REVISED MARCH 18, 2003

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_______________________

No. 02-50449

_______________________

In the Matter of: DENNIS RAY BOUCHIE; SHERRI BOUCHIE,

Debtors.

-------------------

RUSH TRUCK CENTERS OF TEXAS L.P.; HELEN G. SCHWARTZ, Trustee,

Appellants,

versus

DENNIS RAY BOUCHIE, doing business as

Mission Truck Repair, formerly known as Trinity Vision

Transportation; SHERRI BOUCHIE, also known as Sherri L. Griffin,

Appellees.

_________________________________________________________________

Appeal from the United States District Court

for the Western District of Texas, San Antonio Division

_________________________________________________________________ March 17, 2003

Before WIENER, BENAVIDES, and DENNIS, Circuit Judges.

PER CURIAM:

Appellants Rush Truck Centers of Texas, L.P. and Helen G.

Schwartz, Trustee (collectively “Rush Truck”) challenge the

bankruptcy court’s finding (as affirmed by the district court) that

84.557 acres of land owned by debtors-appellees Dennis and Sherri

Bouchie (collectively “Bouchie”) is a rural homestead under Texas

law and thu s exempt from the bankruptcy estate. Based on the1 See Tex. Prop. Code § 41.002(c) (2000).

2 Id.

2 factors plainly articulated by Texas la w for differentiating

between rural and urban homesteads, we affirm. 1

I. FACTS AND PROCEEDINGS

The bankruptcy court found that Bouchie’s property is a rural

homestead under Tex. Prop. Code 41.002( c). This statute 2 states

that:

(c) A homestead is considered to be urban if, at

the time of designation is made, the property

is:

(1) located within the limits of a

municipality or its extraterritorial

jurisdiction or a platted

subdivision; and

(2) served by police protection, paid or

volunteer fire protection, and at

least three of the following

services provided by a municipality

or under contract to a municipality

(A) electric;

(B) natural gas;

(C) sewer;

(D) storm sewer; and

(E) water.

The ba nkruptcy court held that the property is within the

extraterritorial jurisdiction of Converse, Texas; that it is served

by police protection and fire protection; but that it is not

provided at least three of the listed services by a municipality,

as required by the express language of the statute. Thus, as the

bankruptcy court conclu ded, Bouchie’s property is a rural

homestead. The district court affirmed.3 Crowell v. Theodore Bender Accounting, Inc.

, 138 F.3d 1031,

1033 (5th Cir. 1998).

4 Id.

5 Southland Corp. v. Toronto-Dominion

, 160 F.3d 1054, 1057

(5th Cir. 1998).

6 Rush Truck also argu es that the bankruptcy court erred in

its determination that Bouchie’s property was not provided with

sewer services by a municipality or u nder contract to a

municipality. As Rush Truck did not present this argument to the

district court, we w ill not consider it on appeal. L ittle v.

Liquid Air Corp.

, 37 F.3d 1069, 1071 n.1 (5th Cir. 1994) (en banc).

See also United States v. Olson

, 4 F.3d 562, 5 67 (8th Cir. 1993)

(holding that a party waives an a rgument considered by the

bankruptcy court if he does not reassert the argument on appeal to

the district court).

3 II. ANALYSIS

A. Standard of Review

.

Whether a homestead is urban or rural is a question of fact. 3

The bankruptcy court’s findings of fact are subject to clearly

erroneous review and its conclusions of law receive de novo

review. 4 A finding of fact premised on an incorrect legal

standard, however, loses the protection of the clearly erroneous

rule. 5

B. Determination of Rural or Urban

.

1. Currently Applicable Test

.

Rush Truck first challenges the district court’s

characterization of Bouchie’s property as a rural homestead based

on the district court’s sole application of Tex. Prop. Code §

41.0 02(c). 6 The bankruptcy court did not apply the “multiple7 United States v. Blakeman , 997 F.2d 1084 (5th Cir. 1992).

8 See Act of June 19, 1999, 76th L eg., R.S., ch. 1510, § 2,

1999 Tex. Gen. Laws 5232 (amending Tex. Prop. Code § 41.002(c)).

9 267 B.R. 759 (Bankr. W.D. Tex. 2001).

