Opinion
Case No. 23-01611-FPC7
2024-05-07
IN RE: Lisa R. BLAKENEY, Debtor.
Jason B. Couey, Law Office of Jason Couey, Spokane, WA, for Debtor. Kevin D. O'Rourke, Southwell & O'Rourke, P.S., Spokane, WA, Trustee, Pro Se.
Jason B. Couey, Law Office of Jason Couey, Spokane, WA, for Debtor. Kevin D. O'Rourke, Southwell & O'Rourke, P.S., Spokane, WA, Trustee, Pro Se.
ORDER DENYING OBJECTION TO CLAIM OF EXEMPTION
Frederick P. Corbit, Bankruptcy Judge
Introduction
This case presents a novel question: can a debtor's homestead exemption include both a trailer and the land on which it is situated? The answer is "yes," when the trailer is the debtor's dwelling house.
Lisa Renee Blakeney filed a chapter 7 bankruptcy petition and claimed both her real property and her trailer as her exempt homestead pursuant to RCW 6.13. The Chapter 7 Trustee objected to the claim of exemption because the first sentence of RCW 6.13.010(1) defines a homestead as consisting of the "real or personal property that the owner . . . uses as a residence." [Emphasis added.] Ms. Blakeney responded that she can exempt the land and her trailer because she lives permanently in the trailer that sits on her land. Ms. Blakeney relies on the second sentence of RCW 6.13.010(1), which provides: "In the case of a dwelling house or mobile home, the homestead consists of the dwelling house or mobile home in which the owner resides . . . and the land on which the same are situated." [Emphasis added.]
Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and all "RCW" references are to the Revised Code of Washington.
Background
In August 2018, Ms. Blakeney purchased twenty-two acres of real property in Ferry County, Washington ("Real Property"), and gradually began to turn the Real Property into a site for her off-grid home. In July 2021, Ms. Blakeney parked a 2017, 22-foot-long, Keystone Hideout Bunkhouse Trailer ("Trailer") on her Real Property, for use as her residence. After parking the Trailer, Ms. Blakeney has not removed it from the Real Property, and has spent approximately 720 out of the last 730 nights in the Trailer.
Currently, the Trailer rests on stability jacks, and the vehicle license for the Trailer expired in June 2023. Though the Trailer is not connected to any commercial, state, or municipal utilities, it has sources of water and power. In a self-reliant, off-grid fashion, Ms. Blakeney uses solar panels and batteries, which are contained within a separate shipping container on the property, to power the electrical appliances in her Trailer. If the power from the solar panels is insufficient, Ms. Blakeney uses a generator. Additionally, the Trailer has access to a continuous supply of water by utilizing a frost-free pump from a water tank. Ms. Blakeney has also connected the Trailer to a propane tank for cooking and heating.
On December 14, 2023, Ms. Blakeney filed a chapter 7 bankruptcy petition. In Ms. Blakeney's bankruptcy schedules, she listed the Real Property as the location where she resides, stating: "Debtor resides in trailer on 22 acres with a shipping container that contains solar batteries, pantry and storage (off-grid home)." In her Schedule A/B, part 2 - 4.1, Ms. Blakeney listed the 2017 Keystone Hideout Trailer, and stated: "In good condition. Debtor resides within this trailer on her real property listed on Schedule A."
In Schedule C Ms. Blakeney claimed as exempt $64,000.00 of value for the Real Property and $15,000.00 of value for the Trailer per RCW 6.13.010 - .030. On January 9, 2024, the Chapter 7 Trustee filed an objection to Ms. Blakeney's exemption claims. Specifically, the Trustee objected to Ms. Blakeney's use of RCW 6.13.010 - .030, to exempt both the Real Property and the Trailer. Ms. Blakeney's counsel did not respond to the objection.
The total value for the Real Property and the Trailer is well within the dollar limit for a homestead exemption as allowed pursuant to RCW 6.13.030 and 11 U.S.C. § 522(b)(3).
The Court reviewed the Trustee's objection notwithstanding Debtor's counsel failure to file a timely response. Whether or not an interested party responds, a lodged objection places the validity of a debtor's claimed exemption before the bankruptcy court. See Nunez v. Nunez, (In re Nunez), 196 B.R. 150, 156 (9th Cir. BAP 1996) ("The granting of an uncontested motion is not an empty exercise but requires that the court find merit to the motion.") Because the Trustee's objection placed the issue before the bankruptcy court, and because of the significance of protecting a debtor's home, the bankruptcy court may independently inquire as to the validity of an objection to a debtor's claimed homestead exemption, even if no party in interest challenges the objection.
Despite the lack of objection from Ms. Blakeney's counsel, the Court held a hearing on the Trustee's objection on February 13, 2024. At the hearing, both the Trustee and Ms. Blakeney's counsel appeared. During this hearing, there was no dispute that Ms. Blakeney resides in the Trailer and that the Trailer is located on the Real Property. However, the Court determined there were unanswered factual questions relevant to the exemption inquiry and the Court provided Ms. Blakeney with the opportunity to file a declaration supporting her exemption claims before the Court would rule on the objection. On April 8, 2024, Ms. Blakeney filed her supporting declaration. The objection can now be resolved.
