Opinion
Bankruptcy Case No. 22-11074 TBM
2022-11-17
IN RE: Vivian GOMEZ, Adam Gomez, Debtors.
Jonathan Dickey, Kutner Brinen Dickey Riley, P.C., Denver, CO, for Trustee Joli A. Lofstedt. Chris D. Hefty, Loveland, CO, for Debtors.
Jonathan Dickey, Kutner Brinen Dickey Riley, P.C., Denver, CO, for Trustee Joli A. Lofstedt.
Chris D. Hefty, Loveland, CO, for Debtors.
ORDER SUSTAINING CHAPTER 7 TRUSTEE'S OBJECTION TO DEBTORS’ CLAIM OF EXEMPTION (HOMESTEAD AMOUNT)
Thomas B. McNamara, United States Bankruptcy Judge I. Introduction .
The Debtors, Vivian Gomez and Adam Gomez (together, the "Debtors"), filed their Chapter 7 bankruptcy petition on March 31, 2022 (the "Petition Date"). In their bankruptcy Schedules, the Debtors listed their home located at 798 Depot Drive, Milliken, Colorado 80543-3210 (the "Property") as their main asset. When they filed for bankruptcy protection, the amount of the applicable homestead exemption under COLO. REV. STAT . § 38-41-201(1)(a) was $75,000. Based upon the then-effective Colorado homestead law as well as the Debtors’ valuation of their home and the liens against it, the Debtors asserted a homestead exemption of $0. A week later, on April 7, 2022, Colorado Governor Jared S. Polis signed into law Senate Bill 22-086 ("SB 22-086"). SB 22-086 made numerous exemption law changes quite favorable for debtors. Among other things, the new law increased the standard homestead exemption amount from $75,000 to $250,000.
Now, through an amended claim of homestead exemption, the Debtors want to use the new and higher homestead exemption in their bankruptcy case. They contend that SB 22-086 (which had not been enacted into law as of the Petition Date) somehow governs retroactively. The Chapter 7 Trustee, Joli A. Lofstedt (the "Chapter 7 Trustee"), argues otherwise and objected to the Debtors’ revised claim of homestead exemption. According to the Chapter 7 Trustee, the Colorado exemption laws in effect on the Petition Date govern.
As a general matter, new laws apply only prospectively. That foundational principle is embedded in the Bankruptcy Code, federal law, the Colorado Constitution, Colorado statutes, and case law. There is a potential exception: if the General Assembly endorses retroactive application of a new law in the new law. That did not happen in SB 22-086. Consequently, SB 22-086 applies only prospectively and cannot be used by the Debtors to claim a new and higher homestead exemption than existed as of the Petition Date.
All references to the "Bankruptcy Code" are to the United States Bankruptcy Code, 11 U.S.C. § 101 et seq. Unless otherwise indicated, all references to "Section" are to sections of the Bankruptcy Code.
II. Procedural Background.
On the Petition Date (March 31, 2022), the Debtors filed their Schedules. On their Schedule A/B , the Debtors listed — as their largest asset — their ownership of the Property. The Debtors asserted that the Property was worth $343,325. On their Schedule D , the Debtors disclosed that the Property was subject to a mortgage in favor of U.S. Bank Home Mortgage (the "Bank") in the amount of $375,354. Thus, the Debtors took the position that they had no equity in the Property and the Bank was under-secured to the tune of $32,029. Given that the debt owed to the Bank exceeded the value of the Property, on their Schedule C the Debtors asserted a homestead exemption of $0 under COLO. REV. STAT . § 38-41-201(1)(a). In other words, the Debtors effectively asserted no homestead exemption.
Docket No. 1 at 18. The Court will refer to particular documents contained in the CM/ECF docket for this Bankruptcy Case using the convention: "Docket No. __." The Court takes judicial notice of the docket in this case. See St. Louis Baptist Temple, Inc. v. F.D.I.C. , 605 F.2d 1169, 1172 (10th Cir. 1979) (a court may sua sponte take judicial notice of its docket and of facts that are part of public records).
