513 F.3d 325 (1st Cir. 2008), 07-1925, In re Larson

Docket Nº:07-1925.
Citation:513 F.3d 325
Party Name:In re Mary G. LARSON, Debtor. Mary G. Larson, Plaintiff, Appellant, v. Lloyd L. Howell, Jr., et al., and Stephen E. Shamban, Defendants, Appellees.
Case Date:January 23, 2008
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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513 F.3d 325 (1st Cir. 2008)

In re Mary G. LARSON, Debtor.

Mary G. Larson, Plaintiff, Appellant,

v.

Lloyd L. Howell, Jr., et al., and Stephen E. Shamban, Defendants, Appellees.

No. 07-1925.

United States Court of Appeals, First Circuit

January 23, 2008

Heard Dec. 5, 2007.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS Hon. Rya W. Zobel, U.S. District Judge.

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[Copyrighted Material Omitted]

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Gary W. Cruickshank for appellant.

Edward Fegreus with whom Frederick J. Watson was on brief for appellees.

Before LYNCH, Circuit Judge, STAHL, Senior Circuit Judge, and HOWARD, Circuit Judge.

LYNCH, Circuit Judge.

This case requires us, as a matter of first impression, to determine whether the state crime of negligent vehicular homicide qualifies as a "criminal act" which would cap a debtor's homestead exemption to $125,000 under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), Pub. L. No. 109-8, § 322(a), 119 Stat. 23, 97 (codified at 11 U.S.C. § 522(q)(1)(B)(iv)). We hold that where a state court has found the debtor was criminally liable for negligent homicide, such a finding triggers the federal statutory cap on state homestead exemptions under the BAPCPA.

I.

The District Attorney of Plymouth County, Massachusetts, on September 12, 2002, filed criminal charges against Mary Larson, including a count of negligent homicide by motor vehicle under Mass. Gen. Laws ch. 90, § 24G(b). At a hearing on November 11, Larson admitted the following facts. On September 8, 2002, Larson, then age 69, was driving her van in East Bridgewater, Massachusetts, when she decided to take a shortcut home through a parking lot. As she turned left across the other lane of traffic and into the lot, Larson struck the oncoming motorcycle of Lloyd Howell, who was driving straight through in the opposite lane. Howell's wife, Sherri LaMattina-Howell, a passenger on the motorcycle, died as a result. Larson said she did not see the oncoming motorcycle, but admitted she caused the accident. The judge found facts sufficient to find Larson guilty of negligent vehicular homicide, and continued the case without a finding for one year.

The accident also spurred a civil action in state court. In September of 2002, Howell filed a wrongful death lawsuit seeking damages against Larson for the death of his wife, his own injuries, and the harm to his two young children. Howell voluntarily stayed the tort action pending disposition of the criminal proceedings.

The civil suit resumed and on May 24, 2005, the state court granted summary judgment on the issue of liability for most of Howell's claims.1 Howell and Larson settled the case for $1,000,000.

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Larson filed a petition for bankruptcy under Chapter 7 in the Bankruptcy Court for the District of Massachusetts on October 11, 2005. On November 15, Larson claimed a homestead exemption under state law in the amount of $500,000. See Mass. Gen. Laws ch. 188, § 1A. On December 29, Howell objected to the amount of the homestead exception, contending that it should be limited to $125,000 under 11 U.S.C. § 522(q)(1)(B)(iv), which caps homestead exemptions claimed under state or local law at $125,000 if "the debtor owes a debt arising from . . . any criminal act, intentional tort, or willful or reckless misconduct that caused serious physical injury or death to another individual in the preceding 5 years."2 Howell argued that negligent vehicular homicide is a "criminal act," and that the disposition in the criminal case triggered the cap. On January 3, the bankruptcy trustee independently objected to Larson's homestead exemption on the same grounds.

Larson opposed the reduction in amount, though she repeated her admissions of responsibility for the accident and for LaMattina-Howell's death. Larson presented the same arguments she now makes on appeal: that § 522(q)(1)(B)(iv) did not cap her homestead exemption because (1) the "criminal act" language requires a level of mens rea beyond mere negligence; (2) the disposition in the state court was insufficient to establish a "criminal act"; and (3) Massachusetts public policy requires that homestead exemptions be liberally construed.3

On April 5, 2006, the bankruptcy court issued an opinion...

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