ORDER
This mаtter is before the Court on the Motion for Summary Judgment filed on March 2, 1992 by the plaintiff in the above-referenced adversary рroceeding, Robert E. Brizendine (“Plaintiff”), as Trustee for Brown Transport Corporation (“Debtor”). In the Motion, Plaintiff requests that the Cоurt hold, as a matter of law, that certain transfers to the defendant, Barrett Oil Distributors, Inc. (“Defendant”), are recoverable as preferential transfers. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 157(b)(2)(F). The following constitutes the Court’s Findings of Fact and Conсlusions of Law.
FINDINGS OF FACT
The facts of this case are substantially undisputed. Defendant is a petroleum distributor and supplied fuel to Debtоr. By a check dated August 23, 1989, Debtor paid Defendant $18,080.40 for invoices dated June 28, 1989 and July 13, 1989. Thereafter, on October 31, 1989, Debtor filed a Chapter 11 petition in this Court, which was converted to a Chapter 7 case on January 8, 1990. On September 23, 1991, Plaintiff filed a Comрlaint to Avoid and Recover Preferential Transfers in order to recover the August 23, 1989 payment. This was *691 followed by the Motion for Summary Judgment now before the Court. In the Motion, Plaintiff contends no material issue of fact remains to be decided, and the transfer should be adjudged avoidable and recoverable as a matter of law.
In its response, Defendant does not dispute that there are no material issues to be decided concerning the existence of a preferential trаnsfer, but instead contends that the payment was made in the ordinary course of business, and is thus excepted from the avoidаnce powers of Plaintiff. More specifically, Defendant contends that the sales of fuel and payment for the sаme did not deviate from normal business practices accepted within the industry and was within the course of business of the respective parties, notwithstanding the fact that this was the first such transaction between Defendant and Debtor. Conversely, Plaintiffs position is that the statutory language excepting transfers made in the ordinary course of business requires that the transfer be mаde in the ordinary course of business between the two parties involved, as well as made according to ordinary business terms. Therefore, Plaintiff argues, if there is no prior course of dealings between Defendant and Debtor, this element cannot be satisfied.
The sole issue to be addressed is whether a transfer may come within the ordinary course of business exceрtion to the trustee’s avoidance powers if there is no prior course of dealings between the debtor and transfеree. This Court holds that it may not.
CONCLUSIONS OF LAW
In accordance with Federal Rule of Bankruptcy Procedure 7056, which incorporates Federal Rule of Civil Procedure 56, this Court will grant a motion for summary judgment only when there is no material issue of fact to be tried and the movant is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett,
The parties agree that the payment in question is a preferential transfer, as defined by 11 U.S.C. § 547(b). Therefore, thаt issue will not be addressed. As stated, the relevant facts of this case are undisputed, and the issue is narrow. Is a prior coursе of dealing between the debtor and a transferee necessary for a preferential transfer to come within thе ordinary course of business exception to the avoidance provisions of § 547(b)? The first factor to be examined is the statutory language itself. Section 547(c)(2) states:
The trustee may not avoid under this section a transfer—
(2) to the extent that such transfer was—
(A) in payment of a debt incurred by the debtor in the ordinary course of business or finаncial affairs of the debtor and the transferee;
(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and
(C) made according to ordinary business terms.
11 U.S.C. § 547(c). On its face, this statute requires that three separate elements be satisfied in order fоr the exception to apply.
In re Family Home Sales Center, Inc.,
This Court agrees with Plaintiff and thinks that the better interpretation of the statute is that § 547(c)(2)(B) requires a transferee to show that the transfer was made in the оrdinary course of business
between those two parties. See Samar Fashions, Inc. v. Private Line, Inc.,
Accordingly, it is the holding of this Court that a transferee must satisfy § 547(c)(2)(B) by showing that the transfer was made in the ordinary course of business between the debtor and the transferee. If therе is no prior course of dealings between the parties, the transferee cannot satisfy this element, and the transfer may be avoided. Therefore, Plaintiffs Motion for Summary Judgment is GRANTED, and Plaintiff shall recover $18,040.40 from Defendant. Additionally, Plaintiff also seeks to recover pre-judgment interest on the preference payments. Interest is recoverable in a preferеnce action from the date of the demand for its return by the trustee, or from the date of the commencement of thе adversary proceeding.
See In re Home Co.,
IT IS SO ORDERED.