All-Tex, Inc. v. Branford Partners, LLC (In Re Branford Partners, LLC)

MEMORANDUM

We have jurisdiction to review the decision of the Bankruptcy Appellate Panel under 28 U.S.C. § 158 , and we affirm.

Branford Partners, LLC, was not required to plead in a separate adversary proceeding its avoidance powers under 11 U.S.C. § 544 and § 545 as a defense to All-Tex, Inc.’s alleged liens and interests in the property, and the bankruptcy court properly treated Branford’s motion to dismiss as a motion for summary judgment. See Fed. R. Bankr.P. 7001, 7012, 7056; Chbat v. Tleel (In re Tleel), 876 F.2d 769, 770 (9th Cir.1989); Grove v. Mead Sch. Dist. No. 354, 753 F.2d 1528 , 1532-33 (9th Cir.1985).

A bona fide purchaser under California law would not have had constructive or inquiry notice of All-Tex’s alleged liens and interests in the property because All-Tex did not record its interests in the title record, did not file a lis pendens, and did not have clear and open possession of the property in a manner that contradicted record title. See, e.g., Robertson v. Peters (In re Weisman), 5 F.3d 417, 420-21 (9th Cir.1993); Nat’l Bank of Alaska, N.A. v. Erickson (In re Seaway Express Corp.), 912 F.2d 1125, 1128-29 (9th Cir.1990); Tleel, 876 F.2d at 772 . Neither…