Lenore Berry Ross Storey, Debtor v. Bradford Furniture Company, Inc. ( 2000 )

IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
IN RE: ) FOR PUBLICATION
LENORE BERRY ROSS STOREY, )
) Filed: December 4, 1995
Debtor, )
) Certified Question of Law
v. ) from the United States
) Bankruptcy Court for the
BRADFORD FURNITURE CO., ) Middle District of Tennessee
INC., )
) Case No. 93-08973-KL3-7
Plaintiff, )
) No. 01S01-9409-OT-00112
v. )
) Hon. Keith M. Lundin
LENORE BERRY ROSS STOREY ) United States Bankruptcy
Judge
and ROBERT H. WALDSCHMIDT, )
TRUSTEE, )
) FILED
Defendants, ) December 4,
) 2000
ROBERT H. WALDSCHMIDT, )
TRUSTEE, ) Cecil Crowson, Jr.
Appellate Court Clerk
)
Counter-Plaintiff, )
)
v. )
)
BRADFORD FURNITURE CO., )
INC., )
)
Counter-Defendant )
For the Debtor: For the Trustee:
Steven L. Lefkovitz Robert H. Waldschmidt
Nashville, TN Nashville, TN
O P I N I O N
WHITE, J.
I. QUESTION CERTIFIED
Pursuant to Rule 23 of the Tennessee Supreme Court Rules,1 we have
accepted a question certified to us by the United States Bankruptcy Court
for the Middle District of Tennessee. The bankruptcy court has asked:
Which of the following is the correct interpretation of
Tenn. Code Ann. § 26-2-111(1)(E):
(1) Once asserted in any judicial proceeding, the exemption in
alimony described in Tenn. Code Ann. § 26-2-111(1)(E) is
effective with respect to all subsequent executions, seizures or
attachments of alimony; or
(2) The exemption in alimony described in Tenn. Code Ann. §
26-2-111(1)(E) is effective only if claimed in each judicial
proceeding in which execution, seizure or attachment of
alimony is sought.
For the reasons explained below, we conclude that the alimony
exemption set forth in Tennessee Code Annotated Section 26-2-111(1)(E) is
effective only if claimed in each judicial proceeding in which execution,
seizure, or attachment of alimony is sought.
II. FACTS
This dispute concerns whether an alimony exemption filed by the
debtor in the chancery court exempts the alimony proceeds from execution
in the bankruptcy court. On February 14, 1991, the debtor divorced Carl
1
"The Supreme Court may, at its discretion, answer questions of law certified to it by the
Supreme Court of the United States, a Court of Appeals of the United States, a District
Court of the United States in Tennessee, or a United States Bankruptcy Court in
Tennessee. This rule may be invoked when the certifying court determines that, in a
proceeding before it, there are questions of law of this state which will be determinative
of the cause and as to which it appears to the certifying court there is no controlling
precedent in the decisions of the Supreme Court of Tennessee." Sup. Ct. R. 23, § 1.
2
Storey and was awarded $2,500 per month alimony in futuro. On appeal,
the alimony award was modified to $2,500 per month rehabilitative alimony
in solido for a period of thirty-six months. Storey v. Storey, 835 S.W.2d
593, 597 (Tenn. App.), perm. to appeal denied, (Tenn. 1992).
Prior to the divorce, the debtor purchased furniture on credit from
Bradford Furniture Company. When the debtor failed to make the
payments, Bradford sued her in Davidson County Chancery Court to collect
the debt. In November, 1991, Bradford Furniture Company obtained a
judgment against the debtor in the amount of $33,117.83. Approximately
one year later on November 20, 1992, the furniture company served a
garnishment on Carl Storey, who was delinquent in his alimony payments,
in order to collect the judgment obtained against the debtor. On January 8,
1993, the debtor filed a claim of exemption in the chancery court to halt
Bradford's garnishment pursuant to Tennessee Code Annotated Section 26-
2-111(1)(E). Subsequently, in November, 1993, the debtor filed a voluntary
Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the
Middle District of Tennessee. Two days later, Carl Storey paid $10,000 into
an escrow account maintained by the debtor's divorce lawyer to resolve a
pending contempt proceeding in the chancery court.
On January 24, 1994, the debtor filed documents in the bankruptcy
court claiming an exemption for past, future, and escrowed alimony
pursuant to Tennessee Code Annotated Section 26-2-111(1)(E). Bradford
Furniture Company and the bankruptcy trustee timely objected to the
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claimed exemption. Bradford then filed an adversary proceeding in the
bankruptcy court to determine the validity of its prebankruptcy garnishment
lien on the alimony owed the debtor. The trustee counter-claimed to avoid
Bradford's lien.
On September 29, 1994, the bankruptcy court determined that
Bradford held a valid lien up to the amount of its claim against all unpaid
alimony due the debtor through February 7, 1993, thirty days after the
debtor asserted the exemption in chancery court. See Tenn. Code Ann. §
26-2-111(1) (E) (1990 Supp.). The bankruptcy court also subjected the
alimony held in escrow to Bradford's lien because more than $10,000 of
alimony was due and unpaid before February 7, 1993. However, the
bankruptcy court declined to determine whether the debtor or the trustee
was entitled to the alimony accruing between February 7, 1993 and
February 23, 1994 (thirty days after the debtor claimed the alimony
exemption in the bankruptcy proceeding). That issue, controlled by
Tennessee law, is before us as a certified question under Rule 23 of the
Tennessee Supreme Court Rules.
