1.  MATTERS BEFORE THE COURT AND RULING - This memorandum concerns the motion by the defendants, John and Olivia Olsen (son and daughter-in-law of the debtors), to dismiss the complaint on the pleadings based upon statute of limitation grounds, and the cross- motion of the trustee for summary judgment to avoid a post-petition transfer to the defendants and recover the real property involved. I heard oral argument on February 5, 1992, and ruled from the bench that the motion to dismiss would be denied, and that a summary judgment will be entered granting the trustee's request that the post-petition transfer to defendants be avoided.

          2.  FACTS - Debtors filed a voluntary chapter 11 petition in 1984. The case was converted to chapter 7 in 1987. James Dodson was the initial trustee, but was superseded by Gordon Zerbetz, the plaintiff.

     When the case was filed in 1984, the following two parcels were property of the estate:

Tract B, OLSEN SUBDIVISION, a portion of U.S. Survey 1021 (H.E.S. 38), according to Plat 84-33, Petersburg Recording District, First Judicial District, Alaska. [as more fully described in the Quitclaim Deed recorded on March 22, 1989 in Book 32 at Page 683 et seq in the Petersburg Recording District]

Tideland Lot T-44 and a portion of Tideland Lot T-43 [as more fully described in the Quitclaim Deed recorded on March 22, 1989 in Book 32 at Page 681 in the Petersburg Recording District, the description on which may be defective].

     The complaint alleges that, without notice to the trustee or creditors and without moving for court approval and in violation of the Bankruptcy Code, Raymond and Gladys Olsen conveyed the two     2 ABR 271  parcels to the defendants, John and Olivia Olsen, debtors' son and daughter-in-law, by the quitclaim deeds just mentioned in the preceding two paragraphs. These quitclaim deeds were recorded on March 22, 1989. The quitclaim deeds indicate that they are in fulfillment of a real estate contract, also dated March 20, 1989, between those parties. The complaint also alleges that the trustee became aware of debtors' conveyances between May 30, 1991 and July 10, 1991, about two years and three months after the conveyances. Defendants' answers do not deny these allegations.

     The trustee filed this adversary proceeding in October, 1991, asking that the post-petition transfer be set aside under 11 USC § 549 and the property be turned over to the trustee pursuant to 11 USC §§ 542 or 550.

     In an answer and motion to dismiss filed November 20, 1991, the defendants claim that the trustee's action is time barred under a two-year statute of limitation in 11 U.S.C. § 549(d) (see Docket Nos. 6 and 7). They also cite some other bankruptcy statutes and more generally allege that a two-year statute of limitation started on November 13, 1987 and ran on November 13, 1989 pursuant to 11 U.S.C. §§ 542, 546, 549(b), 550(e), and is subject to the defense of laches.

     The trustee opposed dismissal and cross-filed for summary judgment. See Docket Nos. 8 and 9, filed December 9, 1991. The trustee's motion was supported by an affidavit of the Trustee's attorney, Bernd Guetschow (see Docket No. 9, Exhibit D).

     At the oral argument I asked John Olsen to state what he had done to give actual notice of the transfer to either of the     2 ABR 272  trustees, Bernd Guetschow, or anyone else representing their interests. John Olsen, obstinately, refused to cede control of the hearing or relinquish the floor, though repeatedly ordered by me to let the court conduct the hearing. I finally told him, if he did not stop, he would be cut off from his telephonic participation (as he would have been ordered from the courtroom had he been personally attending).

     He still refused to answer my question regarding what notice he gave to the trustees or their attorney, and I am taking this and his failure to deny the allegations of the complaint that the trustee did not learn of the transfer until more than two years after they occurred as an admission that no notice was given to these representatives of the bankruptcy estate.

          3.  ISSUES - There are two issues. First, should the adversary proceeding be dismissed because it is time barred. If not, the second issue is whether summary judgment be granted to the trustee avoiding the transfers to defendants and ordering defendants off the real estate.

          4.  LEGAL ANALYSIS -

          4.1.  Dismissal under the Two-Year Statute of Limitation in § 549(d) of the Bankruptcy Code - 11 USC § 549 is the section of the Bankruptcy Code dealing with post-petition transfers. § 549(d) states that:

     An action or proceeding under this section may not be commenced after the earlier of --

(1) two years after the date of the transfer sought to be avoided; or

(2) the time that the case is closed or dismissed.

     The defendants see this as a black and white situation; if two years go by, the trustee is barred in all cases (at least in the one before this court) from seeking to avoid the post-petition transfer. In support of their motion that the complaint is time barred, the defendants cite In re Metropolitan Cosmetic Reconstructive Surgery, P.A., 125 BR 556 (Bankr D Minn 1991). In the Metropolitan Cosmetic Case a chapter 11 debtor-in-possession made some transfers by check in 1987 and 1988. A trustee was appointed in the chapter 11 in September, 1988 and the case was converted to chapter 7 in January of 1989. An action was brought in October, 1990 under §§ 544 and 549 of the Bankruptcy Code. The bankruptcy court, in a very brief opinion, stated that § 544 of the Bankruptcy Code did not apply to post-petition transfers and, in a few words, said that the complaint was time barred under § 549(d) because it was filed more than two years after the checks were transferred. There is no discussion in the case about whether the trustee did or did not know of the transfers, or whether the transfers were hidden or disclosed, et cetera.

