*1 UNION, McCONE COUNTY FEDERAL CREDIT Appellant, Plaintiff and v.
TEX FRED WRATISLAW, J. GRIBBLE AND Appellees.
Defendants No. DA 08-0625. Submitted on Briefs June 2009. August Decided 2009.
JUSTICE Union) (Credit the appeals Union Federal Credit County McCone ¶1 County McCone to Court of Judicial District by the Seventh decision We affirm. summary judgment. motion for Fred Wratislaw’s ISSUE Court the District appeal the issue on is whether A restatement of ¶2 summary judgment. third motion by granting Wratislaw’s erred BACKGROUND PROCEDURAL FACTUAL AND 2003, into at least four loan Tex Gribble entered During 2002 and ¶3 defaulted on subsequently He the Credit Union. agreements with loans with various most, all, secured these if not of them. Gribble combine, tractors, a swather and including large equipment pieces of real he did not secure them with Notably, truck. he pickup County. in McCone owned 14, 2005, complaint Union filed a the Credit April On
¶4 loans, interest and late including seeking repayment Gribble Union also the collateral. The Credit fees, right and the to foreclose on attorney fees. and reasonable requested costs real 26, 2005, transferred the later, on Gribble days April Eleven (‘the or ‘the County place” Gribble he owned in McCone Subsequently, claim deed. quit to Fred Wratislaw property”) as a pleadings join to Wratislaw moved to amend Credit Union 7,2005, On October granted the motion. defendant. The District claiming Gribble’s complaint filed an amended the Credit Union It alleged fraudulent. place to Wratislaw was transfer of Gribble delay the intent to hinder made the transfer with that Gribble when he sold the claims, that became insolvent Credit Union’s Gribble Wratislaw, pay adequate that did not and Wratislaw Gribble to set aside It asked the District Court property. for the consideration Act, Fraudulent Transfer §31-2-327 the transfer under the Uniform Act) (UFTA Union to MCA, and allow the Credit or the through any applied to be proceeds, or its levy property, execution on judgment against Gribble. future summary- In November Wratislaw filed a motion for
judgment summary that was denied. In June he filed a second judgment argued he motion which that Gribble was not subject “an [UFTA]” ‘asset’ of the debtor to the because the UFTA excludes to the extent it “property generally exempt 31-2-328(2), nonbankruptcy law.”Section MCA.Wratislaw submitted place, Gribble because was Gribble’s was law, specifically 303,MCA, through §§70-32-101 i.e., the homestead statutes. The Credit Union responded Gribble could not claim the exemption because he failed to declare the Gribble place as his homestead. Additionally, the argued Credit Union had used
various other addresses on documents on file with the Credit Union and around the time he executed quit Wratislaw; claim deed to therefore, genuine there was a issue of material fact as to whether the was Gribble’s residence. The District Court determined argument Credit Union’s second dispositive. It denied motion, ruling Wratislaw’s that Gribble’s use of multiple addresses genuine created a issue of material regarding fact the true place of his residence precluded disposition which summary judgment. on Subsequently, the Credit deposed Union Gribble and Gribble *3 testified that place permanent Gribble was his residence. He explained that he used other addresses at times because he had a traveling job and working was out of state. He further testified that he had his bills sent to his mother’s address so she could take care ofthem in his absence that but he did not live at his mother’s house. He stated kept that he his personal property and business records at the Gribble place and returned there on weekends and working. when not 2008, In June ¶9 Wratislaw filed his third summary motion for judgment, opining that deposition Gribble’s testimony resolved the only issue by of material fact establishing that the property was and, therefore, Gribble’s of residence was exempt under the homestead statutes. The Credit again Union once argued that Gribble failed to file a and, result, homestead declaration as a the homestead protect did not him. Wratislaw countered that the UFTA require did not the filing of a declaration of homestead exemption; rather, it merely required that the property “generally be exempt under nonbankruptcy law.” The District granted Wratislaw’s 17, 2008, motion on ruling November that was Gribble’s residence. It found that Gribble “didnot relinquish residency [by using] different addresses on Additionally, documents.” the court
257 26, 11, 149 P.3d 308, Mont. MT Snyder, that In re found not a in a residency “that actual conclusion supported Without exempt homestead.” being an property requirement homestead file the ‘failure to Union’s analysis of the Credit exemptions that District Court stated argument, declaration” It is from this of debtors. in favor liberally construed Montana are to be that the summary judgment motion for Wratislaw’s granting order appeals. Union Credit OF REVIEW
STANDARD novo, summary judgment de of a district court’s We review pursuant the district court applied criteria apply and the same 56(c). summary judgment grants properly A district court M. R. Civ. P. exist, moving fact of material only genuine when no issues Energy v.Bd. oflaw. Pennaco judgment as a matter is entitled to party 199 P.3d 347 Mont. Rev., 2008 MT Environmental (citation omitted).
