Court Opinion

ID: 2967558
Source: CourtListenerOpinion
Date Created: 2015-09-22 02:52:03.041398+00
Date Added: 2024-06-11T13:14:05.145736
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

In Re: CATHERINE P. MOREHEAD;           
RAYMOND A. MOREHEAD,
                          Debtors.

MARTIN P. SHEEHAN, Trustee for the
Bankruptcy Estate of Catherine P.
Morehead and Raymond Morehead,
                  Plaintiff-Appellee,
                                           No. 01-1172
                 v.
RAYMOND A. MOREHEAD,
            Defendant-Appellant,
                and
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY,
                        Defendant
                                        
2                         IN RE MOREHEAD

In Re: CATHERINE P. MOREHEAD;           
RAYMOND A. MOREHEAD,
                          Debtors.

MARTIN P. SHEEHAN, Trustee for the
Bankruptcy Estate of Catherine P.
Morehead and Raymond Morehead,                  No. 01-1173
                  Plaintiff-Appellee,
                 v.
RAYMOND A. MOREHEAD; CATHERINE
P. MOREHEAD,
             Defendants-Appellants.
                                        
           Appeals from the United States District Court
     for the Northern District of West Virginia, at Clarksburg.
              Irene M. Keeley, Chief District Judge.
      (CA-99-19-1, CA-99-20-1, BK-97-11497, AP-98-1031)

                      Argued: October 31, 2001

                      Decided: March 5, 2002

      Before MICHAEL, MOTZ, and KING, Circuit Judges.

Affirmed by published opinion. Judge Michael wrote the opinion, in
which Judge Motz and Judge King joined.

                            COUNSEL

ARGUED: Thomas Herbert Fluharty, Clarksburg, West Virginia, for
Appellants. Martin Patrick Sheehan, SHEEHAN & NUGENT,
P.L.L.C., Wheeling, West Virginia, for Appellee.
                          IN RE MOREHEAD                            3
                             OPINION

MICHAEL, Circuit Judge:

   The question in this case is whether a Chapter 7 debtor’s right to
receive payments under a privately purchased disability insurance
policy is fully exempt from the bankruptcy estate under W. Va. Code
§ 38-10-4(j)(3) or partially exempt "to the extent reasonably neces-
sary for the support" of the debtor and his dependents under Code
§ 38-10-4(j)(5). Because we cannot assume that payments under this
type of policy will be limited to amounts reasonably necessary for
support, we hold that the payments are partially exempt under W. Va.
Code § 38-10-4(j)(5). We therefore affirm the district court’s order
directing the bankruptcy court to determine the debtor’s "living
expenses and expenditures so as to permit exemption of only that por-
tion of the payments found reasonably necessary to provide support
for" the debtor and his dependents. Sheehan v. Lincoln Nat’l Life, 257
B.R. 449, 457 (N.D. W.Va. 2001).

                                  I.

   On May 9, 1997, Dr. Raymond A. Morehead had a very bad day.
Early that morning he received a call from Lind-Waldock & Com-
pany, a brokerage firm that he used for margin trading in the futures
markets. Lind-Waldock informed Dr. Morehead that the market had
moved against his open positions and that the firm was making an
$850,000 margin call. When Dr. Morehead was unable to meet the
margin call, Lind-Waldock liquidated his positions and informed him
that he owed the firm $321,038. See Lind-Waldock & Co. v. More-
head, 1 Fed. Appx. 104, 105-06 (4th Cir. 2001) (per curiam) (describ-
ing Dr. Morehead’s dealings with Lind-Waldock in more detail).
Later that same day Dr. Morehead was fired from his position as a
surgeon at the Veterans’ Administration Hospital in Clarksburg, West
Virginia. Shortly after these events Dr. Morehead began treatment for
drug dependency. His condition proved to be disabling.

