925 F.

2d 1
1991 A.M.C. 1742

Lowell P. McKINNEY, Plaintiff, Appellant,

v.
WATERMAN STEAMSHIP CORPORATION, Defendant,
Appellee.
No. 90-1622.

United States Court of Appeals,

First Circuit.
Heard Dec. 3, 1990.
Decided Jan. 30, 1991.

Joseph M. Orlando with whom David C. Nunheimer and Orlando &

Associates were on brief, for plaintiff, appellant.
Frank H. Handy, Jr., with whom Richard B. Kydd and Kneeland, Kydd &
Handy were on brief, for defendant, appellee.
Before CAMPBELL and TORRUELLA, Circuit Judges, and BOWNES,
Senior Circuit Judge.
LEVIN H. CAMPBELL, Circuit Judge.

Appellant Lowell McKinney appeals from the dismissal of his action for
personal injury against appellee Waterman Steamship Corp. ("Waterman")
arising from an alleged accident that occurred at sea on board Waterman's ship,
the S.S. Robert E. Lee. McKinney's complaint alleged Jones Act negligence, 46
U.S.C.App. Sec. 688 (1982), and unseaworthiness under general maritime law;
it also sought maintenance and cure benefits. In dismissing McKinney's action,
the district court held that the three-year statute of limitations barred the Jones
Act and general maritime law claims, and that laches barred the maintenance
and cure claim. 739 F.Supp. 678. We affirm.

The district court's discussion of this case's extensive procedural history is

comprehensive, and we need repeat only what is helpful to understand our

discussion here. McKinney's injury occurred no later than on December 12,

1981.1 Almost two years thereafter, on December 1, 1983, Waterman
petitioned for bankruptcy in the Southern District of New York under Chapter
11 of the Bankruptcy Code. The filing of this petition triggered the automatic
stay provisions of 11 U.S.C. Sec. 362. A year later, on November 30, 1984,
McKinney filed a complaint for personal injury against Waterman in the
District Court for the Southern District of New York. The complaint in that
case was virtually identical to the present one. When Waterman's counsel
notified McKinney of the bankruptcy automatic stay, McKinney voluntarily
dismissed the first complaint on May 23, 1985. McKinney then filed a claim in
the bankruptcy case, and his attorney engaged in settlement negotiations with
Waterman representatives. The bankruptcy stay was lifted no later than August
9, 1986, and McKinney filed the present complaint in the District of
Massachusetts more than two years thereafter, on January 17, 1989. Not
counting the time during which the bankruptcy stay prevented McKinney from
suing, more than four years passed between McKinney's injury and the filing of
the present complaint.
The Limitations Period
3

The district court found, and we agree, that a three-year limitations period
applies to McKinney's tort claims. As the court stated, "the source of the
limitations period ultimately proves immaterial because ... all potential sources
suggest three years as the relevant time-frame." 2 We also agree that, for tolling
purposes, "[b]ecause McKinney's injury was of the sort discovered
immediately, his cause of action accrued when he was injured."

The district court correctly concluded that the timeliness of the maintenance
and cure claims depended upon equitable principles of laches, with the threeyear limitations period providing a benchmark after which the bar of laches
would presumptively apply unless plaintiff showed good reason to the contrary.
See Clauson, 823 F.2d at 661 n. 1 (laches applies to maintenance and cure
claims). In Puerto Rican-American Ins. v. Benjamin Shipping, 829 F.2d 281,
283 (1st Cir.1987), we noted that the district court, applying laches within its
sound discretion, "must examine whether plaintiff's delay in bringing suit was
unreasonable and whether defendant was prejudiced by the delay." 829 F.2d at
283. We further noted that if a plaintiff files a complaint within the analogous
statutory period, the burden of proving unreasonable delay and prejudice falls
on the defendant; thereafter, the burden shifts and laches is presumed unless
disproven by plaintiff. Id.

