In re Mendoza

597 B.R. 686
CourtUnited States Bankruptcy Court, S.D. Florida.
DecidedMarch 4, 2019
DocketCASE NO. 18-13386-RAM
StatusPublished
Cited by4 cases

This text of 597 B.R. 686 (In re Mendoza) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Florida. primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Mendoza, 597 B.R. 686 (Fla. 2019).

Opinion

Robert A. Mark, Judge United States Bankruptcy Court

The trustee in this chapter 7 case objects to the debtors' attempt to utilize the federal personal property exemptions. On the petition date, the debtors, who are Venezuelan citizens, were lawfully residing in Florida and had the actual intent to permanently reside in Florida. The issue is, were they "domiciled" in Florida and, therefore, subject to Florida exemptions when, on the petition date, they had a pending application for political asylum? This Court says yes. The fact that their right to remain in the United States was subject to termination if their asylum petition was denied did not defeat Florida domicile and entitle the debtors to utilize the federal exemptions.

Facts

The Debtors in this case are political asylees who have lived in Florida for nearly seven years. They entered the United States in 2012 under B-1/B-2 "visitor" visas that expire in 2022 but they promptly applied for political asylum "in late 2012 or early 2013" (the "Asylum Application") [DE # 58, pp.2-3]. According to the Trustee, the Debtors testified "that since 2013[,] they knew [that] they could not return to Venezuela and had every intention of staying in Florida" [DE # 64, p.4].1 Thus, after the Debtors filed their Asylum Application, the Debtors became immigrants seeking to stay indefinitely in the United States as opposed to visitors residing in Florida for a limited duration under a business or tourism visa. And that was their status on March 23, 2018 (the "Petition Date") when they filed their chapter 7 petition commencing this case.2

On the Petition Date, the Debtors did not own any real property [DE # 1, p.10], so they did not claim a homestead exemption. In Schedule "C," the Debtors claim as exempt only personal property utilizing the federal exemptions in § 522(d) of the Bankruptcy Code (the "Debtors' Claimed Exemptions") [DE # 1, pp. 20-21].

Procedural History

On August 29, 2018, the Chapter 7 Trustee, Marcia T. Dunn (the "Trustee"), filed an objection to the Debtors' Claimed Exemptions (the "Objection") [DE # 53]. In her Objection, the Trustee argues, inter alia , that "the Debtors are Florida residents, and therefore, are not entitled to the federal exemptions. Fla. Stat. § 222.20." Objection at p.3, para. 10. The Debtors filed a response (the "Response")

*688in which they counter that "aliens residing in the United States pending an application for political asylum cannot satisfy Florida's permanency requirements nor qualify to claim Florida exemptions." [DE # 58, p.2]. Therefore, they argue that they are entitled to the exemptions in 11 U.S.C. § 522(d) (the "Federal Exemptions"). The issue is meaningful because the federal personal property exemptions in § 522(d) are more generous than the personal property exemptions available under Florida law.

The Court conducted a preliminary hearing on the Trustee's Objection on September 13, 2018. After the hearing, the Court entered an order [DE # 62] setting a further hearing on "the issue of whether the Debtors are entitled to claim the federal exemptions set forth in 11 U.S.C. § 522(d)" (the "Contested Matter").

Thereafter, the Trustee filed a Memorandum of Law in Support of [her Objection] (the "Trustee's Memorandum") [DE # 64], and the Debtors filed a Response to [the Trustee's Memorandum] (the "Debtors' Memorandum") [DE # 65]. The Court conducted a further hearing on the Contested Matter on October 17, 2018. After the October 17th hearing, the Debtors filed a notice of supplemental authority (the " Lisboa Brief") [DE # 66], and the Court took the Contested Matter under advisement.

Discussion

Section 522 of the Bankruptcy Code governs exemptions in a bankruptcy case. The Federal Exemptions in section 522(d) identify property that may be exempted from a debtor's bankruptcy estate under federal law. The Federal Exemptions apply to a debtor's bankruptcy case "unless the State law that is applicable to the debtor ... specifically does not so authorize." 11 U.S.C. § 522(b)(2). If Florida law applies, the Debtors may not claim the Federal Exemptions because Florida Statute § 222.20 (the "Opt-Out Statute") provides that "residents of this state shall not be entitled to the federal exemptions provided in § 522(d) of the Bankruptcy Code."

The Trustee argues that Florida's Opt-Out Statute precludes the Debtors from claiming the Federal Exemptions because they were undeniably "residents" of Florida on the Petition Date. The Court rejects this argument. The Florida Opt-Out Statute only applies if application of Florida law is appropriate under § 522(b)(3)(A). With certain exceptions not relevant here, Florida law is only applicable to debtors who have been domiciled in Florida for at least 730 days prior to filing for bankruptcy relief. In short, the determinative issue here is domicile, not residency. See In re Arispe , 289 B.R. 245, 248 (Bankr. S.D. Fla. 2002).

Federal common law governs the meaning of "domicile" for purposes of section 522 of the Bankruptcy Code. 4 Collier on Bankruptcy ¶ 522.06, n.16 (16th ed. 2018) (citing Farm Credit Bank of Wichita v. Hodgson (In re Hodgson) , 167 B.R. 945 (D. Kan. 1994) and Mississippi Band of Choctaw Indians v. Holyfield , 490 U.S. 30, 109 S.Ct. 1597, 104 L.Ed.2d 29 (1989) ); see also Furr v. Lordy (In re Lordy ), 214 B.R. 650, 662 (Bankr. S.D. Fla. 1997) (determining a debtor's domicile for 522(b) purposes by reference to In re Hodgson ). That distinction is not significant here because Florida law and federal law similarly distinguish a person's domicile from a person's residence by reference to permanency. Compare Fla. Stat.

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Cite This Page — Counsel Stack

Bluebook (online)
597 B.R. 686, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-mendoza-flsb-2019.