Elouise Kay Maloney

IN THE UNITED STATES BANKRUPTCY COURT FOR THE
WESTERN DISTRICT OF MISSOURI
IN RE: )
)
ELOUISE KAY MALONEY, ) Case No. 04-20947
)
Debtor. )
)
MEMORANDUM OPINION
The matter before the Court in this case is the objection by the Trustee to Debtor’s claim of a
homestead exemption in property at 801 S. Rutherford in Macon, Missouri. The Court has jurisdiction
over this matter pursuant to 28 U.S.C. §§ 1334(b) and 157(a) and (b). This is a core proceeding which
the Court may hear and determine pursuant to 28 U.S.C. § 157(b)(2)(B).
The Trustee contends the Debtor abandoned the property and forfeited her right to claim it as a
homestead when she left it in 1987 when she was married and took up residence in her husband’s mobile
home. Debtor contends she intended to return as evidenced by her recent move back to the property,
which occurred shortly before the hearing on the Trustee’s objection. For the reasons stated below, the
Court sustains the Trustee’s objection to Debtor’s claim of homestead in the property.
I. BACKGROUND
At the time she filed her bankruptcy petition, Debtor scheduled her interest in a parcel of real
property she owns in Macon, Missouri, valued at $10,000, and claimed it as exempt on Schedule C,
pursuant to Mo. Rev. Stat. § 513.475(1). She acquired the property in 1967 and lived in it for 20
years. Some time in 1987, she married and moved into a mobile home owned by her husband, also
located in Macon. She retained ownership of the property and it remained vacant for some time, until it
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was occupied by her son, who did not have a formal lease agreement with Debtor or pay her any rent
for his occupancy of the property. Debtor acquired no interest in the mobile home she lived in with her
husband. Her husband died in January, 2004. She filed this proceeding on April 17, 2004, at which
time she was still living in the mobile home. A first meeting of creditors, pursuant to § 341, was
conducted in this case on May 14, 2004, at which the Trustee questioned the Debtor about the real
estate. On May 24, the Trustee filed her objection to the homestead exemption claim. The Trustee
inspected the property on June 10. At that time, the Debtor still lived in the mobile home and her son
occupied the house on the scheduled real estate. Apparently, in the period between that inspection and
the hearing on the Trustee’s objection to Debtor’s claim of exemption, Debtor moved back into the
property, which she now shares with her son. She testified she believed she had to move out of the
mobile home, but also admitted she was not forced out by any of her husband’s heirs. She has since
transferred the utilities back into her name and has forwarded her mail to her new address. Debtor
claims she intends to remain there and that she did not return sooner, such as immediately after her
husband’s death, because her life was too chaotic, dealing as she was not only with the problems posed
by the death of her husband, but also with the loss of her father, another relative and the daughter of her
best friend.
II. DISCUSSION AND ANALYSIS
In Missouri, a debtor is entitled to claim as exempt up to $15,000.00 in value of a dwelling
house used by the debtor as a homestead. Mo. Rev. Stat. § 513.475(1). It is true that exemption laws
are enacted to provide relief to the debtor and are liberally construed in favor of the debtor. In re
Schissler, 250 B.R. 697, 700 (Bankr. W.D. Mo. 2000); In re Turner, 44 B.R. 118, 119 (Bankr.
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W.D. Mo. 1984). Generally, homestead requires both ownership and occupancy of the premises.
Schissler, 250 B.R. at 700; In re Dennison, 129 B.R. 609, 610 (Bankr. E.D. Mo. 1991); In re
Robinson, 75 B.R. 985, 988 (Bankr. W.D. Mo. 1987). Occupancy, however, is not an absolute
prerequisite to a claim of homestead exemption if the debtor can establish he or she has a bona fide
intention of making the premises a permanent residence. Schissler, 250 B.R. 697 at 700 (quoting
State v. Haney, 277 S.W.2d 632, 637 (Mo. 1955). That intention must be gleaned from all the facts
and the circumstances, not just the declarations of the parties. Id.; Dennison, 129 B.R. at 610.
In this case, the Debtor had established the property as a homestead, but then removed herself
from it for a continuous period of 17 years. The question is whether Debtor thereby abandoned her
homestead and forfeited her right to claim it as exempt. The law does not favor abandonment of a
homestead. Turner, 44 B.R. at 119. As the party objecting to the exemption, the Trustee has the
burden of proof. Fed. R. Bankr. Proc. 4003(c). Physical removal of the debtor from the premises,
however, constitutes prima facie evidence of abandonment. Farris v. Farmington Production
Credit Association (In re Farris), 42 B.R. 388, 389 (Bankr. E.D. Mo. 1984); Kaes v. Gross, 3
S.W. 840, 842 (Mo. 1887) (“removal of a family from the homestead constitutes a prima facie case of
abandonment, and raises a presumption against the claim of homestead which must be rebutted before
such claim can successfully be asserted”); Snodgrass v. Copple, 111 S.W. 845, 846 (Mo. Ct. App.
1908) (“The removal of the family from the homestead is prima facie evidence of abandonment; but it
is not conclusive, and may be overcome by evidence showing that the removal was temporary and
accompanied by an intention to return after the accomplishment of a specific purpose which prompted
it.”) In order to preserve the claim of homestead after physical removal, debtor must demonstrate an
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intention to return, which intention was formed at the time of removal. Schissler, 250 B.R. at 700;
Duffey v. Willis, 12 S.W. 520, 521 (Mo. 1889) (intention to return must be formed at the time of the
removal from the premises). A vague and indefinite intention to return at some future time under certain
conditions is not sufficient to prevent the removal from the premises from constituting an abandonment.
