Locke v. Rehm

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
JAMES B. DOYLE, No. 05-13524
Debtor(s).
______________________________________/
JEFFRY LOCKE, Trustee,
Plaintiff(s),
v. A.P. No. 06-1024
ROSEMARY REHM,
Defendant(s).
_______________________________________/
Memorandum on Motion for Summary Judgment
_________________
Though inartfully pleaded, the court finds paragraphs 5, 6 and 7 of the answer sufficient to raise
the new value defense in § 547(c)(4) of the Bankruptcy Code. The only issue in this case is therefore
whether the date of payment of the new value is deemed to be when defendant’s check was delivered or
when it cleared.
In Barnhill v. Johnson, 503 U.S. 393, 395 (1992), the Supreme Court held that when determining
the date a preference is made the date of its honoring is the correct date. However, the Court
Entered on Docket
June 09, 2006
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 06-01024 Doc# 18 Filed: 06/09/06 Entered: 06/09/06 15:04:43 Page 1 of 2

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specifically did not address the proper date applicable to a § 547(c) defense. 503 U.S. at 402n9. This
court is accordingly bound by Ninth Circuit law on the issue.
The rule in this circuit is that for § 547(c) purposes a payment is made upon delivery of a check
so long as the check is presented and paid within a reasonable time. In re Lee, 108 F.3d 239, 241, (9th
Cir. 1997); In re Wolf & Vine, 825 F.2d 197, 200-01 (9th Cir.1987); In re Wadsworth Building
Components, Inc., 711 F.2d 122, 123 (9th Cir.1983). Since it appears that defendant’s check was
delivered before bankruptcy, plaintiff’s motion for summary judgment must be denied.
Either party may submit an appropriate form of order.
Dated: June 9, 2006
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 06-01024 Doc# 18 Filed: 06/09/06 Entered: 06/09/06 15:04:43 Page 2 of 2