Thaw v. Moser (In the Matter of Thaw)

Citation:
Case No. 14-40108 (5th Cir. October 13, 2014)
Tag(s):
Ruling:
AFFIRMED district and bankruptcycourt ruling that forced sale of non-debtor spouse's homestead interest was not a taking under the Fifth Amendment of the United States Constitution entitling the non-debtor spouse to just compensation because the property interest was acquired after the enactment of BAPCPA. The 5th Circuit distinguished In re Kim, 748 F.3d 647 (5th Cir. 2014) which stated that a homestead interest may constitute a vested property right because the homestead interest was acquired after the enactment of BAPCPA. As a result, the non-debtor spouse may not press a Takings Clause claim.
Procedural context:
Debtor filed Chapter 7 and claimed home exempt from bankruptcy estate. Trustee objected to exemption and filed an adversary proceeding. Following a hearing, the bankruptcy court held that Debtor's exemption should be reduced to $0.00 because of Debtor's attempt to hinder, delay and defraud creditors. The non-debtor spouse claimed she had a separate vested homestead right not subject to limits of 11 U.S.C. 522(o) and (p). Bankruptcy court held that non-debtor spouse did not have a separate and distinct exempt homestead exemption in the home that would entitle her to compensation or prevent the sale by the trustee.District court affirmed.
Facts:
Debtor and spouse purchased a home for $1,750,000 in October 2009 and one month later executed a contract for deed increasing the purchase price to $2,150,000. In the following months, Debtor made monthly payments that were more than twice the amount of the required monthly payments and 18 months later eventually closed on the purchase of the home. Subsequently, Debtor filed Chapter 7 and claimed that the home was exempt from bankruptcy estate but subsequently conceded that the exemption was capped at $146,500. Trustee objected to the exemption and filed an adversary proceeding. Following a hearing, the bankruptcy court held that Debtor's exemption should be reduced to $0.00 because of Debtor's attempt to hinder, delay and defraud creditors. The non-debtor spouse claimed she had a separate vested homestead right not subject to limits of 11 U.S.C. 522(o) and (p). Bankruptcy court held that non-debtor spouse did not have a separate and distinct exempt homestead exemption in the home that would entitle her to compensation or prevent the sale by the trustee.District court affirmed.
Judge(s):
King, Graves, and Higginson, Circuit Judges

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