Davis v. R.A. Brooks Trucking, Co. (In re Quebecor World (USA), Inc.)

491 B.R. 379, 2013 WL 1741946, 2013 Bankr. LEXIS 1664
CourtUnited States Bankruptcy Court, S.D. New York
DecidedApril 23, 2013
DocketBankruptcy No. 08-10152 (SHL); Adversary No. 10-02212 (SHL)
StatusPublished
Cited by22 cases

This text of 491 B.R. 379 (Davis v. R.A. Brooks Trucking, Co. (In re Quebecor World (USA), Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Davis v. R.A. Brooks Trucking, Co. (In re Quebecor World (USA), Inc.), 491 B.R. 379, 2013 WL 1741946, 2013 Bankr. LEXIS 1664 (N.Y. 2013).

Opinion

MEMORANDUM OF DECISION

SEAN H. LANE, Bankruptcy Judge.

Before the Court is a motion for summary judgment filed by plaintiff Eugene I. Davis as Litigation Trustee for the Quebe-cor World Litigation Trust (the “Plaintiff’ or “Trustee”) in the above captioned adversary proceeding. Plaintiff seeks to avoid and recover ten alleged preferential transfers totaling $117,370.05 made by Quebecor World (USA), Inc. (the “Debt- [383]*383or”) in the above-captioned Chapter 11 cases to R.A. Brooks Trucking Co., Inc. (“R.A. Brooks” or “Defendant”) during the 90 day period before the Debtor filed its Chapter 11 case plus prejudgment interest of $15,191.09. Defendant opposed the motion and filed a cross motion for summary judgment. For the reasons set forth below, the Court grants Plaintiffs motion for summary judgment in large part and denying Defendant’s motion for summary judgment.

BACKGROUND

On January 21, 2008, the Debtor filed the underlying bankruptcy case under Chapter 11 of Title 11 of the United States Bankruptcy Code (the “Petition Date”). On May 18, 2009, the Debtor filed its Third Amended Joint Plan of Reorganization of Quebecor World (USA), Inc. and Certain Affiliated Debtors and Debtors-In-Possession (the “Plan”). On July 2, 2009, this Court entered the Findings of Fact, Conclusions of Law, and Order Confirming the Plan (the “Plan”).

Pursuant to the Plan, a litigation trust administered by Plaintiff was created to pursue certain claims as defined under the terms of Plan. On January 14, 2010, the Plaintiff filed an adversary proceeding to avoid ten preferential transfers totaling $117,370.05 made by the Debtor to R.A. Brooks within 90 days of the commencement of the Debtor’s Chapter 11 ease. Specifically, the Plaintiffs complaint seeks to avoid the transfers pursuant to 11 U.S.C. Sections 547, 548, 549, and 502, and to recover the property transferred pursuant to 11 U.S.C. Section 550. In a subsequently filed stipulated order, the Plaintiff agreed to drop its claims under Sections 548 or 549 of the Bankruptcy Code. See So Ordered Stipulation Dismissing Certain Claims (ECF. No. 53). As a result, the Plaintiff only seeks remedies pursuant to Sections 502, 547, and 550 of the Bankruptcy Code to avoid certain transfers made during the Preference Period.

There are no material facts in dispute. The Debtor is a corporation engaged in industrial and commercial printing with its principal place of business located at 150 E. 42nd Street, New York, N.Y. 10017. Affidavit of Charles Brooks ¶ 3.1 The Defendant is a company engaged in the business of supplying transportation services to its customers with its principal place of business located at 5500 Highway 161, North Little Rock, AR 72117. Affidavit of Charles Brooks ¶ 4. The relevant facts regarding the parties’ relationship are undisputed. The Debtor and Defendant began their business relationship in 2002 and it continued until the date of petition. Affidavit of Charles Brooks ¶ 5. There was no written contract between Defendant and the Debtor but the Defendant’s invoices stated that payment was due within ten days of receipt. Affidavit of Charles Brooks ¶ 6. The Debtor made payments by check that always matched the amounts on the invoices. The Debtor sent Defendant a remittance stub with its checks that indicated to which invoices the check payments applied. Affidavit of Charles Brooks ¶ 8. The parties agree that during the 90 days on or before the Petition Date (the “Preference Period”) the Debtor made ten transfers to Defendant totaling $156,130.05, on account of an antecedent debt, from Debtor’s corporate banking account. Davis Deck ¶¶ 7-11. The parties also agree that the Defendant is an unsecured creditor that did not hold a perfected security interest in the assets of the [384]*384Debtor with respect to the transfers, and that unsecured creditors will receive less than a 100% distribution under the Plan. See Davis Decl. ¶¶ 13-14. Prior to the bankruptcy filing, the Debtor owed $38,760 to the Defendant for services rendered to the Debtor in the 90 days prior to the filing. See Exhibit “F” to the Affidavit of Charles Brooks.

DISCUSSION

Summary judgment is appropriate “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.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Fed.R.Civ.P. 56(a) (made applicable to the adversary proceeding by Fed. R. Bankr.P. 7056). The moving party bears the burden of demonstrating the absence of any genuine issue of material fact, and all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Ames Dep’t Stores, Inc. v. Wertheim Schroder & Co., Inc., 161 B.R. 87, 89 (Bankr.S.D.N.Y.1993). Once the moving party meets this initial burden, the non-moving party must go beyond the pleadings and by its own evidence to demonstrate that there is a genuine issue of fact for trial. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548. If the non-moving party fails to make such a showing, then the moving party is “entitled to a judgment as a matter of law.” Celotex, 477 U.S. at 322, 106 S.Ct. 2548; Fed.R.Civ.P. 56(e).

A. Stern v. Marshall

Because this Court is adjudicating a motion for summary judgment, it must consider whether it has the constitutional authority to issue a final decision consistent with Stern v. Marshall, — U.S. -, 131 S.Ct. 2594, 2609, 180 L.Ed.2d 475 (2011). In Stem, the Supreme Court held that a bankruptcy court “lacked the constitutional authority to enter a final judgment on a state law counterclaim that is not resolved in the process of ruling on a creditor’s proof of claim.” Id. at 2620. The decision in Stem is understood in this district to mean that a bankruptcy court lacks final adjudicative authority over a core claim where all of the following three conditions are met: “1) the claim at issue did not fall within the public rights exception; 2) the claim would not necessarily be resolved in ruling on a creditor’s proof of claim; and 3) the parties did not unanimously consent to final adjudication by a non-Article III tribunal. Weisfelner v. Blavatnik (In re Lyondell Chem. Co.), 467 B.R. 712, 719-720 (S.D.N.Y.2012) (internal citations and quotations omitted).

In this case, the Defendant has filed a proof of claim. See Davis Decl., Ex. F. The Plaintiffs claims would necessarily be resolved in ruling on the Defendant’s proof of claim as a result of Section 502(d) of the Bankruptcy Code, which provides that “the court shall disallow any claim of any entity ...

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Cite This Page — Counsel Stack

Bluebook (online)
491 B.R. 379, 2013 WL 1741946, 2013 Bankr. LEXIS 1664, Counsel Stack Legal Research, https://law.counselstack.com/opinion/davis-v-ra-brooks-trucking-co-in-re-quebecor-world-usa-inc-nysb-2013.