Ronnie Logan, Jr. and Icy Lakita Logan, 666 B.R. 801

Ronnie and Icy Lakita Logan, debtors in a Chapter 7 bankruptcy, sought to exempt proceeds from a workers’ compensation claim under Missouri law (Section 287.260, RSMo).
Ms. Logan settled her workers’ compensation claim for $43,376.76, and the funds were deposited by her attorney in a trust account in May 2024.
The bankruptcy petition was filed on June 12, 2024, after the settlement funds had been received by the attorney (and partially released to Ms. Logan post-petition).
The Logans claimed the entire workers’ compensation funds as exempt on their bankruptcy schedules under Section 287.260, and later amended the exemption amount to $27,082.57, with additional wild-card and head-of-household exemptions.
The Chapter 7 Trustee objected, arguing the funds were not exempt because they had already been paid before the bankruptcy filing, and moved to compel turnover of $23,482.57 of the funds (not objecting to other claimed exemptions).

Issue	Logan's Argument	Trustee's Argument	Held
Does Section 287.260 exempt workers’ comp funds after payment	Funds are exempt even after being paid if received post-petition	Exemption applies only to amounts still "payable" on petition date, not paid	Funds are not exempt once paid to the claimant or their agent
Applicability of Erie doctrine to state exemptions	Erie limited in bankruptcy; fed court not bound by state court	Erie applies; federal courts must predict how MO Supreme Court would rule	Erie applies: courts bound by MO Supreme Court or must predict
Whether attorney’s receipt delays “payment”	Funds not paid until Ms. Logan personally receives them	Payment to attorney, as agent, counts as payment to claimant	Payment to attorney as agent equals payment to claimant
Effect of commingling in trust account	Commingling means funds not paid to Ms. Logan	Commingling in attorney’s trust account irrelevant	Commingling does not affect payment—funds no longer “payable”

Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (federal courts must apply state substantive law in diversity cases)
In re Benn, 491 F.3d 811 (8th Cir. 2007) (require Missouri debtors to have explicit statutory basis for claimed exemptions)
In re Abdul-Rahim, 720 F.3d 710 (8th Cir. 2013) (upheld that Missouri exemption statutes require a statutory basis, not common law)
In re Dittmaier, 806 F.3d 987 (8th Cir. 2015) (held that right-to-receive exemptions do not apply to funds already received by debtor)
SSM Health Care Sys. v. Bartel, 914 S.W.2d 8 (Mo. Ct. App. 1995) (Section 287.260 does not exempt workers’ comp funds after claimant has received them)
Tiller v. 166 Auto Auction, 65 S.W.3d 1 (Mo. Ct. App. 2001) (an award is deemed “paid” when claimant receives the check)
State ex rel. Nixon v. Mahmud, 11 S.W.3d 718 (Mo. Ct. App. 1999) (words like "payable" in exemption statutes do not include funds already received)
McIntosh v. Aubrey, 185 U.S. 122 (1902) (pension money is exempt only when due, not after receipt by pensioner)