In re Wenande, 86-00845-BA.
| Decision Date | 20 October 1989 |
| Docket Number | No. 86-00845-BA.,86-00845-BA. |
| Citation | 107 BR 770 |
| Parties | In re Robert Joseph WENANDE and Jean Marie Wenande, d/b/a Tabor Lake Inn, Debtors. |
| Court | U.S. Bankruptcy Court — District of Wyoming |
Randy L. Royal, Greybull, Wyo., for movant.
Dan Gibbs of Ken McCartney, P.C., Cheyenne, Wyo., for respondent.
DECISION DENYING CLAIM OF EXEMPTIONS
THIS MATTER came before the court on June 21, 1989, for hearing on the trustee's Objection to Claim of Exemptions.
The court having considered the Objection, the claim of exemptions, and the amended claim, all papers and pleadings filed herein, having heard argument of counsel, and upon its own review of the applicable statutes and authorities, does hereby render its Decision as follows:
On their Amended Schedule B-4, the debtors claimed the following property as exempt under applicable Wyoming Law as "entireties property":
All of the debtor\'s property that qualifies all, including but not limited to: Stock, mineral interests, real estate, accounts, intangibles and personal property, which includes, but would not necessarily be limited to the following: 1) all of the debtor\'s shares in the Wenande Land & Livestock Co. Inc., 2) all of the debtor\'s shares in the Trail Creek Grazing Assoc. (sic)
This cryptic description of the property claimed as exempt points out a serious and reoccurring problem with claims of exemptions commonly filed in this District—it is impossible to clearly ascertain exactly what property is claimed as exempt.
The debtors' Amended Schedule B-4 was filed in response to this court's January 6, 1987 Order for More Specific Listing of Property for Which an Exemption is Claimed. The January 6, 1987 Order, directed the debtors to "specifically list" the entireties property in which they claim exemptions.
To serve the purpose of a claim of exemption, property must be separately listed on the debtors' Schedule B-4 with "sufficient detail to put the trustee on notice of questionable assertions." Payne v. Wood, 775 F.2d 202, 206 (7th Cir.1985) (). See 11 U.S.C. § 522(l).
Closer adherence to Schedule B-4 as set forth in Official Form 6 will benefit all parties. On Official Form 6, the Schedule B-4 lists headings for "type of Property," "location, description, and, so far as relevant to the claim of exemption, present use of property," "specify statute creating the exemption" and "value claimed as exempt."
In this District a regrettable practice of using a pre-printed "checklist" of exemptions has developed. The Schedule B-4 and the Amended Schedule B-4 filed in this case, attached hereto as Exhibits A and B, are examples of the checklist which has become widely used in this District.
This checklist substitutes a generic statement of a category of property for the "description, . . . present use of property" information required. It also substitutes a preselected dollar amount, or a preselected percentage for the required information on "value claimed."
For example, in the present case the Amended Schedule B-4 has a check mark for "Tools of the Trade" and a preprinted value shown as "$2,000." Exactly what property these debtors consider to be "tools of the trade," where the property is now located, and its present use, are unknown.
The debtors' cryptic reference to "personal property, which includes, but would not necessarily be limited to" certain specified shares of stock is another example. It is inconceivable that the debtors, or their counsel, believed this to be adequate notice to the trustee and creditors of a claim of exemption in personal property other than the specifically listed shares of stock. Similarly, such a reference does not serve the purpose of establishing "who owns what" on the date of discharge. Payne v. Wood, 775 F.2d at 206.
In view of its January 6, 1987 Order, the court must hold that the debtors' designations of property by only categories such as "stocks," "mineral interests," "accounts," "intangibles," and "personal property" are insufficient to constitute a listing of a claim of exemption within the meaning of Bankruptcy Rule 4003. Such a generic description simply does not provide the trustee with adequate notice of the property claimed.
