Since Debtors could Claim Certain Exemptions under the State Law of their Domicile, they Could Not use Federal Exemptions

Since Debtors could Claim Certain Exemptions under the State Law of their Domicile, they Could Not use Federal Exemptions

On September 18, 2010, Debtors married. About that time, they moved to Williston, North Dakota. In December 2010, Debtors founded R Trucking and Excavation. They had one truck which they operated, for the most part, in North Dakota.

Debtors kept some of their things at Jessie’ parents’ house in Rigby, Idaho, but there was a fire at that residence, so they moved those belongings across the street to her grandmother’s home at 139 North 3600 East. Although Debtors never actually resided there, in their Statement of Financial Affairs (“SOFA”) filed in the bankruptcy case, they listed that address as their own from 2010 through October of 2013.  In addition, they listed an address in Douglas, North Dakota from October 2013 – January 2015; an address on Lake Windemere Street in Las Vegas, Nevada from January 2015 – April 2016; and a different Las Vegas address, Espana Court, from April 2016 – March 2017.

Based upon the Court’s review, the evidence shows that Debtors resided exclusively in North Dakota from about the time of their marriage in September 2010 until some time in 2014. In addition to testimony, for example, the evidence shows Debtors signed a lease on a house in the Rice Lake subdivision in Ward County, North Dakota, beginning September 1, 2012. Ex. 102. The term of this lease was three years, however, they apparently moved to Minot, North Dakota, executing another lease on December 29, 2014, for a one-year term beginning on January 1, 2015. Ex. 102. Jessie testified that this last move occurred because the Rice Lake property flooded and was condemned.

Debtors continued to live and work mainly in North Dakota in 2014, but then began spending time in Las Vegas, during which time they considered relocating to Nevada permanently. Debtors signed a lease on the home on Lake Windemere Street in Las Vegas beginning May 1, 2014. That lease was renewed from May 1, 2015 through April 30, 2016. Id. Following the conclusion of that lease, Debtors signed a lease for the Espana Court home in Las Vegas, beginning April 1, 2016.

In February, 2016, Debtors took up residence full-time in Nevada. There they operated a high performance auto aftermarket shop. While they moved most of their things to Nevada, there were some items that would not fit in their Las Vegas residence, including some vehicles and business assets from the trucking and excavation business, which items they moved back to Idaho. Jessie explained that, from January 2015 through March 2017, neither of the Debtors lived in Idaho, although they would visit family there as often as they could. During this period, Debtors utilized the Rigby address on important documents, such as vehicle registrations, tax returns, and Matthew’s commercial driver’s license, because they moved so frequently, they were concerned about important papers getting lost. They also purchased vehicles in Idaho where they had established relationships with lenders and dealerships which, they believed, afforded them better prices and financing. However, they also used addresses in other states for the registrations for those vehicles. Indeed, including both business and personal vehicles, Jessie testified that they registered vehicles in North Dakota, Nevada, and Idaho.

Matthew holds a commercial driver’s license issued by the state of Idaho which he has maintained since Debtors were married. Jessie held a North Dakota driver’s license in 2014 and 2015, Ex. 101, but obtained a Nevada driver’s license some time in 2016 when Debtors were living there. The record is unclear if she obtained an Idaho driver’s license upon moving back.

Ultimately, their Nevada business failed, and in March 2017, Debtors returned to Idaho where they resided, and continue to reside, with Jessie’s parents in Rigby. On July 24, 2017, Debtors filed their chapter 7 bankruptcy petition, listing their address as Rigby, Idaho. Dkt. No. 1. On their schedule C, Debtors claimed exemptions for their property based upon the federal exemptions under § 522 of the Bankruptcy Code, rather than based on any state law. Id. Trustee objected, arguing that Debtors are not entitled to claim the federal exemptions.

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