Leavitt v. Alexander (In re Alexander)
- Summarized by Dean Rallis , Hahn & Hahn, LLP
- 12 years 6 months ago
- Citation:
- BAP No. NV-11-1114-KiPaD (for publication)
- Tag(s):
-
- Ruling:
- The Ninth Circuit BAP affirmed the bankruptcy court's order approving the debtors' claimed exemption for a mobile kitchen as a "vehicle."
- Procedural context:
- In connection with the confirmation hearing on the debtors' chapter 13 plan, the trustee objected to the debtors' exemption in a mobile kitchen. The debtors asserted their rights to exempt the mobile kitchen as a "tool of trade," "household good," and a "vehicle." After briefing, the bankruptcy court sustained the trustee's objection that the mobile kitchen was not a "tool of trade" or a "household good." However, overruling the trustee's objection, the bankruptcy Court determined that the mobile kitchen was a "vehicle" as defined under Nevada law and allowed the debtors' exemption for the mobile kitchen. The chapter 13 trustee appealed to the bankruptcy appellate panel.
- Facts:
- Prior to filing bankruptcy, the debtors purchased a mobile kitchen trailer to be used to operate a mobile barbeque sandwich business. The debtors used the mobile kitchen approximately 12 times prior to filing bankruptcy. Due to health and other reasons, the debtors stopped using the mobile kitchen. Thereafter, the debtors commenced a chapter 13 bankruptcy case. In their schedules, the debtors listed the mobile kitchen with a value of $25,000, their barbeque business with a value of $0.00, and listed the mobile kitchen in their exemptions as a "tool of trade" under local Nevada law (Nevada opted out of the federal exemptions). Over the next couple of years, the trustee objected to the debtors' exemption of the mobile kitchen as a "tool of trade" or "household good." In further briefing, the debtors also asserted that the mobile kitchen was exempt as a "vehicle." The bankruptcy court found that the mobile kitchen was not a "tool of trade" (because the mobile kitchen had not provided support for the debtors in the past, nor was there sufficient evidence to establish a reasonable prospect that it would provide future income), or a "household good" (based on a lack of evidence that the mobile kitchen served as the debtors' household kitchen or even a backyard barbeque). But, the court did find that the mobile kitchen fell within the definition of "vehicle" under the Nevada statutes, and that the debtors are entitled to exempt "one vehicle." Thus, the bankruptcy court sustained the debtors' exemption in the mobile kitchen. The Ninth Circuit BAP concurred, finding that the mobile kitchen was a "vehicle," both under the plain meaning of the Nevada exemption statute (NRS §21.090(1)(f)), as well as consulting another Nevada statutory provision (outside the exemption statutes). And considering Nevada's policy that exemptions are to be liberally and beneficially construed in favor of the debtor, the BAP concluded that the bankruptcy court did not err in its ruling, and that the mobile kitchen is exempt under the local Nevada statute.
- Judge(s):
- KIRSCHER, PAPPAS, AND DUNN, Bankruptcy Judges
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