If there are accounts claimed, at minimum they should be listed by institution on the B-4 Schedule. The official form requires that the value of the account also be set forth. Similarly, the "mineral interests" must be more specifically described in order to provide the trustee or creditors with inquiry notice of questionable assertions.1 "Stocks" should be listed by setting forth the name of the company and the approximate number of shares claimed as exempt.
This court's position is that "value," as set forth on the official form, generally means an approximate dollar amount and not a percentage. Naturally, value is the type of information that is not always available on the date a petition is filed. Where it is not, an estimation, so designated, may serve the purpose of the B-4 Schedule, e.g., "approximately $1,500." If the value is unknown, a simple statement to that effect serves the purpose of the B-4 Schedule.
"Location" of the claimed property is a required item on the B-4 Schedule in Official Form 6, that is often simply omitted.
The better practice is to avoid a reference to another of the debtor's B Schedules as a substitute for the listing required on the Schedule B-4. This practice of referring to the debtor's other B Schedules no doubt arises in a commendable attempt to eliminate duplicative lists. However, a problem arises because debtors usually list on their other B Schedules a mix of exempt and nonexempt property.
For example, debtors must list on their Schedule B-2(c) under "household goods, supplies and furnishings," items such as VCR's, power tools, and expensive art work that are not generally exempt under the Wyoming Statutes. Similarly, they must list many nonexempt and exempt items together under Schedule B-2(e), "wearing apparel, jewelry, firearms, sports equipment, and other personal possessions." When reference is later made to "see exhibit X" it often refers to the property already listed under B-2(c) or (d), some of which is not exempt, and which the debtors did not intend to claim as exempt.
As a result, the trustees have often been forced to file objections to claimed exemptions in certain property, described by reference to another schedule, when neither debtors nor their counsel intended that it all be claimed as exempt. Because of the confusion resulting from this practice, trustees, debtors and debtors' counsel have had to attend unnecessary hearings on objections to exemptions. Such attendance can be very burdensome in a large Federal Judicial District such as the District of Wyoming.2
In the present case, the only property which is described with sufficient clarity to constitute "listing" the property claimed as exempt as entireties property within the meaning of Bankruptcy Rule 4003, are the shares in Wenande Land and Livestock and in the Trail Creek Grazing Association. Once such property is properly listed as claimed, the burden shifts to the trustee to prove the property is not properly claimed as exempt. Bankruptcy Rule 4003(c). The trustee did not meet his burden of showing said stock is not properly claimed as exempt.3
There is nothing in the record to establish that the remaining property, vaguely alluded to in debtors' Amended Schedule B-4, is, in fact, entireties property. For example, from the generic listing of "real estate" it is not possible to ascertain to what property the debtors are referring. The debtors' Schedule B-1 ("Real Property") does list two (2) items. One (1) of these, a house trailer, appears to be personal property.4 The other item appears to be real property located in another state. That other state does not provide for the creation of a tenancy by the entireties in real property. See 7 COLLIER ON BANKRUPTCY at 31 through 42.4 (15th ed.1989).
Having determined that the Wenande Land and Livestock stock and the Trail Creek stock are adequately claimed as exempt as entireties property, and that the trustee did not meet his burden of establishing that the property is not properly claimed as exempt, the court turns to the disposition of entireties property in a joint bankruptcy case of both spouses.
The present case was commenced by a joint voluntary petition for relief under Chapter 11 of the Bankruptcy Code on October 10, 1986. See 11 U.S.C. § 302. It was later converted to a case under Chapter 7. The status of entireties property in a bankruptcy case filed by only one of the spouses has been the subject of many recent cases. See, e.g., Matter of Geoghegan, 101 B.R. 329, 331 (Bkrtcy.M.D.Fla. 1989). However, there is very little case law on the status of entireties property in a bankruptcy case filed by both spouses. See, e.g., Ragsdale v. Genesco, Inc., 674 F.2d 277 (4th Cir.1982) ().
The issue in this case is whether property held by the debtors as tenants by the entireties may be used to satisfy individual claims against either debtor or must, instead, be used solely to satisfy joint claims against both debtors.
A debtor's...
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