Howell, III, Trustee v. Auto-Owners Insurance Company

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
NEWNAN DIVISION
In re: 	:
: 	CASE NO. 22-10965-PMB
3 KINGS CONSTRUCTION 	:
RESIDENTIAL LLC, 	:
: 	CHAPTER 7
Debtor. 	:
:
:
GRIFFIN E. HOWELL, III, 	:
Chapter 7 Trustee, 	:
:
Plaintiff, 	:
: 	ADVERSARY PROCEEDING
v. 	:
: 	NO. 24-1021
AUTO-OWNERS 	:
INSURANCE COMPANY, 	:
:
Defendant. 	:
:
ORDER GRANTING IN PART AND DENYING
IN PART DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
_______________________________________________________________
IT IS ORDERED as set forth below:
________________________________
Paul Baisier
U.S. Bankruptcy Court Judge
Date: July 6, 2026
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Griffin E. Howell, III, duly appointed Chapter 7 Trustee (the “Plaintiff” or the “Trustee”)1
for the Chapter 7 estate of 3 Kings Construction Residential, LLC (the “Debtor”), commenced this
action by filing a Complaint herein on September 9, 2024 (Docket No. 1)(the “Complaint”) against
Defendant Auto-Owners Insurance Company (the “Defendant”). 	This matter comes before the
Court on Auto-Owners Insurance Company’s Motion for Summary Judgment filed on July 17,
2025, with attachments2 (Docket No. 19)(the “Motion”) by the Defendant.
I. 	Background
As alleged in the Complaint, the Trustee seeks to set aside and recover various transfers
(the “Transfers”) of money received by the Defendant and voidable and recoverable as follows:
(i) as preferential transfers under 11 U.S.C. § 547 and § 550 in the amount of $13,589.21; (ii) as
fraudulent transfers under 11 U.S.C. § 544, § 548, and § 550 and O.C.G.A. §§ 18-2-70, et seq. in
the amount of $102,922.72; and finally, (iii) as unauthorized post-petition transfers under 11
U.S.C. § 549(a) and § 550 in the amount of $32,071.74, which were made to the Defendant by the
Debtor through its insiders and principals. 	On October 3, 2024, the Defendant filed Auto-Owners
Insurance Company’s Answer (see Docket No. 4). 	The parties filed their Joint Rule 26(f) Report
1 This case, filed as a voluntary petition under Subchapter V of Chapter 11 on September 7, 2022 (the “Petition Date”),
created a bankruptcy estate consisting of the Debtor’s property under 11 U.S.C. § 541 (the “Estate”). 	See also 11
U.S.C. § 1186 (Property of the Estate). 	Under 11 U.S.C. § 1184, the Debtor was charged with certain fiduciary duties
as a debtor-in-possession (“DIP”) during the Chapter 11 case. 	This case was later converted from a case under
Chapter 11 to a case under Chapter 7 on February 23, 2023. 	See Order Granting Motion to Convert Case to Chapter
7 (Main Case Docket No. 89). 	The Plaintiff was appointed as interim Chapter 7 Trustee pursuant to 11 U.S.C. §
701(a)(1). 	The meeting of creditors under 11 U.S.C. § 341 was held telephonically and concluded on June 30, 2023,
after which the Plaintiff became the permanent Chapter 7 Trustee herein pursuant to 11 U.S.C. § 702(d).
2 These attachments included Auto-Owners Insurance Company’s Brief in Support of its Motion for Summary
Judgment (“Defendant’s Brief in Support”), Defendant Auto-Owners Insurance Company’s Statement of Undisputed
Material Facts (“Defendant’s Statement of Undisputed Facts”), Defendant Auto-Owners Insurance Company’s Notice
of Filing Declaration of Jason Jerome (the “Jerome Declaration”), and Defendant Auto-Owners Insurance Company’s
Notice of Filing of Original Discovery.
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on December 20, 2024 (Docket No. 9), which was approved by the Court on January 14, 2025.
See Order on Rule 26(f) Report (Docket No. 10).3
After the Motion was filed on July 17, 2025, on August 29, 2025, the parties filed a
Stipulation (Docket No. 22)(the “Stipulation”) in which they agreed that the Motion would be set
aside and held in abeyance pending a request on notice by the Defendant that it be considered.
The Stipulation further provided that if such a request was made, the Trustee would have ten (10)
days to respond to the Motion. 	Subsequently, on December 29, 2025, the Defendant filed and
served Defendant Auto-Owners Insurance Company’s Notice Requesting Consideration of Motion
for Summary Judgment (Docket No. 23)(the “Notice Requesting Consideration”). The Trustee
subsequently filed the Trustee’s Response to Motion for Summary Judgment by Defendant on
January 28, 2026 (Docket No. 24)(the “Trustee’s Response”).4 	On February 10, 2026, Defendant
filed Auto-Owners Insurance Company’s Reply Brief in Support of Motion for Summary Judgment
(Docket No. 25) (“Defendant’s Reply”). 	The Trustee then filed Plaintiff’s Sur-Reply to
Defendant’s Brief on Motion for Summary Judgment on March 6, 2026 (Docket No. 30)(the
“Trustee’s Sur-Reply”).5
3 The parties thereafter filed a Joint Motion to Amend the Rule 26(f) Order on May 15, 2025 (Docket No. 14), seeking
to extend the discovery period and other pretrial deadlines that was approved by Order entered on June 20, 2025
(Docket No. 16). 	A subsequent Joint Motion to Amend the Rule 26(f) Order was filed on July 16, 2025 (Docket No.
