Carol Helming v. John Reed
16-6033
| 8th Cir. | May 4, 2017Background
- Debtor Carol Lee Helming filed Chapter 7 and listed a $100,000 single‑premium annuity purchased in May 2013, which pays her $436 per month; she claimed a $436 exemption for those payments.
- The annuity was purchased with proceeds from the sale of the marital residence following her husband’s December 2012 death; payments began 30 days after purchase.
- Prior to the annuity purchase, the Debtor and her husband had commercial‑property debt; the property was foreclosed in Sept. 2013 and creditor Rural Missouri, Inc. (RMI) later sued the Debtor.
- The Trustee objected to the exemption under Mo. Rev. Stat. § 513.430.1(10)(e), which exempts payments "on account of illness, disability, death, age or length of service" to the extent reasonably necessary for support.
- The bankruptcy court sustained the objection, holding the annuity payments are not "on account of" death or age, and the district appellate panel affirmed.
Issues
| Issue | Debtor's Argument | Trustee's Argument | Held |
|---|---|---|---|
| Whether annuity payments qualify as exempt under Mo. Rev. Stat. § 513.430.1(10)(e) (payments must be "on account of" illness, disability, death, age, or length of service) | Payments are exempt because Debtor purchased the annuity after her husband’s death to replace household income — i.e., payments are on account of his death | Payments are not "on account of" death or age because payments were triggered by Debtor’s purchase and election to begin payments, not by husband’s death or Debtor’s age | Court held payments are not "on account of" death or age; exemption denied |
Key Cases Cited
- Rousey v. Jacoway, 544 U.S. 320 (interpreting "on account of" to require causal connection)
- Eilbert v. Pelican (In re Eilbert), 162 F.3d 523 (8th Cir. 1998) (exemptions construed liberally but not beyond statutory language)
- Andersen v. Ries (In re Andersen), 259 B.R. 687 (B.A.P. 8th Cir. 2001) (de novo review on exemption interpretation)
- Huebner v. Farmers State Bank (In re Huebner), 986 F.2d 1222 (8th Cir. 1993) (annuity payments not dependent on triggering event)
- Vickers (In re Vickers), 954 F.2d 1426 (8th Cir. 1992) (Missouri statute similar to federal exemption scheme)
- Weidman (In re Weidman), 284 B.R. 837 (Bankr. E.D. Mich. 2002) (single‑premium annuity not exempt as "on account of" death)
- Kuhrts (In re Kuhrts), 405 B.R. 333 (Bankr. W.D. Mo. 2009) (interpreting Missouri statute)