Osborne v. Dumoulin

• Decision Date: 03 February 2011
• Docket Number: No. SC09–751.,SC09–751.
• Citation: 55 So.3d 577
• Parties: Leslie S. OSBORNE, Appellant,v.Denise J. DUMOULIN, Appellee.
• Court: Florida Supreme Court

55 So.3d 577

Leslie S. OSBORNE, Appellant,

v.Denise J. DUMOULIN, Appellee.

No. SC09–751.

Supreme Court of Florida.

Feb. 3, 2011.

Leslie S. Osborne, Trustee, Rappaport, Osborne and Rappaport, PL, Boca Raton, FL, for Appellant.Patrick S. Scott and Jeffrey T. Kuntz of GrayRobinson, P.A., Fort Lauderdale, FL, for Appellee.Paul Steven Singerman, Ilyse M. Homer and Paul A. Avron of Berger Singerman, P.A., Miami, Florida, on behalf of the Business Law Section of The Florida Bar, as Amicus Curiae.CANADY, C.J.

In this case we consider the circumstances under which a debtor is entitled to the statutory $4000 personal property exemption from legal process for debtors who do not claim or receive the benefit of a homestead exemption. We have for review a question certified by the United States Court of Appeals for the Eleventh Circuit regarding the meaning of section 222.25(4), Florida Statutes (2007)—which contains the personal property exemption—that is determinative of an issue in a bankruptcy case pending in that court and for which there appears to be no controlling precedent from this Court:

Whether a debtor who elects not to claim a homestead exemption and indicates an intent to surrender the property is entitled to the additional exemptions for personal property under Fla. Stat. § 222.25(4).

Osborne v. Dumoulin (In re Dumoulin), 326 Fed.Appx. 498, 502 (11th Cir.2009). We have jurisdiction. See art. V, § 3(b)(6), Fla. Const. In line with the legal analysis we adopt, we clarify the issue presented by rephrasing the certified question as follows:

Whether for the purpose of the statutory personal property exemption in section 222.25(4), a debtor in bankruptcy receives the benefits of Florida's article X, section 4, constitutional homestead exemption where the debtor owns homestead property but does not claim the homestead exemption in bankruptcy and the trustee's administration of the property is not otherwise impeded by the existence of the homestead exemption.

For the reasons explained below, we answer the question in the negative.

I. BACKGROUND

The parties previously stipulated to the essential facts of the case. Denise Dumoulin (Debtor) filed a voluntary chapter 7 bankruptcy petition in federal court. See 11 U.S.C. §§ 301, 701–07 (2006). In her petition, she claimed her Fort Lauderdale home as exempt under article X, section 4 of the Florida Constitution, thus removing it from the bankruptcy estate. She also indicated her intent to surrender the real property. At the time of filing, the Debtor planned to sell her home and lease it back from the purchaser. The sale transaction, however, was not consummated.

After the creditors' meeting, see 11 U.S.C. § 341 (2006), Osborne, the bankruptcy trustee (Trustee), demanded the sum of $4000 in assets from the Debtor's personal property that exceeded the amount of the allowed exemptions under the Bankruptcy Code. (This amount represented most of the Debtor's equity in her car.) The Debtor then filed amendments to her bankruptcy petition, deleting the homestead exemption and newly claiming the $4000 personal property exemption of section 222.25(4), Florida Statutes (2007), the statute at issue in this case. The Trustee objected to the claimed exemption, arguing that the Debtor was not entitled to claim it because she had a homestead. The bankruptcy court, however, overruled the objection and denied the motion for turnover of the personal property. The bankruptcy judge held that the Debtor was not precluded from claiming the statutory personal property exemption, noting that the Debtor intended to surrender the real property and no longer claimed the constitutional homestead exemption.

The Trustee appealed the ruling, and the federal district court affirmed the order overruling the Trustee's objection. The Trustee then appealed to the circuit court. Osborne, 326 Fed.Appx. at 500. Confronted with the question of how to interpret section 222.25(4), the Eleventh Circuit reviewed several bankruptcy cases that offered conflicting views regarding its meaning and certified a question to this Court. Id. at 501–02.

II. ANALYSIS

This case presents an issue of first impression in our state courts regarding the meaning of section 222.25(4), and our answer to the certified question will resolve an ongoing conflict in the bankruptcy courts.¹ The determination of the meaning of a statute is a question of law and thus is subject to de novo review. To give effect to the meaning intended by the Legislature, courts begin by examining the words of a statute to determine its plain and ordinary meaning. Holly v. Auld, 450 So.2d 217, 219 (Fla.1984) (citing A.R. Douglass, Inc. v. McRainey, 102 Fla. 1141, 137 So. 157, 159 (1931)). Only when the statutory language is unclear or ambiguous is it necessary to apply principles of statutory construction to discern its meaning. Tropical Coach Line, Inc. v. Carter, 121 So.2d 779, 782 (Fla.1960).