Id.
Docket No. 1 at 28.
Id.
Docket No. 1 at 24.
About four months later, the Debtors changed their tune about the value of the Property, the nature of the Bank's lien, and the Debtors’ exemptions. On August 3, 2022, the Debtors filed an Amended Schedule A/B , an Amended Schedule C , and an amended Schedule D. This time, the Debtors asserted the value of the Property to be $495,000 — a dramatic increase of $151,675 from the original Schedule A/B. Based on the new value, the Debtors contended that the Bank was over-secured. And, finally, the Debtors upped their asserted homestead exemption in the Property from $0 to $170,350. Again, they asserted that COLO. REV. STAT . §§ 38-41-201(1)(a) justified their homestead exemption.
Docket No. 32.
Docket No. 33.
Docket No. 34.
Docket No. 32 at 1.
Docket No. 34 at 3.
Docket No. 33 at 1. The Court has no evidence supporting the Debtors’ methodology for the new calculated exemption amount which doesn't seem to add up.
Shortly thereafter, the Chapter 7 Trustee filed her "Objection to Debtors’ Claim of Homestead Exemption." In the Exemption Objection, the Chapter 7 Trustee objected that the Debtors were improperly attempting to utilize a new homestead exemption law that was enacted after the Petition Date. In opposition to the Exemption Objection, the Debtors submitted their "Response to Trustee's Objection to Debtors’ Claim of Homestead Exemption and Request for Hearing."
Docket No. 39, the "Exemption Objection."
Docket No. 42, the "Response."
The Court convened a non-evidentiary hearing (the "Hearing") on the Exemption Objection and Response. In advance of the Hearing, the parties filed a "Joint Status Report" in which they presented the Court with a number of stipulated facts (the "Stipulated Facts") to be used for adjudicating the Exemption Objection and Response. At the Hearing, the parties confirmed the Stipulated Facts and asked the Court to decide the Exemption Objection and Response based on the Stipulated Facts and without the need for an evidentiary hearing. Following the Hearing, the Debtors and the Chapter 7 Trustee submitted supplemental legal authority in support of their respective positions. The dispute is now ripe for determination based upon the Stipulated Facts and applicable law.
Docket No. 52, the "Joint Report."
Docket Nos. 55, 56, and 57.
III. Jurisdiction and Venue.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334(a), (b) and (e). This dispute is a core proceeding under 28 U.S.C. §§ 157(b)(2)(A) (matters concerning administration of the estate) and (b)(2)(B) (allowance or disallowance of exemptions from property of the estate). Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
IV. Stipulated Facts .
The Debtors and the Chapter 7 Trustee submitted the following Stipulated Facts and "agreed that there are no disputed facts which would require the Court hearing evidence at a hearing."
Docket No. 52.
1. The Debtors filed their Chapter 7 case on March 31, 2022 (the "Petition Date").
2. On the Petition Date, the Debtors owned real property with an address of 798 Depot Drive; Milliken, CO 80543 (the "Property").
3. The Debtors originally scheduled the value of the Property as $343,325 and subject to liens of $375,354. As a result, the Debtors claim[ed] a homestead exemption of $0 under C.R.S. §§ 38-41-201(1)(a) ; 38-41-201.6 and 38-41-202 because the scheduled value exceeded the amount of the lien.
4. The Debtors claimed a homestead exemption in the Property under C.R.S. § 38-41-201(1)(a), meaning neither of the Debtors claim to be "elderly" or "disabled" as defined by that statutory section.
5. On April 7, 2022 – seven days after the Petition Date – SB 22-086 was signed into law by Governor Polis. As relevant to this proceeding, SB 22-086 increased the homestead exemption under C.R.S. § 38-41-201(1)(a) from $75,000.00 to $250,000.00.
