Court Opinion

ID: 991949
Source: CourtListenerOpinion
Date Created: 2013-07-03 23:44:19.999671+00
Date Added: 2024-06-11T12:34:24.562721
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: CONNER HOME SALES
CORPORATION,
Debtor.

GREGORY B. CRAMPTON,
Petitioner-Appellee,

                                                               No. 96-1228
v.

FIRST UNION NATIONAL BANK OF
NORTH CAROLINA,
Respondent-Appellant,

FEDERAL DEPOSIT INSURANCE
CORPORATION,
Intervenor.

Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
Malcolm J. Howard, District Judge.
(CA-95-740-5-H, BK-87-1708-MO4)

Argued: March 5, 1997

Decided: April 8, 1997

Before WILKINSON, Chief Judge, MICHAEL, Circuit Judge, and
BLACK, Senior United States District Judge for the
District of Maryland, sitting by designation.

_________________________________________________________________

Dismissed and remanded by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: John Michael Booe, PETREE STOCKTON, L.L.P.,
Charlotte, North Carolina, for Appellant. Gregory Byrd Crampton,
NICHOLL & CRAMPTON, Raleigh, North Carolina, for Appellee.
ON BRIEF: F. Joseph Treacy, Jr., J. Neil Robinson, Teresa
DeLoatch, PETREE STOCKTON, L.L.P., Charlotte, North Carolina,
for Appellant. Elizabeth Anania, Stephani W. Humrickhouse, William
P. Janvier, NICHOLL & CRAMPTON, Raleigh, North Carolina; J.
Jerome Hartzell, John R. Rittelmeyer, HARTZELL & WHITEMAN,
L.L.P., Raleigh, North Carolina, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

We allowed First Union National Bank of North Carolina (First
Union) to take an interlocutory appeal of a district court order that
reversed a bankruptcy court order granting partial summary judgment
to First Union. We now dismiss the appeal without prejudice as
improvidently granted.

Appellee Gregory B. Crampton is the trustee of debtor Conner
Home Sales Corporation. The trustee filed a complaint in bankruptcy
court to recover inventory proceeds that First Union received pursuant
to the debtor's grant of a security interest in 1987. The trustee offers
several theories to avoid the transfer and recover the proceeds. One
theory is the "trilateral preference" theory of Levit v. Ingersoll Rand
Fin. Corp. (In re V.N. Deprizio Constr. Co.), 874 F.2d 1186 (7th Cir.
1989). Under this theory, if a debtor makes a transfer more than
ninety days but less than one year before bankruptcy on account of
an antecedent debt guaranteed by an insider, then the trustee may
avoid the transfer as an insider preference and recover from the trans-

                    2
feree even if the transferee is not itself an insider. In 1994, however,
Congress amended the Bankruptcy Code to prevent recovery from
non-insiders for transfers beyond the ninety-day period. See 11
U.S.C.A. § 550(c) (West Supp. 1997). The 1994 amendment is not
retroactive and therefore does not apply to this case.

In this case the bankruptcy court, which was not bound by the Sev-
enth Circuit's Deprizio decision, held that Congress never intended
the result in Deprizio and granted partial summary judgment to First
Union on the trustee's "Deprizio cause of action." The district court
reversed, relying on what it regarded as a literal reading of the statute
prior to the 1994 amendment. The district court then certified its order
for interlocutory appeal under 28 U.S.C. § 1292(b). On February 21,
1996, we granted First Union permission to appeal"the Deprizio
issue."

After consideration of the parties' very thorough briefs, the record,
and the oral arguments of counsel, we are convinced that a determina-
tion of the Deprizio issue on interlocutory appeal is not the most
appropriate way to advance the ultimate resolution of this litigation.
Specifically, we believe that any consideration of the Deprizio issue
by this court would be more appropriate after other important issues
in the case have been determined in the bankruptcy court and a final
decision has been rendered in the district court. Accordingly, we dis-
miss the appeal without prejudice as improvidently granted. The case
is remanded for further proceedings.

DISMISSED AND REMANDED

                     3