A personal injury case by a New Jersey couple against Harrah's Atlantic City casino and its parent company, Caesars Entertainment Inc., can proceed even though the two-year statute of limitations to file a claim had expired, a state appellate panel ruled.

The Appellate Division said the couple, Carmella and Anthony Minelli, had filed a timely complaint under a bankruptcy code provision since Caesars Entertainment Operating Co., the parent of Caesars Entertainment, filed for bankruptcy protection six months before the time bar was set to expire.

"Because we conclude that operation of Section 108(c)(2) of the Bankruptcy Code made plaintiffs' claims timely filed, at least as to defendant Caesars Entertainment Operating Company, we reverse," wrote Judge Allison Accurso for the panel on Tuesday.

The panel only vacated the dismissal as to Caesars Entertainment and the Harrah's defendants  and remanded because the dismissal was based on "the erroneous conclusion that Section 108 afforded plaintiffs no relief even as to Caesars Entertainment Operating Company, an entity clearly protected by the automatic stay."

The defendants contended that the Minellis were not entitled to relief under 11 U.S.C. §108(c) of the bankruptcy code because they filed their case after the two-year limitations period expired, but before the start of a 30-day grace period following an automatic stay.

Christopher Koutsouris of Dasti Murphy McGuckin Ulaky Koutsouris & Connors in the firm's Toms River office represented the Minellis.

"On behalf of the plaintiffs, we're very happy the judges of the Appellate Division correctly applied the federal statute, and once and for all settled this contentious issue in New Jersey," Koutsouris said in an email. "Now, we can look forward to a meritorious resolution of the case."

Reena Shaw of Camacho Mauro Mulholland in Princeton represented Harrah's, and its parent owner and subsidiaries. Shaw did not immediately return a call or email for comment.

Carmella Minelli contends she slipped and injured herself while inside Harrah's Resort Atlantic City on June 2, 2013. She filed a complaint seeking relief on June 30, 2015, according to the decision.

The complaint alleged that Harrah's Operating Company, doing business as Harrah's Resort Atlantic City, a subsidiary of Caesars Entertainment, which in turn was a subsidiary of defendant Caesars Entertainment, were indistinct entities, "inadequately capitalized" and structured "to merely evade responsibility."

Carmella Minelli contended that, despite filing more than two years after the accident, Harrah's AC casino was aware of the claim, and that the bankruptcy of Caesars Entertainment, approximately six months before the two-year limitations period was set to expire, extended her time to sue.

On Jan. 15, 2015, Caesars Entertainment and its 172 or more affiliated entities—but not Harrah's AC—filed a voluntary Chapter 11 petition in U.S. Bankruptcy Court for the Northern District of Illinois, triggering the automatic stay under Section 362 of the Bankruptcy Code, 11 U.S.C. §108, according to the decision.

Carmella Minelli filed her complaint six months after that date, on June 15, 2015, and the defendants filed a notice of suggestion of bankruptcy instead of replying to her complaint.

On Jan. 28, 2019, she obtained from the bankruptcy court a consent order permitting her "to proceed against Caesars [Entertainment Operating Company] as a nominal defendant only" in order to allow the Minellis to "establish liability against Caesars for the sole purpose of seeking relief or any proceeds of available insurance policies issued in the name of, or for the benefit of the Debtors … or any third-party insurance policies that may apply," according to the decision.

The Minellis opposed the defendants' motion to dismiss, arguing that 11 U.S.C. §108 made the filing timely. The defendants countered that the Harrah's companies were not among the Caesars entities seeking bankruptcy protection in court—they were separate and distinct.

The complaint was dismissed with prejudice in the Mercer County Law Division because the Minellis filed after the two-year statute of limitations ran out and, therefore, the defendants claimed, they were not subject to the automatic stay.

The Minellis moved for reconsideration, unsuccessfully, and then appealed.

Title 11 U.S.C. §108 provides, among other things, for filing 30 days after notice of the termination or expiration of the automatic stay, wrote Accurso in the court's published opinion, joined by Appellate Division Judges Clarkson Fisher Jr. and Lisa Rose.

Accurso said the Minellis case differed from the Appellate Division's 1998 holding in Nativo v. Grand Union, where the plaintiff received notice of stay relief 42 days before the statute of limitations expired but did not file her complaint until seven days afterward. The Appellate Division ruled there that the defendant's bankruptcy proceeding did not add to the limitations period.

"This case is different. The statute of limitations on the Minellis' personal injury claim expired while the bankruptcy stay, at least as to Caesars Entertainment, remained in place," said the panel Tuesday.

"Accordingly, Section 108(c)(2) of the Bankruptcy Code plainly permitted her to file an action 'against the debtor, or against an individual … protected under section 1201 or 1301 [stays of action against a co-debtor],' up until '30 days after notice of the termination or expiration of the stay under section 362, here Jan. 28, 2019,'" wrote Accurso in the 11-page opinion.

"As plaintiffs filed their complaint well before that date, it would appear timely filed under Section 108(c)(2) as to those defendants protected by the automatic stay," added Accurso.

The panel said the defendants failed to explain or support the distinction among the nondebtor defendants.

"Because the claim is not adequately briefed, we are not confident we fully understand the argument," Accurso wrote.

Accurso noted that: "The consent order signed by the bankruptcy judge in this matter expressly permits plaintiffs to 'proceed against Caesars [Entertainment Operating Company]' in their action 'pending in the Superior Court of New Jersey, Law Division, Mercer County' in accordance with the order's terms."

As for subsidiary Harrah's Resort Atlantic City, Accurso said, the "only question for our courts is whether the automatic stay was extended by the bankruptcy court to the non-debtor defendants and it was up to the federal courts to extend it beyond them."

"Because the parties have not presented us with any information as to whether the bankruptcy court extended the automatic stay to the non-debtor defendants and, if so, whether plaintiffs sought stay relief to proceed against them, and the trial court did not consider the issue, it is inappropriate for us to do so in the first instance[.]"

She added, "We only vacate the dismissal as to Caesars Entertainment and the Harrah's defendants based as it was on the erroneous conclusion that Section 108 afforded plaintiffs no relief even as to Caesars Entertainment Operating Company, an entity clearly protected by the automatic stay."