IN RE: Joseph Patrick KELLOGG (2020)

MEMORANDUM DECISION AND ORDER OVERRULING, IN PART, CHAPTER 7 TRUSTEE'S OBJECTION TO DEBTOR'S CLAIM OF EXEMPTION, AND DENYING, IN PART, CHAPTER 7 TRUSTEE'S MOTION FOR TURNOVER OF PROPERTY OF THE ESTATE

This Chapter 7 case came before the Court for joint trial on the Chapter 7 Trustee's (the “Trustee”) Objection to Debtor's Claim of Exemptions (Doc. 11), Motion for Turnover of Property of the Estate (Doc. 12), and Objection to Debtor's Amendment to Schedule C (Doc. 39). Following trial, the Court sustained the objections and granted the motion, in part, as to all matters except Debtor Joseph Patrick Kellogg's claimed exemption in his 2012 Thor Motor Coach 27' M-25C E450 Ford V10 (the “Motor Home”). As to the Motor Home, which Mr. Kellogg claims as his exempt homestead pursuant to Fla. Const. art. X, § 4 and Fla. Stat. § 222.05,¹ the Court took the matter under advisement.

The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 157(a). This matter is a core proceeding under 28 U.S.C. § 157(b)(2)(B), (E).

Statement of Facts 2

Mr. Kellogg purchased the Motor Home in June 2017, using a portion of the proceeds from the sale of his then-homestead located at 5540 Lakewood Circle East, Jacksonville, Florida. Mr. Kellogg has maintained the Motor Home as his sole residence since its purchase.

Mr. Kellogg rents, on a month to month basis, a spot for the Motor Home at the Sunny Sands Resort, a mobile home park and campground located in Pierson, Florida (“Sunny Sands”). The spot comes with utility hookups, specifically electrical, water, septic, and cable, which Mr. Kellogg utilizes by connecting to the Motor Home. Mr. Kellogg has rented a spot at Sunny Sands for approximately two and half years. Although he has traveled in the Motor Home away from Sunny Sands during that time, Mr. Kellogg maintained his relationship with the resort as it was “always” his intent to return there. Mr. Kellogg testified that over time, he has been able to upgrade his assigned spot, adding that presently he is in the “best one” and “not going to leave it.”

The Motor Home is configured to serve as a residence. There is a bedroom with a queen-sized bed and a sofa bed for additional sleeping space. There is a kitchen with a stove, oven, and microwave. There is also a bathroom and shower area. Further, the Motor Home is equipped with a roof air-conditioning unit, furnace, and water heater. Upon his inspection of the Motor Home, the Trustee's appraiser noted, among other things, dishes in the sink, a coffeemaker, clothes strewn about the interior, and a television that was hooked up.³ It appeared to him that “someone was living there.” Although he did not speak to Mr. Kellogg specifically on that point, the appraiser assumed that Mr. Kellogg lived there.

Mr. Kellogg does not own any real property.⁴ He does rent a storage unit in South Daytona.⁵ There, Mr. Kellogg stores various items including furniture once used in his prior homestead. Mr. Kellogg describes these items as “junk.”⁶ The Trustee has not inspected the storage unit nor otherwise sought to appraise its contents.

The Motor Home is not permanently affixed to the lot at Sunny Sands. The Motor Home is operable and, prepetition, Mr. Kellogg traveled in it both in and out of state. Since purchasing the Motor Home, Mr. Kellogg has driven it approximately 13,000 miles.⁷ This includes two trips to visit his son in Maine,⁸ a trip to Michigan to care for a dying uncle, and several trips to the Jacksonville area to visit his grandchildren. When he traveled, instead of seeking temporary lodging, Mr. Kellogg continued to reside in the Motor Home. And, he would tow either his truck or motorcycle to use for local transportation.⁹ Mr. Kellogg testified he does not use the Motor Home for “pleasure driving.”¹⁰ Importantly, regardless of where he traveled or for how long, Mr. Kellogg would return the Motor Home—his “only home”—to his spot at Sunny Sands.

Mr. Kellogg filed this chapter 7 case on August 26, 2019. He scheduled the Motor Home as his exempt homestead, noting that he used it as his “residence.”¹¹ At the time of the filing and all times through the date of trial, the Motor Home has been located at Sunny Sands.

