Colwell v. Royal International Trading Corp. (In Re Colwell) , 196 F.3d 1225 ( 1999 )

In re William Frederick COLWELL and Ruby Colwell, Debtors.
William Frederick Colwell, Ruby Colwell, Plaintiffs-Appellees,
v.
Royal International Trading Corporation, Defendant-Appellant.
No. 98-5626
Non-Argument Calendar.
United States Court of Appeals,
Eleventh Circuit.
Nov. 19, 1999.
Appeal from the United States District Court for the Southern District of Florida. (No. 97-8500-CIV-ASG),
Alan S. Gold, Judge.
Before ANDERSON, Chief Judge, DUBINA, Circuit Judge, and GODBOLD, Senior Circuit Judge.
PER CURIAM:
The Colwells jointly filed a Chapter 7 bankruptcy case. Although Florida law does not recognize
legal separations the Colwells had been separated for 31/2 years before filing the petition. Prior to the
bankruptcy petition each had acquired a separate home and had obtained a separate homestead exemption on
that home.
Florida has chosen to opt out of federal exemptions and elected to apply its own. 11 U.S.C. §
522(b)(1); Fla. Stat. §§ 222.21 and 222.20; 3 Collier on Bankruptcy, § 522.08 at 522-44, n. 8a. The
Colwells asserted to the bankruptcy court that Article X, § 4 of the Florida constitution required that they be
granted separate homestead exemptions. Royal International excepted. In 1998 the bankruptcy court
sustained the exception, stating that it could find no case law to support dual homestead exemptions for
married individuals residing on two distinct, non-contiguous parcels of property. See In re Colwell, 208 B.R.
85 (Bankr.S.D.Fla.1997). The Colwells appealed to the United States District Court, S.D. Florida, which
reversed the bankruptcy court. Royal appealed to the Eleventh Circuit.
Pursuant to Erie Railway the bankruptcy court must interpret and apply the Florida exemption law
in the same manner as a Florida state court. Florida state court decisions establish that as a matter of the
public policy of the state, giving a liberal construction as required, a homestead exemption can be established
to each of two people who are married but legitimately living apart in separate residences, if they otherwise
meet the requirements of the exception, and, by "legitimately" they mean that there is no fraudulent or
otherwise egregious act by the beneficiary of the exemption. Law v. Law, 738 So. 2d 522 (Fla.App. 4th
Dist.1999); In re Englander, 95 F.3d 1028 (11th Cir.1996) (closely analyzing Florida law and using Florida
state court cases to determine the applicability of the Florida homestead exemption); Myers v. Lehrer, 671
So. 2d 864, 866 (Fla.App. 4th Dist.1996); Public Health Trust of Dade County v. Lopez, 531 So. 2d 946, 948
(Fla.1988); Isaacson v. Isaacson, 504 So. 2d 1309 (Fla.App. 1st Dist.1987); see also Radin v. Radin, 593
So. 2d 1231 (Fla.App.3d Dist.1992). There is a presumption that the exemption applies. See Snyder v. Davis,
699 So. 2d 999, 1002 (Fla.1997). The district court concluded that the living arrangements of the Colwells
were not shown to be the subject of fraud and that Royal had not brought forth evidence to overcome the
presumption favoring the exception. There was no error.
AFFIRMED.
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