582 B.R. 915
6th Cir. BAP2018Background
- Debtors Austin and Dorothy Felix filed Chapter 7 on January 2, 2015, listing residences in Ohio (973 Mueller Dr.) and Maryland (14700 Elberfeld Ct.). They claimed an Ohio homestead exemption on the Ohio property.
- Trustee objected, arguing the Felixes were domiciled in Maryland for the 730 days before filing (Jan 2, 2013–Jan 2, 2015), so Ohio exemptions were unavailable under 11 U.S.C. § 522(b)(3)(A).
- Evidence showed the couple owned and used both homes: Ohio home housed minor children, schools, doctors, churches, and business ties; Maryland home was purchased in 2009, Mrs. Felix obtained a Maryland driver’s license and registered to vote there, and at least one adult child lived/attended college in Maryland.
- Debtors’ testimony was inconsistent: earlier statements indicated living primarily in Maryland and intent to move; later, after an IRS lien recording error was revealed, they shifted to claiming they mostly lived in Ohio.
- The bankruptcy court found the debtors lacked credibility and held they were domiciled in Maryland during the relevant 730-day period; it sustained the Trustee’s objection and denied the Ohio homestead exemption.
- The Bankruptcy Appellate Panel affirmed, giving deference to the trial court’s credibility findings and concluding the domicile determination was not clearly erroneous.
Issues
| Issue | Plaintiff's Argument (Felix) | Defendant's Argument (Trustee) | Held |
|---|---|---|---|
| Timeliness/formatting of debtor brief | One-day late and formatting defects should not excuse appeal | Appeal warranting dismissal for noncompliance | Panel declined to dismiss; no bad faith or prejudice shown |
| Admission of exhibits | Bankruptcy court wrongly excluded Exhibits Q and R and erred in admitting others outside 730-day period | Excluded exhibits were irrelevant to the 730-day window; some exhibits were stipulated/admitted without objection | Exclusion not an abuse of discretion; admission of certain exhibits was harmless or forfeited/plain-error not shown |
| Proper legal standard for domicile | Debtors claimed Ohio domicile and right to Ohio exemptions | Trustee argued debtors’ domicile was Maryland for 730-day period | Court applied correct legal test (presence + intent; multi-factor inquiry) |
| Domicile determination on facts | Felixes argued evidence supports Ohio domicile (children, house, taxes) | Trustee showed connections to Maryland (residence, voter reg., license, bank acct., purchase/occupation of Maryland home) and highlighted credibility issues | Finding that debtors were domiciled in Maryland during the 730-day period affirmed (not clearly erroneous) |
Key Cases Cited
- Midland Asphalt Corp. v. United States, 489 U.S. 794 (finality of orders for appeal)
- Anderson v. City of Bessemer City, 470 U.S. 564 (deference to factfinder where two permissible views exist)
- District of Columbia v. Murphy, 314 U.S. 441 (multi-factor test for domicile considerations)
- United States v. Olano, 507 U.S. 725 (plain-error review standard for unpreserved evidentiary objections)
- Galva Foundry Co. v. Heiden, 924 F.2d 729 (7th Cir.) (use of multi-factor approach to determine domicile)