Genevievette Walker-Lightfoot

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MICHELLE M. HARNER

U.S. BANKRUPTCY JUDGE

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF MARYLAND

at Baltimore

In re: □□

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Genevievette Walker-Lightfoot, □□ Case No. 19-26957-MMH

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Debtor. □□ Chapter 13

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* * * * * * * * * * * * *

MEMORANDUM OPINION

This matter is before the Court on the Objection to Claimed Exemption (the “Objection”),

filed by the Chapter 13 Trustee (the “Trustee”), and the Response thereto filed by Ms. Genevievette

Walker-Lightfoot, the above-captioned chapter 13 debtor (the “Debtor”). ECF 100, 102. The

Objection pertains to the Debtor’s exemption claim for the proceeds of a legal malpractice cause

of action under Md. Code Ann., Cts & Jud. Proc. § 11-504(b)(2). The Court held a hearing on the

Objection, the Response, and all related papers on January 17, 2024 (the “Hearing”). ECF 100,

102, 114, 135. The Debtor and counsel to the Debtor and to the Trustee appeared at the Hearing.

For the reasons set forth below, the Court will sustain the Objection (and deny the Debtor’s motion

for judgment on partial findings), and grant the Debtor leave to file an amended Schedule C,

including with respect to her claimed exemption under Md. Code Ann., Cts & Jud. Proc. § 11-

504(b)(2).1

A. Relevant Background

The Debtor filed a petition for relief under chapter 13 of the Bankruptcy Code2 on

December 23, 2019. ECF 1. The Debtor has filed her proposed chapter 13 plan and has amended

that proposed plan on several occasions.3 The Court has not yet confirmed the plan. The

confirmation process in this case has been delayed, in part, by a disagreement concerning the

treatment of a prepetition cause of action identified by the Debtor.

The cause of action at issue concerns the Debtor’s legal representation in a prior chapter 13

case. The Debtor asserts that her counsel in that case committed legal malpractice (the

“Malpractice Claim”). The Debtor filed a lawsuit against her formed counsel in the Maryland

circuit court. The Debtor and her former counsel ultimately settled the lawsuit for $25,000.00.

The Debtor listed the Malpractice Claim as an asset of her bankruptcy estate and as exempt

on her amended Schedules A/B and C, respectively.4 ECF 99. Specifically, the Debtor described

the Malpractice Claim as a “Malpractice claim against [former counsel] related to Case

Number 17-18147” and claimed three separate exemptions under Md. Code Ann., Cts. & Jud.

1 Federal Rule of Bankruptcy Procedure 1009 provides that a schedule, among other documents, “may be amended by

the debtor as a matter of course at any time before the case is closed.” Fed. R. Bankr. P. 1009(a). The Court refers to

the Federal Rules of Bankruptcy Procedure herein as the “Bankruptcy Rules.”

2 11 U.S.C. §§ 101 et seq. (the “Code”). The Court sets forth certain references and citations in the footnotes of this

Opinion solely to allow for the provision of more (rather than less) information; the use of footnotes is not intended

to minimize the importance of the materials or their relevance to the Court’s holding.

3 See, e.g., ECF 13, 31, 33, 38, 48, 62, 65, 90, 91, 97, 98.

4 Under section 522 of the Code, a debtor may choose between federal or state exemptions, “unless the State law that

is applicable to the debtor … specifically does not so authorize.” 11 U.S.C. § 522(b)(2). Maryland has opted out of

the federal exemptions provided by the Code. Md. Cts. & Jud. Proc. § 11-504(g). Schedule C itself requires that a

debtor specify “the amount of the exemption you claim[,]” and provide the “[s]pecific laws that allow exemption.”

Official Form 106C.

Proc. § 11-504(b)(2), (b)(5), and (f)(1)(i)(1). ECF 99, Amended Schedule C. The Objection

focuses solely on whether the Debtor may exempt the Malpractice Claim under Md. Code Ann.,

Cts. & Jud. Proc. § 11-504(b)(2). ECF 100.

B. The Hearing

The Hearing in this matter was somewhat unusual procedurally. The Hearing began with a

lengthy discussion regarding whether the Trustee would be permitted to rely on any evidence at

all or any evidence other than what was on the docket of this case at the time of the Hearing.5 The

Trustee argued that he could rely on the Debtor’s pre-filed exhibits and the Debtor’s testimony;

and the Debtor argued that the Trustee was foreclosed from offering any additional evidence. The

Court took this question under advisement and now rules that the Trustee may not introduce any

documents (other than the Debtor’s schedules, including amended Schedule C) or testimony in

support of his case in chief. Based on that record and at the close of the Trustee’s case in chief, the

Debtor’s counsel moved for a judgment on partial findings under Federal Rule of Civil

Procedure 52(c), made applicable to this contested matter by Bankruptcy Rules 7052 and 9014(c),

on the grounds that the Trustee failed to meet his burden under the Code and the Bankruptcy Rules.

The Court heard arguments on the request and took the matter under advisement.

5 The Court acknowledges that papers filed on the docket in any given case may be relevant to a matter before the

Court. Although counsel often identify such papers as proposed exhibits prior to any evidentiary hearing or trial (and

that may in fact be best practices in any case), the Trustee did not do so here. Moreover, even if the Court were to

consider documents on the docket other than the Debtor’s schedules, it would not change the Court’s analysis, and

such expanded consideration would not include documents filed on the docket solely as exhibits in support of the

Debtor’s case in chief. Those documents are filed on the docket as an administrative matter for the Court to allow

electronic access to exhibits in the courtroom and carry no weight in the matter unless and until they are introduced

and admitted into evidence.

