OCTOBER TERM, 1991
Syllabus
TAYLOR
v. FREELAND & KRaNZ ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT
No.91-571. Argued March 2, 1992-Decided April 21, 1992
On the schedule she filed pursuant to §
522(l) of the
Bankruptcy Code, debtor Davis listed as exempt property the
expected proceeds from her pending employment discrimination suit.
Petitioner Taylor, the trustee of Davis' bankruptcy estate, did not
object to the claimed exemption within the 30-day period allowed by
Federal Rule of Bankruptcy Procedure 4003(b). However, upon later
learning that the discrimination suit had been settled for a
substantial sum, Taylor filed a complaint in the Bankruptcy Court
against respondents, Davis' attorneys in that suit, demanding that
they turn over settlement proceeds as property of Davis' estate.
Concluding that Davis had no statutory basis for claiming the
proceeds as exempt, the court ordered respondents to "return" to
Taylor a sum sufficient to payoff all of Davis' unpaid creditors,
and the District Court affirmed. The Court of Appeals reversed,
holding that the Bankruptcy Court had erred because Davis had
claimed the money in question as exempt, and Taylor had failed to
object to the claimed exemption in a timely manner.
Held: A trustee may not contest the validity of a claimed
exemption after the Rule 4003(b) 30-day period has expired, even
though the debtor had no colorable basis for claiming the
exemption. Pp. 642-646.
(a) Because the parties agree that Davis did not have a
statutory right to exempt more than a small portion of the lawsuit
proceeds, let alone the full amount, Taylor apparently could have
made a valid objection under § 522 (l)-which provides,
inter
alia, that "property claimed as exempt ... is exempt" "[u]nless
a party in interest objects," but does not specify the time for
objecting-if he had acted promptly under Rule 4003(b)-which
establishes the 30-day objections period for trustees and creditors
"unless, within such period, further time is granted by the court."
P. 642.
(b) However, Taylor's failure to promptly object precludes him
from challenging the validity of the exemption at this time,
regardless of whether or not Davis had a colorable statutory basis
for claiming it. By negative implication, Rule 4003(b) indicates
that a trustee may not object after 30 days unless a further
extension of time is granted. Because no such extension was allowed
by the Bankruptcy Court in this case, §
522(l) has made the
settlement proceeds exempt. This Court
639
rejects Taylor's argument that, in order to discourage debtors
from claiming meritless exemptions merely in hopes that no one will
object, a court may invalidate an exemption after expiration of the
30-day period where the debtor did not have a good-faith or
reasonably disputable basis for claiming it. To the extent that the
various Code and Rules provisions aimed at penalizing debtors and
their attorneys for improper conduct fail to limit bad-faith
exemption claims, Congress, rather than this Court, may rewrite §
522(l) to include a good-faith requirement. Pp. 643-645.
(c) Taylor's assertion that § 105(a) of the Code permits courts
to disallow exemptions not claimed in good faith despite the
absence of timely objections to such exemptions will not be
considered by this Court, since that argument was first raised in
Taylor's opening brief on the merits and was neither raised nor
resolved in the lower courts. Pp. 645-646.
938 F.2d
420, affirmed.
THOMAS, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and WHITE, BLACKMUN, O'CONNOR, SCALIA, KENNEDY,
and SOUTER, JJ., joined. STEVENS, J., filed a dissenting opinion,
post, p. 646.
Timothy B. Dyk argued the cause for petitioner. With him
on the briefs were
Stephen J. Goodman, Peter M.
Lieb, and
Gary W Short.
Phillip S.
Simon argued the cause for respondents.
With him on the brief was
Kenneth P. Simon. *
JUSTICE THOMAS delivered the opinion of the Court. Section
522(l) of the Bankruptcy Code requires a debtor to file a
list of the property that the debtor claims as statutorily exempt
from distribution to creditors. Federal Rule of Bankruptcy
Procedure 4003 affords creditors and the bankruptcy trustee 30 days
to object to claimed exemptions. We must decide in this case
whether the trustee may contest the validity of an exemption after
the 30-day period if the debtor had no colorable basis for claiming
the exemption.