III. DISCUSSION
Under the Bankruptcy Code, a debtor may claim federal or state
exemptions unless the state has chosen to opt-out of the federal exemption
scheme. 11 U.S.C. § 522(b)(1)(1993). With the enactment of Tennessee
Code Annotated Section 26-2-112 in 1980, Tennessee became one of
several states to create its own scheme of exemptions opting out of the
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federal scheme. Tenn. Code Ann. § 26-2-112 (1980 Repl.). Once "the
individual state has opted-out of the federal scheme, the only exemptions
available to the debtor are those created by the state. In re Lucas, 924 F.2d
597, 599 n.4 (6th Cir. 1991); see also In re Hackler, 35 B.R. 326, 327 n. 1
(Bankr. E.D. Tenn. 1983); In re Norton, 30 B.R. 712, 713 (Bankr. E.D.
Tenn. 1983). Thus, we are called upon to interpret a portion of the
exemption statute passed by our legislature to preempt the use of federal
bankruptcy exemptions by Tennessee citizens in Tennessee courts.
In interpreting legislative provisions, our role is "to ascertain and give
effect to the legislative intent without unduly restricting or expanding a
statute's coverage beyond its intended scope." Roseman v. Roseman, 890
S.W.2d 27, 29 (Tenn. 1994); Lyons v. Rasar, 872 S.W.2d 895, 897 (Tenn.
1994). If the intent can be determined from the plain language of the
provision read in the context of the entire statutory scheme, we must
conclude our inquiry there. See Carson Creek Vacation Resorts, Inc. v.
Department of Revenue, 865 S.W.2d 1, 2 (Tenn. 1993); Wilson v. Johnson
County, 879 S.W.2d 807, 809 (Tenn. 1994); National Gas Distributors, Inc.
v. State, 804 S.W.2d 66, 67 (Tenn. 1991). If the language is ambiguous and
does not yield a clear interpretation, we may consult the legislative history
for additional interpretive guidance. See Carr v. Ford, 833 S.W.2d 68, 69-
70 (Tenn. 1992); Baker v. Promark Products West, Inc., 692 S.W.2d 844,
847 (Tenn. 1985).
The relevant provision which we must interpret constitutes a section
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of the Personal Property Owner's Rights and Garnishment Act of 1978
codified at Tennessee Code Annotated Section 26-2-101 et seq. The
original statute allowed a debtor to exempt certain items of personal
property from process, including attachment, execution, and garnishment for
the purpose of "secur[ing] the poor in the possession and use of the means
necessary for their subsistence." Jones v. Williams, 32 Tenn. 105, 106
(Tenn. 1852). Thus, a debtor was allowed to exempt personal property to
the aggregate value of four thousand dollars ($4,000) and personal items
such as clothing, family portraits and pictures, the family Bible and school
books, and state pension funds. Tenn. Code Ann. § 26-2-102 -- -104 (1980
Repl.). Unlike the federal bankruptcy provisions, however, the 1978 Act
did not include an alimony exemption. Two years later, an alimony
exemption was added with little explanation.2
With the amendment, the statute provides that:
[T]he following shall be exempt from execution, seizure or
attachment in the hands or possession of any person who is a
bona fide citizen permanently residing in Tennessee:
(1) The debtor's right to receive:
...
(E) Alimony to the extent that payment becomes due
more than thirty (30) days after the debtor asserts a claim to
such exemption in any judicial proceeding . . . .
Tenn. Code. Ann. § 26-2-111(1)(E)(1995 Supp.)(emphasis added).3
2
The amendment's house sponsor explained that its purpose was "to correct, well to
make an addition. We took out more of the federal bankruptcy law than we intended to.
This would replace a portion of that." Debate on House Bill 1232, April 17, 1980
(statement of Rep. Wood).
3
The federal alimony exemption provides that a debtor may exempt "alimony, support, or
separate maintenance, to the extent reasonably necessary for the support of the debtor and
6
Based on this language, the debtor contends that she is entitled to
exempt all the alimony that was due more than thirty days after she claimed
the exemption in the chancery court litigation with Bradford Furniture
Company. The debtor argues that the statute's reference to "any judicial
proceeding" is clear and unambiguous, does not restrict the scope of the
exemption, and applies universally. Thus, an exemption claimed pursuant
to the statute binds all creditors in all subsequent judicial proceedings
forever.
Conversely, the trustee argues that, under the statute, the exemption
applies only to the creditors and to the proceeding in which it is filed.
While the debtor may claim exemptions in each and every judicial
proceeding, the trustee contests the blanket application of the exemption to
claims that arise in other distinct judicial proceedings. Thus, he argues that
the alimony exemption became effective as to him and the bankruptcy
proceeding thirty days after the debtor claimed the exemption in the
bankruptcy case.
