Case Title: ZUBROD v. WINTERS

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2002-02-21T00:00:00Z

Document:
ZUBROD v. WINTERS2002 WY 2940 P.3d 1231Case Number: 00-262Decided: 02/21/2002

October Term, A.D. 2001

 

IN RE 
DIXIE WINTERS, a/k/a

Dixie 
Racz Winters

 

TRACY 
ZUBROD, 

Appellant(Trustee/Objector) 
,

 

v.

 

DIXIE 
WINTERS, 

Appellee(Debtor/Respondent) 
.

 

 

Certified 
Question

 from the United States Bankruptcy 
Court

for 
the District of Wyoming:

The 
Honorable Peter J. McNiff, Judge

 

Representing 
Appellant:

Tracy 
L. Zubrod, Chapter 7 Bankruptcy Trustee, Cheyenne, WY.

 Representing 
Appellee:

Jo 
Ann Fulton of Fulton Law Office, P.C., Laramie, WY.

 

Before 
LEHMAN, C.J., and GOLDEN, HILL, KITE, and VOIGT, JJ.

   

LEHMAN, 
Chief Justice. 

[¶1]      Appellee Dixie 
Winters filed a Chapter 7 Bankruptcy Petition with the United States Bankruptcy 
Court, District of Wyoming, on October 13, 1999.  On Schedule B of this peti­tion, 
appellee listed that she owned "2 diamond rings (inherited from mother)."  These rings were initially valued at 
$500.00.  On Schedule C of her 
petition, appellee claimed these rings were exempted as "necessary wearing 
apparel" pursuant to Wyo. Stat. Ann. § 1-20-105.  Appellee later amended Schedule B by 
changing the wording regarding the rings to "wedding rings" and amended the 
value of the rings to $200.00.  
Appellee continued to claim the rings were exempted as "necessary wearing 
apparel" under § 1-20-105.

 

[¶2]      The bankruptcy 
estate, through its appointed trustee Tracy Zubrod, then objected in part to 
appellee's claimed exemption with respect to the rings.  Upon hearing, the United States 
Bankruptcy Court entered an order finding the rings were not exempt.  Appellee appealed  to the United States Bankruptcy 
Appellate Panel of the Tenth Circuit.

 

[¶3]      The United States 
Bankruptcy Appellate Panel of the Tenth Circuit held the rings constituted 
"wedding rings" under Wyo. Stat. Ann. § 1-20-105 and remanded the mat­ter to 
the United States Bankruptcy Court to determine whether the rings were 
"necessary wearing apparel" as defined under that statute.  After holding an evidentiary hearing on 
August 22, 2000, the United States Bankruptcy Court certified to the Wyoming 
Supreme Court the following question:

 

Are 
wedding rings inherited by an unmarried debtor, and which do not signify that 
debtor's own marriage but which are worn for sentimental and ornamental 
purposes, "necessary wearing apparel" under the provisions of Wyo. Stat. Ann. § 
1-20-105 (Lexis 2000)?

 

[¶4]      We answer the 
question in the negative.

 

 

FACTS

 

[¶5]      The facts in this 
case are not complicated.  The two 
rings were inherited by appellee from her mother and were the mother's wedding 
rings.  Appellee is not married, 
however, she wears the wedding band occasionally and the engagement ring on a 
more regular basis.  The rings are 
worn for sentimental reasons and are not kept for investment purposes.  The value of the rings and appellee's 
other exemptible wearing apparel do not total more than the maximum statutorily 
authorized exemption amount of $1,000.00 found in § 
1-20-105.

 

 

 

 

STANDARD 
OF REVIEW

 

[¶6]      The certified 
question requires this court to interpret the meaning of Wyo. Stat. Ann. § 
1-20-105 (LexisNexis 2001).  
Statutory construction is a question of law; accordingly, our standard of 
review is de novo.  In 
interpreting statutes, our primary consideration is to deter­mine the 
legislature's intent.  All statutes 
must be construed in pari materia; and, in ascer­taining the meaning 
of a given law, all statutes relating to the same subject or having the same 
general purpose must be considered and construed in harmony.  We begin by making an inquiry respecting 
the ordinary and obvious meaning of the words employed according to their 
arrangement and connection.  We 
construe the statute as a whole, giving effect to every word, clause, and 
sentence.  Wyoming Bd. of 
Outfitters & Professional Guides v. Clark, 2001 WY 78, ¶12, 30 P.3d 36, 
¶12 (Wyo. 2001); Richards v. Board of County Comm'rs, 6 P.3d 1251, 1253 
(Wyo. 2000); Fontaine v. Board of County Comm'rs, 4 P.3d 890, 894-95 
(Wyo. 2000); Wyoming Dep't of Transp. v. Haglund, 982 P.2d 699, 701-03 
(Wyo. 1999).