*Gary Klein and
Daniel L. Haller filed a brief for
the Mon Valley Unemployed Committee et al. as
amici curiae
urging affirmance.
640
I
The debtor in this case, Emily Davis, declared bankruptcy while
she was pursuing an employment discrimination claim in the state
courts. The relevant proceedings began in 1978 when Davis filed a
complaint with the Pittsburgh Commission on Human Relations. Davis
alleged that her employer, Trans World Airlines (TWA), had denied
her promotions on the basis of her race and sex. The Commission
held for Davis as to liability but did not calculate the damages
owed by TWA. The Pennsylvania Court of Common Pleas reversed the
Commission, but the Pennsylvania Commonwealth Court reversed that
court and reinstated the Commission's determination of liability.
TW A next appealed to the Pennsylvania Supreme Court.
In October 1984, while that appeal was pending, Davis filed a
Chapter 7 bankruptcy petition. Petitioner, Robert J. Taylor, became
the trustee of Davis' bankruptcy estate. Respondents, Wendell G.
Freeland, Richard F. Kronz, and their law firm, represented Davis
in the discrimination suit. On a schedule filed with the Bankruptcy
Court, Davis claimed as exempt property the money that she expected
to win in her discrimination suit against TW A. She described this
property as "Proceeds from lawsuit-[Davis] v. TW A" and "Claim for
lost wages" and listed its value as "unknown." App.18.
Performing his duty as a trustee, Taylor held the required
initial meeting of creditors in January 1985. See 11 U. S. C. §
341; Fed. Rule Bkrtcy. Proc. 2003(a). At this meeting, respondents
told Taylor that they estimated that Davis might win $90,000 in her
suit against TW A. Several days after the meeting, Taylor wrote a
letter to respondents telling them that he considered the potential
proceeds of the lawsuit to be property of Davis' bankruptcy estate.
He also asked respondents for more details about the suit.
Respondents described the procedural posture of the case and
expressed optimism that they might settle with TWA for
$110,000.
641
Taylor decided not to object to the claimed exemption.
The record reveals that Taylor doubted that the lawsuit had any
value. Taylor at one point explained: "I have had past experience
in examining debtors ... [.] [M]any of them ... indicate they have
potential lawsuits ... [M]any of them do not turn out to be
advantageous and many of them might wind up settling far within the
exemption limitation." App. 52. Taylor also said that he thought
Davis' discrimination claim against TWA might be a "nullity."
Id., at 58.
Taylor proved mistaken. In October 1986, the Pennsylvania
Supreme Court affirmed the Commonwealth Court's determination that
TWA had discriminated against Davis. In a subsequent settlement of
the issue of damages, TW A agreed to pay Davis a total of $110,000.
TWA paid part of this amount by issuing a check made to both Davis
and respondents for $71,000. Davis apparently signed this check
over to respondents in payment of their fees. TW A paid the
remainder of the $110,000 by other means. Upon learning of the
settlement, Taylor filed a complaint against respondents in the
Bankruptcy Court. He demanded that respondents turn over the money
that they had received from Davis because he considered it property
of Davis' bankruptcy estate. Respondents argued that they could
keep the fees because Davis had claimed the proceeds of the lawsuit
as exempt.
The Bankruptcy Court sided with Taylor. It concluded that Davis
had "no statutory basis" for claiming the proceeds of the lawsuit
as exempt and ordered respondents to "return" approximately $23,000
to Taylor, a sum sufficient to payoff all of Davis' unpaid
creditors.
In re Davis, 105 B. R. 288 (Bkrtcy. Ct. WD Pa.
1989). The District Court affirmed,
In re Davis, 118 B. R.
