NOT FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
In re: 450 S. WESTERN AVE., LLC,

Debtor,

______________________________ PHILMONT MANAGEMENT, INC.,

Appellant,
v. 450 S. WESTERN AVE., LLC,

Appellee. No. 21-60060 BAP No. 21-1116
MEMORANDUM *

Appeal fromthe Ninth Circuit Bankruptcy Appellate Panel Lafferty III, Faris, and Spraker, Bankruptcy Judges, Presiding Argued and Subm itted Novem ber 15, 2022 Pasadena, California Before: NGUYEN and H.A. THOMAS, Circuit Judges, and FITZWATER, * * District Judge. 

# FILED
APR 10 2023 M OLLY C. DWYER, CLERK U.S. COURT OF APPEALS

* This disposition is not appropriate for publicat io n an d is not precedent except as provided by Ninth Circuit Rule 36-3.

* * The Honorable Sidney A. Fitzwater, United States District Judge for the Northern District of Texas, sitting by designation.Philmont M anagement, Inc
. (“Philmont” ) a ppe als a judgm ent of the B ankruptcy Appellate Panel (“BAP”) 1 affirming a b ankruptcy c ourt order dismissing under Federal Rule of Civil Procedure 12(b)(6) Philm ont’s adversary complaint seeking a determination of the validity, priority, or e xtent of Philm ont’s m echanic’s lien on real property o f ch ap t er 11 debtor 450 S. Western Ave., LLC (the “Debtor”), located in Los Angeles, California. 2 We have jurisdiction under 28 U.S.C. § 158(d)(1), and we vacate and remand. “We review decisions of the BAP de novo and apply the same s t andard of review that the BAP applied to the bankruptcy court’s ruling.” Boyajian v. New Falls Corp. ( In re Boyajian ), 564 F.3d 1088, 1090 (9th Cir. 2009). We independently review the bankruptcy court’s rulings on appeal from the BAP “without according any deference to the BAP.” Salazar v. McDonald ( In re Salazar), 430 F.3d 992, 994 (9th Cir. 2005). We review de novo a dismi s sal under Federal Rule of Civil Procedure 12(b)(6). Tracht Gut, LLC v. L .A. Cnty. Treasurer & Tax C ollector ( In re Tracht Gut), 836 F.3d 1146, 1150 (9th Cir. 2016). We review the denial of leave to am end for abuse of discretion. Id
.

1 Philmont Mgmt., Inc. v. 450 S.W. Ave., LLC ( In re 450 S.W. Ave., LLC ), 633 B.R. 894 (B.A.P. 9th Cir. 2021), aff’g 2021 WL 2528426 (Bankr. C.D. Cal. May 10, 2021).
2 R ule 12(b)(6) i s a

pplicable via Federal R

ule of Bankruptcy Proc e dure 7012(b). - 2 -1. The bankruptcy court first based its dism issal order on the conclusion that

Philm ont’s m e chanic’s lien was invalid because it was not recorded within 9 0 days
o f co m pletion of the work, as C alifornia C ivil Code § 8412 requires, and that Philm ont failed to sufficient ly allege facts to support its theory that the Debtor was equitably estopped fromchallenging the tim eliness of Philm ont’s lien. Philm ont alleged in its com plaint that: (1 ) i t b i l led more than $1.8 million in labor and m aterials for tenant im provem ents to the Debtor’s p r o p erty; (2) when the Debtor failed to pay as promised, Philm ont tim ely recorded a m echanic’s lien on July 18, 2018; (3) over the next 18 m onths or so, the Debtor repeatedly reassured Philm ont that the am ount due under the mechanic’s lien would be paid; (4) the D ebtor inform ed Philm ont that it was com pleting a refinan ce of the property, and Philm ont’s
m echanic’s lien would be paid as part of that transaction; (5) the Debtor requested that Phil m o nt n o t file a lawsuit to perfect its m echanic’s lien because doing so would create a cloud on title and potentially jeopardize the pending refinance; (6) the Debtor and Philm ont understood that Philm ont would sim ply re-record its mechanic’s lien if not paid from the im

