In Re Grand Chevrolet, Inc., and Related Entities,including: Grand Motors, Inc.; Grand Wilshirefinance Corp., Grand Rizal Financecorp., Grand Wilshire Capital,inc., Debtors.irving Sulmeyer, Chapter 11 Trustee, Plaintiff-appellant, v. Pacific Bmw, Defendant-appellee, 29 F.3d 631 (9th Cir. 1994)Annotate this Case
Before: FARRIS, RYMER and KLEINFELD, Circuit Judges.
Trustee Irving Sulmeyer appeals the granting of summary judgment to Pacific BMW. We have jurisdiction under 28 U.S.C. § 1291. We review de novo. In re Food Catering & Housing, Inc., 971 F.2d 396, 397 (9th Cir. 1992).
We have carefully reviewed the record. Pacific BMW introduced uncontroverted evidence that from January 1988 through mid-April 1988 (prior to the 90 day preference period), the debtor purchased ten vehicles from Pacific BMW using "72 hour" purchase drafts. It took the debtor's bank, Manilabank, between 7 and 17 days to honor those drafts.
We reject the trustee's argument that our decision in Matter of Vance, 721 F.2d 259 (9th Cir. 1983), precludes Pacific BMW from invoking the contemporaneous exchange exception, 11 U.S.C. § 547(c) (1), and the ordinary course of business exception, 11 U.S.C. § 547(c) (2). See In re Grand Chevrolet, No. 92-56461 (9th Cir. 1994).
Five of the transfers involved "72 hour" drafts.1 The "72 hour" drafts were honored between 15 and 22 days after they were presented for payment. Although the payments were late, they were sufficiently within the range of prior transactions between the parties to be considered ordinary in relation to past practices. See id. The district court did not err in holding that the ordinary course of business exception applied to those payments.
The debtor purchased a sixth vehicle on May 17, 1988. In exchange for this vehicle, the debtor originally gave Pacific BMW a "72 hour" purchase draft. Later that day, however, the debtor substituted the purchase draft with a check. The check was deposited and honored within three days. Under these circumstances, the district court properly concluded that the debtor's check payment constituted a contemporaneous exchange for new value.