NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

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No. 08-1134

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IN RE: STERGIOS AND RENEE MESSINA,

 Debtors

STEVEN R. NEUNER,

 Appellant

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On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 07-cv-01677)

District Judge: Honorable Jerome B. Simandle

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Argued March 3, 2009

Before: SLOVITER, SCIRICA and HARDIMAN, Circuit Judges.

(Filed: July 9, 2010)

David A. Kasen [Argued]

Kasen & Kasen

1874 East Marlton Pike, Suite 3

Cherry Hill, NJ 08003

Attorney for Appellees

Steven R. Neuner [Argued]

Neuner & Ventura

750 Route 73 South

Suite 210

Marlton, NJ 08053-0000

Attorney for Appellant
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OPINION OF THE COURT

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HARDIMAN, Circuit Judge.

Bankruptcy Trustee Steven Neuner (the Trustee) appeals the District Court’s order

barring his motion to value at zero the exemption claimed by Debtors Stergios and Renee

Messina. We held this appeal c.a.v. pending the Supreme Court’s decision in Schwab v.

Reilly, __ S.Ct. __, No. 08-538, 2010 WL 2400094 (U.S. June 17, 2010). We will vacate

the District Court’s Order and remand for redetermination in light of Schwab.

I.

Because we write for the parties, we will recount only those facts essential to our

decision. On May 26, 2006, the Messinas filed their bankruptcy schedules, wherein they

claimed a $36,900 homestead exemption under 11 U.S.C. § 522(d)(1) on Schedule C. 

Separately, Schedule D identified a secured mortgage in the amount of $113,657.86 held

by Litton Loans and Schedule F listed an unsecured claim of $396,171.13 for a disputed

mortgage held by National Penn Bank. The Trustee did not object initially to the

homestead exemption.

On June 14 and 21, the Messinas sent the Trustee two letters outlining the alleged

defects in the National Penn mortgage. On July 5, the Trustee initiated an adversary

proceeding against National Penn to avoid the mortgage. On August 21, the Trustee
 There is no dispute that this motion is to be treated as an objection to the 1

exemption.

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submitted for court approval a $200,209.64 offer to purchase the Messinas’ residence,

which the Bankruptcy Court approved on September 11, and the Trustee completed the

sale on September 13. On October 18, the Trustee settled the avoidance action, whereby

National Penn consented to avoid its mortgage with regard to the bankruptcy estate and to

other lien-holders with valid, perfected and unavoidable liens on the property.

The Messinas then claimed their homestead exemption should be satisfied by the

remaining proceeds from the sale of their home. On November 17, the Trustee moved for

a court order valuing the Messinas’ exemption at zero, on the grounds that the Messinas 1

had no equity in their home to which the homestead exemption could attach. The

Messinas cross-moved for a court order to have the Trustee pay them the amount of their

exemption. The Bankruptcy Court granted the Trustee’s motion and valued the Messinas’

exemption at zero. The Messinas appealed to the United States District Court for the

District of New Jersey, which reversed the Bankruptcy Court, holding the Messinas were

entitled to their exemption because the Trustee’s motion was an untimely objection under

11 U.S.C. § 522(l) and Rule 4003 of the Federal Rules of Bankruptcy as interpreted by

Taylor v. Freeland & Kronz, 503 U.S. 638 (1992).

In Schwab v. Reilly, the Supreme Court modified Taylor. Relevant to this appeal,

Schwab held that Rule 4003’s thirty-day time limit applies to objections based on “three,

and only three” elements of a claimed Schedule C exemption: (1) the description of the
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exempted property; (2) “the Code provisions governing the claimed exemptions;” and (3)

the amount “listed in the column titled ‘value of claimed exemption.’” Schwab, slip op.

at 12-13. But when the objection is based on other elements—in that case, the debtor’s

market value estimation and “the estate’s right to retain any value in the [property]

beyond the value of the exempted interest”—the thirty-day time limit does not apply. Id.

at 18-19, 22-23.

Because the District Court did not have the benefit of Schwab, we will vacate its

order and remand for further proceedings in light of Schwab.