UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
DEBTOR CASE NO. 91-60868
This matter is before the Court on the objection of Henry Owens,a creditor of the debtor, to a claimed homestead exemption in a residence occupied by the debtor's mother and in which he has a joint life estate and remainder in fee simple. An evidentiary hearing concerning this matter was held on April 16, 1992.
The statute under which the debtor is claiming the exemption, KRS 427.060, provides that the debtor may claim an exemption in real or personal property that the debtor or a dependent of the debtor uses as a permanent residence. The issue herein is therefore whether the debtor's mother may be considered his dependent. A case cited by the debtor, In re Washington, 52 B.R. 17, (Bkrtcy.W.D.Ky. 1981), came to the conclusion that
...the statutory provisions for homestead exemptions satisfy a proper legislative objective by providing the debtor and the debtor's dependents with an opportunity for a new financial start, and it is incumbent upon the courts to liberally interpret and construe them so that the end sought to be accomplished may not be defeated. However, a statute may not receive such broad and liberal interpretation and construction as to place its meaning beyond the scope of the apparent legislative purpose.
At page 55. The court went on to order an evidentiary hearing to determine whether the debtor's daughter qualified as a dependent under the statute.
The evidentiary hearing conducted in this matter elicited testimony from the debtor's mother, Myrtle Griffin, the owner of a joint life estate in the subject property. Mrs. Griffin testifed that her income in the year preceding December 2, 1991, consisted of approximately $5000.00 in Social Security benefits and approximately $6900.00 from the debtor and his wife. Mrs. Griffin stated that the debtor and his wife paid her $60.00 per month interest on money she had loaned them, and that they paid approximately $100.00 per week for babysitting. She stated that she considered the money that she received from them as a gift. (Transcript of Hearing, pp. 21-23).
Although Mrs. Griffin's testimony is somewhat contradictory, it seems clear that the money she was paid by the debtor and his wife was in return for a loan and for babysitting services. Her characterization of the money as a "gift" does not fit the facts as Mrs. Griffin presented them. She provided a service that the debtor and his wife, a physician, needed. The Court assumes that if Mrs. Griffin had not been available to babysit, the debtor and his wife would have had to pay someone else to do so. The fact that Mrs. Griffin was dependent on the income she received from babysitting does not make her a "dependent" of the debtor any more than anyone who works is a "dependent" of his employer.
In conclusion, it is the opinion of this Court that the debtor's mother, Myrtle Griffin, does not qualify as his dependent pursuant to KRS 427.060, and that therefore the debtor may not claim a homestead exemption in the property in question. An order in conformity with this opinion will be entered separately.
By the Court -
Solomon Lee Van Meter, Esq.
Sidney N. White, Esq.