Northern Development, Limited, Plaintiff-appellant, v. John G. Leake, Trustee, Defendant-appellee, 953 F.2d 638 (4th Cir. 1992)

Continental of Verona, Inc. ("CVI"), the general contractor on a ten-unit townhouse project developed by Northern Development, Ltd. ("NDL"), abandoned the project on October 28, 1988, after completing only a portion of the work. NDL thereafter took steps to complete the project. In light of the subcontractors' liens filed after CVI's abandonment of the project, NDL instituted a state court action pursuant to Va.Code Ann. § 43-71 (Michie 1990) to obtain clear title. After CVI filed a Chapter 7 bankruptcy petition in June, 1989, NDL's state court action was removed to the bankruptcy court, and the trustee was designated by the court to act as the representative of the lienholders.

The bankruptcy court ruled that NDL was not entitled to an offset against the lienors' claims for the amount expended by NDL on work on the foundations after CVI's abandonment. Northern Development, Ltd. v. Continental of Verona, Inc. (In re: Continental of Verona, Inc.), No. 5-89-00346 (Bankr.W.D. Va. Feb. 8, 1990). On appeal, the district court affirmed. Northern Development, Ltd. v. Leake, No. CA-90-21-H (W.D. Va. June 7, 1991). NDL appeals the district court's judgment.

We agree with the district court that the dispositive issue--whether NDL's foundation work was completion or repair--is essentially a factual question, and we are not convinced that the bankruptcy court's resolution of this issue was clearly erroneous.^*  Therefore, the judgment of the district court is affirmed.

AFFIRMED.