Kimberly Ann Chapman
The court incorporates by reference in this paragraph and adopts as the findings and analysis of this court the document set forth below. This document has been entered electronically in the record of the United States Bankruptcy Court for the Northern District of Ohio.
Dated: January 23 2025
United States Bankruptcy Judge
MEMORANDUM OPINION AND ORDER SUSTAINING CHAPTER 13 TRUSTEE‘S OBJECTION TO DEBTOR‘S CLAIMS OF EXEMPTION
This cause comes before the court on the Chapter 13 Trustee‘s Objection [Doc. #105] to Debtor‘s claims of exemption [Schedule C, Doc. #103]. While the most recent Schedule C filed by the Debtor simply lists §2329.66 as the basis for her claims of exemption, Debtor‘s Objection to Trustee‘s Objection to Exemption [Doc. #109] specifically quotes Ohio Revised Code
The basis for the Trustee‘s Objection is that the Debtor has claimed homestead exemptions in two separate parcels of property: the one she occupies as her homestead, and a second property that she has an ownership interest in that is occupied by a dependent of the Debtor. The Trustee‘s Objection is based on her reading of
At the hearing held on this issue, the parties agreed that, for purposes of this decision only, there are no facts in issue. The question presented here is strictly a matter of law for the court to decide.
Ohio has opted-out of the federal exemptions, and Debtors’ bankruptcy exemptions are taken from the Ohio statute. See,
The Ohio exemption statute in issue states:
(A) Every person who is domiciled in this state may hold property exempt from execution, garnishment, attachment, or sale to satisfy a judgment or order, as follows:
* * * * * *
(1)(b) In the case of all other judgments and orders, the person‘s interest, not to exceed one hundred twenty-five thousand dollars, in one parcel or item of real or personal property that the person or a dependent of the person uses as a residence.
In analyzing Ohio law, this bankruptcy court must apply the “law of the state‘s highest court.” Garden City Osteopathic Hosp. v. HBE Corp., 55 F.3d 1126, 1130 (6th Cir. 1995). But, if “the state‘s highest court has not decided the applicable
In interpreting state law exemption provisions, Ohio courts follow the rule that exemption statutes are to be construed liberally in favor of the debtor and any doubt in interpretation should be in favor of granting the exemption. See, Daugherty v. Cent. Trust Co. of Northeastern Ohio, N.A. (1986), 28 Ohio St.3d 441, 504 N.E.2d 1100, 1104 (“[W]e acknowledge the liberal construction of exemption statutes afforded by the courts of this state....“); Dennis v. Smith (1932), 125 Ohio St. 120, 180 N.E. 638, 640 (“‘Laws exempting property of a debtor from execution are to be construed liberally in his favor. A statutory provision in the nature of an exception to the general law on the subject of exemptions should be given a strict construction.‘” (citation omitted)); In re Oglesby, 333 B.R. 788, 791 (Bankr. S.D. Ohio 2005)(“Ohio exemption provisions are to be construed liberally in favor of the debtor and a debtor‘s dependents and any doubt in interpretation should be in favor of granting the exemption.“); In re Wycuff, 332 B.R. 297, 300 (Bankr. N.D. Ohio 2005) (construing exemption statute liberally is necessary “to effectuate [the statute‘s] remedial purpose: affording the debtor life‘s basic necessities“).
However, the Ohio Supreme Court has also held that exemptions are limited to the express language used in the statute: “[E]xemption statutes * * * are in derogation of the common-law rights of creditors. * * * Thus, as to any property or rights that are subject to attachment or execution, any claim by an individual for an exemption from the claims of his creditors must be based upon a statutory provision for such exemption. * * * The legislature has the exclusive authority to declare what property shall be exempt from the purview of collection laws.” Ohio Bell Tel. Co. v. Antonelli (1987), 29 Ohio St.3d 9, 11, 504 N.E.2d 717, 718 (enforcing the statutory words of limitation — “before payments” — in denying a claim of exemption in workers’ compensation funds).
Thus, the “liberal construction of the Ohio exemptions statute does not allow a court to enlarge the statute or strain its meaning.” In re Zingale, 451 B.R. 412, 416 (6th Cir. BAP 2011); In re Schramm, 431 B.R. 397, 400 (6th Cir. BAP 2010)(quoting Daugherty, 28 Ohio St.3d at 447, 504 N.E.2d at 1105).
