*

The Honorable Denise Page Hood, 

the Eastern District of Michigan, sitting 

1

RECOMMENDED FOR FULL-

Pursuant to Sixth Circ

ELECTRONIC CITATION: 2000 F

File Name: 00a0

UNITED STATES COU

FOR THE SIXTH 

____________

In re: ROBIN L. JOHNSTON,

Debtor.

________________________ROBIN L. JOHNSTON,

Appellant,

v.

THOMAS HAZLETT,

Appellee.

Appeal from the Bankrupt

of the Sixth C

No. 97-59613—Barbara J. Sell

Argued: Septembe

Decided and Filed: A

Before: BATCHELDER and G

HOOD,

*

 Distric
2 In re Johnston No. 98-3954

_________________

COUNSEL

ARGUED: Andrew W. Miller, Steubenville, Ohio, forAppellant. Thomas Hazlett, HARPER & HAZLETT, St.Clairsville, Ohio, for Appellee. ON BRIEF: Andrew W.

Miller, Steubenville, Ohio, for Appellant. Thomas Hazlett,HARPER & HAZLETT, St. Clairsville, Ohio, for Appellee.

_________________

OPINION

_________________

ALICE M. BATCHELDER, Circuit Judge. DebtorAppellant Robin L. Johnston appeals the decision of the

Bankruptcy Appellate Panel affirming the Bankruptcy Court’sdenial of her claim that her 1997 earned income tax credit(“EIC”) is exempt from inclusion in her Chapter 7 bankruptcyestate. For the reasons that follow, we affirm the decision ofthe Bankruptcy Appellate Panel.

I.

On October 20, 1997, Robin L. Johnston filed a voluntary

petition for relief under Chapter 7 of the United StatesBankruptcy Code. Johnston listed in her petition for relief a1997 EIC in the amount of $2,000 and claimed the entireamount as an exemption. The Bankruptcy Court sustained theTrustee’s objection to the exemption, rejecting Johnston’sargument that because she had no “legal or equitable interest”in the EIC at the time she filed her petition, the EIC cannot bedefined as property of the estate under 11 U.S.C. § 541. TheBankruptcy Appellate Panel for the Sixth Circuit affirmed thedisallowance of the exemption, holding that an EIC isproperty of the bankruptcy estate under 11 U.S.C. § 541, evenif the bankruptcy petition is filed prior to the end of the taxyear in which the EIC is earned.
No. 98-3954 

1Issues not raised before the trial 

waived. See White v. Anchor Motor Freig

Cir. 1990).

2See, e.g., Baer v. Montgomery (In 

(10th Cir. B.A.P. 1998); In re Fraire, No. 

(D. Kan. Jan. 2, 1997); In re McCourt, 21997); In re Barnett, 214 B.R. 632 (Ba

Beagle, 200 B.R. 595 (Bankr. N.D. Ohio 161 (Bankr. N.D. Ohio 1996); In re Goe

Mo. 1996); In re George, 199 B.R. 60 (Brown, 186 B.R. 224 (Bankr. W.D. KyB.R. 158 (Bankr. E.D. Ky. 1992); In re B

D. Idaho 1992); In re Davis, 136 B.R. 20re Richardson, 216 B.R. 206 (Bankr. S.D

Johnston raises three assignmen

because she was not entitled to the year, she had neither a legal nor aEIC at the time she filed her petitiopart of the bankruptcy estate; (2) tU.S.C. § 522(b)(1) is unconstitutiomilitates in favor of allowing her her limited earnings. Because she first time on appeal, we will not 

confine our review to Johnston’s f

II.

Whether the EIC was properly i

bankruptcy estate is purely an issbankruptcy court’s conclusions of Isaacman (In re Isaacman), 26 F.3

The overwhelming majority of c

issue have rejected the argument t

In Baer v. Montgomery (In re Mo

(10th Cir. B.A.P. 1998), for examhad determined that a debtor’s EIC of the tax year was not part of thcourt based its reasoning on the opi
4 In re Johnston No. 98-3954

(In re Searles), 445 F. Supp. 749 (D. Conn. 1978), which heldthat under the “fresh start” provision of § 70a(5) of theBankruptcy Act, EICs are “expectancies” accruable at the endof the tax year and payable in the year following bankruptcy.Searles, 445 F. Supp. at 753. The Bankruptcy AppellatePanel for the Tenth Circuit reversed and remanded, notingthat the bankruptcy court’s conclusions were misplaced inlight of the Bankruptcy Reform Act of 1978:

The Bankruptcy Act was repealed in favor of the

modern Bankruptcy Code by the Bankruptcy Reform Actof 1978. Though the “fresh start” maxim rising fromsection 70a(5) of the Act may have been a fundamentalconsideration in the formation of the Code, we recognizethe maxim to be a limited, and no longer a completelyunencumbered, guiding principle. Unlike the Act, theCode requires that all property of the debtor, whether ornot exempt, be included in the bankruptcy estate,mandating that an estate in bankruptcy comprise “alllegal or equitable interests of the debtor in property as ofthe commencement of the case.” 11 U.S.C. § 541(a)(1)(1994). Legislative history indicates section 541 isintended to be given a broad definition to include “allkinds of property, including tangible or intangibleproperty, causes of action . . ., and all other forms ofproperty specified in section 70a of the Bankruptcy Act. . . . [I]t includes as property of the estate all property ofthe debtor, even that needed for a fresh start.” H.R.Rep.No. 95-595, at 367 (1977). Any conclusion that EICs arenecessary or mandatory for a “fresh start” may bereasonably inferred under the Act, but is incorrect in lightof the Code.

Montgomery, 219 B.R. at 916 (alteration in original).Montgomery further held that “qualifying individuals mayrequest payment of EICs at the end of the tax year, or at anytime during the tax year,” id. at 917, and, citing In re Davis,136 B.R. 203, 207 (Bankr. S.D. Iowa 1991), that “[n]eitherpossession nor constructive possession, either prior to orcontemporaneous with the filing for bankruptcy protection, is

No. 98-3954 required to vest an individual wEICs.” Id.

In the case before us here, the B

reviewed the reasoning and conclu

concluded, “Montgomery also helthe estate under § 541, even when filed prior to the end of the tax yearto be available to qualifying individtax year.’ We agree with Montgom(In re Johnston), 222 B.R. 552, 5(internal citations omitted).

We agree with the Bankruptcy 

reasoning of the Montgomery panewe hold that in the case before us and appellate panel properly determwas property of the bankruptcy eJohnston filed her bankruptcy petitax year in which the credit was ea

CONCLUS

The decision of the Bankruptcy 

the judgment of the Bankruptcy C