Bianca Rucker v. Johnny Belew, 943 F.3d 395

Debtor Johnny Belew initially omitted an account (in his wife’s name) that had received his Social Security deposits; he later amended schedules to list it and claimed $2.30 as exempt. The Trustee did not object to that amendment.
The Trustee then discovered Belew had, over a year before filing, withdrawn over $30,000 and stored the cash in a home safe; Belew amended his schedules again to identify and claim an interest in that cash as exempt.
The Trustee objected to the second amendment, arguing Belew’s initial nondisclosure and concealment evidenced bad faith and warranted barring the amendment.
The bankruptcy court overruled the Trustee’s objection, holding the Bankruptcy Code does not authorize denial of exemption amendments based on bad faith; the Bankruptcy Appellate Panel affirmed.
The Trustee appealed to the Eighth Circuit, which considered whether earlier Eighth Circuit precedent (Kaelin) allowing denial of amendments for bad faith survived Supreme Court decisions.
The Eighth Circuit concluded the Supreme Court’s decision in Law v. Siegel abrogates Kaelin and forbids denying an amendment to claim an exemption on a bad-faith ground; the court affirmed the lower courts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a bankruptcy court may deny a debtor’s amendment to claim an exemption based on the debtor’s bad faith	Trustee: Kaelin permits denying amendments for bad faith or creditor prejudice; Law is distinguishable because it involved a surcharge, not amendment	Debtor: Law bars using general equitable powers to deny exemptions or bar amendments absent a statutory basis; Kaelin is abrogated	Held: Law controls; courts may not deny exemption amendments based on bad faith; Kaelin is abrogated

Kaelin v. Bassett, 308 F.3d 885 (8th Cir. 2002) (prior Eighth Circuit rule permitting denial of exemption amendments for bad faith or prejudice)
Law v. Siegel, 571 U.S. 415 (2014) (Supreme Court: bankruptcy courts cannot use §105(a) or inherent powers to contravene Code’s exemption protections)
Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007) (discusses bankruptcy courts’ inherent power to sanction abusive conduct but within Code limits)
In re Pre-Filled Propane Tank Antitrust Litig., 860 F.3d 1059 (8th Cir. 2017) (appellate courts should give deference and respect to strong Supreme Court dicta)
Ellmann v. Baker (In re Baker), 791 F.3d 677 (6th Cir. 2015) (applies Law to prohibit disallowing claimed exemptions for bad faith)
Clabaugh v. Grant (In re Grant), [citation="658 F. App'x 411"] (10th Cir. 2016) (applies Law to bar using equitable powers to deny certain avoidance motions when no statutory basis exists)