In re Felix

Case Type:
Case Status:
17-8004, 2018 WL 159585 (6th Circuit, Apr 06,2018) Published
Exemptions are determined by law based on Debtor's domicile for 730 days pre-petition, Bankruptcy Court conclusion that Debtor's domicile was in Ohio not erroneous.
Procedural context:
Debtors filed for Bankruptcy protection in Ohio and initially claimed Ohio home exempt under Ohio exemptions,. Trustee objected to exemptions asserting that Debtors were domiciled in Maryland. Bankruptcy Court conducted evidentiary hearing and sustained Trustee's objections. On appeal, 6th Circuit Bankruptcy Appellate Panel affirmed Bankruptcy Court ruling as not abuse of discretion.
Debtors filed bankruptcy and claimed Ohio house as exempt under Ohio law. At time of filing, Debtors also owned home in Maryland. Trustee objected to exemptions asserting that Debtors were domiciled in Maryland and that Debtors were not eligible to assert Ohio exemptions. Court held that Domicile is question of fact based on entirety of circumstances, including location of current residence; voting registration and practices; location of spouse and family; location of persona and real property; location of brokerage and bank accounts; membership in churches, clubs, unions and other organizations; location of physician, lawyer, accountant dentist and stockbroker; place of employment or business; drivers license and automobile registration; and payment of taxes. Debtors had lived in Ohio property for 10 years with 5 of 6 children. Minor children attended Oho schools and Debtors claimed Ohio owner-occupied taxes. In 2009, Wife moved to Maryland residence and obtained Maryland driver's license, registered to vote in Maryland, and opened bank account in Maryland. At least one adult child moved to Maryland and enrolled in college while Husband and remaining children remained in Oho. Debtors sold Ohio business in 2012 and formed 6 separate entities in Maryland although none ever operated. Debtors originally proposed to surrender Ohio property and seek loan modification on Maryland home. After the 341 meeting, Trustee objected to IRS liens against Ohio property, at which point Debtors' story changed and Debtors desired to retain now-lien free Ohio home and Debtors suddenly testified that they spent most of their time in Ohio and rarely traveled to Maryland. Bankruptcy court concluded that Debtors' testimony regarding Ohio domicile was not credible and was only "tardy disclosure of intricate organization that defines all explanation necessity" and arose only after Debtors became aware that IRS did not hold lien on Ohio property, BAP affirmed noting that while one could reach differing conclusion based on evidence, Bankruptcy Court findings were entitled to due deference as Bankruptcy Court was in better positon to evaluate Debtors' credibility.
Delk, Harrison, Wise

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