18), seeking a further extension, which was approved by Order entered on July 18, 2025 (Docket No. 20)(the foregoing
Orders, collectively, the “Scheduling Order”).
4 Attached to the Trustee’s Response is the Declaration of Robert Albretsen (the “Albretsen Declaration”). 	Mr.
Albretsen is an accountant employed by the Trustee who has offered extensive testimony in this case following his
detailed examination and analysis of the Debtor’s financial records. 	He is also a certified fraud examiner.
5 Previously, the Trustee filed his Request for Authority to Issue Sur-Reply on February 16, 2026 (Docket No. 26) that
the Court granted by its Order on Request for Authority to Issue Sur-Reply on February 20, 2026 (Docket No. 28).
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II. 	Timeliness of Trustee’s Response and Analysis of Excusable Neglect
As a preliminary matter, the Defendant asserts that the Trustee effectively admitted the
facts the Defendant relies upon in the Motion since he did not file a response to the Motion within
twenty-one (21) days of its filing. 	See Defendant’s Reply, pp. 2-3, citing BLR 7007-1(c). 	As
noted above, the Stipulation later provided that the Trustee would have ten (10) days to respond
once the Defendant filed a Notice Requesting Consideration of the Motion, which it did on
December 29, 2025. 	Although the Trustee did file the Trustee’s Response, it was filed after the
ten-day period referenced in the Stipulation expired on January 13, 2026.6 	The Defendant further
contends that the Trustee may not rely on his tardily filed Trustee’s Response to create issues of
fact without evidence or seek to revive theories of recovery not preserved in the Scheduling Order.7
Consequently, it urges the Court to treat the Defendant’s Statement of Undisputed Material Facts
as not properly controverted, disregard any late-raised theories and argument by the Trustee, and
grant the Motion. 	See BLR 7056-1(a)(2).
The Trustee counters that the Trustee’s Response should be considered by the Court under
the doctrine of excusable neglect. 	He states that his delay in responding resulted primarily from
the fact that during the 10-day response period triggered by the filing of the Notice Requesting
Consideration, Trustee’s counsel’s entire legal office was incapacitated and unable to work for
several weeks due to an outbreak of bacterial pneumonia. 	The Trustee maintains that he has
proceeded in good faith throughout this litigation in conducting his affairs and never sought an
6 As noted above, the Trustee’s Response was filed on January 28, 2026.
7 This reference is not entirely clear, and, in any event, the Scheduling Order does not limit the issues to be addressed.
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undue advantage from the delay experienced due to his untimeliness in responding to the Motion.
See Trustee’s Sur-Reply, pp. 10-13.
As an initial matter, it is not clear for several reasons that there was an operative deadline
for the Trustee’s response to the Motion. 	First, by agreeing to the Stipulation asking that the
Motion be held in abeyance at a time when the Plaintiff’s response was already overdue under the
applicable rules, the Defendant in no way preserved its right to assert the failure of the Trustee’s
to respond timely prior to that time. 	Instead, the Defendant agreed that the Trustee could have
additional time, after it filed a notice, to file a response. 	In those circumstances, any argument
that the response was already untimely and thus facts could not be controverted in a subsequent
response was waived. 	Further, as to the purported new deadline so established, the parties
requested in the Stipulation that it be made an Order of the Court, presumably to render the
deadline meaningful. 	However, that request was never followed up on, and the Stipulation was
never made an Order of the Court, such that the deadline was not one ordered by this Court.
Finally, even if the January 13, 2026, deadline was an operative deadline, the Trustee’s
failure to meet it will be excused for the reasons that follow. 	As authorized by Federal Rule of
Bankruptcy Procedure (“F.R.B.P.”) 9006(b)(1)(B), for cause shown, the Court may permit an act
that was required to be done within a specified period to be completed after the time has expired
“where the failure to act was the result of excusable neglect.”8 	The United States Supreme Court
clarified the meaning of “excusable neglect” under F.R.B.P. 9006(b)(1) in Pioneer Inv. Servs. Co.
v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993). 	In Pioneer, the Court acknowledged that
8 Application of this analysis is warranted in these circumstances, but again, the “deadline” at issue was not imposed
by “these rules, a notice under these rules, or a court order.” 	F.R.B.P. 9006(b)(1).
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although the term “neglect” as used in the rules does not “inflexibly” exclude every “instance of
an inadvertent or negligent omission,” still, such neglect must be “excusable.” 	507 U.S. at 394-
95.
The Court set forth an analysis guided by equitable concerns and a consideration of the
circumstances in connection with an omission or failure to act timely. 	The factors to be weighed
include the following: “‘the danger of prejudice to the [opposing party], the length of the delay
and its potential impact on judicial proceedings, the reason for the delay, including whether it was
within the reasonable control of the movant, and whether the movant acted in good faith.’”
Pioneer, supra, 507 U.S. at 395, quoted in Cheney v. Anchor Glass Container Corp., 71 F.3d 848,
850 (11th Cir. 1996).
Since a “determination of excusable neglect is an equitable one,” an evaluation of each
factor is appropriate. 	Valdez v. Feltman (In re Worldwide Web Sys., Inc.), 328 F.3d 1291, 1297
(11th Cir. 2003). 9 	Thus, it is “a flexible standard that takes ‘into account all the relevant
circumstances’ and is not a mechanical test.” 	Petite v. MedCross Imaging, LLC (MedCross
9 In Valdez, supra, the Eleventh Circuit stated that the absence of prejudice alone is insufficient, and the court must
also consider meritorious defense as well as a good reason for failing to respond. 	Id. at 1297. 	In that case, the court
affirmed the denial of a motion to set aside a default judgment under F.R.C.P. 60(b)(1) on grounds of excusable neglect
because the moving party failed to satisfy the latter two requirements. 	Id. at 1297-98. 	As the court stated:
Valdez is correct that in Cheney we acknowledged that the Supreme Court in Pioneer…accorded
primary importance to the absence of prejudice and to the interest of efficient judicial administration
in determining whether the district court had abused its discretion. Cheney, 71 F.3d at 849–850.
