Matter of Neis
| Decision Date | 11 February 1982 |
| Docket Number | Bankruptcy No. LM7-81-00423. |
| Citation | 17 BR 656 |
| Parties | In the Matter of Don Orriel NEIS, Debtor. |
| Court | U.S. Bankruptcy Court — Western District of Wisconsin |
Smyth, Sauer, Becker, Lynch & Smyth, Ltd. by William J. Sauer, La Crosse, Wis., for Trane Employees Credit Union.
Thompson, Parke & Heim, Ltd. by Richard C. Thompson, La Crosse, Wis., for Raymond Mook, Sr. and Anna M. Mook.
Johns, Flaherty & Gillette, S.C. by Galen W. Pittman, La Crosse, Wis., for Don Orriel Neis, debtor.
At the trial in this matter held September 22, 1981, the following facts were established. In 1972, Don and Andrea Neis, as joint tenants, purchased a house at 4062 Glenhaven Drive, La Crosse, Wisconsin ("the Glenhaven house"). Beginning in March, 1979, Don Neis divided his time between the Glenhaven house and a room at 1117 South Fifth Street because he and his wife were having marital problems. For the period prior to April 2, 1979, Mr. Neis lived at the Glenhaven house most of the time and kept his belongings there. Andrea Neis filed for divorce on April 2, 1979. Mr. Neis then removed his belongings from the Glenhaven house and moved to an apartment at 1638 Bainsbridge, La Crosse, Wisconsin. On July 5, 1979, a temporary order in the divorce proceeding provided that Mr. Neis "vacate the residence of the parties immediately." In September, 1979, Mr. Neis moved again to a single-family dwelling that he owned at 1107 Wells Street, Onalaska, Wisconsin.
On June 11, 1980, a judgment was docketed against Don Neis on behalf of Cameron, Nix, Collins and Quillin, Ltd. ("Cameron"). On June 17, 1980, a judgment was docketed against Don Neis on behalf of Raymond and Anna Mook ("the Mooks"). Trane Employee's Credit Union ("Trane") docketed a third judgment against Neis on July 16, 1980. A divorce was granted to Don and Andrea Neis on November 26, 1980. The divorce court ordered the sale of the Glenhaven house. The order called for even division of the proceeds after allowing certain adjustments and credits. Andrea Neis (Mekkelson) moved out of the Glenhaven house on January 15, 1981. On February 1, 1981, Don Neis moved back to the Glenhaven house to protect it from vandalism while awaiting its sale.
Don Neis filed a chapter 7 bankruptcy proceeding on March 6, 1981. On March 31, 1981, Don Neis, Andrea Neis (Mekkelson), Trane, Cameron and Raymond and Anna Mook entered into an agreement providing for partial release of the judgment liens to allow the Glenhaven property to be sold free and clear of all liens. The agreement created an escrow fund for the net proceeds of the sale of the house. No money is to be disbursed until so ordered by the bankruptcy court.
The debtor, Don Neis, claims his equity in the Glenhaven house is exempt as homestead under Wis.Stats. § 815.20. Trane, Cameron and Raymond and Anna Mook object to the homestead exemption claiming Don Neis had abandoned the property as his homestead. At the trial, Don Neis testified that he did not intend to abandon his homestead rights.
The sole issue to be determined is whether the property at 4062 Glenhaven was the homestead of Don Neis at the time the judgments were docketed. The answer must be based on Wisconsin law of homesteads.
Wis.Stats. § 815.20 provides that:
(1) An exempt homestead . . . selected by a resident owner and occupied by him shall be exempt from execution, from the lien of every judgment and from liability for the debts of such owner to the amount of $25,000,. . . . Such exemption shall not be impaired by temporary removal with the intention to reoccupy the premises as a homestead nor by the sale thereof, but shall extend to the proceeds derived from such sale to an amount not exceeding $25,000, while held, with the intention to procure another homestead therewith, for 2 years.
As the statute makes clear, a homestead must be occupied by an owner or it cannot be characterized as exempt. The legislature has recognized, however, that in certain instances an owner may be prevented from occupying his or her homestead. In those cases where the circumstances do not permit actual residence, the exemption may be allowed nonetheless. Herrick v. Graves, 16 Wis. 163, 172 (1862) discusses some of these circumstances.
For the statute makes occupancy and possession by the owner an essential feature or characteristic of a homestead; and it would be a solecism to say that a man\'s homestead was in one place, when, in truth and fact, he resided elsewhere. From this it must not be assumed that a party would lose his homestead when he ceased to actually live upon it with his family. This, we think, is too narrow a construction of the statute. And hence we have held, in a case decided at this term, that a party would not forfeit the exemption on being absent from home a season, traveling with his family, . . . or should be prevented, by some temporary necessity, from occupying his homestead for a time with his family.
Generally, the removal must be temporary and there must be an intention to reoccupy the premises. The duration of the removal is of no importance.
The statute does not limit the measure of removal, but it does the kind of removal. Absence is licensed without limit, so that the homestead remain the homestead, for the exemption to operate upon. As suggested by Paine, J., in Re Phelan, the owner may visit the antipodes, without forfeiture of his exemption, so that his purpose be essentially temporary, animo revertendi to his homestead as his homestead, and not of indefinite absence. Re Miller\'s Estate, 3 Rawle, 312. But if his removal be animo manendi, or to live elsewhere indefinitely, so that he could acquire another home, the exemption of his former homestead ceases, because it ceases to be his homestead. Jarvais v. Moe, 38 Wis. 440, 445-46 (1875).
In deciding whether an absence is temporary, a court will consider intent of the person claiming the exemption. However, a claimant's testimony on this issue will not be determinative if the statement concerning intent is contradicted by his or her actions. This issue was addressed by the Wisconsin Supreme Court in Hauser v. Schauer, 215 Wis. 75, 79, 254 N.W. 343 (1934).
While it is always proper for one claiming a homestead exemption to testify as to what his intentions were at the time of removing from his homestead, such professions are of little force or effect when they are of an ex post facto character and made after intervening occurrences have made such professions advantageous.
In applying the somewhat restrictive statutory language to particular fact situations, Wisconsin courts have tended to liberally construe the statute in favor of debtors. The Wisconsin Supreme Court explained the rationale for liberal construction in Schwanz v. Teper, 66 Wis.2d 157, 163, 223 N.W.2d 896 (1974).
There is a strong public policy in this state to protect the homestead exemption. . . . Because of this public policy, homestead statutes are liberally construed in favor of the debtor, . . . and homestead rights are preferred over the rights of creditors.
The Wisconsin Court of Appeals recently stated that "homestead statutes are remedial legislation and, as such, are to be liberally construed in favor of the debtor." State...
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