Lenore Berry Ross Storey, Debtor v. Bradford Furniture Company, Inc.

• Court: Tennessee Supreme Court
• Decided: December 4, 2000
• Docket: 93-08973-KL3-7
• Status: Published

Opinion

IN THE SUPREME COURT OF TENNESSEE

AT NASHVILLE

IN RE: ) FOR PUBLICATION LENORE BERRY ROSS STOREY, ) ) Filed: December 4, 1995 Debtor, ) ) Certified Question of Law v. ) from the United States ) Bankruptcy Court for the BRADFORD FURNITURE CO., ) Middle District of Tennessee INC., ) ) Case No. 93-08973-KL3-7 Plaintiff, ) ) No. 01S01-9409-OT-00112 v. ) ) Hon. Keith M. Lundin LENORE BERRY ROSS STOREY ) United States Bankruptcy Judge and ROBERT H. WALDSCHMIDT, ) TRUSTEE, ) ) FILED Defendants, ) December 4, ) 2000 ROBERT H. WALDSCHMIDT, ) TRUSTEE, ) Cecil Crowson, Jr. Appellate Court Clerk ) Counter-Plaintiff, ) ) v. ) ) BRADFORD FURNITURE CO., ) INC., ) ) Counter-Defendant )

For the Debtor: For the Trustee:

Steven L. Lefkovitz Robert H. Waldschmidt Nashville, TN Nashville, TN

O P I N I O N WHITE, J.

I. QUESTION CERTIFIED

Pursuant to Rule 23 of the Tennessee Supreme Court Rules,1 we have

accepted a question certified to us by the United States Bankruptcy Court

for the Middle District of Tennessee. The bankruptcy court has asked:

Which of the following is the correct interpretation of Tenn. Code Ann. § 26-2-111(1)(E):

(1) Once asserted in any judicial proceeding, the exemption in alimony described in Tenn. Code Ann. § 26-2-111(1)(E) is effective with respect to all subsequent executions, seizures or attachments of alimony; or

(2) The exemption in alimony described in Tenn. Code Ann. § 26-2-111(1)(E) is effective only if claimed in each judicial proceeding in which execution, seizure or attachment of alimony is sought.

For the reasons explained below, we conclude that the alimony

exemption set forth in Tennessee Code Annotated Section 26-2-111(1)(E) is

effective only if claimed in each judicial proceeding in which execution,

seizure, or attachment of alimony is sought.

II. FACTS

This dispute concerns whether an alimony exemption filed by the

debtor in the chancery court exempts the alimony proceeds from execution

in the bankruptcy court. On February 14, 1991, the debtor divorced Carl

1 "The Supreme Court may, at its discretion, answer questions of law certified to it by the Supreme Court of the United States, a Court of Appeals of the United States, a District Court of the United States in Tennessee, or a United States Bankruptcy Court in Tennessee. This rule may be invoked when the certifying court determines that, in a proceeding before it, there are questions of law of this state which will be determinative of the cause and as to which it appears to the certifying court there is no controlling precedent in the decisions of the Supreme Court of Tennessee." Sup. Ct. R. 23, § 1.

2 Storey and was awarded $2,500 per month alimony in futuro. On appeal,

the alimony award was modified to $2,500 per month rehabilitative alimony

in solido for a period of thirty-six months. Storey v. Storey, 835 S.W.2d

593, 597 (Tenn. App.), perm. to appeal denied, (Tenn. 1992).

Prior to the divorce, the debtor purchased furniture on credit from

Bradford Furniture Company. When the debtor failed to make the

payments, Bradford sued her in Davidson County Chancery Court to collect

the debt. In November, 1991, Bradford Furniture Company obtained a

judgment against the debtor in the amount of $33,117.83. Approximately

one year later on November 20, 1992, the furniture company served a

garnishment on Carl Storey, who was delinquent in his alimony payments,

in order to collect the judgment obtained against the debtor. On January 8,

1993, the debtor filed a claim of exemption in the chancery court to halt

Bradford's garnishment pursuant to Tennessee Code Annotated Section 26-

2-111(1)(E). Subsequently, in November, 1993, the debtor filed a voluntary

Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the

Middle District of Tennessee. Two days later, Carl Storey paid $10,000 into

an escrow account maintained by the debtor's divorce lawyer to resolve a

pending contempt proceeding in the chancery court.

On January 24, 1994, the debtor filed documents in the bankruptcy

court claiming an exemption for past, future, and escrowed alimony

pursuant to Tennessee Code Annotated Section 26-2-111(1)(E). Bradford

Furniture Company and the bankruptcy trustee timely objected to the

3 claimed exemption. Bradford then filed an adversary proceeding in the

bankruptcy court to determine the validity of its prebankruptcy garnishment

lien on the alimony owed the debtor. The trustee counter-claimed to avoid

Bradford's lien.

