In re Superior Toy & Mfg. Co., Inc.
| Decision Date | 23 June 1995 |
| Docket Number | Bankruptcy No. 90 B 04481. Adv. No. 93 A 01222. |
| Citation | 183 BR 826 |
| Parties | In re SUPERIOR TOY & MANUFACTURING CO., INC. a/k/a Carter Manufacturing Company, an Illinois Corporation, Debtor. Catherine STEEGE, not individually but as Trustee for the Estate of Superior Toy and Manufacturing Co., Inc., Plaintiff, v. AT & T, Nolan & Company Graphics and Advertising, Inc., et al., Defendants. |
| Court | U.S. Bankruptcy Court — Northern District of Illinois |
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Catherine Steege, Jenner & Block, Chicago, IL, trustee for Superior Toy & Mfg. Co., Inc.
Sharon Swarsensky, Much Shelist Freed Denenberg & Ament, P.C., Chicago, IL, for Nolan & Co. Graphics and Advertising, Inc.
The matters before the court are the amended motion of Catherine Steege, not individually but as trustee ("Trustee") for the estate of Superior Toy & Manufacturing Co., Inc. ("Superior" or "Debtor"), for summary judgment against Nolan & Company Graphics and Advertising, Inc. ("Nolan") and Nolan's motion for summary judgment against the Trustee. The Trustee seeks to recover $25,015.49 in payments made by Superior to Nolan that she alleges were preferential pursuant to § 547(b).1 Nolan admits that substantially all of the payments took place during the preference period but asserts that each payment is not avoidable as a preference. For the reasons stated below, the court will grant the Trustee's motion for summary judgment and deny Nolan's.
Local Rule 402.M of the Bankruptcy Rules of the United States District Court and the United States Bankruptcy Court for the Northern District of Illinois requires the moving party to file a detailed statement of material facts as to which there are no genuine issue. The party opposing the motion is required by Local Rule 402.N to file a response to the movant's statement and set forth any facts which require denial of summary judgment. Each party has filed their respective 402.M and 402.N statements. From these statements, the following facts emerge as undisputed:
On March 9, 1990, an involuntary Chapter 7 bankruptcy petition was filed against Superior. Subsequently, Superior consented to an order for relief and converted the case to a Chapter 11 case. Then, on December 26, 1991, Superior converted its case to a Chapter 7 case. Nolan provided packaging design, finished art, and catalog design for Superior. In 1988, two calendar years preceding Superior's bankruptcy, Superior paid Nolan's invoices in an average of 50 days. In the ninety days before the petition date, Superior made two payments to Nolan covering numerous invoices. As some of Nolan's defenses depend on the individual check, a detail of what each check covered is necessary2:
1. Check 1 — Check 27756, which cleared Superior's account on December 26, 1989, was for $14,796.49 and covered the following invoices:
Days
Invoice No. Invoice Date Amount Outstanding3
14269 10/04/89 $ 2,775.50 83
14270 10/04/89 1,184.75 83
14276 10/05/89 161.00 82
14287 10/11/89 750.00 76
14288 10/11/89 750.00 76
14289 10/11/89 683.50 76
14300 10/18/89 946.25 69
14322 10/30/89 133.00 57
14349 11/09/89 386.75 47
5026 12/05/89 2,111.38 21
5027 12/05/89 1,708.25 21
5029 12/05/89 637.50 21
5033 12/06/89 76.23 20
5034 12/06/89 2,398.63 20
5037 12/06/89 93.75 20
__________
Total: $14,796.49
2. Check 2 — Check 27781, which cleared Superior's account on January 9, 1990, was for $9,939.25 and covered the following invoices:
Days
Invoice No. Invoice Date Amount Outstanding
5060 12/12/89 $115.00 28
5061 12/13/89 3,816.00 27
5062 12/13/89 543.75 27
5093 12/27/89 3,451.00 13
5094 12/27/89 690.00 13
5111 01/02/90 436.00 7
5112 01/02/90 887.50 7
_________
Total: $9,939.25
In addition, on March 6, 1990, Superior paid Nolan $279.75 ("Check 3") for invoice no. 5264 dated February 21, 1990. This check did not clear the bank until three days after the involuntary petition was filed and therefore constitutes a postpetition transfer. It is not disputed that each of these were transfers of the Debtor's property which occurred while the Debtor was insolvent. Further, Nolan does not contend that it had a security interest in property of the Debtor. Next, during the 90 days prior to bankruptcy, the Debtor was not regularly paying its accounts payable. Finally, the Trustee had demanded that Nolan return the funds it received from these checks. However, Nolan maintains that it did not receive more than it would have in a Chapter 7 liquidation and also asserts several defenses that would preclude the Trustee from recovering any payments found to be preferential. Consequently, Nolan has not acceded to Superior's demand to return the funds.
