In re Woller
483 B.R. 886
Bankr. W.D. Wis.2012Background
- Darrell and Rita WollER filed Chapter 7 in July 2011; they have a home (~$172k) with ~$81k mortgage; Darrell is a truck driver, Rita works for Regal Beloit; they claimed Wisconsin exemptions for assets including a semi-tractor ($15k), a bank account (~$2,175), a $49k retirement annuity, and $3,567.06 in trucking receipts; trustee objected to these exemptions; Rita deposited $62k from inherited land sale into an attorney trust, later funding the annuity; debtor’s filings show a mix of business and personal assets and limited nonexempt equity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the semi-tractor is exempt as equipment or motor vehicle | Woller: tractor is equipment used in business; motor vehicle exclusion does not bar equipment | Trustee: tractor is a motor vehicle, not equipment, thus not exempt as business property | Exemption allowed for semi-tractor as equipment (and possibly as motor vehicle) under Wis. Stat. 815.18(3) |
| Whether the initial business bank account is exempt | Account used for personal living expenses; eligible for personal-use exemption | Account is business-related and not exempt; funds must be returned | Bank account designated as business is non-exempt; trustee may recover only funds actually in the business account on filing |
| Whether trucking receipts qualify as net income exempt under Wis. Stat. 815.18(2)(n) and 3(h) | Net income from personal services (independent contractor) may be exempt; 75% of gross receipts payable for personal service | Net income concept limited to wages; not account receivable; may be limited | Exemption granted for net income; treat as personal services and allow 75% exemption with proper calculation |
| Whether the annuity funded with land-sale proceeds is exempt under Wis. Stat. 815.18(3)(j) and related 3(f)/4 | Annuitiy qualifies if IRC-compliant and intended for retirement; not subject to $4,000/24-month limit | Trustee argues potential fraud or non-retirement purpose; may seek $4,000 limit if applicable | Annuity fully exempt under 815.18(3)(j); no sufficient extrinsic fraud evidence to deny exemption; not subject to 3(f) limit in this context |
Key Cases Cited
- In re Bruski, 226 B.R. 422 (Bankr.W.D.Wis.1998) (retirement benefits exemption; IRC compliance not strictly required)
- Cirilli v. Bronk (In re Bronk), 444 B.R. 902 (Bankr.W.D.Wis.2011) (exemption planning insufficient alone to show fraud; extrinsic activity required)
- In re Smiley, 864 F.2d 562 (7th Cir. 1989) (exemptions should not be used to create a smokescreen; evaluating intent)
- Village of San Jose v. McWilliams, 284 F.3d 794 (7th Cir. 2002) (exemption planning vs. actual delay of creditors; ethical considerations)
- Snorek v. Boyle, 118 N.W.2d 132 (Wis. 1962) (motor vehicle definition; contextual interpretation of exemptions)