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No. 13-1560
In Re:
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.
Terrence W. Boyle,
District Judge. (5:12cv00533BO; 8:12-bk-00569-RDD)
Argued:
Decided:
362(a)(4)
provides
for
an
automatic
stay
of
any
But
exceptions
exist,
including
an
exception
under
the
perfection
of,
an
interest
in
property
to
the
extent that the trustees rights and powers are subject to such
perfection under [11 U.S.C. 546(b).]
11 U.S.C. 362(b)(3).
an
interest
in
property
that
predates
the
bankruptcy
petition but is not yet perfected at the time the debtor files
for bankruptcy if, in the absence of the bankruptcy filing, the
perfected
interest
would
be
effective
against
third
party
the
heart
of
this
appeal
is
whether
construction
A careful
And because
stay
bankruptcy
court
exception
and
have
district
3
been
court
met,
we
hold
correctly
that
the
allowed
the
I.
Debtor Construction Supervision Services (CSS), a fullservice
construction
company,
filed
Chapter
11
bankruptcy
Subcontractors
Subcontractors).
(named
in
the
case
caption)
(the
to
run
equipment.
The
Subcontractors
delivered
the
CSSs
January
2012
bankruptcy
filing,
the
their
post-petition
notice
and
perfection
would
fall
and
post-petition
real
property,
notice
and
objected
perfection.
4
to
the
BB&T
Subcontractors
argued
that
the
The Subcontractors
maintained that the stay did not block them from noticing and
perfecting
post-petition
exception
for
petitions,
the
because
property
doing
interests
post-petition
so
that
perfection
fell
under
predate
of
stay
bankruptcy
which
would
be
bankruptcy
court
acknowledged
that
there
existed
decisions
ruled
and
against
BB&T,
holding
that
the
and
perfection.
for
the
equipment,
Id. at *2-4.
pertinent
stay
i.e.,
before
lien
notice
and
were
concededly
met,
the
Id.
appealed
court,
to
held
the
that
district
Creditor
court,
which,
Appellees
like
the
post-petition
constituted
automatic
permitted
stay.
BB&T
exception
further
to
the
appealed
bankruptcy
to
this
codes
Court,
which
See, e.g., In
II.
On
appeal,
BB&T
primarily
contends
that
because
the
We disagree.
A.
Upon
the
filing
of
Chapter
11
bankruptcy
petition,
courthouse
distribution.
in
favor
See,
of
e.g.,
systematic
Safety-Kleen,
and
equitable
Inc.
asset
(Pinewood)
v.
Wyche, 274 F.3d 846, 864 (4th Cir. 2001) (A chief purpose of
the
automatic
stay
is
to
allow
for
systematic,
equitable
in
different
courts.
(quotation
marks
omitted)).
Amongst
those things the stay bars are any act[s] to create, perfect,
or
enforce
any
lien
against
property
of
the
estate[.]
11
U.S.C. 362(a)(4).
As
with
most
things,
exceptions
to
the
stay
exist.
any
act
to
perfect,
or
to
maintain
or
continue
the
11 U.S.C. 362(b)(3).
546(b)
intervention
of
11 U.S.C. 546(b).
protect[s],
a
bankruptcy
in
spite
petition,
In other words,
of
those
the
surprise
whom
State
law
an
effective
perfection.
date
that
is
earlier
than
the
date
of
See also In re Maryland Glass Corp., 723 F.2d 1138, 1141 (4th
Cir. 1983) ([T]he intervention of a petition . . . should not
cut off an interest holders opportunity to perfect where the
interest
holder
could
have
perfected
against
an
entity
Section
362(b)(3)
and
Section
546(b)
refer
to
an
If
bankruptcy,
the
parties
agree
that
the
Subcontractors
F.3d 607, 611 (4th Cir. 2013) (en banc) (quoting Natl Coal. for
Students with Disabilities Educ. & Legal Def. Fund v. Allen, 152
F.3d 283, 289 (4th Cir. 1998)).
