1. INTRODUCTION- The defendant, Enstar Natural Gas Company, filed a Motion To Dismiss (Docket Entry 7, filed January 8, 1998). The court will treat this as a motion for summary judgment, since it is supported by an affidavit of Enstar's Credit Manager.

The trustee sued to recover an $11,036.76 preference. Enstar argues that payments made by MarkAir Express (MAE) within ninety days of the petition date are exempt from avoidance because they were made in the ordinary course of business. 11 USC § 547(c)(2)(B).

No response was filed by the plaintiff trustee.

Given the short period of delinquency, the declaration of Enstar's Credit Manager provides sufficient proof that $1,963.64 of the claim was paid within the ordinary course of business.

However, since the court has no detail on the actual history of MAE's 5 ABR 163      prior dealings with Enstar to determine if the payments were in fact within the ordinary course of the dealings between the parties with respect to the balance of $9,073.12, summary judgment will be denied as to that amount.

2. BACKGROUND- In its complaint, MAE indicates that nine Enstar invoices were paid with three MAE checks. The facts are outlined in the following table:

The dates and amounts in the table are from Exhibit A to Complaint (Docket Entry 1, filed October 23, 1997). Enstar's answer admits dates and amounts.

The table uses the date of honoring the check to determine when the transfer was made for the purposes of § 547(b). Barnhill v Johnson, 112 SCt 1386, 1387 (1992).

With respect to the check for $1,963.64, a small portion was not even due at the time the check cleared ($63.19), and the balance of $1,900.45 was only a few days past the due date.

With respect to the $6,823.12 check, the payment was 63 through 71 days 5 ABR 164      past the due date.

Regarding the final $2,250.00 check, the Exhibit appears to be incorrect, or some facts have not been set forth. The $2,250.00 item shows a check clearing on September 14, 1995, an invoice date of the same date, and an invoice due date 38 days before the invoice date. Something does not compute concerning this transaction, and it is possible Exhibit A to the complaint contains a typo.

3. ANALYSIS-

3.1. Summary Judgment Standards- FRBP 7012(b) incorporates FRCP 12(c). Rule 12(c) provides that the court shall treat a motion such as Enstar's as a motion for summary judgment since it presents matters outside the pleadings.

It is the duty of the party defending against a motion for summary judgment, after the movant has shown that there is no issue of material fact and that it is entitled to summary judgment as a matter of law, to present issues of material fact if it wants to preserve the matter for trial. See, Chitkin v Lincoln National Ins. Co., 879 FSupp 841, 848-49 (SD Cal 1995) for a good explanation of the summary judgment standards.

First, however, the movant must at least show that it is entitled to summary judgment on the facts. Id.

The Affidavit of R. D. Kron, the Manager of the Credit & Customer Accounting Systems for Enstar (Docket Entry 9, filed January 8, 1998), states, in conclusionary terms, that payments were in the ordinary course of business. He became the Credit Manager in 1995. Without any specificity, he said MAE had been late in making its payments in the past, and upon Enstar applying some pressure, MAE eventually came through with payment for past balances. Unfortunately, no detail of the past credit history has been provided. Nor has any detail on the type of collection 5 ABR 165      effort been supplied.

The conclusion that the payments were in the "ordinary course of business" lacks a sufficient factual predicate to support the conclusion that the payments were in the ordinary course of business. Hansen v United States, 7 F3d 137 (9^th Cir 1993); Mark v United States, 578 F2d 261, 263 (9^th Cir 1978).

3.2. Preference- A payment that is preferential is nonetheless exempt from avoidance if the transfer was to pay a debt incurred in the ordinary course or financial affairs of the debtor and the transferee, made in the ordinary course of business or financial affairs of the debtor and the transferee, and made according to ordinary business terms. 11 USC § 547(c)(2).

Kron's Affidavit indicates that MAE's payments had been habitually slow and, when pressed, were brought current. It provides no detail as to the timing of this, or a history at all, including when the demands were made and when the payments were made. See, ¶¶ 4, 6, and 7 of Mr. Kron's Affidavit. It is apparent that payments were made under pressure. The facts are not set forth explicitly enough to know the extent of the pressure. If it was significant, the payments may not have been in the ordinary course of business. See, Matter of Seawinds Limited, 888 F2d 640 (9^th Cir 1989).

On the other hand, minor collection efforts, consistently applied, may not be enough "pressure" to deny a creditor the benefit of the ordinary course of business exception. In re L. Bee Furniture Co., 204 BR 809 (Bankr MD Fla 1997).

In our case, the facts are not developed sufficiently for the court to determine if Enstar is entitled to summary judgment. I refer the parties to In re T.B. Sewing Machine Enterprises Inc., 173 BR 790 (Bankr ND Ga 1993) for a discussion of a creditor's burden in establishing a § 547(c)(2)(B) defense.

5 ABR 166      Also, Enstar has not shown that the payments were according to "ordinary business terms" under § 547(c)(2)(C). In re Food Catering & Housing, Inc., 971 F2d 396, 398 (9^th Cir 1992); In re Loretto Winery, Ltd., 107 BR 707, 709 (9^th Cir BAP 1989).

Nonetheless, the payment for $1,963.64 occurred so close to the due date, that the court will treat Mr. Kron's Affidavit as sufficient to indicate that payment for this amount was within the ordinary course.

4. CONCLUSION- An order granting summary judgment to defendant dismissing the complaint with respect to the $1,963.64 check, and denying the motion with respect to the two other checks for $6,823.12 and $2,250.00, will be entered concurrent with this Memorandum.

This is a small case. The parties ought to be able to resolve it by sitting down and reviewing the facts. I understand they have not even talked. I request that they do so.

If Enstar is right, that the pattern of late payments as shown in past dealings is reflected in the amounts sought by the trustee, and the collection efforts were relatively nominal, perhaps the trustee should concede the matter. I realize the facts could be otherwise, but it will benefit the parties to try to resolve this by negotiation, rather than litigation.

DATED:    February 5, 1998

HERBERT A. ROSS
U.S. Bankruptcy Judge