DISCUSSION summary judgment to erroneously grant the District Court Did Wratislaw? Court erred that the District argues the Credit Union appeal, On therefore, and, residence was Gribble’s
by finding property to file the failed further asserts that because Gribble exempt. It by the homestead, protected was not property declaration third therefore, party it is to a exemption; available that the District Court erred The Credit Union submits creditor. or, alternatively, UFTA was from the holding property that the genuine issues by granting summary judgment it erred because fact to exist. of material continued Court, maintains As he did before the District Wratislaw of other and that his use place was Gribble’s residence change holding traveling job did not constitute
addresses while again asserts that Additionally, Wratislaw once legal his residence. 31-2-328, MCA, because was not an “asset” § He maintains that exempt” as a homestead. “generally *4 protect filed to need not have been a homestead declaration claim claims of a creditor which under UFTA or from property from a notes that of the transfer. Wratislaw yet had not attached at the time filing a formal of whether analyzed has not the issue Montana UFTA; therefore, he relies required upon jurisdictions proposition cases from sister for the that a creditor cannot set aside as fraudulent a transfer of that the debtor Jacob, could have claimed as Jahner v. exempt. 515 N.W.2d (N.D. 1944). opines Wratislaw that because Gribble could have claimed as his homestead and yet the Credit Union had not judgment against obtained Gribble at the time Gribble sold the cannot property, the Credit Union have the transfer set aside as fraudulent. We first address whether the District correctly concluded 1-1-215, was Gribble’s residence. Section MCA
(2003), establishes the determining person’s rules for residence. It provides, in part: relevant has,
Every person law, a residence. In determining following rules are to be observed: (1) It person is the where a remains when not called elsewhere for special labor or other or temporary purpose and to which the person returns in seasons of repose.
(2) may only There be one If person residence. claims residence any within Montana for purpose, then that location is person’s purposes residence for all unless there is a specific statutory exception.
(3) A residence cannot be lost until another gained. (6) The residence can changed only by be the union of act and intent.
We have held that
“merely
this statute
provides a district court with
guidelines in determining
person’s place
Hence,
of residence.
each
regarding
person’s
case
place of residence ‘must stand on its own
”
Co.,
facts.’ Umland v.
356, 25, 319
National Cas.
2003 MT
Mont.
(citation omitted).
addresses the time he money borrowed from the Credit post Union-his mother’s and a officebox. The record confirms this and reveals that he used his mother’s Huntley, Montana address for all loans he secured from the Credit Union in 2002 and and a post Point, office Montana, box Wolf claim quit on the deed to Wratislaw. deposition, In his explained began working that he power for a line construction company February 1997, and continued working for the company until During November 2004. his time with this company, extensively he traveled away and was from Montana for weeks at a time. He therefore had much of his mail delivered to his
259
in his absence
take care of his bills
that she could
mother’s house so
He
his attention.
required
him
mail that
significant
and forward to
officebox. He testified
post
mail sent to a
important
less
also had some
box
post
office
a rural route with
property was
that the Gribble
and his
an affidavit
in both
unequivocally
stated
designation. Gribble
He
his residence.
place to be
considered the Gribble
that he
deposition
at the Gribble
records
belongings and business
personal
all his
kept
traveling for work.
when not
property
to the
always
and
returned
place
Gribble’s
facts to rebut
did not come forward with
The Credit Union
was his residence.
property
claim that the
determining as
not err in
the District Court did
We conclude
place.
the Gribble
residence was
a matter of law that Gribble’s
by
required
intent as
requisite
§1-1-
act and
evidence of
presented
(2003).
and
traveled for business
215,
The fact that Gribble
MCA
does not
box address
post
address or
office
provided his mother’s
America,
claimed
Burchett v. MasTec North
residency.
his
See
defeat
22-24, 322
93, 93
1247; Independence
Inc.,
Mont.
