Appellate Law

CA1: the interaction of sentencing, bankruptcy, collateral consequences of a non-conviction , and criminal law

By S. COTUS

Larson v. Howell, No. 07-1925.  Two homestead exemption in a row.  This one is more interesting the previous one, because ?as a matter of first impression, [requires the First] to determine whether the state crime of negligent vehicular homicide qualifies as a "criminal act" which would cap a debtor's homestead exemption to $125,000 under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), Pub. L. No. 109-8, § 322(a), 119 Stat. 23, 97 (codified at 11 U.S.C. § 522(q)(1)(B)(iv)).?  While the debtor admitted facts in the above case, the case was continued for a year while a civil suit continued.  The debtor claimed the state-law-based homestead exemption of $500,000.

The First holds that after the debtor was convicted of ?negligent homicide? in state court under Mass. Gen. Laws ch. 90, § 24G(b), the mental state implicit in admissions pursuant to that section trigger the cap.

People that hate America stop reading here.  Everyone else read on.

The bankruptcy trustee and the debtor both think that ?"criminal act" language requires a level of mens rea beyond mere negligence; (2) the disposition in the state court was insufficient to establish a "criminal act"; and (3) Massachusetts public policy requires that homestead exemptions be liberally construed.?  The Bankruptcy Court disagreed.

The First says that the statutory text is unambiguous, so legislative history accompanying a version of the bill that was never enacted doesn?t matter.   And, as a statutory matter, the Bankruptcy Code is more concerned with (for the purposes of this provision ? but not others) whether the conduct ?arises? from a criminal act.  Other sections explicitly say ?convicted.?   The First then goes on to say that she ?effectively? plead guilty by admitting the facts because state law says that this is possibel. Mass. Gen. Laws ch. 278, § 18.  But, the First (in a footnote) says it isn?t reaching the question of whether a Bankruptcy court can collaterally attack facts found in state-court proceedings.

Full post as published by Appellate Law and Practice on January 23, 2008 (boomark / email).