Belsome v. Belsome

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

2
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).

4
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).

5
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).

6
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.

7
 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).

8
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.

9
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.

10