According
to
Blacks
Law
Dictionary,
an
interest
in
interest
as
right,
claim,
or
legal
Dictionary
Online
Blacks Law
defines
it
as
legal
share[.]
in
available
at
http://www.oed.com/view/Entry/97735?rskey=rk3c1C&result=1&isAdva
nced=false#eid (last visited April 21, 2014).
This
Court
has
already
made
plain
that
the
broad
term
In re
scope
to
liens
and
holding
that,
under
local
law,
perfected
liens
notwithstanding).
Pship,
262
F.3d
1,
We
are
not
the
only
(1st
Cir.
2001)
(We
hold
that
is
unequivalent
to,
and
broader
than,
the
term
courts
makes
have
differentiated
sensebecause,
while
between
they
are
Accessories,
345
F.3d
at
458-59
9
interests
closely
and
related,
Specifically, a
See, e.g., In re
(describing
lien
as
existing
omitted)).
only
because
of
the
latter.
(footnotes
and
the
materialmen
improvement
who
of
furnished
real
services
property[,]
find
the
Seventh
Circuits
or
materials
includ[ing]
the
in
In
re
AR
provided
statutory
government
agency
with
lien
on
the
effect
the
only
upon
agencys
filing
Id. at 456-57.
verified
petition
that
property
the
was
services.
effective
when
the
date
of
the
employees
lien
performed
in
the
the
employers
last
unpaid
the
employers
property
for
10
unpaid
services
but
did
not
create
any
purposes.
new
interest
in
property
for
Section
546(b)
Id.
Similarly,
here,
we
must
determine
whether
the
To determine
shall
provide
by
proper
legislation
for
giving
to
Gen.
Stat.
44A-18
(2012). 1
Under
this
law,
11
12
subdivision increase
under G.S. 44A-20.
the
liability
of
the
obligor
44A-18s
text
makes
plain
that
it
secures
an
44A-18(5).
Further, a subcontractors entitlement to a lien on funds
arises upon delivery of the materials and equipment:
For this
Gen.
Stat.
44A-18(1)
(A
See also
subcontractor
who
2012,
the
North
Carolina
legislature
amended
Section
not
control
here.
But
because
the
North
Carolina
to
clarify
existing
14
law,
to
correct
misinterpretation,
noting
that
to
or
to
overrule
determine
wrongly
whether
an
decided
amendment
cases
clarifies
and
or
when
certain
subcontractor
lien
claims
arise
to
of
the
N.C.
Gen.
Assembly,
Summaries
of
Research
Substantive
the
2012
Session
of
the
2011
General
Assembly
of
North
address
subcontractor
problems
claims
under
of
lien
the
current
upon
funds
law,
being
including
impaired
by
bankruptcy
court
decisions
that
the
North
Carolina
Shearin
Family
1076818
(Bankr.
Investments,
E.D.N.C.
LLC,
Apr.
No.
17,
08070828JRL,
2009).
Prior
2009
to
WL
these
written
in
the
future
tense:
first
lien
court held that the notice of claim of lien not only perfects
but actually creates the interest.
Id.
The
bankruptcy court and district court both held that they did, and
we agree.
16
F.2d
at
114142.
There
is
no
dispute
that
the
work
before
Carolina
law,
the
securing
the
funds
CSS
filed
for
Subcontractors
earned
as
bankruptcy.
became
entitled
result
of
44A-18(5).
And
the
Subcontractors
to
having
Under
North
lien
furnished
entitlement
to
lien
See, e.g.,
the
improvement.).
We
therefore
conclude
that
the
counters
Subcontractors
had
at
that
any
the
time
rights
CSS
filed
or
interests
the
petition
were
its
BB&T focuses
17
also
places
heavy
emphasis
on
the
phrase
[u]pon
compliance with this Article set out at the top of Section 44A18 before the statutes enumerated subsections.
According to
BB&T, that phrase must mean that no interest exists unless the
statutory notice and perfection requirements have been met.
We
The
stay
or
11
exception
continue
U.S.C.
the
for
any
act
perfection
362(b)(3),
are
to
of,
met.
perfect,
an
or
to
interest
in
We,
like
the
bankruptcy court and district court, thus hold that the Section
18
III.
For the foregoing reasons, the district courts affirmance
of the bankruptcy courts order is
AFFIRMED.