Macumber v. Shafer
| Decision Date | 10 December 1981 |
| Docket Number | No. 47634-9,47634-9 |
| Citation | 96 Wn.2d 568,637 P.2d 645 |
| Parties | . MACUMBER wwi Helen M. Macumber dba Husky Awning, Macumber Renovating, and Husky Mobile Home Tire and Axle, Appellants, v. James W. SHAFER, Trustee in Bankruptcy, Respondent. Supreme Court of Washington, En Banc |
| Court | Washington Supreme Court |
Quigley, Hatch, Loveridge & Leslie, Jack J. Cullen, Seattle, for appellants.
Jay V. Dishnow, Jr., Seattle, for respondent.
The United States District Court for the Western District of Washington has certified the following question to this court pursuant to Chapter RCW 2.60:
Does the 1977 amendment to the Washington Homestead Statute (RCW 6.12.050), which amendment increased the exemption amount from $10,000 to $20,000, permit a debtor to claim the increased exemption amount as against a creditor who extended unsecured credit prior to the date of the amendment?
We answer this question in the affirmative.
The stipulated facts indicate that prior to May 28, 1977 appellant, William Macumber, obtained an unsecured loan of $2800 from Rainier Bank. On May 28, 1977, an amendment to RCW 6.12.050 became effective, increasing the authorized homestead exemption from $10,000 to $20,000. Subsequent thereto, appellant made a homestead declaration claiming the $20,000 exemption. On May 24, 1979, nearly two years later, appellant filed a voluntary petition in bankruptcy, claiming the full homestead exemption.
Respondent, James Shafer, trustee in bankruptcy, limited the homestead exemption to $10,000, the maximum authorized prior to the May 28, 1977 statutory amendment. The bankruptcy court affirmed the decision and an appeal to the federal district court followed. The instant certification resulted.
Two issues arise: First, should the amendment to RCW 6.12.050 be applied retroactively; and, second, is retroactive application of the amendment violative of article 1, section 10 of the United States Constitution.
Turning first to the question of retroactivity, we note that generally statutes are presumed to apply prospectively, unless there is some legislative indication to the contrary. Agency Budget Corp. v. Washington Ins. Guar. Ass'n, 93 Wash.2d 416, 610 P.2d 361 (1980); Johnston v. Beneficial Management Corp., 85 Wash.2d 637, 641, 538 P.2d 510 (1975). An exception is recognized, however, if a statute is remedial in nature and retroactive application would further its remedial purpose. Agency, supra, 93 Wash.2d at 425, 610 P.2d 361; Haddenham v. State, 87 Wash.2d 145, 550 P.2d 9 (1976); Hammack v. Monroe St. Lumber Co., 54 Wash.2d 224, 231-32, 339 P.2d 684 (1959). See also Sutherland, Statutory Construction § 60.02 (4th rev. ed. 1979).
Homestead statutes are enacted as a matter of public policy in the interest of humanity and thus are favored in the law and are accorded a liberal construction. Cody v. Herberger, 60 Wash.2d 48, 371 P.2d 626 (1962); Lien v. Hoffman, 49 Wash.2d 642, 306 P.2d 240 (1957); Bank of Anacortes v. Cook, 10 Wash.App. 391, 395, 517 P.2d 633 (1974). The homestead exemption was created to insure a shelter for each family. Clark v. Davis, 37 Wash.2d 850, 226 P.2d 904 (1951); Anacortes, supra 10 Wash.App. at 395, 517 P.2d 633. It was not created to protect the rights of creditors, First Nat'l Bk. v. Tiffany, 40 Wash.2d 193, 242 P.2d 169 (1952); Anacortes, supra, 10 Wash.App. at 395, 517 P.2d 633.
The amendment in question was enacted in response to a constant rise in the cost of living. It merely increased the dollar amount of the homestead exemption. As such it was remedial in nature.
In order to further the purpose of the homestead legislation in general, and to give effect to the amendment increasing the dollar amount of the exemption in particular, the amendment must be applied retroactively. Thus, any debts incurred prior to the amendment are subject to the post-amendment amount of the exemption. See generally, United States v. Smith, 486 F.Supp. 76 (E.D.La.1980); Wilkinson v. Carpenter, 277 Or. 557, 561 P.2d 607 (1977).
We next turn to the question of whether retroactive application of the amendment is unconstitutional under article 1, section 10 of the United States Constitution (the contract clause) 1 which provides:
No state shall ... pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts ...
The prohibition against impairment of contracts "is not an absolute one and is not to be read with literal exactness like a mathematical formula". Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398, 428, 54 S.Ct. 231, 78 L.Ed. 413, 88 A.L.R. 1481 (1934). In Blaisdell, the United States Supreme Court upheld the constitutionality of a Minnesota statute that authorized the courts to postpone sales and extend periods of redemption in foreclosure of mortgages and execution sales. In so ruling, the Court recognized that implicit in every contract is the concept that the state retains "authority to safeguard the vital interests of its people." Blaisdell, supra at 434, 54 S.Ct. at 238.
The Court further stated that not every modification constitutes an impairment of a contract. Rather, some constitute merely a modification of the remedy. Blaisdell, supra at 430, 54 S.Ct. at 237. Rather, the remedy could be modified as long as it does not totally deny or seriously impair the value of the right. Blaisdell, supra at 433, 54 S.Ct. at 238. See also El Paso v. Simmons, 379 U.S. 497, 85 S.Ct. 577, 13 L.Ed.2d 446 (1965) holding that a Texas statute limiting the purchaser's reinstatement rights after forfeiture of the land for nonpayment of interest, to five years after the date of forfeiture, was not violative of the contract clause even though previously there had been no time limit for reinstatement.
Recent decisions of this court have followed Blaisdell. See Crane Towing, Inc. v. Gorton, 89 Wash.2d 161, 570 P.2d 428 (1977); Aetna Life Ins. Co. v. Washington Life & Dis. Ins. Guar. Ass'n, 83 Wash.2d 523, 520 P.2d 162 (1974). 2 In Crane Towing, several tow truck associations challenged a comprehensive regulatory scheme governing private property owners and towing firms. It was asserted that the statute impaired existing contracts between the towing firms and private property owners. Although holding this contention failed for lack of evidence as to the contracts, we also stated:
It is presumed that parties contract with knowledge that reservation of essential attributes of sovereign power is written into all contracts as a postulate of the legal order.
Crane Towing, 84 Wash.2d at 174, 570 P.2d 428.
Applying federal and Washington State law to the facts in the instant case, we find a retroactive application of the increased homestead exemption is not unconstitutional under...
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