On September 29, 1994, the bankruptcy court determined that

Bradford held a valid lien up to the amount of its claim against all unpaid

alimony due the debtor through February 7, 1993, thirty days after the

debtor asserted the exemption in chancery court. See Tenn. Code Ann. §

26-2-111(1) (E) (1990 Supp.). The bankruptcy court also subjected the

alimony held in escrow to Bradford's lien because more than $10,000 of

alimony was due and unpaid before February 7, 1993. However, the

bankruptcy court declined to determine whether the debtor or the trustee

was entitled to the alimony accruing between February 7, 1993 and

February 23, 1994 (thirty days after the debtor claimed the alimony

exemption in the bankruptcy proceeding). That issue, controlled by

Tennessee law, is before us as a certified question under Rule 23 of the

Tennessee Supreme Court Rules.

III. DISCUSSION

Under the Bankruptcy Code, a debtor may claim federal or state

exemptions unless the state has chosen to opt-out of the federal exemption

scheme. 11 U.S.C. § 522(b)(1)(1993). With the enactment of Tennessee

Code Annotated Section 26-2-112 in 1980, Tennessee became one of

several states to create its own scheme of exemptions opting out of the

4 federal scheme. Tenn. Code Ann. § 26-2-112 (1980 Repl.). Once "the

individual state has opted-out of the federal scheme, the only exemptions

available to the debtor are those created by the state. In re Lucas, 924 F.2d

597, 599 n.4 (6th Cir. 1991); see also In re Hackler, 35 B.R. 326, 327 n. 1

(Bankr. E.D. Tenn. 1983); In re Norton, 30 B.R. 712, 713 (Bankr. E.D.

Tenn. 1983). Thus, we are called upon to interpret a portion of the

exemption statute passed by our legislature to preempt the use of federal

bankruptcy exemptions by Tennessee citizens in Tennessee courts.

In interpreting legislative provisions, our role is "to ascertain and give

effect to the legislative intent without unduly restricting or expanding a

statute's coverage beyond its intended scope." Roseman v. Roseman, 890

S.W.2d 27, 29 (Tenn. 1994); Lyons v. Rasar, 872 S.W.2d 895, 897 (Tenn.

1994). If the intent can be determined from the plain language of the

provision read in the context of the entire statutory scheme, we must

conclude our inquiry there. See Carson Creek Vacation Resorts, Inc. v.

Department of Revenue, 865 S.W.2d 1, 2 (Tenn. 1993); Wilson v. Johnson

County, 879 S.W.2d 807, 809 (Tenn. 1994); National Gas Distributors, Inc.

v. State, 804 S.W.2d 66, 67 (Tenn. 1991). If the language is ambiguous and

does not yield a clear interpretation, we may consult the legislative history

for additional interpretive guidance. See Carr v. Ford, 833 S.W.2d 68, 69-

70 (Tenn. 1992); Baker v. Promark Products West, Inc., 692 S.W.2d 844,

847 (Tenn. 1985).

The relevant provision which we must interpret constitutes a section

5 of the Personal Property Owner's Rights and Garnishment Act of 1978

codified at Tennessee Code Annotated Section 26-2-101 et seq. The

original statute allowed a debtor to exempt certain items of personal

property from process, including attachment, execution, and garnishment for

the purpose of "secur[ing] the poor in the possession and use of the means

necessary for their subsistence." Jones v. Williams, 32 Tenn. 105, 106

(Tenn. 1852). Thus, a debtor was allowed to exempt personal property to

the aggregate value of four thousand dollars ($4,000) and personal items

such as clothing, family portraits and pictures, the family Bible and school

books, and state pension funds. Tenn. Code Ann. § 26-2-102 -- -104 (1980

Repl.). Unlike the federal bankruptcy provisions, however, the 1978 Act

did not include an alimony exemption. Two years later, an alimony

exemption was added with little explanation.2

With the amendment, the statute provides that:

[T]he following shall be exempt from execution, seizure or attachment in the hands or possession of any person who is a bona fide citizen permanently residing in Tennessee:

(1) The debtor's right to receive:

...

(E) Alimony to the extent that payment becomes due more than thirty (30) days after the debtor asserts a claim to such exemption in any judicial proceeding . . . .

Tenn. Code. Ann. § 26-2-111(1)(E)(1995 Supp.)(emphasis added).3

2 The amendment's house sponsor explained that its purpose was "to correct, well to make an addition. We took out more of the federal bankruptcy law than we intended to. This would replace a portion of that." Debate on House Bill 1232, April 17, 1980 (statement of Rep. Wood). 3 The federal alimony exemption provides that a debtor may exempt "alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and

6 Based on this language, the debtor contends that she is entitled to

exempt all the alimony that was due more than thirty days after she claimed

the exemption in the chancery court litigation with Bradford Furniture

Company. The debtor argues that the statute's reference to "any judicial

proceeding" is clear and unambiguous, does not restrict the scope of the

exemption, and applies universally. Thus, an exemption claimed pursuant

to the statute binds all creditors in all subsequent judicial proceedings

forever.

Conversely, the trustee argues that, under the statute, the exemption

applies only to the creditors and to the proceeding in which it is filed.

While the debtor may claim exemptions in each and every judicial

proceeding, the trustee contests the blanket application of the exemption to

claims that arise in other distinct judicial proceedings. Thus, he argues that

the alimony exemption became effective as to him and the bankruptcy

proceeding thirty days after the debtor claimed the exemption in the

bankruptcy case.

