Alberts v. HCA Inc. (In Re Greater Southeast Community Hospital Corp. I)

MEMORANDUM DECISION REGARDING MOTION FOR PARTIAL SUMMARY JUDGMENT AND CROSS-MOTION FOR SUMMARY JUDGMENT

Sam J. Alberts, trustee for the DCHC Liquidating Trust (the “Trust”) and plaintiff in this adversary proceeding, seeks to avoid and recover certain allegedly fraudulent transfers (the “Michael Reese Transfers”) from Michael Reese Medical Center Corporation (“Michael Reese”), as well as other debtors in this jointly administered bankruptcy case (collectively the “Debtors”), to defendants HCA, Inc. (“HCA”), *297 Galen Hospital Illinois, Inc. (“GHI”), and Western Plains Capital, Inc. (“Western”) under the Illinois Uniform Fraudulent Transfer Act, 740 Ill. Comp. Stat. 160/1 et seq. (1990) (the “IUFTA”), pursuant to 11 U.S.C. § 544. Aberts has moved for partial summary judgment with respect to Count III of his second amended complaint (D.E. No. 56, filed July 21, 2005) (the “Complaint”). 1 HCA and GHI (collectively the “Defendants”) oppose this motion and have cross-moved for summary judgment on all counts in the Complaint. 2

The Complaint lists six counts: two causes of action premised on § 5(a)(1) of the IUFTA (Counts I and II), see 740 Ill. Comp. Stat. 160/5(a)(l), two causes of action under § 5(a)(2) of the IUFTA (Counts III and IV), see id. at 160/5(a)(2), and two causes of action under § 6(a) of the IUF-TA (Counts V and VI). See id. at 160/6(a). Aberts seeks partial summary judgment with respect to Count III on a single issue: whether the count is barred by the statute of repose set forth in the IUFTA. The Defendants seek summary judgment on this issue and several others. For the reasons that follow, the court will deny Aberts’s motion in part, grant in part and deny in part the cross-motion filed by the Defendants, and defer consideration of one issue at this time.

I

The following facts are undisputed. 3 Michael Reese was formed as a wholly-owned subsidiary of Doctors Community Hospital Corporation (“DCHC”), a privately-held healthcare management company organized under the laws of Delaware. (PI. Statement of Material Undisputed Facts ¶ 15) (D.E. No. 104, filed March 9, 2006). 4 On July 8, 1998, Michael Reese entered into an asset purchase agreement (the “APA”) with GHI, a corporate subsidiary of fellow defendant HCA, for the purchase of Columbia Michael Reese Hospital and Medical Center (“Michael Reese Hospital”). (Comply 15). Michael Reese and GHI entered into a series of amendments to the APA throughout the fall of 1998. (Compl.1ffl 17-21). On November 9, 1998, the parties signed the “Sixth Amendment” to the APA — the last such document signed prior to the purchase of the hospital. (ComplY 21). The purchase of Michael Reese Hospital closed on November 12, 1998. (Def. Statement of Undisputed Material Facts ¶ 4 (D.E. No. 198, filed *298 August 28, 2006)). 5

Michael Reese and its affiliated Debtors filed for chapter 11 relief on November 20, 2002. After protracted proceedings lasting almost 18 months, the Debtors achieved confirmation of their second amended plan of reorganization (the “Plan”) on April 5, 2004, and their operations were taken over by entities known as the “Reorganized Debtors.” Section 6.6 of the Plan provides for the creation of the Trust, which is charged with liquidating certain assets of the Debtors and distributing the proceeds to certain classes of creditors (including certain unsecured creditors). 6 Among the assets transferred to the Trust were fraudulent conveyance and other actions authorized under chapter 5 of the Bankruptcy Code. (Plan §§ 4.10, 6.6(f)).

Alberts initiated the instant adversary proceeding on November 18, 2004. After filing an amended complaint (while at the same time opposing the Defendants’ motion to dismiss the original complaint), 7 the Defendants filed a second motion to dismiss. The court denied the second motion to dismiss, but ordered Alberts to file a second amended complaint alleging facts that would justify his “lumping” together of the debtors in his complaint or specify which of the debtors consummated the allegedly fraudulent conveyance.

Alberts amended his complaint again on July 21, 2005, and moved for partial summary judgment on March 9, 2006. The Defendants filed an initial opposition to this motion under Fed.R.Civ.P. 56(f) and then filed a supplemental opposition, which Alberts moved to strike. 8

The parties appeared before the court on April 4, 2006, for a hearing on Alberts’s motion for partial summary judgment, at which time the court ruled from the bench that the motion should be granted in part and denied in part. The court subsequently entered an order reciting that Michael Reese transferred $66,048,840.00 towards the purchase of Michael Reese Hospital. 9

*299 Alberts filed the instant motion on July 27, 2006. The Defendants responded to this latest motion by filing both an opposition and a cross-motion for summary judgment. The Defendants filed a separate motion for summary judgment on November 6, 2006, which the court has not yet considered.

II

Pursuant to Fed.R.Civ.P. 56 (as incorporated by Fed. R. Bankr.P. 7056), summary judgment will be granted where “there is no genuine issue as to the material fact and the ... moving party is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(c). The court must deny summary judgment where there is a genuine issue as to any material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). If the movant makes a properly supported motion, the burden shifts to the opposing party to demonstrate specific facts showing that there is a genuine issue for trial. Id.

