Noreen Wiscovitch Rentas, Chapter 7 Trustee v. Vaquerias Tres Monjitas, Inc.

• Court: United States Bankruptcy Court, D. Puerto Rico
• Decided: December 20, 2013
• Docket: 12-00125
• Status: Unknown

Opinion

1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF PUERTO RICO 2

4 IN RE: CASE NO. 09-02048 5 Chapter 7 PMC MARKETING CORP 6 Adversary No. 12-00125 7

8 Debtor(s)

9 NOREEN WISCOVITCH RENTAS 10 CHAPTER 7 TRUSTEE 11 Plaintiff 12 vs. 13 14 VAQUERIAS TRES MONJITAS, INC 15 Defendants FILED & ENTERED ON 12/20/2013 16

19 OPINION AND ORDER 20 Before this Court is Plaintiff’s Motion for Summary Judgment and accompanying Statement 21 of Facts [Dkt. No. 35, 36], Defendant’s Opposition [Dkt. No. 44], and Plaintiff’s Reply to 22 23 Defendant’s Opposition [Dkt. No.’s 48, 49]. For the reasons set forth below, Plaintiff’s Motion for 24 Summary Judgment is GRANTED. 25 I. Background

Debtor, PMC Marketing Corporation, filed a voluntary chapter 11 bankruptcy petition on March 18, 2009. On May 21, 2010, Debtor’s bankruptcy case was converted to a chapter 7. On March 2, 2012, Debtor’s Chapter 7 Trustee and Plaintiff, herein Noreen Wiscovitch Rentas, filed an 1 adversary proceeding to recover funds to the estate from the Defendant in the amount of $40,766.85. 2 Plaintiff's Motion for Summary Judgment and Defendant’s Reply followed. 3 II. Summary Judgment Standard 4 5 The role of summary judgment is to look behind the facade of the pleadings and assay the 6 parties' proof in order to determine whether a trial is required. Under Federal Rules of Civil 7 Procedure, Rule 56(c), made applicable in bankruptcy by Federal Rules of Bankruptcy Procedure, 8 9 Rule 7056, a summary judgment is available if the pleadings, depositions, answers to interrogatories, 10 and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to 11 any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 12 13 56(c); Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 4 (1st Cir. 2010). As to issues on which 14 the movant, at trial, would be compelled to carry the burden of proof, it must identify those portions 15 of the pleadings which it believes demonstrates that there is no genuine issue of material fact. In re 16 17 Edgardo Ryan Rijos & Julia E. Cruz Nieves v. Banco Bilbao Vizcaya & Citibank, 263 B.R. 382, 388 18 (B.A.P. 1st Cir.2001). A fact is deemed "material" if it potentially could affect the outcome of the 19 suit. Borges, 605 F.3d at 5. Moreover, there will only be a "genuine" or "trial worthy" issue as to 20 21 such a "material fact," "if a reasonable fact-finder, examining the evidence and drawing all 22 reasonable inferences helpful to the party resisting summary judgment, could resolve the dispute in 23 24 that party's favor." Id. at 4. The court must view the evidence in the light most favorable to the 25 nonmoving party. Alt. Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 26 (1st Cir. 2004).

Therefore, summary judgment is “inappropriate if inferences are necessary for the judgment and those inferences are not mandated by the record.” Rijos, 263 B.R. at 388. Although this perspective is favorable to the nonmoving party, she still must demonstrate, 1 “through submissions of evidentiary quality, that a trial worthy issue persists.” Iverson v. City of 2 Boston, 452 F.3d 94, 98 (1st Cir. 2006). Moreover, “[o]n issues where the nonmovant bears the 3 ultimate burden of proof, [she] must present definite, competent evidence to rebut the motion.” 4 5 Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.1991).These showings may not rest upon 6 “conclusory allegations, improbable inferences, and unsupported speculation.” Medina-Muñoz v. 7 R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.1990). But, the evidence offered by the 8 9 nonmoving party “cannot be merely colorable, but must be sufficiently probative to show differing 10 versions of fact which justify a trial.” Id. See also Horta v. Sullivan, 4 F.3d 2, 7-8 (1st Cir.1993) (the 11 materials attached to the motion for summary judgment must be admissible and usable at trial.) “The 12 13 mere existence of a scintilla of evidence” in the nonmoving party's favor is insufficient to defeat 14 summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 15 202 (1986); González-Pina v. Rodríguez, 407 F.3d 425, 431 (1st Cir. 2005). 16 17 In the summary judgment motion presently before the court, Plaintiff argues that there are no 18 genuine issues as to any material facts and that therefore the moving party is entitled to judgment as a 19 matter of law. Plaintiff argues that Debtor’s transfer of $40,766.85 is a preferential transfer under 11 20 21 U.S.C. § 547 because such payment was cashed between December 29, 2008 and March 13, 2009. In 22 this case, all the requirements are met because the payment was made to a creditor, on account of an 23 antecedent debt, during the preference period, while Debtor was insolvent, and such payments 24 25 permitted the creditor to receive more than it would have if the case was under a Chapter 7

