In re Feliciano

487 B.R. 47, 2013 WL 625113, 2013 Bankr. LEXIS 637
CourtUnited States Bankruptcy Court, D. Massachusetts
DecidedFebruary 20, 2013
DocketNo. 12-40804-MSH
StatusPublished
Cited by8 cases

This text of 487 B.R. 47 (In re Feliciano) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Feliciano, 487 B.R. 47, 2013 WL 625113, 2013 Bankr. LEXIS 637 (Mass. 2013).

Opinion

MEMORANDUM OF DECISION AND ORDER ON TRUSTEE’S OBJECTIONS TO DEBTORS’ CLAIM OF EXEMPTIONS

MELVIN S. HOFFMAN, Bankruptcy Judge.

Before me is the objection by the chapter 7 trustee, David W. Ostrander, to the exemptions claimed by the debtors, Ever Feliciano and Myrna Caraballo, in real property and a motor vehicle.

The facts of this case are undisputed. The debtors, husband and wife, filed a voluntary joint petition for relief under chapter 7 of title 11 of the United States Code (the “Bankruptcy Code”) on March 2, 2012. Schedule A (real property) accompanying their petition lists an ownership interest in real estate described as “Unfinished Construction — Lot 74 Susua Alta Comm., Yauco, Puerto Rico” with a value of $46,500. The debtors resided at this property from the mid-1980s until 1995, when they moved with their children to the United States. No one has lived at the Yauco property for at least the past ten years and the debtors have engaged in ongoing efforts to sell it. The property has deteriorated since 1995 and needs considerable work to make it habitable. The Yauco property is the only real property reflected in the debtors’ schedules. The debtors currently reside with their daughter and son-in-law at 56 Gibbon Street in Marlborough, Massachusetts which is their address of residence set forth on their chapter 7 petition.

The debtors’ original schedule C (property claimed as exempt) claimed among other things the Yauco property as exempt under Mass Gen. Laws ch. 188, § 1 and a 1994 Toyota as exempt under Mass Gen. Laws ch. 235, § 34(16). The trustee filed an objection to the debtors’ claimed ex[50]*50emption in the Yauco property only, on the basis that the Massachusetts homestead exemption is not applicable to out of state property.1 The debtors filed a motion to amend schedule C to switch from state to federal exemptions. On their amended schedule C, the debtors claimed the Yauco property as exempt under Bankruptcy Code § 522(d)(1) and the Toyota as exempt under Bankruptcy Code § 522(d)(2). The trustee objected to the motion to amend schedule C and in the alternative objected to the debtors’ claimed exemptions in both the real estate and the motor vehicle. I granted the debtors’ motion to amend and will now rule on the trustee’s objections.

Under Bankruptcy Code § 522(b), debtors may elect either the federal bankruptcy exemptions set forth in § 522(d) or the exemptions available under state, federal non-bankruptcy or local law, provided that spouses filing jointly must make the same election.2 In re Gentile, 483 B.R. 50, 51 (Bankr.D.Mass.2012). Unless a party in interest objects, a claimed exemption is presumed valid. If an objection is filed, the objecting party has the burden of establishing that the claimed exemption is invalid. Fed. R. Bank. Pro. 4003(c) and Bankruptcy Code § 522(l); see also In re Gordon, 479 B.R. 9 (Bankr. D.Mass.2012). “As a policy matter, exemption rights are to be construed liberally in the debtor’s favor in view of Congress’s goal of providing a meaningful fresh start for debtors.” In re Griffith, 449 B.R. 909, 911 (Bankr.W.D.Wis.2011).

The trustee makes three arguments in support of his position that the debtors cannot exempt the Yauco property under Bankruptcy Code § 522(d)(1). The trustee asserts that Bankruptcy Code § 522(d)(1) is unavailable because the debtors did not reside at the property on the petition date (or indeed since 1995), they have no immediate plans to return to the property, and the structure located on the property is uninhabitable.

The debtors counter with two arguments. They state first that their intention throughout the bankruptcy has been to return to the Yauco property and that it has continued to serve as their domicile from the time they left Puerto Rico. Second, they maintain that on the petition date, the Yauco property was their only residence and they were merely guests of their daughter at the Marlborough property. Although not articulated clearly, the debtors appear to be arguing that their earlier occupancy of the Yauco property coupled with their ongoing intention to return there should equate with use for the purposes of satisfying the federal exemption statute.

Bankruptcy Code § 522(d)(1) provides that “[t]he debtor’s aggregate interest, [51]*51not to exceed $21,625 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence” is exempt from a debtor’s bankruptcy estate. The debtors’ ability to exempt the Yauco property under Bankruptcy Code § 522(d)(1) hinges on the interpretation of the phrase “real property or personal property that the debtor or a dependent of the debtor uses as a residence.”

As a general principle, the language of a statute should be construed according to its plain meaning unless doing so would lead to an absurd result. Lamie v. U.S. Tr., 540 U.S. 526, 534, 124 S.Ct. 1023, 1030, 157 L.Ed.2d 1024 (2004) quoting Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 6, 120 S.Ct. 1942, 147 L.Ed.2d 1 (2000) (“It is well established that ‘when the statute’s language is plain, the sole function of the courts — at least where the disposition required by the text is not absurd — is to enforce it according to its terms.’ ”)

Although “residence” is not defined by the Bankruptcy Code, the term is not ambiguous.3 In re Lawrence, 469 B.R. 140, 142 (Bankr.D.Mass.2012). Black’s Law Dictionary defines residence as “the place where one actually lives,” and elaborates that a person thus may have “more than one residence at a time.” BLACK’S LAW DICTIONARY 1423 (9th ed. 2009). Although a debtor may have more than one residence that could qualify for exemption under Bankruptcy Code § 522(d)(1), such a residence must be a place where the debtor “actually lives,” at least part of the time. Id.

The facts of this case call attention to the present-tense verb “uses” in the analysis of the language of Bankruptcy Code § 522(d)(1). “The Code speaks in the present tense which indicates that usage must transcend the petition date or at least exist as of the petition date. Thus where a debtor had never used a residence prior to filing, bankruptcy courts have held that the residence may not be exempted under § 522(d).” In re Lawrence, 469 B.R. at 142 citing In re Gandy, 327 B.R. 807 (Bankr.S.D.Tex.2005) and In re Cole, 185 B.R. 95 (Bankr.D.Me.1995). The parties agree that for a time prior to 1995, the Yauco property served as the debtors’ residence, but it is undisputed that no one has lived there for at least a decade. The debtors emphasize that they have continued to pay taxes on the Yauco property and that their ownership of the property may allow Puerto Rico’s General Court of Justice to assert personal jurisdiction over them. The fact that the debtors own the Yauco property and that such ownership may subject them to certain legal rights and responsibilities is not in dispute, but Bankruptcy Code § 522(d)(1) requires a use of real property not just mere ownership or maintenance in order to claim it as exempt.

The debtors suggest that their intention to return to the Yauco property is the added ingredient that brings the property within the scope of Bankruptcy Code § 522(d)(1).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Joseph W. Prestia
W.D. Pennsylvania, 2024
In re Tankersley
575 B.R. 848 (E.D. Arkansas, 2017)
In re James
560 B.R. 15 (D. Massachusetts, 2016)
Sikirica v. Yanovich (In re Yanovich)
544 B.R. 306 (W.D. Pennsylvania, 2016)
In re Williams
515 B.R. 395 (D. Massachusetts, 2014)
In re Kology
499 B.R. 20 (D. Massachusetts, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
487 B.R. 47, 2013 WL 625113, 2013 Bankr. LEXIS 637, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-feliciano-mab-2013.