We begin our analysis with a review of the text of section 222.25(4) and section 4 of article X of our constitution as well as the rules of construction that apply to such exemptions. We then examine the legal context of the exemption statute. Next, we describe the basic conflict in the bankruptcy courts over the statute's meaning and, finally, we resolve the conflict and answer the rephrased certified question.

A. The Statutory Personal Property Exemption and the Constitutional Homestead Exemption

Section 222.25, Florida Statutes, provides in pertinent part as follows:

222.25. Other individual property of natural persons exempt from legal process.—The following property is exempt from attachment, garnishment, or other legal process:

....

(4) A debtor's interest in personal property, not to exceed $4,000, if the debtor does not claim or receive the benefits of a homestead exemption under s. 4, Art. X of the State Constitution. This exemption does not apply to a debt owed for child support or spousal support.

(Footnote omitted.) Section (4) was added to the statute in 2007. Ch.2007–185, § 1, Laws of Fla. (effective July 1, 2007). This exemption, sometimes referred to as the “wild card” exemption, permits an individual to exempt $4000 in personal property from the reach of creditors as long as the individual “does not claim or receive the benefits of” the article X homestead exemption. This statutory personal property exemption is distinct from the personal property exemption provided in our constitution. Art. X, § (4)(a)(2), Fla. Const. (exempting from forced sale or levy “personal property to the value of one thousand dollars”). Only the statutory exemption is at issue here.

Section 4, article X of the Florida Constitution provides in pertinent part as follows:

SECTION 4. Homestead; exemptions.—

(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:

(1) a homestead....

With regard to the homestead exemption, this Court “has long been guided by a policy favoring the liberal construction of the exemption.... A concomitant in harmony with this rule of liberal construction is the rule of strict construction as applied to the exceptions.” Havoco of America, Ltd. v. Hill, 790 So.2d 1018, 1021 (Fla.2001) (citing Milton v. Milton, 63 Fla. 533, 58 So. 718, 719 (1912)). We apply the same rule of liberal construction in favor of the statutory exemption to determine when a debtor “receive[s] the benefits” of the homestead exemption and thus becomes ineligible to claim the section 222.25(4) personal property exemption.

B. The Legal Context of the Statute

Before we examine the conflict in the bankruptcy courts regarding section 222.25(4), we outline the context of the statute within Florida and federal law. First, the constitutional homestead exemption to which the statute refers “protects the homestead against every type of claim and judgment except those specifically mentioned in the constitutional provision itself.” Olesky v. Nicholas, 82 So.2d 510, 513 (Fla.1955). ² “According to the plain and unambiguous wording of article X, section 4, a homestead is only subject to forced sale for (1) the payment of taxes and assessments thereon; (2) obligations contracted for the purchase, improvement or repair thereof; or (3) obligations contracted for house, field or other labor performed on the realty.” Havoco, 790 So.2d at 1022 (quoting Butterworth v. Caggiano, 605 So.2d 56, 60 (Fla.1992)); see Wilhelm v. Locklar, 46 Fla. 575, 35 So. 6, 6 (1903) (“No judgment is a lien on said property unless it come[s] within the exceptions of the Constitution.”); see, e.g., Ilkanic v. City of Fort Lauderdale, 705 So.2d 1371, 1373 (Fla.1998) (“[T]he civil restitution lien [ § 960.293, Fla. Stat. (Supp.1994) ] cannot be a cloud on homestead property.”); Demura v. County of Volusia, 618 So.2d 754, 756 (Fla. 5th DCA 1993) (“Although the statute [ § 162.09, Fla. Stat. (1991) ] merely provides that any lien created pursuant to an administrative fine may not be foreclosed on real property which is homestead, the Constitution itself goes much farther: No such lien exists as to such homestead property.”).

When a person acquires property and makes it his or her home, the property is “impressed with the character of a homestead, and no action of the Legislature or declaration or other act on [the owner's] part [is] required to make it [the owner's] homestead, for it [is] already such in fact.” Hutchinson Shoe Co. v. Turner, 100 Fla. 1120, 130 So. 623, 624 (1930) (citing Baker v. State, 17 Fla. 406, 408–09 (Fla.1879) (stating that under the constitutional provision, the homestead is “exempt from forced sale, whether [the owner] has or has not been...