10 Id. at 766.

11 Id.

12 Id.

4 factors” test adopted in U nited States v. Blakeman

. 7 B lakeman ’ s

applicability in light of the 1999 amendments of section 41.002(c)

is a question of first impression for this court. 8

The bankruptcy court in the instant case applied the approach

it had previously developed in In re Perry

. 9 In that case, the

bankruptcy court concluded that the question whether a homestead is

rural or urban is answered by first appl ying section 41.002(c). 1 0

Under Perry , if the homestead does not qualify as urban under the

statute, it is rural and the inquiry ends. 1 1 I f, however, th e

homestead meets the statutory definition of “urban,” then the court

continues with its analysis by appl ying the B lakeman five-factor

test. 12 T he bankruptcy court in th e instant case held that

Bouchie’s property did not meet the statutory definition of “urban”

and thus classified it as rural, ending its inquiry.

To determine whether the Blakeman test is applicable in light

of the 1999 amendment to section 41.002(c), it is useful to

summarize briefly its origins. Prior to 1989, a homestead was

characterized as urban or rural by applying a five-factor test13 Blakeman , 997 F.2d at 1091.

14 Id. at 1091 n.14 ( quoting In re Bradley

, 960 F.2d 502, 511-

12 n.18 (5th Cir. 1992) ( citing Vitron Corp. v. Winstead

, 521

S.W.2d 754, 755 (Tex. Civ. App.

-- Eastland 1975, no writ); Rockett

v. Williams , 78 S.W.2d 1077, 1078 (Tex. Civ. App. -- Dallas 1935,

writ dism’d); Purdy v. Grove

, 35 S.W.2d 1078, 1081-82 (Tex. Civ.

App.

-- Eastland 1931, writ ref’d); 43 Tex. Jur. 3d Homesteads § 15

(1985))).

15 Bradley , 960 F.2d at 511-12 n.18.

16 Id. at 511 ( quoting Act of June 14, 1989, 71st Leg., R.S.,

ch. 391, § 2, 1989 Tex. Gen. Laws 1519, amended by

, Act of June 19,

1999, 76th Leg., R.S., ch. 1510, § 2, 1999 Tex. Gen. Laws 5232).

17 Id. at 511-12.

5 developed by the Texas courts

. 13 T he factors that the courts

considered included “(1) the location of the land with respect to

the limits of the municipality; (2) the situs of the land in

question; (3) the existence of municipal utilities and services;

(4) the use of the lot and adjacent property; and (5) the presence

of platted streets, blocks and the like.” 14

In 1989, the Texas legislature enact ed section 41.002(c). 1 5

As enacted, section 41.0 02(c) stated that “[a] homestead is

considered to be rural if, at the time the designation is made, the

property is not served by municipal utilities and fire and police

protection.” 16 I n Bradley

, we held that a homestead that is not

served by municipal utilities, fire, and police protection is rural

under section 41.002(c) as it was then written. 17 We left the

question open, however, whether s ection 41.002(c) provided the

exclusive test for making the rural/urban determination or whether18 Id. at 511-12 n.18.

19 Id.

20 Blakeman , 997 F.2d at 1091.

21 See id.

22 Id.

6 it was but a factor to consider. 18 W e indicated, nevertheless, that

the legislative history suggested that section 41.002(c) “might not

displace the tradit ional common law definition of ‘homestead’ in

all cases.” 19

W e answered that question in B lakeman

, ruling that the 1989

version o f section 41.002(c) is not “the exclusive test to

determine whether a property’s homestead status: it is but one

factor a court considers to determine whether a court considers to

determine whether the homestead is urban or rural.” 20 We thus held

that section 41.002(c) did not overturn the common law five-factor

test. 21 W e then determined on the facts in Blakeman that the

property at issue constituted a rural homestead, despite the fact

that it was served by municipal utilities or fire and police

protection. 22

In 1999, the Texas legislature substantially rewrote section

41.002(c) in its current form, as quoted above. Unlike the

prev ious version of the section, the current version provides a

detailed framework for determining when a property is “urban” and

substantially incorporates the factors included in the traditional23 Wichita County v. Hart

, 917 S. W.2d 779, 782 (Tex. 1996)

( quoting Acker v. Texas Water Comm'n

, 790 S.W.2d 299, 301 (Tex.