The Trustee argues that the Motor Home cannot qualify as Mr. Kellogg's homestead because it is “inherently mobile” and lacks the requisite degree of physical permanency given Mr. Kellogg's extensive prepetition travels. Mr. Kellogg asserts that the Motor Home is configured for long-term habitation, that it is his sole permanent residence, and that he maintains and always returns to the spot at Sunny Sands, and, thus, the Motor Home qualifies as his homestead.

Discussion

The Court must decide if the Motor Home qualifies as Mr. Kellogg's exempt homestead under Florida law.¹² Florida's generous homestead exemption is rooted in the state constitution and its protections have been extended by the state legislature to cover non-traditional homes.¹³ It is well settled that Florida's homestead exemption is to be liberally construed in favor of the claimant and in favor of its public policy purpose, namely “to promote the stability and welfare of the state” by protecting the family home.¹⁴

In bankruptcy, a debtor's claim of exemption is “presumptively valid.”¹⁵ The burden falls to the objecting party to establish that the debtor's exemption is not properly claimed.¹⁶

At issue here is the exemption provided in Fla. Stat. § 222.05, which states:

Any person owning and occupying any dwelling house, including a mobile home used as a residence, or modular home, on land not his or her own which he or she may lawfully possess, by lease or otherwise, and claiming such house, mobile home, or modular home as his or her homestead, shall be entitled to the exemption of such house, mobile home, or modular home from levy and sale as aforesaid.

The Court must determine whether the Motor Home is Mr. Kellogg's “dwelling house” within the meaning of Fla. Stat. § 222.05. The statute does not define the term. Rather, it provides two illustrative examples which indicates “that the legislature intended to enlarge the definition of the term ‘dwelling house’ rather than to limit the term to modular and mobile homes or to list every possible type of dwelling house.”¹⁷ And a broad interpretation of the term is consistent with the liberal construction the homestead exemption is to receive.

What qualifies as a “dwelling house” is a fact driven inquiry to be made on an case-by-case basis.¹⁸ Both sides agree that guidance is found in the six factors articulated in In re Yettaw.¹⁹ These are:

1) The Debtor's intent to make the nontraditional abode his homestead.

2) Whether the debtor has no other residence.

3) Whether the evidence establishes a continuous habitation.

4) Whether the debtor maintains at least a possessory right associated with the land establishing a physical presence.

5) Whether the nontraditional abode has been physically maintained to allow long-term habitation versus mobility.

6) Whether the physical configuration of the abode permits habitation, otherwise the physical characteristics are immaterial.20

The list is non-exhaustive, and no one factor is determinative. But principal among the factors is the debtor's intent.²¹

Considering the evidence in light of the liberal standard to be applied, the Court concludes that the Motor Home is Mr. Kellogg's “dwelling house” and, therefore, his exempt homestead. Mr. Kellogg purchased the Motor Home intending to use it as his residence. The Motor Home, by nature, was configured to permit habitation and Mr. Kellogg has maintained it in that fashion. Mr. Kellogg has used it continuously as his residence since its purchase including during periods when he traveled to visit family. Mr. Kellogg has maintained his membership with and rights to a spot at Sunny Sands and, without fail, has returned there after his travels away. On the date of the filing, the Motor Home was in Mr. Kellogg's spot at Sunny Sands attached to utility services. It has not moved since that date up through the date of trial. Finally, Mr. Kellogg has no other residence.

In his attempt to defeat Mr. Kellogg's exemption, the Trustee notes certain statements made either on the bankruptcy petition or during the 2004 Exam. The Court addresses each briefly.

First, the Trustee notes that during his 2004 Exam, Mr. Kellogg stated that recreational vehicles are “not really made to live in” and that he was keeping certain items in storage in case he needed them “for a place to live.”²² But these statements must be viewed in context and further considered in light of Mr. Kellogg's testimony at trial. Mr. Kellogg was expressing concern about the Motor Home's longevity given his intent to use it as a full-time residence rather than the occasional use traditionally associated with recreational vehicles. Accordingly, the Court finds these statements do not help the Trustee.

