In Re Hunters Run Limited Partnership, Debtor. Miner Corporation, and John Hand, Dba/sunny Day Cement Company v. Hunters Run Limited Partnership

John Hand, d/b/a Sunny Day Cement Co. (“Hand”), appeals the district court’s order concluding that Hand’s Washington state mechanic’s lien had expired during pending bankruptcy court proceedings. We hold that 11 U.S.C. § 108 (c) tolled the statutory enforcement period governing Hand’s lien, reverse and remand.

I

FACTS

On March 11, 1986, the subject property was conveyed to Hunters Run Limited Partnership (“Hunters Run”). On March 12, 1986, Hunters Run filed its petition for relief under Title XI U.S.C. Ch. 11. Thereafter, the subject property was sold pursuant to an order of the bankruptcy court. Under this order, the property was sold free and clear of liens and encumbrances. All liens were transferred to the proceeds of the sale, with validity and priority to be determined at a later date. Hunters Run objected to Hand’s lien claim on the ground that it had expired under Washington law.

Following hearings on Hunters Run’s Application for Determination of Validity and Priority of Liens, the bankruptcy court ruled in a published opinion that Hand’s lien against the property ceased to exist when the eight-month statute of duration in RCW 60.04.100 expired without action by Hand…