If the moving party does not bear the burden of proof at trial on an issue, summary judgment may be granted if the moving party shows “that there is an absence of evidence to support the nonmov-ing party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the movant alleges that the opposing party lacks proof to establish requisite elements of its case, the movant must show the absence of such facts. Id. The court must view the opposing party’s evidence in the light most favorable to nonmovant’s position and draw inferences in favor of that party, provided such inferences are justifiable or reasonable. Matsushita Elec. Indus. Co., Inc. v. Zenith Radio Corp., 475 U.S. 574, 587-88, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

A. Statute of Limitations

The only issue presented by Alberts’s motion is whether Alberts is time-barred from pursuing Count III of his Complaint by § 10 of the IUFTA, which provides that a cause of action under the act “is extinguished” unless brought “within four years after the transfer was made or the obligation incurred.” 740 Ill. Comp. Stat. 160/10(a). Alberts does not dispute that his complaint was filed more than four years after the purchase of Michael Reese Hospital, but argues that he is entitled to invoke the statute of limitations available to any unsecured creditor of the estate at the time that Michael Reese filed its petition.

Alberts identifies two such creditors: the United States Department of Health and Human Services (“HHS”) and the Internal Revenue Service (“IRS”). According to Alberts, HHS held a claim for Medicare overpayments pursuant to 28 U.S.C. § 1345, while the IRS held separate claims for taxes owed under the Federal Unemployment Tax Act, 11 U.S.C. § 3301 et seq. (“FUTA”), and for employment taxes owed pursuant to § 3111 of the Internal Revenue Code. 26 U.S.C. § 3111(a). He argues that the existence of these three claims allows him to access either the six-year statute of limitations provided by 28 U.S.C. § 2415 for actions brought by the United States government (for the HHS claim) or the ten-year statute of limitations provided by 26 U.S.C. § 6502 10 for tax *300 claims brought by the IRS (for the two IRS claims).

The Defendants argue in response that (1) Alberts lacks standing to assert any claims held by HHS or the IRS, or, alternatively, should be equitably estopped from doing so, (2) Alberts cannot invoke any statute of limitations other than § 10 of the IUFTA as a matter of law, and (3) there is no evidence in the record that either HHS or the IRS were unsecured creditors of Michael Reese as of the petition date. 11 The court considers each category of documents in turn.

1. Standing & Equitable Estoppel

As a threshold issue (although it is actually one of the last arguments that they make), the Defendants argue that Alberts lacks standing to assert causes of action held by the IRS or HHS. (Def. Opp’n at 83-93 (D.E. No. 195, filed August 28, 2006)). Alternatively, they request that the court bar Alberts from pursuing the instant action under traditional principles of equity. (Def. Opp’n at 93-96). Both arguments derive from the provisions of the Plan, which vest the § 544(b) claims formerly held by the Debtors in the Trust but leaves the claims against the former estate held by the IRS and HHS with the Reorganized Debtors. (Plan §§ 1.29, 6.3(e)).

The standing argument requires little effort to refute. Section 6.6 of the Plan provides for the transfer of the “Liquidating Trust Assets” to the Trust. The Liquidating Trust Assets include “Litigation Claims” (Plan § 1.50), which the Plan defines as meaning, inter alia, “all remaining causes of action of the Debtors as of the Effective Date, including but not limited to claims or causes of action under sections 542 through 553 of the Bankruptcy Code....” (Plan § 1.53). 12

This court has already concluded that Alberts can invoke the same powers that a chapter 11 trustee or debtor-in-possession would possess because he is a “representative of the estate” as defined by 11 U.S.C. § 1123. Alberts v. Tuft (In re Greater Southeast Cmty. Hosp. Corp. *301 I), 333 B.R. 506, 537-38 (Bankr.D.D.C.2005) (“Tuft ”). Alberts works on behalf of the estate, and it is that interest, not the interests of specific creditors, that matters in determining whether a person can invoke § 544(b). 13 His standing is not in doubt.

The court is equally unpersuaded by the Defendants’ equitable estoppel argument. The argument assumes that HHS and the IRS will receive no benefit from any recoveries made by Alberts because the Plan bifurcated the former Debtors into the Trust, which holds and prosecutes the litigation claims formerly held by the Debtors for the benefit of certain creditors, and the Reorganized Debtors, who retain the former Debtors’ liabilities to HHS and the IRS. However, as the court explained in a recent decision involving a different liquidating trust, even creditors who hold no interests in a trust benefit from the creation of the trust because they receive a greater pro rata distribution under the debtor’s plan of reorganization than they would have received had other creditors not exchanged their claims for shares in the trust. Premium of America, LLC v. Sanchez (In re Premium Escrow Services, Inc.), 342 B.R. 390, 401 & n. 5 (Bankr.D.D.C.2006).

In short, it does not matter whether the IRS or HHS would benefit now from any recovery made by Alberts in this proceeding because, starting from the petition date, they already benefitted from the mere possibility of recovery, which could have only increase the possibility that the Debtors would pay the IRS and HHS claims in a manner satisfactory to those creditors. 14 In any event, § 544(b) simply does not require an estate representative to demonstrate that the creditor into whose shoes she steps as of the petition date will benefit from the recovery, nor does it recognize an equitable defense on those grounds to recovery of otherwise avoidable transfers of assets. Even if the IRS and HHS claims had been paid in full mere hours after commencement of the case, that would not alter the estate representative’s ability to invoke § 544(b). See n. 11, supra.

