STEVEN RHODES, Chief Bankruptcy Judge
Before the Court are cross motions for summary judgment in this action to avoid and recover preferential transfers under 11 U.S.C. §§ 547 and 550. On October 20, 2006, the Michigan Supreme Court issued an order declining to answer a certified question in this case and others. On December 11, 2006, a consolidated hearing was held before all the bankruptcy judges of this district. Following the consolidated hearing, the Court took this matter under advisement.
I.
The following facts are not in dispute. On October 1, 2004, Roger and Mary Eden filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code. Prior to the commencement of this case, they purchased real property located at 150 Juniper Street, Auburn Hills, Michigan. On August 5, 2004, the Edens obtained two loans from MILA, Inc., d/b/a/Mortgage Investment Lending Associates, Inc., and granted first and second mortgages on the property to Mortgage Electronic Registration Systems, Inc. ("MERS"), as nominee of MILA. The mortgages were in the amounts of $126,320 and $31,580 respectively. MILA assigned its interest in the first mortgage to Litton and its interest in the second mortgage to Wilshire.
A recording log maintained by Alpha Title Agency, dated August 11, 2004, shows the mortgages were delivered to the Oakland County Register of Deeds along with twenty-three unrelated instruments. The title agency provided a check dated August 13, 2004 for payment of the recording fees for the twenty-five documents. On September 16, 2004, the mortgages were assigned liber and page numbers.
Wilshire claims the mortgages were delivered to the register of deeds on August 16, 2004, along with a "blank endorsed [sic] check payable to the Oakland County Register of Deeds dated August 13, 2004." Neither party addressed in what way the check was "blank" or what effect an incomplete check has on its status as a negotiable instrument. The parties did not inform the Court how or when the blank check was completed. Since the parties have not argued that the blank check in some way affected the time by which the recording fee was paid, the Court will not address that issue.
The trustee contends the mortgages were recorded, and thus perfected, on September 16, 2004, and are subject to avoidance under 11 U.S.C. § 547(b). Wilshire claims the mortgages were delivered to the Oakland County Register of Deeds on August 16, 2004, in recordable form and with the proper recording fee. Wilshire asserts the mortgages were perfected on August 16, 2004, 11 days after the Edens received possession of the property and within the 20 day grace period of § 547(c)(3)(B).
This chapter 7 case was commenced prior to the BAPCPA amendments of October 17, 2005. Unless otherwise indicated, all citations in this opinion will be to the Bankruptcy Code as effective prior to the BAPCPA amendments.
II.
Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact regarding an essential element of the non-moving party's case. Street v. J.C. Bradford Co., 886 F.2d 1472, 1479 (6th Cir. 1989) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986)). After the moving party has met its burden, the burden shifts to the non-moving party to set forth specific facts showing a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2510 (1986). All facts and inferences must be viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986).
III.
11 U.S.C. § 547(b) authorizes the trustee to avoid a pre-petition preferential transfer of a debtor's interest in property made within 90 days of bankruptcy. It provides:
(b) Except as provided in subsection © of this section, the trustee may avoid any transfer of an interest of the debtor in property —
(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 —
(A) on or within 90 days before the date of the filing of the petition; or
(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would receive if —
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and © such creditor received payment of such debt to the extent provided by the provisions of this title.
11 U.S.C. § 547(b).
Not every element of § 547(b) is in dispute. The parties do not argue that Wilshire is not a creditor. Nor has evidence been offered to challenge the presumption of insolvency under 11 U.S.C. § 547(f). Further, the parties did not address § 547(b)(5), whether the creditor would receive more than they would have received in a case under chapter 7 had the transfer not been made. Nevertheless, the Court has sufficient facts before it to conclude that § 547(b)(5) is satisfied. Schedule F of the Edens' petition lists $71,084.91 in unsecured, nonpriority debt. Had the mortgage interest not been granted, Wilshire's interest would have been listed as one among twenty-three other general unsecured debts.
For purposes of this case, the transfer of the mortgage interests were made at the time the mortgages were perfected. 11 U.S.C. § 547(e)(2)(B). Not all preferential transfers are subject to avoidance, however. Particular to this case, purchase money security interests perfected within 20 days after the debtors receive possession of the property are safeguarded from the trustee's preference-avoidance powers of § 547(b). 11 U.S.C. § 547(c)(3)(B).
In Michigan, a mortgage is perfected upon recording. Gold v. Interstate Fin. Corp. (In re Schmiel), 2005 WL 5165691, at *2 (Bankr. E.D. Mich. July 27, 2005). Recording occurs at the moment the mortgage is received by the county register of deeds, provided it is in recordable form when received and the statutory recording fee was paid when the mortgage was left for recordation. Schmiel, 2007 WL 588628, at *14. Nothing in the record before the Court suggests that the mortgages were not in recordable form when received by the Oakland County Register of Deeds.
The evidence must establish that no genuine issue of material fact exists regarding when the mortgages were presented in recordable form to the Oakland County Register of Deeds for recordation and when the statutory recording fee was paid. It is without dispute that the latest date by which the mortgages were recorded was September 16, 2004.