bankruptcy proceeding. In its Reply, Defendant argues that the payment may not be avoided by the Plaintiff pursuant to Sections 547(c)(1) and (c)(2). Defendant did not provide any evidence to invoke the Section 1 547(c)(1) contemporaneous exchange for new value defense. As to Section 547(c)(2), Defendant 2 provides a table that shows all the payments made from January 8, 2008 to March 12, 2009, which 3 includes the last five checks in dispute, and then argues that it “has shown the pattern of invoicing 4 5 and payment for more than a year, and the pattern is the same within the 90 days prior to the filing of 6 the petition….” 7 In the Plaintiff's Response to the above, she contends that as to the new value defense, 8 9 Defendant has failed to establish two out of the three requirements under Section 547(c)(1). The 10 three requirements, Plaintiff argues, are as follows: “(1) that the parties intended for the transfer to be 11 a contemporaneous exchange for new value, (2) that the exchange was in fact contemporaneous, and 12 13 (3) that the new value was in fact given.” As to the ordinary course of business defense, Defendant 14 did not provide this Court with copies of the invoices to determine whether such payments were 15 made in accordance with the terms of the invoice. Therefore, such defense is waived and without 16 17 merit. Even if such defense is not waived, the table Defendant provided did not establish a set pattern 18 of payments or transactions that could be considered as ordinary course of business. 19 A. Summary Judgment Analysis 20 21 After reviewing the Plaintiff’s arguments, and the relevant law, this Court concludes that 22 there are no genuine issues as to material facts and that the moving party is entitled to judgment as a 23 matter of law. In a motion for summary judgment, in order to carry its burden of production, the 24 25 moving party must either produce evidence negating an essential element of the nonmoving party's

claim or defense or demonstrate that the nonmoving party does not have sufficient evidence of an essential element to carry its ultimate burden of persuasion at trial. Lopez v. Corporacion Azucarera de Puerto Rico, 938 F.2d 1510, 1516-17 (1st Cir. 1991); High Tech Gays v. Defense Indus. Sec. 1 Clearance Office, 895 F.2d 563, 574 (9th Cir.1990). In order to carry its ultimate burden of 2 persuasion on the motion, the moving party must persuade the court that there is no genuine issue of 3 material fact. Id. 4 5 Therefore, if a moving party fails to carry its initial burden of production, the nonmoving 6 party has no obligation to produce any evidence, even to the extent that the nonmoving party would 7 have the ultimate burden of persuasion at trial. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 160, 8 9 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); High Tech Gays, 895 F.2d at 574. With such scenario above, 10 the nonmoving party can then defeat a summary judgment motion without producing any evidence. 11 See High Tech Gays, 895 F.2d at 574; Clark v. Coats & Clark, Inc., 929 F.2d 604, 607 (11th 12 13 Cir.1991). On the contrary, if a moving party carries out its burden of production, the nonmoving 14 party must produce evidence to support its claim or defense. See High Tech Gays, 895 F.2d at 574; 15 Cline v. Industrial Maintenance Eng'g. & Contracting Co., 200 F.3d 1223, 1229 (9th Cir.2000). 16 17 Therefore, if the nonmoving party fails to produce sufficient evidence to create a genuine issue of 18 material fact, the moving party prevails in the motion for summary judgment. See Celotex Corp. v. 19 Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (“Rule 56(c) mandates the entry 20 21 of summary judgment, after adequate time for discovery and upon motion, against a party who fails 22 to make a showing sufficient to establish the existence of an element essential to that party's case, 23 and on which that party will bear the burden of proof at trial.”) Alternatively, if the nonmoving party 24 25 produces sufficient evidence to establish a genuine issue of material fact, the nonmoving party

