602 B.R. 353
Bankr. S.D. Ohio2019Background
- Debtor Edward Montgomery (78) purchased a Piketon, Ohio property (Laurel Ridge) with a $10,000 loan; deed also lists his daughter Kelly so she can inherit the property.
- The two-bedroom house was uninhabitable; Kelly, her husband, and Debtor’s grandson Tyler repaired the house using their funds and Tyler (non-dependent) occupied it to insure it.
- After heart surgery, Debtor moved onto the Laurel Ridge parcel in August 2017 and lived in a travel camper parked behind the house; the camper was connected to the house’s water and electric (utilities in Debtor’s name). Debtor uses the house for meals, laundry, showers, and slept there occasionally.
- Debtor filed Chapter 7 on October 11, 2018, listed Laurel Ridge on Schedule A, and claimed the Ohio homestead exemption under Ohio Rev. Code §2329.66(A)(1)(b).
- Trustee objected, arguing Debtor did not “use” the house as his residence (because he lived in the camper) and that the house was occupied by a non-dependent (Tyler), so the exemption should be denied for the parcel.
- The bankruptcy court received testimony and briefing and overruled the Trustee’s objection, finding Trustee failed to meet her burden.
Issues
| Issue | Plaintiff's Argument (Trustee) | Defendant's Argument (Montgomery) | Held |
|---|---|---|---|
| Whether Debtor may claim Ohio homestead exemption in Laurel Ridge when he lived in a camper on the parcel | Debtor lived in a removable camper, not the house on the parcel; thus he did not ‘‘use’’ the house as his residence and the parcel should not qualify | Debtor lives on the parcel, uses both camper and house facilities (meals, laundry, showers), utilities in his name, camper has been stationary and connected — whole parcel is his residence | Exemption allowed: camper + house were part of Debtor’s residence; Trustee failed to prove otherwise |
| Whether presence of a non-dependent (Tyler) occupying the house defeats Debtor’s homestead claim | Tyler, a non-dependent, occupies the house; that occupancy precludes treating the house (or parcel) as Debtor’s residence for exemption purposes | Debtor still uses the premises as his residence despite Tyler’s occupancy; statute protects property used by the debtor or a dependent | Non-dependent occupant did not defeat exemption given Debtor’s demonstrated use of the property |
| Whether statute excludes movable structures (campers) from “residence” for exemption | Trustee argues movable camper should not be treated as residence tied to parcel | Debtor points to lack of statutory restriction and practical, continuous use tied to the parcel and utilities | Court: statute does not exclude campers; courtly definition focuses on occupancy and use, so camper qualifies |
| Whether Trustee met her burden of proof to overcome exemption claim | Trustee bears burden to prove exemption improper and offered no directly persuasive authority distinguishing camper from house | Debtor relied on facts showing continuous use, access to house, utilities in his name, and debtor-favoring exemption interpretation | Court: Trustee failed to carry burden; exemptions construed liberally in debtor’s favor |
Key Cases Cited
- In re Lewis, 327 B.R. 645 (Bankr. S.D. Ohio 2005) (exemptions construed in favor of debtors)
- In re Kimble, 344 B.R. 546 (Bankr. S.D. Ohio 2006) (Ohio homestead exemption requires interest and that debtor or dependent uses property as residence)
- Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007) (discusses core bankruptcy purposes post-BAPCPA)
- Grogan v. Garner, 498 U.S. 279 (1991) (burden and purpose of bankruptcy discharge/fresh start)
- In re Harlin, 325 B.R. 184 (Bankr. E.D. Mich. 2005) (co-owner sale detriment to non-debtor can outweigh estate benefit)
- In re McCoy, 92 B.R. 750 (Bankr. N.D. Ohio 1988) (trustee unable to sell where non-debtor co-owner would suffer greater detriment than estate benefit)