In determining the relevant analogous limitations period, the district court

concluded that the federal uniform maritime tort limitations period, 46

U.S.C.App. Sec. 763a, was applicable. The court reasoned that where, as here,
the maintenance and cure claim arises out of the same personal injury as the
other tort counts, even though the source of the claim is contractual, the
uniform period provides the appropriate benchmark for all aspects of the injury,
including maintenance and cure. Cf. Aguilar v. Standard Oil Co. of New Jersey,
318 U.S. 724, 730, 63 S.Ct. 930, 933, 87 L.Ed. 1107 (1943) (maintenance and
cure is an implied employment contract provision and is not predicated on fault
or negligence); Butler v. American Trawler Co., Inc., 887 F.2d 20, 21 (1st
Cir.1989) (Congress intended uniform maritime tort limitations period to
preclude the operation of different state limitations statutes with respect to
maritime torts). See generally, Barnes v. Andover Co., L.P., 900 F.2d 630, 63337 (3d Cir.1990) (discussing history and character of maintenance and cure).
The district court ruled, therefore, that the section 763a three-year statute of
limitations was applicable to place the burden of proof upon McKinney to show
that the delay was reasonable and did not prejudice Waterman.
6

As the most analogous state statute of limitations period is also three years, we
need not decide whether the district court properly selected the section 763a
three-year limitations period as the relevant benchmark. Massachusetts law
provides that a three-year limitations period applies to "actions of contract to
recover for personal injuries." Mass.Gen.Laws Ann. ch. 260, Sec. 2A. While
McKinney argues that the maintenance and cure claim is not governed by
Section 763a, he concedes in his brief that a personal injury is "an obvious
prerequisite of the claim" and suggests no other state law limitations reference
period for purposes of allocating the burden of proof when applying laches
principles. The present maintenance and cure claim, arising here out of a
personal injury, fits within the Massachusetts limitations provision for a
contract action to recover for personal injuries. There is no reason, therefore, to
consider the applicability of the six-year Massachusetts limitations period for
contract actions "other than those to recover for personal injuries."
Mass.Gen.Laws Ann. ch. 260, Sec. 2 (1959).

Application of the Limitations Period

7

McKinney's difficulty is that, after subtracting the full period that the automatic
stay was in effect, his present suit was still not brought within three years.
McKinney argues on appeal that he should receive an equitable extension of the
statute of limitations and that, under the laches analysis relevant to his
maintenance and cure claim, he did not unreasonably delay filing that claim.
McKinney maintains that he did not "sleep on his rights," that his initial filing
in the Southern District of New York put Waterman on notice of the lawsuit,

and that Waterman was apprised of McKinney's continued pursuit of a remedy

by means of McKinney's involvement in ongoing settlement negotiations. The
linchpin of McKinney's arguments is his assertion that he did not receive notice
that the bankruptcy stay was lifted. Consequently, he says he was unaware that
he was free to refile his complaint until his suspicion was aroused long after the
limitations period had elapsed. McKinney argues that Waterman, aware that the
stay was lifted and of McKinney's unawareness of this fact during continuing
settlement negotiations, should be estopped from asserting limitations defenses.
8

However, McKinney filed no counteraffidavits or other evidence in the district

court supporting the contentions in his appellate brief that he was without
notice of the lifting of the automatic stay. To the contrary, such evidentiary
materials as there are indicate that he did receive notice and that his attorney, at
least, was well aware of the progress and termination of the bankruptcy
proceedings. The record appendix on appeal, designated by appellant
McKinney, includes Waterman's brief in reply to McKinney's opposition to the
motion to dismiss, to which is attached an affidavit of mailing of the notice of
the confirmation of the plan, dated July 17, 1986. The page of the mailing list
attached to the affidavit of mailing specifies McKinney as a recipient of notice.