pending refinance within 90 days o f the original recording and that the Debtor would not claim that the successive liens were untim ely; (7) Philm ont relied on the Debtor’s representations and prom ises in not comm encing an action to foreclose its m echanic’ s l i en , and instead re-recorded its m echanic’s lien four tim es
- 3 -between June 2018 and Decem ber 2019; (8) Philm ont’s m ultiple recordings of its
m echanic’s lien were consistent with the parties’ understanding, so the Debtor did not
o b j ect ; ( 9 ) the Debtor continued to assure Philm ont that its lien would be paid from the refinance, but that the process required more tim e; and (10) in reasonable reliance
on the Debtor’s representations and prom ises, Philm ont reco r d ed its fifth and final
m echanic’s lien on Decem ber 19, 2019 for the outstanding sum due from the Debtor (which now exceeded $2.3 millio n )
. On January 10, 2020, the Debtor filed a voluntary chapter 11 bankruptcy petition. The bankruptcy court was required to accept th es e factual allegations as true and construe them in the light m ost favorable to Philm ont as the nonm oving party, Skilstaf, Inc. v. CVS Caremark Corp. , 669 F.3d 1 0 0 5 , 1014 (9th Cir. 2012), and to draw all reasonable inferences in favor of Philm ont, Usher v. City of Los A ngeles , 828 F.2d 556, 561 (9th C ir. 1987). We ho l d th at , when viewed under these standards, Philm ont’s com

plaint pleaded a plausible equitable estoppel theory that excused it from tim ely re-recording its m echanic’s lien within 90 days of the com pletion of the work. See Holdgrafer v. Unocal Corp. , 160 Cal. App. 4th 907, 925-27 (2008); Lantzy v. Centex Homes , 73 P.3d 517, 532-34 (Cal. 2003). 2. The second basis for the bankruptcy court’s dismissal order was that, even if Philm ont could allege sufficient facts to support a reasonable inference of equitable
- 4 -estoppel, Philm ont’s failure to allege that it tim ely r eco r d ed a notice of perfection

un der § 546(b) of the Bankruptcy Code required dismissal. According to the bankruptcy court, “[e] ven if the Court were to overlook the unt i m el iness of the Decem ber 19, 2019 lien, dismissal would still be required because Philm ont has not alleged—and c annot allege—that it tim ely provided the notice necessary to maintain the perfection of its lien as required by § 546(b).” But Philm ont was not required to give notice under 11 U.S.C. § 546(b)(2), so the bankruptcy court erred in holding that Philm ont’s m echanic’s lien was unenforceable and dismissing its adversary co mp l aint with prejudice. Section 546(b)(2) of the B ankruptcy Code provides, in pert i n ent part, that when a law described in § 546(b)(1) requires co mmen cement of an action to accom plish perfection or m aintenance or continuation of perfection of an interest in property and th at action has not been comm enced prior to the bankruptcy petition, the interest in property shal l be perfected, or the perfection of the interest shall be m aintained or continued, by giving notice within the tim e fixed by law f o r such comm encement. Section 8460(a) of the California Civil Code provides that “[t] he claim ant s h all
comm ence an action to enforce a lien within 90 days after recordation of the claim of lien. If the claim ant does not c omm ence an action to enforce the lien within that tim e, th e cl ai m of lien expires and is unenforceable.” The bankruptcy c ourt held that, in
- 5 -com

bination, § 8 4 60(a) of the California Civil Code and § 546(b)(2) of the Bankruptcy Code required that Philm ont give notice within 90 days of Decem ber 19, 2019—that is, by M ar ch 1 8, 2 020. And because Philm ont did not give notice until April 29, 2020, its Decem ber 19, 2019 m echanic’s lien expired and is unenforceable under § 8460(a). But the foreclosure action that § 8460(a) of the California C ivil Code requires is one of lien enforcem ent, not of p er fection or m aintenance or continuation of perfection; therefore, the notice provision of § 546(b)(2) does not apply. See Miner Corp. v. Hunter

s Run Ltd. P ’Ship (

In re Hunters Run Ltd. P’ship ), 875 F.2d 1425, 1428 (9th Cir. 1989); Pioneer C onstr., Inc. v. Glob. Inv. C orp. , 202 Cal. App. 4th 161, 167-68 (2011). 3 Instead, if the holder of a m echanic’s lien is required under § 8460(a) to c omm ence an action to enforce the lien and the autom atic stay is in effect, § 108(c) of the Bankruptcy Code operates to toll the 90-day deadline to commence the action. See In re Hunters R un Ltd. P’ship , 875 F.2d at 1428; Pioneer Constr., Inc. , 202 Cal. App. 4th at 167-68 (2011). Accordingly, we vacate the BAP’s judgm ent and rem and with instructions to the BAP to rem and this adversary proceeding to the bankruptcy

3 While Debtor cites to In re Baldwin Builders , 232 B.R. 406 (B.A.P. 9th Cir. 1999), we conclude that this case is controlled by In re Hunters Run
. - 6 -court for further proceedings consistent with this disposition.

VACATED and REMANDED.

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