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Decisions
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re
MICHAEL and KARIN BIASI, No. 95-10232
Debtors.
___________________________/
Memorandum of Decision
Debtors Michael and Karin Biasi own an unencumbered pickup truck worth about $6,000.00.
They have claimed $1,200.00 in equity in the truck exempt pursuant to California Code of Civil
Procedure section 704.010, and an additional $4,300.00 pursuant to section 704.060. The trustee
has objected on grounds that the debtors are only entitled to a maximum of $2,500.00 in exempt
property pursuant to section 704.060, and that the debtors cannot use that exemption to protect
a vehicle when they have used section 704.010 to exempt equity in the same vehicle. Section
704.060(a)(3) allows a marries couple to exempt up to $5,000.00 in tools of the trade used by
both in the same business by which both earn a livelihood. The trustee argues that because Karin
has a full-time job, the debtors are limited to the $2,500.00 exemption of section 704.060(a)(1)
even though she also works in the small manufacturing business operated by Michael, and even
though her duties in the business include use of the truck.
Since both Michael and Karin actually work in the business and actually use the truck in the
business, the requirements of section 704(a)(3) have been met. There is no requirement in the
statute that both spouses must work 40 hours per week in the business, nor is there any
disqualification if one spouse has an additional source of income. It is not appropriate for the
court to infer limitations to an exemption statute.
Section 704.060(c) provides that a motor vehicle may not be exempted as a tool of the trade
if there is a motor vehicle exempt under Section 704.010 which is reasonably adequate for the
debtor's business. In this case, there is no such vehicle. Since the truck is worth far more than
$1,200.00, only a small portion of the equity in the vehicle is exempt under section 704.010. The
statute does not say, as the trustee suggests, that section 704.060 may not be used to exempt a
vehicle if section 704.010 is used.
For the foregoing reasons, the court determines that the debtors are entitled to the $5,000.00
exemption of section 704.060(a)(3), and that they may use that exemption to protect the excess
equity in a commercial vehicle claimed as exempt under section 704.010. Accordingly, the
trustee's objection will be overruled. Counsel for the debtors shall submit an appropriate form
of order.
Dated: April 20, 1995 _______________________
Alan Jaroslovsky
U.S. Bankruptcy