Case Law
Decision Date
23
Jul 2019
Name
IN RE: Edward R. MONTGOMERY, Debtor.
Attorney(s)
Claire Ripley Fried, Chillicothe, OH, for Debtor., Beth M. Miller, The Law Office of Beth M. Miller, LLC, Gahanna, OH, for Trustee., Judge Caldwell This Memorandum Opinion and Order resolves an Objection to Debtor's Homestead Exemption. Chapter 7 Trustee Susan L. Rhiel (Trustee), filed the Objection, and Edward R. Montgomery (Debtor) responded. Based upon testimony and the pleadings, the Court finds and concludes that the Trustee has failed to sustain her burden of proof, and overrules the Objection. The bases for this ruling follow., To recover from the heart surgery, Debtor lived in Kelly's home across the road for six weeks. Once able, Debtor moved onto Laurel Ridge in August 2017, in a two-bedroom travel camper with a kitchen, owned by the Sartins. At that point there was no room for him in the house. Debtor pays $300.00 per month for use of the camper. While it is on wheels, and is not attached to a deck or porch, the camper has been hooked to the electric and water supplies of the house. These utilities are in Debtor's name., While Debtor does not have keys to the house, he uses it for meals, laundry and showers. In addition, he slept in the house on the couch when the camper pipes froze, during the winter of 2019. To enter the house, he knocks on the door, but if there is no answer he walks in. Debtor retrieves his mail from a post office box, and Tyler uses the Laurel Ridge mailbox. The camper sits directly behind the house, and has not been moved since August 2017. Debtor's belongings are in the camper, he typically sleeps inside, and plans to remain there after repairs to the frozen plumbing., Approximately a year after the move to Laurel Ridge, Debtor filed this bankruptcy case on October 11, 2018, under Chapter 7 of the United States Bankruptcy Code (Code). That same day, Debtor listed Laurel Ridge on Schedule A ("legal or equitable interest in any residence, building, land, or similar property"). He assigned a value of $83,330.00. Debtor also claimed the Ohio homestead exemption for Laurel Ridge on Schedule C. OHIO REV. CODE ANN. § 2329.66(A)(1)(b). To date, creditors filed nine claims that total $70,805.77. This sum includes the unsecured claim of Atomic Credit Union, Inc., related to the purchase of Laurel Ridge. The note has a remaining balance of $4,904.86., The Trustee objected to Debtor's homestead exemption on November 16, 2018, on two grounds as earlier discussed. First, the Trustee correctly points out that Debtor lived in the camper located at Laurel Ridge, rather than the adjacent house, on the date of the bankruptcy filing. Second, the Trustee accurately notes that this same house is occupied by Debtor's grandson Tyler and family, and Tyler is not a dependent. As a result, the Trustee declares that all of Laurel Ridge is not Debtor's residence, for purposes of the Ohio homestead exemption., Parsing the Ohio homestead exemption in this manner, Trustee recommends that this Court deprive the Debtor of an exemption in any portion of Laurel Ridge. So, then the Debtor loses his interest in Laurel Ridge, along with the funds he has paid over time on the $10,000.00 note (approximately $5,095.14). Kelly, Debtor's daughter, then becomes a co-owner of Laurel Ridge with the Trustee, after her family invested their time and funds to make the house livable. How to account for these expenditures is unknown. Further, should the Trustee prevail, she could seek to sell Debtor's former interest, as well as that of his daughter Kelly. 11 U.S.C. § 363(h)(1)-(3)., In view of this snowball effect and lack of statutory support, the Court instructed the parties to research and provide any caselaw directly on point with the Trustee's stance. As noted in the Trustee's brief, the camper "can easily be unhooked from the electricity and water and be relocated across the street to his daughter's property or to a mobile home park." However, the Trustee as movant, could not find any supporting cases directly on point, but offered ones deemed similar. Yet, the Court does not find them persuasive for the complex circumstances of this case., As this sale language suggests, it sets a high bar to obtain approval of co-owner sales. See Rhiel v. Central Mortgage Co., et al. (In re Kebe) , 2014 WL 8276561, at *16 (Bankr. S.D. Ohio Dec. 23, 2014) (denying trustee's sale of property which would have caused non-debtor co-owner, who lived in house with spouse and children, significant detriment while netting relatively modest recovery for the estate); Lewis v. Harlin (In re Harlin) , 325 B.R. 184, 191 (Bankr. E.D. Mich. 2005) (detriment imposed on non-debtor co-owner by forcing her out of her home to pay the debtor's debts far outweighed any benefit to the estate); Hunter v. Levesque (In re McCoy) , 92 B.R. 750, 752-53 (Bankr. N.D. Ohio 1988) (trustee could not sell where psychological, emotional, and financial detriment to non-debtor co-owner outweighed minimal financial benefit of sale to the estate)., Sixth, as stated earlier, neither Ohio's exemption statute nor the Code define "residence" for homestead exemption purposes. Nor does the wording of the exemption statute exclude campers, or limit the exemption to only permanent, or semi-permanent structures, such as mobile homes, that are not readily removeable. Yet, courts addressing the meaning of "residence" have simply defined it as property that a debtor occupies and uses as a home. E.g. , In re Wallace , 2016 WL 829833, at *2 (Bankr. N.D. Ohio Mar. 2, 2016). Simply, the Trustee has failed to present any persuasive authority that separates Laurel Ridge and the house from the camper. There is no basis for this Court to treat one as a residence, while not the other., In sum, given the facts and the law detailed above, the Court finds and concludes that the Trustee has failed to sustain her burden of proof. There is no dispute that Debtor lived in a camper at Laurel Ridge from August, 2017, to the date of bankruptcy filing on October 11, 2018. Debtor purchased Laurel Ridge to be near his family that live across the road. The camper has been hooked to the water and electric supply of the house, and the utilities are in the Debtor's name. The Debtor enters the house at will, and uses it for meals, laundry and showers. In addition, he slept in the house on the couch when the camper pipes froze during the winter of 2019. Finally, the camper sits directly behind the house, and has not been moved since August 2017. All these factors lead the Court to find and conclude that the Debtor has access to and uses all the structures, on wheels or not, that sit on the Laurel Ridge soil. All these possessions are Debtor's residence.
ABI Membership is required to access the full summary of In re Montgomery Please sign in if you are already an ABI member, or otherwise you may Become an ABI Member