6. On August 3, 2022, Debtors amended their Schedules A/B and C, increasing the scheduled value of the Property to $495,000.00 and increasing the claimed homestead exemption under §§ 38-41-201(1)(a) ; 38-41-201.6 and 38-41-202 to $170,350.00 based on SB 22-086 (the "Amended Claim of Exemption").
V. Applicable Law.
The core issue in this dispute is whether the Debtors are entitled to claim a homestead exemption under the new version of COLO. REV. STAT . § 38-41-201(1)(a) passed after they filed their Petition. The dispute — primarily legal in nature — implicates both bankruptcy law and Colorado law.
A. Bankruptcy Law.
The commencement of a bankruptcy case creates an estate that includes "all legal or equitable interests of the debtor in property." 11 U.S.C. § 541(a). However, a debtor may exempt certain property from the bankruptcy estate. 11 U.S.C. § 522(b) ; see also Kulp v. Zeman (In re Kulp) , 949 F.2d 1106, 1107 (10th Cir. 1991). Section 522 contains a list of approved federal exemptions but also permits States the authority to "opt-out" from federal exemptions and substitute State exemptions instead. Colorado elected to "opt-out" from the federal exemption scheme so Colorado residents may only claim exemptions under Colorado statutes. COLO. REV. STAT . § 13–54–107 (federal exemptions are "denied to residents of this state."). Thus, Colorado law governs exemptions claimed by Colorado residents such as the Debtors. 11 U.S.C. § 522 ; Law v. Siegel , 571 U.S. 415, 425, 134 S.Ct. 1188, 188 L.Ed.2d 146 (2014) ("when a debtor claims a state-created exemption, the exemption's scope is determined by state law") (emphasis in original); Kulp , 949 F.2d at 1107 (interpreting Colorado exemption statutes); In re Romero , 533 B.R. 807, 810-11 (Bankr. D. Colo. 2015), aff'd , 579 B.R. 551, 557 (D. Colo. 2016).
Under the Bankruptcy Code as applied in opt-out-States, exemptions are determined by the State law "that is applicable on the date of the filing of the petition to the place in which the debtor's domicile has been located for the 730 days immediately preceding the date of the filing of the petition ...." 11 U.S.C. § 522(b)(3)(A) ; see also Myers v. Matley , 318 U.S. 622, 628, 63 S.Ct. 780, 87 L.Ed. 1043 (1943) (pre-dating Bankruptcy Code but providing: "the bankrupt's right to a homestead exemption becomes fixed at the date of filing of the petition in bankruptcy ...."); White v. Stump , 266 U.S. 310, 312, 45 S.Ct. 103, 69 L.Ed. 301 (1924) (pre-dating Bankruptcy Code but holding: "the state laws existing when the petition is filed [are] the measure of the right to exemptions."); Marcus v. Zeman (In re Marcus) , 1 F.3d 1050, 1051 (10th Cir. 1993) ("We hold that the law in effect on the date of [bankruptcy] filing controls what exemptions will be available to a debtor ...."); U.S. v. Kaminski , 2009 WL 10681960, at *3 (D. Colo. Oct. 23, 2009). This legal principle, embedded in the Bankruptcy Code is sometimes referred to colloquially as the "snapshot" rule. Rockwell v. Hull (In re Rockwell) , 968 F.3d 12, 18 (1st Cir. 2020) (as applied to bankruptcy exemptions, the " ‘snapshot’ rule [means that] the debtor's financial situation is frozen in time [as of the petition date], as if someone had taken a snapshot of it.").
B. State Law .
Relying on Colorado law, the Debtors assert that they may utilize new Colorado exemption law (SB 22-086), even though such law was passed after the Petition Date.
1. Effective Date of a New Statute .
COLO. CONST . art. V, § 19 provides that: "[a]n act of the general assembly shall take effect on the date stated in the act, or, if no date is stated in the act, then on its passage." SB 22-086 states no express effective date. So, presumptively and as a matter of Colorado constitutional law, SB 22-086 became effective on the date of its passage: April 7, 2022.
