Ellmann v. Baker (In re Baker)

Summarized by Laura Bartell , Wayne State University Law School
10 years 8 months ago

Citation:

No. 14-2149 (6th Cir. July 2, 2015)

Tag(s):

Ruling:

Affirming the district court, the Court of Appeals held that the Supreme Court's decision in Law v. Siegel, 134 S.Ct. 1188 (2014) limits the bankruptcy court's power to disallow claimed exemptions on the basis of debtor misconduct, and that the trustee waived his objection to the timeliness of the amendments to the bankruptcy schedules.

Procedural context:

Appeal from E.D. Mich. which affirmed bankruptcy court decision

Facts:

Debtors owned home which was subject to foreclosure action prior to bankruptcy. They did not disclose any interest in the house or any cause of action related to the foreclosure on their bankruptcy schedules. After they received their discharge, debtors filed an action alleging that the foreclosure was defective and seeking to set it aside. The trustee then moved to reopen the case, alleging that the cause of action was an asset of the estate. The bankruptcy court reopened the case, and the debtors then filed an amended schedule disclosing the suit and claiming an exemption for part of the damages sought. The trustee objected to the exemption on the grounds of the debtors' earlier failure to disclose and other wrongful acts. The court held that under Law v. Siegel, 134 S.Ct. 1188 (2014) a debtor's bad faith or misconduct is not a basis for disallowing an exemption. The court also held that the trustee's objection to the timeliness of the amendment to the schedule was waived by failure to raise it within 30 days after the amendment was filed.

Judge(s):

Cole, Chief Judge, Merritt and Batchelder.

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