Michael Valone v. Jon Waage
784 F.3d 1398
11th Cir.2015Background
- Michael and Kristie Valone (Florida residents) filed a joint Chapter 13 bankruptcy and claimed Florida’s $4,000 "wildcard" personal property exemption under Fla. Stat. § 222.25(4).
- The wildcard is available only if the debtor "does not claim or receive the benefits of a homestead exemption under s. 4, Art. X of the State Constitution." The Valones owned a home but did not claim the homestead exemption in their petition.
- Chapter 13 trustee Jon Waage objected, arguing that Chapter 13’s protections (automatic stay and plan treatment) effectively give homeowners the benefits of the homestead exemption, making the Valones ineligible for the wildcard.
- The bankruptcy court sustained the objection (citing Osborne v. Dumoulin and federal decisions), and the district court affirmed after the bankruptcy court confirmed the Valones’ Chapter 13 plan.
- The Eleventh Circuit considered whether the district court’s order was appealable (final) and then reviewed de novo whether the Valones "received the benefits of the homestead exemption" such that § 222.25(4) barred the wildcard.
- The court concluded the residence was protected by the Bankruptcy Code’s automatic stay (not Florida’s homestead exemption) at filing, so the Valones did not receive the homestead exemption’s benefits and thus were eligible for the wildcard exemption.
Issues
| Issue | Valone(s) Argument | Waage (Trustee) Argument | Held |
|---|---|---|---|
| Whether a Florida debtor who files Chapter 13 and owns homestead property "receives the benefits of the homestead exemption" so as to bar the § 222.25(4) wildcard | Filing Chapter 13 does not mean the debtor received the Florida homestead exemption; wildcards available if homestead exemption not claimed or received | Chapter 13’s protections (automatic stay/ability to retain home under plan) effectively give debtors the benefits of the homestead exemption, barring the wildcard | Court held Chapter 13 protection alone does not equal receiving the Florida homestead exemption; wildcard available unless homestead exemption itself (or equivalent under state law) protects the residence |
| Whether the district court’s order was final and appealable | N/A (procedural) | N/A | The order was final because the bankruptcy court confirmed the plan and the district court closed the case, so appellate jurisdiction existed |
| Proper temporal focus for determining "receiving the benefits" (during bankruptcy or after discharge) | Focus on whether debtor receives homestead protection when asserting personal property exemptions during case | Trustee argued protection during/through Chapter 13 should count | Court applied Florida precedent: the relevant period is when the debtor asserts the personal property exemption; future or post-discharge protection irrelevant |
| Interaction between § 222.25(4) and Chapter 13’s liquidation test under § 1325(a)(4) | Interpreting § 222.25(4) to exclude debtors who simply file Chapter 13 preserves Chapter 13 parity with Chapter 7 and respects liquidation test | Trustee’s reading could inflate Chapter 13 plan payments by denying the wildcard, undermining liquidation comparison | Court held trustee’s interpretation would conflict with Chapter 13’s liquidation test and statutory text; rejected trustee’s position |
Key Cases Cited
- Osborne v. Dumoulin, 55 So. 3d 577 (Fla. 2011) (holds a debtor who does not claim the homestead exemption may nevertheless be receiving its benefits; disallowance under § 222.25(4) depends on whether the homestead exemption itself protects the property)
- Wisz v. Moister (In re Wisz), 778 F.2d 762 (11th Cir. 1985) (discusses finality of district court orders affirming bankruptcy court disallowance of exemptions)
- Whaley v. Tennyson (In re Tennyson), 611 F.3d 873 (11th Cir. 2010) (addresses finality of bankruptcy confirmation orders for appellate jurisdiction)
- United States v. Ron Pair Enters., Inc., 489 U.S. 235 (Supreme Court 1989) (statutory construction principle: start with plain language of the statute)
- Orlick v. Kozyak (In re Fin. Federated Title & Trust, Inc.), 309 F.3d 1325 (11th Cir. 2002) (explains de novo review of legal questions on appeal from bankruptcy decisions)
- Catlin v. United States, 324 U.S. 229 (Supreme Court 1945) (definition of a final order for appellate jurisdiction)