While the confirmation of the Chapter 11 plan on June 19, 1986 did not
mention release from the automatic stay specifically, an automatic stay under
11 U.S.C. Sec. 362(a) is normally lifted when the confirmation order is issued.
Since confirmation revests the property of the estate in the debtor, (as well as
discharging the debtor from all dischargeable pre-petition debts),3 the stay of
an act against the property of the estate would no longer be applicable. See In re
Turning Point Lounge, Ltd., 111 B.R. 44, 46 (Bankr.W.D.N.Y.1990)
(automatic stay ceases to operate upon confirmation of Chapter 11 plan); In re
Korgan, 52 B.R. 557 (Bankr.D.Or.1985) (automatic stay expired upon
confirmation of Chapter 11 plan); In Re Paradise Valley Country Club, 31 B.R.
613, 615 (D.Colo.1983) ("Since confirmation of a Chapter 11 plan has the dual
effect of revesting the debtor with title to its property and discharging the
debtor from all dischargeable pre-petition debts, there can be no further
application of the automatic stay subsequent to confirmation"); In re Thrush, 31
B.R. 106, 107 (Bankr.M.D.Pa.1983) (order granting relief from automatic stay
lacked significance because six days later debtors were discharged and
automatic stay was thereby lifted by operation of law).

10

Moreover, the record appendix includes an affidavit of James P. Laughlin, (an

attorney involved in representing Waterman in the bankruptcy proceedings),
attached to Waterman's motion to dismiss McKinney's present complaint.
Laughlin represents in this affidavit that Vincent Lipori, Esquire, of Carro,

Spanbock, Fass, Geller, Kaster & Cuiffo, filed a proof of claim on behalf of
McKinney in the bankruptcy proceedings. Laughlin also represents that
McKinney appeared through counsel in the bankruptcy proceedings in
connection with personal injury claimants' efforts to obtain relief from the
automatic stay. In response to the claimants' efforts, the bankruptcy court
issued an order on July 14, 1986 which purportedly would have the effect of
vacating the automatic stay 15 days from the date of the order if Waterman
failed to refile a 28 U.S.C. Sec. 157(b)(5) motion to transfer personal
injury/wrongful death cases to the District Court for the Southern District of
New York, originally filed in the bankruptcy court. As Waterman never refiled
the Sec. 157(b)(5) motion, the automatic stay would have lapsed under the July
24, 1986 order on August 9, 1986.4
11

The bankruptcy court order appears in the district court record and is also
published. See In re Waterman S.S. Corp., 63 B.R. 435, 438
(Bankr.S.D.N.Y.1986). On its first page is a list of appearances, including that
of Carro, Spanbock, by Vincent Lipari. It is a fair inference that all such listed
counsel were notified of the bankruptcy court's order. Notice to an attorney is
notice to the client. See Fed.R.Civ.P. 5(b); Irwin v. Veterans Administration, --U.S. ----, 111 S.Ct. 453, 456, 112 L.Ed.2d 435 (1990).

12

To be sure, the present action was dismissed by the district court on a motion to
dismiss on the pleadings under Fed.R.Civ.P. 12(b)(6). While under
Fed.R.Civ.P. 12(c) the district court may accept matters outside the pleadings
and treat the motion as one for summary judgment, in such a case Rule 12(c)
provides that "all parties shall be given reasonable opportunity to present all
material made pertinent to such a motion by Rule 56." See Whiting v. Maiolini,
921 F.2d 5 (1st Cir.1990). There is no indication here that the parties were ever
told in so many words that the court was proceeding under Rule 12(c). But this
court has "treat[ed] any error in failing to give express notice as harmless when
the opponent has received the affidavit and materials, has had an opportunity to
respond to them, and has not controverted their accuracy." Id., quoting Moody
v. Town of Weymouth, 805 F.2d 30, 31 (1st Cir.1986) (per curiam). See also
Fudge v. Penthouse International, Ltd., 840 F.2d 1012, 1015 n. 1 (1st Cir.),
cert. denied, 488 U.S. 821, 109 S.Ct. 65, 102 L.Ed.2d 42 (1988). But see Jones
v. Automobile Insur. Co. of Hartford, 917 F.2d 1528, 1532 n. 4 (11th Cir.),
reh'g denied, 920 F.2d 13 (1990).

