Opinion
Case No. 19-56885 (Jointly Administered)
2023-09-29
IN RE: MURRAY ENERGY HOLDINGS CO., et al., Debtors.
Brenda K. Bowers, Tiffany Strelow Cobb, Columbus, OH, Benjamin Butterfield, Todd Goren, Lorenzo Marinuzzi, Jennifer Marines, Erica Richards, Allison B. Selick, Morrison & Foerster LLP, New York, NY, Melissa S. Giberson, Vorys, Sater, Seymour and Pease LLP, Columbus, OH, for Creditor Committee Official Committee of Unsecured Creditors. Melissa S. Giberson, Thomas Loeb, Vorys, Sater, Seymour and Pease LLP, Columbus, OH, for Creditor Committee Pre-Effective Date Official Committee of Unsecured Creditors. Roma N. Desai, Bernstein Shur Sawyer & Nelson PA, Portland, ME, for Special Counsel. Jeremy Shane Flannery, Office of the United States Trustee, Columbus, OH, Monica V. Kindt, John W. Peck Federal Building, Cincinnati, OH, Benjamin A. Sales, Office of the United States Trustee, Cincinnati, OH, for U.S. Trustee. Scott Alan Norcross, Kohrman Jackson & Krantzm, Cleveland, OH, for Respondent Gary D. Underdahl, Kara E Casteel, Ask LLP, Eagan, MN, Travis Bayer, Dinsmore & Shohl, Cincinnati, OH, for Debtor In Possession.
Brenda K. Bowers, Tiffany Strelow Cobb, Columbus, OH, Benjamin Butterfield, Todd Goren, Lorenzo Marinuzzi, Jennifer Marines, Erica Richards, Allison B. Selick, Morrison & Foerster LLP, New York, NY, Melissa S. Giberson, Vorys, Sater, Seymour and Pease LLP, Columbus, OH, for Creditor Committee Official Committee of Unsecured Creditors. Melissa S. Giberson, Thomas Loeb, Vorys, Sater, Seymour and Pease LLP, Columbus, OH, for Creditor Committee Pre-Effective Date Official Committee of Unsecured Creditors. Roma N. Desai, Bernstein Shur Sawyer & Nelson PA, Portland, ME, for Special Counsel. Jeremy Shane Flannery, Office of the United States Trustee, Columbus, OH, Monica V. Kindt, John W. Peck Federal Building, Cincinnati, OH, Benjamin A. Sales, Office of the United States Trustee, Cincinnati, OH, for U.S. Trustee. Scott Alan Norcross, Kohrman Jackson & Krantzm, Cleveland, OH, for Respondent Gary D. Underdahl, Kara E Casteel, Ask LLP, Eagan, MN, Travis Bayer, Dinsmore & Shohl, Cincinnati, OH, for Debtor In Possession. MEMORANDUM OPINION AND ORDER (A) GRANTING IN PART AND DENYING IN PART PLAN ADMINISTRATOR'S MOTION FOR SUMMARY JUDGMENT SUSTAINING THE FIRST OMNIBUS OBJECTION TO CERTAIN MECHANIC'S LIEN CLAIMS OF GMS MINE REPAIR & MAINTENANCE, INC. (Doc. 2402) and (B) GRANTING IN PART AND DENYING IN PART GMS'S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT (Doc. 2435) John E. Hoffman, Jr., United States Bankruptcy Judge
I. Introduction
Murray Energy Holdings Co. and its affiliated debtors and debtors in possession ("Debtors") initiated this contested matter by filing an objection (Doc. 1749) to the mechanic's lien claims of GMS Mine Repair & Maintenance, Inc. ("GMS"). The plan administrator appointed under the Debtors' confirmed Chapter 11 plan ("Plan Administrator") then filed its motion for summary judgment on the claim objection ("Motion") (Doc. 2402), and GMS filed a cross-motion for summary judgment ("Cross-Motion") (Doc. 2435). For the reasons stated below, the Motion and the Cross-Motion are granted in part and denied in part.
II. Jurisdiction and Constitutional Authority
The Court has jurisdiction to hear and determine this matter under 28 U.S.C. § 1334(b) and the general order of reference entered in this district in accordance with 28 U.S.C. § 157(a). An action seeking the allowance or disallowance of claims against the estate is a core proceeding, see 28 U.S.C. § 157(b)(2)(B), as is the determination of the validity, extent, or priority of liens, see 28 U.S.C. § 157(b)(2)(K). "To the extent [a] matter involves a determination of the validity, extent and priority of liens on property of the estate and claims against such property, the matter 'would necessarily be resolved in the claims allowance process,' " BMO Harris Bank, N.A. v. Vista Mktg. Grp., Ltd. (In re Vista Mktg. Grp., Ltd.), 548 B.R. 502, 512 (Bankr. N.D. Ill. 2016) (quoting Stern v. Marshall, 564 U.S. 462, 499, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011)), and a bankruptcy court therefore would have the constitutional authority to finally adjudicate it. See Waldman v. Stone, 698 F.3d 910, 919 (6th Cir. 2012) ("When a debtor . . . seeks disallowance of a creditor's claim against the estate . . . the bankruptcy court's authority is at its constitutional maximum."); Black Diamond Comm. Fin. L.L.C. v. Murray Energy Corp. (In re Murray Energy Holdings Co.), 616 B.R. 84, 87 (Bankr. S.D. Ohio 2020) ("[B]ankruptcy courts have the constitutional authority to enter final orders adjudicating the validity and priority of liens on property of the estate."). The Court accordingly has the constitutional authority to finally adjudicate this contested matter.
