United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS December 28, 2005
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 05-30311
In The Matter Of: Tessie Belsome
Debtor
TESSIE BELSOME,
Appellee,
v.
KARL BELSOME; RONALD J HOF, Chapter 7 Trustee,
Appellants.
Appeal from the United States District Court
for the Eastern District of Louisiana
Before REAVLEY, GARZA, and BENAVIDES, Circuit Judges.
BENAVIDES, Circuit Judge:
This case concerns the classification of a school bus under
the Louisiana statute that outlines exemptions available in a
bankruptcy. Specifically, the question is whether a school bus is
a tool or a motor vehicle under the state’s exemption statute.
Like the wheels on a bus, this issue has gone round and round the
bankruptcy courts. For the reasons stated below, we hold that a
school bus is a motor vehicle under Louisiana’s exemption statute.
I. FACTUAL AND PROCEDURAL BACKGROUND
On May 28, 2004, Tessie Belsome (“Appellee”) voluntarily filed
for relief under Chapter 7 of the Bankruptcy Code. At the time of
her filing, the Appellee worked as a school bus driver for the
Jefferson Parish School System. She drove a 1997 Thomas school bus
she financed through her credit union. In her bankruptcy filing,
the Appellee filed an exemption for the school bus as a tool of her
trade under La. Rev. Stat. § 13:3881(A)(2)(a). The bus is valued
at $22,500 with a mortgage debt of $1514.
The Chapter 7 trustee and Belsome’s former husband
(“Appellants”) filed objections to the Appellee’s claim for the
exemption. They argued that La. Rev. Stat. § 13:3881(A)(2)(a) does
not apply because the bus is a motor vehicle, and the exemption is
therefore limited to $7500 under La. Rev. Stat. § 13:3881(A)(2)(d).
The bankruptcy court sustained the objections and allowed an
exemption of only $7500. The Appellee appealed the order to the
district court who reversed. The court held the bus fell within
§ 13:3881(A)(2)(a) rather than § 13:3881(A)(2)(d) because it is “a
necessary tool for [the Appellee] to earn a living.” This ruling
allows the bus to be completely exempt from the bankruptcy. The
Appellants filed a timely appeal to this Court.
II. DISCUSSION
We review the district court’s decision under the same
standard that the district court used to review the bankruptcy
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court’s decision. Hodge v. Sinclair, 417 F.3d 527, 529 (5th Cir.
2005); Kennard v. Mbank Waco, N.A., 970 F.2d 1433, 1457 (5th Cir.
1992). Here, the district court applied de novo review. The only
issue is a legal one, and, therefore, de novo is the appropriate
standard. Hodge, 417 F.3d at 529.
A. Louisiana’s Exemption Statute
Louisiana has opted out of the federal exemptions available to
debtors under the Bankruptcy Code. See 11 U.S.C. § 522(d) (2000)
(defining federal exemptions). Debtors in Louisiana can only
choose exemptions available under the Louisiana exemption statute,
La. Rev. Stat. § 13:3881. It states:
(A) The following income or property of a debtor is
exempt from seizure under any writ, mandate, or process
whatsoever, except as otherwise herein provided:
. . . .
(2) That property necessary to the exercise of a trade,
calling, or profession by which he earns his livelihood,
which shall be limited to the following:
(a) Tools.
(b) Instruments.
(c) Books.
(d) Seven thousand five hundred dollars in equity
value for one motor vehicle per household, used by the
debtor and his family household. The equity value of the
motor vehicle shall be based on the NADA retail value for
the particular year, make and model. The one motor
vehicle may be used in exercising a trade, calling or
profession or used for transportation to and from the
place at which the debtor earns his livelihood.
La. Rev. Stat. Ann. § 13:3881(A)(2) (West Supp. 2005).
“[E]xemption statutes, being in derogation of the general rule
of non-exemption, must be strictly construed, but not so as to
destroy their purpose.” In re Black, 225 B.R. 610, 614 (Bankr.
3
M.D. La. 1998). That purpose is to “provide for the subsistence,
welfare, and ‘fresh start’ of the debtor, to the end that his or
her family will not be destitute and so that the debtor will not
become a charge on the state.” In re Black, 225 B.R. at 614. In
deciding how to interpret the exemption, this Court must look at
the plain meaning of the statute, focusing on “the words
themselves.” In re Brown, 189 B.R. 653, 661 (Bankr. M.D. La.
1995); see also In re Black, 225 B.R. at 614.