Alberts has standing to pursue this lawsuit, and there is nothing inequitable in permitting him to do so. The Defendants’ arguments to the contrary are denied.

2. Sovereign immunity

Section 544(b) of the Bankruptcy Code permits a trustee (or other representative of the estate) to “use [the] statutes of limitations available to any creditor in whose shoes he stands in bringing the action.” Osherow v. Porras (In re Porras), 312 B.R. 81, 97 (Bankr.W.D.Tex.2004); accord G-I Holdings, Inc. v. Those Parties Listed on Exhibit A (In re G-I Holdings, Inc.), 313 B.R. 612, 636 (Bankr.D.N.J.2004) (“G-I Holdings /”), rev’d in part on other grounds by Official Comm. of Asbestos Claimants v. Bank of N.Y., Civil No. 04-3423, 2006 WL 1751793 (D.N.J. June 21, 2006) (“G-I Holdings *302 II”). 15 In the case of government creditors, the statute of limitations provided by federal law to the specific creditor in question trumps any statute of limitations set forth in the applicable state fraudulent transfer law under the Supreme Court’s ruling in United States v. Summerlin, 310 U.S. 414, 60 S.Ct. 1019, 84 L.Ed. 1283 (1940). In re Porras, 312 B.R. at 97; accord Shearer v. Tepsic (In re Emergency Monitoring Technologies, Inc.), 347 B.R. 17, 18-19 (Bankr.W.D.Pa.2006).

In Summerlin, the Supreme Court expounded upon the “well settled” rule “that the United States is not bound by state statutes of limitation or subject to the defense of laches in enforcing its rights.” Summerlin, 310 U.S. at 416, 60 S.Ct. 1019. Writing for the majority, Chief Justice Hughes stated unequivocally:

When the United States becomes entitled to a claim, acting in its governmental capacity and asserts its claim in that right, it cannot be deemed to have abdicated its governmental authority so as to become subject to a state statute putting a time limit upon enforcement.

Id. at 417, 60 S.Ct. 1019. As the Ninth Circuit explained in Bresson v. Comm’r of Internal Revenue, 213 F.3d 1173 (9th Cir.2000), “if the United States comes into possession of a valid claim, that claim cannot be ‘cut off later by a state statute of limitations.” Id. at 1176.

Numerous courts have held that the Summerlin rule applies to fraudulent transfer actions brought by an unsecured governmental creditor. See, e.g., Bresson, 213 F.3d at 1177-79; United States v. Moore, 968 F.2d 1099, 1100-01 (11th Cir.1992); United States v. Jepsen, 131 F.Supp.2d 1076, 1087-88 (W.D.Ark.2000); United States v. Nemecek, 79 F.Supp.2d 821, 824-27 (N.D.Ohio 1999); United States v. Cody, 961 F.Supp. 220, 221 (S.D.Ind.1997); United States v. Smith, 950 F.Supp. 1394, 1402-04 (N.D.Ind.1996); United States v. Bantau, 907 F.Supp. 988, 991 (N.D.Tex.1995). 16 Many of these same courts have rejected expressly the position (previously espoused by the Defendants) that Summerlin does not apply because the UFTA contains a “statute of repose” rather than a “statute of limitations.” See, e.g., Bresson, 213 F.3d at 1177-79; Nemecek, 79 F.Supp.2d at 825-27; Cody, 961 F.Supp. at 220. 17

*303 Notwithstanding these settled principles of law, the Defendants argue that the four-year statute of limitations set forth in § 10 of the IUFTA is the governing statute of limitations even if unsecured governmental creditors with longer statute of limitations were in existence as of the petition date. They argue that Summerlin does not apply in this case because (1) the IRS and HHS have other ways of enforcing any claims they might have against Michael Reese Corp., (2) Alberts is not acting in a governmental capacity, and (3) Summerlin does not apply to future governmental creditors (ie., governmental creditors not in existence at the time of the challenged transfer). Each of these arguments contradicts settled law and sound reason; accordingly, each argument must be rejected as a matter of law.

(a) Alternative means of enforcement

The Defendants quote selectively — very selectively — from the Summerlin decision to support the novel proposition that “a state statute of limitations will remain effective and applicable against a federal entity as long as there is ‘an opportunity [for] the United States otherwise to enforce its claim.’ ” (Def. Opp’n at 15 (quoting Summerlin, 310 U.S. at 417, 60 S.Ct. 1019)). This is a gross distortion of the Supreme Court’s actual sentiment. The language surrounding the Defendants’ quote clarifies the meaning of the excerpted language:

If this were a statute merely determining the limits of the jurisdiction of a probate court and thus providing that the County Judge should have no jurisdiction to receive or pass upon claims not filed within the eight months, while leaving an opportunity to the United States otherwise to enforce its claim, the authority of the State to impose such a limitation upon its probate court might be conceded. But if the statute, as sustained by the state court, undertakes to invalidate the claim of the United States, so that it cannot be enforced at all, because not filed within eight months, we think the statute in that sense transgressed the limits of state power.

Summerlin, 310 U.S. at 417, 60 S.Ct. 1019 (emphasis added).

