Opinion
Case No. 05-33406.
December 13, 2005
OPINION
This matter is before the Court on an Objection to Debtors' Claim of Exempt Property filed by the Chapter 7 Trustee, Carla J. Randolph (Trustee). The Debtors, Scotty and Joyce Walker (Debtors), filed their voluntary petition pursuant to Chapter 7 of the Bankruptcy Code on August 2, 2005. The Debtors claimed a $750 exemption in a 1999 International Harvester 9400 tractor-trailer on their Schedule C, pursuant to the Illinois "tools of trade" exemption. See 735 ILL. COMP. STAT. 5/12-1001(d) (West 2005). The Debtors list the current market value of the tractor-trailer on their Schedule C at $20,000.
Although this provision of the Illinois exemption statute covers other types of property, it is commonly referred to as the "tools of trade" exemption and will be so referenced in this Opinion.
The Trustee filed a timely objection to the Debtors' exemption claim on October 1, 2005, arguing the tractor-trailer is not a "tool of trade." The Trustee cites to this Court's recent opinion in In Re Webb to support her position. See In Re Webb, No. 05-32127, slip op. at 3-4 (Bankr. S.D. Ill. Oct. 18, 2005). In Webb, the Trustee objected to the debtors' claim of a $500 exemption in a flatbed car trailer pursuant to the Illinois "tools of trade" exemption. Id. at 1. The current market value of the flatbed car trailer was $500. Id. The Court applied the augmentation approach, which focuses on an item's monetary value as opposed to the purpose for which it is used, to decide the issue of whether the trailer was a "tool of trade." The augmentation approach was adopted by the Seventh Circuit Court of Appeals and has been consistently applied by Illinois bankruptcy courts. See In Re Patterson, 825 F.2d 1140 (7th Cir. 1987); In Re Gentry, 297 B.R. 553 (Bankr. C.D. Ill. 2003); In Re Zias, 202 B.R. 263 (Bankr. N.D. Ill. 1996); and In Re Pitts, No. 87-40332, slip op. at 5 (Bankr. S.D. Ill. Jan 4., 1988).) In Webb, this Court held the flatbed car trailer was a "tool of trade" since the current market value of the trailer was less than the $750 cap imposed by the Illinois "tools of trade" exemption. Id. at 2-4.
Despite case precedent, the Debtors in this case argued that the augmentation approach leads to inconsistent results when determining whether or not an object can be considered a "tool of trade." Specifically, the Debtors argued that under the augmentation approach, a similar item, such as a trailer, may be considered a "tool of trade" in one case but not in another.
Although the Debtors make a reasonable argument for a more liberal use-based approach in determining whether items are considered "tools of trade," this Court is required to follow the precedent established by the Seventh Circuit Court of Appeals and followed by Illinois bankruptcy courts. Under this precedent, the tractor-trailer in this case cannot be considered a "tool of trade" since it has a current market value that exceeds the $750 cap imposed by the Illinois "tools of trade" exemption. Thus, the Debtors are not entitled to a $750 exemption in their tractor-trailer pursuant to the Illinois "tools of trade" exemption.
This Opinion constitutes this Court's findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. A separate Order will be entered.