P.3d
2004 MT
¶¶
Because
Halseth,
100, Mont.
property as fraudulent may the transfer be set aside exemption, and therefore transfer under the setting The result of aside a under the UFTA. in the who property is that at issue revests debtor UFTA debtor, creditor in the property transferred it. Once the is revested satisfying judgment may against purposes make a claim case, set In this if the transfer was creditor has the debtor. and the fraudulent, would revest to Gribble aside as the Gribble from the proceeds or the property, Credit Union could seek to use owes. repayment of the debt Gribble property, sale of the that transfer of an “asset” provides, part, The UFTA in relevant and future creditors if the existing is fraudulent as to a debtor hinder, delay, or the asset with an “actual intent to debtor transferred creditor, reasonably equivalent value receiving or without defraud” 31-2-333(1), MCA. obligation. transfer or Section exchange for the debtor,” not include of a but does “property An “asset” is defined as nonbankruptcy under generally exempt it is “property to the extent 31-2-328(2)(b), before us is whether Section MCA. issue law.” homestead, that it was Gribble’s given was an “asset” law.” See nonbankruptcy under “generally exempt homesteads are (homestead §25-13-615, MCA exempt judgment); from execution of § (homestead 70-32-201, MCA exempt generally); from execution (In (S.D. 2000) Delson), Dzikowski v. re Delson 247 B.R. Fla. ‘generally CTA]ninterest in homestead is ’). If property satisfy law.’ does not the definition of an “asset” UFTA, subject its transfer is not provisions. Act’s crux argument of the Credit Union’s is that while the UFTA defines “asset”to “generally exclude that is exempt” under laws, qualify Montana, as an excluded asset “expressly”or must be “absolutely”exempt via the compliance debtor’s provisions with the words, of Montana’s homestead statutes. In other *6 it position is the Credit Union’s protected by that to be the homestead Montana, exemption in whether against arising a claim in bankruptcy, UFTA, under pursuit or in of a judgment, a debtor must have first (‘The filed by 70-32-105, the declaration required MCA person § a selecting homestead must execute acknowledge, in the same manner as a of real is acknowledged, a declaration of record.’). homestead and file the same argues for It that without such filing, a homeowner in Montana is protected by not the homestead exemption. The Credit urges Union us to agree exclusively based on the language of the homestead statute rather than language on the of However, the UFTA. we conclude that since the Credit Union is seeking UFTA, relief under the we must primarily guided by be its provisions. The UFTA excludes from its definition of “asset”property that
is “generally exempt under nonbankruptcy law.”The term “generally” means “as a rule” disregard or “in of specific regard instances with to an picture.” overall Merriam-Webster Online Dictionary, retrieved July 21, 2009, from http://www.merriam-webster.com/dictionary. The majority of plus states the District of Columbia have homestead exemption laws. See e.g. 6-10-2, Ala. Code Cal. Code § Civ. Proc. §704.720, Iowa Code The §561.16. existence of exemption homestead provisions in over 45 quite simply states means that homesteads are “generally exempt” from execution or forced Additionally, sales. while (see some states offer protection automatic homestead e.g. Ariz. Rev. 33-1102; Stat. 6.13.040), § Wash. Rev. Code many states, § like Montana, require that a homeowner file a declaration or claim of homestead exemption. The requirement declaration, of formal however, while presumably necessary to defeat certain claims homeowner/debtor, is not contained in the UFTA. While the UFTA could have been drafted to requirement include the that the debtor providing exemptions, for such exemption in those states hold a formal into a statute this Court to insert It not the function of was not. Therefore, 1-2-101, MCA. omitted. Section that has been provision written, as conclude because Gribble’s the statute we law,”it “generally exempt under homestead would be of the UFTA. purposes is not an “asset”for Montana’s with interpretation consistent foregoing In exemptions in favor of debtors. liberally construing of tradition February Snyder her home bankruptcy sold Snyder, proceeding, September for that home in filed her homestead bankruptcy bankruptcy in October 2005. In her Chapter and filed for $22,000 to from petition, right exempt