   Dr. Morehead and his wife, Catherine P. Morehead, filed a volun-
tary Chapter 7 petition in the Bankruptcy Court for the Northern Dis-
trict of West Virginia on June 4, 1997. The bankruptcy trustee, Martin
P. Sheehan, filed a Report of No Distribution on July 16, 1997, and
4                           IN RE MOREHEAD
the case was closed. The trustee discovered a few months later that
Dr. Morehead was receiving payments of $10,000 per month under
a disability income insurance policy he had purchased from Lincoln
National Life Insurance Company in 1986. The Moreheads had not
disclosed this policy in their bankruptcy petition. Acting on the trust-
ee’s motion, the bankruptcy court reopened the Moreheads’ case on
February 18, 1998. The trustee promptly filed an adversary proceed-
ing against Lincoln National and Dr. Morehead, seeking an order that
would require the defendants to turn over to the bankruptcy estate all
past and future payments made under the policy. The Moreheads then
amended schedules B and C to their bankruptcy petition. They listed
the disability policy as an asset but claimed that payments under the
policy were fully exempt from the bankruptcy estate under W. Va.
Code § 38-10-4(j)(3), which allows debtors to exempt their right to
receive "a disability, illness or unemployment benefit." The trustee
objected to the amendment on two grounds. First, he argued that the
amendment should be disallowed because the Moreheads’ failure to
disclose the disability policy in their initial bankruptcy filing was a
fraudulent effort to conceal an asset. Second, the trustee argued that
even if the amendment was allowed, the disability payments did not
qualify as fully exempt under § 4(j)(3); rather, they were partially
exempt "to the extent reasonably necessary for the support of the
debtor and any dependent of the debtor" under § 4(j)(5).

   In an opinion and order dated December 8, 1998, the bankruptcy
court denied the trustee’s objection to the Moreheads’ amended
schedules, which included the claim of exemption for the disability
policy. The court found that the Moreheads had not fraudulently con-
cealed the policy and concluded that payments under the policy were
fully exempt from the bankruptcy estate under W. Va. Code § 38-10-
4(j)(3). The bankruptcy court then dismissed as moot the trustee’s
adversary proceeding against Lincoln National and Dr. Morehead.
The trustee appealed to the United States District Court for the North-
ern District of West Virginia. The district court affirmed the bank-
ruptcy court’s finding that the Moreheads did not fraudulently conceal
the disability policy; however, the district court reversed the bank-
ruptcy court’s decision that the disability payments were fully exempt
from the bankruptcy estate. Sheehan, 257 B.R. at 457. Reasoning that
full exemption of the disability payments would be inequitable and
contrary to bankruptcy policy, the district court held that the disability
                           IN RE MOREHEAD                              5
payments should be partially exempted under W. Va. Code § 38-10-
4(j)(5). The district court’s order remanded the case to the bankruptcy
court for a determination of the extent to which the disability pay-
ments were (and are) reasonably necessary for the Moreheads’ sup-
port. The Moreheads now appeal the district court’s decision that
payments under the Lincoln National policy are only partially exempt
from the bankruptcy estate. This is a decision on a legal issue, and our
review is de novo. In re Meyer, 244 F.3d 352, 355 (4th Cir. 2001).

                                   II.

   When a debtor files for bankruptcy protection, an estate is created
that includes "all legal or equitable interests of the debtor in property
as of the commencement of the case." 11 U.S.C. § 541(a)(1). Federal
bankruptcy law allows a debtor to exempt some of his property —
mainly basic necessities — from the bankruptcy estate. The exemp-
tions can afford the debtor some economic and social stability, which
is important to the fresh start guaranteed by bankruptcy. See Williams
v. U.S. Fid. & Guar. Co., 236 U.S. 549, 554-55 (1915). West Virginia
has exercised its option under 11 U.S.C. § 522(b) to enact its own
exemption scheme. As a result, debtors domiciled in West Virginia,
such as the Moreheads, claim exemptions under W. Va. Code § 38-
10-4 rather than under the federal bankruptcy code, 11 U.S.C.
§ 522(d). See generally Julia A. Chincheck, The Effects of West Vir-
ginia’s Bankruptcy Exemption Statute on Resident Debtors, 86 W.
Va. L. Rev. 227 (1983). At the time the Moreheads filed their bank-
ruptcy petition, the relevant exemption provision in the West Virginia
Code provided that:

      Any person who files a petition under the federal bank-
    ruptcy law may exempt from property of the estate in a
    bankruptcy proceeding the following property:

    ...

