Consumer Bankruptcy Journal Winter 2016 - Page 46

Nevada Personal Injury Exemption Applies on a Per-Claim Basis T he Nevada personal injury exemption applies to multiple claims rather than being limited to the aggregate total of all claims. Kaplan v. Dutra (In re Kaplan), No. 69065 (Nev. Dec. 1, 2016). Chapter 7 debtor, David John Kaplan, was involved in two unrelated incidents in which his back was injured. He claimed two personal injury exemptions for $16,150 each in his bankruptcy schedules. The chapter 7 trustee objected to the exemptions arguing that the debtor was entitled to a maximum $16,150 for one or more personal injury claims. Finding no state court precedent on the issue, the bankruptcy court certified the question to the Nevada Supreme Court. The Nevada statute, NRS 21.090(1) (u), exempts: “Payments, in an amount not to exceed $16,150, received as compensation for personal injury, not including compensation for pain and suffering or actual pecuniary loss, by the judgment debtor or by a person upon whom the judgment debtor is dependent at the time the payment is received.” The Nevada Supreme Court found the language of the statute, specifically the terms “payments” and “personal injury,” to be ambiguous in this context. The legislative history of the personal injury addition to the exemption statute was likewise unhelpful. So, the court turned to “reason and public policy” for guidance. Generally, the Nevada exemptions are to be liberally construed in favor of the debtor. In this case, because the personal injury exemption did not include payments for pain and suffering or actual pecuniary loss, the court concluded that the exemption applied to those funds necessary to 46 CONSUMER BANKRUPTCY JOURNAL the debtor’s recovery and ability to maintain his livelihood. As multiple injuries are likely to result in a longer recovery period, it was reasonable to conclude that the exemption should be applied on a per-claim basis. Comparing In re Comeaux, 305 B.R. 802 (Bankr. E.D. Tex. 2003), with In re Phillips, 485 B.R. 53 (Bankr. E.D. N.Y. 2012), the court noted a split in the bankruptcy courts when applying the comparable federal personal injury exemption, section 522(d)(11)(D). Comeaux relied on liberal exemption construction rules, the fact that Congress did not specify that the exemption was to be applied in the aggregate, and the fact that debtors with multiple personal injury claims would need multiple exemptions, to find that the exemption applies on a perclaim basis. Phillips, on the other hand, relied on section 102(7)’s interpretive instruction that “the singular includes the plural,” to aggregate the exemption. Based on its own analysis, the Nevada Supreme Court agreed with the reasoning in Comeaux and held that “the statute entitles the debtor to an exemption for each personal injury claim, on a per-claim basis.” Rediscover the lost art of human interaction. Solo and small firm clients don’t want to talk to a machine. Which is why firms like yours rely on Ruby, the highly trained team of offsite receptionists who handle all your calls with the perfect mix of friendliness and professionalism. With Ruby, you’ll stand out from the competition by providing an exceptional customer experience delivered by a real, caring person. 866-611-RUBY (7829) or visit callruby.com/nacba kaplan-nevada-sct-cert-questiondec-2016 Winter 2016 National Association of Consumer Bankruptcy Attorneys