272 (WD Pa. 1990), but the Court of Appeals for the Third Circuit
reversed,
938 F.2d
420 (1991). The Court of Appeals held that the Bankruptcy Court
could not require respondents to turn over the money because Davis
had claimed it as exempt, and Taylor had failed to
642
object to the claimed exemption in a timely manner. We granted
certiorari, 502 U. S. 976 (1991), and now affirm.
II
When a debtor files a bankruptcy petition, all of his property
becomes property of a bankruptcy estate. See 11 U. S. C. § 541. The
Code, however, allows the debtor to prevent the distribution of
certain property by claiming it as exempt. Section 522(b) allowed
Davis to choose the exemptions afforded by state law or the federal
exemptions listed in § 522(d). Section
522(l) states the
procedure for claiming exemptions and objecting to claimed
exemptions as follows:
"The debtor shall file a list of property that the debtor claims
as exempt under subsection (b) of this section .... Unless a party
in interest objects, the property claimed as exempt on such list is
exempt."
Although §
522(l) itself does not specify the time for
objecting to a claimed exemption, Federal Rule of Bankruptcy
Procedure 4003(b) provides in part:
"The trustee or any creditor may file objections to the list of
property claimed as exempt within 30 days after the conclusion of
the meeting of creditors held pursuant to Rule 2003(a) ... unless,
within such period, further time is granted by the court."
In this case, as noted, Davis claimed the proceeds from her
employment discrimination lawsuit as exempt by listing them in the
schedule that she filed under §
522(l). The parties agree
that Davis did not have a right to exempt more than a small portion
of these proceeds either under state law or under the federal
exemptions specified in § 522(d). Davis in fact claimed the full
amount as exempt. Taylor, as a result, apparently could have made a
valid objection under §
522(l) and Rule 4003 if he had acted
promptly. We hold, however, that his failure to do so prevents him
from challenging the validity of the exemption now.
643
A
Taylor acknowledges that Rule 4003(b) establishes a 30day period
for objecting to exemptions and that §
522(l) states that
"[u]nless a party in interest objects, the property claimed as
exempt ... is exempt." He argues, nonetheless, that his failure to
object does not preclude him from challenging the exemption at this
time. In Taylor's view, §
522(l) and Rule 4003(b) serve only
to narrow judicial inquiry into the validity of an exemption after
30 days, not to preclude judicial inquiry altogether. In
particular, he maintains that courts may invalidate a claimed
exemption after expiration of the 30-day period if the debtor did
not have a good-faith or reasonably disputable basis for claiming
it. In this case, Taylor asserts, Davis did not have a colorable
basis for claiming all of the lawsuit proceeds as exempt and thus
lacked good faith.
Taylor justifies his interpretation of §
522(l) by
arguing that requiring debtors to file claims in good faith will
discourage them from claiming meritless exemptions merely in hopes
that no one will object. Taylor does not stand alone in this
reading of § 522(b). Several Courts of Appeals have adopted the
same position upon similar reasoning. See
In re Peterson,
920 F.2d
1389, 1393-1394 (CA8 1990);
In re Dembs, 757 F.2d
777, 780 (CA6 1985);
In re Sherk, 918
F.2d 1170, 1174 (CA5 1990).
We reject Taylor's argument. Davis claimed the lawsuit proceeds
as exempt on a list filed with the Bankruptcy Court. Section
522(l), to repeat, says that "[u]nless a party in interest
objects, the property claimed as exempt on such list is exempt."
Rule 4003(b) gives the trustee and creditors 30 days from the
initial creditors' meeting to object. By negative implication, the
Rule indicates that creditors may not object after 30 days "unless,
within such period, further time is granted by the court." The
Bankruptcy Court did not extend the 30-day period. Section
522(l) therefore has made the property exempt. Taylor cannot
contest the ex-
644
emption at this time whether or not Davis had a colorable
statutory basis for claiming it.