2. Presumption that Enacted Laws are Effective Prospectively .
COLO. REV. STAT. § 2-4-202 (which is directed at the "construction of statutes" in Colorado) codifies the presumption that a statute should be applied prospectively. It states plainly: "A statute is presumed to be prospective in its operation."
The Colorado Supreme Court's decision, City of Colo. Springs v. Powell , 156 P.3d 461 (Colo. 2007), is the seminal Colorado appellate opinion explaining the presumption of prospective application for Colorado statutes as well as the very narrow circumstances justifying exceptions to the rule. In that case, the City of Colorado Springs (the "City") was relying on a new statute to preclude the wrongful death lawsuits of mothers who lost children to drowning in drainage ditches. The City claimed that the new statute, unlike the predecessor statute, afforded it immunity from liability. The Colorado Supreme Court rejected the City's argument and held that the statute did not apply retroactively to events which occurred prior its passage. Id. The Colorado Supreme Court instructed:
Absent legislative intent to the contrary, we presume a statute operates prospectively. We make this presumption in accordance with statutory and common law guidance mandating that unless intent to the contrary is shown, legislation shall apply only to those transactions occurring after it takes effect. This presumption is rooted in policy considerations, namely the notion of fair play and the desire to promote stability in the law.
As a corollary, retroactive application of a statute is generally frowned upon by
both common law and statute. A statute is considered retroactive if it applies to transactions that have already occurred or to rights and obligations that existed before its effective date. Although disfavored, retroactive changes in the case law are permitted, and the retroactive application of a statute is not necessarily unconstitutional. Only "retrospective" legislation is constitutionally prohibited. COLO. CONST . art. II, § 11 ....
A statute is retrospective if it "takes away or impairs vested rights acquired under existing laws, or creates a new obligation, imposes a new duty, or attaches a new disability, in respect to transactions or considerations already past.
Id. at 464-65 (citations omitted). Importantly, the Colorado Supreme Court also confirmed that "legislation operates prospectively unless the intent for retroactivity is clear." Id. at 466.
Colorado courts employ a two-step analysis to determine if a statute is retrospective:
First, we must determine whether the General Assembly intended the challenged statute to operate retroactively. Second, if we ascertain that the General Assembly intended retroactivity, we then determine whether the challenged statute is unconstitutionally retrospective.
Id. at 465 ; see also People v. Chavarria-Sanchez , 207 P.3d 902, 904 (Colo. App. 2009) (When a statute has a retroactive effect, and it appears that the legislature intended such retroactivity, the court must determine "whether applying the statute would be permissibly ‘retroactive’ or impermissibly ‘retrospective.’ ... These related issues require courts to interpret how new legislation changed the prior legal landscape. Retroactivity analysis turns in part on whether any changes were ‘substantive’ rather than ‘only procedural or remedial.’ ").
The Debtors recognize these general legal principles in their Response and concur that in Colorado legislation is presumed to have prospective effect unless a contrary intent is clearly expressed by the General Assembly. Response ¶ 10 (citing Ficarra v. Dep't of Regul. Agencies , 849 P.2d 6, 13 (Colo. 1993) ). But, the Debtors do not point the Court to anything in SB 22-086 which clearly expresses that contrary intent by the General Assembly; nor do they identify anything which even implies that the General Assembly intended SB 22-086 to have retroactive application.
C. Burden of Proof .
Federal Rule of Bankr. P. 4003 places the burden of proof on the "objecting party... to prove that the exemptions are not properly claimed." Fed. R. Bankr. P. 4003. If, however, the objecting party produces evidence to rebut the presumption that the exemption is properly claimed, then the burden shifts to the debtor to produce evidence demonstrating that the exemption is proper. The burden of persuasion remains with the objecting party. Romero , 533 B.R. at 811 (citing In re Larson , 260 B.R. 174, 186 (Bankr. D. Colo. 2001) ).