          (j) The debtor’s right to receive:

            (1) A social security benefit, unemployment
          compensation or a local public assistance benefit;
6                          IN RE MOREHEAD
            (2) A veterans’ benefit;

            (3) A disability, illness or unemployment ben-
         efit;

            (4) Alimony, support or separate maintenance,
         to the extent reasonably necessary for the support
         of the debtor and any dependent of the debtor;

            (5) payment under a stock bonus, pension,
         profit sharing, annuity or similar plan or contract
         on account of illness, disability, death, age, or
         length of service, to the extent reasonably neces-
         sary for the support of the debtor and any depen-
         dent of the debtor . . . .

W. Va. Code § 38-10-4(j) (Michie 1997) (emphasis added).* The
benefits listed in §§ 4(j)(1)-(3) are fully exempt from the bankruptcy
estate without regard to their amount. In contrast, the payments listed
in §§ 4(j)(4)-(5) are "partially exempt" in the sense that debtors are
entitled to exempt these payments only to the extent that the payments
are reasonably necessary for the support of the debtor and his depen-
dents. A debtor may, of course, be entitled to exempt the full amount
of a payment classified under §§ 4(j)(4) or 4(j)(5) if the payment does
not exceed an amount reasonably necessary for support.

   Because W. Va. Code § 38-10-4(j) is identical to 11 U.S.C.
§ 522(d)(10), we may look to case law interpreting the federal exemp-
tions (and similar state exemptions) for help in interpreting the West
Virginia statute. Our task is to decide whether payments made under
a privately purchased disability insurance policy should be classified
as fully exempt "disability . . . benefit[s]" under W. Va. Code § 38-
10-4(j)(3) or partially exempt "payment[s] under a . . . contract on
account of . . . disability" under § 4(j)(5). We have not uncovered any
case law discussing the relationship between the two disability
exemptions in the West Virginia statute, nor have we found case law

  *Section 38-10-4(j)(5) was amended in 1999 to add an exemption for
"funds on deposit in an individual retirement account (IRA), including a
simplified employee pension (SEP) regardless of the amount of funds."
                            IN RE MOREHEAD                               7
discussing the analogous provisions in the federal bankruptcy code.
Only two courts, both outside of our circuit, have discussed the treat-
ment of disability payments under state exemption schemes modeled
on the federal code. See In re Bari, 43 B.R. 253, 255 (Bankr. D.
Minn. 1984) (classifying disability payments from an employer as
partially exempt under Minnesota exemption modeled on 11 U.S.C.
§ 522(d)(10)(E)); Sanders v. Sanders, 711 A.2d 124, 128 (Me. 1998)
(classifying payments under disability insurance policy as partially
exempt under Maine exemption modeled on 11 U.S.C.
§ 522(d)(10)(E)). We thus have a case of first impression in this cir-
cuit.

   Both sides in this case believe that § 4(j) classifies types of disabil-
ity benefits or payments as fully or partially exempt on the basis of
their source, but each side of course argues for a different result. The
respective arguments are based on the fact that the payments come
from a privately purchased insurance policy rather than from the gov-
ernment or an employer. We are not convinced by the argument
advanced by either side. The trustee claims that the use of the word
"benefit" in § 4(j)(3) establishes that the "disability, illness or unem-
ployment" benefits referred to there are government benefits. He
therefore argues that Dr. Morehead’s disability payments must fall
under § 4(j)(5) because they do not come from the government. The
most obvious problem with this argument is that the word "benefit"
is not restricted to government benefits. Black’s Law Dictionary
defines "benefit" in part as "[f]inancial assistance that is received
from an employer, insurance, or a public program (such as social
security) in time of sickness, disability, or unemployment." Black’s
Law Dictionary 151 (7th ed. 1999). Indeed, the Lincoln National pol-
icy itself describes the payments made to Dr. Morehead as his "total
disability monthly benefit." The trustee’s interpretation of § 4(j)(3) is
also inconsistent with a leading bankruptcy treatise, which describes
the analogous federal exemption, 11 U.S.C. § 522(d)(10)(C), as
exempting "[t]emporary contractual benefits, most of which will arise
from the debtor’s employment." 2 William L. Norton, Jr., Norton
Bankruptcy Law & Practice 2d § 46:17 (Supp. 1999). Consequently,
the fact that Dr. Morehead’s disability payments come from an insur-
ance company rather than from the government does not mean that
they must be classified under § 4(j)(5) rather than § 4(j)(3).
8                          IN RE MOREHEAD
   The Moreheads, arguing for the opposite result, claim that the
§ 4(j)(5) exemption covers only rights to payment that arise from the
debtor’s employment. Because Dr. Morehead’s insurance contract
with Lincoln National was not obtained through his employer, the
Moreheads contend that the disability payments received by Dr.
Morehead must be exempt under the other provision, § 4(j)(3). There
is no case law interpreting § 4(j)(5), but courts have not read the anal-
ogous federal provision, 11 U.S.C. § 522(d)(10)(E), to be limited
solely to plans or contracts provided by or through the debtor’s
employer. For example, many courts have held that individual retire-
ment accounts (IRAs) fall within the scope of 11 U.S.C.
§ 522(d)(10)(E). See, e.g., In re Rawlinson, 209 B.R. 501, 508
(B.A.P. 9th Cir. 1997); In re Link, 172 B.R. 707, 711 (Bankr. D.
Mass. 1994); In re Cilek, 115 B.R. 974, 1000 (Bankr. W.D. Wis.
1990). The Cilek court explicitly rejected the argument that only a
plan or contract established by the debtor’s employer is exempt under
§ 522(d)(10)(E). Cilek, 115 B.R. at 987 n.14. Although some courts
have ruled that IRAs are not exempt under § 522(d)(10)(E), see, e.g.,
In re Moss, 143 B.R. 465, 467 (Bankr. W.D. Mich. 1992), no court
has explained this result by reasoning that IRAs are not provided by
the debtor’s employer. Cf. Cilek, 115 B.R. at 978 (listing various rea-
sons courts have given for concluding that IRAs are not exempt under
§ 522(d)(10)(E)). As a result, we reject the Moreheads’ argument that
Dr. Morehead’s disability payments must be fully exempt under
§ 4(j)(3) simply because he did not obtain the right to those payments
from or through his employer.

