In Re Paul Potts Builders, Inc., Bankrupt. William B. Grover, Trustee v. The County of Marin

This is an appeal from the judgment of the United States District Court for the Northern District of California entered on July 8, 1977. The judgment reversed the March 15, 1977 order of the Bankruptcy Judge and held that the mechanic’s lien in dispute should be satisfied as a valid preference. We. note jurisdiction and affirm.

FACTS

On September 9, 1975, Bay Area Design Group (Group) filed a valid mechanic’s lien pursuant to California Civil Code § 3110 against certain real property belonging to Paul Potts Builders, Inc. Group did not commence an action to foreclose on the lien until December 9, 1975, 91 days after recor-dation of the lien. The suit was held to be untimely under California Civil Code § 3144, which prescribes a 90-day period from recordation for foreclosure of a mechanic’s lien.

On February 24, 1976, a petition for bankruptcy was filed by Paul Potts Builders, Inc. The bankrupt’s trustee William B. Grover (Trustee) moved the bankruptcy court to declare the lien void. On March 15, 1977, the bankruptcy court held that the right to the lien itself had expired because a foreclosure action was not timely brought. On June 28, 1977, the District Court reversed and held…