The bankruptcy court found the statute to be ambiguous with two
possible interpretations:
[I]t could be read that the first claim of exemption in alimony
"in any judicial proceeding" is good against the world, forever -
- it precludes all subsequent efforts at execution, seizure or
attachment; or, it could be read that a claim of exemption in
alimony precludes only the execution, seizure or attachment
with respect to which the exemption is asserted.
While both interpretations are possible, we conclude that the purpose and
any dependent of the debtor." 11 U.S.C. § 522 (d)(10)(D)(1993).
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intent of the legislation is accomplished only if the provision is read to
provide an exemption in the particular proceedings in which it is claimed.
To read the statute as a permanent, all encompassing exemption good
against the world would produce unwieldy results. Such a reading would
exempt claims before they existed. It would exempt claims without notice
to the creditors. It would paradoxically create an exemption which would
outlive the debtor.
The statutory scheme in which the alimony exemption is located is
one that deals with a variety of creditors' remedies, including attachment,
garnishment, execution, and bankruptcy. Viewed in this context the
indefinite phrase "any judicial proceeding" applies to numerous
circumstances. Were the exemption universal and permanent in application,
an exemption filed in a general sessions court eviction case would apply to
bankruptcy proceedings filed by the same debtor a decade later or to assets
identifiable as alimony in the estate at the debtor's death. The framework in
which this provision appears suggests to us that such a result was not
intended.
Likewise, the language of the statute supports our conclusion. The
"[w]ord 'any' has a diversity of meaning and may be employed to indicate
'all' or 'every' as well as 'some' or 'one' and its meaning in a given statute
depends upon the context and the subject matter of the statute." Black's
Law Dictionary 94 (6th ed. 1990). "It is often synonymous with 'either',
8
'every', or 'all'." Id.; see also Roddy Mfg. Co. v. Olsen, 661 S.W.2d 868,
871 (Tenn. 1983)(the word "any" in a statute is synonymous with the word
"all"); Employers Liability Assur. Corp. v. Farquharson, 188 S.W.2d 965,
969 (Tenn. 1945)("We take it that any and every . . . mean all. . . . Any
means one or more of a group. Every means the entire group without
exception.").
The phrase "judicial proceeding" has been defined as:
Any proceeding wherein judicial action is invoked and taken.
Any proceeding to obtain such remedy as the law allows. Any
step taken in a court of justice in the prosecution or defense of
an action. A general term for proceedings relating to, practiced
in, or proceeding from, a court of justice; or the course
prescribed to be taken in various cases for the determination of
a controversy or for legal redress or relief. A proceeding in a
legally constituted court. A proceeding wherein there are
parties, who have opportunity to be heard, and wherein the
tribunal proceeds either to a determination of facts upon
evidence or of law upon proved to conceded facts.
Black's Law Dictionary at 849 (citations omitted).
We note the imprecision of that definition and clarify by way of
example. Each cause of action would constitute a judicial proceeding, but
each attempt to execute by various methods on one judgment would not.
Therefore, in a given case, a filed exemption would protect the debtor for
each and every exception attempted so long as it was filed in compliance
with the exception statute.
The language of the statute, coupled with the context of the provision,
and the sparse legislative history convince us that "any judicial proceeding"
9
means a judicial proceeding in which the exemption is asserted. The
alimony exemption is effective, therefore, only in the judicial proceeding in
which it is filed. Were we to find otherwise and carry that finding to its
logical conclusion, our statute would grant an indefinite exemption in
separate and distinct judicial proceedings, an exemption that could outlive
the debtor. We do not believe that the alimony exemption was intended to
be effective forever against the entire world, commencing from the time the
debtor first claimed the exemption in a judicial proceeding, extending at that
moment to even nonexistent debts, and enduring indefinitely.
Rather, we hold that the debtor must claim the exemption in each
judicial proceeding in which the debtor wants protection. This interpretation
is consistent with the general principle that a "claim of exemption under one
execution may not and usually does not dispense with the necessity of the
claim under other different executions where the different executions were
issued on different judgments." 35 C.J.S. Exemptions § 130 (1960); see
also 31 Am. Jur. § 308 (1989). This interpretation does not deprive the
diligent debtor of any protection, but it does establish a method whereby
claimed exemptions will be known to the parties and judges in the particular
judicial proceeding consistent with other similar provisions in our statutes.
See Tenn. Code Ann. § 26-2-114 (1980 Repl.)(exemptions exercised after
debtor becomes judgment debtor and having no application to executions
filed prior to exemptions).
IV. CONCLUSION
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We hold that the alimony exemption of Tennessee Code Annotated
Section 26-2-111(1)(E) is effective only if claimed in each judicial
proceeding in which execution, seizure, or attachment of alimony is sought.
The Clerk will transmit this opinion in accordance with Rule 23,
Section 8 of the Rules of the Supreme Court. The costs in this Court will be
taxed equally between the debtor and the trustee.
____________________________________
Penny J. White, Justice
CONCUR:
Anderson, C.J, Drowota, Reid, Birch, JJ.
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