Court Opinion

ID: 8031408
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:14:28.737141+00
Date Added: 2024-06-11T16:36:53.175464
License: Public Domain

JUSTICE RICE,
dissenting.
¶16 In Archer, virtually the same arguments were made as here. Archer suffered from significant, ongoing medical expenses. The proceeds from a sales contract he held were “used exclusively to pay for [Archer’s] end-of-life medical, surgical or hospital care and medications.” Archer, ¶ 6. Like Giacometto argues here, Archer argued that the proceeds should be exempted under § 25-13-608(1)(f), MCA, “to the extent those proceeds are used for [his] medical care,” and because “exemption statutes must be liberally construed.” Archer, ¶¶ 9, 14.
¶17 We rejected those arguments, and held that the term “benefits” under § 25-13-608(l)(f), MCA, “includes only those payments to a debtor which are expressly earmarked for the sole purpose of paying medical, surgical or hospital bills.” Archer, ¶ 19 (emphasis added). Because there were “no contractual restrictions” on Archer’s use of the proceeds that would prohibit him from using the funds for something other than the “sole purpose” of medical costs, we held that the proceeds could not be exempted under § 25-13-608(l)(f), MCA. We also noted that the principle of liberal construction of bankruptcy exemptions “may not disregard plain legislative mandate.” Archer, ¶ 15.
¶18 The Court plows much ground in an effort to distinguish the HSA here from the contract in Archer, but misses the most salient point: that the account holder of an HSA is no more required to spend the funds on medical care than the contract holder was in Archer. Quite simply, the funds in an HSA are not “expressly earmarked for the sole purpose” of medical costs. Archer, ¶ 19. Indeed, the Court’s emphasis on the State and Federal regulation of the account is mere window-dressingbecause it is nonetheless expressly permissible for Giacometto to use the account for any purpose of his choosing. See § 15-61-203(1), MCA (an account holder “may withdraw money from the individual’s medical care savings account for any purpose other than an eligible medical expense ....”). The true distinguishing point between the Court’s decision and our decision in Archer is that the account here has “health” in its title, while the contract in Archer did not.
¶19 The account holder’s ability to spend the funds in the HSA for any purpose necessitates the adoption of a new rule by the Court for later “disqualification” of the exemption if the money is spent for other purposes. Such “disqualification” could require the bankruptcy trustee to chase down debtors years after cases have closed, when the trustee discovers that the HSAs have “lost” their exempt status. The Court *88has, in effect, legislated a special process for administration of an exemption, one that could be elongated over many years. This should be a legislative call. “ ‘In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted.’ Section 1-2-101, MCA.” In re Golz, 2015 MT 318, ¶ 13, 381 Mont. 385, 360 P.3d 1142 (holding that inherited IRAs are not exempt from the bankruptcy estate).
¶20 Busy with its own legislating, the Court overlooks the obvious implication of the real Legislature’s recent enactment of SB 216 in the 2017 Legislative Session. The bill was entitled “An Act Exempting ... Medical Savings Accounts from Bankruptcy,” creating for the first time an exemption for HSAs. As we are to presume “that the Legislature does not pass meaningless or useless legislation,” Lucas Ranch, Inc. v. Mont. Dep’t of Revenue, 2015 MT 115, ¶ 15, 379 Mont. 28, 347 P.3d 1249, the effect of the legislation was to change the prior status of HSAs. This effect is confirmed by SB 216’s corresponding repeal of § 15-61-202(7), MCA, which, as the Trustee notes, was a prior statutory indication that such accounts would not be considered exempt in a bankruptcy proceeding. The repeal of this section was necessary to make HSAs exempt in bankruptcy proceedings.
¶21 Based upon our precedent interpreting the subject statutes, I would answer the question in the negative.