VI. Legal Analysis .
In the Debtors’ Amended Schedule C, the Debtors effectively asserted a $250,000 homestead exemption rather than the $75,000 homestead exemption which was the amount set by Colorado exemption law in effect when they filed their Petition. The Debtors filed their case on March 31, 2022. Colorado SB 22-086, which overhauled several Colorado exemptions, including the homestead exemption, was signed into law on April 7, 2022. The new law amended COLO. REV. STAT . §§ 38-41-201(1)(a) and 38-41-205 to both change the amount of the homestead exemption and redefine the type of "dwelling" to which the homestead exemption applies. In addition, the new law amended various provisions of COLO. REV. STAT . § 13-54-102 dealing with personal property exemptions.
Under the Bankruptcy Code's "snapshot" rule, the Debtors were limited to the exemptions available under Colorado law "applicable on the date of the filing of the petition ...." — not new laws enacted later. 11 U.S.C. §§ 522(b)(2) and (b)(3)(A) ; see also Myers, 318 U.S. at 628, 63 S.Ct. 780 ; Marcus , 1 F.3d at 1051. And, Colorado law governing the interpretation of new laws dictates that SB 22-086 cannot be applied retroactively either. Thus, the Debtors are limited to the amount of the homestead exemption provided for the version of COLO. REV. STAT . §§ 38-41-201(1)(a) which was in effect on the Petition Date.
The Colorado Constitution provides that when a new law does not state an effective date, the statute is effective on the date of passage. COLO. CONST . art. V, § 19. In this case, SB 22-086 became effective on April 7, 2022. Moreover, as a matter of Colorado statutory construction, in the absence of clear indication to the contrary, legislation applies only prospectively. COLO. REV. STAT . § 2-4-202 ("A statute is presumed to be prospective in its operation."); see also Powell , 156 P.3d at 464 ; People v. Apodaca-Zambori , 410 P.3d 463, 466 (Colo. App. 2013) ("The principles of statutory construction may be applied to determine the correct effective date of a statute.").
To determine whether the General Assembly clearly meant for the new and higher homestead exemption in SB 22-086 to apply retroactively (i.e. , in derogation of the presumptive rule), the Court's analysis must begin with the text of SB 22-086. Powell , 156 P.3d at 466 ("certainly the most efficient and obvious manner of communicating such a desire is for the legislature to state its intent that the new law have retroactive application"). The words "retroactive" or "retroactively" do not appear anywhere in the language of SB 22-086. Moreover, there is no other text in SB 22-086 which, in some way other than through the use of the words "retroactive" or "retroactively," implies retroactive application of SB 22-086. In the rare circumstances in which the General Assembly means for a statute to apply retroactively, the legislature says so. For example, COLO. REV. STAT . § 15-11-1106.5 is titled "Retroactive Application of Certain Provisions – Notice of Election" and states: "Sections 15-11-1102.5 and 15-11-1104.5 shall apply retroactively ...." The Colorado Legislature did not do anything like that in SB 22-086.
The General Assembly's decision not to apply SB 22-086 retroactively seems to make good sense. After all, if SB 22-086 applied retroactively to claims of exemptions prior to April 7, 2022, that may mean that debtors in all Colorado consumer bankruptcy cases filed prior to April 7, 2022, could seek to invoke the higher homestead exemption contained in SB 22-086, seemingly without any limits. For example, a debtor in a case filed in 2010 and closed in 2015 could seek to reopen under 11 U.S.C. § 350 and assert the newly-enacted and higher homestead exemption thereby upsetting the decisions and distributions made years ago. And, all pending Chapter 7 and Chapter 13 cases likely would need to be re-adjudicated too. Doing away with the normal rule of prospective application could open a Pandora's box of consequences.
Following the normal rules of statutory construction per COLO. REV. STAT . § 2-4-202, the absence of express retroactive language in a new statute is compelling evidence that the new statute applies only prospectively. However, that is not the end of the Court's inquiry. In some circumstances, legislative history might be enough to prove the Colorado Legislature's intent to apply a new statute retroactively. Powell , 156 P.3d at 466-68 (considering the "legislative history surrounding" a new statute).