Second, the Trustee highlights that Mr. Kellogg invested only a portion of the proceeds from the sale of his prior homestead to purchase the Motor Home, choosing to spend the rest to live extravagantly.²³ This argument is a bit of a red herring and seemingly intended to discredit Mr. Kellogg. There is no requirement under Florida law that individuals reinvest in full, or in large part, proceeds from the sale of an exempt homestead into a new homestead. Individuals are free to invest such proceeds as they deem fit. However, should an individual decide to reinvest such proceeds into a new homestead, his claim to a continued homestead exemption in the proceeds is limited to the amount reinvested. Any surplus loses its exempt status.²⁴ Further, Mr. Kellogg's claimed exemption of a Motor Home appraised at $31,250 ²⁵ is exceedingly modest in comparison with mansions valued at millions of dollars which are often held to be exempt under Florida law.²⁶ Consistent with Florida law, Mr. Kellogg used a portion of the proceeds from the sale of his prior homestead to precure for himself a new homestead and now seeks the appropriate exemption. The fact that he elected to purchase a more modest home while spending the rest of the proceeds on other things is of no moment.

Third, the Trustee emphasizes that on his bankruptcy petition, Mr. Kellogg stated that he lived at 8334 Red Holly Lane, Jacksonville, FL,²⁷ which is not the address for Sunny Sands. At both his 2004 Exam and at trial, Mr. Kellogg explained that this address belonged to a friend who had, for a period of time, allowed him to use the address, including to obtain his driver's license as Mr. Kellogg could not use his post office box address. Mr. Kellogg testified that he never lived at the address. And, on those rare occasions when he stayed there, Mr. Kellogg slept in the Motor Home which he parked out front. When asked directly where he lived, Mr. Kellogg provided the address for Sunny Sands. He also stated that he had lived at Sunny Sands for over two years.²⁸ Mr. Kellogg's use of his friend's address on his bankruptcy petition appears to have been in error or at least improvident.²⁹ Mr. Kellogg's counsel acknowledged as much at trial, stating that he probably should have had Mr. Kellogg amend his petition well before trial but conceded that he had not.

But the Trustee does not rely heavily on these statements to make his case. Rather, the crux of his argument may be summed up in a single word: mobility. The Trustee asserts that the Motor Home is “inherently mobile” and emphasized Mr. Kellogg's actual use of the Motor Home as a motor vehicle as evidenced by his frequent travels. The Trustee argues that the Motor Home's mobility defeats the homestead claim because the requisite degree of permanency is lacking.

The Trustee's focus on “inherent mobility” is puzzling as he concedes that a recreational vehicle or houseboat, under the right circumstances, could have sufficient permanency to render it eligible for homestead status. As example, the Trustee cites a recreational vehicle that is inoperable and on blocks or without tires. The trouble is that a recreational vehicle in such condition remains “inherently mobile” as its tires could be restored and its engine repaired or replaced. For that matter, permanency is never absolute as even a structure built and attached to a foundation can be moved. Simply put, the mere fact that a recreational vehicle may be capable of movement is not enough to destroy an otherwise valid homestead claim in that vehicle.³⁰

Perhaps the best indication that mobility standing alone is not enough to fall outside of the purview of Fla. Stat § 222.05 is the language of the statute itself. Section 222.05 expressly provides that a “mobile home” is within the ambit of “dwelling house[s].” And had it been the intent to exclude all movable nontraditional abodes, the legislature could have easily so provided by, for example, stating that a “dwelling house” be “affixed to” rather than simply “on” land.

The Trustee's contention that Mr. Kellogg's prepetition travels in the Motor Home categorically defeat his homestead claim is not persuasive. It is well established that a claim of exemption is generally measured as of the petition date.³¹ At the relevant time, the Motor Home was situated in Mr. Kellogg's spot at Sunny Sands and connected to utilities. And although he had been traveling in the Motor Home mere weeks before the filing,³² as was his intent and more importantly his practice, he had returned to his spot at Sunny Sands.

The Trustee also argues, citing In re Kirby,³³ that Mr. Kellogg's extensive prepetition travels negate the physical permanency requirement embedded in Florida homestead law. Even if his travels are labeled extensive,³⁴ Mr. Kellogg, unlike the Kirbys, maintains a fixed, permanent interest in Florida by virtue of his maintenance of his spot at Sunny Sands.