III. Background
GMS's proofs of claim that are the subject of this opinion are based on the mechanic's liens it filed in West Virginia. Mechanic's liens are "statutory lien[s] secured by real or personal property, often for goods or services supplied in connection with improving, repairing or maintaining the property." In re Murray Energy Holdings Co., 639 B.R. 463, 467 (Bankr. S.D. Ohio 2022) ("WV-Eligibility Opinion"). This is not the first time these claims have been before the Court. The Court previously issued its WV-Eligibility Opinion, which addressed the secured status of GMS's claims and those of other creditors that asserted claims based on their West Virginia's mechanic's liens. See WV-Eligibility Op., 639 B.R. at 463. In the WV-Eligibility Opinion, the Court considered whether GMS and the other mechanic's lien claimants were eligible to file mechanic's liens under West Virginia's laborer's lien statute, W.Va. Code § 38-2-31 (West 2023) ("Section 31"), or were required, as the Plan Administrator contended, to file their mechanic's liens under West Virginia's contractor's lien statute, W.Va. Code § 38-2-1, which they failed to do.
The Court granted partial summary judgment to GMS and the other mechanic's lienholders on the eligibility issue, holding that they had a right to file mechanic's liens under the laborer's lien statute. Id. at 490. But the Court held that Section 31 provides lien priority to a mechanic's lienholder that files under that statute only "to the extent and value of one month's . . . work or labor" and that another West Virginia statute, W. V. Code § 38-2-33 ("Section 33"), requires mechanic's lienholders to set forth in their notices of lien the one-month amounts for which they claim priority. Id. at 485-87. The Court found that GMS had not properly shown its one-month amount and thus deferred a ruling as to what portion of GMS's claim had priority status vis-à-vis later filed liens until GMS had the opportunity to comply with the directives the Court set forth in the WV-Eligibility Opinion. Id. at 489-90.
Ordinarily, when a bankruptcy court uses the phrase "priority status," it does so to denote that a particular unsecured claim or expense is entitled to priority in payment under § 507 of the Bankruptcy Code. See 11 U.S.C. § 507. Here, however, the Court uses the phrase priority status to refer to the priority that Section 31 grants a mechanic's lienholder over a later-filed lien to the extent of one month's work or labor. And when the Court finds that all or part of an amount on a GMS invoice is entitled to priority status, that amount may be included in calculating the allowed amount of GMS's related secured claim.
In the WV-Eligibility Opinion, the Court found that
Claims 2502, 2507, 2547, 2558 and 2560: Claims 2502, 2547 and 2558 each contain one Notice of Lien. Claim 2507 contains two Notices of Lien, which are identical but are filed in different counties. Claim 2560 also contains two identical Notices of Lien filed in different counties. All claims include an accounts receivable aging report containing a chronological listing of invoices covering work performed over several months. While the reports show multiple invoices listed within each month, there are no actual invoices attached to the Notices of Lien and thus it is impossible to determine whether any particular invoice covered a span of more than one month.WV-Eligibility Opinion, 639 B.R. at 488. The Court then directed GMS to set forth its one-month priority amounts for each proof of claim:
GMS shall determine which one-month's work it wishes to claim as priority for each Notice of Lien within these claims, locate the invoices or other documentation evidencing that work, and calculate the total of that month's work. GMS shall provide the documentation, calculations and priority amount claimed to [the Plan Administrator] within 30 days of the date of the entry of the order accompanying this opinion. [The Plan Administrator] shall then have 30 days within which to file any objection to the documentation, calculations, and the claimed amounts. If no objection is filed, that one-month amount calculated by GMS for each Notice of Lien will be allowed as a secured claim with priority over any subsequent lien. But GMS will have a priority claim for only one of the two identical liens filed in separate counties in Claim Nos. 2507 and 2560. The remaining amount of each claim will be reclassified and allowed as a general, unsecured claim.Id.
In response to the WV-Eligibility Opinion, GMS filed its Notice by GMS Mine Repair & Maintenance, Inc. of One Month Priority Amounts for Proofs of Claim No. 2502, 2507, 2547, 2558, and 2560 Pursuant to the Opinion and Order Entered March 31, 2022 ("Priority Notice") (Doc. 2937). The Plan Administrator then filed its objection to the Priority Notice ("Objection") (Doc. 2956).