   The failure of both of these arguments means that we cannot
always look to the source of the payments to tell the difference
between the "disability benefits" fully exempted by § 4(j)(3) and the
"payments under a contract on account of disability" partially
exempted by § 4(j)(5). A leading bankruptcy treatise suggests an
alternative approach: distinguish between the two disability exemp-
tions on the basis of the duration of the payments rather than their
source. The treatise states that 11 U.S.C. § 522(d)(10)(C), the federal
analog of West Virginia Code § 38-10-4(j)(3), covers "[t]emporary
contractual benefits," whereas 11 U.S.C. § 522(d)(10)(E), the federal
analog of § 38-10-4(j)(5), covers "permanent employment-related
benefits." 2 Norton, supra, § 46:17. One state court (in Maine) has
recited this distinction in classifying certain disability insurance pay-
                           IN RE MOREHEAD                             9
ments as partially exempt under a state provision modeled on 11
U.S.C. § 522(d)(10)(E). See Sanders, 711 A.2d at 128. Whatever the
merits of this approach as a general matter, we do not find it helpful
here because the payments provided by disability insurance policies
like Dr. Morehead’s are not readily classified as either permanent or
temporary. Some benefits, such as retirement benefits that will con-
tinue until death, are clearly permanent. And benefits with a short,
fixed time limitation (for example, unemployment benefits running
for ninety days) are clearly temporary. Disability insurance payments
fall somewhere in the middle. For example, Dr. Morehead’s payments
could continue until he reaches age 65 (another twelve-and-one-half
years) or they could stop tomorrow if his disability ends. Indeed, the
record does not indicate whether Dr. Morehead is still disabled or
how long he will remain disabled. This kind of uncertainty about the
length of a disability is not uncommon, and under such circumstances
courts have no principled way to decide how permanent or temporary
the disability payments will be. We therefore conclude that the dis-
tinction between temporary and permanent benefits is not helpful in
deciding whether the § 4(j)(3) or the § 4(j)(5) exemption applies in
this case.