Finally, it is worth noting that shortly after the trial of these contested matters, the State of Florida, like most states, declared a lockdown in the effort to curb a national pandemic. And it is appropriate to acknowledge that putting Mr. Kellogg out of his only home in the midst of a national health crisis, particularly after requiring turnover of his truck, seems especially harsh and inconsistent with Florida's liberal policy of preserving homes and protecting families.³⁵

The Court, therefore, concludes that the Trustee has not defeated Mr. Kellogg's exemption in the Motor Home. The facts and circumstances here establish that the Motor Home is Mr. Kellogg's “dwelling house” within the meaning of Fla. Stat. § 222.05, and it is therefore entitled to homestead protection. Accordingly, it is

 ORDERED:

1. Debtor's claim of exemption in the 2012 Thor Motor Coach 27' M-25C E450 Ford V10, pursuant to Fla. Const. art. X, § 4 and Fla. Stat. § 222.05, is valid and, thus, ALLOWED.

2. To the extent the Trustee seeks to disallow Debtor's claimed exemption in the Motor Home, the Trustee's Objection to Debtor's Claim of Exemptions (Doc. 11) and Objection to Debtor's Amendment to Schedule C (Doc. 39) are OVERRULED.

3. To the extent the Trustee seeks to require Debtor to turn over the Motor Home, the Trustee's Motion for Turnover of Property of the Estate (Doc. 12) is DENIED.

FOOTNOTES

1.   Docs. 1 & 36. Mr. Kellogg amended his Schedule C shortly before trial to add the claim of exemption under Fla. Stat. § 222.05. The amendment has been allowed. See Doc. 42.

3.   See Trustee's Ex. 4; Debtor's Ex. 1.

4.   Mr. Kellogg lists one parcel in Jacksonville on Schedule A/B, but also indicates he has no real interest in it because his ex-wife was awarded the property in their divorce. Trustee's Ex. 2.

5.   See Trustee's Ex. 2, Sch. G.

6.   See, e.g., Trustee's Ex. 5, Tr. of § 341 Meeting of Creditors (“341 Mtg.”), 6:7–13; Trustee's Ex. 6, Tr. of Debtor's Rule 2004 Exam (“2004 Exam”), 17:21–18:2.

7.   The actual number of miles driven may be closer to 18,400 based upon the mileage reflected in the appraisal and the sales invoice for the Motor Home. Compare Debtor's Ex. 1, with Debtor's Ex. 13.

8.   The Court takes judicial notice that a round trip journey from Pierson, FL to Maine is, conservatively, 2,500 miles.

9.   Once he reached his destination, Mr. Kellogg would rent a spot at a mobile home park and connect to utilities. During the trip, he would park overnight in a Walmart or Cracker Barrel parking lot and use the Motor Home's self-contained batteries and water and septic tanks for utility services.

10.   See also 2004 Exam 11:15–22.

11.   Trustee's Ex. 2, Sch. A/B and Sch. C.

12.   See 11 U.S.C. § 522(b)(2); Fla. Stat. § 222.20.

13.   See, e.g., In re Yettaw, 316 B.R. 560, 562 (Bankr. M.D. Fla. 2004).

14.   See, e.g., id.; Miami Country Day Sch. v. Bakst, 641 So. 2d 467, 468–69 (Fla. Dist. Ct. App. 1994) (quoting Pub. Health Tr. of Dade Cty. v. Lopez, 531 So. 2d 946, 948 (Fla. 1988)); see generally Havoco of Am., Ltd. v. Hill, 790 So. 2d 1018, 1020–21 (Fla. 2001).

15.   In re Schumacher, 400 B.R. 831, 835 (Bankr. M.D. Fla. 2008); see 11 U.S.C. § 522(l).

16.   Fed. R. Bankr. P. 4003(c); see In re Yettaw, 316 B.R. at 562.

17.   Miami Country Day Sch., 641 So. 2d at 469; see In re Mead, 255 B.R. 80, 83 (Bankr. S.D. Fla. 2000); In re Meola, 158 B.R. 881, 882 (Bankr. S.D. Fla. 1993) (“[T]he legislature obviously sought to extend the homestead exemption not only to mobile and modular homes but to other, perhaps unforeseeable, types of living quarters, by using the ‘including’ language.”).