IV. The Parties' Positions
A. The Priority Notice
The Priority Notice consists of the proof of claim numbers along with the one-month total claimed for each, the grand total claimed and five attached exhibits (one for each numbered proof of claim), each of which was accompanied by a number of invoices. GMS's Priority Notice is barebones and not accompanied by any argument, explanation, declaration or affidavit.
The proofs of claim are attached to the Motion as Exhibits C through G.
GMS set forth the one-month priority amount it seeks for each claim as follows:
Proof of Claim 2502 - Monongalia County Coal Company | $260,932.58 |
Proof of Claim 2507 - Ohio County Coal Company | $812,123.24 |
Proof of Claim 2547 - Marion County Coal Company | $359,588.77 |
Proof of Claim 2558 - Marshall County Coal Company | $193,915.74 |
Proof of Claim 2560 - Harrison County Coal Company | $231,736.93 |
Total: | $1,858,297.26 |
B. The Objection
The Plan Administrator objects to the Priority Notice on the ground that GMS "fail[ed] to establish that the priority amounts claimed are indicative of 'one-month's work' as limited by W. Va. Code 38-2-31." Obj. at 2. According to the Plan Administrator, the Priority Notice does not explain how GMS calculated its one-month priority amounts and does not reflect work done within the claimed month. Id. at 3. Thus, it argues that GMS has failed to establish "that its one-month amount designations properly reflect one-month's work entitled to priority under [Section 31]." Id. To illustrate its point, the Plan Administrator attaches five tables to its Objection. See Obj., Doc. 2956-1, Tables 1-5.
V. Legal Analysis
A. Summary Judgment Standard
Under Federal Rule of Civil Procedure 56, made applicable in this matter by Rule 7056 of the Federal Rules of Bankruptcy Procedure, a court "shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "On a motion for summary judgment, facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts." Ricci v. DeStefano, 557 U.S. 557, 586, 129 S.Ct. 2658, 174 L.Ed.2d 490 (2009) (cleaned up). "A dispute is 'genuine' only if based on evidence upon which a reasonable [finder of fact] could return a [judgment] in favor of the non-moving party." Gallagher v. C. H. Robinson Worldwide, Inc., 567 F.3d 263, 270 (6th Cir. 2009). And a "factual dispute concerns a 'material' fact only if its resolution might affect the outcome of the suit under the governing substantive law." Id.
As stated above, the Plan Administrator and GMS have filed cross-motions for summary judgment. When parties do so,
[e]ach party, as a movant for summary judgment, bears the burden of establishing that no genuine issue of material fact
exists and that he or she is entitled to judgment as a matter of law. The fact that one party fails to satisfy that burden on his or her own Rule 56 motion does not automatically indicate that the opposing party or parties has satisfied the burden and should be granted summary judgment on the other motion.Fed. Energy Regul. Comm'n v. Coaltrain Energy, L.P., 501 F. Supp. 3d 503, 522 (S. D. Ohio 2020).
The Court previously granted summary judgment in favor of GMS on the issue of its eligibility to file notices of lien under Section 31. The question presented here is whether either party is entitled to summary judgment on the issue of GMS's compliance with Section 33 such that its one-month claims are entitled to priority status. In addition, in the Cross-Motion, GMS seeks a ruling that Section 31 does not reduce or otherwise limit in any way the amount or extent to which its liens are entitled to priority status.
B. Analysis of the Parties' Positions
Section 33 requires that the one-month priority amount be set out separately in any Notice of Lien. Under West Virginia law, "one-month means a calendar month," West Virginia Code § 2-2-4, and a calendar month "runs from a given day in one month to a day of the corresponding number in the next month, except where the last month has not so many days, in which event it expires on the last day of that month." WV-Eligibility Op., 639 B.R. at 478 (quoting Bank of Union v. Baird, 72 W.Va. 716, 79 S.E. 738, 739 (1913)). Because GMS failed to attach actual invoices to its notices of lien, it was "impossible [for the Court] to determine whether any particular invoice covered a span of more than one month." Id. at 488. GMS has now submitted invoices, but those invoices are unclear in several respects. Many of the invoices list only the date the invoice was generated but contain no information regarding the time span covered by the invoice. While some invoices contain a date range within the priority month claimed by GMS, other invoices contain, in small print in the lower left corner, a range of dates that fall on one side or the other of the date range for which GMS is seeking priority treatment. And GMS offered no documentary evidence or declaration testimony to show that the amount sought in the invoice has been adjusted to reflect only work done within the claimed month.
