In re Rivera
| Decision Date | 10 June 2013 |
| Docket Number | No. 12–09036 ESL.,12–09036 ESL. |
| Citation | 499 B.R. 175 |
| Parties | In re David Roman RIVERA, Madeline Quiñones Colon, Debtors. |
| Court | U.S. Bankruptcy Court — District of Puerto Rico |
OPINION TEXT STARTS HERE
Jesus Enrique Batista Sanchez, The Batista Law Group, PSC, San Juan, PR, for Debtor.
Noreen Wiscovitch Rentas, West Palm Beach, FL, for Trustee.
This case is before the court upon the Chapter 7 Trustee's Amended Objection to Claimed Exemptions (the “ Objection ”, Docket No. 23) and the Debtors' Response thereto (Docket No. 26). The Chapter 7 Trustee objects to several claimed exemptions under Puerto Rico law 1 and requests the turnover of certain amounts and/or the surplus not allowed under certain exemption statutes. The Debtors contend the claimed exemptions are proper. For the reasons stated below, the Chapter 7 Trustee's Objection is granted in part and denied in part.
The Debtors filed their voluntary bankruptcy petition on November 9, 2012 (Docket No. 1). In Schedule C, they claimed the following exemptions under Puerto Rico law (Docket No. 1, p. 17):
+----------------------------------------------------------------------------+
¦Property ¦Legal grounds ¦Value of exemption ¦
+----------------------------------+---------------------+-------------------¦
¦ ¦PR Act No. 195 ¦ ¦
¦Primary residence ¦enacted on September ¦$130,000 ¦
¦ ¦13, 2011, as amended ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Stove $200; Refrigerator $600; ¦32 L.P.R.A. § 1130 ¦ ¦
¦Microwave $150; Kitchen Utensils ¦(14) ¦$1,050 ¦
¦$40; Dinnerware $30; Cookware $30 ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Washer and Dryer ¦32 L.P.R.A. § 1130 ¦$200 ¦
¦ ¦(14) ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Living Room Set $100; Bedroom Set ¦32 L.P.R.A. § 1130(2)¦$50 ¦
¦$100; Chest and Nightstands $150 ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Dinning Room Set $100; Tables and ¦32 L.P.R.A. § 1130(1)¦$150 ¦
¦Chairs $50 ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Television Set $300; DVD Player ¦32 L.P.R.A. § 1130 ¦$430 ¦
¦$30; TV Sound System $100 ¦(14) ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Mobile Phone $75; Computer $100; ¦32 L.P.R.A. § 1130 ¦$200 ¦
¦Printer $25 ¦(14) ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Personal Clothes, Shoes, Jewelry ¦32 L.P.R.A. § 1130(2)¦$440 ¦
¦and Other Apparel ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Undefined Benefit From Marriott ¦25 L.P.R.A. § 383 ¦$1 ¦
¦San Juan Retirement Plan ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦1993 Nissan Pathfinder ¦32 L.P.R.A. § 1130(6)¦$897 ¦
+----------------------------------+---------------------+-------------------¦
¦2005 Mitsubishi Montero ¦32 L.P.R.A. § 1130(6)¦$375 ¦
+----------------------------------+---------------------+-------------------¦
¦TOTAL ¦ ¦$134,093 ¦
+----------------------------------------------------------------------------+
On February 15, 2013, the Chapter 7 Trustee filed her Objection to Debtors' claimed exemptions (Docket No. 23). She sustains that the Debtors have not demonstrated compliance with Articles 11 and 12 of Puerto Rico's Home Protection Act No. 195 enacted on September 13, 2011 (the “2011 PR Home Protection Act”) and therefore the homestead exemption must be denied. In regards to the stove, microwave, kitchen utensils, dinnerware and cookware, the Chapter 7 Trustee avers that 32 L.P.R.A. § 1130(14) does not include those specific exemptions. As to the living room set, bedroom set, chest, nightstands, dining room set, tables, chairs and television set, the Chapter 7 Trustee argues that the claimed amounts exceed the ones allowed in the pertinent Puerto Rico statutes, which warrants the exemption to be disallowed or have the excess value turned over to the bankruptcy estate. The Chapter 7 Trustee further contends that the DVD Player, sound system, mobile phone, computer or printer are not expressly allowed in 32 L.P.R.A. § 1130(14), that the Debtors did not sufficiently detail the wearing apparel they claimed exempt, and that they did not prove that the motor vehicles constitute a working tool, especiallysince they are retired and receiving retirement pensions. Finally, in regards to the interests the Debtors claim in the Marriott San Juan Retirement Plan, the Chapter 7 Trustee argues that the benefits in 25 L.P.R.A. § 383 are reserved for pensions for disability or death in the line of duty in regards to State Internal Security and that the Debtors have not established that the proceeds of such retirement plan fit its legislative purpose. Thus, the Chapter 7 Trustee seeks the turnover of Debtors' funds in the 401(k) plan.
