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
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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.”
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kaplan-nevada-sct-cert-questiondec-2016
Winter 2016
National Association of Consumer Bankruptcy Attorneys