Iannacone v. Hanson
Filing
18
ORDER reversing the order of the bankruptcy court and the matter is remanded to the bankruptcy court.(Written Opinion). Signed by Senior Judge David S. Doty on 8/4/2014. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 13-2991(DSD)
In Re Belinda Hanson:
Bankruptcy 13-33447
Chapter 7 Case
Debtor.
----------------------------------Michael J. Iannacone, Trustee,
Appellant,
ORDER
v.
Belinda Hanson,
Appellee.
Mary F. Sieling, Esq., Michael J. Iannacone III, Esq. and
Iannacone Law Office, PLLC, 8687 Eagle Point Boulevard,
Lake Elmo, MN 55042, counsel for appellant.
Andrew C. Walker, Esq., Curtis K. Walker, Esq., May C.
Hoben, Esq. and Walker & Walker Law Offices LLC, 4356
Nicollet Avenue South, Minneapolis, MN 55409, counsel for
appellee.
This matter is before the court upon the appeal by Michael
Iannacone of the October 3, 2013, order of the bankruptcy court.
Iannacone appeals the bankruptcy court’s order overruling his
objection to debtor Belinda J. Hanson’s claimed exemption of an
inherited individual retirement account (IRA).
Based on a review
of the file, record and proceedings herein, the court reverses and
remands the matter to the bankruptcy court.
BACKGROUND
This bankruptcy dispute arises out of the petition for Chapter
7 bankruptcy filed by Hanson on July 16, 2013.
Hanson listed an IRA valued at $68,114.74.
In her petition,
ECF No. 4-1, at 12.
Hanson claimed that the IRA was exempt from bankruptcy proceedings
pursuant to 11 U.S.C. § 522(d)(12).
Id.
Iannacone, as the
bankruptcy trustee, objected to the claimed exemption, arguing
that, because the IRA at issue was inherited from Hanson’s mother,
it could not be considered exempt.
ECF No. 4-2.
On October 2,
2013, the bankruptcy court overruled the objection and allowed
Hanson’s claimed exemption of the inherited IRA.
ECF No. 4-6.
Iannacone appeals.
DISCUSSION
When an appellant elects to have the district court hear its
appeal of a final judgment of the bankruptcy court, the district
court “acts as an appellate court and reviews the bankruptcy
court's legal determinations de novo and findings of fact for clear
error.”
In re Falcon Prods., Inc., 497 F.3d 838, 840–41 (8th Cir.
2007) (citation and internal quotation marks omitted).
Under 11 U.S.C. § 522(d)(12), “[r]etirement funds to the
extent that those funds are in a fund or account that is exempt
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from taxation” are exempted from bankruptcy proceedings.
At the
time of the bankruptcy court’s order, it was an open question
whether IRAs inherited from a non-spouse qualified as “retirement
funds” under § 522(d)(12).
Compare In re Clark, 714 F.3d 559, 562
(7th Cir. 2013) (finding inherited IRAs not exempt from bankruptcy
proceedings), with In re Chilton, 674 F.3d 486, (5th Cir. 2012)
(“[I]nherited IRAs are contained in an “account” that is “exempt
from taxation” as that phrase is used in section 522(d)(1).”).
On
June 12, 2014,1 however, the Supreme Court squarely addressed the
issue, ruling that inherited IRAs do not “qualify as retirement
funds within the meaning of th[e] bankruptcy exemption.”
Rameker, 134 S. Ct. 2242, 2244 (2014).
Clark v.
As a result, the court
finds that the bankruptcy court erred in overruling Iannacone’s
objections relating to the inherited IRA, as such accounts cannot
be claimed as exempt under 11 U.S.C. § 522(d)(12).
Therefore, the
court reverses the bankruptcy court’s October 2, 2013, order
overruling the objections by Iannacone.
1
On December 13, 2013, the court stayed this matter pending
the Supreme Court’s resolution of Clark. ECF No. 16.
3
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that the
October 2, 2013, order of the bankruptcy court is reversed and the
matter is remanded to the bankruptcy court.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:
August 4, 2014
s/David S. Doty
David S. Doty, Judge
United States District Court
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