The Plan Administrator provided a table with explanatory notes, copied below, for each GMS claim. The Court reviewed each invoice listed in the tables and confirms that the Plan Administrator's characterization of the invoices is correct, except as otherwise noted in the Court's footnoted changes. The highlighting found in each table is in the original. The pink, or darker, highlighting denotes invoices for which there are one or more days outside the claimed month. The yellow or lighter, highlighting denotes invoices that contain no dates. The lines with no highlighting reflect that all work invoiced was performed within the claimed month. The tables begin on the next page.
Table 1: Claim 2502
GMS Claimed Month: 7/13/2019-8/11/2019
Invoice | Amount | Invoice Date | Date Range Start | Date Range End | Days Covered in Invoice | Days Outside Claimed Month |
|---|---|---|---|---|---|---|
[Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] |
187842 | $5,749.64 | 7/26/2019 | 7/15/2019 | 7/21/2019 | 7 | 0 |
188016 | $5,864.73 | 8/1/2019 | 7/22/2019 | 7/28/2019 | 7 | 0 |
188070 | $24,999.88 | 7/31/2019 | Unlisted | Unlisted | Unknown | Unknown |
188401 | $15,027.00 | 8/14/2019 | Unlisted | Unlisted | Unknown | Unknown |
188402 | $15,027.00 | 8/14/2019 | Unlisted | Unlisted | Unknown | Unknown |
188403 | $15,027.00 | 8/14/2019 | Unlisted | Unlisted | Unknown | Unknown |
188404 | $15,027.00 | 8/14/2019 | Unlisted | Unlisted | Unknown | Unknown |
188405 | $15,027.00 | 8/14/2019 | Unlisted | Unlisted | Unknown | Unknown |
188406 | $15,027.00 | 8/14/2019 | Unlisted | Unlisted | Unknown | Unknown |
188420 | $24,838.40 | 8/15/2019 | Unlisted | Unlisted | Unknown | Unknown |
188426 | $10,253.25 | 8/15/2019 | 7/22/2019 | 7/28/2019 | 7 | 0 |
188440 | $39,175.00 | 8/15/2019 | Unlisted | Unlisted | Unknown | Unknown |
189843 | $24,330.49 | 8/16/2019 | Unlisted | Unlisted | Unknown | Unknown |
189845 | $15,027.00 | 8/16/2019 | Unlisted | Unlisted | Unknown | Unknown |
Total: |
The actual sum of this column is $260,932.58.
[Editor's Note: The Preceding image contains the references for footnotes, 3]
The actual invoice date is 7/03/2019.
Issue A: Invoices listing a date range that includes days outside of the designated month:
Issue B: Invoices that do not list a date range: Nos. 188070, 188401, 188402, 188403, 188404, 188405, 188406, 188420, 188440, 189843 and 189845.• Invoice No. 0000185349-2R (19 of 42 days outside claimed month)
• Invoice No. 187549 (5 of 7 days outside claimed month)
The Plan Administrator's Issue B did not include invoices 188440, 189843 and 189845. These invoices also do not contain a date range and thus the Court has added them to the Issue B listing.
Table 2: Claim 2507
GMS Claimed Month: 6/2/2019-7/1/2019
Invoice | Amount | Invoice Date | Date Range start | Date Range End | Days covered in Invoice | Days Outside Claimed Month |
|---|---|---|---|---|---|---|
[Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] |
186528 | $8,559.38 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186529 | $1,966.25 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186530 | $6,270.00 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186531 | $4,731.57 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186532 | $10,170.79 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186533 | $15,640.68 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186534 | $8,992.92 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186538 | $10,667.40 | 6/13/2019 | 6/5/2019 | 6/10/2019 | 6 | 0 |
186539 | $13,266.19 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186543 | $11,490.94 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186544 | $9,301.28 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186545 | $4,685.63 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186546 | $16,469.70 | 6/13/2019 | 6/3/2019 | 6/9/2019 | 7 | 0 |
186750 | $15,023.81 | 6/21/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186751 | $10,504.38 | 6/21/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186752 | $8,855.05 | 6/21/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186753 | $10,125.94 | 6/21/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186754 | $2,633.13 | 6/21/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186755 | $7,920.00 | 6/21/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186756 | $7,040.00 | 6/21/2019 | 6/7/2019 | 6/11/2019 | 5 | 0 |
186758 | $16,469.70 | 6/21/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186846 | $2,500.32 | 6/26/2019 | 6/9/2019 | 6/13/2019 | 5 | 0 |
