Greenville Plaza v. Corp. Real Est. ( 1998 )


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  •                                                     Filed:   May 20, 1998
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 96-2200
    (CA-96-1745-6-20, BK-95-71435-B)
    Greenville     Plaza      Investors       Limited
    Partnership,
    Plaintiff - Appellee,
    versus
    Corporate Real Estate Service, etc.,
    Defendant - Appellant.
    O R D E R
    The Court amends its opinion filed May 11, 1998, as follows:
    On page 3, first paragraph, lines 6-7 -- the word "identify"
    is corrected to read "identi ty."
    For the Court - By Direction
    /s/ Patricia S. Connor
    Clerk
    UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    In Re: GREENVILLE PLAZA INVESTORS
    LIMITED PARTNERSHIP,
    Debtor.
    GREENVILLE PLAZA INVESTORS
    LIMITED PARTNERSHIP,
    Plaintiff-Appellee,                                  No. 96-2200
    v.
    CORPORATE REAL ESTATE SERVICE,
    INCORPORATED, formerly known as
    The Webb-Stevenson Company,
    d/b/a Plaza Executive Suites,
    Defendant-Appellant.
    Appeal from the United States District Court
    for the District of South Carolina, at Greenville.
    Henry M. Herlong, Jr., District Judge.
    (CA-96-1745-6-20, BK-95-71435-B)
    Submitted: April 15, 1998
    Decided: May 11, 1998
    Before WIDENER and MOTZ, Circuit Judges, and
    HALL, Senior Circuit Judge.
    _________________________________________________________________
    Affirmed by unpublished per curiam opinion.
    _________________________________________________________________
    COUNSEL
    Charles Benjamin Patterson, ARRINGTON, HOLLOWELL & PAT-
    TERSON, L.L.P., Greenville, South Carolina, for Appellant. Helen
    Elizabeth Burris, NEXSEN, PRUET, JACOBS & POLLARD, L.L.P.,
    Greenville, South Carolina, for Appellee.
    _________________________________________________________________
    Unpublished opinions are not binding precedent in this circuit. See
    Local Rule 36(c).
    _________________________________________________________________
    OPINION
    PER CURIAM:
    Corporate Real Estate Services, Inc., (Corporate) appeals from the
    district court's order affirming the bankruptcy court's order granting
    summary judgment in favor of Greenville Plaza Investors (Greenville)
    avoiding a lease between the parties pursuant to 
    11 U.S.C. §§ 544
    (a),
    550 (1994) and 
    S.C. Code Ann. §§ 30-7-10
    , 27-33-30 (Law. Co-op
    1976). Corporate contends that the bankruptcy court erred by (1) fail-
    ing to apply the appropriate federal and state law in reaching its deci-
    sion; (2) failing to address its counterclaim; and (3) failing to take into
    consideration Greenville's discovery abuses. For the reasons that fol-
    low, we affirm.
    Greenville, a South Carolina limited partnership, filed a petition
    under Chapter 11 of the Bankruptcy Code on March 20, 1995. Its pri-
    mary asset was real estate known as Nationsbank Plaza in Greenville,
    South Carolina. Corporate claimed a possessory interest in the prop-
    erty based on a lease agreement (Agreement) dated March 31, 1994,
    and amended on March 1, 1995. The Agreement purports to grant a
    leasehold interest in Nationsbank Plaza to Corporate from June 1,
    1994, through August 31, 1997. Neither the Agreement nor the
    Amendment were recorded prior to Greenville's filing of its bank-
    ruptcy petition.
    2
    Greenville sought to avoid the lease under 
    S.C. Code Ann. §§ 30
    -
    7-10, 27-33-30, which provide that if a document evidencing a lease-
    hold interest in real estate for a period of longer than twelve months
    is not recorded it is invalid and unenforceable against certain bona
    fide purchasers and/or subsequent creditors. Under 
    11 U.S.C. § 544
    (a)
    (the "strong-arm" clause), a trustee in bankruptcy may take the iden-
    tity of a hypothetical entity that could, under state law, defeat a
    claimed interest in the debtor's property.* Greenville, as debtor in
    possession, has the same rights and powers as a trustee. See 
    11 U.S.C. § 1107
    (a) (1994).
    Section 544(a)(3) confers upon the trustee the rights of a bona fide
    purchaser when, as in this case, real property is at issue. The extent
    of the trustee's strong arm powers is defined by the law of the state
    where the property is located. See 4 Lawrence P. King, Collier on
    Bankruptcy, ¶ 544.02 at 544-5, 544-14 (1996). Contrary to Corpo-
    rate's assertions, the bankruptcy court and the district court properly
    applied South Carolina law to determine that the Agreement was sub-
    ject to avoidance under § 544(a)(3). See 
    S.C. Code Ann. § 30-7-10
    (providing that a leasehold interest in real estate for a period greater
    than twelve months is invalid and unenforceable against certain bona
    fide purchasers and/or subsequent creditors without notice); In re
    Kitchin Equip. Co. of Virginia, Inc., 
    960 F.2d 1242
    , 1245 (4th Cir.
    1992) ("a debtor in possession, without regard to any knowledge, is
    empowered to avoid any transfer of property of the debtor or any obli-
    gation of the debtor that is voidable by a hypothetical lien creditor").
    _________________________________________________________________
    * Section 544(a)(3) provides that:
    (a) The trustee shall have, as of the commencement of the case,
    and without regard to any knowledge of the trustee or of any
    creditor, the rights and powers of, or may avoid any transfer of
    property of the debtor or any obligation incurred by the debtor
    that is voidable by--
    ...
    (3) a bona fide purchaser of real property, other than fix-
    tures, from the debtor, against whom applicable law permits
    such transfer to be perfected, that obtains the status of a bona
    fide purchaser and has perfected such transfer at the time of
    the commencement of the case, whether or not such a pur-
    chaser exists.
    3
    Corporate next claims that the bankruptcy court erred by failing to
    address its counterclaims in ruling on Greenville's motion for sum-
    mary judgment. However, as the district court properly found, Corpo-
    rate failed to raise these counterclaims at the hearing on Greenville's
    motion for summary judgment. And, in any event, none of Corpo-
    rate's counterclaims were supported by the record.
    Finally, Corporate contends that the bankruptcy court failed to take
    into account alleged discovery abuses committed by Greenville. Spe-
    cifically, Corporate claims that Greenville delayed producing certain
    documents and scheduling of depositions that it needed to adequately
    oppose Greenville's summary judgment motion. Even assuming that
    Corporate's allegations are true, Corporate is precluded from arguing
    that inadequate discovery made summary judgment inappropriate
    because it did not submit an affidavit informing the district court that
    additional discovery was necessary for it to respond to Greenville's
    summary judgment motion. See Fed. R. Civ. P. 56(f); see also Evans
    v. Technologies Applications & Serv. Co., 
    80 F.3d 954
    , 961 (4th Cir.
    1996) (holding that on appeal, a party must have submitted a Rule
    56(f) affidavit in order to argue that summary judgment was inappro-
    priate because of inadequate discovery).
    Accordingly, we affirm.
    AFFIRMED
    4
    

Document Info

Docket Number: 96-2200

Filed Date: 5/20/1998

Precedential Status: Non-Precedential

Modified Date: 4/18/2021