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Larry K. Alexander v. Mary Jensen-Carter, 99-4285 (2001)

Court: Court of Appeals for the Eighth Circuit Number: 99-4285 Visitors: 24
Filed: Jan. 08, 2001
Latest Update: Mar. 02, 2020
Summary: United States Court of Appeals FOR THE EIGHTH CIRCUIT _ No. 99-4285 _ In re: Larry Kenneth Alexander, * * - * * Larry Kenneth Alexander, * On Appeal from the United States * Bankruptcy Appellate Panel Appellant, * for the Eighth Circuit. * v. * [To Be Published] * Mary Jo A. Jensen-Carter, * * Appellee. * _ Submitted: November 3, 2000 Filed: January 8, 2001 _ Before RICHARD S. ARNOLD, HANSEN, and BYE, Circuit Judges. _ PER CURIAM. Larry K. Alexander appeals the Bankruptcy Court’s order sustainin
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                       United States Court of Appeals
                              FOR THE EIGHTH CIRCUIT
                                      ___________

                                      No. 99-4285
                                      ___________

In re: Larry Kenneth Alexander,            *
                                           *
      ---------------------                *
                                           *
Larry Kenneth Alexander,                   * On Appeal from the United States
                                           * Bankruptcy Appellate Panel
             Appellant,                    * for the Eighth Circuit.
                                           *
      v.                                   * [To Be Published]
                                           *
Mary Jo A. Jensen-Carter,                  *
                                           *
             Appellee.                     *
                                      ___________

                              Submitted: November 3, 2000
                                  Filed: January 8, 2001
                                      ___________

Before RICHARD S. ARNOLD, HANSEN, and BYE, Circuit Judges.
                           ___________

PER CURIAM.

       Larry K. Alexander appeals the Bankruptcy Court’s order sustaining an objection
to his claimed homestead exemption. The Bankruptcy Appellate Panel affirmed, and
so do we.

      In June 1998, Alexander filed a Chapter 13 bankruptcy petition declaring under
penalty of perjury that his street address was 175 North Lexington Ave., St. Paul,
Minnesota. In a later filed Schedule I, Alexander stated under penalty of perjury that
at “all times relevant” 175 North Lexington was “the home of the debtor,” and listed
his employer’s address as 875 Laurel Avenue, St. Paul. In Schedule C, however,
Alexander claimed the Minnesota homestead exemption for 875 Laurel. The Chapter
13 Trustee objected to the exemption, arguing that Alexander did not live at 875 Laurel
and did not occupy the property on the date he filed bankruptcy, and that, therefore, he
could not claim the exemption.

       During an evidentiary hearing, Alexander admitted that he listed 175 North
Lexington as his home address in his petition, and that he listed 175 North Lexington
as his home address and 875 Laurel as his business address in Schedule I. Shortly
thereafter, in December 1998, the Bankruptcy Court issued an order sustaining the
Trustee’s objection and denying Alexander’s homestead exemption on the basis of
Alexander’s sworn representations, and converted his case to a Chapter 7 bankruptcy.

       Alexander filed an amended Schedule C as part of the Chapter 7 proceedings,
again claiming 875 Laurel as his homestead. The Chapter 7 Trustee objected, but
Alexander argued that this Court’s decision in In re Lindberg, 
735 F.2d 1087
(8th Cir.
1984), permitted him to exempt 875 Laurel because he was living there on the date the
Bankruptcy Court converted his case. After a hearing and briefing by the parties, the
Bankruptcy Court noted that when Lindberg was decided, the Bankruptcy Code
provided that the property of a debtor’s estate in a converted case included any new
property the debtor acquired after filing bankruptcy. This being the case, the Lindberg
court held equity required debtors to be allowed to claim their exemptions on the date
of conversion, because to hold otherwise would deprive debtors of the opportunity to
exempt from their estate property they acquired after filing their bankruptcy petition.
The Bankruptcy Court held, however, that Lindberg’s equitable underpinnings were
eliminated when Congress enacted 11 U.S.C. § 348(f)(1)(A) as part of the Bankruptcy
Reform Act of 1994, defining the property of the estate as all the property the debtor
has an interest in on the date the debtor files bankruptcy. Accordingly, the Bankruptcy

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Court concluded that 11 U.S.C. §§ 348(a) (conversion of case does not effect change
in date of filing of petition) and 522(b)(2)(A) (debtor may exempt from property of
estate any property exempt under state law that is applicable on date of filing petition)
mandated that Alexander’s homestead exemption be determined on the date he filed his
Chapter 13 petition, and sustained the Trustee’s objection. The Bankruptcy Appellate
Panel affirmed the Bankruptcy Court’s decision and denied Alexander’s petition for
rehearing.