186847 | $6,523.13 | 6/26/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186848 | $10,128.13 | 6/26/2019 | 6/10/2019 | 6/16/2019 | 7 | 0 |
186871 | $73,372.80 | 6/26/2019 | Unlisted | Unlisted | Unknown | Unknown |
Invoice | Amount | Invoice Date | Date Range start | Date Range End | Days covered in Invoice | Days Outside Claimed Month |
|---|---|---|---|---|---|---|
186970 | $9,770.50 | 6/27/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
186971 | $10,454.10 | 6/27/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
186972 | $10,454.08 | 6/27/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
186976 | $3,891.25 | 6/27/2019 | 6/16/2019 | 9 | 0 | |
186978 | $7,105.00 | 6/27/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
186980 | $6,215.00 | 6/27/2019 | 6/21/2019 | 6/24/2019 | 4 | 0 |
186982 | $15,032.50 | 6/27/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
186989 | $2,860.00 | 6/27/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
186990 | $4,358.75 | 6/27/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
186991 | $6,215.00 | 6/27/2019 | 6/14/2019 | 6/17/2019 | 4 | 0 |
187164 | $8,540.00 | 7/5/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187165 | $3,281.25 | 7/5/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187169 | $15,629.70 | 7/5/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187170 | $10,546.25 | 7/5/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187171 | $3,613.75 | 7/5/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187172 | $2,612.50 | 7/5/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187177 | $15,932.72 | 6/30/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187178 | $15,250.21 | 6/30/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
187181 | $3,300.00 | 6/30/2019 | Unlisted | Unlisted | Unknown | Unknown |
187182 | $10,457.35 | 6/30/2019 | 6/17/2019 | 6/23/2019 | 7 | 0 |
187183 | $10,004.54 | 6/30/2019 | 6/13/2019 | 6/19/2019 | 7 | 0 |
187184 | $14,239.57 | 6/30/2019 | Unlisted | Unlisted | Unknown | Unknown |
187307 | $7,833.44 | 7/11/2019 | 6/21/2019 | 6/26/2019 | 6 | 0 |
187309 | $11,930.63 | 7/11/2019 | 6/21/2019 | 6/26/2019 | 6 | 0 |
187313 | $10,580.94 | 7/11/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187315 | $10,987.82 | 7/11/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
187319 | $8,871.46 | 7/11/2019 | 6/24/2019 | 6/30/2019 | 7 | 0 |
[Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] |
187363 | $1,929.38 | 7/11/2019 | 6/29/2019 | 6/29/2019 | 1 | 0 |
187366 | $8,511.25 | 7/11/2019 | 6/28/2019 | 7/1/2019 | 4 | 0 |
188051 | $4,480.12 | 7/31/2019 | Unlisted | Unlisted | Unknown | Unknown |
188052 | $1,935.88 | 7/31/2019 | Unlisted | Unlisted | Unknown | Unknown |
188475 | $41,580.00 | 8/16/2019 | Unlisted | Unlisted | Unknown | Unknown |
189000 | $9,456.00 | 8/31/2019 | Unlisted | Unlisted | Unknown | Unknown |
189001 | $9,456.00 | 8/31/2019 | Unlisted | Unlisted | Unknown | Unknown |
189546 | $9,240.00 | 9/19/2019 | Unlisted | Unlisted | Unknown | Unknown |
189547 | $9,240.00 | 9/19/2019 | Unlisted | Unlisted | Unknown | Unknown |
Invoice | Amount | Invoice Date | Date Range start | Date Range End | Days covered in Invoice | Days Outside Claimed Month |
|---|---|---|---|---|---|---|
189548 | $9,240.00 | 9/19/2019 | Unlisted | Unlisted | Unknown | Unknown |
189549 | $8,400.00 | 9/19/2019 | Unlisted | Unlisted | Unknown | Unknown |
189550 | $9,240.00 | 9/19/2019 | Unlisted | Unlisted | Unknown | Unknown |
183826-4R | $18,000.00 | 7/9/2019 | Unlisted | Unlisted | Unknown | Unknown |
Total: | $812,123.24 |
The actual end date on the invoice is 6/20/2019, and the days covered in the invoice is five.
[Editor's Note: The Preceding images contains the reference for footnote5]
Issue A: Invoices listing a date range that includes days outside of the designated month:
• 186305 (6 of 7 days outside claimed month)
• 186306 (6 of 7 days outside claimed month)
• 186319 (6 of 7 days outside claimed month)
• 186320 (6 of 7 days outside claimed month)
• 186322 (6 of 7 days outside claimed month)
• 186324 (2 of 4 days outside claimed month)
• 186328 (6 of 7 days outside claimed month)
• 186329 (6 of 7 days outside claimed month)
• 186330 (6 of 7 days outside claimed month)
• 186331 (6 of 7 days outside claimed month)
• 186332 (6 of 7 days outside claimed month)
• 186333 (6 of 7 days outside claimed month)
• 187358 (1 of 13 days outside claimed month)
• 187359 (1 of 3 days outside claimed month)
Issue B: Invoices that do not list a date range: Invoice Nos. 186871, 187181, 187184, 188051, 188052, 188475, 189000, 189001, 189546, 189547, 189548, 189549, 189550, and 183826-4R.