While the absence of prejudice to the nonmoving party and to the interest of efficient judicial
administration are of “primary importance,” the Pioneer and Cheney decisions do not alter the fact
that a determination of excusable neglect is an equitable one that necessarily involves consideration
of all three elements—a meritorious defense, prejudice, and a good reason for not responding to the
complaint—and not, as Valdez argues, exclusively prejudice.
Valdez, supra, 328 F.3d at 1297. 	Therefore, all three (3) factors must be considered.
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Imaging, LLC), 2023 WL 4111563, *5, 2023 Bankr. LEXIS 1603, at *17 (Bankr. N.D. Ga. June
21, 2023). 	Further, “[w]hen considering the reason for the delay, excusable neglect ‘may include,
when appropriate, late filings caused by inadvertence, mistake, or carelessness under certain
circumstances.’” 	MedCross, supra, 2023 WL 4111563, at *5, quoting Locke v. SunTrust Bank,
484 F.3d 1343, 1346 (11th Cir. 2007). 	In Cheney, supra, 71 F.3d 848, the Eleventh Circuit
applied the Pioneer analysis to F.R.C.P. 60(b) and reversed the denial of relief where a breakdown
in communication between a party’s own counsel led to the failure to meet a deadline to seek a
new trial by six (6) days. 	In that case, the court noted the lack of prejudice to the nonmoving
party in granting relief, the minimal extent of the delay, the absence of bad faith, and the failure
amounting to innocent oversight or carelessness by counsel as opposed to a deliberate disregard of
the rules. 	71 F.3d at 850.
Applying these standards, the Court concludes that although the Trustee’s Response was
filed fifteen (15) days after the purported due date and thirty (30) days after the Defendant filed its
Notice Requesting Consideration, this late-filed pleading will be allowed and considered. 	The
Defendant has not shown any prejudice that it has endured based on the delayed response.
Although not insignificant, a two (2) week delay in this matter is not overly concerning, especially
in view of the reason for the delay and the length of time that this matter has been pending overall.10
As represented in the Trustee’s Sur-Reply, the delay was based on a debilitating illness contracted
by counsel and attorney error, which the Court finds to be adequate as a reason in the
10 By January of 2026, this case had been pending for roughly sixteen (16) months, an extended period facilitated in
part by the various extensions of time agreed to by the parties. 	See note 3, supra. 	The Stipulation alone ultimately
involved a roughly four (4) month delay in the case.
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circumstances. 	On review, there also does not seem to be any credible suggestion of bad faith or
attempt to obtain an undue advantage from the delay, and as discussed in more detail below, certain
of the Trustee’s claims appear to have sufficient merit such that he should be allowed to prosecute
them based on the allegations in the Complaint.
III. 	Defendant’s Motion for Summary Judgment
A. Defendant’s Statement of Facts
Among other things, the Defendant asserts in the Defendant’s Statement of Undisputed
Facts that the premium payments constituting part of the Transfers in the amount of $78,166.33
were made more than ninety (90) days before the Petition Date. 	The Defendant also states that it
issued various insurance policies to the Debtor, including commercial general liability coverage
for which the Debtor paid premiums in the course of operations of its construction business. 	This
insurance coverage, however, did not include any automobile policies. 	Instead, the Defendant
asserts that Owners Insurance Company (“Owners”), which the Defendant claims is a separate
subsidiary insurer of the Defendant, issued the commercial automobile policies for which the
Debtor paid $47,216.21 in premiums (as part of the Transfers).
The Defendant adds that these premiums were paid in the ordinary course of business and
were made for new value received. 	It also states that Tony Harris, Sr. (“Mr. Harris”), the Debtor’s
principal, testified at the Section 341 Meeting of Creditors in this case that the insured vehicles
were used in the Debtor’s business.11 	Further, in responding to the Defendant’s Interrogatories,
11 This testimony, while possibly relevant as evidence (but see infra note 12), is not an admission that is binding on
the Trustee. 	The Court has not found any case authority that supports the notion that a trustee would be bound, as
the Defendant suggests. 	The apparent absence of such authority makes sense since a case trustee and a debtor stand
in a potentially adversarial relationship, in that the trustee may need to challenge a debtor’s statements or testimony
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the Defendant notes that the Trustee failed to identify any persons involved in authorizing or
directing the Transfers in support of his allegation that they were insiders. 	It further claims the
Trustee also did not identify any actual or constructive fraud on the part of either the Defendant or
Owners. 	See Defendant’s Statement of Undisputed Facts.
B. Trustee’s Response
The Trustee relies on the detailed factual allegations offered in the Complaint and the
statements of Mr. Albretsen in the Albretsen Declaration. 	As summarized (see Trustee’s
Response, pp. 2-3), the Trustee contends that the only undisputed facts are that the Debtor made
certain insurance premium payments to the Defendant as initial transferee for automobile
insurance and that the Debtor did not own any vehicles. 	Instead, the insured vehicles were owned
by Mr. Harris individually. 	It is otherwise apparent from the history of this case that Mr. Harris
caused the Debtor to use its funds to pay various expenses for the benefit of Mr. Harris’ family
members (the “Insiders”) and his other affiliate businesses. 	Based on his assessment of the facts
previously established in this case, witness testimony, and available business records, the Trustee
states that Mr. Albretsen would testify, as stated in his Declaration, that there is no basis to relate
or connect Mr. Harris’ personal use of these vehicles with any corporate purpose of the Debtor.
