Charles W. Ries, Trustee of the Bankruptcy Estate v. Linda C. Thiesse

61 F.3d 631

Charles W. RIES, Trustee of the Bankruptcy Estate, Appellant,
v.
Linda C. THIESSE, Appellee.

No. 94-4078.

United States Court of Appeals,
Eighth Circuit.

Submitted June 15, 1995.
Decided July 31, 1995.

Margaret Henrietta Culp, Mankato, MN, argued, for appellant.

Robert John Winzenburg, Mankato, MN, argued, for appellee.

Before BEAM, Circuit Judge, ROSS, Senior Circuit Judge, and MURPHY, Circuit Judge.

BEAM, Circuit Judge.

1

This appeal involves the application of Minnesota's homestead exemption. The bankruptcy court held that the debtor, Linda C. Thiesse, was entitled to the exemption, and the district court affirmed. We reverse and remand.

I. BACKGROUND

2

For many years, Thiesse owned and occupied real property in Fairmont, Minnesota. In September 1993, Thiesse left Minnesota, apparently to help her fiancee settle in Michigan. Five months later, Thiesse filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code and claimed her Minnesota property as a homestead exemption. The Trustee objected to the exemption on the grounds that Thiesse had abandoned the homestead.

3

Thiesse filed a motion for summary judgment. The bankruptcy court granted the motion, holding that Thiesse "did not lose her homestead rights through nonoccupancy, regardless of her intentions, and she did not 'abandon' the homestead." The Trustee appealed to the district court, which affirmed the bankruptcy court without comment. This appeal followed.

II. DISCUSSION

4

Under Minnesota law, a debtor's homestead is exempt from seizure or forced sale. Minn.Stat. Sec. 510.01. The homestead exemption applies to the "house owned and occupied by a debtor as the debtor's dwelling place, together with the land upon which it is situated." Id. The exemption does not require constant occupancy; the owner can "remove" from the homestead without affecting the exemption, if the owner does not abandon the homestead as "the place of abode." Minn.Stat. Sec. 510.07.

5

The creditor must establish abandonment of the homestead by clear and convincing evidence. Vickery v. First Bank, 368 N.W.2d 758, 763 (Minn.App.1985). " 'Abandonment of a homestead results when the owner removes therefrom and ceases to occupy the same, with the intention of never returning, or with no intention of returning thereto to reside.' "1 In re Hickman, 222 Minn. 161, 23 N.W.2d 593, 597 (1946) (quoting Bowers v. Norton, 173 Minn. 576, 218 N.W. 108, 109 (1928)). Accord Gordon v. Emerson-Brantingham Implement Co., 168 Minn. 336, 210 N.W. 87, 88 (1926); Clark v. Dewey, 71 Minn. 108, 73 N.W. 639, 640 (1898); Williams v. Moody, 35 Minn. 280, 28 N.W. 510, 511 (1886). This definition of abandonment requires a court to address whether the owner truly "ceased to occupy" the homestead and whether the owner had the requisite intent. See Muscala v. Wirtjes, 310 N.W.2d 696, 698 (1981).2

6

Given this background, we find the bankruptcy court's ruling unclear in two respects. First, it is unclear whether the court used the correct definition of abandonment; although the court cited several of the cases noted above, the court also stated in a footnote that "abandonment results from the act of declaration or renunciation, not from removal or subjective intention." Second, it is unclear how the court applied the definition of abandonment to the facts of this case; the court did not make specific findings as to either occupancy or intent. Rather than contribute to the confusion, we think the most prudent course would be to remand the case to the bankruptcy court for clarification.

III. CONCLUSION

7

We reverse the decision of the bankruptcy court and remand the cause for further proceedings consistent with this opinion. At a minimum, the bankruptcy court should use the definition of abandonment from In re Hickman, supra, and should make specific findings as to occupancy and intent.

1

Alternatively, abandonment results when the owner ceases to occupy the homestead for more than six months without filing the requisite notice. Minn.Stat. Sec. 510.07. In the present case, Thiesse ceased to occupy her homestead, if at all, for less than six months. Therefore, notice is not at issue

2

For cases focusing on cessation of occupancy, see In re Lehman, 44 B.R. 946, 948 (Bankr.D.Minn.1984); In re Joy, 5 B.R. 681, 683-84 (Bankr.D.Minn.1980); Millett v. Pearson, 143 Minn. 187, 173 N.W. 411, 412 (1919); Jaenicke v. Fountain City Drill Co., 106 Minn. 442, 119 N.W. 60, 61 (1909). For cases focusing on intent, see Vickery v. First Bank, 368 N.W.2d 758, 763-64 (Minn.App.1985); Donaldson v. Lamprey, 29 Minn. 18, 11 N.W. 119, 120-21 (1881)