Table 3: Claim 2547
GMS Claimed Month: 4/14/2019-5/13/2019
Invoice | Amount | Invoice Date | Date Range Start | Date Range End | Days covered in Invoice | Days Outside Claimed Month |
|---|---|---|---|---|---|---|
184727 | $10,315.88 | 4/23/2019 | Unlisted | Unlisted | Unknown | Unknown |
184729 | $1,929.38 | 4/23/2019 | Unlisted | Unlisted | Unknown | Unknown |
184887 | $10,000.00 | 4/24/2019 | Unlisted | Unlisted | Unknown | Unknown |
184923 | $12,770.00 | 4/26/2019 | Unlisted | Unlisted | Unknown | Unknown |
184924 | $13,859.38 | 4/26/2019 | Unlisted | Unlisted | Unknown | Unknown |
184965 | $23,821.85 | 4/30/2019 | Unlisted | Unlisted | Unknown | Unknown |
185151 | $21,974.50 | 5/3/2019 | Unlisted | Unlisted | Unknown | Unknown |
$2,539.69 | 5/9/2019 | Unlisted | Unlisted | Unknown | Unknown | |
185322 | $9,659.54 | 5/9/2019 | 4/28/2019 | 4/28/2019 | 1 | 0 |
185335 | $1,890.00 | 5/13/2019 | Unlisted | Unlisted | Unknown | Unknown |
185336 | $12,262.30 | 5/13/2019 | Unlisted | Unlisted | Unknown | Unknown |
185538 | $5,731.25 | 5/16/2019 | 4/29/2019 | 5/12/2019 | 14 | 0 |
185539 | $4,292.04 | 5/16/2019 | 5/11/2019 | 5/12/2019 | 2 | 0 |
185560 | $12,216.89 | 5/16/2019 | 4/28/2019 | 4/28/2019 | 1 | 0 |
[Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] |
185677 | $115,848.00 | 5/21/2019 | Unlisted | Unlisted | Unknown | Unknown |
185825 | $10,552.68 | 5/23/2019 | 5/12/2019 | 5/12/2019 | 1 | 0 |
185843 | $8,949.46 | 5/24/2019 | Unlisted | Unlisted | Unknown | Unknown |
186192 | $24,965.14 | 5/3/2019 | Unlisted | Unlisted | Unknown | Unknown |
188448 | $16,407.28 | 8/15/2019 | Unlisted | Unlisted | Unknown | Unknown |
188449 | $15,565.00 | 8/15/2019 | Unlisted | Unlisted | Unknown | Unknown |
Total: | $359,588.77 |
In its Table 3 the Plan Administrator improperly includes Invoice 185321 in the group of invoices containing no date range. The actual invoice contains a date range from April 22, 2019 to April 28, 2019, with seven days within the claimed month and zero days outside the month. As a result, the Court has removed Invoice 185321 from the Issue B listing.
[Editor's Note: The Preceding image contains the reference for footnote6]
Issue A: Invoices listing a date range that includes days outside of the designated month: 185625 (13 of 35 days outside claimed month).
Issue B: Invoices that do not list a date range: Invoice Nos. 184727, 184729, 184887, 184923, 184924, 184965, 185151, 185335, 185336, 185677, 185843, 186192, 188448, and 188449.
Table 4: Claim 2558
GMS Claimed Month: 8/18/2019-9/16/2019
Invoice | Amount | Invoice Date | Date Range Start | Date Range End | Days covered in Invoice | Days Outside Claimed Month |
|---|---|---|---|---|---|---|
188626 | $23,769.18 | 8/21/2019 | Unlisted | Unlisted | Unknown | Unknown |
[Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] |
188825 | $16,772.94 | 8/28/2019 | 8/19/2019 | 8/25/2019 | 7 | 0 |
188881 | $4,350.00 | 8/29/2019 | Unlisted | Unlisted | Unknown | Unknown |
[Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] |
188953 | $10,458.45 | 9/2/2019 | 8/19/2019 | 8/25/2019 | 7 | 0 |
188954 | $8,916.25 | 9/2/2019 | 8/19/2019 | 8/25/2019 | 7 | 0 |
[Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] | [Redacted] |
189108 | $12,025.38 | 9/5/2019 | 8/26/2019 | 9/1/2019 | 7 | 0 |
189113 | $10,150.00 | 9/6/2019 | 8/26/2019 | 9/1/2019 | 7 | 0 |
189114 | $4,060.00 | 9/6/2019 | 8/26/2019 | 9/1/2019 | 7 | 0 |
189306 | $15,399.94 | 9/11/2019 | 9/2/2019 | 9/8/2019 | 7 | 0 |
189342 | $6,580.00 | 9/12/2019 | 9/2/2019 | 9/8/2019 | 7 | 0 |
189514 | $4,854.00 | 9/19/2019 | 9/9/2019 | 9/15/2019 | 7 | 0 |
189986 | $16,950.84 | 9/30/2019 | Unlisted | Unlisted | Unknown | Unknown |
Total: | $193,915.74 |
Issue A: Invoices listing a date range that includes days outside of the designated month:
• 188630 (20 of 21 days outside claimed month)
• 188952 (6 of 7 days outside claimed month)
• 188955 (6 of 7 days outside claimed month)
Issue B: Invoices that do not list a date range: Invoice Nos. 188626, 188881, and 189986.