Snodgrass, 111 S.W. at 846. Actual removal from the homestead, with no intention to return, amounts
to forfeiture. Schissler, 250 B.R. at 700; Duffey, 12 S.W. at 521.
In this instance, the Debtor failed to prove that she formed an intention to return to her property
and use it as a homestead at the time she removed herself from it in 1987. Debtor simply never testified
clearly that she intended to return to the property at the time she married and moved to her husband’s
mobile home. Courts have held that the length of time a debtor is absent from the property is an
important factor in determining whether the facts establish that a forfeiture occurred. Kaes, 3 S.W. at
842 (“The length of time that the claimant is absent from his locus in quo will constitute an important
factor, in connection with other circumstances, in determining whether the aggregate result of all the
facts is sufficient to establish that a forfeiture of the acquired right has occurred by reason of
abandonment.”) In this instance, Debtor was continually absent from the property for a period of
approximately 17 years, a fact which weighs heavily against her claim. In a similar case, the Missouri
Court of Appeals held that a wife whose husband had died and who remarried and then removed
herself with her children and household goods to the home of her new husband and resided there for
four years had abandoned her former homestead. Kaes, 3 S.W. at 843.
Unlike some of the reported cases involving alleged abandonment, Debtor’s removal was not
for a specified period or purpose, which would be consistent with returning when that period expired or
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that purpose was achieved. See, e.g., New Madrid Banking Co. v. Brown, 65 S.W. 297 (Mo.
1901) (move induced by wife’s illness and opportunity for children to attend better schools); Victor v.
Grimmer, 95 S.W. 274 (Mo. Ct. App. 1906) (debtor moved to avoid nuisance and intended to return
upon abatement). Debtor moved on the occasion of her marriage, a significant life-changing
experience, and one which she obviously intended at the time to be permanent. She testified herself
that she did not anticipate outliving her husband. If she did not so anticipate, then it follows that she did
not intend to return to her property unless she and her husband made a joint decision to do so. While
Debtor testified that she and her husband discussed from time to time the possibility of moving back to
her property, she did not testify that they ever made such a decision, let alone at the time she removed
herself from it in 1987. As a matter of fact, after her husband died, she did not even then immediately
return to the property. Although Debtor is there now, has stated her intention to remain and taken
certain acts to establish a relationship to the property, these things were apparently done only in
response to the Trustee’s indication that she would object to the Debtor’s claim of homestead. Neither
the timing nor the context of this declaration and these actions supports Debtor’s claim. She offers no
evidence of a declaration of intent contemporaneous to her leaving the property in 1987.
Even if the Debtor had clearly testified that she formed an intention to return when she left her
property in 1987, her declaration to that effect would not be determinative. Because such statements
can be self-serving, the abandonment determination must be made based on all the surrounding facts
and circumstances. Unlike some of the other decided cases, Debtor’s alleged intent to return to the
property is not corroborated by evidence of other conduct confirming this intent, such as having left
personal property behind at the time of departure. See, e.g., New Madrid, 65 S.W. at 298; Victor,
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95 S.W. at 274. Although Debtor retained ownership of the property and did not encumber her
interest with a contract for sale or a long-term lease, her retention of ownership is equally consistent
with dispositions of the property other than the resumption of occupancy, including eventual sale or
transfer of the property to her heirs upon her death.
Finally, Debtor’s current occupancy of the property does not establish her claim for a
homestead exemption. If Debtor previously abandoned the property without intention to return and
therefore forfeited her claim of homestead, her new claim could only be established from the date of her
renewed occupancy with an intention to remain. Under the circumstances, however, that renewed
occupancy cannot be effective to establish a homestead claim. First, Debtor’s entitlement to claims of
exemption is to be determined as of the date of the filing of the petition. In re Alexander, 236 F.3d
431, 432 (8th Cir. 2001); In re Peterson, 897 F.2d 935 (8th Cir. 1990) (debtor’s right to exemption
determined as of date of filing and subsequent events will not affect right to exemption). Here, Debtor
did not occupy the residence at the time of the filing of the petition, at the time she claimed her
homestead exemption, or at the time of the first meeting of creditors. Second, upon the filing, the rights
of the Trustee intervened. The Debtor cannot reestablish a claim to homestead after a previous
abandonment if third parties have acquired rights in the interim. Kaes, 3 S.W. at 842 (“if such right be
once lost and possession of the homestead be again resumed, such resumption of possession will only
have the effect of giving origin to a new homestead right, bearing date from the new occupancy, and
having no retroactive validity on the old right lost by abandonment, and possessing no force against the
rights of third persons acquired in the interim between the loss of the old and the acquisition of the new
right.”) On the date of the filing of the petition, the property became property of the estate, pursuant to
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§ 541, which the Trustee has the right to administer for the benefit of the Debtor’s creditors.
III. CONCLUSION
For all these reasons, the Court sustains the Trustee’s objection to Debtor’s claim of a
homestead exemption in the property at 801 S. Rutherford in Macon, Missouri. After having physically
removed herself from the property for some 17 years and continuously occupying a residence with her
husband, it was incumbent upon Debtor to demonstrate to the Court that at the time of her removal in
1987 she intended to return to the property and occupy it as a residence. Debtor offered no credible
evidence that she formed such an intention at that time.
The foregoing constitutes my Findings of Fact and Conclusions of Law in accordance with
Rules 9014(c) and 7052 of the Federal Rules of Bankruptcy Procedure. A separate order will be
entered as required by Rule 9021.
/s/ Dennis R. Dow
Bankruptcy Judge
Date: July 1, 2004
Copies to:
Kyle Emmons
Janice Harder
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