The bankruptcy court found the statute to be ambiguous with two

possible interpretations:

[I]t could be read that the first claim of exemption in alimony "in any judicial proceeding" is good against the world, forever - - it precludes all subsequent efforts at execution, seizure or attachment; or, it could be read that a claim of exemption in alimony precludes only the execution, seizure or attachment with respect to which the exemption is asserted.

While both interpretations are possible, we conclude that the purpose and

any dependent of the debtor." 11 U.S.C. § 522 (d)(10)(D)(1993).

7 intent of the legislation is accomplished only if the provision is read to

provide an exemption in the particular proceedings in which it is claimed.

To read the statute as a permanent, all encompassing exemption good

against the world would produce unwieldy results. Such a reading would

exempt claims before they existed. It would exempt claims without notice

to the creditors. It would paradoxically create an exemption which would

outlive the debtor.

The statutory scheme in which the alimony exemption is located is

one that deals with a variety of creditors' remedies, including attachment,

garnishment, execution, and bankruptcy. Viewed in this context the

indefinite phrase "any judicial proceeding" applies to numerous

circumstances. Were the exemption universal and permanent in application,

an exemption filed in a general sessions court eviction case would apply to

bankruptcy proceedings filed by the same debtor a decade later or to assets

identifiable as alimony in the estate at the debtor's death. The framework in

which this provision appears suggests to us that such a result was not

intended.

Likewise, the language of the statute supports our conclusion. The

"[w]ord 'any' has a diversity of meaning and may be employed to indicate

'all' or 'every' as well as 'some' or 'one' and its meaning in a given statute

depends upon the context and the subject matter of the statute." Black's

Law Dictionary 94 (6th ed. 1990). "It is often synonymous with 'either',

8 'every', or 'all'." Id.; see also Roddy Mfg. Co. v. Olsen, 661 S.W.2d 868,

871 (Tenn. 1983)(the word "any" in a statute is synonymous with the word

"all"); Employers Liability Assur. Corp. v. Farquharson, 188 S.W.2d 965,

969 (Tenn. 1945)("We take it that any and every . . . mean all. . . . Any

means one or more of a group. Every means the entire group without

exception.").

The phrase "judicial proceeding" has been defined as:

Any proceeding wherein judicial action is invoked and taken. Any proceeding to obtain such remedy as the law allows. Any step taken in a court of justice in the prosecution or defense of an action. A general term for proceedings relating to, practiced in, or proceeding from, a court of justice; or the course prescribed to be taken in various cases for the determination of a controversy or for legal redress or relief. A proceeding in a legally constituted court. A proceeding wherein there are parties, who have opportunity to be heard, and wherein the tribunal proceeds either to a determination of facts upon evidence or of law upon proved to conceded facts.

Black's Law Dictionary at 849 (citations omitted).

We note the imprecision of that definition and clarify by way of

example. Each cause of action would constitute a judicial proceeding, but

each attempt to execute by various methods on one judgment would not.

Therefore, in a given case, a filed exemption would protect the debtor for

each and every exception attempted so long as it was filed in compliance

with the exception statute.

The language of the statute, coupled with the context of the provision,

and the sparse legislative history convince us that "any judicial proceeding"

9 means a judicial proceeding in which the exemption is asserted. The

alimony exemption is effective, therefore, only in the judicial proceeding in

which it is filed. Were we to find otherwise and carry that finding to its

logical conclusion, our statute would grant an indefinite exemption in

separate and distinct judicial proceedings, an exemption that could outlive

the debtor. We do not believe that the alimony exemption was intended to

be effective forever against the entire world, commencing from the time the

debtor first claimed the exemption in a judicial proceeding, extending at that

moment to even nonexistent debts, and enduring indefinitely.

Rather, we hold that the debtor must claim the exemption in each

judicial proceeding in which the debtor wants protection. This interpretation

is consistent with the general principle that a "claim of exemption under one

execution may not and usually does not dispense with the necessity of the

claim under other different executions where the different executions were

issued on different judgments." 35 C.J.S. Exemptions § 130 (1960); see

also 31 Am. Jur. § 308 (1989). This interpretation does not deprive the

diligent debtor of any protection, but it does establish a method whereby

claimed exemptions will be known to the parties and judges in the particular

judicial proceeding consistent with other similar provisions in our statutes.

See Tenn. Code Ann. § 26-2-114 (1980 Repl.)(exemptions exercised after

debtor becomes judgment debtor and having no application to executions

filed prior to exemptions).

IV. CONCLUSION

10 We hold that the alimony exemption of Tennessee Code Annotated

Section 26-2-111(1)(E) is effective only if claimed in each judicial

proceeding in which execution, seizure, or attachment of alimony is sought.

The Clerk will transmit this opinion in accordance with Rule 23,

Section 8 of the Rules of the Supreme Court. The costs in this Court will be

taxed equally between the debtor and the trustee.

____________________________________ Penny J. White, Justice

CONCUR:

Anderson, C.J, Drowota, Reid, Birch, JJ.