 

 

DISCUSSION

 

[¶7]      Wyoming statute § 
1-20-105 provides:

 

The 
necessary wearing apparel of every person not exceeding one thousand dollars 
($1,000.00) in value, deter­mined in the manner provided in W.S. 1-20-106 is 
exempt from levy or sale upon execution, writ of attachment or any process 
issuing out of any court in this state.  
Necessary wearing apparel shall not include jewelry of any type other 
than wedding rings.

 

[¶8]      The United States 
Bankruptcy Code provides for the ability of the individual state 
legis­latures to determine items of exemption which may be claimed pursuant 
to 11 U.S.C. § 522(b).  This 
ability, known as "opting out" of the federal exemptions, is provided under 11 
U.S.C. § 522(b) as follows:

 

Notwithstanding 
section 541 of this title, an individual debtor may exempt from property of the 
estate the property listed in either paragraph (1) or, in the alternative, 
paragraph (2) of this subsection. . . . Such property 
is

 

(1) property 
that is specified under subsection (d) of this section, unless the State law 
that is applicable to the debtor under paragraph (2)(A) of this subsection 
specifi­cally does not so authorize; or, in the 
alternative,

 

(2)(A) 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 180 days immediately preceding the date of the filing of the petition, 
or for a longer portion of such 180-day period than in any other place; 
and

 

(B) any 
interest in property in which the debtor had, immediately before the 
commencement of the case, an interest as a tenant by the entirety or joint 
tenant to the extent that such interest as a tenant by the entirety or joint 
tenant is exempt from process under applicable nonbankruptcy 
law.

 

Once 
a state has exercised its option to utilize its own exemption statutes rather 
than the federal exemptions set forth in 11 U.S.C. § 522(d), a particular debtor 
may solely utilize the state-provided exemptions of his residency and may not 
choose between state and federal exemptions.  See Wyo. Stat. Ann. § 1-20-109 
and In re Miller, 101 B.R. 713, 715 (Bankr. E.D.Okla. 1989).1

 

[¶9]      Upon review of 
the Wyoming exemption statutes enacted and presently in place, giv­ing 
particular attention to Wyo. Stat. Ann. § 1-20-105, we do not find them to be 
ambiguous.  We note, however, that 
the terms "necessary wearing apparel" and "wedding rings" have not been defined 
by statute nor have these terms been previously interpreted through established 
Wyoming case law.

 

[¶10]   Nevertheless, we also recognize in 
attempting to glean the intent of the Wyoming legislature in enacting the 
designated exemptions, most particularly § 1-20-105, that the legislature did 
not include a separate exemption allowance for jewelry as does 11 U.S.C. 
§ 522(d)(4), which provides:

 

The 
following property may be exempted under subsection (b)(1) of this 
section:

 

. . .

 

The 
debtor's aggregate interest, not to exceed $1000 in value, in jewelry held 
primarily for the personal, family, or household use of the debtor or a 
dependent of the debtor.

 

We 
further note that the Wyoming legislature failed to afford a general exemption, 
some­times known as a "wild card" exemption, for use by a debtor as had been 
allowed by other states to its debtors.  
As such, we believe that these omissions are indications that the 
legis­lature meant to expressly make jewelry nonexempt with the limited and 
explicit exception of wedding rings.  
Indeed, this intent is clearly identified by the legislature's plain and 
specific use of that language provided in the last sentence of § 1-20-105 that 
"[n]ecessary wearing apparel shall not include jewelry of any type other 
than wedding rings."  
(Emphasis added.)