Deadlines may lead to unwelcome results, but they prompt parties
to act and they produce finality. In this case, despite what
respondents repeatedly told him, Taylor did not object to the
claimed exemption. If Taylor did not know the value of the
potential proceeds of the lawsuit, he could have sought a hearing
on the issue, see Rule 4003(c), or he could have asked the
Bankruptcy Court for an extension of time to object, see Rule
4003(b). Having done neither, Taylor cannot now seek to deprive
Davis and respondents of the exemption.
Taylor suggests that our holding will create improper
incentives. He asserts that it will lead debtors to claim property
exempt on the chance that the trustee and creditors, for whatever
reason, will fail to object to the claimed exemption on time. He
asserts that only a requirement of good faith can prevent what the
Eighth Circuit has termed "exemption by declaration."
Peterson,
supra, at 1393. This concern, however, does not cause us to
alter our interpretation of § 522
(l).
Debtors and their attorneys face penalties under various
provisions for engaging in improper conduct in bankruptcy
proceedings. See,
e. g., 11 U. S. C. § 727(a)( 4)(B)
(authorizing denial of discharge for presenting fraudulent claims);
Rule 1008 (requiring filings to "be verified or contain an unsworn
declaration" of truthfulness under penalty of perjury); Rule 9011
(authorizing sanctions for signing certain documents not "well
grounded in fact and ... warranted by existing law or a good faith
argument for the extension, modification, or reversal of existing
law"); 18 U. S. C. § 152 (imposing criminal penalties for fraud in
bankruptcy cases). These provisions may limit bad-faith claims of
exemptions by debtors. To the extent that they do not, Congress may
enact comparable provisions to address the difficulties that Taylor
predicts will
645
follow our decision. We have no authority to limit the
application of §
522(l) to exemptions claimed in good
faith.
B
Taylor also asserts that courts may consider the validity of the
exemption under a different provision of the Bankruptcy Code, 11 U.
S. C. § 105(a), despite his failure to object in a timely manner.
That provision states:
"The court may issue any order, process, or judgment that is
necessary or appropriate to carry out the provisions of this title.
No provision of this title providing for the raising of an issue
by a party in interest shall be construed to preclude the court
from, sua sponte, taking any action or making any determination
necessary or appropriate to enforce or implement court orders or
rules, or to prevent an abuse of process." Ibid. (emphasis
added).
Although Taylor stresses that he is not asserting that courts in
bankruptcy have broad authorization to do equity in derogation of
the Code and Rules, he maintains that § 105 permits courts to
disallow exemptions not claimed in good faith. Several courts have
accepted this position. See,
e. g., Ragsdale v.
Genesco,
Inc., 674 F.2d
277, 278 (CA4 1982);
In re Staniforth, 116 B. R. 127,
131 (Bkrtcy. Ct. WD Wis. 1990);
In re Budinsky, No.
90-01099, 1991 WL 105640 (WD Pa., June 10, 1991).
We decline to consider § 105(a) in this case because Taylor
raised the argument for the first time in his opening brief on the
merits. Our Rule 14.1(a) makes clear that "[o]nly the questions set
forth in the petition [for certiorari], or fairly included therein,
will be considered by the Court," and our Rule 24.1(a) states that
a brief on the merits should not "raise additional questions or
change the substance of the questions already presented" in the
petition. See
Yee v.
Escondido, 503 U. S. 519, 535
(1992). In addition, we have
646
said that "[o]rdinarily, this Court does not decide questions
not raised or resolved in the lower court[s]."
Youakim v.
Miller, 425 U.
S. 231, 234 (1976)
(per curiam). These principles help
to maintain the integrity of the process of certiorari. Cf.
Oklahoma City v.
Tuttle, 471 U. S. 808, 816
(1985). The Court decides which questions to consider through
wellestablished procedures; allowing the able counsel who argue
before us to alter these questions or to devise additional
questions at the last minute would thwart this system. We see no
"unusual circumstances" that warrant addressing Taylor's § 105(a)
argument at this time.
