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Turner v. New York Hospital (In Re Moskowitz)
Citations: 14 B.R. 307; 5 Collier Bankr. Cas. 2d 266; 8 Bankr. Ct. Dec. (CRR) 687; 1981 U.S. Dist. LEXIS 14610Docket: 81 Civ. 5443
Court: District Court, S.D. New York; September 22, 1981; Federal District Court
On September 11, 1981, New York Hospital sought permission to appeal a Bankruptcy Court decision that denied its motion to dismiss a complaint filed by Sidney Turner, the Trustee for the Debtors. The complaint aimed to recover $4,350 in insurance proceeds paid directly to New York Hospital for the Debtors' account within three months prior to the Debtors' bankruptcy filing. New York Hospital argued that the payment did not qualify as a preferential transfer under 11 U.S.C. 547 and did not diminish the Debtors' estate to the detriment of creditors. The Bankruptcy Court ruled that the payment constituted an "indirect parting with property," defining it as a transfer under 11 U.S.C. 101(40) and classified it as "property of the debtor" per 11 U.S.C. 541(a)(1). Furthermore, it found the payment did reduce the estate's assets rather than merely substituting creditors. The Court concluded that the Trustee's complaint sufficiently stated a claim for relief and rejected the motion to dismiss, indicating unresolved factual questions related to the possible assignment of the proceeds and their legal implications. New York Hospital's appeal raised two main questions: whether the payments constituted transfers of the Debtors' property under 11 U.S.C. 547 and whether they resulted in a detrimental reduction of the Debtors' estate. The District Court noted that jurisdiction for the appeal was governed by 28 U.S.C. 1334 and acknowledged that the issues presented by New York Hospital were indeed factual disputes best suited for resolution at trial or via summary judgment. Due to the principles of judicial efficiency and the advancement of litigation, New York Hospital's request for an interlocutory appeal regarding the denial of its motion to dismiss is denied. The criteria for granting such appeals, as outlined in 28 U.S.C. 1292(b), require a controlling legal question with substantial grounds for differing opinions and the potential to expedite litigation. In this case, unresolved factual questions exist that could influence the legal issues at stake, thus failing to meet the requirement for an appeal that would materially advance the case. Granting the appeal could lead to a subsequent appeal regarding the finding of a constructive trust, potentially delaying the ultimate resolution of the litigation. Consequently, permission to appeal the Bankruptcy Court's Decision and Order dated August 21, 1981, is denied.