In re Weinshank
| Decision Date | 28 May 2009 |
| Docket Number | No. 08-25508-PGH.,08-25508-PGH. |
| Citation | 406 B.R. 413 |
| Parties | In re David Ari WEINSHANK, Debtor. |
| Court | U.S. Bankruptcy Court — Southern District of Florida |
John L. Walsh, Esq., Fort Lauderdale, FL, for debtor.
Deborah Menotte, West Palm Beach, FL, for trustee.
MEMORANDUM ORDER SUSTAINING IN PART AND OVERRULING IN PART TRUSTEE'S OBJECTION TO CLAIMED EXEMPTIONS
This matter came before the Court for evidentiary hearing on April 27, 2009, upon Deborah C. Menotte's ("Trustee") Objection to Claimed Exemptions ("Objection"), wherein the Trustee objected to David Ari Weinshank's (the "Debtor") claim that funds in his Washington Mutual bank account qualify for exemption as traceable earnings deposited into a financial institution pursuant to Florida Statutes § 222.11(2)(c) and (3).
The facts of this matter are undisputed.1 The Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on October 17, 2008. The Debtor's schedules disclose that on the petition date, the Debtor had an interest in a bank account at Washington Mutual with a scheduled balance of $4,500.00. The Debtor claimed this amount as exempt pursuant to Fla. Stat. § 222.11(2)(c), Art. 10 § 4(a)(2), and Fla. Stat. § 222.061.
The Debtor is a single man who does not provide support for anyone other than himself. At the time of the filing, the Debtor was employed at Pinecrest Rehab Hospital earning $4,214.14 per month. All of the funds in the Debtor's bank account are traceable to funds he received from Pinecrest Rehab Hospital as an employee. On the date of the bankruptcy filing, the amounts within the Debtor's bank accounts included $4,631.95 within his Washington Mutual checking account, and $197.63 within his Washington Mutual savings account.
The Trustee's Objection asserts that the funds on deposit at Washington Mutual are not exempt because the Debtor is not a head of family and seeks turnover of the subject funds. The Debtor concedes that the $197.63 balance in the Washington Mutual savings account does not qualify for exemption under § 222.11(3) because the funds have been on deposit for more than six months.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b) and 28 U.S.C. § 157(b). This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B).
The question before the Court is whether the Debtor can apply Florida Statutes § 222.11(2)(c) and (3) to exempt funds on deposit in his Washington Mutual checking account as of the petition date. The Trustee maintains that the § 222.11(3) exemption for qualified earnings on deposit in a financial institution is not available to the Debtor because he is not a head of family. However, as discussed below, the Court finds that the Debtor is entitled to the exemption based upon a plain reading of the statute.
Fla. Stat. § 222.11 "Exemption of wages from garnishment" provides:
(1) As used in this section, the term:
(a) "Earnings" includes compensation paid or payable, in money of a sum certain, for personal services or labor whether denominated as wages, salary, commission, or bonus.
(b) "Disposable earnings" means that part of the earnings of any head of family remaining after the deduction from those earnings of any amounts required by law to be withheld.
(c) "Head of family" includes any natural person who is providing more than one-half of the support for a child or other dependent.
(2) (a) All of the disposable earnings of a head of family whose disposable earnings are less than or equal to $500 a week are exempt from attachment or garnishment.
(b) Disposable earnings of a head of a family, which are greater than $500 a week, may not be attached or garnished unless such person has agreed otherwise in writing. In no event shall the amount attached or garnished exceed the amount allowed under the Consumer Credit Protection Act, 15 U.S.C. § 1673.
(c) Disposable earnings of a person other than a head of family may not be attached or garnished in excess of the amount allowed under the Consumer Credit Protection Act, 15 U.S.C. § 1673.
(3) Earnings that are exempt under subsection (2) and are credited or deposited in any financial institution are exempt from attachment or garnishment for 6 months after the earnings are received by the financial institution if the funds can be traced and properly identified as earnings. Commingling of earnings with other funds does not by itself defeat the ability of a head of family to trace earnings.
Fla. Stat. § 222.11 (2009).
