Gordon v. Pappalardo (In re Gordon)

Summarized by Jennifer Saffer , J.L. Saffer, PC
13 years 8 hours ago

Citation:

Gordon v. Pappalardo (In re Gordon), BAP No. 12-060 (BAP 1st Cir. March 13, 2013) (for publication

Tag(s):

Ruling:

In this appeal by a debtor in her chapter 13 case, the Bankruptcy Appellate Panel for the First Circuit (the "BAP") affirmed, after de novo review, the bankruptcy court’s order sustaining the chapter 13 trustee’s objection to the debtor's claimed exemption in a scheduled remainder interest in real estate. Like the bankruptcy court had, the BAP determined that because the property claimed as exempt was not "owned" by the debtor as required by and within the meaning of Mass. Gen. Laws ch. 188, § 3(a), and the debtor had elected Massachusetts' exemption rules rather than the federal, as was her option under 11 USC § 522(b). After noting that the only question at issue was if the debtor was an “owner” under the relevant Massachusetts statute, the BAP quoted itself, and explained: “ 'Whether a debtor has a valid declaration of homestead on real property as of the bankruptcy filing is governed by Massachusetts law.' Hildebrandt v. Collins (In re Hildebrandt), 320 B.R. 40, 43 (B.A.P. 1st Cir. 2005). Because this state’s highest court has yet to decide this precise issue [i.e., if a remainder interest in real property makes the holder of such interest an "owner" of such property within the meaning of the statute], 'we must predict, as best we can, 'how it would rule. Gourdin v. Agin (In re Gourdin), 431 B.R. 885, 893 n.12 (B.A.P. 1st Cir. 2010) (internal quotations and citations omitted)". In predicting how the Supreme Judicial Court (“SJC”) would rule on the instant issue, the BAP turned to several decisions of the SJC, and explained that while these opinions recognize that exemptions should be construed broadly, the CJS explicitly warns against “stretch[ing] that principle in a manner that fundamentally ignores the words of the statute.” Boyle, 962 N.E.2d at 174. n.12. In Boyle, the SJC held that the holder of a beneficial interest in a real estate trust was not entitled to claim a homestead exemption in it because under the then- operative definition, a qualified “owner” did not include a real estate trust beneficiary. Subsequently, the statute was amended to included in the definition of owner a "life estate holder or holder of a beneficial interest in a trust.” See Mass. Gen. Laws ch. 188, § 1. Like the version of the statute applicable in Boyle, however, the current statutory language, plainly “does not extend its benefits to remaindermen.” After declining to follow two cases addressing the issue under laws of two other states, and rejecting policy arguments in light of the plain language of the statute, the BAP affirmed, concluding, “Given the Supreme Judicial Court’s adherence to the statute’s definition of ‘owner’ (and that definition’s limits), Boyle, 962 N.E.2d at 172, we cannot imagine the court would conclude that the holder of a remainder interest was entitled to the exemption, because such an interest falls outside the statute’s terms. ‘If the Legislature intentionally omits language from a statute, no court can supply it.’ Doe v. Superintendent of Schs. of Worcester, 653 N.E.2d 1088, 1095 (Mass. 1995) . . . . * * * The Homestead Statute requires that the party claiming the exemption be an ‘owner’ and that he or she ‘occupy or intend to occupy’ the claimed homestead. Mass. Gen. Laws ch. 188, § 3(a). Because [the debtor] cannot satisfy the first element, we need say no more.”

Procedural context:

Chapter 13 trustee objected to debtor's exemption, under state law, of a scheduled quarter remainder interest in certain real property. After briefing and argument, the bankruptcy court sustained the trustee's exemption, and and this appeal followed.

Facts:

Chapter 13 debtor scheduled a one quarter remainder interest in real property, and claimed that it was exempt under Massachusetts law which she had elected under section 522(b) of the Bankruptcy Code. Chapter 13 Trustee objected arguing that a remainderman was not an "owner" entitled to the homestead exemption.

Judge(s):

Haines, Tester, and Godoy, United States Bankruptcy Appellate Panel Judges

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