   The discussion so far suggests that payments under privately pur-
chased disability insurance policies do not fit neatly within either the
§ 4(j)(3) or the § 4(j)(5) exemption. Perhaps policies like Dr. More-
head’s simply escaped the attention of the West Virginia legislature
and Congress when they drafted their lists of bankruptcy exemptions.
Cf. In re Thomas, 1990 WL 62438, at *3 n.2 (Bankr. D. Minn. 1990)
(suggesting that "Congress probably did not consider which, if any,
exemption should apply to [workers’ compensation] awards"). The
West Virginia legislature simply adopted the federal exemptions ver-
batim when it passed § 38-10-4(j), and there is no legislative history
on that statute. The legislative history of the analogous federal
exemption, 11 U.S.C. § 522(d)(10), is not helpful. That history
explains only that § 522(d)(10) "exempts certain benefits that are akin
to future earnings of the debtor." H.R. Rep. No. 95-595, at 362
(1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6318. Because all pay-
ments on account of disability are meant to replace future earnings,
this history sheds no light on Congress’s decision to allow full
exemption of some disability payments while allowing only partial
exemption of others. In the absence of any indication of specific legis-
10                         IN RE MOREHEAD
lative intent about the treatment of payments under privately pur-
chased disability insurance contracts, we will explore whether full or
partial exemption of these payments is more consistent with the pol-
icy behind the bankruptcy exemptions.

  Congress succinctly reiterated this policy when it enacted the
Bankruptcy Reform Act of 1978:

     The historical purpose of . . . exemption laws has been to
     protect a debtor from his creditors, to provide him with the
     basic necessities of life so that even if his creditors levy on
     all of his nonexempt property, the debtor will not be left
     destitute and a public charge. [This] purpose has not
     changed. . . .

H.R. Rep. No. 95-595, at 126 (1977), reprinted in 1978 U.S.C.C.A.N.
at 6087. In short, the bankruptcy exemptions are designed to help the
debtor make a "fresh start." See Wright v. Union Cent. Life Ins. Co.,
304 U.S. 502, 514 (1938) ("The development of bankruptcy legisla-
tion has been towards relieving the honest debtor from oppressive
indebtedness and permitting him to start afresh."). W. Va. Code § 38-
10-4(j) and 11 U.S.C. § 522(d)(10) give effect to this policy by insur-
ing that debtors who rely on non-wage income are not deprived of
life’s basic necessities.

   The most notable distinction between the various exemptions listed
in W. Va. Code § 38-10-4(j) is that between full and partial exemp-
tions. Sections 4(j)(1)-(3) list benefits that are fully exempt, while
§§ 4(j)(4) and 4(j)(5) list benefits or payments that are exempt only
to the extent reasonably necessary for the support of the debtor and
his dependents. We can imagine only two possible reasons why the
West Virginia legislature (or Congress) would make this distinction.
One is that the legislature might have believed that certain types of
payments (those listed in §§ 4(j)(1)-(3)) ought to be available to debt-
ors even when the payments exceed the amount reasonably necessary
for support. But this explanation is totally inconsistent with the bank-
ruptcy policy of allowing debtors a chance to start over, exempting
only the basic means to support that chance. This policy suggests that
debtors are never entitled to exempt more than is reasonably neces-
sary for support. The more logical reason for the legislature’s decision
                           IN RE MOREHEAD                             11
to allow full rather than partial exemption for certain types of benefits
is this: the legislature believed that the fully exempt benefits (for
example, social security, unemployment compensation, and veterans’
benefits) listed in §§ 4(j)(1)-(3) could be assumed to be no more than
an amount reasonably necessary for the support of the debtor and his
dependents. See In re Dale, 252 B.R. 430, 436 (Bankr. W.D. Mich.
2000) (observing that in enacting the analogous federal exemptions in
11 U.S.C. § 522(d)(10)(A)-(C), "Congress simply assumed that the
benefit[s] would be necessary [for the support of the debtor] without
further examination"). This explanation for the structure of the statute
shows why the legislature specifically classified the social security,
unemployment compensation, public assistance, and veterans’ bene-
fits listed in §§ 4(j)(1)-(2) as fully exempt. No one lives lavishly on
these benefits. By the same token, workers’ compensation benefits,
which are not listed in the statute, should also be classified as fully
exempt under § 4(j)(3), for these benefits can be assumed to be "not
much higher than is necessary to keep the worker from destitution."
In re Cain, 91 B.R. 182, 183 (Bankr. N.D. Ga. 1988) (internal quota-
tion marks and citation omitted) (holding that workers’ compensation
benefits are fully exempt under 11 U.S.C. § 522(d)(10)(C), the federal
analog of W. Va. Code § 38-10-4(j)(3)). Accord In re Evans, 29 B.R.
336, 338-39 (Bankr. D. N.J. 1983); In re LaBelle, 18 B.R. 169, 171
(Bankr. D. Me. 1982).

