16-1233

In Re: 11 East 36th, LLC

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED

ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE

PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A

DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN

ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST

SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals

2 for the Second Circuit, held at the Thurgood Marshall United

3 States Courthouse, 40 Foley Square, in the City of New York,

4 on the 16 day of December, two thousand sixteen. th

5

6 PRESENT: DENNIS JACOBS,

7 JOSÉ A. CABRANES,

8 BARRINGTON D. PARKER,

9 Circuit Judges,

10

11 - - - - - - - - - - - - - - - - - - - -X

12 IN RE: 11 EAST 36TH, LLC,

13 Debtor,

14

15 VICTORIA GUTHRIE, 

16 Claimant-Appellant,

17

18 -v.- 16-1233

19

20 11 EAST 36TH, LLC, MORGAN LOFTS, LLC, 

21 Debtors-Appellees,

22

23 - - - - - - - - - - - - - - - - - - - -X

24

25 FOR APPELLANT: ANTHONY F. GIULIANO, Pryor &

26 Mandelup, L.L.P., Westbury, New

27 York.

28

1
1 FOR APPELLEES: JONATHAN S. PASTERNAK, DelBello

2 Donnellan Weingarten Wise &

3 Wiederkehr, LLP, White Plains,

4 New York.

5

6 Appeal from judgment of the United States District

7 Court for the Southern District of New York (Torres, J.,

8 Grossman, B.J.).

9 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED

10 AND DECREED that the judgment of the district court be

11 AFFIRMED. 

12 Victoria Guthrie appeals from the judgment of the

13 United States District Court for the Southern District of

14 New York (Torres, J., Grossman, B.J.) expunging her claim

15 and declining to consider her constructive trust argument. 

16 We assume the parties’ familiarity with the underlying

17 facts, the procedural history, and the issues presented for

18 review. We affirm the district court’s judgment because

19 Guthrie can no longer sue either in rem or in personam, and

20 because she has waived her constructive trust claim.

21 In 2007, Guthrie mortgaged a condominium and loaned the

22 proceeds to the Morgan Investment Fund, LLC (the “Morgan

23 Fund”). When the loan was about to mature, Guthrie agreed

24 to extend it if she received additional security. Avi

25 Bobker, who managed the Morgan Fund, arranged for several

26 other entities controlled by his family to sign pledge

2
1 agreements putting up collateral in exchange for the loan

2 extension. One entity that signed a pledge agreement was 11

3 East 36th, LLC (“11 East”). 11 East had a 100% interest in

4 an entity called Morgan Lofts, LLC (“Morgan Lofts”), and

5 Morgan Lofts in turn owned several condominium units. 11

6 East pledged its ownership interest in Morgan Lofts as

7 security for the Morgan Fund’s debt to Guthrie, and Avi

8 Bobker filed a UCC financing statement for the pledge on

9 Guthrie’s behalf. 11 East received no benefit from the

10 transaction.

11 A few years later, 11 East and Morgan Lofts have both

12 entered bankruptcy, and Guthrie has filed a Proof of Claim.

13 However, the bankruptcy court discovered that the financing

14 statement was inconsistent with the pledge: the financing

15 statement described the collateral as the apartments Morgan

16 Lofts owned, but the collateral pledged was actually 11

17 East’s ownership interest in the Morgan Lofts entity itself.

18 The bankruptcy court found that the financing statement was

19 "seriously misleading," that it was therefore ineffective to

20 perfect Guthrie's security interest, and that Guthrie’s

21 resulting unperfected claim was avoided under 11 U.S.C. §

22 544(a). She was left with no claim whatsoever, and the

23 district court affirmed. 

3
1 Guthrie does not appeal the holdings that the UCC

2 statement was materially misleading, that her claim was

3 therefore unperfected, or that it was properly avoided under

4 the Bankruptcy Code. Her argument on appeal is that her

5 claim should have been allowed to persist as an unsecured

6 claim, rather than being expunged. 

7 As Guthrie concedes, she never had a right to sue 11

8 East in personam for the debt owed to her by the Morgan

9 Fund; and the bankruptcy court avoided her right to proceed

10 in rem against the collateral (11 East’s interest in Morgan

11 Lofts). Guthrie has failed to persuade us that any other

12 claim against the bankruptcy estate remains, and we decline

13 to look for one. Since 11 East received no benefit from its

14 pledge to Guthrie, and in the absence of a clear right to a

15 claim, she has failed to show why she should share, pari

16 passu, with the other unsecured creditors of 11 East. Even

17 if we could posit some sort of non-in rem, non-in personam

18 claim, it is difficult to see how the bankruptcy court could

19 (other than by speculation) determine the dollar value of

20 Guthrie’s claim, given uncertainty as to whether the Morgan

21 Fund will default, whether the other pledging entities can

22 pay, and whether the starting point for the value of a claim

23 should be the value of the Morgan Fund’s debt or the value

24 of 11 East’s interest in Morgan Lofts, whatever that may be.

4
1 The district court had discretion to address Guthrie’s

2 constructive trust claim despite her failure to raise it

3 before the bankruptcy court. Davis v. Shah, 821 F.3d 231,

4 246 (2d Cir. 2016). It did not abuse its discretion by

5 declining to do so: the factual predicates for a

6 constructive trust claim are disputed, and there is no

7 manifest injustice in holding that she has waived her claim.

8 Id.

9 For the foregoing reasons, and finding no merit in the

10 parties’ other arguments, we hereby AFFIRM the judgment of

11 the district court. 

12

13

14 FOR THE COURT:

15 CATHERINE O’HAGAN WOLFE, CLERK

16

5