The Plan Administrator's Table 4 mistakenly lists the beginning date of the claimed month as 8/8/2019, rather than 8/18/2019. The Court has listed the correct date in its heading to Table 4.
Table 5: Claim 2560
GMS Claimed Month: 10/6/2019-11/4/2019
Invoice | Amount | Invoice Date | Date Range Start | Date Range End | Days covered in Invoice | Days Outside Claimed Month |
|---|---|---|---|---|---|---|
190074 | $34,146.12 | 10/8/2019 | Unlisted | Unlisted | Unknown | Unknown |
190982 | $112,412.27 | 10/28/2019 | Unlisted | Unlisted | Unknown | Unknown |
191059 | $85,178.54 | 10/25/2019 | Unlisted | Unlisted | Unknown | Unknown |
Total: | $231,736.93 |
Issue A: All three of the invoices (Nos. 190074, 190982, and 191059) do not list a date range.
(1) Invoices with Missing Dates
The Plan Administrator argues that the Court should ignore all invoices with missing dates because there is no way of knowing "that the work described in the invoices was actually performed within GMS's selected months[.]" Obj. at 4. The West Virginia mechanic's lien statute does not specifically instruct a claimant on what it must do to show "the amount of the claim for such month." W. Va. Code § 38-2-33. And the Court has not found—nor have the parties cited—any case law applying Section 33 in these or similar circumstances or otherwise shedding any light on the proper application of the statute. Section 33 merely requires that a mechanic's lienholder state both the total amount claimed in the notice of lien along with a separate amount for the month in which priority is claimed. Thus, the Court lacks decisional guidance as to how the one-month priority amount should be calculated. Still, it seems obvious that if the claimant cannot show that the one-month's work for which priority is sought was actually performed during the month claimed, then the Court has no basis upon which to find it is entitled to priority status. If there were no date requirement, there would be nothing to prevent a mechanic's lienholder from providing every invoice generated over the entire duration of a job and asserting that all of them reflect work done in the claimed month. That would not comport with the intent of the statute, which is to give laborers a priority claim against both the real and personal property of the party for whom they performed work, but only for work performed in a one-month period. The Court agrees with the Plan Administrator that it cannot grant priority status as to those invoices missing the dates for which services were rendered or goods supplied. As for those invoices missing dates, GMS has not met its burden of showing an entitlement to priority status.
(2) Invoices with Extended Date Ranges
The Plan Administrator also argues that invoices containing a date range in the lower left corner should be disregarded because there is no explanation of the meaning of those date ranges. Id. at 4-6. While true, it also stands to reason that the date ranges reflect the timeframe during which work was done. Otherwise, there would appear to be no reason to include date ranges on an invoice. But many of the invoices containing date ranges include dates that fall outside of the month designated by GMS as its priority month. And none of those invoices reduce the amount claimed by the portion of the invoice falling outside the one-month parameter. Because the Court cannot ascertain how much of the amount claimed on extended date-range invoices is entitled to priority status and has no information on which to pro-rate the invoices, it is unable find any amount claimed on the extended date-range invoices is entitled to priority status. Thus, as to those invoices whose dates fall outside the month designated by GMS as its priority month, GMS has not met its burden of establishing an entitlement to priority status.
(3) Invoices That Comply with the WV-Eligibility Opinion's Directive
That leaves the following invoice amounts that appear to comply with both the Court's directive in its WV-Eligibility Opinion and the requirements of Sections 31 and 33:
Claim No. 2502: Claim No. 2502 was filed as a secured claim in the amount of $694,350.27. Mot., Doc. 2402-5, Ex. C. Of that total, GMS claims priority for the one-month period from July 13, 2019 through August 11, 2019, and attached 16 invoices totaling $260,932.58 to support its one-month claim. Priority Not., Doc. 2937, Ex. 1 at 4-22. Of those invoices, all but three either contain dates that fall outside the claimed month, at least in part, or contain no dates whatsoever. The total of the three invoices that fall entirely within the claimed one-month period is $21,867.62. This sum shall be accorded priority status and may be included in the amount of GMS's secured claim. The remaining amount of Claim No. 2502 shall be reclassified as a general, unsecured claim.