Trustee’s Response, p. 2 & p. 9, citing Albretsen Declaration, ¶¶ 9-19.
The Trustee also asserts that any statements by Mr. Harris that the vehicles were used in
the Debtor’s business lack supporting detail. 	Further, the Trustee contends that the Defendant’s
sole reliance upon Mr. Harris’ testimony during his Section 341 Meeting to establish Debtor
in bringing an action for recovery of assets for the benefit of the bankruptcy estate and creditors whose interests the
trustee represents.
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benefit from the Transfers fails, as this Court has already found Mr. Harris’ testimony lacks
credibility.12 	The Trustee adds that no claims were ever made by the Debtor on the insurance
policies at issue. 	The Trustee further states that Mr. Harris has either failed or refused to turn over
to the Trustee any records that would show whether and to what extent the subject vehicles for
which insurance coverage was obtained were ever used for the benefit of the Debtor in the conduct
of its business affairs as Owners claims. 	Trustee’s Response, p. 3.
The Trustee also states that he will amend his Complaint to abandon all claims premised
upon payments for insurance policies other than those pertaining to automobile insurance coverage
maintained on personal vehicles of insiders of the Debtor and paid for by the Debtor. 	Trustee’s
Response, p. 4.13 	The Trustee acknowledges that the Defendant maintains this amount totals
$47,216.21 in premiums paid by the Debtor through Defendant to Owners on the commercial
automobile insurance policies, but he does not concede that this amount is correct and asserts it is
subject to evidence of payment allocation among all the policies. Trustee’s Response, p. 7, ¶ 9;
Trustee’s Sur-Reply, p. 5. 	See also Defendant’s Brief in Support, p. 7; Jason Declaration, ¶¶ 10
12 Here, the Trustee urges the Court to take judicial notice of its own findings regarding contempt and the numerous
misrepresentations made by Mr. Harris in this case. 	Trustee’s Response, pp. 12-14. 	The Trustee also states that
when witness credibility is at stake it may not be determined on summary judgment and all inferences should be drawn
in favor of the non-moving party. 	As reflected on the docket in this case, the Court entered an Order Granting in
Part and Denying in Part and Application for Entry of Default Judgment Against Defendants and Addressing Related
Requests for Relief by the Parties in Docket Nos. 109, 110, 113, 115, 122, & 137 (Docket No. 138)(the “Order Granting
Default”)(Adversary Proceeding No. 23-1007, Griffin Howell, Trustee and The United States v. Tony Harris, Sr., et
al.), that contains various findings of fact and conclusions of law regarding, among other things, Mr. Harris’ lack of
credibility as a witness and Mr. Harris’ liability in causing certain fraudulent transfers in connection with his
management of the Debtor’s business and control of its property.
13 Such an amendment to the Complaint is not necessary, as the Court will grant the Defendant’s Motion to that extent
in this Order.
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& 11; Defendant’s Statement of Facts (various insurance policy related documents attached thereto
as Exhibits).14
Without offering contrary evidence, the Trustee takes issue with the Defendant’s
contention that the subject auto policies were issued by Owners, which as noted above the
Defendant asserts is a separate corporate entity. 	As for its argument that Owners should have
been, but was not, timely added to this action as the true party in interest and may not be added
now, the Trustee maintains that he still may amend the Complaint to do so.15
On review, however, because the Defendant allegedly first received the payments
constituting the Transfers, it would be an “initial transferee,” and it would not be necessary to add
Owners as a defendant herein as the party “for whose benefit” the Transfers were made.16 	Section
550(a) governs the scope of recovery regarding the transferee(s) of an avoided transfer, and it
provides as follows:
(a) Except as otherwise provided in this section, to the extent that a transfer
is avoided under section 544, 545, 547, 548, 549, 553(b), or 724(a) of
this title, the trustee may recover, for the benefit of the estate, the
14 The Defendant disputes the Trustee’s ability to amend and add Owners at this late date as well as the Trustee’s
“attempt” to create a fact issue with respect to how the Defendant allocated the Transfers. 	See Defendant’s Reply.
15 The Defendant’s argument that the Trustee cannot succeed in amending the Scheduling Order (Defendant’s Reply,
pp. 7-9) is more properly considered if the Trustee actually files a motion for authority to do so in connection with
seeking leave to amend his Complaint to add Owners as a party defendant. 	The Defendant states that the Trustee is
somehow improperly trying to keep multiple avoidance theories in play. 	It states that because the Trustee limited his
discovery response to an interrogatory regarding preferences to “preferences,” the Trustee cannot attempt a “late
pivot” to include other avoidance theories targeting payments made outside the ninety (90) day preference recovery
window. 	The Court does not find this contention persuasive. 	The response at issue does not constitute an admission
that all other theories of recovery are thereby waived. 	Allegations of fraudulent conveyance and preferential transfers
are separate theories of recovery, and the Trustee is clearly seeking both. 	Defendant’s Reply, pp. 6 & 12; Trustee’s
Sur-Reply, p. 7.
16 See generally In re Int’l Admin. Servs., 408 F.3d 689, 704 (11th Cir. 2005)(addressing related issue, court held that
recovery against subsequent transferee not precluded by failing to first sue initial transferee).