 

[¶11]   Furthermore, upon review of the 
plain and unambiguous language used within § 1-20-105, we simply cannot agree 
with the holding rendered by the United States Bankruptcy Appellate Panel of the 
Tenth Circuit that the rings involved in this case constituted wedding rings 
under § 1-20-105.  Rather, we 
construe the language used to be limited in nature to include only wedding rings 
of the debtor.  This conclusion is 
supported by the defi­nition of the term "wedding ring" as stated in 
Webster's Third New International Dictionary Unabridged (1997) as 
follows:

 

A 
ring often consisting of a plain gold or platinum band given by the groom to the 
bride during the wedding service; also:  
a similar ring given by the bride to the groom in a double-ring 
service.

 

[¶12]   We conclude this limited approach 
is consistent with the general purposes and guide­lines behind allowing 
debtors to file for bankruptcy protection.  
4 Collier on Bankruptcy at ¶ 522.01 (15th rev. ed.) explains:

 

A 
fundamental component of an individual debtor's fresh start in bankruptcy is the 
debtor's ability to set aside certain property as exempt from the claims of 
creditors.  Exemption of property, 
together with the discharge of claims, lets the debtor maintain an appropriate 
standard of living as he or she goes forward after the bankruptcy 
case.

 

1 
Collier on Bankruptcy at ¶ 1.03[2][a] also recognizes 
that:

 

Chapter 
7 of the Bankruptcy Code is entitled "Liquidation" and the title fully expresses 
the purpose of the chapter's provisions.  
Chapter 7 provides the mechanism for taking control of the property of 
the debtor, selling it, and distributing the proceeds to creditors in accordance 
with the distribution scheme of the Code.

 

Two 
ideals underlie chapter 7.  From the 
creditor's viewpoint, chapter 7 establishes the concept of equitable 
distribution among creditors of a debtor's resources which, in most cases, are 
insufficient to permit full payment to all.  From the individ­ual debtor's 
vantage point, chapter 7 permits the honest debtor to obtain a new financial 
life through the discharge of unpaid debts.

 

(Footnotes 
omitted.)  

 

[¶13]   In attempting to balance the above 
noted basic bankruptcy principles, we believe that the better approach is to 
allow debtors an exemption as to their own personal wedding rings thereby not 
requiring debtors to hand over those wedding rings to satisfy claims of their 
creditors.  As recognized long ago 
in the case of Towns v. Pratt, 66 Am.Dec. 726, 728 (N.H. 
1856):

 

            
The object of the [exemption] statute is not to secure to the debtor the 
enjoyment of property of that character at the expense of his creditors, but to 
prevent his being stripped of those arti­cles of utility and convenience, 
under the limited value pre­scribed, requisite for the comfort of himself 
and family in maintaining a household in every condition of 
life.

 

[¶14]   As expressed by the United States 
Bankruptcy Court, District of Wyoming, in its Order on Objection to Exemption 
entered in this case, a ruling that all wedding rings, what­ever their 
nature, are exempt under Wyo. Stat. Ann. § 1-20-105 would simply be to construe 
the explicitly expressed exemption stated therein to the point of 
absurdity.  We 
agree.

 

 

CONCLUSION

 

[¶15]   For the reasons expressed above, we 
find that pursuant to Wyo. Stat. Ann. § 1-20-105 an exemption exists only for 
wedding rings insofar as such wedding rings signify the debtor's own personal 
marriage.  Thus, rings which do not 
represent the debtor's own per­sonal marriage are not exempt as they do not 
constitute "necessary wearing apparel" as spe­cifically expressed within the 
plain and unambiguous language of Wyo. Stat. Ann. § 
1-20-105.

 

[¶16]   Accordingly, we hold that wedding 
rings inherited by an unmarried debtor, and which do not signify that debtor's 
own marriage but which are worn for sentimental or ornamental purposes, are not 
"necessary wearing apparel" under the provisions of Wyo. Stat. Ann. § 
1-20-105.  The certified question is 
answered in the negative.

FOOTNOTES

1Wyoming statute § 1-20-109 
(LexisNexis 2001) provides:

 

            
In accordance with section 522(b)(2) of the Bankruptcy Reform Act of 
1978, 11 U.S.C. § 522(b)(1) [11 U.S.C. § 522(b)(2)], the exemptions from 
property of the estate in bankruptcy provided in 11 U.S.C. § 522(d) are not 
authorized in cases where Wyoming law is applicable on the date of the filing of 
the petition and the debtor's domicile has been located in Wyoming for the one 
hundred eighty (180) days immediately preceding the date of the filing of the 
petition or for a longer portion of the one hundred eighty (180) day period than 
in any other place.