In Re Morrison
443 B.R. 378
Bankr. M.D.N.C.2011Background
- Debtor Wendy Morrison filed Chapter 7 on February 26, 2010; unsecured debt totaled $52,175.80 and she owns a Greensboro condo to be surrendered.
- Form B22A showed household size of one, with CMI of $3,930.16 and a negative monthly disposable income under the means test.
- Debtor lived with her boyfriend, who paid all rent; no information on his income/expenses was included in Schedule I or J.
- BA moved to dismiss under 707(b)(1) and (b)(3) alleging abuse; parties later stipulated facts regarding household economics and living arrangement.
- Stipulations (Sept. 2, 2010) established: Debtor single with no dependents, boyfriend rents, mortgage on boyfriend’s house, and Debtor pays utilities/food for both; shared expenses indicate financial intermingling.
- Upon briefing, the parties agreed the economic unit test should govern household size, but disputed whether Morrison’s household is one or two persons for the means test.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is the proper household size for the means test? | BA: two-person household; Debtor: one. | Debtor: one; BA: two. | Household size is two persons. |
| Which approach defines household size for the means test? | Adopt heads on beds or IRS dependency approaches. | Adopt economic unit approach. | Economic unit approach is correct. |
| Should the boyfriend be included in Form B22A calculations as part of Morrison's household? | Economic unit inclusion warrants consideration of boyfriend. | Not necessary to define household; parties may adjust calculations later. | Debtor and boyfriend constitute a single economic unit; include for household size; specific B22A treatment not decided here. |
Key Cases Cited
- Lamie v. U.S. Trustee, 540 U.S. 526 (2004) (plain-language interpretation governs when text is plain)
- Smith v. United States, 508 U.S. 223 (1993) (interpreting undefined terms by ordinary meaning in context)
- In re Ellringer, 370 B.R. 905 (Bankr. D. Minn. 2007) (household size can be broader than familial relationships)
- In re Jewell, 365 B.R. 796 (Bankr. S.D. Ohio 2007) (rejects strict IRS dependency approach; supports economic unit concept)
- Herbert v. Herbert, 405 B.R. 165 (Bankr. W.D.N.C. 2008) (case-by-case economic-unit analysis; avoids heads-on-beds overbreadth)
- Hartford Underwriters Ins. Co. v. Union Planters Bank, 530 U.S. 1 (2000) (contextual plain-meaning approach to statutory interpretation)