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property transferred, or, if the court so orders, the value of such
property, from—
(1) the initial transferee of such transfer or the entity for whose benefit such
transfer was made; or
(2) any immediate or mediate transferee of such initial transferee.
11 U.S.C. § 550(a)(emphasis supplied). 	Consequently, the Trustee can recover from the
Defendant as the initial transferee without suing Owners, the party that allegedly provided the
relevant auto policies and that allegedly was the ultimate recipient of the funds.
The Trustee disputes the Defendant’s statement that payments made by the Debtor to
Owners total $47,216.21 because this figure is based on an allocation of a larger payment that he
does not concede is correct. 	Defendant’s Statement of Facts, ¶ 12; Jerome Declaration, ¶ 11.
Thus, he disputes any claim that the Defendant did not receive any part of the Transfers or how
the Transfers were allocated among the various insurance policies and further contends no
evidence has been presented on these issues. 	Trustee’s Response, p. 7.
On this point, the Defendant counters that the fact $47,216.21 was paid to Owners is
supported by the sworn testimony offered in the Jerome Declaration. 	Further, it argues that the
Trustee cannot create a fact issue based on a “failure of proof” claim when he admits the fact
purportedly in issue (the amount attributed to Owners) but presents no countervailing evidence of
his own. 	Defendant’s Reply, p. 5.
In any event, the Trustee asserts that it is beyond question that the Defendant may be liable
as an initial transferee of the Transfers and that they may be recoverable from it by virtue of 11
U.S.C. § 544, § 548, and § 550(a) and O.C.G.A. §§ 18-2-70, et seq. 	Trustee’s Response, pp. 5-6.
The Trustee adds that since the Defendant is the moving party on the Motion, the Defendant will
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need to provide more information regarding the timing of the Transfers and how they were in fact
allocated or credited between the Defendant and Owners.17 	Trustee’s Response, pp. 6-8.18
The Trustee also challenges the statements offered in the Jerome Declaration on grounds
that they are not competent evidence because Mr. Jerome is an attorney with no personal
knowledge of the facts or transactions identified therein. 	See Sitts v. United States, 811 F.2d 736,
742 (2d Cir. 1987), holding modified by Einaugler v. Supreme Ct. of State of N.Y., 109 F.3d 836
(2d Cir. 1997). 	Mr. Jerome states that he is an employee of the Defendant. 	The extent to which
he reviewed the records and other information presumably prepared by others and on which he
based his declarative statements is not disclosed and he has not been offered as an expert.19
17 Again, the Trustee attempts to clarify his position that although he is seeking to narrow the issues, he is only
conceding the alleged amount of $47,216.21 as a material fact in terms of the amount paid for the automobile policies
through the Transfers. 	The Trustee maintains, however, that further detail is needed concerning the timing of the
payments and how they were in fact allocated or credited against the automobile policies. 	Until then, he argues that
the precise amount of premium payments on automobile insurance that is voidable cannot be determined. 	Trustee’s
Response, pp. 5-7. 	The Defendant takes issue with the Trustee’s attempt to “reserve an unspecified ‘allocation’ point”
as sufficient to create a genuine issue of fact. 	Defendant’s Reply, p. 5.
18 As previously mentioned, the Trustee disputes that the Debtor received any benefit from the Transfers as the
possible basis for an affirmative defense by the Defendant, since there are no facts showing evidence of actual use or
benefit conferred other than the disputed testimony of Mr. Harris. 	The Trustee adds that the Defendant has produced
no evidence of facts showing that the Transfers were made in the “ordinary course of business,” and asserts they did
not benefit the Debtor based on the statements of his expert, Mr. Albretsen. 	Trustee’s Response, pp. 9 & 11. The
ordinary course defense, however, may or may not be difficult to establish in a business like the Debtor that was
riddled with fraud. 	See e.g. In re Buehler, 2022 WL 837914, at *3 (Bankr. N.D. Iowa Mar. 21, 2022), quoting Harder
v. JPPCS, Inc. (In re Graff), 454 B.R. 745, 751 (Bankr. W.D. Mo. 2011)(“‘Even if the debtor’ business transactions
were irregular, they may be considered ‘ordinary’ for purposes of § 547(c)(2) if those transactions were consistent
with the course of dealings between the particular parties’”); but see Danning v. Bozek (In re Bullion Reserve of North
America), 836 F.2d 1214, 1219 (9th Cir. 1988)(holding in the case of investors, Code § 547(c)(2) is not a defense to
a preference action where the transfer was made by a “fraudulent business”), as cited in In re Bennett Funding Grp.,
Inc., 253 B.R. 316, 322 (Bankr. N.D. N.Y. 2000).
19 See note 27, infra.
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Finally, the Trustee maintains that, along with the fact of the Debtor’s funding the Transfers
and the Defendant’s receipt as transferee,20 it is undisputed that the Debtor was insolvent during
the relevant statutory period. 	Relying on past testimony in this case, the Trustee further contends
that insiders of the Debtor engaged in a continuing pattern of fraudulent activity that is indicative
of both actual fraudulent intent and constructive fraud.21 	The Defendant has not addressed this
latter contention regarding the insiders’ pattern of behavior.
C. Legal Standard for Summary Judgment
Summary judgment may be granted pursuant to Federal Rule of Civil Procedure
(“F.R.C.P.”) 56, which is made applicable herein by Federal Rule of Bankruptcy Procedure
(“F.R.B.P.”) 7056, “if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” 	F.R.C.P. 56(a). 	In deciding a motion
for summary judgment, the court “is not . . . to weigh the evidence and determine the truth of the
matter but to determine whether there is a genuine issue for trial.” 	Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986).