B. Bankruptcy Courts Split on Application of the Exemption Statute
The Louisiana Supreme Court has not interpreted the exemption
statute as it relates to school busses and, therefore, it offers no
guidance on the present issue. Similarly, Louisiana’s intermediate
courts offer little guidance as they have not interpreted the most
recent version of the statute.1 Given the federal nature of
bankruptcy filings, the interpretation of La. Rev. Stat. § 13:3881
has, for the most part, taken place in federal bankruptcy courts.
Those who have applied the exemption statute to school busses and
similar vehicles have reached opposite results. Compare In re
Romano, No. 04-19155, at 2 (Bankr. E.D. La. May 18, 2005) (holding
1
See Hamner & Co. v. Johnson, 135 So. 77, 78 (La. Ct. App.
1931) (a truck used as a school bus was exempt from seizure as a
tool necessary for continuing the debtor’s trade); cf. Jones v.
Scott, 167 So. 117, 119 (La. Ct. App. 1936) (a state judge’s car
was not exempt because it was not used in the discharge of his
duties); Termplan, Inc. v. Tucker, 215 So. 2d 385, 386 (La. Ct.
App. 1968) (traveling salesman’s car was exempt because it was
used in his trade).
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that a bus fell within the “motor vehicle” exemption) with In re
Lewis, No. 03-16552, at 4 (Bankr. E.D. La. Dec. 15, 2003) (holding
that a truck driver’s Freightliner truck fell within the “tools”
exemption).
In In re Vicknair, 315 B.R. 822, 824 (Bankr. Ed. La. 2004),
the bankruptcy court held that a 1996 Thomas Bus fell within
Louisiana’s “motor vehicle” exemption rather than the “tools”
exemption.2 The court looked to Louisiana law that provides, “when
a law is clear and unambiguous and its application does not lead to
absurd consequences, the law shall be applied as written and no
further interpretation may be made.” Id. at 826. The court went
further to state that “‘courts should give effect to all parts of
a statute and should not give a statute an interpretation that
makes any part superfluous or meaningless, if that result can be
avoided.’” In re Vicknair, 315 B.R. at 826 (quoting In re
Succession of Boyter, 756 So. 2d 1122, 1129 (La. 2000)). The court
then concluded that La. Rev. Stat. § 13:3881(A)(2) as written
limits the exemption for motor vehicles to $7500, and, therefore,
the bus at issue could not be included under the “tools” exemption.
2
In In re Vicknair, the debtor tried to exempt two vehicles,
the bus under the “tools” exemption and another vehicle under the
“motor vehicle” exemption. The court held that the statute was
clear that only one motor vehicle could be exempt. 315 B.R. at
829. It appears that debtors often try to exempt multiple
vehicles. See, e.g., In re Romano, No. 04-19155, at 1 (Bankr.
E.D. La. May 18, 2005) (attempting to exempt a school bus and a
1996 Chevy C1500).
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Id.
The court in In re Vicknair provided a review of statutory
changes to La. Rev. Stat. § 13:3881(A)(2). It pointed out that
motor vehicles were first specified in Louisiana’s exemption
statute in 1979. Id. at 828. The 1979 version limited the
exemption to “one pickup truck and trailer actually used in [the
debtor’s] trade.”3 Id. A later amendment to the statute limited
the exemption to a pickup truck less than three tons or a nonluxury
motor vehicle.4 Id. The final change, in 2003, limited the
exemption to $7500 in equity. The court found that the legislative
history showed a repeated intent “to limit the exemption of motor
vehicles.” Id.
Two cases, In re Crawford and In re Black, show how courts
3
The 1979 version of the statute exempted:
The tools, instruments, and books necessary to the
exercise of a trade, calling, or profession by which he
earns his livelihood, in whole or in part, provided that
motor vehicles and trailers, except one pickup truck and
trailer actually used in his trade, shall not be deemed
to fall within the provision of this paragraph.
La. Rev. Stat. Ann. § 13:3881(A)(2) (repealed 1982).
4
The 1983 version of the statute exempted:
One pickup truck with a gross weight of less than three
tons, or one motor vehicle, which does not possess any of
the characteristics of a luxury automobile as defined
under R.S. 39:365(B) which also shall not be a vehicle
used solely for transportation to and from the place at
which the debtor earns his livelihood.
La. Rev. Stat. Ann. § 13:3881(A)(2)(d) (repealed 2003).
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interpreting the exemption statute have strictly applied the
statutory language. In In re Crawford, 27 B.R. 24, 25 (Bankr. W.D.
