In re Delk
| Decision Date | 24 March 2016 |
| Docket Number | Case No. 15-31502 |
| Parties | In re: Jerry R. Delk, Debtor |
| Court | U.S. Bankruptcy Court — Southern District of Ohio |
This matter was heard on the Objection to Claim of Exemption in 770 Birchwood Drive, Greenville, Ohio filed by the Chapter 7 Trustee, Roger Luring and the response of the debtor, Jerry Delk. The issue tried was whether Jerry abandoned his residence so as to lose any entitlement to a homestead exemption in that property under Ohio law. For the reasons to be discussed, the court finds that while Jerry moved out of his residence upon the filing of a divorce action by his wife, Vicki Delk, he did not abandon that residence and attempted to re-establish his residence at the property, only to be precluded from doing so by a temporary restraining order obtained by Vicki from the domestic relations court, resulting in Jerry's constructive occupancy of the residence under the doctrine of stress of circumstances, thereby entitling Jerry to a homestead exemption in the residence.
Jerry filed this Chapter 7 bankruptcy case on May 8, 2015. Roger Luring was appointed as the Chapter 7 Trustee.
Jerry listed 770 Birchwood Drive, Greenville, Ohio (the "Property") as his street address on the petition, but provided a P.O. Box 97, Greenville, Ohio as his mailing address. Jerry initially scheduled the Property on his Schedule A as his "marital residence," but did not assert an exemption in that real estate on Schedule C. doc. 1. However, Jerry did file a statement of intention on the petition date, claiming the property as exempt and that he was reaffirming the first and second mortgage loans on the property, both held by Greenville National Bank. doc. 4.1 Jerry reaffirmed those two mortgage loans and filed reaffirmation agreements on August 5, 2015. docs. 15 & 16. The Property was also listed on Schedule D as his "marital residence."
On August 18, 2015 Jerry filed an Amended Schedule C, asserting an exemption in the amount of $27,456.65 in the Property pursuant to Ohio Revised Code § 2329.66(A)(1) - the Ohio homestead exemption provision. doc. 20. On August 20, 2015 the Trustee filed a timely objection to that amended claim of an exemption in the residence. doc. 21. Jerry filed a response to that objection on September 9, 2015. doc. 24. The court held the hearing on this contested matter on November 18, 2015. This court has jurisdiction pursuant to 28 U.S.C. § 1334 and is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B).
The evidence established that the Property was purchased by and is titled jointly to Jerry and Vicki, through a joint deed with right of survivorship. On July 9, 2014 Vicki filed a divorce complaint against Jerry in the Darke County Common Pleas Court (the "Divorce Court"), Case No. 14-DIV-00331 (the "Divorce Action"). The Property was listed as the address of both Jerry and Vicki on the Domestic Relations Questionnaire filed with the Divorce Court on July 9, 2014. Debtor Ex. 1. The Divorce Action remains pending. Other than the temporary restraining order discussed below, no temporary or final orders ordering support and allocating or distributing property interests have been entered by the Divorce Court. Jerry and Vicki have no minor children or other dependents.
On July 11, 2014, approximately ten months prior to filing bankruptcy and two days after Vicki filed the divorce complaint, Jerry signed a lease along with his friend, Michelle Mendenhall, for an apartment located at 423 W. 4th Street, Greenville, Ohio (the "Apartment"). Trustee Ex. A.2 The stated term of the lease ran from July 11, 2014 through July 11, 2015.3 Trustee Ex. A. The testimony conflicted as to whether Jerry moved out of the Property at that time. Vicki testified that he did in fact move out of the Property at that time and moved into the Apartment with his girlfriend, Ms. Mendenhall. See also Trustee Ex. B. The testimony of Dana Rex, Vicki's daughter and Jerry's step-daughter, supported Vicki's testimony that Jerry moved out of the Property in July 2014. Ms. Rex testified that she lived in a house somewhat behind the Property and could see the back of the Property from her house. She tried to track what occurred at her mother's house over a concern for her mother's safety. She testified that she did not observe Jerry spending evenings at the marital residence after July 2014.