defeats the motion. See id. Therefore, the primary inquiry this Court must decide first is whether the Plaintiff, as the moving party carried its initial burden of production and accordingly whether the Defendant, as the 1 nonmoving party, had an obligation to produce evidence in response. The Supreme Court provided 2 for such analytical framework in Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 3 L.Ed.2d 142 (1970), and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 4 5 (1986). 6 The Supreme Court, under Adickes and Celotex, offered guidance that a moving party 7 without the ultimate burden of persuasion at trial may regardless carry its 8 9 initial burden of production by either of two methods: the moving party may produce evidence 10 negating an essential element of the nonmoving party's case, or, after suitable discovery, the moving 11 party may show that the nonmoving party does not have enough evidence of an essential element of 12 13 its claim or defense to carry its ultimate burden of persuasion at trial. In practice, the first method 14 mentioned above or the Adickes method, may be more commonly employed because the moving 15 party may find it easier to produce affirmative evidence negating an essential element of the 16 17 nonmoving party's claim or defense than it is to show that the nonmoving party has insufficient 18 evidence to carry its ultimate burden of persuasion at trial. The second or the Celotex method is 19 equally favored legally, where in appropriate cases, a moving party can carry its initial burden of 20 21 production by demonstrating that the nonmoving party does not have enough evidence to carry its 22 ultimate burden of persuasion at trial. 23 B. Preferential Transfers 24 25 In this instant case, the court takes judicial notice that the Debtor’s bankruptcy filing date is

March 18, 2009 as per the date stated on the Case Docket. The question this Court must then answer is whether Debtor’s payments in the amount of $40,766.85 cashed between December 29, 2008 and March 13, 2009, constitute avoidable transfers. In order for payments to be recoverable as 1 preferential transfers, payments must satisfy all of the requirements of 11 U.S.C. § 547(b). The 2 Trustee bears the burden of proving the transfers were: (1) to or for the benefit of a creditor; (2) for 3 or on account of an antecedent debt owed by the debtor before such transfers were made; (3) made 4 5 while the debtor was insolvent; (4) on or within ninety (90) days before the date of filing of the 6 petition; and (5) that enabled the benefited creditor to receive more than such creditor would have 7 received had the case been a chapter 7 liquidation and the creditor had not received the transfer. 11 8 9 U.S.C. § 547 (b). The court is satisfied as per the evidence provided by Plaintiff that Debtor's 10 payments to Defendant meet the criteria of Section 547(b), and therefore are a preference as defined 11 by the Code. 12 13 i. New Value Exception 14 Although Section 547(b) of the Bankruptcy Code authorizes a trustee to avoid preferences, 15 Section 547(c) equips the transferee with certain defenses. These defenses “are designed to rescue 16 17 from attack in bankruptcy those kinds of transactions, otherwise fitting the definition of a preference, 18 that are essential to commercial reality and do not offend the purposes of preference law, or that 19 benefit the ongoing business by helping to keep the potential bankrupt afloat.” Epstein, Nickles & 20 21 White, Bankruptcy, Practitioner Treatise Series, Vol. 1, § 6–3, at 587 (1992). Pursuant to Section 22 547(c), the trustee may not avoid a transfer under Section 547(b) that (1) was “intended by the debtor 23 and the creditor ... to be a contemporaneous exchange for new value given to the debtor” and “in 24 25 fact” was a “substantially contemporaneous exchange” (“contemporaneous exchange defense”), 11