The initial burden of proving the absence of dispute as to any material fact rests with the
moving party. 	Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). 	To meet this
initial 	burden, 	the 	moving 	party 	must 	identify 	“the 	pleadings, 	depositions, 	answers 	to
interrogatories, and admissions on file, together with the affidavits, if any, which it believes
20 This assertion is disputed by the Defendant, although it does not specify whether that means it disputes receiving
any payments at all or that it merely paid these amounts over to Owners.
21 Here, the Trustee refers to various court testimony produced during trial in this bankruptcy case and the Albretsen
Declaration. 	See Trustee’s Response, pp. 11-14.
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demonstrate the absence of a genuine issue of material fact.” 	Celotex Corp. v. Catrett, 477 U.S.
317, 323 (1986)(internal quotations omitted). 	Once the party seeking summary judgment has
identified those materials demonstrating the absence of a genuine issue of material fact, the non-
moving party cannot rest on mere denials or conclusory allegations. 	Instead, the non-moving
party must instead go beyond the pleadings and designate, through proper evidence such as by
affidavits or personal knowledge or otherwise, specific facts showing the existence of a genuine
issue for trial. 	See F.R.C.P. 56(c) & (e); see also Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986); Johnson v. Fleet Finance Inc., 4 F.3d 946, 948-49 (11th Cir.
1993); Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115-16 (11th Cir. 1993).
Here, because the Defendant will not bear the burden of proof at trial, it can carry its initial
burden on its Motion first, by showing that there is insufficient evidence to support the Trustee’s
case as the non-moving party, or second, by offering positive evidence that demonstrates the
Trustee will not be able to prove his case at trial. 	See Standard Fire Ins. Co. v. Knowles, 129 F.
Supp. 3d 1271, 1274–75 (N.D. Ala. 2015), citing Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115-
16 (11th Cir. 1993). 	When this burden is satisfied, the nonmoving party may not then rely on
allegations or denials stated in its own pleadings (F.R.C.P. 56(e)) but must present specific facts
demonstrating the existence of a genuine dispute concerning material facts in issue. 	In re White,
2017 WL 3278842, at *2 (Bankr. N.D. Ga. Aug. 1, 2017), citing Hairston v. Gainesville Sun Pub.
Co., 9 F.3d 913, 918 (11th Cir. 1993).
All reasonable doubts should be resolved in favor of the non-moving party, and “[i]f
reasonable minds could differ on any inferences arising from undisputed facts, summary judgment
should be denied.” 	Twiss v. Kury, 25 F.3d 1551, 1555 (11th Cir. 1994)(citing Mercantile Bank &
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Trust v. Fidelity & Deposit Co., 750 F.2d 838, 841 (11th Cir. 1985)). 	In addition, deciding issues
of credibility or state of mind or intent are not appropriate in ruling on summary judgment. 	Atl.
Specialty Ins. Co. v. Newson, 672 F. Supp. 3d 1346, 1348 (N.D. Ga. 2023), appeal dismissed sub
nom. Newson v. Hernandez, 2023 WL 8316397 (11th Cir. Aug. 9, 2023), citing Stewart v. Booker
T. Washington Ins., 232 F.3d 844, 848 (11th Cir. 2000).
D. Analysis
1. 	Voidable Preferences
To avoid the Transfers as preferential under Section 547(b), the Trustee must show under
Count I of the Complaint that they were: (1) “to or for the benefit of a creditor,” (2) “for or on
account of an antecedent debt owed by the debtor before such transfer was made,” (3) “made while
the debtor was insolvent,” (4) “made on or within 90 days before the date of the filing of the
petition,” and (5) enabled the defendant to receive more than it would have received in a
hypothetical Chapter 7 liquidation if the transfer had not been made. 	11 U.S.C. § 547(b).22 	The
Defendant contends the Trustee has not satisfied and cannot satisfy the timing element of this test
regarding all the Transfers. 	It also relies on certain affirmative defenses under Section 547(c)(1)
and (2) such as contemporaneous exchange for new value and ordinary course of business.23
On review, it does not appear either that the Defendant has shown that there is insufficient
evidence to support the Trustee’s case or that it has offered evidence demonstrating that the Trustee
22 The burden of proving each of the above elements falls on the Trustee. 11 U.S.C. § 547(g). 	The Defendant does
not appear to contest any elements other than the timing of the Transfers and whether they fall within the ninety (90)
day avoidance period.
23 The Defendant, of course, bears the burden of proving these defenses under Section 547(g).
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will not be able to prove his preference claim at trial. 	From the pleadings of record, it appears
that the Trustee may properly proceed to prove his assertion of an avoidable preferential transfer
to Owners as the ultimate beneficiary of such payments on the automobile policies, and that the
Defendant initially received the Transfers, however they were finally allocated. 	Based on the
above legal standard, it has not been shown by the Defendant that the Trustee cannot prove through
proper evidence that, during the preference period, Owners received more than it would have
otherwise received in a liquidation on its debt based on the Transfers made during the Debtor’s
insolvency.
