Court Opinion

ID: 181129
Source: CourtListenerOpinion
Date Created: 2010-12-15 16:23:09+00
Date Added: 2024-06-11T12:30:58.609269
License: Public Domain

United States Bankruptcy Appellate Panel
                              FOR THE EIGHTH CIRCUIT

                                       No. 10-6072

In re:                                       *
                                             *
Virgil Hurd, Jr.,                            *
                                             *
         Debtor.                             *
                                             *
Fred C. Moon,                                *       Appeal from the
                                             *       United States
         Trustee - Appellant,                *       Bankruptcy Court for the
                                             *       Western District of Missouri
               v.                            *
                                             *
Virgil Hurd, Jr. ,                           *
                                             *
         Debtor - Appellee.                  *

                                Submitted: December 1, 2010
                                 Filed: December 15, 2010

Before KRESSEL, Chief Judge, SCHERMER and NAIL, Bankruptcy Judges

SCHERMER, Bankruptcy Judge

      Fred C. Moon, Chapter 7 trustee (the “Trustee”) for the bankruptcy estate of
Virgil Hurd, Jr. (the “Debtor”), appeals from an order overruling the Trustee’s
objection to the Debtor’s claim of an exemption in a 1997 Wrangler Gooseneck 2
Horse Trailer (the “Trailer”) pursuant to § 513.430.1(6) of the Missouri Revised
Statutes. We have jurisdiction over this appeal from the final order of the bankruptcy
court. See 28 U.S.C. § 158(b). For the reasons set forth below, we reverse.

                                       ISSUE
       The issue on appeal is whether the Debtor was entitled to an exemption in
the Trailer under § 513.430.1(6) of the Missouri Revised Statutes. We conclude
that he was not.

                                   BACKGROUND
       On April 7, 2010, the Debtor filed a voluntary petition for relief under Chapter
7 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States
Bankruptcy Court for the Western District of Missouri. He listed the Trailer on his
schedule of personal property, assigning it a value of $3,000.1 The Debtor included
the Trailer on his schedule of exemptions, claiming the entire $3,000 value of the
camping trailer as exempt under MO. REV. STAT. § 513.430.1(6).2

      The Debtor moved into the Trailer in 2008 after his ex-wife “kicked [him] out.”
At the time of his move, he fixed the Trailer as his living quarters so he could stay
warm. The Debtor obtains electricity for the Trailer by plugging it into a socket. His
water comes from a barrel with a pump. The Trailer is twenty feet long and six feet
wide.

       The Debtor receives his mail at the address listed for the land where the Trailer
is parked. The Trailer is parked on the property of the Debtor’s friend, Jeff Julian.

       1
               The Debtor’s schedules refer to the Trailer as a “camping trailer.” At trial and in
papers filed with the bankruptcy court, the Debtor described the Trailer as the item he listed as a
“camping trailer” on his schedules.
       2
              On his Schedules, the Debtor claimed the Trailer exempt pursuant to “RSMo
513.430(6).” It is clear from a reading of the statute that the Debtor was referring to MO. REV.
STAT. § 513.430.1(6).

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When the Debtor began parking his Trailer on Mr. Julian’s property, the Debtor was
renting Mr. Julian’s farm. Thereafter, Mr. Julian allowed the Debtor to park the
Trailer on his property without paying rent, provided that the Debtor paid the electric
bill.

        The Debtor’s girlfriend lives in a house. Since January 2010, the Debtor has
spent approximately seventy percent of his time staying overnight at his girlfriend’s
house. During the winter of 2009, he spent approximately fifty-five to sixty percent
of his time staying overnight at his girlfriend’s house. Prior to the time when he filed
his bankruptcy petition, the Debtor was served with process at his girlfriend’s house.

       In addition to using the Trailer as a place to sleep, the Debtor has also used it
for transporting his own horses and his girlfriend’s horses. The Trailer is moved using
the Debtor’s pickup truck.