        On appeal, Alexander reiterates his position that he could claim 875 Laurel as
exempt under Lindberg and argues the Chapter 7 Trustee’s objection was untimely
because Federal Rule of Bankruptcy Procedure 4003(b) required the Chapter 7 Trustee
to file her objection within thirty days of the meeting of creditors in his Chapter 13 case
rather than within thirty days of the meeting of creditors in his converted case.

      Initially, we reject Alexander’s challenge to the timeliness of the Chapter 7
Trustee’s objection. Both the Chapter 13 and Chapter 7 Trustees filed objections to
his homestead exemption within thirty days of the respective meetings of creditors. See
Fed. R. Bankr. P. 4003(b) (Trustee may file objections to property claimed as exempt
within 30 days after conclusion of meeting of creditors).

      We have reviewed Lindberg and agree with the Bankruptcy Court that the
equitable concerns underlying Lindberg are no longer relevant in light of the
Bankruptcy Reform Act of 1994. As the Bankruptcy Court noted, Lindberg was
motivated by the concern that debtors who had their cases converted would not have
the opportunity to exempt from their estate new property they acquired after filing
bankruptcy. See In re 
Lindberg, 735 F.2d at 1090
. We held: “Only if the same date
controls what is property of the estate and what exemptions may be claimed can the
debtor make full use of exemption laws.” 
Id. -3- After
we decided Lindberg, a circuit split developed as to whether the filing date
or the conversion date controlled what property formed the debtor’s estate. Compare
In re Bobroff, 
776 F.2d 797
, 803-04 (3d Cir. 1985) (original-petition filing date), with
In re Lybrook, 
951 F.2d 136
, 137-38 (7th Cir. 1991) (conversion date). Citing Lindberg
for support, the Lybrook court expressed concern that debtors in converted cases would
be able to acquire new property without fear that it would become property of the
estate and open to liquidation for the benefit of their creditors. See In re 
Lybrook, 951 F.2d at 137-38
(“a rule of once in, always in is necessary to discourage . . .
opportunistic behavior that hurts creditors” and to prevent debtors from proceeding
under Chapter 13 indefinitely to keep newly acquired property out of estate and away
from creditors). This state of affairs changed, however, when Congress added section
348(f)(1) to the Bankruptcy Code in 1994. Section 348(f)(1)(A) provides that the
property of a converted Chapter 7 estate is the property of the estate as of the date of
the Chapter 13 filing. The legislative history to section 348(f)(1) indicates that
Congress intended this language to overrule the holding of cases such as Lybrook in
favor of those cases holding that the property of the estate in a converted case is the
property the debtor had when he filed his original Chapter 13 petition. See 140 Cong.
Rec. H10770 (Oct. 4, 1994).

       It is clear to us that the express language of section 348(f) and its legislative
history abrogates the rationale underlying Lindberg. Other courts that have considered
Lindberg since the enactment of section 348(f)(1) have held as much. See In re Stamm,
222 F.3d 216
, 217-18 (5th Cir. 2000) (rejecting position supported by Lindberg); In re
Sandoval, 
103 F.3d 20
, 23 (5th Cir. 1997) (finding § 348(f) undercuts some of
Lindberg’s rationale); In re Beshirs, 
236 B.R. 42
, 45-47 (Bankr. D. Kan. 1999)
(Lindberg was flawed under law in effect at time it was decided, and further
undermined by changes in law); In re Ferretti, 
230 B.R. 883
, 888-90 (Bankr. S.D. Fla.
1999) (rejecting Lindberg’s policy arguments); In re Weed, 
221 B.R. 256
, 258 & n.4
(Bankr. D. Nev. 1998) (§ 348(f) overruled cases citing Lindberg for support). But see
In re Wegner, 
243 B.R. 731
, 736-37 (Bankr. D. Neb. 2000) (finding debtor’s eligibility

                                           -4-
for homestead exemption in converted case to be determined as of date of conversion
“[f]or the reasons expressed in In re Lindberg”). We conclude that, when read
together, sections 348(a), 348(f), and 522(b)(2)(A) provide what exemptions are
available to the debtor. We therefore hold that Lindberg, which was decided before the
statute was amended, has been, in effect, overruled by Congress. We further hold that
the Bankruptcy Court correctly sustained the Chapter 7 Trustee’s objection to
Alexander’s homestead exemption. See In re Smoinikar, 
200 B.R. 640
, 644 (Bankr.
D. Minn. 1996) (Minnesota homestead exemption law requires that debtor “actually
occupy” residence).

       Alexander did not present his remaining arguments to the Bankruptcy Court, and
thus they are not properly before this Court. See First Bank Investors’ Trust v. Tarkio
College, 
129 F.3d 471
, 477 (8th Cir. 1997) (appellate court does not consider issues
not presented to bankruptcy court).

      Accordingly, we affirm.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




                                          -5-

Source:  CourtListener

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