In other words, the Court merely distinguished a statute that eliminated a claim, which the Court held to be impermissible, from a statute that barred a particular court from hearing a claim, which the Court considered permissible. Nothing in the passage quoted above suggests that the Supreme Court intended for Summer-lin to apply only when a governmental creditor possesses a single cause of action.

The court cannot conceive of a reason why the Supreme Court would have en-grafted the kind of limitation on the federal government’s sovereign immunity that the Defendants propose. As the Court made clear two years prior to the Sum-merlin decision in Guaranty Trust Co. of N.Y. v. United States, 304 U.S. 126, 58 S.Ct. 785, 82 L.Ed. 1224 (1938) (“Guaranty Trust”), the “true reason” for the federal government’s immunity from laches or state statutes of limitations “is to be found in the great public policy of preserving the public rights, revenues, and property from injury and loss[ ] by the negligence of public officers.” Id. at 132, 58 S.Ct. 785 (quotation omitted).

It can hardly be argued that the Sum-merlin rule “preserv[es] the public rights” if it only applies whenever the government has no other rights to assert in a particular *304 dispute. To the contrary, both Guaranty Trust and Summerlin stand for the proposition that governmental error should never compromise the national public interest except insofar as the people limit their own rights through the passage of federal statutes of limitations. See E.I. Dupont De Nemours & Co. v. Davis, 264 U.S. 456, 462, 44 S.Ct. 364, 68 L.Ed. 788 (1924) (“an action on behalf of the United States in its governmental capacity ... is subject to no time limitation, in the absence of congressional enactment clearly imposing it”) (“E.I.Dupont ”).

(b) Governmental capacity

The Defendants suggest that the putative claims held by HHS and the IRS are not claims held in a “governmental capacity” because these creditors will not benefit from the instant lawsuit. See United States v. Banks, 115 F.3d 916, 919 (11th Cir.1997) (state statute of limitations applies “when the government is acting to vindicate private interests, not a sovereign or public interest” (emphasis in original)). As the court explained in discussing Al-berts’s standing to bring this suit, this theory rests on the flawed premise that the IRS and HHS must receive a present benefit from Alberts’s lawsuit for their interests to be served when they have already benefitted insofar as the right to bring the lawsuit could only have a positive impact on the payment of their claims. See part II.A.1, supra.

There is another, more fundamental flaw in the Defendants’ argument. It assumes that Alberts is asserting the claims actually held by the IRS and HHS, as though these claims were assigned to him by the creditors. They were not. The claims assigned to Alberts were separate claims held by the Debtors as debtors-in-possession that arose under § 544(b). See nn. 12-13, supra.

Congress crafted § 544(b) to give the representative of the estate the ability to avoid any transaction that any unsecured creditor of the estate could have avoided as of the petition date. 18 The estate representative steps into the shoes of each such unsecured creditor and is cloaked with the rights of that creditor. If an unsecured creditor of the estate could have avoided a transaction under state law despite the existence of a state statute of limitations on that claim because the creditor was acting in a “governmental capacity,” so too can the estate representative avoid the transfer under § 544(b). The unsecured creditor’s ability to trump the applicable state statute of limitations might derive from its sovereign immunity, but the estate representative’s ability to override that same limitation derives from § 544(b). 19 The focus of the court in determining who is acting in a “governmental capacity” is the unsecured creditor, not the estate representative.

The basis for the claims allegedly held by the IRS derives from Subtitle C of the Internal Revenue Code, which effectuates the authority given to Congress to “collect Taxes” pursuant to Article I, § 8 of the Constitution. The basis for the claim allegedly held by HHS is the government’s common law right to recovery of *305 funds paid in error to Michael Reese Hospital. See United States v. Lahey Clinic Hosp., Inc., 399 F.3d 1, 5 (1st Cir.2005) (describing common law causes of action under which HHS can pursue Medicare overpayments). Both types of claims fall squarely within the rubric of the agencies’ “governmental capacities]”. 20

(c) Future creditors

Finally, the Defendants argue that the Summerlin rule cannot protect the claims held by the IRS and. HHS because those alleged claims arose after the Michael Reese Transfers. According to the Defendants, application of the Sum-merlin rule under such circumstances would “violate[ ] the parties’ state-created, substantive right to protection from liability because the parties have no way of knowing when, if ever, their liability associated with the transfer will be extinguished.” (Def. Opp’n at 22). It would also supposedly “rewrite [§ ] 544(b) and extend its reach beyond comprehension. ...” (Def. Opp’n at 13). 21

This argument holds little water. 22 The IUFTA allows future creditors to utilize its remedies. 740 Ill. Comp. Stat. 160/5. There is no great injustice in allowing HHS or the IRS to have a fraudulent transfer claim under the IUFTA without a set statute of limitations. The Defendants’ argument would apply as well to a claim in existence prior to the fraudulent transfer whose existence remained undisclosed. Consider a debtor who conceals her tax debt by failing to file a tax return. 23 Such a debtor should not profit from her own deceit any more than a tortfeasor who conceals her tort is allowed to profit from that dishonesty by invoking the statute of limitations. 24