        The Trustee objected to the Debtor’s claim of an exemption in the Trailer. At
a trial on the Trustee’s objection, the Trustee contended that during the six to twelve
month period before the Debtor filed his bankruptcy petition, the Debtor did not use
the Trailer as his principal residence. He also argued that the Trailer did not qualify
as a “mobile home” under § 513.430.1(6) and did not meet the requirements for the
definition of a “manufactured home” under § 700.010 of the Missouri Revised
Statutes.

       The bankruptcy court overruled the Trustee’s objection to the Debtor’s
exemption. It explained that exemptions should be liberally construed and
commented that it did not necessarily know that Missouri law requires all mobile
homes to satisfy the definition of “manufactured home” under § 700.010. The
bankruptcy court noted that even though the structure was not manufactured with the
intent that it be used as a residence, it was somewhat modified such that it could be
used as the Debtor’s residence, it was used by the Debtor at least part of the time as

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a home, the Debtor is not married and has no other place to live except his girlfriend’s
home. The Debtor used the Trailer because he had no other place to live.

       On appeal, the Trustee argued that the bankruptcy court should not have
determined that the Trailer was a “mobile home” under § 513.430.1(6) without proof
that the Trailer satisfied the requirements of §700.010, and that the bankruptcy court
erred when it determined that the Trailer was used as the Debtor’s principal residence.
The Debtor did not participate in any way in this appeal.

                            STANDARD OF REVIEW
       We review the bankruptcy court’s findings of fact for clear error and its
conclusions of law de novo. Moss v. Block (In re Moss), 266 B.R. 697, 700 (B.A.P.
8th Cir. 2001)(citations omitted), aff’d, 289 F.3d 540 (8th Cir. 2002).

                                     DISCUSSION
       In general, a debtor’s bankruptcy estate consists of “all legal or equitable
interest of the debtor in property as of the commencement of the case.” 11 U.S.C.
§541(a)(1); Benn v. Cole (In re Benn), 491 F.3d 811, 813 (8th Cir. 2007). Bankruptcy
Code § 522(b) provides a debtor with the option to exempt certain property from his
estate. 11 U.S.C. § 522(b). “[M]ost assets become property of the estate upon the
commencement of the bankruptcy case, see 11 U.S.C. § 541, and exemptions
represent the debtor’s attempt to reclaim those assets or, more often, certain interests
in those assets, to the creditors’ detriment.” Mwangi v. Wells Fargo Bank, N.A. (In
re Mwangi), 432 B.R. 812, 820 (B.A.P. 9th Cir. 2010)(quoting Schwab v. Reilly, 560
U.S. —, —, 130 S.Ct. 2652, 177 L.Ed.2d 234 (2010)).

        Pursuant to § 522(b) of the Bankruptcy Code, a debtor may exempt from
property of the estate: (1) property listed in Bankruptcy Code § 522(d); or (2) property
which is exempt under applicable federal law other than § 522(d) and the state and
local laws of the place where the debtor has been domiciled for a specified period of

                                           4
time. 11 U.S.C. § 522(b)(1). A state may opt out of the §522(d) exemptions. 11
U.S.C. § 522(b)(2). A debtor whose domicile is in a state that has opted out of the
federal Bankruptcy Code exemptions is limited to the exemptions applicable under
federal law other than § 522(d) and the laws of such state and locality. 11 U.S.C. §
522(b)(2) and (3).

       The Trustee does not dispute that Missouri is the Debtor’s domicile. Pursuant
to § 513.427 of the Missouri Revised Statutes, Missouri has opted out of the federal
exemption scheme. MO. REV. STAT. § 513.427. Because the Debtor claimed an
exemption pursuant to § 513.430.1(6) of the Missouri Revised Statutes, the scope of
the exemption is to be determined by Missouri state law. Norwest Bank Neb., N.A. v.
Tveten (In re Tveten), 848 F.2d 871, 873 (8th Cir. 1988)(“When the debtor claims a
state-created exemption, the scope of the claim is determined by state law.”).
Exemptions are to be construed liberally in favor of the exemption. Id. at 875. The
Trustee bears the burden of proving that the exemption should be disallowed. See
Fed. R. Bankr. P. 4003(c)(objecting party has burden of proving that exemption is not
properly claimed).