1990)).

7 test. Like its predecessor version, however, section 41.002(c)

does not explicitly state that it is the exclusive test for whether

a homestead is urban or rural.

At this point , the canons of statutory construction come to

bear. “A ‘statute is presumed to have been enacted by the

legislature with complete knowledge of the existing law and with

reference to it.’” 23 O ur holding in Blakeman that section 41.002(c)

was not the exclusive test for determ ining homestead status predated the Texas legislature’s amendmen t of section 41.002(c) by

seven years. Thus, at first glance, the fact that the amended

version does not state that section 41.002(c) supplies the

exclusive test suggests that the legislature did not intend to

displace Blakeman

. As we explain below, however, the Texas

legislature did incorporate part of the Blakeman test into the

current version of the statute. Under the well-known canon

inclusio unius est exclusio alterius

, this indicates that the

legislature inten t ionally excluded the other factors from the

rural/urban determination. This latter inference is more

consistent with the other evidence that section 41. 002(c) in its

current form leaves no room for the Blakeman test.

Another fundamental principle of statutory interpretation

holds that “[w]hen the legislature amends a law, it is presumed24 Buc kner Glass & Mirror, Inc. v. T.A. Pritchard Co. , 697

S.W.2d 712, 714 (Tex. App.

—— Corpus Christi 1985, no writ) ( citing

Amer. Surety Co. of New York v. Axtell Co. , 120 Tex. 166, 177-78,

36 S.W.2d 715, 719 (1931)).

25 Tex. Prop. Code § 41.002(c).

26 Id.

8 that it intends to change the law.” 24 T his canon of interpretation

s uggests that the Texas legislature, by substantially amending

section 41.002(c), intended to change the tes t for determining

which homesteads are urban and which are rural.

In the framework of these interpretive rules, we conclude that

the Blakeman approach did not survive the 1999 amendment to section

41.002(c). In amending section 41.002, the legislature created a

detailed scheme for determining which homestead s are to be

considered urban. If courts continued to graft the common law test

on to this statute, they would fundamentally rewrite it and, in

effect, would defeat the legislature’s ability to change the state

of the law by statutory amendment. Further, applying Blakeman to

section 41.002(c) as amended in 1999 is inappropriate in light of

the legislature’s deliberately including some of the B lakeman

factors in the amendment and excluding other s. The legislature

included two of the Blakeman factors in the statute: Location of

the property with respect to municipal limits and whether the land

is platted. 25 In addition, the statute refers to a third B lakeman

factor

—— the existence of municipal utilities and services

——

which was part of the predecessor statute. 26 Under the e xpressio2 7 See Rodriguez v. State

, 953 S.W.2d 342, 354 (Tex. App.

——

Austin 1997, pet. ref’d).

28 In re Canales

, 52 S.W.3d 698, 702 (Tex. 2001) ( citing Tex.

Gov’t Code § 312.005 (2000)).

29 Joseph W . McKnight, F amily Law: Husband and Wife

, 55 SMU.

L. Rev. 1035, 1053 (2002).

30 See Tex. Prop. Code § 41.002(c )(2) (a municipality must

provide three of six lis ted services in order for property to be

considered urban).

9 unius maxim, the decision to include three of the Blakeman factors

but not the others must be construed to prohibit the extrastatutory consideration of those other factors. 27

Finally, in construing any statute, a court’s primary goal is

to give effect to the l egislature’s intent. 2 8 The purpose of the

1999 amendment was to provide more certainty to lenders and to

municipal taxing authorities as to the homestead character of

land. 29 Continuing to apply the B lakeman factors in addition to the

detailed defini tion provided by the statute would frustrate this

purpose. The legislature went as far as to weigh how many services

a municipality must provide (assumi ng other predicate conditions

are met) for a homestead to be urban. 30 Courts should not preempt

this balancing by reweighing or adding factors.

Our interpretation of the statute today is co nsistent with

that of a noted scholar of Texas property law. Professor McKnight

states th at, unlike the 1989 version of section 41.002 which

defi ned some homesteads as rural without stating that all other

homesteads were necessarily urban, the 19 99 amendment states31 Joseph W. McKnight, Family Law: Husband and Wife

, supra

, at

1026.