Berkemer v.
McCarty, 468 U. S. 420, 443, n. 38
(1984).
The judgment of the Court of Appeals is
Affirmed.
JUSTICE STEVENS, dissenting.
The Court states that it has "no authority to limit the
application of §
522(l) to exemptions claimed in good
faith."
Ante, at 645. It does not deny, however, that it has
ample authority to hold that the doctrine of equitable tolling
applies to the 30-day limitations period in Federal Rule of
Bankruptcy Procedure 4003(b).l In my view, such a result is
supported not only by strong equitable considerations, but also by
the common law, the widespread practice of the bankruptcy courts,
and the text of § 522(b).
I
Rule 4003, which is derived from §
522(l) of the Code and
in part from former Bankruptcy Rule 403, shifted the em-
1 Rule 4003(b) provides:
"The trustee or any creditor may file objections to the list of
property claimed as exempt within 30 days after the conclusion of
the meeting of creditors held pursuant to Rule 2003(a) or the
filing of any amendment to the list or supplemental schedules
unless, within such period, further time is granted by the court.
Copies of the objections shall be delivered or mailed to the
trustee and to the person filing the list and the attorney for such
person."
647
phasis of the earlier Rule, placing the burden on the debtor to
list her exemptions and the burden on the parties in interest to
raise objections. Rule 4003(b) in particular fills a gap that
remains in § 522
(l), which is silent as to the time in
which parties in interest must file their objections. Rule 4003(b)
provides for a 30-day period for objections. Although the adoption
of Rule 4003 has furthered the interest in orderly administration,
there is no suggestion that it was put into effect in order to
avoid prejudice to the debtor. Thus, there is no identifiable
reason why ordinary tolling principles that apply in other contexts
should not also apply in bankruptcy proceedings; indeed, the
generally equitable character of bankruptcy makes it especially
appropriate to apply such rules in this context.
It is familiar learning that the harsh consequences of federal
statutes of limitations have been avoided at times by relying on
either fraudulent concealment or undiscovered fraud to toll the
period of limitation. For example, in
Bailey v.
Glover, 21 Wall. 342, 349-350 (1875), the Court described
two situations in which the "strict letter of general statutes of
limitation" would not be followed,
id., at 347. The first
situation is "where the ignorance of the fraud has been produced by
affirmative acts of the guilty party in concealing the facts," and
the second is "where the party injured by the fraud remains in
ignorance of it without any fault or want of diligence or care on
his part."
Id., at 347-348. The former involves fraudulent
concealment; the latter defines undiscovered fraud. The Court
concluded in
Bailey that fraudulent concealment, which was
at issue in that case, tolls the running of the statute of
limitations when the fraud "has been concealed, or is of such
character as to conceal itself."
Id., at 349-350. To hold
otherwise, reasoned the Court, would "make the law which was
designed to prevent fraud the means by which it is made successful
and secure."
Id., at 349. In
Holmberg v.
Armbrecht, 327
U. S. 392, 397 (1946), the Court extended the reach of this
tolling doctrine when
648
it observed that it is to be "read into every federal statute of
limitation." 2
In this case, even if there was no fraud, and even if it is
assumed that the trustee failed to exercise due diligence, it
remains true that the parties injured by the trustee's failure to
object within the 30-day period are innocent creditors. Moreover,
it is apparently undisputed that there was no legitimate basis for
the claim of an exemption for the entire award. See
ante, at
642. Under these circumstances, unless the debtor could establish
some prejudice caused by the trustee's failure to object promptly,
I would hold that the filing of a frivolous claim for an exemption
is tantamount to fraud for purposes of deciding when the 30-day
period begins to run.