Moreover, it is far from clear that applying the Summerlin rule in cases like this *306 would “provid[e] a trustee with avoidance powers that have no temporal limitations whatsoever” as the Defendants intimate. (Def. Opp’n at 13). In Guaranty Trust, the Supreme Court refined its sovereign immunity jurisprudence by holding that a claim assigned to the United States government that had already lapsed under the applicable state statute of limitations was not “revived” by its assignment to the United States. 304 U.S. at 141-42, 58 S.Ct. 785. In the Court’s view, because there had “been no neglect or delay by the United States or its agents,” the government had “lost no rights by any lapse of time after the assignment,” id. at 141, 58 S.Ct. 785, and “the United States never acquired a right free of a pre-existing infirmity, ... which public policy does not forbid.” Id. at 141-42, 58 S.Ct. 785. 25

Guaranty Trust involved the assignment of a claim, whereas the hypothetical claim at issue here arose by operation of § 544(b). Nevertheless, a persuasive case could be made that Guaranty Trust would prevent a governmental creditor from bringing an action under the IUFTA if its claim did not arise until after the four-year statute of repose had passed. Such a rule would render the Defendants’ “Chicken Little” argument moot.

Finally, the whole point of the Summerlin rule and the doctrine of federal sovereign immunity in general is that the “right to protection from liability” (i.e., statutes of limitations or repose) created by an individual State can be “violate[d]” by the federal government whenever it is in the public interest to do so. Indeed, where Congress does not pass a statute of limitations specifically limiting a claim held by the government, that claim is inexhaustible. E.I. Dupont, 264 U.S. at 462, 44 S.Ct. 364.

For all these reasons, the court concludes that Alberts can utilize the extended statute of limitations available to unsecured governmental creditors assuming that such creditors existed as of the petition date.

3. Existence of unsecured governmental creditors

Having determined the availability of a statute of limitations longer than that provided by § 10 of the IUFTA as a matter of law, the court now considers whether there is any genuine dispute as to whether creditors capable of invoking such statutes existed on the petition date as a factual matter. As the court noted previously, Alberts hangs his hat on three alleged claims: one purportedly held by HHS due to Medicare overpayments made to Michael Reese throughout 2002, and two purportedly held by the IRS for FUTA and employment taxes. In all three cases, Al-berts relies at least in part on the proofs of claim filed by HHS and the IRS in the Debtors’ main case as proof of the claims’ existence.

“Proofs of claim are more than mere pleadings or allegations — they are some evidence.” In re Cluff, 313 B.R. 323, 340 (Bankr.D.Utah 2004); accord In re Dove-Nation, 318 B.R. 147, 152 (8th Cir. *307 BAP 2004); see also In re McGee, 258 B.R. 139, 147 (Bankr.D.Md.2001) (noting that even rebutted proof of claim “retains some weight as evidence”). 26 Thus, Al-berts need only show that the proofs of claim filed by HHS and the IRS establish at least one of these creditors as holding an allowable unsecured claim on the Debtors’ petition date to survive the Defendants’ cross-motion. 27 If Alberts can clear that hurdle, the burden will fall on the Defendants to present some evidence contradicting any such proofs of claim if they are to defeat Alberts’s summary judgment motion.

(a) HHS claim

HHS filed Proof of Claim No. 01883 on November 3, 2003. (PI. Mem. at Ex. 1 (D.E. No. 177, filed July 27, 2006)). In its proof of claim, HHS asserted an “[ujnsecured [n]on[-p]riority [c]laim” totaling $176,400.00 for Medicare overpayments made over the course of 2002. In a subsequent letter sent to former DCHC Vice-President Donna Talbot on November 15, 2005, Mutual of Omaha Insurance Company (“Mutual of Omaha”), the insurance provider acting as an intermediary between HHS and Michael Reese, calculated that Michael Reese owed HHS $53,186.00 for overpayments made in 2002. (Dem-chick Decl. at Ex. C). 28 The HHS proof of claim and Mutual of Omaha letter are the only exhibits proffered by Alberts in support of his allegation that HHS was an unsecured creditor as of the petition date.

This meager evidence is not enough to withstand the Defendants’ cross-motion for summary judgment. As the court explained at the hearing on the parties’ last round of summary judgment motions, the evidence produced by Alberts suggests that Michael Reese was overpaid at some point in 2002, but it does not show that the company was overpaid before the petition date. (Apr. 4, 2006 Hr’g Tr. at 148:8-17 (D.E. No. 145, filed May 12, 2006)). Simply put, there is not even a scintilla of evidence that HHS overpaid Michael Reese anytime before December 31, 2002.

Alberts might have avoided this result had he produced evidence as to which costs reported by Michael Reese at the end of 2002 fell short of the projected costs reported by Michael Reese throughout the year. Such evidence would have allowed the court to determine when specific Medicare overpayments were made. But Al-berts has given the court nothing of the sort. Instead, he has submitted a draft settlement between a group of affiliated *308 debtors and HHS in a different bankruptcy case in which the parties have agreed to pro-rate HHS’s claim for Medicare over-payments as if the overpayments had been made uniformly throughout the course of the year. (PI. Mem. at Ex. 2). This “evidence” suggests that the parties in that case found it more convenient to pro-rate HHS’s claim than to litigate it, nothing more.

There is no evidence in the record from which a factfinder could reasonably infer that HHS was an unsecured creditor of Michael Reese on the Debtors’ petition date. For that reason, summary judgment must be granted to the Defendants with respect to Alberts’s invocation of the six-year statute of limitations provided by 28 U.S.C. § 2415 based on the claim allegedly held by HHS.

