MEMORANDUM ORDER ON TRUSTEE’S OBJECTION TO CLAIMED EXEMPTIONS AND APPLICATION FOR TURNOVER
THIS MATTER came before the Court for hearing on February 13, 2008, upon Michael R. Bakst’s (“Trustee”) Objection to Claimed Exemptions and Application for Turnover (“Objection”), wherein the Trustee objects to John H. Jevne and Monique P. Jevne’s (collectively, “Debtors”) claim of exemption for their Florida residence and for two motor vehicles.
BACKGROUND
The facts of this matter are undisputed. 1 The Debtors filed a voluntary Chapter 7 petition on October 31, 2007. The Debtors were domiciled in Rhode Island from September 1994 through July 6, 2006. Thereafter, the Debtors moved to Florida, and in June 2006, the Debtors purchased real property located in Vero Beach, Florida (“Real Property”) for $325,000.00. The Debtors’ Schedule A lists and values the Real Property at $292,500.00. The Debtors’ Schedule D discloses liens on the Real Property consisting of a first mortgage in the amount of $256,900.47. The Debtors claimed the Real Property as exempt pursuant to Rhode Island Statutes § 9-26-4.1, which provides for a $300,000 homestead exemption.
The Debtors also listed two jointly owned vehicles on Schedule B: a 2000 Volvo S70 which they valued at $7,505.00, and a 2006 Chevrolet Trailblazer which they valued at $16,440.00. There are no liens listed for either vehicle on Debtors’ Schedule D. The Debtors initially claimed an exemption of $10,000.00 for each of the vehicles. The Debtors subsequently amended their schedules to allocate an aggregate exemption of $20,000.00 between the two vehicles. Based upon the Debtors’ amended schedules, the vehicles are worth $3,945.00 in excess of the exemption allowed under Rhode Island Statutes § 9-26-4(13).
JURISDICTION
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b). This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B).
CONCLUSIONS OF LAW
1. BAPCPA’s alterations to § 522(b)(3)(A)
Prior to the 2005 enactment of the Bankruptcy Abuse Prevention and Con
In an effort to thwart forum shopping by debtors who move to states with more generous exemption rights, Congress substantially amended 11 U.S.C. § 522(b)(3)(A) and provided a complicated choice of law provision that determines the exemptions that a debtor may claim:
(3) Property listed in this paragraph is—
(A) subject to subsections (o) and (p), any property that is exempt under Federal law, other than subsection (d) of this section, or State or local law that is applicable on the date of the filing of the petition at the place in which the debtor’s domicile has been located for the 730 days immediately preceding the date of the filing of the petition or if the debt- or’s domicile has not been located at a single State for such 730-day period, the place in which the debtor’s domicile was located for 180 days immediately preceding the 730-day period or for a longer portion of such 180-day period than in any other place;
11 U.S.C. § 522(b)(3)(A).
As amended, § 522(b)(3)(A) lengthened the time that a debtor must be domiciled in a state in order for the debtor to avail himself of that state’s property exemptions from 180 days to 730 days. If a debtor’s domicile was not located at a single location for 730 days, the state law where the debtor was domiciled for 180 days immediately preceding the 730-day period, or for the longest portion of such 180-day period, provides the applicable exemption law. See 11 U.S.C. § 522(b)(3)(A). Juxtaposed against § 522(b)(3)(A), however, is the fact that the determination of venue remains unchanged post-BAPCPA. The debtor’s place of residence for the 180-day period immediately preceding commencement of the case continues to determine the venue for filing a bankruptcy petition. See 28 U.S.C. § 1408. Thus, if a debtor has not been domiciled in one place for at least two years, the exemption law of the state where the debtor resides will not apply. Consequently, one of the effects of BAPC-PA’s comprehensive changes to the choice of law provision contained in § 522(b)(3)(A), is that courts are now required to construe varying exemption laws of many different states.
2. Do homestead exemptions apply ex-traterritorially?
Section 522(b) (3)(A)’s new choice of law provision requires courts to construe state exemption laws to determine if a particular state’s homestead law applies extraterritorially. Thus, post-BAPCPA the issue of whether a state’s homestead law applies to real property located outside the state has become critical to determining the available homestead exemptions for debtors who move within two years prior to filing a bankruptcy petition.
In some states, the homestead statute’s plain language explicitly limits its application to property within the state. For example, Alaska’s homestead statute § 09.38.010 states that the exemption is available for
“property in this state
used as the principal residence.” Alaska Stat. § 09.38.010 (emphasis added). Colorado statutes similarly restrict Colorado’s homestead exemption by providing that
Where homestead statutes are silent on the propriety of their extraterritorial application, courts in some states have construed homestead laws to have no extraterritorial force.
See e.g., In re Sanders,
While courts in other states have construed their state’s facially nonrestrictive homestead laws to have extraterritorial effect.
