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Pioneer Construction, Inc v. Global Investment Corp. et al

December 21, 2011

PIONEER CONSTRUCTION, INC., PLAINTIFF AND APPELLANT,
v.
GLOBAL INVESTMENT CORP. ET AL., DEFENDANTS AND RESPONDENTS.



APPEAL from a judgment of the Superior Court of Los Angeles County, Randy Rhodes, Judge. (Los Angeles County Super. Ct. No. PC046872)

The opinion of the court was delivered by: Johnson, J.

CERTIFIED FOR PUBLICATION

Reversed.

Pioneer Construction, Inc. (Pioneer) appeals from a judgment entered for defendants Global Investment, Inc. (Global) and Su-Chin Chen Tsou (Tsou) in Pioneer's action for foreclosure of mechanic's liens recorded against property owned by a debtor in bankruptcy, Oakridge Homes LLC (Oakridge). Global and Tsou purchased Oakridge's property at a trustee's sale held after relief from the automatic stay was obtained in Oakridge's bankruptcy proceedings. The trial court sustained defendants' demurrer on the grounds the recording of the mechanic's liens against the property while Oakridge's bankruptcy was pending violated the automatic stay of Bankruptcy Code section 362 (11 U.S.C. § 362). We reverse, finding the 90-day period for foreclosing on Pioneer's mechanic's lien under Civil Code section 3144 was tolled during the pendency of the bankruptcy proceedings pursuant to Bankruptcy Code section 108, subdivision (c). (11 U.S.C. § 108(c).)

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

In March 2005, Pioneer and Oakridge entered into an agreement pursuant to which Pioneer agreed to perform construction services on 19 lots owned by Oakridge located on Old Stone Way in Stevenson Ranch (Property). Pioneer performed its part of the agreement, but Oakridge failed to pay Pioneer sums due it for the construction project.

On April 17, 2008, Pioneer recorded a mechanic's lien in the Los Angeles County Recorder's office against the Property in the amount of $2,471,332.06, listing Oakridge as the debtor, and listing Nasir Eftekhar, Jin Shen, and Benjamin Zhu as the owners of the property.

On June 13, 2008, Oakridge filed for bankruptcy under chapter 11.

On January 29, 2009, Pioneer recorded a second mechanic's lien in the Los Angeles County Recorder's Office in the amount of $2,669,832.06, listing Oakridge as the debtor and David Zhen, Benjamin Zhu, Nasir Eftekhar, and Simon Thomas Homes, Inc. as the owners of the property.

On April 15, 2009, Pioneer filed a "Notice of Perfection of Security Interest" in Oakridge's chapter 11 proceedings, asserting a lien of $2,669,832.06, and attaching the mechanic's lien recorded January 29, 2009.

In May or July 2009, Cathay Bank and Global obtained relief from the automatic stay in Oakridge's bankruptcy and sold the property at a trustee's sale on August 25, 2009 to defendant Tsou.

Pioneer filed a complaint to foreclose its two mechanic's liens on November 12, 2009, stating two causes of action, one for each lien.*fn1 It also recorded a lis pendens on November 20, 2009.

Global and Shou demurred to the complaint, and filed a motion to expunge the lis pendens, based on in invalidity of the two mechanic's liens. On March 11, 2010, on the eve of the hearing on Global and Shou's demurrer, Pioneer filed its first amended complaint for foreclosure of the two mechanic's liens. On March 16, 2010, the trial court granted the motion to expunge the lis pendens.

On March 23, 2010, Global and Shou demurred to the first amended complaint, arguing that (1) complaint had not been filed within 90 days of the April 17, 2008 mechanic's lien as required by Civil Code section 3144*fn2 because a total of 135 days elapsed between recordation and the filing of the complaint (computed as 56 days between the filing of the lien and Oakridge's chapter 11 bankruptcy filing, which precluded action on the lien, and 79 days between the property's sale at a trustee's sale in August 2009 and the filing of the complaint on November 12, 2009); and ...


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