Document Type

Article

Publication Date

12-8-2000

Abstract

Plaintiff-appellant Ritz-Craft Corporation of PA, Inc. ("Ritz-Craft") appeals from a judgment entered in the United States District Court for the Southern District of New York (McMahon, J.) dismissing its action to declare its mechanic's lien superior to the mortgage lien of defendant-appellee National Electric Benefit Fund ("NEBF"). Ritz-Craft and NEBF are creditors of a bankrupt partnership, Nob Hill Partners III, L.P. ("NHP-III"), which was formerly engaged in developing a section of an apartment complex in Elmsford, New York. NEBF was the construction lender for the project, while Ritz-Craft manufactured, delivered, and erected one-hundred and twenty modular housing units for NHP-III. Neither NEBF nor Ritz-Craft has been paid in full by NHP-III; both have filed liens against NHP-III's real property.

In May of 1998, Ritz-Craft commenced an adversary proceeding in which it claimed that its lien was superior to NEBF's lien. Ritz-Craft's claim was based on the assertion that NEBF had filed a materially false affidavit in connection with its construction loan, entitling Ritz-Craft's lien to priority over NEBF's lien. On May 28, 1999, the United States Bankruptcy Court for the Southern District of New York (Hardin, Bankr.J.) granted summary judgment in favor of Ritz-Craft after finding that NEBF's affidavit was materially false, and that its false filing subjected it to the penalty of subordination under New York's Lien Law. See Ritz-Craft Corp. of PA, Inc. v. National Educ. Benefit Fund (In re Elm Ridge Assocs.), 234 B.R. 349, 355-56 (Bankr.S.D.N.Y.1999) ("Ritz-Craft I"). On November 19, 1999, the United States District Court for the Southern District of New York reversed the bankruptcy court's judgment and dismissed Ritz-Craft's claim, the district court having found that NEBF's Lien Law affidavit was not materially false. See Ritz-Craft Corp. of PA, Inc. v. National Electrical Benefit Fund (In re Elm Ridge Assocs.), 241 B.R. 321, 330 (S.D.N.Y.1999) ("Ritz-Craft II").

For the reasons that follow, we affirm the judgment of the district court.

Comments

234 F.3d 114 (2000)

In re ELM RIDGE ASSOCIATES, Elm Ridge Associates, II, Nob Hill Partners III, L.P., Debtors, Ritz-Craft Corporation of PA, Inc., Plaintiff-Appellant,

v.

National Electric Benefit Fund, Defendant-Appellee.

Docket No. 00-5001.

United States Court of Appeals, Second Circuit. August Term, 2000.

Argued: September 18, 2000.

Decided: December 8, 2000.

New York Law School location: File #2876, Box #142

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