Under Ohio law, state statutes are to be interpreted pursuant to
The issue presented is whether the words of limitation in
As a starting point, the court finds that in the context of the Ohio exemption provisions, the more natural reading of the homestead exemption statute is that it is limited to the claimant‘s interest in ‘one parcel or item of real or personal property’ (hereinafter “one parcel“) used as a residence or used as a residence by a dependent. The use of the property as a residence — either by the Debtor, or by a dependent of the Debtor — is a statutory requirement for qualifying to take the homestead exemption in “one parcel“. It does not expand the number of parcels upon which a Debtor may claim a homestead exemption.
As the Sixth Circuit Bankruptcy Appellate Panel noted in Breece: “‘‘In determining legislative intent it is the duty of this court to give effect to the words used, not to delete words used or to insert words not used.’ Columbus–Suburban Coach Lines, Inc. v. Public Utils. Comm‘n, 20 Ohio St.2d 125, 127, 254 N.E.2d 8, 9 (1969).” In re Breece, 2013 WL 197399 at *8, 2013 Bankr. LEXIS 203 at *24 (6th Cir. BAP Jan. 18, 2013). There are two parts of
There are a number of other factors that also support this interpretation.
First, every state has statutory exemptions, and a homestead exemption is part of almost all (if not all) state law exemption schemes. In addition, there are federal exemptions (not applicable where the debtor is domiciled in Ohio) that include a homestead exemption. The leading national legal treatises recognize the general rule that only one homestead exemption may be claimed. See, 40 Am.Jur. 2d Homestead §66 (2024)(“Generally, only one homestead can be claimed by a family or by an individual.“)(footnotes omitted); 40 Corpus Juris Secundum, Homesteads §8 (2024)(“No claimant of homestead rights is entitled to two homesteads at the same time.“)(footnote omitted).
In addition, under the federal exemptions, courts have held that while there may be multiple properties that would qualify as a “homestead“, only one homestead exemption is allowed. See, In re Lawrence, 469 B.R. 140, 143 (Bankr. D. Mass. 2012)(“They were entitled to exempt either one, but only one, under § 522(d)(1).“); In re Spain, 103 B.R. 286, 295 (N.D. Ala. 1988)(“the trustee correctly points out that unless a case involves joint debtors, only one homestead exemption may be claimed under § 522(d)(2).“).
In Ohio, “every person”2 is now entitled to claim the Ohio exemptions that
However, allowing a single individual to claim more than one homestead exemption does not appear to have been the legislature‘s intent. This court has addressed this issue in passing, in what is likely dicta. The court‘s decision in In re Snyder, 645 B.R. 595 (Bankr. N.D. Ohio 2022)
dealt with a married couple living apart in two separate jointly owned properties. While the issue of debtors’ dependents was not pressed by counsel, the court noted: “Even if the Debtors’ dependents resided in the Hardin Property, this Debtor would only be able to exempt his interest in “one parcel” of property.” Snyder, 645 B.R. at 601 (footnotes omitted). In an earlier decision, In re Williams, the court stated: “Among other constraints, the homestead exemption, as claimed by the Debtors under
Another reason why the “one parcel” limitation should be enforced is the way it fits within the overall framework of the Ohio exemption statutes. For example, Ohio limits a debtor an exemption in “one motor vehicle“.
Similarly, courts have enforced the “one parcel” provision, not allowing the exemption to be expanded to non-contiguous real estate, even if those separate parcels are, arguably, used as part of the claimant‘s homestead. See, In re Williams, 345 B.R. 853, 856 (Bankr. N.D. Ohio 2006)(30-acre non-contiguous parcel was “not entitled to be exempted under §2329.66(A)(1)(b).“).
Finally, looking at the use of the term “dependent(s)” in the same exemption subsection, it appears to be primarily a way to expand eligibility for an exemption, not to change the number of available homestead exemptions. The phrase “dependent of the person” is used twice in
For all of these reasons, the court finds that Debtor is limited to a single homestead exemption under
To the extent that the issue here is the Debtor being able to claim an exemption in the other parcel in order to utilize the powers granted to debtors by
Accordingly, it is ORDERED that the Trustee‘s Objection to Exemption [Doc. #105] is Sustained.
JUDGE JOHN P. GUSTAFSON