Waller v. Bell

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS August 11, 2005
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
_____________________ Clerk
No. 04-61178
Summary Calendar
____________________
IN THE MATTER OF: BLONDENA ALLEN WALLER
Debtor
________________________________________
BLONDENA WALLER,
Appellant,
v.
J. C. BELL, Trustee,
Appellee.
__________________
Appeal from the United States District Court
for the Southern District of Mississippi
(03-CV-318)
_______________________
Before DAVIS, SMITH, and DENNIS, Circuit Judges.
Per Curiam*:
Appellant Blondena Waller (Waller)appeals the district
court’s judgment disallowing her exemption under Mississippi code
§ 85-3-17. After filing a Chapter 13 bankruptcy, Waller claimed
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
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an exemption of $10,000 due to a pending claim against Gaylor
Chemicals for the release of chemicals which purportedly affected
her. The Trustee objected to this exemption and the Bankruptcy
Court upheld this objection. The district court affirmed the
Bankruptcy Court’s interpretation of the statute and subsequent
denial of the exemption to Waller.
The only issue on appeal is whether Appellant is entitled to
claim a $10,000 exemption on a personal injury claim based on a
pending class action lawsuit in which no judgment has been
entered or settlement reached. Waller argues that the language of
the Mississippi statute is vague and so should be liberally
construed in her favor. The Bankruptcy Court interpreted § 85-3-
17 as requiring a judgment in order for the exemption to take
effect.
§ 85.3.17 reads as follows:
The proceeds of any judgment not exceeding ten thousand
dollars recovered by any person on account of personal
injuries sustained, shall inure to the party or parties in
whose favor such judgment may be rendered, free from all
liabilities for the debts of the person injured.
The district court found that Waller was not entitled to an
exemption under this statute because “[w]hether a particular
property or interest in property of a debtor’s bankruptcy estate
is eligible for an exemption provided by federal or state law is
determined ‘strictly ‘as of’ the date on which the petition in
bankruptcy is filed’.” District Court Opinion 3, citing In re
Orson, 283 F.3d 686, 691 (5th Cir. 2002). See also In re
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Peterson, 897 F.2d 935, 937 - 38 (8th Cir. 1990). The district
court concluded that, because as of the date that Waller filed
her petition no judgment had been entered in her personal injury
claim and so no “proceeds” of that judgment existed, Waller was
ineligible for the exemption.
Additionally, the district court found that any judgment
that is eventually rendered on Waller’s personal injury claim
will not be exempt as after-acquired property because they will
be proceeds that result from a pre-petition cause of action,
which this Court has held belongs to the bankruptcy estate.
See In re Wischan, 77 F.3d 875, 877 (5th Cir. 1996).
Because it is a settled principle of law that the
applicability of an exemption must be determined on the basis of
the facts as of the day the debtor files her petition, we agree
with the district court’s finding that Appellant cannot prevail
on her statutory arguments and affirm on the basis of the
district court’s November 24, 2004 “Order and Reasons”.
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