Legal Analysis
The Washington State Constitution provides: "The legislature shall protect by law from forced sale a certain portion of the homestead and other property of all heads of families." Const. article 19, section 1. Consistent with this section of the Constitution, the Legislature passed laws relating to homesteads, now codified in RCW 6.13.010 et seq. "The homestead statute implements the policy that each citizen have a home where his family may be sheltered and live beyond the reach of financial misfortune." Pinebrook Homeowners Ass'n v. Owen, 48 Wash. App. 424, 427, 739 P.2d 110, 113 (1987). Washington courts have established that the homestead statute is to be construed liberally, so that it can "achieve its purpose of protecting family homes." In re Dependency of Schermer, 161 Wash. 2d 927, 953, 169 P.3d 452, 465 (2007), citing Pinebrook Homeowners Ass'n v. Owen, 48 Wash. App. 424, 427, 739 P.2d 110 (1987). The homestead statute furthers public policy by ensuring a debtor has shelter. Burch v. Monroe, 67 Wash. App. 61, 64, 834 P.2d 33, 34 (1992) citing Macumber v. Shafer, 96 Wash. 2d 568, 570, 637 P.2d 645 (1981). Furthermore, when the owner of the property uses personal property as a primary residence, it is automatically protected under homestead statute. RCW 6.13.040(1).
The basic description of a homestead appears in RCW 6.13.010(1) which provides:
The homestead consists of real or personal property that the owner or a dependent of the owner uses as a residence. In the case of a dwelling house or mobile home, the homestead consists of the dwelling house or the mobile home in which the owner resides or intends to reside, with appurtenant buildings, and the land on which the same are situated and by which the same are surrounded, or improved or unimproved land, regardless of area, owned with the intention of placing a house or mobile home thereon and residing thereon. A mobile home may be exempted under this chapter whether or not it is permanently affixed to the underlying land and whether or not the mobile home is placed upon a lot owned by the mobile home owner or a dependent of the owner. Property included in the homestead must be actually intended or used as the principal home for the owner.
The Trustee concedes that the Trailer can be claimed as exempt under the homestead statute as "personal property," but he argues that unlike a dwelling house or mobile home, the statute does not specifically provide that both the personal property—such as a trailer—and the land on which it is situated can be included together under the exemption. However, the Trustee's distinction between a trailer and mobile home is immaterial if the trailer is a dwelling house.
Travel trailers and mobile homes can be titled as personal property in Washington. (See generally RCW Chapters 46.12 and 65.20). However, mobile homes and travel trailers are generally used differently by their owners. For example, a mobile home is typically towed by a large truck from a vendor's lot to real property where it is affixed to the land and remains in place for a relatively long period as a primary residence. By contrast, travel trailers are frequently, and relatively easily, pulled by cars or small trucks from place to place and used as temporary lodging. However, nothing prevents a travel trailer from being used like a mobile home. Thus, a travel trailer, like a mobile home, can be left permanently on real property and used as a dwelling house.
Prior to specific mention of mobile homes in RCW 6.13.010(1), and in response to a question whether mobile homes may be included under the homestead statute, a 1980 Washington State Attorney General's Opinion buttressed the inclusive nature of the homestead statute. See, 1980 Op. Att'y Gen. No.23. The Attorney General opined that a mobile home, when used as a residence, is considered a dwelling house: "[d]ecisions construing these provisions of the law establish that it is the use or potential use of property as a residence and not the character of the property itself which triggers the law's application." Id. at 4. The Attorney General's Opinion reinforces the fact that the Legislature's intent underlying the homestead statute is to protect the dwelling where a person resides, regardless of the specific characteristics of the property.
Subsequent to the Attorney General's opinion, the Washington State Legislature amended the homestead statute to specifically identify mobile homes as exempt. Laws of 1981, ch. 329, § 7.
Additionally, the homestead statute does not define dwelling house, or establish guidelines as to what may, or may not, be considered a dwelling house. (See generally RCW 6.13). Thus, classifying a trailer as a dwelling house is appropriate if the facts establish that the trailer, combined with real property, is akin to a typical primary residence, such as house.
What may be considered a dwelling is addressed in other sections of the RCW. The Washington Residential Landlord-Tenant Act defines a dwelling unit as "a structure or that part of a structure which is used as a home, residence, or sleeping place by one person or by two or more persons maintaining a common household, including but not limited to single-family residences and units of multiplexes, apartment buildings, and mobile homes." RCW 59.18.030(10). Additionally, the Washington Criminal Code defines dwelling as, "any building or structure, though movable or temporary, or a portion thereof, which is used or ordinarily used by a person for lodging." RCW 9A.04.110(7).
Here the facts establish that Ms. Blakeney utilizes her Trailer as her principal home and not as a temporary dwelling. Also, Ms. Blakeney's bankruptcy schedules and declaration attest that there is no dwelling other than the Trailer on her Real Property that could be used as her principal home. Therefore, considering the facts presented, and construing the homestead statute liberally, this Court finds that Ms. Blakeney's Trailer is her dwelling house, and the objection must be denied.
Order
For the reasons set forth above, the Trustee's objection is denied.
So Ordered.