In re Housh

535 B.R. 671, 2015 Bankr. LEXIS 2778, 2015 WL 4978725
United States Bankruptcy Court, E.D. Louisiana·Decided August 20, 2015·No. CASE NO. 15-10632·Published

Opinion

MEMORANDUM OPINION

Jerry A. Brown, U.S. Bankruptcy Judge

This matter came before the court on June 16, 2015 on the Chapter 7 Trustee’s motion to disallow exemption for a vessel and surrender of vessel and documentation (P-11), and the opposition thereto filed by the debtors (P-17). After reviewing the parties’ motion and opposition, and the arguments of the trustee and debtor’s counsel, the court entered an order denying the trustee’s motion. The court issues this memorandum opinion because this is an issue of first impression for this court. The debtors are entitled to an exemption under Louisiana Constitution Article 12; Section 9 and Louisiana Revised Statute 20:1 for the vessel listed in Schedule C of the petition.

[672]*672I. Background Facts

The facts of this matter are not in dispute. The sole issue presented is whether a vessel can qualify for a homestead exemption under current state law. On March 19, 2015 the debtors filed for relief under Chapter 7 of the Bankruptcy Code. In Schedule C of the petition, the debtors claimed a homestead exemption for a 1988 34’ Catalina Sailboat (“vessel”) under La. Const. Art. 12, Section 9; LSA-R.S. 20:1. Upon meeting with the debtors, and their counsel, the Chapter 7 Trustee informed the parties that he did not believe that a homestead exemption for moveable vessels exists under Louisiana law. On May 4, 2015, the trustee filed the instant motion seeking to disallow the homestead exemption claim and for surrender of the vessel. On June 5, 2015, the debtors filed an opposition to the trustee’s motion for disallowance of exemption and surrender of the vessel. The court heard arguments on the trustee’s motion and the debtors’ objection on June 16, 2015.

II. Legal Analgsis

Under the Bankruptcy Code, a debtor is allowed to claim an exemption for property of the estate when such property is classified as exempt under federal or state law. 11 U.S.C. 522(b)(2)(A). Louisiana is an opt out state, and as such state law governs the classification of and parameters for property claimed as exempt. The Louisiana Constitution provides for an exemption of an individual’s homestead from seizure and sale.1 Additionally, LSA-R.S. 20:1 provides a definition for property claimed as exempt.

The revised statutes define a homestead as a “residence occupied by an owner.”2 While the statute specifies that a homestead includes the residence and the land which it occupies, it does not specify what manner of dwelling shall be classified as a residence; nor does it require that a residence be permanently affixed to the land which it occupies. La. Const. Art. 7, Section 20(A)(1) expands the language of the statute by providing, in part:

The same homestead exemption shall also fully apply to the primary residence, including a mobile home, which serves as a bona fide home and which is owned and occupied by any person or persons owning the property in indivi-sión, regardless of whether the homeowner owns the land upon which the home or mobile home is sited.3

Nothing has been found in Louisiana law that specifically precludes the debtors from claiming an exemption for a vessel. In this instance, it thus appears that a house is not a homestead until the bankruptcy court rules that it is.

The debtors acknowledge the lack of precedent in Louisiana to support the argument for the claimed exemption of a vessel as their homestead. The debtors assert that there is ample precedent from other bankruptcy courts in the Gulf Coast region in which the court allowed a vessel to be claimed as a homestead. In particular, the debtors point to the holdings of Florida and Mississippi courts that have allowed homestead exemption claims for vessels and motor homes. The debtors assert that the vessel is their sole residence. Further, the debtors state that since September 2011 the vessel has been moored, subject to a lease/rental agreement, at the Beau Chene Marina in Mandeville, Louisiana.4 The debtors receive, and are billed for, utilities at this [673]*673location and receive their mail at a marina postbox. Finally, the debtors state their intent to maintain their residency on the vessel indefinitely. The trustee does not challenge their factual assertions.

Louisiana law lacks any reference to the applicability of the homestead exemption to a vessel. Ample jurisprudence from bankruptcy courts in neighboring states does deal with this issue. These neighboring state courts have found that a debtor can claim a homestead exemption for a vessel serving as a principle residence.

In In Re Scudder, 97 B.R. 617 (Bankr.S.D.Ala.1989) the court overruled a trustee’s objection to the debtor’s claimed exemption for a houseboat. The court made the factual determination that the houseboat was the debtor’s principle place of residence. Then it moved to the question of whether a houseboat was a “similar dwelling” as used in Code of Alabama 6-10-2, the applicable Alabama homestead exemption law. The court noted that the vessel in question was completely equipped for on board living, in that it contained areas for cooking, dining, and sleeping. Additionally, the vessel was equipped with a recreational area as well as electrical and plumbing systems. Based on its findings, the court concluded that the houseboat was a “similar dwelling” within the meaning of Code of Alabama 6-10-2 and therefore qualified for the homestead exemption claimed by the debtor. The court concluded that the “similar dwelling” phrase was an attempt by the Alabama legislature to include unforeseeable types of living spaces under the exemptions law, without having to enumerate every conceivable type of dwelling that might qualify.5

In a similar case, also brought upon the trustee’s objection to claimed exemptions, the bankruptcy court for the Southern District of Florida reached the same conclusion as the Scudder court. In In Re Mead, 255 B.R. 80 (Bankr.S.D.Fla.2000) the debtor claimed a homestead exemption for a 34’ Hatteras boat, which he kept docked in a rented slip space. The trustee raised a two-pronged objection. First, he objected based on the fact that the boat was capable of movement in navigable waterways and on the open sea. Second, the trustee argued that even if the boat was the debtor’s residence, he could not claim the homestead exemption because he did not own the slip space in which the boat was moored. In reaching its conclusion, the court noted that in order for the boat to qualify for the homestead exemption, it would have to meet the classification of a “dwelling house” as indicated in Fla. Stat. § 222.05, which extended homestead exemption protection to “any dwelling house including a mobile home used as a residence.” The bankruptcy court, in order to define “dwelling house,” looked to the case of In Re Meola, 158 B.R. 881, 882 (Bankr.S.D.Fla.1993). The court, in Meola,

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In re Housh, 535 B.R. 671, 2015 Bankr. LEXIS 2778, 2015 WL 4978725 (La. 2015).

535 B.R. 671 (In re Housh) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

In Re Scudder
97 B.R. 617 (S.D. Alabama, 1989)
In Re Meola
158 B.R. 881 (S.D. Florida, 1993)
In Re Mead
255 B.R. 80 (S.D. Florida, 2000)