13

Here, the district court concluded, undoubtedly from the matters outside the
pleadings recited above,5 that McKinney was represented by counsel and was
served with copies of the bankruptcy court orders. Waterman's affidavit was
filed on January 29, 1990, and the district court did not grant the motion to

dismiss until May 31, 1990. Not only did McKinney have sufficient opportunity
to file his own affidavit and fail to do so, but McKinney made no objection to
consideration of Waterman's affidavit. McKinney, in fact, designated it for
inclusion in the record appendix on appeal. Moreover, while McKinney has
maintained that he did not receive notice of the termination of the stay, he has
not contested the accuracy of Waterman's affidavit. We also take judicial notice
of the proceedings in the bankruptcy court, and the documents filed therein,
copies of which appear in the record here and whose authenticity is not
disputed. D'Amario v. Butler Hospital, 921 F.2d 8 n. 1 (1st Cir.1990); Kowalski
v. Gagne, 914 F.2d 299, 305 (1st Cir.1990) ("It is well-accepted that federal
courts may take judicial notice of proceedings in other courts if those
proceedings have relevance to the matters at hand."); E.I. Du Pont de Nemours
& Co., Inc. v. Cullen, 791 F.2d 5, 7 (1st Cir.1986).
14

Considering all the record evidence and taking judicial notice of the bankruptcy
court proceedings, McKinney's delay in refiling this action until 29 months after
the bankruptcy stay was lifted--after nearly two years had already elapsed
between McKinney's injury and Waterman's bankruptcy filing--cannot be
excused. We agree with the district court that the action is time-barred.6 Even if
neither McKinney nor his counsel received notice of any specific order
terminating the stay, they were well aware of the bankruptcy proceedings, they
received notice of the confirmation of the plan, and they appeared in
connection with the issues addressed in the court's July 24, 1986 order. Waiting
to investigate the status of the stay and then filing this action nearly two and a
half years later, sixteen months after the limitations period had run, is clearly a
failure to exercise reasonable diligence in preserving legal rights. McKinney
also argues that the voluntarily dismissed 1984 action in New York had
sufficiently notified Waterman of the lawsuit within the limitations period. But
that lawsuit was terminated by its dismissal. As the district court stated:
"According to [McKinney's] rationale, a plaintiff who provided notice of his
claim within the period could then wait an indefinite time to reinitiate the
prosecution of his case."

15

Likewise, McKinney's argument that Waterman should be equitably estopped

from asserting a limitations defense is unsupported. The party asserting
estoppel has the burden of proving it. K-Mart Corp. v. Oriental Plaza, Inc., 875
F.2d 907, 912 (1st Cir.1989). McKinney alleges no action on the part of
Waterman that would amount to inducing McKinney to sleep on his rights.7 See
Clauson, 823 F.2d at 661 (elements of estoppel include proof that estopped
party knowing facts intentionally act so as to induce ignorant party to rely on
such action to his or her injury).

16

Finally, based on the foregoing, a fortiori McKinney failed to carry his burden
to prove both that his delay was reasonable and did not prejudice the defendant.
His maintenance and cure claim is therefore barred by laches. See Benjamin
Shipping, supra.

17

Affirmed. Costs to appellees.

