262 B.R. 68 (8th Cir.BAP (Minn.) 2001), 00-6114, In re Soost
| Date | 01 June 2001 |
| Citation | 262 B.R. 68 |
| Docket Number | No. 00-6114 MN. |
| Parties | In re Charles Kerwin SOOST, doing business as Cottage Enterprises, Debtor. Charles Kerwin Soost, Debtor-Appellant, v. NAH, Inc., doing business as Nordaas American Homes, Creditor-Appellee. |
| Court | 8th Circuit |
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Submitted May 2, 2001.
Filed June 1, 2001.
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William L. Bodensteiner, Austin, MN, for appellant.
Donald W. Savelkoul, Albert Lea, MN, for appellee.
Before WILLIAM A. HILL, SCHERMER, and FEDERMAN, 1 Bankruptcy Judges.
WILLIAM A. HILL, Bankruptcy Judge.
Debtor Charles Kerwin Soost appeals from the bankruptcy court's 2 order pursuant to 11 U.S.C. § 522(f) avoiding the lien of judgment creditor NAH, Inc. only to the extent that it impaired the debtor's $1.00 exemption in a parcel of nonresidential real estate valued at $26,000.00 in the debtor's bankruptcy schedules. 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 affirm the bankruptcy court's lien avoidance order.
BACKGROUND
Prior to bankruptcy, the debtor was self-employed as a contractor in the construction business. In that capacity, he bought various construction supplies from NAH, Inc. ("NAH") on credit. However, the debtor experienced financial difficulties which rendered him unable to pay his outstanding balance with NAH. After repeated attempts to collect on the debt, NAH sought and obtained a state court judgment against the debtor in the amount of $12,248.74. Subsequently, NAH discovered that the debtor owned nonresidential real property in Waseca County, Minnesota. Accordingly, NAH docketed its judgment in Waseca County to establish a judgment lien against the debtor's nonresidential real estate. NAH then foreclosed its judgment lien.
A few days prior to the sheriff's sale of his nonresidential real estate, the debtor filed a chapter 7 bankruptcy petition. The debtor's schedules disclosed that the subject real estate had a current market value of $26,000.00, that there was a first priority mortgage in favor of the debtor's mother on the property in the amount of $46,879.54, and that the debtor claimed an exemption in the subject real estate in the amount of $1.00 under 11 U.S.C. § 522(d)(5). The section 341 meeting of creditors was conducted on July 12, 2000, and no objections to the debtor's claimed exemptions were filed within the thirty days allowed by Federal Rule of Bankruptcy Procedure 4003(b).
The debtor received a chapter 7 discharge on September 12, 2000. Shortly thereafter, he filed a motion to avoid NAH's judgment lien against his nonresidential
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real estate pursuant to 11 U.S.C. § 522(f)(1)(A). NAH opposed the debtor's motion, and the bankruptcy court conducted a hearing as to lien avoidance on October 19, 2000. On November 1, 2000, the bankruptcy court issued an order avoiding NAH's judgment lien to the extent that it impaired the $1.00 exemption claimed by the debtor.
The debtor appeals from the bankruptcy court's lien avoidance order, arguing that his $1.00 exemption caused the entire parcel of real estate to become exempt after no objections were filed within the time allowed under Fed. R. Bankr.P. 4003(b). According to the debtor, since the entire parcel is exempt, NAH's judicial lien should have been avoided in its entirety. NAH asserts that the bankruptcy court's lien avoidance order should be affirmed because the debtor's exemption is limited to the amount claimed as exempt in the debtor's schedules. In addition, NAH argues that the debtor failed to file a timely notice of appeal.
STANDARD OF REVIEW
On appeal, we review the bankruptcy court's findings of fact for clear error and its conclusions of law de novo. Fed. R. Bankr.P. 8013; Hatcher v. U.S. Trustee (In re Hatcher), 218 B.R. 441, 445 (8th Cir. BAP 1998) (citations omitted); Gourley v. Usery (In re Usery), 123 F.3d 1089, 1093 (8th Cir.1997); O'Neal v. Southwest Mo. Bank ( In re Broadview Lumber Co.), 118 F.3d 1246, 1250 (8th Cir.1997).