    In contrast to the full exemptions in §§ 4(j)(1)-(3), the exemptions
in §§ 4(j)(4)-(5) are limited because alimony payments and payments
under plans and contracts of the sort listed in § 4(j)(5) have the poten-
tial in some cases to exceed greatly what is reasonably necessary for
support of the debtor and his dependents. Though most alimony pay-
ments may be necessary for support, they can be "extravagant (wit-
ness the divorces of the super-rich) or be supplemented by earnings
if the bankrupt debtor also is employed." Dale, 252 B.R. at 436. Simi-
larly, payments from stock bonus plans, profit sharing plans and the
like are not inherently limited to amounts reasonably necessary for
support of the debtor and his dependents. See, e.g., In re Woodford,
73 B.R. 675, 681-82 (Bankr. N.D. N.Y. 1987) (holding that only 30
percent of the money in a bankrupt lawyer’s retirement plan was rea-
sonably necessary for his support). We believe, then, that the West
Virginia legislature classified various types of benefits and payments
as fully or partially exempt in § 38-10-4(j) by making assumptions
12                         IN RE MOREHEAD
about whether these benefits and payments would be limited to
amounts reasonably necessary for the support of the debtor and his
dependents. Using this approach, the legislature created two catego-
ries of disability-related payments: "disability benefits" fully
exempted by § 4(j)(3) and "payments under a contract on account of
disability" partially exempted by § 4(j)(5). The legislature created the
two categories because it reasoned that some, but not all, disability
payments could be assumed to be limited to amounts reasonably nec-
essary for support. Accordingly, the right to receive payments under
a privately purchased disability insurance contract is fully exempt
from the bankruptcy estate under § 4(j)(3) only if payments of this
type can be assumed to be limited to amounts reasonably necessary
for the support of the debtor and his dependents.

   The facts of this case illustrate why we cannot assume that pay-
ments under a privately purchased disability insurance contract will
be limited to amounts reasonably necessary for support. Dr. More-
head’s policy originally paid benefits of $10,000 per month, with pay-
ments increasing later to $13,000 per month under the policy’s cost-
of-living rider. These amounts might be reasonably necessary to
maintain the lifestyle to which the Moreheads had been accustomed,
but the standard of reasonable necessity in bankruptcy law is a more
modest one. In the leading case of In re Taff, 10 B.R. 101 (Bankr. D.
Conn. 1981), the court explained that the "appropriate amount to be
set aside for the debtor ought to be sufficient to sustain basic needs,
not related to his former status in society or the lifestyle to which he
is accustomed." Id. at 107. In short, the fresh start guaranteed by
bankruptcy, and supported by the exemption scheme, does not entitle
a debtor to maintain the lifestyle to which he was accustomed in bet-
ter times. This point is confirmed by other West Virginia exemptions.
Cf. W. Va. Code § 38-10-4(a) (limiting exemption for interest in real
or personal property used as a residence to $15,000); § 38-10-4(b)
(limiting exemption for interest in motor vehicles to interest in one
vehicle up to the value of $2,400). Because the payments under Dr.
Morehead’s disability policy appear to be considerably more than
what is sufficient for basic needs, the district court was correct to
order a remand for the bankruptcy court to determine the extent to
which the disability payments are reasonably necessary for the More-
heads’ support.
                           IN RE MOREHEAD                           13
   In sum, we hold that the right to receive payments under a privately
purchased disability insurance policy is partially exempt from the
bankruptcy estate under W. Va. Code § 38-10-4(j)(5) rather than fully
exempt under § 38-10-4(j)(3). This holding is required because we
cannot assume that payments under such a policy will be limited to
amounts reasonably necessary for the support of the debtor and his
dependents. Of course, we are not saying that a debtor may never
exempt the full amount of these payments from the bankruptcy estate.
He may do so if the full amount is reasonably necessary for his and
his dependents’ support.

                                 III.

   We affirm the district court’s decision that Dr. Raymond A. More-
head’s right to receive payments under the Lincoln National disability
policy is partially exempt from the bankruptcy estate under W. Va.
Code § 38-10-4(j)(5). We also affirm the district court’s order
remanding the case for the bankruptcy court to determine the extent
to which the payments under the policy are reasonably necessary for
the support of Dr. Morehead and his dependents.

                                                          AFFIRMED