     In our case, the property is located in Southeast Alaska, in the Petersburg Recording District. The trustee's complaint states that the transfer was not discovered by him until several months ago, more than two years from the date of the transfers in March, 1989.

     Under these circumstances, the statute would be tolled. § 549(d) is not jurisdictional in nature. Smith v. Mark Twain National Bank, 805 F2d 278, 294 (where the court applied a doctrine of equitable estoppel to avoid the two-year statute of limitations     2 ABR 274  where the trustee relied on the creditor's representation and let the two years expire).

     Judge Chinen of the Bankruptcy Court in Hawaii recently held that the two-year statute can be tolled because of deceptive behavior by debtor. See, In re Fan 132 BR 430 (Bankr D Hawaii 1991). A similar holding is R & L Cartage & Sons, Inc., 118 BR 646, 652 (Bankr ND Ind 1990) and In re Bookout Holsteins, Inc., 100 BR 427, 430 (Bankr ND Ind 1989) (in which the court said passive, as well as active, concealment can give rise to an equitable estoppel).

     A party, especially an insider, should not be permitted to secretly receive an unauthorized transfer from the estate, and then raise the defense of the two-year statute of limitation where the trustee does not know of the transfer and cannot reasonably be expected to discover it.

     Defendants' motion to dismiss appears to fall under FRCivP 12(c), incorporated by FRBP 7012, as a motion for judgment on the pleadings. In analyzing the motion, the allegations of the non-moving party are accepted as true and those of the moving party which have been denied are assumed to be false. Hal Roach Studios, Inc. v Richard Feiner and Company, Inc., 883 F2d 1429, 1426 (9th Cir 1989) ("Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law").

     Therefore, the defendants' motion to dismiss will be denied since the trustee raises a pertinent issue of material fact by alleging he first learned of the transfers more than two years     2 ABR 275  after they occurred, and he filed the complaint very soon after learning about the transfers.

          4.2.  Trustee's Avoidance of the Post-Petition Transfers and Turnover under §§ 549 (a) and 542 - The trustee moved for summary judgment, asking that the transfer of the two parcels be avoided under § 549 of the Bankruptcy Code and that the property be returned to the trustee. The motions were brought under FRCivP 56, incorporated by FRPB 7056. The standard for granting summary judgment in the Ninth Circuit was recently discussed in Hughes v. USA, ______ F2d ______, 1992 WL 1610, p*10 (9th Cir 1992):

We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339- 40 (9th Cir. 1989); Judie v. Hamilton, 872 F.2d 919, 920 (9th Cir. 1989). Fed. R. Civ. P. 56 establishes the procedural framework for summary judgment motions. A defending party, such as the government in this case, may move for summary judgment with or without supporting affidavits. Fed. R. Civ. P. 56(b). The moving party bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of " "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). After the moving party has met its initial burden, Rule 56(e) ... requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the " "depositions, answers to interrogatories, and admissions on file," designate " "specific facts showing that there is a genuine issue for trial." Id. at 324.

     Thus, I view the facts most favorable to the defendants, despite the badges of fraud in this case, e.g.: (a) a transfer not authorized by the court; (b) suspicious documentation; (c) transfer     2 ABR 276  to a close relative. However, the defendants have submitted no testimony in support of their position.

     The trustee, on the other hand, has submitted the affidavit of Bernd Guetschow, the trustee's attorney alleging that the trustees had no knowledge of the transfers until more than two years after the March 22, 1989 transfer date. If this were the only evidence in support of summary judgment, I probably would deny the motion on the basis of In re Aquaslide 'N' Dive Corporation, 85 BR 545, 548 (9th Cir BAP 1987) that affidavits of an attorney not based upon personal knowledge should be disregarded. It is very likely that Mr. Guetschow does have some personal knowledge, but acknowledging his affidavit might disqualify him from acting as the estate's attorney in this adversary proceeding since he would be a witness.

     The trustee's motion is supported by an admission of debtors that the trustee had no knowledge of the March 22, 1989 transfers until some time in mid-1991. Debtors' failure to deny the trustee's allegations to this effect in their answers in the complaint is an admission. FRCivP 8(d) incorporated by FRBP 7008. Although I tried to give John Olsen an opportunity to rebut this admission, he would not take advantage of the chance, but tried to disrupt the hearing.

     The two parcels of real property belonged in the estate. 11 USC § 541(a). When the trustee was appointed, he became the party entitled to control and possession of the estate property so it could be liquidated. 11 USC § 704. The sale or use of the property out of the ordinary course of business requires a notice     2 ABR 277  and hearing. 11 USC § 363(b). There was none. 11 USC § 549 allows a trustee to avoid an unauthorized post-petition transfer. In re Schwartz, _____ F2d _____, 1992 US App Lexis 566 at p*15 (9th Cir 1992). There is no genuine issue of material fact that this is what transpired in this case. Therefore, summary judgment will be entered for the trustee, avoiding the transfers and revesting the property in the trustee. The trustee is entitled to turnover of the property under § 542 of the Bankruptcy Code if defendants are in possession.

          4.3.  Defendants' Defenses Under §§ 542, 546, 550(e) and Laches - On their face, as the trustee points out, none of these statutes and/or defenses are grounds for dismissal.
Compare In re Reed, 940 F2d 1315, 1323 (9th Cir 1991) re laches.