Further, there appear to be issues of fact regarding Defendant’s assertion of affirmative
defenses. 	For instance, the Defendant has not shown undisputed facts establishing that the
Transfers were made “in payment of a debt incurred by the debtor in the ordinary course of
business.” 	See 11 U.S.C. § 547(c)(2). 	Although the Defendant may have quantified the amounts
paid on the automobile policies, there is an absence of evidence regarding payment and invoicing
dates and how each portion of such payments was credited toward the automobile policies. 	See
Trustee’s Response, p. 6. 	Similarly, issues of fact remain concerning Defendant’s assertion that
the Transfers provided “value” under Section 547(c)(1) or (c)(4) because even though insurance
is arguably “valuable,” it has not been established that the Defendant is entitled to judgment on
this affirmative defense. 	Here, a proper basis has not been shown to explain why it was necessary
to the Debtor’s business that it pay to insure vehicles used by the Insiders for personal matters such
that it received any value or benefit through the Transfers to the extent used to pay premiums for
the automobile policies. 	See Trustee’s Response, pp. 16-17.
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2. 	Fraudulent Transfers
As set forth in Count II, the Trustee seeks to avoid the Transfers as fraudulent under several
legal theories. 	The Trustee may seek to void the Transfers as fraudulent conveyances pursuant to
Section 548(a)(1)(A) for actual fraud, or for constructive fraud under Section 548(a)(1)(B). 	These
subsections provide as follows:
(a)(1) The trustee may avoid any transfer…of an interest of the debtor in property,
or any obligation…incurred by the debtor, that was made or incurred on or within
2 years before the date of the filing of the petition, if the debtor voluntarily or
involuntarily—
(A) made such transfer or incurred such obligation with actual intent to
hinder, delay, or defraud any entity to which the debtor was or became, on or after
the date that such transfer was made or such obligation was incurred, indebted; or
(B)(i) received less than a reasonably equivalent value in exchange for such
transfer or obligation; and
(ii)(I) was insolvent on the date that such transfer was made or such
obligation was incurred, or became insolvent as a result of such transfer or
obligation;
(II) was engaged in business or a transaction, or was about to engage in
business or a transaction, for which any property remaining with the debtor was an
unreasonably small capital; [or]
(III) intended to incur, or believed that the debtor would incur, debts that
would be beyond the debtor’s ability to pay as such debts matured….
11 U.S.C. § 548(a)(1)(A) & (B)(emphasis supplied).
Next, the Trustee seeks to use Georgia’s Uniform Fraudulent Transfer Act (“UFTA”) as a
basis for avoiding the Transfers. 	See O.C.G.A. §§ 18-2-70, et seq. 	The Trustee first relies on the
standing and powers conferred upon him under 11 U.S.C. § 544(a) as a hypothetical creditor
extending credit to the Debtor as of the Petition Date and obtaining a judicial lien or an execution
against the Debtor. 	Here, the Trustee may seek to void transfers made with actual fraudulent
intent as provided under applicable Georgia law. 	See O.C.G.A. § 18-2-74(a)(1). 	To determine
whether the Debtor acted with actual intent, “consideration is given to an open-ended set of factors
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listed in O.C.G.A. § 18–2–74(b), which are commonly called the ‘badges of fraud.’” 	In re White,
2017 WL 3278842, at *3 (Bankr. N.D. Ga. Aug. 1, 2017).
As further alleged by the Trustee, the Transfers may also be set aside as constructively
fraudulent under O.C.G.A. § 18-2-74(a)(2).24 	To succeed on this claim, the Trustee would need
to show that the Debtor made the Transfers while insolvent and “without receiving a reasonably
equivalent value in exchange” or fair consideration. 	O.C.G.A. § 18-2-74(a)(2).25 	In addition,
under 11 U.S.C. § 544(b), to the extent the Trustee can identify a creditor in existence at the time
of the Transfers holding an unpaid allowed unsecured claim, he may avail himself of certain
remedies provided by applicable law.26
24 With respect to the statute of limitations period, Georgia law provides as follows:
A cause of action with respect to a fraudulent transfer or obligation under this article is extinguished
unless action is brought:
(1) Under paragraph (1) of subsection (a) of Code Section 18-2-74, within four years after the
transfer was made or the obligation was incurred or, if later, within one year after the transfer or
obligation was or could reasonably have been discovered by the claimant;
(2) Under paragraph (2) of subsection (a) of Code Section 18-2-74 or subsection (a) of Code Section
18-2-75, within four years after the transfer was made or the obligation was incurred; or
(3) Under subsection (b) of Code Section 18-2-75, within one year after the transfer was made or
the obligation was incurred.
O.C.G.A. § 18-2-79 (emphasis supplied).
25 O.C.G.A. § 18–2–74(a)(2)(B) substantially mirrors the constructive fraud claims under the Bankruptcy Code. 	See
11 U.S.C. § 548(a)(1)(B).
26 For instance, O.C.G.A. § 18–2–75 provides that a transfer will be voidable as to a creditor whose claim arose before
the transfer where “the debtor made the transfer...without receiving reasonably equivalent value in exchange for the
transfer...and the debtor was insolvent at the time or the debtor became insolvent as a result of the transfer....”
O.C.G.A. § 18–2–75(a). 	See In re Palisades at W. Paces Imaging Ctr., LLC, 501 B.R. 896, 908 (Bankr. N.D. Ga.
2013). 	The Trustee, however, did not assert this state law provision as a ground for relief.
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On review, the Defendant has not shown a lack of evidence to support the Trustee’s claims
as to some items and has not offered evidence demonstrating that the Trustee will be unable to
prove his case at trial on this count. 	Issues of fact remain pertaining to the Debtor’s receipt of
reasonably equivalent value in exchange for the Transfers based on actual usage of the subject
vehicles and benefit to the Debtor as well as actual fraud.