See e.g., In re Weza,
In
Arrol,
the Ninth Circuit affirmed the bankruptcy court’s determination that California’s homestead exemption law applied extraterritorially to the debtor’s Michigan residence.
In re Arrol,
Accordingly, if the language of a state’s homestead statute restricts its application to property located within the state, the statute cannot be given extraterritorial effect by this Court. If the plain language of a state’s homestead statute is silent as to its extraterritorial effect, the Court will look to that state’s case law precedent to determine if the state’s homestead statute can be applied to property outside of the state. If the state’s homestead statute is silent as to its extraterritorial effect and there is no case law precedent determining the propriety of its extraterritorial application, the Court believes it is appropriate to interpret the state’s homestead law to apply extraterri-
3. Debtors’ Florida Real Property is Exempt Pursuant to Rhode Island Homestead Law
In this case, the Debtors cannot use Florida’s exemptions because they were not domiciled in Florida for 730 days prior to filing their petition. The Trustee does not dispute that Rhode Island exemptions were properly claimed by the Debtors for their automobiles, which are located in Florida, pursuant to the choice of law provisions of § 522(b)(3)(A). Nevertheless, the Trustee objects to the extraterritorial application of Rhode Island’s homestead exemption for the Debtors’ residence which is also located in Florida.
It is the Trustee’s position that Rhode Island’s homestead law applies only to real property located within Rhode Island, and therefore it cannot apply to the Debtors’ Real Property located in Florida. In support of his position, Trustee cites this Court’s opinion in
In re Schlakman,
The applicable homestead statute in this case, Rhode Island Gen. Laws § 9-26-4.1, is silent as to its extraterritorial effect, and
4. The Motor Vehicles
The Trustee also objected to the Debtors’ claim of exemption in two motor vehicles. The Trustee initially objected to the Debtors’ claimed vehicle exemptions because he had no evidence that the vehicles were jointly owned. The Trustee further argued that it was improper to aggregate or “stack” the Debtor’s individual vehicle exemptions toward multiple vehicles. In subsequent pleadings, the Trustee indicated that he had seen the titles evidencing that the Debtors’ joint ownership of the vehicles. In addition, the Trustee now concedes that Rhode Island law permits stacking of exemptions to allow the Debtors an aggregate exemption of $20,000.00 in the vehicles. However, the Trustee still disputes the value of the 2006 Chevrolet Trailblazer and seeks turnover of this vehicle so that it can be sold, with the Debtors to receive their allowed exemption from the sale proceeds. Alternatively, the Trustee states that he is amenable to permitting the Debtors to pay an amount equal to the equity above exemptions on the Chevrolet Trailblazer, provided the parties can reach an agreement as to its value. Without an agreement as to the value of the Chevrolet Trailblazer, the Court is unable to determine its value without an evidentiary hearing. If the value of the vehicle remains disputed, the parties should contact the Court’s Courtroom Deputy to set an evidentiary hearing at which time the Court will determine the value of the vehicles and the Trustee’s request for turnover.
ORDER
The Court, having reviewed the Objection, all pleadings related thereto, the arguments of the parties, the applicable law, and being otherwise fully advised in the premises, hereby
ORDERS AND ADJUDGES that:
1. Trustee’s objection to Debtors’ claim of homestead exemption pursuant to R.I. Gen. Laws § 9-26-4.1 is OVERRULED. The Court finds that R.I. Gen. Laws § 9-26-4.1 applies extraterritorially to the Debt- or’s residence located in Florida.
2. If necessary, the parties should contact the Court’s Courtroom Deputy to set an evidentiary hearing to determine the value of the 2006 Chevrolet Trailblazer. The Court will determine the merits of the Trustee’s request for turnover at that time.
ORDERED.
Notes
. The parties filed a Stipulation of Fads in Regard to Trustee’s Objedion to Claimed Ex emptions and Application for Turnover (C.P.# 46).
. The Court notes that § 522(b)(3) provides an exemption saving clause in its “hanging paragraph” which allows a debtor to claim federal exemptions in cases where a debtor could be left with no available exemptions. This provision states:
If the effect of the domiciliary requirement under subparagraph (A) is to render the debtor ineligible for any exemption, the debtor may elect to exempt property that is specified under subsection (d).
11 U.S.C. § 522(b)(3).
Thus, if the applicable exemption law of the debtor's domicile requires that the debtor reside within the state to claim exemption rights, or if the state law does not permit an exemption to be taken on property located outside the state, the debtor may still claim the federal exemptions even if the state of the debtor's domicile is an opt-out state that prohibits its residents from using the federal exemptions.
In re Fabert,
. In
In re Franklino,
In light of the absence of Rhode Island case law on the issue, the Court would not hesitate to certify to the Rhode Island Supreme Court the question of whether Rhode Island Gen. Laws § 9-26-4.1 has extraterritorial effect. Unfortunately, the Court is without a procedure that would allow it to do so.