On March 13, 2013, the Debtors filed an Amendment to Schedules to “correct exemptions” (Docket No. 25). The only “correction” was changing the legal grounds on the Debtors' benefit from the Marriott San Juan Retirement Plan from 25 L.P.R.A. § 383 to 11 U.S.C. § 522(b)(3)(C). Thus, in their new amended Schedule C, Debtors claim the following exemptions and values:
+----------------------------------------------------------------------------+
¦Property ¦Legal grounds ¦Value of exemption ¦
+----------------------------------+---------------------+-------------------¦
¦ ¦PR Act No. 195 ¦ ¦
¦Primary residence ¦enacted on September ¦$130,000 ¦
¦ ¦13, 2011, as amended ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Stove $200; Refrigerator $600; ¦32 L.P.R.A. § 1130 ¦ ¦
¦Microwave $150; Kitchen Utensils ¦(14) ¦$1,050 ¦
¦$40; Dinnerware $30; Cookware $30 ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Washer and Dryer ¦32 L.P.R.A. § 1130 ¦$200 ¦
¦ ¦(14) ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Living Room Set $100; Bedroom Set ¦32 L.P.R.A. § 1130(2)¦$350 ¦
¦$100; Chest and Nightstands $150 ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Dinning Room Set $100; Tables and ¦32 L.P.R.A. § 1130(1)¦$150 ¦
¦Chairs $50 ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Television Set $300; DVD Player ¦32 L.P.R.A. § 1130 ¦$430 ¦
¦$30; TV Sound System $100 ¦(14) ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Mobile Phone $75; Computer $100; ¦32 L.P.R.A. § 1130 ¦$200 ¦
¦Printer $25 ¦(14) ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Personal Clothes, Shoes, Jewelry ¦32 L.P.R.A. § 1130(2)¦$440 ¦
¦and Other Apparel ¦ ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦Undefined Benefit From Marriott ¦11 U.S.C. § 522(b)(3)¦$1 ¦
¦San Juan Retirement Plan ¦(C) ¦ ¦
+----------------------------------+---------------------+-------------------¦
¦1993 Nissan Pathfinder ¦32 L.P.R.A. § 1130(6)¦$897 ¦
+----------------------------------+---------------------+-------------------¦
¦2005 Mitsubishi Montero ¦32 L.P.R.A. § 1130(6)¦$375 ¦
+----------------------------------+---------------------+-------------------¦
¦TOTAL ¦ ¦$134,093 ¦
+----------------------------------------------------------------------------+
On March 14, 2013, the Debtors filed a Response to [the Chapter 7] Trustee's Objection (Docket No. 26). In regards to the personal exemptions claimed under 32 L.P.R.A. § 1130(14) for the stove, kitchen utensils, dinnerware and cookware, the Debtors sustain that under the liberal interpretation in which Puerto Rico case law has construed exemptions, the term “home-use kitchens” includes these kitchen items. As to the amounts of the exemptions claimed over the living room set, bedroom set, chest and nightstands, dining room set, tables and chairs, the Debtors sustain that they can each claim the full amount afforded in the relevant Puerto Rico statutes because they are two joint debtors. The Debtors also argue that the television set, stereo equipment...
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