U.S.C. § 547(c)(1); (2) was “in payment of a debt incurred by the debtor in the ordinary course of business” (“ordinary course of business defense”), 11 U.S.C. § 547(c)(2); or (3) was followed in time by “new value” given by the creditor “to or for the value of the debtor” (“subsequent new value 1 defense”), 11 U.S.C. § 547(c)(4). 2 In order to prevail on a contemporaneous exchange defense, the Defendant must demonstrate 3 (1) that the parties intended the transfer to be a contemporaneous exchange, (2) that the transfer was 4 5 in fact contemporaneous AND (3) that exchange was in fact contemporaneous. In re Shelton 6 Harrison Chevrolet, Inc., 202 F3d. 834 (6th Cir. 2000); In re Barefoot, 952 F2d 795 (4thCir.1991); 7 See also, Cimmaron Oil Co. v Cameron Consultants, Inc., 71 BR 1005 (ND Tex., 1987) (Under 11 8 9 USCS § 547(c)(1), a creditor who received payment during preference period must show: (1) creditor 10 extended new value to debtor; (2) both parties intended exchange to be contemporaneous; and (3) 11 exchange was actually contemporaneous.). It is important to note that the Defendant must prove all 12 13 three elements. Specifically a defendant must provide proof that the parties intended the transfer to 14 be a contemporaneous exchange for new value. In re Wadsworth Bldg. Components, Inc., 711 F2d 15 122 (9th Cir., 1983). As to the “contemporaneous exchange for new value” defense, the Defendant 16 17 appears to argue Sections 547(c)(1)(A) and 547(c)(1(B) as if they were separate defenses, when in 18 fact they are tied together. Moreover, the table in Exhibit 1 of Defendant's Reply shows that the 19 Debtor didn’t pay the invoices immediately upon receipt of the merchandise. In fact, it shows the 20 21 opposite - Debtor paid for invoices which were over 122 days old during the preference period. 22 The Defendant fails to allege, much less provide evidence of all of the requirements under 23 Section 547(c)(1). At most, the Defendant has alleged that new value was provided (the third 24 25 requirement). The Defendant has not provided this Court proof of what the new value was or in what

amount. The Defendant is silent as to the other two requirements - it has failed to convince the court that the parties intended for the exchange to be contemporaneous, and that the transfers were in fact contemporaneous. In this instant case, Defendant fails to successfully invoke the defense of new 1 value exception. 2 ii. Ordinary Course of Business Exception 3 Section 547(c)(2) of the Bankruptcy Code, as amended by the Bankruptcy Abuse Prevention 4 5 and Consumer Protection Act of 2005 (“BAPCPA”), provides that: 6 (c) The trustee may not avoid under this section a transfer 7 (2) to the extent that such transfer was in payment of a debt incurred by the debtor 8 in the ordinary course of business or financial affairs of the debtor and the transferee, 9 and such transfer was; (A) made in the ordinary course of business or financial affairs of the 10 debtor and the transferee; or 11 (B) made according to ordinary business terms. (emphasis added)

12 11 U.S.C. § 547(c)(2); 11 U.S.C. § 547(g); In re Healthco Int'l, Inc., 132 F.3d 104, 109 (1st Cir. 13 1997); Advo-System, Inc. v. Maxway Corp., 37 F.3d 1044, 1047 (4th Cir.1994); Sulmeyer v. Suzuki 14 15 (In re Grand Chevrolet, Inc.), 25 F.3d 728, 732 (9th Cir.1994); Jones v. United Sav. & Loan Ass'n. 16 (In re U.S.A. Inns of Eureka Springs, Ark., Inc.), 9 F.3d 680, 682 (8th Cir.1993). This statutory 17 change demonstrates that creditors no longer had to meet all three prongs under § 547(c)(2) but 18 19 merely the first and second prongs1 or the first and third prongs. 20 The ordinary course of business exception thrives from the core of bankruptcy preference 21 law. As such, this exception shields payments received by creditors provided that the steps taken are 22 23 consistent with the customary practice among specific industry participants. Congressional records 24 are consistent with this interpretation. An examination of the pertinent Records reveal that the 25 purpose of this exception was to “leave undisturbed normal financial relations, because it does not

detract from the general policy of the preference section to discourage unusual action by either the

1 For the purpose of the analysis, Section 547(c)(2) is the “first prong”; Section 547(c)(2)(A) is the “second prong;” and Section 547(c)(2)(B) is the “third prong.” 1 debtor or [its] creditors during the debtor's slide into bankruptcy.” H.Rep. No. 595, 95th Cong., 1st 2 Sess. 373 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News 6329. Sections 547(c)(2) and 3 547(c)(2)(A) in relevant part, state that: 4 5 “The trustee may not avoid under this section a transfer to the extent that such transfer was in payment of a debt incurred by the debtor in the ordinary course of business or 6 financial affairs of the debtor and the transferee and such transfer was—(A) made in the 7 ordinary course of business or financial affairs of the debtor and the transferee.” (emphasis ours) 8