18.   See In re Schumacher, 400 B.R. at 835; In re Yettaw, 316 B.R. at 562–63; cf. In re Meola, 158 B.R. at 882.

19.   316 B.R. 560.

20.   Id. at 562–63.

21.   In re Schumacher, 400 B.R. at 835; cf. In re Mead, 255 B.R. at 84–85 (concluding that the test for determining what constitutes a “dwelling house” should be “based on function and use of the dwelling structure, rather than its size, design, utility hookups, or ability to be moved” (emphasis added)).

22.   2004 Exam 18:14–20.

23.   See 2004 Exam 30:22–33:3.

24.   See JBK Assocs., Inc. v. Sill Bros., Inc., 191 So. 3d 879, 880–81 (Fla. 2016); see also In re Binko, 258 B.R. 515, 518 (Bankr. S.D. Fla. 2001).

25.   Trustee's Ex. 4.

26.   See In re Mangano, 158 B.R. 532, 535 (Bankr. S.D. Fla. 1993):Certain members of the public (and the media) believe that Florida's homestead exemption allows wealthy debtors to shelter a disproportionate amount of their wealth from creditors. In most instances, the perceived unfairness is a function of Florida law as written in Florida's constitution and statutes․ In this case, the Court is confronted with the opposite end of the spectrum—debtors with virtually no property other than the vehicle in which they live. Here, there is room for judicial discretion within the confines of the Bankruptcy Code, Florida Statutes and Florida Constitution[;]S. Walls, Inc. v. Stilwell Corp., 810 So. 2d 566, 571 (Fla. Dist. Ct. App. 2002):Underlying the policy considerations embodied within the provisions of article X, section 4(a)(1), is the adage that “a man's home is his castle.” Although a castle to one person may be a shanty to another, the law does not so discriminate. Thus, regardless of whether one's castle is a traditional family home or a modest cottage, whether it is a rural farmhouse or a villa by the sea, whether it floats or sits on wheels, whether it is a condominium or a co-op, it should receive the same protection under Florida law.

27.   This address also appears on his Florida driver's license. Trustee's Ex. 12. Mr. Kellogg acknowledged that he had not updated his address on his license but stressed that he does not live at the Red Holly Lane address.

28.   E.g., 2004 Exam 4:24–5:8.

29.   It is also possible that counsel in completing the petition within his filing software simply used the address on Mr. Kellogg's driver's license. After all, at the 341 meeting, the Trustee compared the address on the petition with Mr. Kellogg's driver's license to confirm his identity. 341 Mtg. 4:15–19.

30.   See In re Mead, 255 B.R. at 85 (concluding that the “better test” was based on “function and use of the dwelling” rather than upon, among others, its “ability to be moved”); see also In re McClain, 281 B.R. 769, 773 (Bankr. M.D. Fla. 2002) (indicating that the fact that the motor home “appeared to be driveable” [sic] and was actually driven as late as the petition date was not troubling); Miami Country Day Sch., 641 So. 2d at 469 (“The houseboat is similar to a mobile home which the legislature has determined is a dwelling house; although both may be moved, they are self-contained living environments, designed for use as residences rather than transportation.”).

31.   E.g., In re Cannon, 568 B.R. 859, 864 (Bankr. M.D. Fla. 2016); In re Fodor, 339 B.R. 519, 521 (Bankr. M.D. Fla. 2006); In re Ballato, 318 B.R. 205, 209 (Bankr. M.D. Fla. 2004).

32.   Mr. Kellogg returned from one of his trips to Maine shortly before the petition was filed. Trustee's Ex. 11.

33.   223 B.R. 825 (Bankr. M.D. Fla. 1998).

34.   The Trustee labels Mr. Kellogg's travels extensive, in part, as he leaves for months at a time. But Mr. Kellogg explained that the length of his trips is largely a result of the much cheaper monthly rental term for a spot for the Motor Home at mobile home parks.

35.   Cf. In re Meola, 158 B.R. at 882 (concluding that, on the facts before the court, the debtor's travel trailer qualified as a “dwelling house” under Fla. Stat. § 222.05 as “[t]o hold otherwise would not only discriminate against those whose financial condition allows them to purchase only a modest trailer as a home, but would also vitiate the legislature's purpose in enacting the statute[ ]”).

Roberta A. Colton, United States Bankruptcy Judge