In re Kelsey
477 B.R. 870
Bankr. M.D. Fla.2012Background
- Debtors filed Chapter 7 in 2011; they resided in Florida since 2010 but previously lived in Colorado.
- Debtors moved to Florida before filing, triggering Florida’s 730/180-day domicile framework for exemptions.
- Real Property is located in Port Charlotte, Florida, valued at $69,500, claimed exempt under Colorado homestead law.
- Debtors also claimed various Personal Property exemptions under Colorado’s general personal property statute.
- Trustee objects to all Colorado exemptions as non-extraterritorial; Debtors rely on §522(b)(3)(A) and the savings clause.
- Court applies Jevne two-step framework to determine extraterritorial reach of Colorado exemptions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Colorado’s homestead exemption apply extraterritorially? | Kelsey/Sedar rely on extraterritorial Colorado exemptions for real property. | Trustee argues Colorado homestead is limited to property within Colorado. | Colorado homestead exemption not extraterritorial; sustained in part |
| Do Colorado personal property exemptions apply extraterritorially? | Colorado personal property exemptions apply to out-of-state property. | Trustee argues they do not extend beyond Colorado residents/property. | Colorado personal property exemptions do apply extraterritorially; overruled in part |
| Does the hanging paragraph savings clause permit use of federal exemptions for the real property? | Savings clause allows use of §522(d) federal exemptions when state exemptions fail. | Trustee argues no federal exemptions if state exemptions are inapplicable. | Savings clause permits use of §522(d) federal exemptions for the real property |
| What is the exempt amount for the Debtors’ Real Property under §522(d)? | Debtors stack exemptions under §522(d)(1) for each debtor. | Trustee seeks reduction to reflect non-exempt portions. | Each debtor exempt up to $21,625; total $43,250; Trustee entitled to $26,250 from non-exempt portion |
Key Cases Cited
- In re Jevne, 387 B.R. 301 (Bankr.S.D.Fla. 2008) (two-part Jevne framework for extraterritorial exemption analysis)
- In re Stephens, 402 B.R. 1 (10th Cir. BAP 2009) (adopts Jevne procedure for Colorado exemptions)
- Sandberg v. Borstadt, 109 P. 419 (Colo. 1910) (exemption laws are for residents; Sandberg discussed, but not dispositive on extraterritoriality)
- In re Jewell, 347 B.R. 120 (Bankr. W.D.N.Y. 2006) (rejects strict residency-based denial of Colorado exemptions; notes opt-out relevance)