Ordered that the orders are affirmed insofar as appealed from; and it is further,
Ordered that the respondents are awarded one bill of costs.
These actions arise from losses incurred when a fire destroyed property of the plaintiffs which was stored in a Nassau County warehouse operated by the defendant, Dane Murphy, Inc. (hereinafter Dane Murphy), which allegedly was the agent, servant, and/or employee of the defendant Allied Van Lines, Inc. (hereinafter Allied). The first action, brought by Mary and Elliott Rosenbaum, was stayed automatically against Dane Murphy when it filed for bankruptcy protection. Thereafter, the Rosenbaums moved to consolidate this action with nine similar actions brought by others and to sever the claims against Dane Murphy. Allied cross-moved for a stay pending resolution of the bankruptcy proceedings, asserting that it would be prejudiced by the absence of Dane Murphy. In an order dated February 22, 1991, the Supreme Court denied the stay, directed a joint trial of the actions, and granted the severance of so much of the complaint in Action No. 1 as is asserted against Dane Murphy. Subsequently, the bankruptcy court granted Dane Murphy a partial lifting of the stay so that it could pursue a declaratory judgment action against its insurance company, wherein it sought a declaration that the insurance company had wrongfully denied coverage on the warehouse and was obligated to defend and indemnify Dane Murphy in all actions arising from the fire. Allied then moved to renew its motion for a stay of the action. Upon granting renewal, the court adhered to its prior ruling, without prejudice to renew upon resolution of the declaratory judgment action.
The automatic stay provisions of the Federal bankruptcy laws do not extend to non-bankrupt codefendants (see, Lynch v Johns-Manville Sales Corp., 710 F.2d 1194). Therefore, it is in the discretion of the court to grant a severance (see, CPLR 603; King v. Northway Agencies, 127 A.D.2d 955; County of Broome v. Aetna Cas. Sur. Co., 126 A.D.2d 818), as well as a stay (see, CPLR 2201; Houston v. Trans Union Credit Information Co., 154 A.D.2d 312). We find that it was not an improvident exercise of discretion for the court to deny Allied's motion for a stay and grant the plaintiffs' motion severing Dane Murphy from Action No. 1.
It has been generally held that "the balance of the equities lies with plaintiffs when one defendant has received an automatic stay pursuant to 11 U.S.C. § 362 (a) [the bankruptcy law] and codefendants request a stay of the entire action" (Lottes v Slater, 114 A.D.2d 580, 581; see also, Gold v. Johns-Manville Sales Corp., 723 F.2d 1068; Williford v. Armstrong World Indus., 715 F.2d 124). Such is the case here, as the plaintiffs would suffer an undue hardship if the stay were granted. Moreover, contrary to the appellant's contention, Dane Murphy is not an indispensable party, and further litigation without it would not be futile or meaningless (see, County of Chenango Indus. Dev. Agency v. Lockwood Greene Engrs., 111 A.D.2d 508; Friend v Dibble, 124 Misc.2d 151). We also note that Dane Murphy has no plans to reorganize and apparently will emerge from the bankruptcy proceedings without any assets. In addition, the fact that Dane Murphy is pursuing a declaratory judgment action against its insurer does not support a denial of the severance motion or warrant a stay on behalf of Allied at this juncture.
We have considered Allied's remaining contention and find it to be without merit. Lawrence, J.P., Miller, O'Brien and Pizzuto, JJ., concur.