521 B.R. 382
Bankr. M.D. Fla.2014Background
- Swarup filed bankruptcy after dissolution proceedings; Indiana court issued a Written Order dividing marital assets, giving Swarup interests in theAccounts.
- Accounts at issue include ING Annuity, Fidelity 780 Money Market, Fidelity 205 Money Market, and a Fidelity IRA, which Swarup listed as exempt in Schedule C.
- Indiana dissolution law vests a spouse with an equitable interest in marital assets upon filing, which matured when the Written Order was entered.
- Florida exemptions § 222.21(2) broadly exempt any interest in enumerated account types, and Florida law applies because of domicile.
- Trustee and Triage object to the exemptions but the court concludes Swarup had a pre-petition equitable/contingent interest in the Accounts, making them exempt under Florida § 222.21(2).
- Written Order post-dates the petition and Swarup’s interest matured under Indiana law; the court declines to treat oral pre-petition ruling as controlling for exemption purposes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Swarup had an exemptible interest in the Accounts on petition date. | Swarup had a contingent/equitable interest that matured pre-petition. | Trustee argued interest was insufficient or inchoate to exempt. | Yes; Swarup had an exemptible equitable/contingent interest under Florida § 222.21(2). |
| Whether Indiana oral ruling or Written Order controls the extent of Swarup’s interest. | Oral ruling vested the interest pre-petition. | Written order controls; oral ruling uncertain. | Written Order confirms interest; oral ruling uncertain but unnecessary to defeat exemption. |
| Whether Florida exemptions permit exemption of equitable interests in exempt property. | Florida § 222.21(2) broadly exempts any interest in eligible accounts. | Trustee sought to limit exemptions to bare legal title interests. | Yes; equitable/contingent interests can be exempt under § 222.21(2). |
Key Cases Cited
- In re Dzielak, 435 B.R. 538 (Bankr.N.D.Ill.2010) (debtor may exempt contingent interest in exempt property under broad state exemption)
- In re Burgeson, 504 B.R. 800 (Bankr.W.D.Pa.2014) (contingent/equitable interests may be exempt despite not being fully owned)
- In re Holloway, 81 F.3d 1062 (11th Cir.1996) (state exemptions and ownership interests; relevance to exemptions)
- In re Pettit, 224 B.R. 834 (Bankr.M.D.Fla.1998) (presumptive validity of exemptions; burden on objector)
- Owen v. Owen, 500 U.S. 305 (1991) (an interest not possessed by the estate cannot be exempted)
- Travelers Cas. & Sur. Co. of Am. v. Pacific Gas & Elec. Co., 549 U.S. 443 (2007) (property interests defined by state law)
- In re Dzeliak, 435 B.R. 538 (Bankr.N.D.Ill.2010) (Illinois-style contingency/vesting supports exemption of contingent interests)
- Clark v. Rameker, 134 S. Ct. 2242 (2014) (Supreme Court on retirement funds exemption scope)