Source: https://law.justia.com/cases/federal/appellate-courts/F2/955/957/448066/
Timestamp: 2019-07-19 19:43:44
Document Index: 743769546

Matched Legal Cases: ['§ 522', '§ 522', '§ 522', 'art.8', '§ 522', '§ 522', '§ 522']

In Re Victor D. Mcgreevy; Darlene A. Mcgreevy, Debtors.darlene A. Mcgreevy, Plaintiff-appellant, v. Itt Financial Services, Defendant-appellee, 955 F.2d 957 (4th Cir. 1992) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fourth Circuit › 1992 › In Re Victor D. Mcgreevy; Darlene A. Mcgreevy, Debtors.darlene A. Mcgreevy, Plaintiff-appellant, v....
In Re Victor D. Mcgreevy; Darlene A. Mcgreevy, Debtors.darlene A. Mcgreevy, Plaintiff-appellant, v. Itt Financial Services, Defendant-appellee, 955 F.2d 957 (4th Cir. 1992)
US Court of Appeals for the Fourth Circuit - 955 F.2d 957 (4th Cir. 1992)
Argued Dec. 4, 1991. Decided Feb. 5, 1992
Appellant Darlene A. McGreevy appeals a decision by the United States District Court for the District of Maryland affirming a bankruptcy court's denial of her motion to avoid appellee ITT Financial Services' lien on a shotgun and a rifle. The sole issue presented on appeal is whether Mrs. McGreevy's shotgun and rifle constitute "household goods" within the meaning of 11 U.S.C. § 522(f) (2) (A). We agree with the district court and the bankruptcy court that these firearms are not household goods within the meaning of section 522(f) (2) (A), and therefore affirm.
ITT Financial Services acquired a nonpossessory, nonpurchase-money security interest in certain items of Mrs. McGreevy's personal property, including one shotgun and one rifle, as security for a loan extended to Mrs. McGreevy. Mrs. McGreevy and her husband subsequently petitioned for bankruptcy under Chapter 7 of the Bankruptcy Code. During the pendency of the bankruptcy proceedings, Mrs. McGreevy filed a motion to avoid the lien against the shotgun and the rifle1 pursuant to 11 U.S.C. § 522(f) (2) (A).2 The bankruptcy court denied the motion principally on the authority of In re Barnes, 117 B.R. 842 (Bankr.D. Md. 1990), see infra note 6, holding that the rifle and shotgun were not "household goods" within the meaning of section 522(f) (2) (A). App. at 51-55. Mrs. McGreevy appealed the bankruptcy court's decision to the district court. The district court affirmed on the same ground that firearms are not "household goods" under section 522(f) (2) (A). McGreevy v. ITT Fin. Servs., 130 B.R. 200 (D. Md. 1991). Mrs. McGreevy thereafter appealed to this court.
Section 522(f) allows debtors to avoid liens on "household goods" that are "held primarily for the personal, family, or household use of the debtor or a dependent of the debtor."3 The issue presented in this case--an issue of first impression in this Circuit--is whether Mrs. McGreevy's shotgun and rifle are "household goods" within the meaning of 11 U.S.C. § 522(f) (2) (A).4
Essentially two different definitions of "household goods" have achieved prominence in the bankruptcy courts since the adoption of the Bankruptcy Code in 1978. For the reasons explained below, we reject both of these definitions in favor of a definition that we are convinced is more faithful to congressional intent as evidenced in the language of section 522(f) (2) (A).
The "necessity" requirement is derived not from the language of the statute itself, but from a passage in the House Report to the Bankruptcy Reform Act of 1978 which emphasizes that the purpose of the Bankruptcy Code is to ensure debtors a fresh start after bankruptcy. See H.R.Rep. No. 595, 95th Cong., 2d Sess. 126, reprinted in 1978 U.S.Code Cong. & Admin.News 5963, 6087 (" [The bill] adopts the position that there is a Federal interest in seeing that a debtor that goes through bankruptcy comes out with adequate possessions to begin his fresh start."). The courts that have imposed a "necessity" requirement have extrapolated from this statement of general purpose the requirement that household goods must be necessary to a fresh start to be eligible for lien avoidance. The courts that have adopted this definition have uniformly held that firearms are not "household goods" within the meaning of section 522(f) (2) (A).7
We reject this definition of "household goods" because it is without foundation in the statute. Section 522(f) (2) (A) does not limit those household goods that are eligible for lien avoidance to only those goods that are necessary to a debtor's fresh start. It allows debtors to avoid liens on all exempt household goods that are held primarily for personal, family, or household use. Congress, in effect, decided that all such goods are important to a debtor's fresh start following discharge from bankruptcy, and it effected that decision by the inclusion--without limitation--of "household goods" in the list of personal property eligible for lien avoidance.