II
This, in essence, is also the position adopted by numerous
Bankruptcy Courts and three Courts of Appeals.3 Over a period of
years, they have held that the failure to make a timely objection
is not dispositive, Rule 4003(b) notwithstanding. For example, in
In re Hackett, 13 B. R. 755, 756 (Bkrtcy. Ct. ED Pa. 1981),
the court explained that "[e]quita-
2 The tolling of a statute of limitations is not limited to
cases of fraud.
In medical malpractice suits, for example, this Court has long
endorsed the view that the statute of limitations will not bar the
claim of one who was "blameless[ly] ignoran[t]" of his injury;
rather, the statute of limitations will not begin to run until he
has knowledge of his injury.
Urie v.
Thompson,
337 U. S. 163,
170 (1949).
3 Some Bankruptcy Courts, however, have read the statute and
Rule narrowly and have refused to examine any exemption in the
absence of a timely objection. See,
e. g., In re Bradlow,
119 B. R. 330, 331 (Bkrtcy. Ct. SD Fla. 1990);
In re Duncan,
107 B. R. 754 (Bkrtcy. Ct. WD Okla. 1988);
In re Payton, 73
B. R. 31, 32 (Bkrtcy. Ct. WD Tex. 1987);
In re Kretzer, 48
B. R. 585, 587 (Bkrtcy. Ct. Nev. 1985);
In re Gullickson, 39
B. R. 922 (Bkrtcy. Ct. WD Wis. 1984). Although the court in
In
re Hawn, 69 B. R. 567 (Bkrtcy. Ct. ED Tenn. 1987), took a
similar view, it at least recognized that the result might be
different if there had been "evidence that the debtor fraudulently
or negligently concealed any facts from the trustee or any
creditors."
Id., at 568.
649
ble considerations dictate that a debtor should not be allowed
exemptions to which she is obviously not entitled." This view was
echoed in
In re Rollins, 63 B. R. 780, 783-784 (Bkrtcy. Ct.
ED Tenn. 1986): "[T]he debtor cannot make property exempt simply by
claiming it as exempt when there is no apparent legal basis for the
exemption. In that situation, the trustee's failure to object to
the claim of exemption within the time limit of Rule 4003(b) does
not create an exemption." More recently, the court in
In re
Ehr, 116 B. R. 665, 667 (Bkrtcy. Ct. ED Wis. 1988), reaffirmed
this approach, as did the court in
In re Staniforth, 116 B.
R. 127, 130 (Bkrtcy. Ct. WD Wis. 1990). As one court explained:
"Read strictly, Rule 4003 and Section
522(l) support
appellants' position concerning waiver. But, most courts have not
followed appellants' interpretation of these provisions. Instead,
most courts hold that an exemption must have an apparent legal
basis for an exemption to overcome an untimely objection."
In re
Stutterheim, 109 B. R. 1010, 1012 (Kan. 1989).
The equitable principles that motivated these Bankruptcy Courts
are best encapsulated by the court in
In re Bennett, 36 B.
R. 893 (Bkrtcy. Ct. WD Ky. 1984). There, the court explained that
to apply Rule 4003(b) rigidly would be to encourage a debtor to
claim that all of her property was exempt, thus leaving it to the
trustee and creditors to sift through the myriad claimed exemptions
to assess their validity. Such a policy would result in reversion
to "the law of the streets, with bare possession constituting not
nine, but ten, parts of the law; orderly administration of estates
would be replaced by uncertainty and constant litigation if not
outright anarchy."
Id., at 895.4
4 Bankruptcy courts would understandably be reluctant to
encourage a policy that would contribute to the overburdening of
the bankruptcy court system. As counsel for the trustee explained:
"Last year there were 880,000 bankruptcy filings, 291 bankruptcy
judges to deal with all of those filings, and a real need on the
part of the bankruptcy courts to rely on the
650
Although several Courts of Appeals and Bankruptcy Courts did not
go as far as these courts, preferring instead in the case of an
untimely objection to examine a claimed exemption to determine if
there was a "good-faith statutory basis" for the exemption, they
nevertheless eschewed the literal reading of the statute and rule
adopted by the Court today. They did so because they believed it
was important to strike a proper balance between avoiding the
undesirable effect of "exemption by declaration" and yet not
permitting a trustee "another bite at the debtor's apple where the
debtor has claimed certain property exempt in good faith."