The affidavit of Sandy Olson, an employee of Alpha Title Agency, states that the mortgages were listed on a recording log dated August 11, 2004. Ms. Olson attests that the mortgages were to be picked up on August 13, 2004 by courier Charles Rush. Ms. Olsen states that Mr. Rush was instructed to hand-deliver the mortgages to the Oakland County Register of Deeds on Monday, August 16, 2004. The affidavit of Charles Rush corroborates that he picked up the mortgages from the title agency on August 13, 2004, and delivered them to the Oakland County Register of Deeds for recordation on August 16, 2004.
The trustee contends that the affidavit of Charles Rush is unreliable because an affidavit from Mr. Rush entered in another case describes the procedures of the Wayne County Register of Deeds office in the exact manner that this affidavit describes the procedures at the Oakland County Register of Deeds. Indeed, the two affidavits of Mr. Rush describe identical internal procedures for both Wayne County and Oakland County Register of Deeds.
According to Mr. Rush, at both the Wayne County and Oakland County Register of Deeds office a clerk reviews the mortgages for property legal description, property address and proper recording fee. If corrections are needed, the corrections are made immediately at the register of deeds office. According to Mr. Rush, the corrected mortgage is then re-presented to the clerk on the same day.
The affidavit of Laura Thierbach, the Chief Deputy Register at the Oakland County Register of Deeds, describes the process for mortgage recordation that was in place in August and September 2004. Ms. Thierbach states that it was the policy of the Oakland County Register of Deeds to require title companies that were batch filing multiple documents to leave the documents in a folder at the register of deeds office for review and validation. Documents were validated in the order of their receipt. Once validated, the documents were placed in the same folder in a file drawer for pick-up by the title company representative according to that representative's schedule. The title company representative would bring the validated documents to the cashier for the register of deeds, who would then accept the proper fee and assign liber and page numbers. According to Ms. Thierbach, "rush" processing, a procedure in which an instrument could be validated, paid for and affixed with a record date stamp all in one day, was not available for large groups of multiple filings.
The affidavits of Laura Thierbach and Charles Rush regarding the procedures followed by the Oakland County Register of Deeds are inconsistent. It is not proper for the Court to weigh the evidence or make credibility determinations at the summary judgment stage. Anderson v. Liberty Lobby, Inc., 477 U.S. at 249, 106 S. Ct. at 2511. The Court concludes that genuine issues of material fact exist regarding when the mortgages were left for recordation.
The remaining question is when the statutory recording fee was paid. The affidavit of Sandy Olson states that the title agency provided Charles Rush with a blank check, dated August 13, 2004, to pay all recording fees for the documents on the August 11, 2004 log. According to the affidavit, the mortgages were placed on the recording log to be picked up on August 13, 2004. The affidavit states that Charles Rush was instructed to hand-deliver all mortgages on the recording log to the Oakland County Register of Deeds on August 16, 2004. The affidavit does not identify the date the check was provided to Mr. Rush, nor does the affidavit state that the recording fee was to be delivered to the register of deeds on August 16, 2004 along with the mortgages.
The affidavit of Laura Thierbach states that the cashier at the register of deeds office does not accept the recording fee until after the document has been validated. Michigan law requires the statutory recording fee to be paid when the mortgage is left for recordation. Mich. Comp. Laws § 600.2567(1)(a). "[T]he failure or the refusal of a register of deeds to accept payment of a recording fee when a mortgage in recordable form is delivered . . . should not result in a mortgage left for record not being deemed recorded. . . ." Schmiel, 2007 WL 588628, at *19 n. 5. "[I]f the mortgagee has done all that it is required or permitted by the law to do, it should not be penalized by the failure of the register of deeds to perform its statutory duties, over which the mortgagee has no control." Id.
Similarly, the affidavit of Charles Rush attests that the title agency provides him a check for purposes of recordation with the Oakland County Register of Deeds, but does not identify when that check was provided. Mr. Rush states that he collected the mortgages from the title company and delivered the mortgages to the register of deeds office on August 16, 2004. Mr. Rush does not state that he delivered the recording fee to the register of deeds office on that date.
Although the affidavits of Sandy Olsen and Charles Rush imply that the recording fee was picked up from the title agency along with the mortgages, and was delivered to the Oakland County Register of Deeds on August 16, 2004, the affidavits do not say as much. The check itself is of little help and shows only that it was dated August 13, 2004. The Court was not provided with a copy of the back of the check which may have offered additional evidence regarding the date payment was made. Accordingly, the Court finds that there are genuine issues of material fact regarding when the statutory recording fee was paid.
The record before the Court simply does not establish when the mortgages were delivered or when the recording fee was paid. The answers to those questions will determine whether the transfer of the mortgage interests falls under § 547(b)(2) or under § 547(c)(3)(B).
Therefore, the Court has determined that summary judgment cannot be granted in favor of either party in this case. The Court finds that there are genuine issues of material fact and this case must proceed to trial. Accordingly, the Court denies the trustee's motion for summary judgment and denies Wilshire's cross motion for summary judgment. The Court will enter an order consistent with this opinion.