The second definition adopted in the bankruptcy courts is more defensible as a matter of statutory construction than the first definition, but it is still, we believe, inadequate. Under the second definition, "household goods" include all goods typically found and used in or around the home, whether or not they would be considered strictly necessary to a debtor's fresh start.8 The two courts that have applied this definition in determining whether firearms are "household goods" have come to different conclusions. Compare In re Barrick, 95 B.R. 310, 313 (Bankr.M.D. Pa. 1989) (gun is not household good because it is "not personal property normally used by the debtor in or about the residence"; stereo and VCR are household goods), with In re Barley, 74 B.R. 450, 452 (Bankr.N.D. Ind. 1987) (rifle is household good because it "could be used in or about the debtors' residence"; chain saw is also household good).
We therefore hold that "household goods" under section 522(f) (2) (A) are those items of personal property that are typically found in or around the home and used by the debtor or his dependents to support and facilitate day-to-day living within the home, including maintenance and upkeep of the home itself.
The McGreevys live in a townhouse that adjoins other townhouses in a complex of twenty-five to thirty townhouses. App. at 24, 27. Mrs. McGreevy testified that her husband uses the rifle primarily to hunt deer in Maryland, West Virginia, and Pennsylvania, id. at 21, and occasionally uses both firearms for target practice at her uncle's house or in Mount Airy, id. at 25-26. Mrs. McGreevy noted only as an afterthought that the shotgun and rifle are also available for protection of their home and persons. Id. at 23. It is evident from this testimony that the McGreevys' firearms are usually, if not exclusively, used away from the McGreevy household and its curtilage and that they are not used by the McGreevys to support or facilitate their day-to-day household living. Accordingly, they do not constitute "household goods" under 11 U.S.C. § 522(f) (2) (A), as we define that term today.
We hold that the firearms at issue in this case are not "household goods" within the meaning of section 522(f) (2) (A). The judgment of the district court is therefore affirmed.
11 U.S.C. § 522(f) (2) (A) (emphasis added).
This definition has been adopted in both firearm lien avoidance contexts, see infra note 7, and non-firearm lien avoidance contexts, see, e.g., In re Vale, 110 B.R. 396, 406 (Bankr.N.D. Ind. 1989) (power drill and mower are household goods; movie camera, projector, hedge trimmer, and boat motor are not household goods); In re McTearnen, 54 B.R. 764, 765 (Bankr.D. Colo. 1985) (camping equipment, fishing rods, tools, and bicycle are not household goods); In re Ruppe, 3 B.R. 60, 61 (Bankr.D. Colo. 1980) (camera and projectors are not household goods)
Some courts require that the items also be of limited resale value in order to be considered "household goods." See, e.g., In re McCain, 114 B.R. 652, 654 (Bankr.E.D. Mo. 1990) (two firearms are not household goods, but camera is); In re Oglesby, 98 B.R. 960, 962 (Bankr.E.D. Mo. 1989) (rifles and pistol are not household goods); In re Reid, 97 B.R. 472, 478 (Bankr.N.D. Ind. 1988) (camera, aquarium, bicycle, lawnmower, grill, calculator, gym weight set, one radio and tape player, coin collection, and one fishing rod and reel per person are household goods; camping equipment, excess radios, and excess fishing equipment are not household goods); In re Gray, 87 B.R. 591, 592-93 (Bankr.W.D. Mo. 1988) (guns and swimming pool are not household goods; two televisions, VCR, computer, stereo, CB radio base, tools, lawn equipment, luggage, barbecue grill, hobby equipment, phone, swing set, auto repair equipment, and sporting knives are household goods); In re Psick, 61 B.R. 308, 313 (Bankr.D. Minn. 1985) (car, dirt-bike, tractor-loader, and tiller are not household goods); In re Wetzel, 46 B.R. 254, 255 (Bankr.W.D. Va. 1984) (firearms are not household goods).
The Eighth Circuit, in In re Thompson, 750 F.2d 628, 631 (8th Cir. 1984) essentially adopted both requirements of necessity and limited resale value. The Tenth Circuit has rejected the Thompson requirements as "contrary to [the] plain words" of section 522(f). In re Liming, 797 F.2d 895, 901 & n. 6 (10th Cir. 1986).