La. 1982), the bankruptcy court examined the 1979 version of the
statute, which only exempted one pickup truck and trailer. The
debtor was an emergency room doctor who was subject to emergency
calls on a twenty-four hour basis. Id. He was seeking an
exemption on his 1978 Ford automobile. Id. The bankruptcy court
found that “[t]here is no doubt that a doctor’s automobile is a
necessary tool of his trade.” Id. The court went further to
state, “The Louisiana legislature, however, has seen fit to amend
the exemption statute so as to specifically delete the automobile
from the classification of tool or instrument of trade or
profession. The wording of the statute is so specific that it
leaves no room whatever for interpretation by a court.” Id.
A similar holding resulted in In re Black, 225 B.R. at 625.
There, the court had to determine if a dump truck could be exempt
under the 1983 version of the statute, which did not allow for the
exemption of a luxury vehicle. Id. at 612. The statute
incorporated the definition of luxury vehicle as defined elsewhere
in Louisiana law: “a wheelbase over 121 inches in length; a V8
engine with a displacement over 360 cubic inches; and a total
weight over 4500 pounds.” Id. The court held that the dump truck
met the qualifications of a luxury vehicle, and, therefore, it did
not fall within the motor vehicle exemption. Id. at 625.
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Courts that have exempted vehicles under the “tools” provision
have based their decisions on appeals to the broader purpose of the
statute. See, e.g., In re Lewis, No. 03-16552, at 5 (“The Debtor
is a truck driver; the Freightliner is necessary for him to earn a
living.”). The statutory language of La. Rev. Stat.
§ 13:3881(A)(2)(a) does not define “tools,” but Louisiana courts
have crafted a test for determining what qualifies. The test is
“whether the tool or instrument is necessary for the exercise of
the profession, that is whether or not the debtor will be prevented
from exercising his trade or profession if he is deprived of the
tool or instrument.” Sun County Distribs. v. Starkey, 637 So. 2d
739, 740 (La. Ct. App. 1994). While a school bus might fit this
“functionality” test, this approach ignores the plain meaning of
the statute. The language clearly establishes two categories:
tools and motor vehicles. The functionality test might adequately
judge the merit of other objects, but it fails to replace the
judgment of the legislators who clearly desired a different rule
for motor vehicles.5
5
The Appellee argues that Louisiana law has two distinct
definitions for “bus” and “motor vehicle,” and therefore the
legislature did not intend for “busses” to be considered “motor
vehicles” under the exemption statute. See La. Rev. Stat. Ann.
§ 32:1(5) (2002), defining “bus,” and La. Rev. Stat. Ann.
§ 32:1(40) (2002), defining “motor vehicle”). The Appellee fails
to cite La. Rev. Stat. § 32:1(62), which defines a “school bus”
as “every motor vehicle that complies with the color, equipment,
and identification requirements set forth in this Chapter and is
used to transport children to and from school . . . .” La. Rev.
Stat. Ann. § 32:1(62) (2002) (emphasis added).
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C. A School Bus Falls Within the Motor Vehicle Exemption,
§ 13:3881(A)(2)(d)
The statutory language of La. Rev. Stat. § 13:3881(A)(2)(d) is
clear. The legislature drafted a specific exemption for motor
vehicles, and that provision must apply to all motor vehicles,
including school busses. This follows the cannon of statutory
construction that allows specific language of a statute to trump
general language. Here, “motor vehicle” is the more specific term.
The statute states that the exempted motor vehicle “may be used in
exercising a trade, calling or profession.” La. Rev. Stat. Ann.
§ 13:3881(A)(2)(d). If such a vehicle fell within the “tools”
exemption, this language would become superfluous. In addition,
the Louisiana legislature was clear that only one motor vehicle
would qualify for an exemption. If this Court were to find that a
school bus fell with the “tools” provision, a debtor could seek to
exempt a second vehicle under the “motor vehicle” exemption.
The motor vehicle exemption provision has a history of precise
limitations: first to one pickup truck and trailer, then to a
pickup truck less than three tons or a nonluxury motor vehicle, and
In a similar argument, the Appellee suggests that the
legislature did not intend busses to be a part of the motor
vehicle exemption, because the provision specifically references
the “NADA retail value,” and NADA does not include bus values.
The provision in no way lists the NADA valuation as a condition
of the exemption, and, as the Appellants point out, the
Appellee’s interpretation would make it so that new cars do not
fall within the exemption because NADA only applies to used
vehicles.
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now to $7500 in equity. This Court will not expand on what the
legislature has clearly intended to limit.
III. CONCLUSION
A school bus falls within Louisiana’s “motor vehicle”
exemption as seen by the clear meaning of the statutory language.
For this reason, the district court’s judgment is VACATED and
REMANDED for proceedings consistent with this opinion.
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