Quickway Metal Fabricators, Inc. v. Grossinger's Associates (In re Grossinger's Associates)

125 B.R. 106, 1991 Bankr. LEXIS 371
CourtDistrict Court, S.D. New York
DecidedMarch 15, 1991
DocketBankruptcy No. 89 B 20943; No. 90 ADV. 6050
StatusPublished

This text of 125 B.R. 106 (Quickway Metal Fabricators, Inc. v. Grossinger's Associates (In re Grossinger's Associates)) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quickway Metal Fabricators, Inc. v. Grossinger's Associates (In re Grossinger's Associates), 125 B.R. 106, 1991 Bankr. LEXIS 371 (S.D.N.Y. 1991).

Opinion

DECISION ON COMPLAINT TO RECLAIM FROM TRUSTEE A PORTE COCHERE

HOWARD SCHWARTZBERG, Bankruptcy Judge.

Quickway Metal Fabricators, Inc. (“Quickway”), a creditor in this aborted Chapter 11 case, seeks to reclaim from the Chapter 7 trustee a Porte Cochere, or structural steel canopy, that was erected and affixed to the front of the former Grossinger’s Hotel building in Liberty, New York. The Grossinger’s Hotel and Country Club was sold by the Grossinger family to the debtor, Grossinger’s Associates, a New York Limited Partnership, which planned to rehabilitate the property with the assistance of a construction manager. Quickway was engaged to erect a structural steel Porte Cochere in front of the main building and lobby, which it did. However, Quickway claims that it was not paid in full for the project and, therefore, has commenced an adversary proceeding in which Quickway alleges that title to the steel not permanently installed continues to remain with Quickway so that Quickway should be permitted to reclaim the removable steel.

FINDINGS OF FACT

1.On December 17, 1989, the debtor filed with this court its petition for reorga-nizational relief under Chapter 11 of the Bankruptcy Code. On July 30, 1990, on motion of the United States trustee, the debtor’s Chapter 11 case was converted for liquidation under Chapter 7 of the Bankruptcy Code and a trustee in bankruptcy was thereafter appointed and qualified to act.

2. Prior to the commencement of the Chapter 11 case, on March 10, 1989, Quick-way and YA-GDM Construction Venture (“YA-GDM”), the debtor’s construction manager for the Grossinger’s rehabilitation project, entered into a written contract, pursuant to which Quickway was to provide and install structural steel for a Porte Cochere to be affixed to the front of the main building and lobby at the former Grossinger’s Hotel.

3. Quickway is a specialty contractor, engaged in fabricating and installing structural steel, including the structural steel Porte Cochere involved in this case. A Porte Cochere is a large canopy which, when affixed to a building such as the debtor’s hotel, enables cars and trucks to drive under the canopy so that guests and luggage may enter and exit in all kinds of weather.

4. Paragraph 15 of the Quickway contract provides:

15. Ownership of Material Prior to Installation. All material placed on the project by the Contractor (and not paid by the owner) prior to its incorporation into the Project shall be owned unconditionally by the Contractor and shall be free of the lien of any third party.

4. Quickway alleges in support of its complaint for reclamation that the material supplied and erected has neither been incorporated into the project nor has payment been made.

5. The trustee in bankruptcy alleges in her answer that Quickway was paid $65,-835.00 for the erection of the Porte Coch-ere and has asserted certain affirmative defenses and a counter-claim for reimbursement for materials furnished by Quickway that were not approved in accordance with the contract in question. The trustee in bankruptcy also alleges that Quickway failed to submit a written de[108]*108mand in writing for reclamation as required under 11 U.S.C. § 546(c).

6. Between March and August of 1989, Quickway fabricated the steel needed for the Porte Cochere and installed the structural support, consisting of four support columns permanently affixed to the main building. The columns were embedded in cement blocks poured into the ground and in pockets cut into the building wall. Quickway attached the balance of the steel beams to the support structure, welding, fitting and bolted the parts to the existing support columns and structure. The steel for the roof covering was delivered to the job site, but had not been installed when the debtor’s Chapter 11 petition was filed. Thus, approximately 90% of the work called for under the contract had been completed before the Chapter 11 petition was filed.

7. The nuts in the anchor bolts in the ground were tightened, but not permanently affixed so that they could be loosened later on for flexibility to match up the remaining beams and roofing in order to complete the job. The remainder of the work to be done, consisting of alignment, final bolting and installation of the roof section, could be completed in one day, according to the testimony of Quickway’s vice president in charge of manufacturing. He also said that the entire structure was designed specially for the Grossinger’s project.

8. The debtor’s engineering expert testified that the Porte Cochere was a permanent structure and an integral part of the main building, based on the architectural plans and designs for the building. It would take seven laborers approximately two weeks to remove the Porte Cochere from its present location.

9. According to the records of the general partner of the debtor’s construction manager, approximately 96% of the invoiced amounts for the Porte Cochere were paid, which fact was disputed by Quickway’s president. In any event, the trustee has not produced any cancelled checks or other evidence that any portion of Quickway’s claim was paid. However, this point is not material to the instant case, which involves a reclamation commenced by Quickway and not the trustee’s objection to a proof of claim. Proof of full payment on behalf of the debtor would be a complete defense to Quickway’s action and proof of partial payments, including the specific amounts paid, would serve as a partial defense to the total amount of Quickway’s proof of claim. Because there was no proof that any specific amounts were paid to Quickway on behalf of the debtor, and because the proceeding is not in the nature of an objection to Quickway’s proof of claim, Quickway’s complaint for reclamation will be resolved solely on its merits without determining the allowed amount of Quickway’s claim.

10. Based on the evidence at the hearing it has been established that the Porte Cochere was permanently annexed to the real estate and the main building at the Grossinger’s job site. It was clearly appropriated to the use intended, namely to serve as a Porte Cochere, or canopy attached to the main building just outside the lobby. Quickway and the debtor’s construction manager intended that the Porte Cochere was to be permanently annexed to the real estate and the building. Indeed, the structure is still in place and has withstood storms and bad weather since it was erected in early 1989. Hence, the question to be decided is whether the Porte Cochere is a fixture annexed to the real estate.

11. The fact that the steel structure may be taken down by seven laborers in approximately two weeks, or that the nuts have not been permanently tightened, does not detract from its status as a permanent fixture. A removal of part of the structure, while leaving in place the four columns and the support structure permanently attached to the main building, which Quickway concedes is a permanent part of the building, will result in the removal of part of the structural composition of the main building at the job site.

12. Quickway may not remove any portion of the Porte Cochere which it affixed to the main building at the job site without undermining the integrity of the existing [109]*109building and real estate to which the Porte Cochere was affixed.

13.

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Bluebook (online)
125 B.R. 106, 1991 Bankr. LEXIS 371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quickway-metal-fabricators-inc-v-grossingers-associates-in-re-nysd-1991.