9 Under the first two prongs, Sections 547(c)(2) and 547(c)(2)(A), the Defendant simply needs 10 11 to demonstrate by a preponderance of the evidence that the specific transaction was ordinary as 12 between the parties. Daly v. Radulesco (In re Carrozzella & Richardson), 247 B.R. 595, 603 13 (B.A.P.2d Cir.2000); see also In re Enron Creditors Recovery Corp., 376 B.R. at 459 (stating that the 14 15 subjective test focuses solely on the prior dealings of debtor and creditor). So while a late payment is 16 usually non-ordinary, a defendant can rebut this presumption if late payments were the standard 17 course of dealing between the parties. See Id. (quoting 5 ALAN N. RESNICK & HENRY J. 18 19 SOMMER, COLLIER ON BANKRUPTCY ¶ 504.04[2][ii], at 547–55 (16th ed. 2010) 20 (“COLLIER”)). In determining whether a transfer satisfies the requirements of Section 547(c)(2)(A), 21 courts examine several factors including “(i) the prior course of dealing between the parties, (ii) the 22 23 amount of the payment, (iii) the timing of the payment, (iv) the circumstances of the payment, (v) the 24 presence of unusual debt collection practices, and (vi) changes in the means of payment.” Buchwald 25 Capital Advisors LLC v. Metl–Span I., Ltd. (In re Pameco Corp.), 356 B.R. 327, 340

(Bankr.S.D.N.Y.2006); Official Comm. of Unsecured Creditors of 360 networks (USA) Inc. v. U.S. Relocation Servs. (In re 360 networks (USA) Inc.), 338 B.R. 194, 210 (Bankr.S.D.N.Y.2005); see also Hassett v. Goetzmann (In re CIS Corp.), 195 B.R. 251, 258 (Bankr.S.D.N.Y.1996). 1 To a certain extent, Defendant must establish a “baseline of dealings” between the parties to 2 “enable the court to compare the payment practices during the preference period with the prior 3 course of dealing.” In re Fabrikant & Sons, Inc., 2010 WL 4622449, at *3; Cassirer v. Herskowitz (In 4 5 re Schick), 234 B.R. 337, 348 (Bankr.S.D.N.Y.1999). Defendant therefore must “demonstrate some 6 consistency with other business transactions between the debtor and the creditor.” Id. at *3. 7 Summarily, this Court would have to engage in a comparison of the average number of days between 8 9 the invoice and payment dates during the pre-preference and preference periods. In re Quebecor 10 World (USA), Inc., 08-10152 SHL, 2013 WL 1741946 (Bankr.S.D.N.Y. Apr. 23, 2013); Also see In 11 re Fabrikant & Sons, Inc., 2010 WL 4622449, at *4. Defendant, in this instant case, did not 12 13 supplement any evidence within the factors as stated above including those that may demonstrate any 14 sort of patterns, except the fact that these payments were indeed paid to and deposited by the 15 Defendant. Although the Defendant has not established with adequate evidence to prevail under 16 17 Section 547(c)(2)(A), this subsection also calls for an examination of Section 547(c)(2)(B). 18 Unlike, Sections 547(c)(2) and 547(c)(2)(A), in which the interpretation relies on the proof of 19 the parties’ own dealings, Section 547(c)(2)(B) has an objective element which requires reference to 20 21 external datum. A survey of circuit case law reveals that the majority of the Circuit Courts of Appeal, 22 with the exception of the Eleventh Circuit Court of Appeals,2 concluded that the “ordinary business 23 terms” meaning is to be held broadly to customary terms and conditions used by other individuals in 24 25 the same industry witnessing exact or similar problems. In re Roblin Industries, Inc., 78 F.3d 30, 39

(2nd Cir. 1996) (collecting cases). Such conduct between the debtor and the creditor should be held