In Barnes, the Bankruptcy Court for the District of Maryland held that a .22 pistol, a 30-06 rifle, two shotguns, and a .22 rifle were not household goods under section 522(f) (2) (A). Barnes, 117 B.R. at 847. The court defined "household goods" to include only those items of personal property that are reasonably necessary for day-to-day residential living and necessary to a fresh start after bankruptcy. Id. at 847-48. It reasoned that firearms "are sporting goods normally used outside and away from the home" and as such are necessary neither to day-to-day living nor to a debtor's fresh start after bankruptcy. Id
See, e.g., Barnes, 117 B.R. at 847-48; In re Thornton, 91 B.R. 913, 916 (Bankr.C.D. Cal. 1988); In re Greenlee, 61 B.R. 257, 258 (Bankr.D. Colo. 1986); In re Noggle, 30 B.R. 303, 305-06 (Bankr.E.D. Mich. 1983)
See, e.g., In re Caruthers, 87 B.R. 723, 728 (Bankr.N.D. Ga. 1988) (television and stereo system are household goods); In re Miller, 65 B.R. 263, 265-66 (Bankr.W.D. Mo. 1986) (television, stereo, lawnmower, and tools are household goods; bicycle and camera are not household goods); In re Vaughn, 64 B.R. 213, 215 (Bankr.S.D. Ind. 1986) (stereo and computer are household goods); In re Coleman, 5 B.R. 76, 79 (Bankr.M.D. Tenn. 1980) (stereo system is a household good)
Some courts have expanded this proximity definition to include "personal property that enables the debtor and his dependents to live in a usual convenient and comfortable manner or that has entertainment or recreational value ... even though it is used away from the residence or its curtilage." In re Bandy, 62 B.R. 437, 439 (Bankr.E.D. Cal. 1986) (emphasis added) (televisions, VCR, computer, answering machine, video game, stereo system, golf clubs, exercise equipment, tools, and lawnmower are household goods). Those courts that have considered whether firearms are "household goods" under this expanded definition not surprisingly have concluded that they are household goods. See In re Champion, 94 B.R. 709, 711-12 (Bankr.S.D. Ala. 1988) (firearms and camping equipment are household goods); In re Courtney, 89 B.R. 15, 16 (Bankr.W.D. Tex. 1988) (firearms, bow and arrows, cameras, golf clubs, and bicycle are household goods); In re Ray, 83 B.R. 670, 673 (Bankr.E.D. Mo. 1988) (guns, lawn equipment, camping equipment, bicycles, and exercise equipment are household goods); In re Bowen, 82 B.R. 102, 104-05 (Bankr.E.D. Mo. 1988) (guns, VCR, fishing equipment, golf clubs, tent, cameras, tools, luggage, penny collection, and barbecue grill are household goods).
See, e.g., Vale, 110 B.R. at 406 ("If the legislature intended such a broad and sweeping application of § 522(f) (2) (A) it could have merely permitted lien avoidance in 'all goods found in and around the Debtor's household,' or like language, but did not."); Oswald v. ITT Financial Services, 85 B.R. 541, 543 (W.D. Mo. 1986) ("Items are not 'household goods' merely because they are found in many, or most homes."); Noggle, 30 B.R. at 305 ("If Congress had intended to permit a debtor to avoid a lien on all items kept in a household, there would have been no need to separately list [the other categories of property].")
The vast majority of bankruptcy courts that have addressed the issue have held, as the district court did here, that firearms can never constitute household goods. See, e.g., Barnes, 117 B.R. at 847-48; Oglesby, 98 B.R. at 962; Barrick, 95 B.R. at 313; Gray, 87 B.R. at 593; In re Weaver, 78 B.R. 135, 139 (Bankr.N.D. Tex. 1987); Oswald, 85 B.R. at 543; Wetzel, 46 B.R. at 255; Noggle, 30 B.R. at 306; In re McPherson, 18 B.R. 240, 241 (Bankr.D.N.M. 1982); In re Cole, 15 B.R. 322, 325 (Bankr.W.D. Mo. 1981). Contra Champion, 94 B.R. at 712; Courtney, 89 B.R. at 16; Ray, 83 B.R. at 673; Bowen, 82 B.R. at 105; Barley, 74 B.R. at 452
It appears from the fact-specific inquiry conducted by some courts that they would be receptive to claims that particular firearms can be household goods under section 522(f) (2) (A). See, e.g., McCain, 114 B.R. at 653-54; Thornton, 91 B.R. at 916; Greenlee, 61 B.R. at 258. Contra In re Gonshorowski, 110 B.R. 51, 53 (Bankr.N.D. Ala. 1990)