482 B.R. 918
10th Cir. BAP2012Background
- Debtor Lucio Leide Foah filed a Chapter 7 petition in the District of New Mexico on August 5, 2011.
- Foah claimed a New Mexico life-insurance exemption for cash surrender value from Northwestern Mutual Life, policy acquired in 1992.
- Foah is both owner and named beneficiary; policy insures two lives, with $375,000 per insured and $750,000 total, payable on the second death.
- At filing, cash surrender value was about $281,000, which Foah sought to exempt; Creditor RES-GA Memorial objected.
- The insureds include Foah’s deceased mother and his living father, who resides in Georgia; the policy’s other details are undisputed.
- The bankruptcy court granted summary judgment in Foah’s favor, and the district court affirmed the exemption interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NM exemption requires the insured to be NM resident | Foah argues exemption applies if either insured or policy is with NM resident. | Creditor contends only an NM-resident insured triggers exemption under the statute. | Exemption applies when the policy insures an NM resident or is purchased by an NM resident. |
Key Cases Cited
- Quackenbush v. Allstate Ins. Co., 517 U.S. 706 (U.S. 1996) (statutory interpretation principles applied)
- In re Smith, 401 B.R. 487 (10th Cir. BAP 2009) (bankruptcy exemption interpretation)
- In re Warren, 512 F.3d 1241 (10th Cir. 2008) (exemption analysis and debtor relief principles)
- In re Carlson, 303 B.R. 478 (10th Cir. BAP 2004) (statutory construction and exemption context)
- Whitely v. N.M. State Pers. Bd., 850 P.2d 1011 (N.M. 1993) (interpretation of state exemption provisions)