The Debtors contend that Section 1 of SB 22-086 (Legislative Declaration) evidences the Colorado Legislature's intent that the new and higher homestead exemption be applied retroactively. The Legislative Declarations in SB 22-086 note that the "recent rises in Colorado's population and home values have made it more difficult for people to find affordable housing." The Colorado Legislature found that "the higher cost of housing has forced many of Colorado's aging and less-wealthy individuals to reside in unconventional housing." Further, the General Assembly observed that "the increase in the cost of homes has left the current homestead exemption outdated."
Based upon those findings, the Colorado Legislature declared:
... it is in the best interests of residents of the state for the general assembly to: (a) Increase the amount of the homestead exemption; (b) Expand the definition of ‘homestead’ ..., (c) Increase the maximum amounts of existing exemptions for depository accounts and certain types of property; and (d) Create new exemptions for (I) Firearms and hunting and fishing equipment; (II) Economic impact payments; (III) Health savings accounts; and (IV) Money placed into a life expectancy set-aside account or similar reserve fund ....
SB 22-086 at 3.
The foregoing Legislative Declarations certainly are explanations as to why the General Assembly elected to change Colorado exemption law. However, the Debtors were unable to identify any specific part of the Legislative Declarations which clearly evidences an intention to have such changes, or any of them, apply retroactively.
The Court has independently scrutinized the Legislative Declarations one by one and as a whole. In the end, the Court determines that nothing in the Legislative Declarations suggests — let alone makes clear — that the General Assembly intended to depart from the normal prospective application presumption for SB 22-086. Powell , 156 P.3d at 467-68 (declining to find any legislative intent for retroactivity where the legislative history was "unclear, "reveal[ed] no conclusive intent" and was "inconclusive."); Chavarria-Sanchez , 207 P.3d at 907 ("Surety has not identified, nor has our independent review of the statutory text and legislative history revealed, any legislative intent that could ‘overcome the presumption of prospectivity.’ ").
Having failed to show an express or implied intention of the General Assembly to have SB-22-086 apply retroactively, the Debtors argue that the new legislation only changed the amount of the exemption and not the right to the exemption. Because they claimed a homestead exemption under the earlier version of COLO. REV. STAT . § 38-41-201(1)(a), they contend that they are now entitled to the higher exemption amount afforded by the new COLO. REV. STAT . § 38-41-201(1)(a). However, the Powell decision dictates otherwise. In Powell , the City argued that the new statute which gave it immunity from suit merely clarified an existing statute (which did not afford the City immunity from suit) and, thus, could be used to determine what rights and immunities existed under the original statute. The Colorado Supreme Court rejected the City's argument and provided the framework for addressing it:
A legislative amendment either clarifies or changes existing law, and we presume
that by amending the law the legislature has intended to change it. This presumption can be rebutted, however, by a showing that the legislature meant only to clarify an ambiguity in the statute by amending it. To distinguish between a change and a clarification, we employ a three-pronged analysis by looking to the legislative history surrounding the amendment, considering the plain language used by the General Assembly, and assessing whether the provision was ambiguous before it was amended.
Powell , 156 P.3d at 465 (internal citations omitted).
SB 22-086 did not "clarify" existing Colorado homestead exemption law. The text of SB 22-086, including the Legislative Declarations, demonstrates that the General Assembly enacted SB 22-086 as a wholesale and substantive change to Colorado exemption law, not a mere clarification. Also, COLO. REV. STAT . § 38-41-201(1)(a) as in effect on the Petition Date was not ambiguous and stated rather plainly: "Every homestead in the state of Colorado shall be exempt from execution and attachment ... [to the extent of] [t]he sum of seventy-five thousand dollars if the homestead is occupied as a home by an owner thereof ...." SB 22-086 reflects the General Assembly's policy choice to "change" Colorado homestead exemption law as of April 7, 2022. SB 22-086 is a new law. Thus, the Debtors’ argument that the Colorado Legislature was merely clarifying the amount of the homestead exemption provided for in the earlier version of COLO. REV. STAT . § 38-41-201(1)(a) so as to justify their claim of a $250,000 homestead exemption must fail.
