Peter Scott Kipp

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
PETER SCOTT KIPP
DEBTOR
CASE NO.
05-00718-5-ATS
ORDER ALLOWING TRUSTEE’S OBJECTION TO EXEMPTIONS
Pending before the court is the trustee’s objection to the chapter
7 debtor’s claim of exemption in a coin collection. A hearing was held
in Raleigh, North Carolina on June 8, 2005. For the reasons that
follow, the objection will be allowed.
The debtor, Peter Scott Kipp, filed a voluntary petition for
relief under chapter 7 of the Bankruptcy Code on February 26, 2005. On
Schedule B of his petition, he listed a coin collection valued at
$5,000. On Schedule C, he claimed an interest in a "coin collection,
net value $3,825.00" as a personal or household good exempt under North
Carolina General Statute § 1C-1601(a)(4). The trustee objected on the
grounds that the coin collection cannot be characterized as a household
good and is not otherwise exempt or exemptible. The trustee contends
that the coin collection is property of the estate within the meaning
of 11 U.S.C. § 541.
Section 1C-1601(a)(4) of the North Carolina General Statutes
provides that the debtor may retain, free of the enforcement of the
claims of creditors, the debtor’s aggregate interest up to specified
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monetary limits in "household furnishings, household goods, wearing
apparel, appliances, books, animals, crops, or musical instruments,
that are held primarily for the personal, family, or household use of
the debtor or a dependent of the debtor." In this jurisdiction, the
case frequently cited for purposes of determining the sort of items
that can be claimed through the household goods exemption is McGreevy
v. ITT Financial Serv. (In re McGreevy), 955 F.2d 957 (4th Cir. 1992).
McGreevy is a lien avoidance case rather than an exemptions case, but
it construes 11 U.S.C. § 522(f)(2)(A), which identifies the exemptions
available in bankruptcy and contains language almost identical to that
in § 1C-1601(a)(4). The McGreevy court reviewed varying methods of
determining what qualifies as a "household good" and adopted the
"functional nexus" test, which provides that an item qualifies as a
"household good" when it is "used to support and facilitate daily life
within the house." 955 F.2d at 962. The court observed that pots and
pans serve that function, whereas a model car collection would not.
955 F.2d at 962. There are surprisingly few cases construing McGreevy
in recent years, but the appellate court’s recitation of a required
relationship between the good to be exempted and its use in the
household still is generally accepted as solid precedent.
Without relying exclusively on McGreevy, given the differing
contexts in that case and in this one, the court concludes that the
coin collection cannot qualify as a "household good." Aside from the
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debtor’s personal attachment to the collection and its value as a
hobby, the fact remains that the collection has its own independent
value much like an antique. The court is persuaded that it should
rightly be included as part of the estate. The debtor has claimed some
portion of the collection’s value under the "wild card" exemption, so
he will be able to retain at least some of the coins that carry the
most sentimental value to him or his family.
Accordingly, the trustee’s objection to the debtor’s exemption
is ALLOWED.
SO ORDERED.
DATED: June 10, 2005
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