(b) Employment tax claim

In the alternative, Alberts asserts that the IRS was an unsecured creditor as of the Debtors’ petition date because Michael Reese owed the IRS $87,067.67 in FICA and Medicare taxes for the pay period commencing on November 10, 2002, and ending on November 23, 2002. The only evidence presented in support of this allegation is the affidavit of current Michael Reese CFO Phillip J. Robinson (with a series of unauthenticated exhibits attached thereto) 29 and a series of documents filed in the Debtors’ main bankruptcy case. 30

The Defendants contend that the IRS was not a creditor of Michael Reese on the petition date because the employer taxes serving as a basis for the claim did not attach until the wages in question were paid by Michael Reese, which could not have occurred pre-petition given that the pay period itself extended three days past the petition date. (Def. Opp’n at 40). But the IRS did not need to hold a matured claim against Michael Reese to qualify as a creditor on the petition date. Rather, the Bankruptcy Code defines the term “creditor” to include any entity holding a “claim” against the debtor arising pre-petition, 11 U.S.C. § 101(10)(A), and defines a “claim” as meaning any “right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.” Id. at § 101(5)(A) (emphasis added).

In this case, the IRS held a contingent claim against Michael Reese as soon as its employees performed work for which they were entitled to a wage (the contingency being the payment of the wage for the work performed). See Psychotherapy and Counseling Center, Inc. v. Shalala (In re Psychotherapy and Coun *309 seling Center, Inc.), 195 B.R. 536, 543 (Bankr.D.D.C.1996) (citing Lousberg, Kopp, Kutsunis, and Weng, P.C. (In re Bonnett), 158 B.R. 125 (Bankr.C.D.Ill.1993), for the proposition that a “contingent claim is a claim that has not yet accrued and that is dependent upon some future event that may never happen”). To the extent that this claim arose pre-petition, the IRS was a pre-petition creditor of Michael Reese. The date upon which the claim matured is irrelevant. 31

The Defendants argue that the IRS was not a priority unsecured creditor for purposes of 11 U.S.C. § 507(a)(8) because the tax return relating to the employer taxes in question was not due in the three years preceding the petition date, and that therefore the IRS must have been an administrative (as opposed to an unsecured) creditor on the petition date. (Def. Opp’n at 47-50). This is pure hogwash. “Taxes arising from conduct of the debtor, as opposed to the estate, are pre[-]petition taxes and should not be compensated as an administrative expense.” In re Garfinckels, 203 B.R. 814, 819 (Bankr.D.D.C.1996). “When employment taxes relate to wages or salaries earned pre[-]petition but not paid until after the filing in bankruptcy, they are specifically excluded from administrative status by virtue of sections 503(b)(1)(B)(i) and 507(a)(8)(D).” 4 Collier on Bankruptcy ¶ 503.07[2][d] (15th ed.2006). 32

Section 507(a)(8)(D) provides for treatment of taxes owed on wages earned within ninety days of the petition date so long as the return on those taxes is due “after three years before the date of the filing of the petition....” 33 In other words, returns due longer than three years before the petition (e.g., in this case, a return due December 31, 1998) are not accorded priority status under the sub-section. Nothing in the statute suggests that the return must be due pre-petition.

The Defendants suggest that because § 507(a)(8) (A) (iii) provides for priority treatment of certain kinds of taxes “not assessed before, but assessable, under applicable law or by agreement, after, the commencement of the case,” and because *310 no such language is present in § 507(a)(8)(D), the latter section prevents employer taxes for pay periods straddling the petition date from receiving priority treatment. (Def. Reply at 21). 34 They cite Paulson v. IRS (In re Paulson), 152 B.R. 46 (Bankr.W.D.Pa.1992), as having “explicitly stated that [an] employment tax period that straddles the petition date did not have a return that was due to be filed ‘within three years prior to the filing of the bankruptcy petition’ per 11 U.S.C. § 507(a)(8)(D).” (Def. Reply, at 22).

The Defendants’ statutory construction argument presents a classic comparison of apples to oranges. Section 507(a)(8)(A) addresses the priority of taxes “measured by income or gross receipts” (ie., income and sales taxes). Sub-section (A)(i) sets forth the general rule that such taxes be “for a taxable year ending on or before the date of the filing of the petition for which a return, if required, is last due ... after three years before the date of the filing of the petition.” In other words, the subsection permits priority unsecured treatment of tax claims based on returns due within three years of the petition date so long as the return is due “on or before” the year in which the petition is filed.

Sub-sections (A)(ii) and (A)(iii) essentially operate as gap-fillers for the IRS where a return is due more than three years prior to the petition date but a late assessment (ie., an assessment made outside the ordinary three-year window set forth in 26 U.S.C. § 6501(a)) is made by the IRS for some legitimate reason (e.g., litigation in the Tax Court regarding a notice of deficiency determined by the Commissioner). Sub-section (A)(ii) treats tax claims under those circumstances as priority unsecured claims if the taxes are “assessed within 240 days ... before the date of the filing of the petition.... ” Sub-section (A)(iii) covers taxes that are assessable before the petition date but not assessed until after the petition is filed regardless of how long ago the return corresponding to that assessment was filed.