In re
Peterson, 920 F.2d
1389, 1393-1394 (CA8 1990); see
In re Sherk, 918 F.2d
1170, 1174 (CA5 1990);
In re Dembs, 757
Here, the trustee would succeed under either approach.
Whether the court is always permitted to entertain an objection
to a claimed exemption (at least until the case is closed) 5 when
the claimed exemption is invalid or whether the court can do so
only if the claimed exemption lacks a good-faith statutory basis
would mean that in this case the court could review the debtor's
claimed exemption. Here, the parties acknowledge that the debtor
could not claim a statutory basis for her claimed exemption for the
full award because neither backpay nor tort recovery is exempt
under § 522(d)(5).
III
The practice of these lower courts has been motivated not only
by equitable considerations, but also by the requirement set forth
in § 522(b). Section
522(l) explicitly provides that "[t]he
debtor shall file a list of property that the debtor
good faith of debtors in claiming exemptions, otherwise the
whole system would collapse." Tr. of Oral Arg. 13. For example,
this trustee alone "had approximately two or three hundred of these
cases a year, which ... is typical of bankruptcy trustees all
across the country."
Id., at 15.
5 The parties have stipulated that the debtor's case has never
been closed. App. 56.
651
claims as exempt under subsection (b) of this section."
Subsection (b) limits exemptions claimed by the debtor to "any
property that is exempt under federal law ... or State or local law
that is applicable on the date of the filing of the petition." 11
U. S. C. § 522(b)(2)(A). When a debtor claims exemptions that do
not even arguably satisfy this condition,6 there is good reason to
hold that the filing does not comply with § 522 and therefore the
30-day objection period does not begin to run. As one court noted:
"If Debtor may select in any manner her exemptions, then no purpose
is served by the inclusion of the ... terms."
In re
Kingsbury, 124 B. R. 146, 148, n. 9 (Bkrtcy. Ct. Me. 1991). It
declined to conclude that Congress added the requirements that the
property be exempted "under federal law ... or state law or local
law" but "refused to grant them meaning."
Ibid. (emphasis
omitted).
IV
The Court's disposition of this case is straightforward.
Because it regards the meaning of the statute and Rule as
"plain," that is the end of the case. I have no doubt, however,
that if the debtor or the trustee were guilty of fraud, the Court
would readily ignore what it now treats as the insurmountable
barrier of "plain meaning." The equities in this case are not as
strong as if fraud were implicated, but our power to reach a just
result despite the "plain meaning" barrier is exactly the same as
it was in
Bailey v.
Glover, 21
6 The debtor's claimed exemptions in this case not only failed
to satisfy any statutory basis, but also failed to provide even the
basic information necessary to inform the trustee adequately about
the exemption. For example, the debtor indicated on her Schedule
B-4 Property Claimed As Exempt form that she was claiming the
"[p]roceeds from lawsuit," but that the value was "unknown." App.
14-15. Although the value of the full award ended up amounting to
$110,000, and only an amount of approximately $24,000 was required
to satisfy the claims of all of her creditors, the debtor never
amended her schedule to reflect the precise value of the award.
652
Wall. 342 (1875). Here, as in
Bailey, we should be guided
by the common-law principles that have supported the tolling of
other statutes of limitations, and, in addition, by the experience
of bankruptcy courts that have recognized the need for a similar
rule to achieve both equitable results and fair administration in
cases of this kind. In my view, it is a mistake to adopt a "strict
letter" approach,
id., at 347, when justice requires a more
searching inquiry. Accordingly, I respectfully dissent.
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