DISCUSSION
1. Timeliness of the Debtor's Notice of Appeal
An appellate court has no subject matter jurisdiction over an untimely appeal. United States v. Henry Brothers Partnership (In re Henry Brothers Partnership), 214 B.R. 192, 197 (8th Cir. BAP 1997) (citation omitted). Notice of appeal must be filed within ten days after entry of the judgment, order, or decree appealed from. Fed. R. Bankr.P. 8002. However, when the last day of the filing period falls on a Saturday, notice of appeal is timely when it is filed by the end of the following Monday. Fed. R. Bankr.P. 9006(a); United States v. Schimmels (In re Schimmels), 85 F.3d 416, 420 (9th Cir.1996).
In this case, because the order appealed from was entered on November 1, 2000, the last day of the period for filing notice of appeal fell on Saturday, November 11, 2000. Accordingly, the debtor had until the end of Monday, November 13, 2000, to file a timely notice of appeal. Although NAH asserts that the debtor's notice of appeal was not filed until November 14, 2000, there is nothing in the record which supports this assertion. In fact, the Bankruptcy Appellate Panel's own docket sheet indicates that notice of appeal was filed on November 13, 2000. Because the only evidence before us indicates that the debtor's notice of appeal was timely, NAH's assertion to the contrary must fail.
2. The Effect of the Debtor's $1.00 Exemption
Pursuant to 11 U.S.C. § 522(d)(5), the debtor claimed a $1.00 exemption in a parcel of nonresidential real estate worth $26,000.00 according to the bankruptcy schedules. The debtor contends that the entire parcel is now exempt pursuant to 11 U.S.C. § 522(l) because no one objected to his $1.00 exemption within the time allowed under Fed. R. Bankr.P. 4003(b). Because the debtor's lien avoidance argument is based on the foregoing proposition, we must determine the effect of the debtor's $1.00 exemption in the subject real estate.
Upon the filing of a bankruptcy petition, all of the debtor's property becomes
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part of the bankruptcy estate. 11 U.S.C. § 541. "The Code, however, allows the debtor to prevent the distribution of certain property by claiming it as exempt." Taylor v. Freeland & Kronz, 503 U.S. 638, 642, 112 S.Ct. 1644, 1647, 118 L.Ed.2d 280 (1992). Exempted property is no longer part of the bankruptcy estate. Abramowitz v. Palmer, 999 F.2d 1274, 1276-77 (8th Cir.1993). To claim an exemption, "[t]he debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this section." 11 U.S.C. § 522(l ). "Unless a party in interest objects, the property claimed as exempt on such list is exempt." Id. To object to an exemption, a party in interest must "file an objection to the list of property claimed as exempt ... within 30 days after the meeting of creditors held under § 341(a) is concluded or within 30 days after any amendment to the list or supplemental schedules is filed, whichever is later." Fed. R. Bankr.P. 4003(b).
However, when a debtor takes an exemption in a particular asset pursuant to section 522(d)(5), the "property claimed as exempt" within the meaning of section 522(l) is merely an interest in property not to exceed a specified value. See 11 U.S.C. § 522(d)(5); Owen v. Owen, 500 U.S. 305, 310, 111 S.Ct. 1833, 1836, 114 L.Ed.2d 350 (1991) ("Most of the federally listed exemptions (set forth in § 522(d)) are explicitly restricted to the 'debtor's aggregate interest' or the 'debtor's interest' up to a maximum amount."). Accordingly, where the value of an asset exceeds the amount of the claimed exemption, the asset as a whole does not become exempt. See Wissman v. Pittsburgh Nat'l Bank, 942 F.2d 867, 871 (4th Cir.1991) ("We do not agree ... that by claiming [as exempt] a value less than the statutory maximum, or no value at all, as in this case, the entire property becomes exempt."). Instead, only a partial interest representing a certain amount of the asset's value is exempted. Specifically, the exempted interest has a value that is equal to the amount of the claimed exemption. Under these circumstances, the bankruptcy estate retains an interest in the subject asset because only a partial interest has been exempted by the debtor. See First of America Bank v. Gaylor (In re Gaylor), 123 B.R. 236, 239 (Bankr.E.D.Mich.1991) (the debtor's property remains property of...
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