proceeds she claimed a estate, statutory bankruptcy her from the sale of home to bankruptcy court was unsure how exemption. therefore, following proceed circumstances; it certified under such question of to this Court: Under Montana’s liberal construction law proceeds of the exemptions, is a debtor allowed to trace from sale not declaration debtor’s home when the debtor had filed homestead prior Snyder, the home? 1-3. selling ¶¶ establishing summarized the statutes We relevant explained homestead in Montana. We then Montana relating from Legislature property exempt revised the laws significant our ways, execution in two one of which is relevant to 70-32-216(1), MCA, amended, analysis here. We said that § if the “provides protection proceeds properties for traceable from such have claimed as an at the properties ‘could been homestead’ *7 disposal. statutory change to a right time of This created the claim circumstances, homestead in the delineated after the exemption, a of, person claiming and the property disposed has been after Snyder, the 10 property.” homestead has vacated ¶ §70-32-216(1),MCA, (emphasis original). in We noted while §70-32-106,MCA, a which mandates that homestead inconsistent with the person making must a statement declaration contain time is residing premises declaration on the at the the declaration is and made, liberally construe homestead we must nonetheless 11-13. this Snyder, in of the debtor. For exemption laws favor ¶¶ reason, bankruptcy question we answered the court’s certified stating eligible if is for affirmatively, ‘yes, the homestead otherwise §70-32-216, holding Snyder in exemption pursuant to MCA.” prior the that a formal clearly undercuts Credit Union’s contention a for a to filing qua of a declaration is sine non debtor homestead any against protections obtain execution. Finally, construing we note that when a statute derived from a
¶23 act, jurisdictions uniform it is refer to of appropriate to decisions other in the interpreting general purpose act order “to effectuate of among [UFTA] uniform making enacting the states it.” Section 31-2- support MCA. We find for v. Rudolph, our conclusion Farstveet (N.D. 2001) (A may challenge a N.W.2d creditor transfer only if property subject levy fraud would be to and if execution revested in the Rudolph transferor. Because could claimed have property exemption possessed it, homestead while she title to homestead.), Farstveets cannot enforce their claim and In (Ariz. 2009) (The Roca, re 404 B.R. 542-544 UFTA Arizona could not be to utilized avoid transfer of homestead property because UFTA.). homestead is not an “asset” under keeping liberally In construing ¶24 with Montana’s tradition of debtors, exemptions favor of conclude we that homestead is not an subject “asset” under the UFTA and provisions therefore is not to the of the Act.
CONCLUSION reasons, foregoing For the affirm grant ¶25 we the District Court’s summary judgment in favor of Wratislaw. LEAPHART,
JUSTICE MORRIS and RICE concur.
JUSTICE WARNER dissents. I dissent. As Gribble did not file a exemption, as required statute, property question is an asset described in the UFTA. agree I with the Court that because the Credit Union did not
rebut Gribble’s claim that the property was his there is no fact, material summary judgment issue is appropriate. disagree I legal with the Court’s conclusion that the is not an UFTA generally asset as it is exempt from execution. 31-2-328, MCA, Section provides:
(2) debtor, “Asset” means of a but the term does not include:
(b) property generally exempt extent law; 70-32-105, MCA, Section relating protection of homestead execution, from provides: selecting person homestead must execute and acknowledge,
in the same manner as a of real property acknowledged, *8 for record. and file same of homestead a declaration giving possible, much as statutes as to harmonize This Daniels, Union v. Federal Credit of them. Yellowstone effect to each §1-2-101, It 595; MCA. 451, 181 Mont. 111, 18, Mont. 2008 MT ¶ another relegate at one statute and primarily look appropriate is not 31-2-328 status, does at 19. Sections secondary as the Court to a is an question 70-32-105, MCA, are not conflict. all, not at generally exempt-it not and it is asset of Gribble did do so. a homestead. He not until he selects unless and §70-32-105, MCA, meaningless. today renders Court’s decision transfer a trial on whether the and remand for I would reverse UFTA. I dissent. under the to Wratislaw was fraudulent from Gribble