Claim No. 2507: Claim No. 2507 was filed as a secured claim in the amount of $4,228,364.44. Mot., Doc. 2402-6, Ex. D. Of that total, GMS claims priority for the one-month period from June 2, 2019 through July 1, 2019, and attached 78 invoices totaling $812,123.24 to support its one-month claim. Priority Not., Doc. 2937, Ex. 2 at 23-104. Of those invoices, 51 contain dates that fall completely within the one-month period. The remaining 27 invoices either contain dates that fall outside the claimed month, at least in part, or contain no dates whatsoever. The total of the 51 invoices that fall entirely within the claimed one-month period is $452,805.69. This sum shall be accorded priority status and may be included in the amount of GMS's allowed secured claim. The remaining amount of Claim No. 2507 shall be reclassified as a general, unsecured claim.
GMS lists 79 invoices in its Notice of Priority with respect to Claim No. 2507, and the Plan Administrator's Table 2 includes 79 invoices, but one invoice included in both lists—Invoice No. 186322 in the amount of $9,572.67—was not filed with GMS's Exhibit 2 to the Priority Notice (Doc. 2937). And the Court is unaware of how the Plan Administrator obtained information to categorize the invoice on its Table 2 as being one that falls outside the date range. Because the invoice is not part of the summary judgment record, the Court has no basis to conclude that it was for work falling within the 30-day date range. The Court therefore must exclude this invoice when determining the amount of GMS's secured claim.
Claim No. 2547: Claim No. 2547 was filed as a secured claim in the amount of $1,018,747.69. Mot., Doc. 2402-7, Ex. E. GMS claims priority for the one-month period from April 14, 2019 through May 13, 2019, and attached 21 invoices totaling $359,588.77 to support its one-month claim. Priority Not., Doc. 2937, Ex. 3 at 105-127. Of those invoices, six fall entirely within the one-month period, and total $44,992.09. This amount shall be accorded priority status. The remaining invoices either contain dates that fall, at least in part, outside the claimed month or contain no dates whatsoever. Thus, the remaining amount of Claim No. 2547 shall be reclassified as a general, unsecured claim.
As noted in Footnote 7, the Plan Administrator lists Invoice No. 185321 in the amount of $2,539.69 as having an unlisted date range, with an unknown number of days covered by the invoice. Doc. 2956-1, Ex. A at 5. But Invoice No. 185321 contains a date range of April 22, 2019 to April 28, 2019, and thus it (1) falls within GMS's claimed one-month period (Doc. 2937 at 113), meaning it (2) may be included in calculating the amount of its allowed secured claim.
Claim No. 2558: Claim No. 2558 was filed as a secured claim in the amount of $699,941.20. Mot., Doc. 2402-8, Ex. F. GMS claims priority for the one-month period from August 18, 2019 through September 16, 2019, and attached 15 invoices totaling $193,915.74 to support its one-month claim. Priority Not., Doc. 2937, Ex. 4 at 128-144. Of those invoices, nine fall entirely within the one-month period and total $89,216.96. This sum shall be accorded priority status and may be included in calculating the amount of GMS's secured claim. The remaining invoices either contain dates that fall, at least in part, outside the claimed month or contain no dates whatsoever. Thus, the remaining amount of Claim No. 2558 shall be reclassified as a general, unsecured claim.
Claim No. 2560: Claim No. 2560 was filed as a secured claim in the amount of $1,072,308.79. Mot., Doc. 2402-9, Ex. G. GMS claims priority for the one-month period from October 6, 2019 through November 4, 2019, and attached three invoices totaling $231,736.93 to support its one-month claim. Priority Not., Doc. 2937, Ex. 5 at 145-149. None of the three invoices contains dates showing when services were rendered or goods provided, and thus the sums stated in those invoices may be included in the total amount of GMS's allowed secured claim. The entirety of Claim No. 2560 shall be reclassified as a general, unsecured claim.
VI. Conclusion
For the reasons stated above, the Plan Administrator's Summary Judgment Motion is GRANTED in part and DENIED in part. GMS Claim No. 2502 is allowed as a secured claim in the amount of $21,867.82. The remainder of Claim 2502 is reclassified as a general, unsecured claim. GMS Claim No. 2507 is allowed as a secured claim in the amount of $452,805.69. The remainder of Claim No. 2507 is reclassified as a general, unsecured claim. GMS Claim No. 2547 is allowed as a secured claim in the amount of $44,992.09. The remainder of Claim No. 2547 is reclassified as a general, unsecured claim. GMS Claim No. 2558 is allowed as a secured claim in the amount of $89,216.96. The remainder of Claim No. 2558 is reclassified as a general, unsecured claim. GMS Claim No. 2560 in the amount of $1,072,308.79 is reclassified in full as a general, unsecured claim.
As previously stated, in its Cross-Motion GMS also asks the Court to find that W.Va. Code § 38-2-31 does not reduce or otherwise limit in any way the amount or extent to which its mechanic's liens are entitled to priority over later encumbrances. But the Court rejected this argument for the reasons explained in the WV-Eligibility Opinion. Thus, to the extent that GMS's Cross-Motion seeks such a ruling, it is DENIED.
IT IS SO ORDERED.