Opinion
22-10140
10-17-2022
IN THE MATTER OF: RENEE MINER Debtor
NOT INTENDED FOR PUBLICATION
DECISION ON OBJECTION TO EXEMPTION
Robert E. Grant Chief Judge, United States Bankruptcy Court
About four months before the involuntary petition initiating this case was filed, the debtor and her minor daughter vacated the family home and moved in with the debtor's parents. The debtor then filed for a divorce; sought and obtained a restraining order against her husband. The divorce is still proceeding. Pending its conclusion, the state court has awarded the debtor temporary custody of the parties' daughter and the husband has been granted temporary possession of the marital home, for which he is to pay all expenses in lieu of child support, and supervised visitation. At the time this case was filed, the debtor and her daughter continued to reside with the debtor's parents.
The debtor has claimed a $19,300 exemption in the marital residence. Given that the debtor was not living in that property on the date of the petition, the trustee has objected to the claimed exemption. The debtor responded asserting that, notwithstanding her absence, the property continues to be the residence of both her and her dependent daughter. The issues raised by the objection have been submitted on stipulations of fact and the briefs of counsel. In addition to the historical sequence of events, the stipulated facts include the following: most of the personal possessions of the both the debtor and her daughter continue to be located at the property in question; that property's address is the address used for the debtor's driver's license and voter's registration, and the daughter's school attendance; and, the daughter was claimed as a dependent on the debtor's 2021 tax returns.
A debtor domiciled in Indiana, may exempt "real or personal property constituting the personal or family residence of the debtor or a dependent of the debtor . . .." I.C. 34-55-10-2(c)(1).What constitutes an Indiana domiciliary's residence can be open to debate: a debate that often plays out in the bankruptcy courts. See, Matter of Burns, 218 B.R. 897 (Bankr. N.D. Ind. 1998); In re Briggs, 2019 WL 494110 (Bankr. S.D. Ind. 2019); In re Sullivan, 2019 WL 4687113 (Bankr. S.D. Ind. 2019); In re Gorman 2008 WL 4966039 (Bankr. S.D. Ind. 2008). The term "residence" is "ordinarily used in a sense of fixed and permanent abode, as distinguished from a place of temporary occupation . . .." Burns, 218 B.R. at 899.
Indiana has opted out of the federal bankruptcy exemptions. See, 11 U.S.C. § 522(b). As a result, its residents are limited to the exemptions specified by Indiana law. I.C. 34-55-10-1. The exemption for residential property is substantially more generous than the exemption for "other real estate or tangible personal property," I.C. 35-55-10-2(c)(2), which can be claimed in addition to the exemption for residential property.
Indiana courts have routinely held that exemptions "should be liberally construed in favor of the debtor" "because it makes the exemption more broadly available." In re Howell, 27 N.E.3d 723, 726, 27 (Ind. 2015). Furthermore, exemptions exist not only for the benefit of the debtor but also for the debtor's family and so should be given a "construction . . . as will save the debtor and his family at all times the full exemption which the law bestows." Levin v. Dare, 203 B.R. 137, 145 (S.D. Ind. 1996) quoting Pomeroy v. Beach, 49 N.E. 370 (Ind. 1898). See also, In re Briggs, 2019 WL 494110 *3 (Bankr. S.D. Ind. 2019) (debtor could presumably allocate the exemption between multiples residences).
The trustee has the burden of proving the exemption has not been properly claimed. Fed.R.Bankr.P. Rule 4003(c). In other words, the trustee has the burden of proving that the property in question is not the residence of either the debtor or her dependent daughter. Given the liberality with which exemptions are construed, in light of the stipulated facts, the trustee has failed to satisfy that burden. The trustee's objection to the debtor's claimed exemption in the property located at 9210 Eagle Creek Court, Fort Wayne, Indiana, will be OVERRULED.
An order doing so will be entered.