      MO. REV. STAT. §513.430.1(6)

        Section 513.430.1 sets forth a list of property for which a debtor’s interest is
exempt from attachment and execution. MO. REV. STAT. § 513.430.1. Subsection 6
includes “[a]ny mobile home used as the principal residence but not on or attached to
real property in which the debtor has a fee interest, not to exceed five thousand dollars
in value.” MO. REV. STAT. § 513.430.1 (6)(emphasis added). The term “mobile home”
is not defined in § 513.430. However, § 700.010(6) defines the phrase “manufactured
home,” in pertinent part, as:

      a factory-built structure or structures which, in the traveling mode, is
      eight body feet or more in width or forty body feet or more in length, or,
      when erected on site, contains three hundred twenty or more square feet,
                                           5
      equipped with the necessary service connections and made so as to be
      readily movable as a unit or units on its or their own running gear and
      designed to be used as a dwelling unit or units with or without a
      permanent foundation.

MO. REV. STAT. § 700.010(6)(emphasis added). No separate definition is included for
the term “mobile home” in § 700.010.

       We interpret the description of “manufactured home” in § 700.010(6) as
defining the term “mobile home” in § 513.430.1(6). The title of Chapter 700 of the
Missouri Revised Statutes refers to manufactured homes and mobile homes
synonymously. It is called “Manufactured Homes (Mobile Homes).” MO. REV. STAT.
§ 700.010 et seq. In contexts other than defining the term “mobile home” under §
513.430.1(6), Chapter 700 has been regarded as applying to mobile homes. See, e.g.,
Meyers v. Johnson, 182 S.W.3d 278, 281 and n.2 (Mo. Ct. App. 2006)(using Chapter
700 section that discusses application for certificate of title for manufactured home to
determine court’s jurisdiction based on title, if any, appellant obtained over mobile
home); In re White, 287 B.R. 232, 234-35 (Bankr. E.D. Mo. 2002)(examining whether
mobile home was converted to realty under section of Chapter 700 that refers to
manufactured homes); In re Thornton, 269 B.R. 682, 684-85 (Bankr. W.D. Mo.
2001)(same); Parker v. Parker (In re Parker), 25 S.W.3d 611, 615-16 (Mo. Ct. App.
2000)(same); Ferrell Mobile Homes, Inc. v. Holloway, 954 S.W.2d 712, 714-15 (Mo.
Ct. App. 1997)(determining party’s right of possession to mobile home under sections
of Chapter 700 referring to abandoned manufactured homes); see also Green Tree
Servicing, LLC v. Coleman (In re Coleman), 392 B.R. 767, 772-73 (B.A.P. 8th Cir.
2008)(discussing the classification of manufactured homes and mobile homes as real
or personal property under Chapter 700).

      The Trailer does not qualify as a mobile home. It measures twenty feet long
and six feet wide, meaning it contains only 120 square feet. Section 700.010(6)
requires the structure to be eight feet wide and forty feet long or to contain three

                                           6
hundred and twenty or more square feet. Because the Trailer does not meet the
threshold requirement under § 513.430.1(6) that it be a mobile home, we do not need
to analyze whether the Trailer was used by the Debtor as his principal residence as
required by § 513.430.1(6).

      MO. REV. STAT. § 513.475.1

       The Debtor claimed the exemption in the Trailer pursuant to § 513.430.1(6).
However, we note that the Debtor also would not be entitled to exempt the Trailer
under § 513.475.1 of the Missouri Revised Statutes. That statute provides, in
pertinent part, an exemption for “[t]he homestead of every person, consisting of a
dwelling house and appurtenances, and the land used in connection therewith, not
exceeding the value of fifteen thousand dollars, which is or shall be used by such
person as a homestead.” MO. REV. STAT. § 513.475.1. A plain reading of the term
“dwelling house” suggests that it does not include a trailer designed and constructed
to move horses from one place to another.

                                 CONCLUSION
      For the foregoing reasons, we reverse the decision of the bankruptcy court.

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