This matter is before the Court pursuant to 28 U.S.C. § 157, and is referred here under Local District Rule 2.33. This court has subject matter jurisdiction and this is a core proceeding under 28 U.S.C. § 157(b)(2)(F).
Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c) (adopted by Fed.R.Bankr.Pro. 7056). The primary purpose for granting a summary judgment motion is to avoid unnecessary trials when there is no genuine issue of material fact in dispute. Trautvetter v. Quick, 916 F.2d 1140, 1147 (7th Cir.1990); Farries v. Stanadyne/Chicago Div., 832 F.2d 374, 378 (7th Cir.1987) (quoting Wainwright Bank & Trust Co. v. Railroadmen's Federal Sav. & Loan Ass'n of Indianapolis., 806 F.2d 146, 149 (7th Cir.1986)).
The burden is on the moving party to show that no genuine issue of material fact is in dispute. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86, 106 S.Ct. 1348, 1355, 89 L.Ed.2d 538 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A party seeking summary judgment always bears the initial responsibility of informing the court of the basis for its motion, and must identify those portions of the "pleadings, depositions, answers to interrogatories, and affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. at 2553. However, once the motion for summary judgment is made and supported as described above, Rule 56(e) provides that a party opposing the motion may not rest upon the mere allegations or denials in his pleading; the response of that party must set forth specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324, 106 S.Ct. at 2553; Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356; Doe v. Cunningham, 30 F.3d 879, 882 (7th Cir.1994); Waldridge v. American Hoechst Corp., 24 F.3d 918, 920 (7th Cir. 1994).
On a summary judgment motion, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Anderson, 477 U.S. at 255, 106 S.Ct. at 2513; Matsushita, 475 U.S. at 586, 106 S.Ct. at 1355; Peerman v. Georgia-Pacific Corp., 35 F.3d 284, 286 (7th Cir.1994); Cuddington v. Northern Ind. Public Serv. Co., 33 F.3d 813, 815 (7th Cir.1994). However, the existence of a material factual dispute is sufficient only if the disputed fact is determinative of the outcome under applicable law. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; Frey v. Fraser Yachts, 29 F.3d 1153, 1156 (7th Cir. 1994).
The Court should not "weigh the evidence." Anderson, 477 U.S. at 249, 106 S.Ct. at 2510; Illinois Bell Telephone Co. v. Haines and Company, Inc., 905 F.2d 1081, 1087 (7th Cir.1990), vacated on other grounds, 499 U.S. 944, 111 S.Ct. 1408, 113 L.Ed.2d 462 (1992). However, "if evidence opposing summary judgment is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-250, 106 S.Ct. at 2510-2519; Griffin v. Air Line Pilots Ass'n, Int'l., 32 F.3d 1079, 1084 (7th Cir.1994). When the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial and summary judgment should be granted. Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356.
When each side seeks summary judgment, that does not by itself preclude the existence of genuine issues of material fact preventing the granting of either motion. The court must rule on each motion separately in determining whether or not each judgment should be entered, in accordance with applicable principles. CSFM Corp. v. Elbert & McKee Co., 870 F.Supp. 819, 830 (N.D.Ill.1994); ITT Indus. Credit Co. v. D.S. America, Inc., 674 F.Supp. 1330, 1331 (N.D.Ill.1987) (Shadur, J.). See C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2720 (2d ed. 1983 & Supp.1987). Cross motions for summary judgment do not require the court to decide the case on those motions. The court can deny both motions if both parties fail to meet...
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