With respect to the arguments set forth in the Defendant’s Reply and rebuttals in the
Trustee’s Sur-Reply, the Defendant has asserted that the Trustee cannot create an issue of fact
through his conclusory insistence that the Defendant issued the policies or was the payee on the
Transfers. 	As noted above, the Defendant objects to any attempt by the Trustee to defeat the
Motion by attempting to raise an issue regarding allocation of payments. 	Here, the Defendant
states the Trustee has failed to point to any evidence supporting such claim or the rendering of a
judgment against the Defendant. 	It adds this conclusion is especially warranted when the issuer
of the policies and payee of the premiums have already been shown by undisputed evidence not to
be the Defendant—but a separate insurer and non-party herein. 	Defendant’s Reply, pp. 4-5.
As averred in the Jerome Declaration, 27 Owners issued the commercial automobile
insurance policies, and the Defendant issued the non-automobile related insurance policies. 	The
27 The Trustee takes issue with Mr. Jerome’s personal, first-hand knowledge as a basis for his statements presumably
because as in-house counsel, he was not the person responsible for receiving and allocating premium payments and
otherwise maintaining records pertaining thereto. 	Although the substance of Mr. Jerome’s statements may be
inadmissible as hearsay or on some other ground at this stage, the statements may be considered if they could be
reduced to admissible form at trial. 	See Rowell v. BellSouth Corp., 433 F.3d 794, 800 (11th Cir. 2005)(“On motions
for summary judgment, we may consider only that evidence which can be reduced to an admissible form. See Macuba
v. Deboer, 193 F.3d 1316, 1324–25 (11th Cir.1999)(although evidence that is otherwise admissible may be accepted
in an inadmissible form at summary judgment stage, hearsay [there] could not be reduced to admissible form)).
“[E]mployees are generally found to have personal knowledge of, and therefore may testify in relation to, records of
their employers that they reviewed in their official capacities.” 	In re Hilton, 544 B.R. 1, 8-9 (Bankr. N.D. N.Y. 2016).
In this context, however, even if the Court accepted the truth of these statements, it still must be shown who received
the Transfers and how they were applied.
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parties appear to contest the allocation of lump sum payments made on the automobile and non-
automobile policies and/or both. 	The question of what part of each payment included in the
Transfers goes to which policy remains a disputed issue of fact.28
Finally, as mentioned above, issues of witness credibility are not appropriate for evaluation
on summary judgment. 	Based on the extensive history of this case and the Court’s previous
opportunities to observe Mr. Harris’ on direct and cross-examination at trial, however, the Trustee
is correct that the Court has previously determined Mr. Harris’ testimony not to be credible and its
utility in establishing disputed facts unreliable.29
3. 	Unauthorized Post-Petition Transfers
Finally, in Count III, the Trustee alleges that Insiders of the Debtor caused it to pay to the
Defendant the amount of $32,071.74 during the post-petition period as part of the Transfers under
11 U.S.C. § 549(a). 	On review, the Trustee’s claim is asserted within the time provided in Section
549(d), and the unauthorized post-petition transfers may be recovered from the Defendant as a
transferee under Section 550(a) unless it shows it is entitled to a statutory defense. 30 	The
Defendant argues in response that “these payments were made in exchange for ongoing insurance
28 The Defendant appears to be operating under the assumption that it can escape liability simply because the Transfers
were either made directly to Owners or made their way to Owners from the Defendant as issuer of the automobile
policies. 	Although the former may be true, as to the latter, however, as discussed above the Trustee has made a viable
claim that under the theories of relief set forth in the Complaint, the Defendant may be found liable for recovery as an
initial transferee of the Transfers under 11 U.S.C. § 550.
29 Another related issue in this proceeding will be whether, and if so to what extent, the “law-of-the-case doctrine”
applies with respect to this Court’s prior findings of fact and conclusions of law in connection with Mr. Harris’
intentional conduct in making the Transfers on behalf of the Debtor or the resulting consequences of same to the
Debtor’s financial condition. 	See Mann v. GTCR Golden Rauner, L.L.C., 483 F.Supp.2d 864, 870 (D. Ariz. 2007);
see also United States v. Siegelman, 786 F.3d 1322, 1327 (11th Cir. 2015).
30 In the final count, Count IV, the Trustee seeks an accounting. It appears that this count remains as an issue to the
extent necessary to determine how the Transfers were allocated.
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coverage that protected the Debtor’s assets and continued operations during the pendency of its
bankruptcy case.” 	Defendant’s Brief, p. 18. 	As such, the payments contributed to the ongoing
value of this bankruptcy estate as a routine business expense.
The Defendant has not shown that it is entitled to a defense that these payments were made
in the ordinary course of business. 	Although insurance is obviously valuable, the Defendant has
presented no undisputed facts demonstrating that the insurance coverage in issue conferred any
benefit upon the Debtor as opposed to Insiders of the Debtor. 	As alleged by the Trustee, all the
post-petition payments were made for automobile coverage. 	As discussed above, there is no
competent evidence showing that the Debtor had an insurable interest in the subject vehicles or
that they were used in the Debtor’s business. 	Moreover, the Court never approved the making of
such payments from property of the Debtor’s bankruptcy estate for the personal benefit of third-
party insiders in connection with their vehicles. 	See Main Case Docket passim.
Conclusion
Based on the foregoing discussion, it is
ORDERED that the Motion is GRANTED to the extent that the Transfers were made to
the Defendant as premium payments on insurance policies that were not automobile insurance
policies. 	It is further
ORDERED that the Motion is DENIED to the extent that the Transfers were made to the
Defendant as premium payments on the automobile insurance policies.
The Clerk is directed to serve a copy of this Order upon the Trustee, counsel for the Trustee,
Defendant, counsel for the Defendant, and the United States Trustee.
[END OF ORDER]
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