Jerry showed up at the Property on an evening in March 2015. Vicki's testimony concerning that event is as follows:
Tr. at 21. In her affidavit, Vicki stated that "[o]n March 16, 2015, JERRY DELK advised me that he was planning on moving back into the marital residence." Trustee Ex. B, ¶ 5. Consistent with Vicki's testimony at the hearing and her sworn affidavit, on March 18, 2015 Vicki filed a motion with the Divorce Court seeking a restraining order to keep Jerry from returning to the residence and seeking exclusive occupancy of the residence. The Divorce Court granted that motion on an uncontested basis, and on March 25, 2015 entered an order ordering that: Jerry "be, and he hereby is, restrained and enjoined from re-entering the marital premises located at 770 Birchwood Dr., Greenville, Ohio." (the "TRO"). See Trustee Ex. C. The court further ordered that Vicki "be, and she hereby is, granted the exclusive use and occupancy of the marital residence to the exclusion of [Jerry] during the pendency of this action." Id.
Jerry testified that he did not move out of the marital residence until late March 2015, when he was served with the TRO. He testified that prior to that time he stayed at the Property approximately four days each week and at the Apartment with Ms. Mendenhall a couple days each week. Tr. at 13 & 43. He testified that when he started staying with Ms. Mendenhall in the apartment, he "left with what he had on [his] back." Tr. at 10-11. Jerry also testified that he maintained the swimming pool, mowed outside the fenced area of the yard, and performed other maintenance and work around the Property until he was served with the TRO. Tr. at 47-48. Vicki testified that he had clothing and other personal property at the Birchwood Drive property and moved out "on a piecemeal basis." Tr. at 20-21 & 26. The testimony was consistent that Jerry did go to the Property during the day when Vicki was not home on some occasions. Tr. at 37, 47-48. However, Vicki insisted that he did not spend the night there from July 2014 until the evening in March 2015 when he returned. Tr. at 19, 21, 26 & 27. Jerry testified that he came home to the Property late at night after cleaning up and shutting down his ice cream parlor for the evening and sometimes parked in the garage, inferring that people outside the home would not know he was at the Property because of his late hours and his parking in the garage. Tr. at 15-16.
As to the issue of Jerry moving out of the Property, the court finds the testimony of Vicki and Ms. Rex to be more credible. Their testimony is also supported by Jerry signing the lease with Ms. Mendenhall for the Apartment on July 11, 2014. While the court finds that Jerry sometimes did return to the Property during the day prior to being served with the TRO, including for performing work and maintenance around the residence, he moved out of the Property in July 2014.
It is undisputed that Jerry has resided in the Apartment at least since he was served with the TRO. However, Jerry testified that it is was and remained his intention since the divorce action was filed to return to the Property, but for the TRO. He testified that he is hoping that the Divorce Court awards him possession of the property. Tr. at 42-43, 46, and 48.
Both Jerry and Vicki testified that the mortgage payments for the Property and housing expenses such as the real estate taxes and utilities are paid through checks issued by Vicki from a business account for the Back in Time Cafe, which is owned jointly by Jerry and Vicki. However, following the issuance of the TRO, Jerry has not worked at the Cafe, but has received paychecks from the business. Jerry asserted that half of the income from the Cafe belongs to him. Vicki continues to work at the Cafe and testified that that the income from the Cafe which is used to make the mortgage payments and to pay the housing-related expenses is attributable to her labor. Tr. at 29-34.
The Trustee asserts that Jerry's claim of the homestead exemption in the Property should be denied because Jerry vacated and abandoned it in July 2014, only attempting to return to the premises in March 2015 to be able to claim the Property as his primary residence for bankruptcy exemption planning purposes. Jerry asserts that he is entitled to the homestead exemption in the Property because the only reason he left the premises was because of the TRO granted by the Divorce Court and that it is his intention to return to property, hoping the Divorce Court awards the property to him.
The Trustee had the burden by a preponderance of the evidence to show that the exemption...
To continue reading
Request your trial