Bruess v. Dietz (In re Bruess)
| Decision Date | 29 October 2015 |
| Docket Number | No. 15–6019.,15–6019. |
| Citation | 539 B.R. 560 |
| Parties | In re Sandra Jo BRUESS, formerly known as Sandy B. Macho, formerly known as Sandra J. Rolloff, Debtor. Sandra Jo Bruess, Debtor–Appellant v. Michael S. Dietz, Trustee–Appellee. |
| Court | U.S. Bankruptcy Appellate Panel, Eighth Circuit |
Thomas F. Miller, argued, Wayzata, MN, for appellant.
Michael Scott Dietz, argued, Rochester, MN, (Michael Scott Dietz, Erin Anne Collins, Rochester, MN, on the brief), for appellee.
Before SCHERMER, SALADINO and NAIL, Bankruptcy Judges.
The Appellant, Sandra Jo Bruess, appeals from an order of the bankruptcy court1 sustaining the bankruptcy trustee's objection to her claim of an exemption in certain real property and limiting the exemption to $155,675.00. We have jurisdiction over this appeal from entry of the bankruptcy court's final order pursuant to 28 U.S.C. § 158(b). For the reasons set forth below, we affirm.
This case arises out of the Chapter 7 bankruptcy proceeding filed by Ms. Bruess in the District of Minnesota on December 15, 2014. On Schedule C of her bankruptcy filing, Ms. Bruess claimed as exempt, pursuant to Minnesota law, her one-third interest in her homestead property located in Minnesota. Ms. Bruess acquired her interest in the property by quitclaim deed from her father and his wife dated April 5, 2010, which was filed for record in Brown County, Minnesota, on January 14, 2013.2 The value of her claimed exemption was $562,760.33.
The bankruptcy trustee objected to the homestead exemption claim asserting that Ms. Bruess did not acquire her interest in the property until her father caused the quitclaim deed to be recorded on January 14, 2013, which was only 700 days prior to bankruptcy filing. As such, according to the trustee, Ms. Bruess acquired the property within the 1215–day window of 11 U.S.C. § 522(p)(1), thereby limiting her state law exemption to $155,675.00 in value. Ms. Bruess, on the other hand, argued that she acquired the property when the deed was executed on April 5, 2010, which was substantially more than 1215 days prior to the bankruptcy filing. Therefore, her state law homestead exemption should not be limited pursuant to 11 U.S.C. 522(p)(1).
On March 31, 2015, the bankruptcy court held a hearing on the trustee's objection and Ms. Bruess' resistance. The parties submitted a Stipulation of Fact under which they agreed:
The trustee also submitted affidavits, along with a transcript of Ms. Bruess' testimony at her § 341 meeting. Ms. Bruess did not submit any evidence, and the parties submitted the matter to the bankruptcy court for consideration. The bankruptcy court issued its oral ruling on the record sustaining the trustee's objection. Specifically, the bankruptcy court found that, until he instructed his attorney to record it, “Donn Bruess retained complete control over the fate of that deed.” Therefore, delivery (and transfer of interest) did not take place until January 14, 2013, when he directed his attorney to record it.
Ms. Bruess appealed, asserting that the bankruptcy court erred in determining that she did not acquire her interest in the property, and the deed from her father was not “delivered” under Minnesota law, until her father instructed his attorney to record it.
We review the bankruptcy court's conclusions of law de novo and its findings of fact for clear error. Addison v. Seaver (In re Seaver), 540 F.3d 805, 809 (8th Cir.2008) ; Doeling v. Nessa (In re Nessa), 426 B.R. 312, 314 (8th Cir. BAP 2010). The parties are in agreement that the resolution of this appeal turns on when the deed was delivered under Minnesota law, which is a question of fact. Under long-standing Minnesota case law:
It is, of course, very elementary law that a deed does not take effect until there is a delivery to the grantee,.... Delivery is a question of fact,.... The important question in determining whether there has been a delivery is the intent of the grantor that the instrument shall pass out of his control, and operate as a conveyance.
Babbitt v. Bennett, 68 Minn. 260, 71 N.W. 22, 22–23 (1897).
A factual finding is clearly erroneous if, after examining the entire record, we are left with a definite and firm conviction that the bankruptcy court has made a mistake. Anderson v. City of Bessemer City, 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985) (quoting United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948) ). This standard plainly does not entitle a reviewing court to reverse the finding of the trier of fact simply because it is convinced that it would have decided the case differently. Anderson, 470 U.S. at 573, 105 S.Ct. 1504. Where there are two permissible views of the evidence, the fact finder's choice between them cannot be clearly erroneous. Id. at 574, 105 S.Ct. 1504.
Under 11 U.S.C. § 522, a debtor who files bankruptcy may exempt from property of the estate the property delineated in 11 U.S.C. § 522(d),3 or may use the exemptions available under state law and other federal laws. 11 U.S.C. § 522(b)(1)(3). Here, Ms. Bruess elected to use the exemptions available under state and federal law other than bankruptcy law.
One of the exemptions claimed by Ms. Bruess is the Minnesota homestead exemption as set forth in Minnesota Statutes §§ 510.01 and 510.02. Minnesota Statutes § 510.02. In Schedule C, Ms. Bruess claimed her entire interest in her homestead property, valued at $562,760.33, as exempt.
The trustee does not dispute Ms. Bruess' entitlement to a homestead exemption under Minnesota law. The trustee only argues that the limitation of 11 U.S.C. § 522(p) should apply. That section was added by the 2005 BAPCPA amendments to the Bankruptcy Code and provides a limitation on the dollar value of certain state law exemptions for recently acquired property. Specifically, for purposes of this appeal, that section limits a state law exemption in real property as follows:
11 U.S.C. § 522(p)(1)(A). The only issue in this appeal is whether Ms. Bruess “acquired” the property in which she claims her homestead exemption within the 1215–day period preceding the filing of the petition thus limiting her homestead exemption to $155,675.00.
In bankruptcy, property rights are determined by reference to state law. Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979). Minnesota law is well-settled that the transfer of an interest in real property does not occur until the delivery of the deed.
Georgen–Running v. Bidwell (In re Bidwell), 326 B.R. 759, 764–65 (Bankr.D.Minn.2005) (footnote omitted).
Thus, the fact question for the bankruptcy court was whether Donn Bruess intended to surrender control of the deed with an intent to convey title when he signed it and left it with his attorney. As the party objecting to the homestead exemption, the trustee had the burden of proving that the exemption was not properly claimed. Fed. R. Bankr. P. 4003(c). The trustee's evidence included the Stipulation of Fact between the parties. Under the terms of that stipulation, the parties agreed that the deed was executed by Donn Bruess and his wife on April 5, 2010; that it was notarized by his attorney; that the deed remained in the attorney's possession from April 5, 2010, until it was recorded on January 14, 2013; and that on January 14, 2013, Donn Bruess directed his attorney to record the deed.
The trustee also presented affidavits from each of Ms. Bruess' two brothers, William and Steven. Steven's affidavit stated: ...
To continue reading
Request your trial
-
Sarachek v. Luana Sav. Bank (In re Agriprocessors, Inc.)
...[the court is] ... left with a definite and firm conviction that the bankruptcy court has made a mistake." Bruess v. Dietz (In re Bruess ), 539 B.R. 560, 564 (8th Cir. BAP 2015) (citing Anderson v. City of Bessemer City , 470 U.S. 564, 573, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985) ). For matte......