Opinion
Bankruptcy No. 07-21021-MBM, Related to Doc. No. 39.
January 29, 2008
Natalie Lutz Cardiello, for the Chapter 7 Trustee., Francis E. Corbett, for Jay P. LaMond.
ORDER OF COURT
AND NOW, this 25th day of January, 2008, upon consideration of 42 Pa.C.S.A. § 8124 11 U.S.C. § 522 42 Pa.C.S.A. § 8124 42 Pa.C.S.A. § 8124 42 Pa.C.S.A. § 8124 42 Pa.C.S.A. § 8124 hereby ORDERED, ADJUDGED, AND DECREED NOT EXEMPT 42 Pa.C.S.A. § 8124 EXEMPT 42 Pa.C.S.A. § 8124 see Consumers Time Credit, Inc. 248 F.Supp. 158 160-61 40 P.S. § 517 42 Pa.C.S.A. § 8124 or their cash value" In re Phillips 7 F.Supp. 807 808 40 P.S. § 517 "the cash surrender value was exempt Gordy v. Buscillo, et. al. 40 P.S. § 517 OVERRULED ALLOWED; DIRECTED 42 Pa.C.S.A. § 8124 42 Pa.C.S.A. § 8124
(a) the objection by Natalie Lutz Cardiello, the instant Chapter 7 Trustee (hereafter "the Trustee"), to the exemption by the instant debtor of four (4) life insurance policies (hereafter "the Life Insurance Policies") with a present cash surrender value of $54,728 (hereafter "the Trustee's Objection to Exemption"), (b) the response by Jay P. LaMond, the instant debtor (hereafter "the Debtor"), to the Trustee's Objection to Exemption, (c) the Debtor's Bankruptcy Schedule C, wherein the Debtor exempts the Life Insurance Policies, as well as their cash surrender value, pursuant to (c)(4) — the Debtor has elected to take the state exemptions pursuant to (b)(3), and (d) the parties' joint submission dated January 17, 2008, to supplement the record of the hearing held on January 8, 2008, wherein (i) the Debtor appears to now concede that the Life Insurance Policies are not exempt under (c)(4), (ii) the Debtor now contends instead that such policies are exempt under (c)(6), (iii) the Trustee continues to maintain that, because the Life Insurance Policies are assignable, they are not exempt under (c)(4), and (iv) the Trustee contends that, because the Debtor is the only person that possesses a present entitlement to funds that would emanate from the Life Insurance Policies (via their cash surrender value), such policies — or, perhaps more accurately, their present cash surrender value — are also not exempt pursuant to (c)(6), and after notice and a hearing on the Trustee's Objection to Exemption, which hearing was held on January 8, 2008, it is that: (1) the Life Insurance Policies are under (c)(4) because they are assignable; (2) the Life Insurance Policies, including their present cash surrender value, are, however, pursuant to (c)(6), and regardless of the fact that the Debtor is the only person that possesses a present entitlement to funds that would emanate from such policies, , , (E.D.Pa. 1965) (construing , which provision is the precursor — and the language of which provision is identical in all significant respects — to (c)(6), and, in so doing, holding that "[w]e think it would be destructive of the benevolent policy of this statute to permit the creditor of the insured . . . to reach the policies — emphasis added); , , (M.D.Pa. 1934) (likewise construing (i.e., Pa. Act of June 28, 1923, P.L. 884) and holding that from all claims of the creditors of the bankrupt" — emphasis added); , 18 Pa.D. C. 224, 226 (Philadelphia Municipal Ct. 1932) (likewise construing Pa. Act of June 28, 1923, P.L. 884 (i.e., ) and holding, in particular, with respect to the words "the net amount payable," that "these words `might be held to mean either the net amount payable after the death of the insured, or the net amount payable upon the surrender of the policy.' They are quite as applicable to one as to the other, and simply mean that the fund exempted is that which arises after deduction of loans or other amounts properly due to the insurer"); (3) the Trustee's Objection to Exemption is, therefore, and the Debtor's exemption of the Life Insurance Policies and their cash surrender value is and (4) the Debtor is to amend his Bankruptcy Schedule C forthwith so as to reflect that the Insurance Policies are exempted pursuant to (c)(6) rather than (c)(4).