McKinney alleges that he was injured when he fell while checking warning
lights on a deck crane aboard the ship, striking his back and being knocked
unconscious. McKinney asserts that the accident occurred on December 12,
1981. According to Waterman, McKinney's initial accident report listed
December 1, 1981 and his interrogatory responses listed November 21, 1981 as
the date of the accident

McKinney concedes in his brief that a three-year statute of limitations governs

Jones Act claims. Uniform Statute of Limitations for Maritime Torts, 46
U.S.C.App. Sec. 763a (1982). See also Clauson v. Smith, 823 F.2d 660, 661
(1st Cir.1987) ("The Jones Act ... incorporates by reference the three-year
limitations period contained in the Federal Employers' Liability Act (FELA), 45
U.S.C. Sec. 56.") Massachusetts law, if applicable, also provides a three-year
limitations period for tort actions. Mass.Gen.L. ch. 260, Sec. 2A (Supp.1990).
A three-year limitations period is thus clearly applicable to the Jones Act and
maritime unseaworthiness tort counts

While the Chapter 11 plan does not appear in the record, we presume that the
personal injury claims were not discharged pre-petition debts, since Waterman
does not assert otherwise

Some explanation is required for the issuance of an order pursuant to which an

automatic stay was lifted, which automatic stay had already been lifted by
virtue of the confirmation of a Chapter 11 plan. According to Waterman, the
personal injury claimants filed various motions to lift the automatic stay at
some time prior to June 7, 1986. In response to the motions to vacate the stay,
Waterman moved on June 7, 1986 for the transfer pursuant to 28 U.S.C. Sec.
157(b)(5). Pursuant to 11 U.S.C. Sec. 362(e), 30 days from the request to lift
the stay, the stay is terminated with respect to the party making the request
unless the Court, after notice and a hearing, orders the stay continued. Thus,
once that period elapsed, no later than 30 days from June 7, 1986, (in other
words, July 7, 1986) the stay here would have been lifted pursuant to 11 U.S.C.
Sec. 362(e), but for the lifting of the stay prior to that time upon confirmation
of the plan on June 19, 1986

Notwithstanding these two legal mechanisms whereby the stay would have
been lifted under the Bankruptcy Code prior to July 24, 1986, however, the
bankruptcy court entered an additional order denying the personal injury
claimants' motions to lift the stay conditional upon Waterman's refiling in the
appropriate forum the Sec. 157(b)(5) motion to transfer. Possibly, the
bankruptcy judge felt that he was compelled to rule on the motions to vacate
and the motion to transfer, which had been filed prior to the June 19, 1986
confirmation order, perhaps forgetting that the confirmation of the plan had
already disposed of the automatic stay. See In re Thrush, 31 B.R. 106, 107,
supra (bankruptcy court, in granting motion to vacate automatic stay, was
unaware of status of entire bankruptcy proceeding and therefore entered order
granting motion that was without significance).
In any event, we need not decide precisely when the automatic stay was lifted.
Suffice it to say that the stay was lifted no later than August 9, 1986, and that,
as discussed below, McKinney and his counsel should have been aware that
they were entitled to proceed with their personal injury claims after that date.
5

See Republic Steel Corp. v. Pennsylvania Engineering Corp., 785 F.2d 174,
178 (7th Cir.1986) (both parties had reasonable opportunity to--and did in fact-present materials pertinent to Rule 56 proceeding; district court could have
treated motion as one for summary judgment and it was equally proper for
court of appeals to do so, considering the record on appeal to include
undisputed statements of fact appearing in submitted affidavits)

See Irwin, 111 S.Ct. at 457-58 ("Federal courts have typically extended
equitable relief only sparingly. We have allowed equitable tolling in situations
where the claimant has actively pursued his judicial remedies by filing a
defective pleading during the statutory period, or where the complainant has
been induced or tricked by his adversary's misconduct into allowing the filing
deadline to pass. We have generally been much less forgiving in receiving late
filings where the claimant failed to exercise due diligence in preserving his
legal rights." (footnotes omitted))

McKinney argues that settlement negotiations continued during the pendency

of the bankruptcy stay, that he submitted to a medical examination, and that
Waterman had contact with McKinney's counsel after the stay was lifted.
McKinney, however, fails to point to any specific evidence that Waterman
continued such negotiations after the lifting of the stay, much less sought to
induce McKinney into sleeping on his rights