Like sub-section (A), § 507(a)(8)(D) limits the scope of the priority treatment afforded by § 507(a) to claims based on returns due to be filed no earlier than three years before the debtor’s petition for bankruptcy relief. Unlike sub-section (A), sub-section (D) provides no exceptions for tax claims based on returns due more than three years prior to the petition date. That is because sub-section (D), unlike sub-section (A), is tied to wages earned by individuals within ninety days of the petition date (or the date of the cessation of the debtor’s business, whichever comes first). 11 U.S.C. § 507(a)(3). 35

To summarize, the language regarding assessment found in § 507(a)(8)(A)(iii) extends the potential scope of priority backwards for the taxes listed in that sub-section. Nothing in that sub-section or any other part of § 507(a)(8) *311 suggests that Congress intended to allow the IRS to hold priority claims where the return is filed post-petition in sub-section (A) but not subsection (D). To the contrary, sub-section (A)(i) applies only to returns for a year ending “on or before” the petition date — a restriction not found in sub-section (D). 36 “Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983) (internal quotation omitted).

As for the In re Paulson decision, that case concerned a dispute between the IRS and a debtor as to whether certain penalties and post-petition interest on taxes and penalties were immune from the debtor’s discharge pursuant to 11 U.S.C. §§ 727(b) and 523(a)(1)(A). Id. at 47. 37 As part of its recitation of the facts underlying the dispute, the bankruptcy court noted that the IRS had made assessments on employer taxes for the first and fourth quarters of 1983, “which quarter was partially pre-petition and partially post-petition,” id., and that the debtor’s tax liabilities for “the first and second quarters of 1983 ... were all due to be filed within three years prior to the filing of the bankruptcy petition.” Id. (emphasis added). In the Defendants’ view, the court’s omission of the fourth quarter of 1983 in the latter quote is tantamount to a ruling that “the ‘straddling’ employment tax quarter was not a priority claim.” (Def. Reply at 22).

The court finds it highly unlikely that the Paulson court would make a ruling of the sort suggested by the Defendants sub silentio and without solicitation from the parties. It is far more likely that the court’s initial description of “a Form 941 liability against the Debtor for the fourth quarter of 1983,” id., was actually a typographical error given that (1) the decision never mentions a “Form 941” for the fourth quarter of 1983 again, and (2) the decision mentions a “Form 941” for the second quarter of 1983 everywhere else in the decision except in that initial description. See id. at 47, 51. In any event, the court can hardly be persuaded by a decision devoid of reasoning with respect to the point at issue. In re Paulson is useless insofar as the instant dispute is concerned.

There is, however, another problem with the evidence produced by Alberts that the Defendants do not address. The Robinson affidavit references a pay period running from November 10, 2002, to November 23, 2002, but it does not specify that wages were earned on all or any specific days within that period. The most that a factfinder could infer from his evidence is that wages might have been earned prior to the petition date. As the party with the burden of proof on this issue, Alberts must establish that wages were earned prior to the petition date, not that they could have been earned prior to the petition date.

There is one important difference between this gaffe by Alberts and his similar *312 mistake with respect to the alleged HHS claim. Alberts was put on notice by the court at a prior hearing that he needed to provide more than a range of dates straddling the petition date to fulfill his eviden-tiary burden with respect to the latter claim. He was not given notice that he needed to supply evidence that wages were earned prior to November 20, 2002. The court did not raise the issue at the prior hearing, and the Defendants failed to articulate the problem in their lengthy opposition and cross-motion.

It would be unfair to hold Alberts’s feet to the fire for failing to supply evidence that no one thought to request. 38 For that reason, the court will give both Alberts and the Defendants an opportunity to supplement the record with respect to whether wages were earned by Michael Reese employees between November 10, 2002, and November 19, 2002. Should Alberts fail to supply such evidence, summary judgment will be granted to the Defendants on this point. But if Alberts is able to provide evidence that would permit an inference that work was performed prior to the petition date (e.g., by providing documentary or testimonial evidence to the effect that Michael Reese employees worked on the dates in question or usually worked on the days of the week that fell within those dates), the court will grant summary judgment in his favor on this point unless the Defendants can produce evidence to the contrary. 39

(c) FUTA claim

Finally, Alberts asserts that the IRS was a pre-petition unsecured creditor of Michael Reese based on FUTA taxes assessed on July 15, 2002. The issue here is not whether evidence in support of this assertion exists, but whether such evidence is admissible. The Defendants contend that it is not because (1) the evidence was produced after the close of discovery and (2) some of the evidence is unauthenticated.

The court agrees with the Defendants that Alberts should not receive summary judgment on this issue. The only evidence that Alberts produces in support of his position is the proof of claim filed by the IRS against Greater Southeast Community Hospital in the Debtors’ main bankruptcy case and an undated letter from the IRS that is misidentified as a copy of Michael Reese’s 940EZ tax form for the period ending on December 31, 1999, in the affidavit that purports to authenticate it. (Demchick Decl. ¶ 9). Both documents were produced after the close of discovery, and the letter from the IRS is inadmissible because it was not properly authenticated. Fed. R. Bankr.P. 7056 (incorporating Fed. R.Civ.P. 56(e)); Fed.R.Evid. 602.

*313 At the same time, the proof of claim filed by the IRS would be enough by itself to defeat a motion for summary judgment, see In re Cluff, 318 B.R. at 340, and the court sees no justice in striking the proof of claim if it was seasonably produced, an issue in dispute. Alberts represents that the evidence was disclosed within a reasonable time of its discovery. (PL Reply ¶¶ 56-57). The Defendants quarrel that Al-berts was in a position to locate the proof of claim earlier. The court views this as a material issue in genuine dispute that is better off left for resolution at a plenary hearing at the pre-trial conference scheduled in this adversary proceeding.

