Gladwell v. Reinhart
291 P.3d 228
Utah2012Background
- Dr. Reinhart claimed a 75% exemption for pre-petition wages paid after filing, based on Utah Section 70C-7-103 and Section 1678 of the Consumer Protection Act.
- Trustee opposed; bankruptcy court allowed the exemption; district court affirmed; Tenth Circuit certified state-law questions.
- Tenth Circuit held Section 1678 does not permit a bankruptcy exemption and certified three Utah-law questions to resolve under Section 108.
- Utah history: earnings exemption existed pre-1981, repealed by the Exemptions Act in 1981, with Section 103 added as a complement rather than a substitute.
- Court concludes Section 103 does not create a bankruptcy exemption; Section 108 only limits garnishment in a narrow consumer-credit-judgment context; no bankruptcy exemption is created by Section 103.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Utah Code § 70C-7-103 create a bankruptcy exemption or limit garnishment outside bankruptcy? | Reinhart argues § 103 creates a bankruptcy exemption. | Gladwell argues § 103 does not create an exemption and is limited to garnishment for consumer-credit judgments. | § 103 does not create an exemption in bankruptcy; it limits garnishment. |
Key Cases Cited
- Kokoszka v. Belford, 417 U.S. 642 (1974) (Supreme Court held CP Act garnishment provision not an exemption in bankruptcy (context discussion))
- In re Stewart, 32 B.R. 132 (Bankr. D. Utah 1983) (analyzed Utah wage exemptions; predecessor to § 103; predecessor reasoning rejected)
- Reinhart I, 2011 UT 77 (Utah (Supreme Court) 2011) (held the framework for interpreting bankruptcy exemptions in Utah; liberal construction cautions)