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Sheehan v. Ash

United States Court of Appeals, Fourth Circuit

May 4, 2018

MARTIN P. SHEEHAN, Trustee - Appellant, and U.S. TRUSTEE, Trustee,
v.
KEITH DOYLE ASH; PHYLLIS JEAN ASH, Debtors - Appellees.

          Argued: March 20, 2018

          Appeal from the United States District Court for the Northern District of West Virginia, at Clarksburg. Irene M. Keeley, Senior District Judge. (1:16-cv-00109-IMK)

         ARGUED

          Martin Patrick Sheehan, SHEEHAN & NUGENT, PLLC, Wheeling, West Virginia, for Appellant.

          Eugene Robert Wedoff, Oak Park, Illinois, for Appellees.

         BRIEF

          Todd B. Johnson, JOHNSON LAW, PLLC, Morgantown, West Virginia, for Appellees.

          Before NIEMEYER and KING, Circuit Judges, and Leonie M. BRINKEMA, United States District Judge for the Eastern District of Virginia, sitting by designation.

         Affirmed by published opinion.

          KING, Circuit Judge

         Martin P. Sheehan, as the bankruptcy trustee, appeals from the district court's affirmance of the bankruptcy court's ruling that denied Sheehan's objection to exemptions claimed by the debtors. See Sheehan v. Ash, No. 1:16-cv-109 (N.D. W.Va. June 27, 2017), ECF No. 25 (the "Opinion"). Sheehan maintains on appeal that the district court erred in deciding that the applicable bankruptcy statute authorized the debtors to utilize Louisiana's state law statutory scheme to exempt personal property in West Virginia from the debtors' bankruptcy estate. As explained below, we agree with the district court and affirm.

         I.

         This appeal arises from a Chapter 7 bankruptcy proceeding initiated by Keith and Phyllis Ash in July 2015 in the Northern District of West Virginia.[1] Their bankruptcy was complicated by the fact that the Ashes had recently changed their residence - moving from Louisiana to West Virginia in March 2015 - and owned property located in both states. The West Virginia property is in dispute here, and includes a checking account, two television sets, items of clothing, a wedding band, two firearms, and a well- used vehicle. See J.A. 96.[2] The total value of the debtors' property in West Virginia - subject to their claimed exemptions - is approximately $3, 450. Id. To better understand Sheehan's appeal, a brief review of some pertinent legal provisions is warranted.

         A.

         In a Chapter 7 bankruptcy proceeding, the debtor's legal and equitable property interests become part of the bankruptcy estate. See 11 U.S.C. § 541(a)(1). When the bankruptcy estate is placed under the control of a trustee, he must "collect and reduce to money" the assets of the bankruptcy estate for the benefit of creditors. Id. § 704(a)(1). To prevent the debtor from becoming destitute, the debtor is entitled to exempt certain property from the bankruptcy estate. See Clark v. Rameker, 134 S.Ct. 2242, 2247 n.3 (2014). Those property exemptions can be derived from either federal or state law, and we are ...


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