The Court's conclusion in this case is buttressed by an especially key decision virtually indistinguishable from the current situation: Kaminski , 2009 WL 10681960, at *3. In Kaminski, as in this case, a debtor sought to claim a higher homestead exemption based upon a new law enacted by the Colorado Legislature after her bankruptcy filing. When the Kaminski debtor filed for bankruptcy protection, COLO. REV. STAT . § 38-41-201(a) (2000) provided for a $45,000 homestead exemption. Four months after the bankruptcy filing, the Colorado Legislature doubled the homestead exemption (for elderly debtors) to $90,000. COLO. REV. STAT . § 38-41-201(a) (2007). Just like in this case, the Kaminski debtor tried to assert the new and higher homestead exemption. The Chapter 7 Trustee objected. The Kaminski court held that "[a] debtor's state law exemptions, including the homestead exemption, are determined by the ‘law that is applicable on the date of the filing of the petition.’ " Id. (quoting 11 U.S.C. § 522(b) ). The Kaminski court concluded: "[the debtor] is not entitled to the $90,000.00 homestead exemption for an elderly owner set forth in the most recent version of COLO. REV. STAT . § 38-41-201, as that statute was not effective until May 14, 2007, more than four months after the Petition Date." Id. The Court finds the Kaminsky opinion well-reasoned and compelling. Other Colorado-oriented decisions are in accord. Parr v. Rodriguez (In re Parr) , 2018 WL 564572, at *3 n.26 (10th Cir. BAP Jan. 26, 2018) (unpublished) ("Effective July 1, 2015, the [Colorado] homestead exemption dollar limits were increased .... Because [the debtor] filed his bankruptcy petition prior to the effective date of the amendments to the dollar limits, the former amounts [i.e., amounts available on the petition date] ... are applicable."). The Chapter 7 Trustee bears the burden to prove that the Debtors have not properly claimed the higher homestead exemption under SB 22-086. The Chapter 7 Trustee has met her burden based upon the Stipulated Facts and relevant law. The Debtors failed to establish that the Colorado Legislature intended for SB 22-086 to apply retroactively. There is nothing in the text or the legislative history of SB 22-086 to support the Debtors’ request. And, the law — including the Bankruptcy Code, the Colorado Constitution, Colorado statutes, and directly apposite case law — dictates that SB 22-086 cannot be applied retroactively. Thus, the Court must sustain the Exemption Objection.
The Debtors have not come to grips with Section 522(b), the Colorado Constitution, Colo. Rev. Stat . § 2-4-202, and the presumption that a new statute applies only prospectively. Instead, the Debtors have presented a hodgepodge of case law most of which is based on non-Colorado exemption statutes. (Docket Nos. 42 and 56). The Court has reviewed the authorities presented by the Debtors and finds such case law inapposite. For example, in one of the decisions cited by the Debtors, In re Barnhart , 47 B.R. 277 (Bankr. N.D. Tex. 1985), voters approved an amendment of the Texas Constitution pertaining to homestead exemptions on November 8, 1983. Then, the debtor filed for bankruptcy about 6 months later on May 7, 1984. That sequence is the opposite of the current dispute. So, the Barnhart decision has no import in this case. Suffice it to say that none of the citations referenced by the Debtors support retroactive application of SB 22-086.
Since the Court finds that SB 22-086 does not operate retroactively, the Court need not consider whether any retroactive application of the statute would be "unconstitutionally retrospective." Powell , 156 P.3d at 465.
VII. Conclusion and Orders .
For the reasons set forth above, the Court:
ORDERS that the Debtors’ Amended Claim of Exemption (Amended Schedule C) is DENIED; and
FURTHER ORDERS that the Chapter 7 Trustee's Exemption Objection is SUSTAINED.