32 Id. (footnotes omitted).

33 Perry , 267 B.R. at 766-67.

10 expressly which homesteads are urban and which are rural. 31 “Under

the statutory amendments . . . , availability of [the enumerated]

services within a municipality makes the homestead urban, but lack

of amenities allows the rural character of the homestead to be

maintained.” 32

Having concluded that the Blakeman approach can no longer be

used to distinguish between rural and urban homesteads, we cannot

endorse the Perry approach crafted by the bankruptcy court. Under

Perry ’s bifurcated approach, a bankrup tcy court could determine

that a homestead that is “urban” within the express terms of the

amended section 41.002(c) is, nevertheless, not urban based on nonstatutory common law factors. 33 T his cannot be correct. P erry may

have been designed to a ccommodate B lakeman with the amended

statute, but our dispensing with Blakeman removes the need to make

such an accommodation. The amended statute is the exclusive

vehicle for distinguishing between rural and urban homesteads.

2. Use of the Property

.

Rush Truck also argues that even if Bouchie’s property is not

urban, as defined within se ction 41.002(c), it still should not

receive the benefit of the homestead exemption because the property

is not “used for the purposes of a rural home” as required by Tex.34 109 B.R. 715 (Bankr. W.D. Tex. 1989).

35 See In re Mitchell

, 132 B.R. 553 (Bankr. W.D. Tex. 1991).

See also Painewebber, Inc. v. Murray

, 260 B.R. 815, 829 (E.D. Tex.

2001) (noting that Spencer is the only bankruptcy case that focuses

on the “means of livelihood” in determining a rural homestead).

11 Prop. Code § 41.002(b) (2000). Rush Truck does not challenge the

bankruptcy court’s finding that the Bouchie’s use the property as

their home. Rather, Rush Truck contends that the bankruptcy court

erred in not requiring Bouchie to show that the land is used for

rural purposes.

Rush Truck is correct only to the extent that the bankruptcy

court was required to determine that Bouchie intended to use their

property as a rural home. Rush Truck goes further, however,

contending that there must also be a showing that the land around

the home is used for support of the family. Rush Truck relies

primarily on the bankruptcy court’s decision in In re Spencer

, 34

which held that a property owner seeking to take advantage of the

rural homestead exemption must demonstrate that the lan d is used

for agricultural or other rural e conomic activity to support the

family. We disagree with Rush Truck and with the S pencer decision

as well. To date, S pencer remains an outlier, and its analysis of

the homestead exemption has not been adopted by other bankruptcy

j u dges in the Western District of Texas. 35 W e agree with the

reasoning in Mitchell : Under Texas homestead l aw, all that is36 Id

. at 559. S ee also Posey v. Bass

, 77 Tex. 512, 514, 14

S.W. 156 (1890) (stating that “[i]t is the place of the homestead

that gives character to it, not the business of the head of the

family. If it be in the country, it is a rural homestead”);

Franklin v. Coffee

, 18 Tex. 413 (1857) (allowing ho mestead

protection when evidence showed that property was used as home and

no evidence property was being used for economic support).

37 L&A Contracting Co. v. Southern Concrete Servs.

, 17 F.3d

106, 113 (5th Cir. 1994) (waiver for failing to cite authority).

12 required for rural homestead purposes is that the property be used

as a home. 36

3. Severance of the Property

.

Rush Truck alternatively suggests that Bouchie effectively

severed the property into two separate tracts by taking out a

mortgage on only 15 of the 84.557 acres, and that the unmortgaged

portion of the property is thus part of the homestead only if

Bouchie can show that they used it to support their home on the

fifteen acres. As Rush Truck cites no authority for this

proposition, it is not adequately briefed and is therefore waived. 37

III. CONCLUSION

The Texas legislature in 1999 enacted a detailed test for

classifying homesteads as urban or rural. It is not the place of

the courts to redefine urban and rural homesteads under the guise

of applying extraneous common law factors when the legislature has

told us which factors to apply. Additionally, for a rural

homestead to qualify for the homestead exemption, it need only be

used as a home. No more is required. The bankruptcy court was

correct in exempting Bouchi e’s homestead. For the foregoing13

r easons, we affirm the judgment of the bankruptcy court as

previously affirmed by the district court.

AFFIRMED.