2 See Marathon Oil Co. v. Flatau (In re Craig Oil Co.), 785 F.2d 1563, 1566-67 (11th Cir.1986) (The Eleventh Circuit adopted the conduct of the parties standard instead of the objective inquiry adopted by the other Circuits. 1 objectively in light of the industry practices. Therefore, “only dealings so idiosyncratic as to fall 2 outside that broad range should be deemed extraordinary and therefore outside the scope of 3 subsection [B].” In re Tolona Pizza Products Corp., 3 F.3d 1029, 1033 (7th Cir.1993). This 4 5 interpretation is in line with the Congressional legislative history as it reveals: 6 The purpose of the preference section is two-fold. First, by permitting the trustee to avoid 7 pre-bankruptcy transfers that occur within a short period before bankruptcy, creditors are discouraged from racing to the courthouse to dismember the debtor during [its] slide into 8 bankruptcy. The protection thus afforded the debtor often enables [it] to work [its] way out of 9 a difficult financial situation through cooperation with all of [its] creditors. Second, and more important, the preference provisions facilitate the prime bankruptcy policy of equality of 10 distribution among creditors of the debtor. Any creditor that received a greater payment than 11 others of [its] class is required to disgorge so that all may share equally. The operation of the preference section to deter “the race of diligence” of creditors to dismember the debtor before 12 bankruptcy furthers the second goal of the preference section-that of equality of distribution. 13 H.Rep. No. 595, 95th Cong., 1st Sess. 177-78 (1977), reprinted in 1978 U.S.Code Cong. & 14 15 Admin.News 5963, 6138. This Court agrees that the objective standard contained in 11 U.S.C. § 16 547(c)(2)(B) mandates a creditor to establish that a payment for which it seeks the protection of 17 under the "ordinary course of business exception" to fall within the ordinary practice of others 18 19 similarly situated within the same industry. 20 Having established this objective standard under Section 547(c)(2)(B), “ordinary business 21 terms” must include those terms employed by similarly situated debtors and creditors facing the same 22 23 or similar situations. Therefore, if the terms in question are ordinary for industry participants under 24 financial distress, then they are ordinary for the industry. This objective standard serves a protective 25 function to which a creditor that agrees to restructure a debt in a manner consistent with industry

practice in those circumstances would not lose the benefit of such exception. Such objective standard

The conduct of the parties standard observes the conduct of the parties themselves to determine if the terms of a preferential transfer are ordinary). 1 also serves a dual policy function: (1) an industry creditor acting in a specific manner would not be 2 viewed as performing an unusual practice when such creditor does no more than follow usual 3 industry practice, precisely the kind of behavior the ordinary course of business exception was 4 5 intended to protect, and (2) it lessens the restrictions a creditor would experience in courses of action 6 typical in untroubled times in order to allow room for realistic debt workouts without unfairly 7 penalizing those creditors who take conventional steps to institute a repayment plan. See In re U.S.A. 8 9 Inns of Eureka Springs, Arkansas Inc., 9 F.3d 680 at 682-86. The table provided by Defendant 10 demonstrates that there is no “set pattern of payments or transactions” which can be considered as 11 ordinary course of business. See Dkt. No. 44, Exhibit 1. Debtor made 31 payments in the 15 months 12 13 prior to the filing of the petition. In some months, the Debtor made up to four payments (January of 14 2008), and in others no payments at all (April of 2008). The payments ranged from $4,337.53 up to 15 $36,470.84 prior to the preference period, but during the preference period the payments only ranged 16 17 between $5,001.35 to $11,755.79. 37. As can be seen from the table, the payments prior to the 18 preference period were late, between 48 and 123 days. During the preference period, the payments 19 were between 122 and 148 days late. This shows that during the preference period, the Debtor was 20 21 paying much later than prior to the preference period. The average "lateness" of the payments prior to 22 the preference period was 85.7 days and the median was 91 days. On the other hand, the average 23 "lateness" of the payments during the preference period was 134 days and the median was 135 days. 24 25 During the preference period the payments were made for much older invoices (average of 135 days

late) at an average of $8,463, but prior to the preference period the payments were considerably closer to the invoice being paid (average of 85.7 days late) and for more money on average $13,743. There was no set payment pattern which can be interpreted as constituting an "ordinary course of 1 |! business” defense. In this instant case, Defendant fails to present sufficient evidence to invok 2 Section 547(c)(2)(B), and thus cannot qualify for the "ordinary course of business” exception. 3 4 Conclusion 5 Summarily, Plaintiff successfully carried out the burden as mandated by Adickes an: 6 Celotex. Not only did Plaintiff produce evidence negating an essential element of the nonmovin 7 party's case, but she also established that the Defendant does not have sufficient evidence of a 8 > |! essential element of its claim or defense to carry its ultimate burden of persuasion at trial. Moreover 10 Defendant fails to present sufficient evidence to demonstrate that there is a genuine issue of fact 1 11 12 || dispute for a trial. 13 WHEREFORE, IT IS ORDERED that Plaintiff’ s Motion for Summary Judgment shall be 14 and it hereby is, GRANTED. Clerk to enter judgment. 15 16 SO ORDERED 17 San Juan, Puerto Rico, this 20th day of December, 2013. 18 19 20 eo Hie 22 Brian K. Tester 23 U.S. Bankruptcy Judge 24 25