In this case, it is undisputed that the Debtor is not a head of family as defined in § 222.11(1)(c), and that the subject funds represent earnings paid to the Debtor within six months of the Debtor's bankruptcy that are traceable into his Washington Mutual checking account. While courts determining contested matters pursuant to § 222.11 have considered whether someone is a head of family, what types of income constitute "earnings" under the statute, and whether such funds can be traced,2 there appears to be no case law determining whether the exemption provided for in § 222.11(2)(c) and (3) is available to a debtor who is not a head of family. To resolve this matter, the Court must interpret the statute starting with the plain language of the provisions to be interpreted. Pugliese v. Pukka Development Inc., 550 F.3d 1299, 1303 (citing United States v. Silva, 443 F.3d 795, 797-798 (11th Cir.2006)).
"The first rule in statutory construction is to determine whether the `language at issue has a plain and unambiguous meaning with regard to the particular dispute.'" Shotz v. City of Plantation, 344 F.3d 1161, 1167 (11th Cir.2003) (citing United States v. Fisher, 289 F.3d 1329, 1337-38 (11th Cir.2002)). Courts "apply the plain language of a statute unless doing so would lead to an absurd result." Pugliese, 550 F.3d at 1303 (citing United States v. Silva, 443 F.3d 795, 797-798 (11th Cir.2006)). "If the statute's meaning is plain and unambiguous, there is no need for further inquiry." CBS Broadcasting, Inc. v. EchoStar, 532 F.3d 1294, 1301 (11th Cir.2008) (citing United States v. Silva, 443 F.3d 795, 797-798 (11th Cir.2006)). However, if the statutory language is ambiguous, courts may examine extrinsic materials, including legislative history to determine legislative intent. Shotz, 344 F.3d at 1167 (citing Fed. Reserve Bank of Atlanta v. Thomas, 220 F.3d 1235, 1239 (11th Cir.2000)).
The Court finds that the language of Fla. Stat. § 222.11(2) and (3) is unambiguous with regard to the dispute in this case. The statute is divided into three subsections. Subsection (1) provides definitions for three terms: "earnings", "disposable earnings" and "head of family". Subsection (2) sets forth the amount of disposable earnings that are exempt from garnishment or attachment by creditors in three different situations based upon the circumstances of the debtor. Subsection (2)(a) exempts all of the disposable earnings of a head of family whose disposable earnings are less than or equal to $500 per week. Subsection (2)(b) further exempts all of a head of family's disposable earnings which are greater than $500 per week provided the head of family has not agreed otherwise in writing. However, even if the head of family agrees otherwise in writing, in no event can the amount attached or garnished exceed the amount allowed under the Consumer Credit Protection Act, 15 U.S.C. § 1673. In contrast, subsection (2)(c) specifically addresses persons other than a head of family and exempts from attachment or garnishment, earnings of a person other than a head of family up to the limits established under 15 U.S.C. § 1673. Section 1673 generally limits the amount that can be garnished or attached to 25% of the individual's disposable earnings per week.3
Finally, subsection (3) provides that earnings that are exempt under subsection (2), that have been credited or deposited into a financial institution, and which can be traced and identified as earnings, are exempt for six months after receipt by the financial institution. The Court finds nothing in the statute that would limit application of § 222.11's exemption provisions to situations involving only a "head of family".
The Trustee argues that even though subsection (3) generally references earnings that are exempt under subsection (2), the exemption is only provided for by subsection (2)(a), and that the remaining subsections (2)(b) and (2)(c) provide exceptions to the exemption which are subject to the limits of 15 U.S.C. § 1673. But that is not what the statute says. If the Florida Legislature intended to limit subsection (3)'s application to only those funds that are exempt pursuant to subsection (2)(a) rather than to those funds that are exempt pursuant to subsection (2) in its entirety, it could have done so. Moreover, at the hearing in response to the Court's questioning, the Trustee conceded that subsection (2)(b) also provides an exemption for a head of family. Examining the language of subsections (2)(b) and (2)(c), the Court finds that they are so similar that no logical interpretation would permit the exemption to a head of family pursuant to subsection (2)(b), while disallowing the exemption to a non-head of family pursuant to subsection (2)(c). Rather, a plain reading of subsection (2) reveals that varying amounts of earnings of an individual in Florida are exempt from attachment or garnishment under three distinct circumstances relating to the status and circumstances of the individual.
The Court notes that "the plain meaning rule is not to be blindly applied if application leads to an absurd or futile result." American Bankers Ins. Group v. United States of America, 408 F.3d 1328, 1334 (11th Cir.2005). The Court finds that a plain reading of Fla. Stat. § 222.11 does not lead to an...
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