Both sides to this dispute have engaged in a “scorched earth” litigation strategy that has produced many needless delays and unseemly accusations throughout this proceeding. If that is how the parties wish to conduct themselves, so be it, but they can hardly expect the court to resolve their disputes over unmet discovery deadlines based on the papers submitted in connection with cross-motions for summary judgment. The court will tentatively deny summary judgment with respect to both sides of this issue subject to renewal once the court resolves the messy issue regarding the delay in production of the IRS proof of claim.

B. Existence of an Unsecured Present Creditor

In addition to their opposition to Al-berts’s motion for summary judgment, the Defendants seek summary judgment with respect to all of the counts in Alberts’s Complaint. The court has resolved that cross-motion insofar as Counts I-IV of the Complaint are concerned, 40 but Counts V and VI of the Complaint reference a different provision of the IUFTA that imposes additional evidentiary requirements on Al-berts. Specifically, they invoke § 6(a) of the IUFTA, which only provides relief for creditors of a debtor in existence at the time of the challenged transfer. Id. at 16076(a).

Alberts has demonstrated that at least two subsidiaries of National Century Financial Enterprises (“NCFE”) 41 — NPF-CSL, Inc. and NPF X, Inc. — were creditors of Michael Reese at the time of the Michael Reese Transfers. (Lau Decl. at Exs. 2-3). 42 These creditors were not, *314 however, entitled to an extended statute of limitations like HHS or the IRS. Their potential claims expired on November 12, 2002, pursuant to § 10 of the IUFTA. 43

Alternatively, Alberts argues that HHS was an unsecured creditor of Michael Reese at the time of the Michael Reese Transfers. 44 The process by which he arrives at this conclusion is somewhat convoluted. He argues that GHI owed HHS for Medicare overpayments prior to its sale of Michael Reese Hospital, and that those liabilities were assumed by Michael Reese as part of the APA. Alberts then argues that because the closing statement of the APA was executed on November 11, 1998, and “the majority of the subject transfers were made at 12:57 and 12:59 on November 12, 1998,” (PI. Opp’n ¶ 7), Michael Reese became obligated on the debt owed to HHS for Medicare overpayments prior to “the majority of’ its allegedly fraudulent transfers.

As a practical matter, Alberts’s position — namely, that a creditor of Michael Reese existed prior to the Michael Reese Transfers because the exchange of consideration between the parties to the purchase of Michael Reese Hospital did not occur instantaneously — is too cute by half. As a technical matter, it is simply wrong. The payments made to the Defendants on November 12, 1998, followed the incur-rence of debt to GHI by Michael Reese in exchange for the hospital, which occurred when the APA was executed on November 11. This incurrence of debt would itself be avoidable pursuant to a timely complaint under the IUFTA if it defrauded a creditor in existence at the time of the incur-rence. See 740 Ill. Comp. Stat. 160/6(a) (providing for avoidance of “transferís] made” or “obligation[s] incurred”). There is evidence that there were such creditors in existence, but HHS itself was not an unsecured creditor of Michael Reese at the time of the incurrence of debt to GHI; rather, it became a creditor of Michael Reese upon the incurrence of the debt.

If the underlying incurrence of debt to GHI is not avoidable, the subsequent payment of that debt on November 12,1998, is similarly unavoidable because the only way that the subsequent transfers made by Michael Reese could have been for less than equivalent value (or actually fraudulent) would be if the underlying incurrence of debt GHI is avoidable as fraudulent. Singling out one creditor for payment may constitute a preferential transfer under the right circumstances, see 11 U.S.C. § 547, *315 but it is not a fraudulent one. See In re Liquidation of MedCare HMO, Inc., 294 Ill.App.3d 42, 228 Ill.Dec. 502, 689 N.E.2d 374 (1997) (“Under Illinois law, ... the mere preference of one or more creditors over others does not constitute a fraudulent transfer.”).

Unless and until the initial incurrence of debt to GHI by Michael Reese is avoided, Alberts has no right to recover the funds paid in satisfaction of the debt created by that incurrence. Alberts has not demonstrated that there was an unsecured creditor of Michael Reese whose claim existed at the time of the incurrence of debt to GHI and who could have brought a timely suit to avoid that incurrence on the petition date. Therefore, the court will grant summary judgment in favor of the Defendants on Counts V-VI with respect to both the obligation incurred (the acquisition of debt by Michael Reese) and the subsequent transfers (payments made on that debt).

Ill

For the reasons set forth above, and except with respect to the factual issue of whether the IRS had a contingent unsecured claim against Michael Reese for unpaid employment taxes based on work performed by Michael Reese employees between November 10, 2002, and November 23, 2002, the court will deny Alberts’s motion for summary judgment, grant the Defendants’ cross-motion for summary judgment with respect to the factual issue of whether HHS had an unsecured claim against Michael Reese on the petition date and with respect to Counts V and VI, and deny the rest of the cross-motion. The court will enter a separate order to show cause directing all parties to supplement the record in a manner consistent with this decision. Depending on the response of the parties, the court will either grant or deny the balance of the parties’ motions at that time. 45

An order follows.