In re Gillette
| Decision Date | 03 March 1999 |
| Docket Number | Bankruptcy No. 97-230-8G7. |
| Parties | In re Cher Lynn GILLETTE, a/k/a Cher Gillette Pujol, p/k/a Cher Gillette Morse, Debtor. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
Timothy W. Gensmer, Sarasota, FL, for debtor Cher Lynn Gillette.
Davie B. McEwen, St. Petersburg, FL, for trustee Traci K. Strickland.
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND MEMORANDUM OPINION REGARDING TRUSTEE'S OBJECTION TO CLAIMED EXEMPTION
THIS CASE came before the Court for final evidentiary hearing to consider the Objection to Claimed Exemption filed by Traci K. Strickland, the chapter 7 trustee appointed in this case (the Trustee). The property at issue in this matter consists of a one-half interest in a Strong Money Market Account, a one-half interest in a Strong Short Term Bond Fund, and a one-half interest in a vehicle. The Debtor, Cher Lynn Gillette, asserts that she owns the property with her husband as tenants by the entireties, and that she may therefore claim the property as exempt under Florida law. The Trustee objects to the claim of exemptions, and asserts that the Debtor's entitlement to the exemption claimed for the Money Market Account and Bond Fund is governed by the law of either California or Wisconsin, rather than the law of Florida, and that the Debtor may not claim the exemption under applicable state law. Additionally, the Trustee contends that all of the elements required under Florida law to create a tenancy by the entirety are not present in this case.
The Debtor and her husband, Jean Michael Pujol (Pujol), were married in 1993. At the time of their marriage and for several years thereafter, the Debtor and Pujol were residents of California.
The Debtor and Pujol moved to Sarasota, Florida, in December of 1995.
On February 8, 1996, the Debtor and Pujol signed a Strong Funds Account Application. (Trustee's Exhibit No. 1). The completed Application contains the following information:
On February 8, 1996, the Debtor signed a check made payable to Strong Funds in the amount of $70,000. (Trustee's Exhibit No. 2). It appears that the check was written on an account owned by the Debtor and Pujol which was maintained at WestAmerica Bank in Fairfield, California. The notation on the check indicates that $35,000 of the total amount was for investment into the money market fund, and $35,000 was for investment into the short term bond fund.
On June 30, 1996, the Debtor signed an additional check made payable to Strong Funds in the amount of $20,000. (Trustee's Exhibit No. 2). This check was written on the same account owned by the Debtor and Pujol and maintained at WestAmerica Bank in California.
Neither the Debtor nor Pujol was domiciled in Wisconsin when the account was established or when the additional funds were contributed to the account.
The Debtor and Pujol received statements relating to the Strong Money Market Fund and the Strong Short Term Bond Fund for the 1996 calendar year and the 1997 calendar year. (Trustee's exhibit No. 3). The statements were sent to the Debtor and Pujol at their address in Sarasota. According to the statements, the business entity known as Strong Funds was located in Milwaukee, Wisconsin.
A series of approximately twenty checks was written on the Strong Money Market Fund commencing in August of 1996, and continuing through October of 1997. (Trustee's Exhibit No. 4). Two of the twenty checks were signed by both the Debtor and Pujol, and the remaining checks were signed only by the Debtor. The checks reflect that they were written on the Strong Money Market Fund "payable through Firstar Bank Milwaukee, N.A. Milwaukee, WI."
The Debtor filed a petition under chapter 7 of the Bankruptcy Code on January 7, 1997. The Debtor was a resident of Florida when the petition was filed, and her residence and domicile had been in Florida for the one hundred and eighty days immediately preceding the filing of the petition.
On her "Schedule C — Property Claimed as Exempt" which was filed in the case, the Debtor listed various property as exempt under Florida law. As set forth above, the Trustee has objected to the exemption claimed for the Debtor's (1) "1/2 interest as JTE in 1991 Isuzu Amigo," (2) "1/2 interest as JTE in Strong Money Market Acct," and (3) "1/2 interest as JTE in Strong Short Term Bond Fund."
The Florida Vehicle Registration Certificate for the Isuzu reflects that the vehicle is titled in the names of "Pujol Jean Michel or Cher Gillette." (Trustee's Exhibit No. 5).
The Debtor claimed a one-half interest in the Strong Money Market Fund and the Strong Short Term Bond Fund as exempt on the basis of "Florida Law — Joint tenancy by the entirety." The Trustee asserts that Florida law does not apply to the disposition of the Strong Funds. Instead, the Trustee contends that the law of either California or Wisconsin governs the Debtor's entitlement to the claimed exemptions.
Section 522(b)(2) of the Bankruptcy Code provides:
(Emphasis supplied).
The Debtor was a resident of Florida when she filed the petition. Florida law provides that residents of Florida shall not be entitled to the federal exemptions provided in § 522(d). Fla.Stat. § 222.20. Residents of Florida may exempt property as authorized by § 522(b)(2)(A) and § 522(b)(2)(B) of the Bankruptcy Code.
The exemption authorized by § 522(b)(2)(B) relating to interests as a tenant by the entirety or joint tenant are cumulative to the exemptions under state or local law authorized by § 522(b)(2)(A). The cumulative nature of the exemptions is denoted by the inclusion of the word "and" between subsection (b)(2)(A) and subsection (b)(2)(B). "In addition to the state law exemption provided in Section 522(b)(2)(A), Debtor is also entitled under Section 522(b)(2)(B) to exclude from his bankruptcy estate" any interest in property as a tenant by the entirety or joint tenant to the extent that such interest is exempt under applicable nonbankruptcy law. In re Golub, 80 B.R. 230, 232 (Bankr. M.D.Fla.1987) (Emphasis supplied).
Consequently, a debtor who is a Florida resident on the date that his petition is filed is entitled to claim as exempt not only (1) property that is exempt under state law pursuant to § 522(b)(2)(A), but also (2) property held as a tenant by the entirety or joint tenant to the extent that such property is exempt from process under applicable nonbankruptcy law pursuant to § 522(b)(2)(B).
For purposes of the claim of exemption under § 522(b)(2)(B), the court must determine whether the Debtor had an interest in the property as a tenant by the entirety or as a joint tenant, and the extent to which such interest is exempt from process under applicable nonbankruptcy law.
State law governs the determination of interests in property and the disposition of entireties or joint property. "Since there is no federal law of property, it is necessary to look to state law to determine the nature, extent, and effect of the debtor's interest in a tenancy by the entirety, and whether that interest is immune from the reach of creditors under the applicable law." In re Anselmi, 52 B.R. 479, 484 (Bankr.D.Wyo.1985).
One issue in this case centers on whether Florida state law, California state law, or Wisconsin state law applies to determine the Debtor's ownership interest in the account and is the applicable nonbankruptcy law contemplated by § 522(b)(2)(B) of the Bankruptcy Code. The Debtor has claimed the exemption under the law of Florida, the state in which she currently resides and the state in which she filed her chapter 7 petition. The Trustee contends that the applicable law should be either the law of California, where the Trustee contends that the Debtor resided when she established the Strong accounts and where the money which funded the accounts originated, or the law of Wisconsin, where the accounts are maintained.
To resolve this issue, the Court should apply the choice of law rules of the state of Florida. This case is pending in Florida, which is the state of the Debtor's residence and domicile. ...
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