Roofing Concepts, Inc. v. Kenyon Industries, Inc. (In Re Coated Sales, Inc.)

147 B.R. 842, 1992 U.S. Dist. LEXIS 18236, 1992 WL 361726
CourtDistrict Court, S.D. New York
DecidedDecember 1, 1992
Docket91 Civ. 3740 (DNE)
StatusPublished
Cited by11 cases

This text of 147 B.R. 842 (Roofing Concepts, Inc. v. Kenyon Industries, Inc. (In Re Coated Sales, Inc.)) 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
Roofing Concepts, Inc. v. Kenyon Industries, Inc. (In Re Coated Sales, Inc.), 147 B.R. 842, 1992 U.S. Dist. LEXIS 18236, 1992 WL 361726 (S.D.N.Y. 1992).

Opinion

OPINION & ORDER

EDELSTEIN, District Judge:

Roofing Concepts, Incorporated (“Roofing” or “appellant”) instituted this action to obtain a declaratory judgment from the Bankruptcy Court that it possessed a perfected mechanic’s lien on real property owned by Kenyon Industries, Incorporated (“Kenyon” or “Appellee”). The parties filed cross-motions for summary judgment. In an order dated April 11, 1991, Judge Cornelius Blackshear of the Bankruptcy Court in the Southern District of New York denied Roofing’s summary judgment motion and granted Kenyon’s cross-motion for summary judgment. See In re Coated Sales, Inc., 124 B.R. 17 (Bankr.S.D.N.Y.1991). Roofing has appealed the Bankruptcy Court’s decision.

Roofing is a Rhode Island corporation with its principal place of business in Rhode Island. From May 6, 1988 to May 24, 1988, appellant performed roofing work on a warehouse located in Rhode Island and owned by Kenyon. This work included the provision of labor and materials. The parties do not dispute that Kenyon never paid for this work. On June 16, 1988, Kenyon filed a petition for bankruptcy under Chapter 11 of the Bankruptcy Code (the “Code”).

On or about June 20, 1988, Roofing mailed to Kenyon by certified mail, return receipt requested, a notice of intention to claim a lien — a mechanic’s lien, which it recorded in the Records of Land Evidence in Charleston, Rhode Island on or about June 22, 1988. Also on June 22, 1988, Roofing filed a notice of lis pendens in the Record of Land Evidence and also filed a petition to enforce the mechanic’s lien in the Superior Court of the State of Rhode Island (the “post-petition enforcement” *844 conduct). 1 The Superior Court issued a citation, which Roofing served on Kenyon; Kenyon acknowledged receipt of the citation in a letter sent to the Superior Court, in which Kenyon also indicated that it had filed a petition under Chapter 11 of the Code. On September 6, 1988, Roofing filed a secured claim in this matter in the Bankruptcy Court.

A District Court reviews decisions of a Bankruptcy Court de novo. See In re Ionosphere Clubs, Inc., 922 F.2d 984, 988 (2d Cir.1990). “It is well settled that a court should grant a motion for summary judgment only if the evidence, viewed in the light most favorable to the party opposing the motion, presents no genuine issue of material fact.” Cable Science Corp. v. Rochdale Village, Inc., 920 F.2d 147, 151 (2d Cir.1990); see United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 993, 8 L.Ed.2d 176 (1962); Owens v. New York City Housing Auth., 934 F.2d 405, 408 (2d Cir.), cert. denied, — U.S.-, 112 S.Ct. 431, 116 L.Ed.2d 451 (1991). The Supreme Court has noted that whether an issue is genuine and material for purposes of summary judgment depends on “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). “One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses.... ” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The Supreme Court added that “[sjummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed ‘to secure the just, speedy and inexpensive determination of every action.’ ” Id. at 327, 106 S.Ct. at 2555 (quoting Fed.R.Civ.P. 1).

In this case, the parties do not dispute, and Judge Blackshear found, that no genuine issue of material fact exists. This Court agrees. The issue, then, is whether Roofing has a perfected mechanics lien given Kenyon’s filing of a petition under Chapter 11. For the reasons stated below, this Court finds that Roofing possesses an enforceable lien on Kenyon’s real property. The judgment of the Bankruptcy Court is reversed.

Discussion

This dispute turns on whether Roofing’s post-petition actions were sufficient to perfect its lien. This determination, in turn, hinges on the resolution of thrée issues. The first is whether under Rhode Island law Roofing had to initiate an enforcement action in order to perfect its lien. The second issue is, assuming it did have to initiate such an action, can this Court consider Roofing’s efforts to initiate such an enforcement action in light of Kenyon’s bankruptcy filing. The final issue is, assuming Roofing’s post-petition enforcement conduct is void, did Roofing otherwise manage to perfect its lien.

As to the first issue, this Court finds that an enforcement action is a necessary predicate to perfection under Rhode Island law. Section 34-28-4 of the Rhode Island mechanic’s lien statute provides that mailing and filing a notice of intent to claim a lien “will perfect a lien ... against such land and subject to the provisions of this chapter.” R.I.Gen.Laws § 34-28-4. Roofing contends that it mailed and filed a notice of intent to claim a lien, and that the mailing and filing of such notice is the sole prerequisite to perfection. Section 34-28-4 makes clear, however, that perfection is contingent on compliance with other provisions of the statutory scheme. Commencing an enforcement action is part of this statutory scheme: Section 34-28-10 provides that a lien will be “void and wholly lost” absent the filing of a petition to enforce a lien and a notice of lis pendens *845 within 120 days. The existence of the lien itself is contingent on the filing of such an enforcement action, without which the lien is void. This goes to the enforceability of the lien itself, rather than the right to enforce it. For instance, in another ease construing Rhode Island’s mechanic’s lien statute, In re CNN Development Corp., 112 B.R. 1, 1 (Bankr.D.R.I.1990), the court found that initiating enforcement proceedings was a prerequisite to perfection.

Given that commencing an enforcement proceeding is a predicate to perfection, it is necessary to inquire whether Roofing complied with this requirement. While there is no dispute that Roofing, by filing a petition to enforce a lien and a notice of lis pendens, initiated an enforcement action, this action is void given Kenyon’s Chapter 11 bankruptcy petition. Section 362 of the Code provides for an automatic stay of actions against a debtor that files a petition under the Code. An action to enforce a lien is prohibited and constitutes a violation of the automatic stay. See In re Bain, 64 B.R. 581 (W.D.Va.1986);

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Martin
496 B.R. 323 (S.D. New York, 2013)
In Re Cook
384 B.R. 282 (N.D. Alabama, 2008)
In Re WorldCom, Inc.
362 B.R. 96 (S.D. New York, 2007)
In Re 360 Networks (USA) Inc.
282 B.R. 756 (S.D. New York, 2001)
Village Nurseries v. Gould (In Re Baldwin Builders)
232 B.R. 406 (Ninth Circuit, 1999)
Petr v. Wheeler (In Re Florline Corp.)
190 B.R. 342 (S.D. Indiana, 1996)
Tavella v. Edwards (In Re Edwards)
162 B.R. 83 (D. Connecticut, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
147 B.R. 842, 1992 U.S. Dist. LEXIS 18236, 1992 WL 361726, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roofing-concepts-inc-v-kenyon-industries-inc-in-re-coated-sales-nysd-1992.