Opinion ID: 40374
Heading Depth: 2
Heading Rank: 2

Heading: Bankruptcy Courts Split on Application of the Exemption Statute

Text: 15 The Louisiana Supreme Court has not interpreted the exemption statute as it relates to school busses and, therefore, it offers no guidance on the present issue. Similarly, Louisiana's intermediate courts offer little guidance as they have not interpreted the most recent version of the statute. 1 Given the federal nature of bankruptcy filings, the interpretation of La. Rev.Stat. § 13:3881 has, for the most part, taken place in federal bankruptcy courts. Those who have applied the exemption statute to school busses and similar vehicles have reached opposite results. Compare In re Romano, No. 04-19155, at 2 (Bankr.E.D.La. May 18, 2005) (holding that a bus fell within the motor vehicle exemption) with In re Lewis, No. 03-16552, at 4 (Bankr.E.D.La. Dec. 15, 2003) (holding that a truck driver's Freightliner truck fell within the tools exemption). 16 In In re Vicknair, 315 B.R. 822, 824 (Bankr.E.D.La.2004), the bankruptcy court held that a 1996 Thomas Bus fell within Louisiana's motor vehicle exemption rather than the tools exemption. 2 The court looked to Louisiana law that provides, when a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written and no further interpretation may be made. Id. at 826. The court went further to state that `courts should give effect to all parts of a statute and should not give a statute an interpretation that makes any part superfluous or meaningless, if that result can be avoided.' In re Vicknair, 315 B.R. at 826 (quoting In re Succession of Boyter, 756 So.2d 1122, 1129 (La.2000)). The court then concluded that La.Rev.Stat. § 13:3881(A)(2) as written limits the exemption for motor vehicles to $7500, and, therefore, the bus at issue could not be included under the tools exemption. Id. 17 The court in In re Vicknair provided a review of statutory changes to La.Rev. Stat. § 13:3881(A)(2). It pointed out that motor vehicles were first specified in Louisiana's exemption statute in 1979. Id. at 828. The 1979 version limited the exemption to one pickup truck and trailer actually used in [the debtor's] trade. 3 Id. A later amendment to the statute limited the exemption to a pickup truck less than three tons or a nonluxury motor vehicle. 4 Id. The final change, in 2003, limited the exemption to $7500 in equity. The court found that the legislative history showed a repeated intent to limit the exemption of motor vehicles. Id. 18 Two cases, In re Crawford and In re Black, show how courts interpreting the exemption statute have strictly applied the statutory language. In In re Crawford, 27 B.R. 24, 25 (Bankr.W.D.La.1982), the bankruptcy court examined the 1979 version of the statute, which only exempted one pickup truck and trailer. The debtor was an emergency room doctor who was subject to emergency calls on a twenty-four hour basis. Id. He was seeking an exemption on his 1978 Ford automobile. Id. The bankruptcy court found that [t]here is no doubt that a doctor's automobile is a necessary tool of his trade. Id. The court went further to state, The Louisiana legislature, however, has seen fit to amend the exemption statute so as to specifically delete the automobile from the classification of tool or instrument of trade or profession. The wording of the statute is so specific that it leaves no room whatever for interpretation by a court. Id. 19 A similar holding resulted in In re Black, 225 B.R. at 625. There, the court had to determine if a dump truck could be exempt under the 1983 version of the statute, which did not allow for the exemption of a luxury vehicle. Id. at 612. The statute incorporated the definition of luxury vehicle as defined elsewhere in Louisiana law: a wheelbase over 121 inches in length; a V8 engine with a displacement over 360 cubic inches; and a total weight over 4500 pounds. Id. The court held that the dump truck met the qualifications of a luxury vehicle, and, therefore, it did not fall within the motor vehicle exemption. Id. at 625. 20 Courts that have exempted vehicles under the tools provision have based their decisions on appeals to the broader purpose of the statute. See, e.g., In re Lewis, No. 03-16552, at 5 (The Debtor is a truck driver; the Freightliner is necessary for him to earn a living.). The statutory language of La.Rev.Stat. § 13:3881(A)(2)(a) does not define tools, but Louisiana courts have crafted a test for determining what qualifies. The test is whether the tool or instrument is necessary for the exercise of the profession, that is whether or not the debtor will be prevented from exercising his trade or profession if he is deprived of the tool or instrument. Sun County Distribs. v. Starkey, 637 So.2d 739, 740 (La.Ct.App.1994). While a school bus might fit this functionality test, this approach ignores the plain meaning of the statute. The language clearly establishes two categories: tools and motor vehicles. The functionality test might adequately judge the merit of other objects, but it fails to replace the judgment of the legislators who clearly desired a different rule for motor vehicles. 5 21