This being a bench, not a jury, trial the Court preserved the Debtor’s objections and moved

on to the Debtor’s case in chief.6 The Debtor offered several documents that were admitted into

evidence, and she testified in support of her claimed exemptions. Although the Court allowed the

Trustee to question the Debtor both on cross-examination and on certain independent issues as if

the Trustee had called the Debtor as an adverse witness in his own case, the Trustee did not

separately identify any witnesses to offer testimony in support of the Objection. In this Opinion,

the Court relies only upon evidence that it finds is admissible under all applicable rules.

The Court addresses the Trustee’s evidentiary case and his burden under the Code and the

Bankruptcy Rules, as well as the Debtor’s motion for judgment on partial findings, in the findings

of fact and conclusions of law below.7

C. Findings of Fact

The Trustee relied primarily on the docket in this case to support his position. Hrg. Rec.

1:25. The Trustee did not file a separate exhibit or witness list; rather, he relies upon the doctrine

of judicial notice. The Court noted at the Hearing that it could take judicial notice of the fact that

certain documents were filed but was unsure whether judicial notice was sufficient in this matter.

Id. at 1:26. The Court has now reviewed applicable law and the most relevant document, namely

the Debtor’s amended Schedule C, and finds that Federal Rule of Evidence 201 supports the

Court’s consideration of the docket as part of the Trustee’s case in chief.8 The Objection identifies

6 The Court proceeded in this manner for purposes of judicial economy and to permit the creation of as complete a

record as possible in order to resolve this matter fully.

7 The Court has jurisdiction over this contested matter pursuant to 28 U.S.C. § 1334. The District Court has referred

this case and this matter to this Court under 28 U.S.C. § 157(a) and Local Rule 402 of the United States District Court

for the District of Maryland. This matter is a “core proceeding” under 28 U.S.C. § 157(b)(2). This Opinion constitutes

the Court’s findings of fact and conclusions of law in accordance with Federal Rule of Civil Procedure 52, made

applicable to this matter by Bankruptcy Rules 7052 and 9014.

8 Federal Rule of Evidence 201 provides in relevant part that the Court “may judicially notice a fact that is not subject

to reasonable dispute because it … (2) can be accurately and readily determined from sources whose accuracy cannot

the Debtor’s amended Schedule C, and that document was signed by the Debtor under oath. The

amended Schedule C, in turn, represents uncontroverted facts that are admissible under Evidence

Rule 201 and other applicable rules.9

The Debtor’s testimony focused on the nature of her allegations against her former counsel

and her primary source of damages, which she described as emotional distress damages. Hrg. Rec.

1:42–1:58:50. The Debtor explained that, from her perspective, her former counsel’s actions

caused her to lose her home and to experience a wide range of emotional harm and significant

stress. Id. She provided examples of interactions with the ultimate buyer of her home and how she

had to struggle and scramble to find a place for herself and her young daughter to live. Id. at

1:47:30–1:49. She spoke at several points about how these matters affected her and her daughter

and triggered deep feelings of sadness, depression, and hopelessness. Id. at 1:49–1:54; 1:56. The

Debtor mentioned in passing her assistance from a therapist, but no evidence was presented to

support this testimony. Id. at 1:52:30.

In addition to the Debtor’s testimony, the Debtor offered into evidence her original

Schedules in this case and her prior chapter 13 case (Case No. 17-18147), as well as her amended

reasonably be questioned.” Fed. R. Evid. 201(b)(2). Here, the Debtor cannot reasonably question the accuracy of her

bankruptcy schedules as she signed them under penalty of perjury. See also, e.g., In re Mullins, 360 B.R. 493 (Bankr.

W.D. Va. 2007); In re Harmony Holdings, LLC, 393 B.R. 409 (Bankr. D.S.C. 2008) (taking judicial notice of the

debtor’s schedules and noting that “they are admissions of the Debtor signed under penalty of perjury.”); Fed. R. Evid.

801(d)(2). As the United States District Court for the District of Maryland has explained,

“[A] court may properly take judicial notice of ‘matters of public record’ and other information that,

under Federal Rule of Evidence 201, constitute ‘adjudicative facts.’” Goldfarb, 791 F.3d at 508; see

also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); Katyle v. Penn Nat’l

Gaming, Inc., 637 F.3d 462, 466 (4th Cir. 2011), cert. denied, ––– U.S. ––––, 132 S. Ct. 115 (2011);

Philips, 572 F.3d at 180. Pursuant to Fed. R. Evid. 201, a court may take judicial notice of

adjudicative facts if they are “not subject to reasonable dispute,” in that they are “(1) generally

known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready

determination by resort to sources whose accuracy cannot reasonably be questioned.”

Mua v. Maryland, No. CV ELH-16-01435, 2017 WL 633392, at *6 (D. Md. Feb. 15, 2017), aff’d, 700 F. App’x 309

(4th Cir. 2017).

9 Fed. R. Evid. 801–807.

Schedules and the release agreement executed in connection with the settlement of the Malpractice

Claim.10 ECF 135. The Debtor relied on the two sets of original Schedules to show, among other

things, that she had no equity in her home at the time of the foreclosure. D. Ex. 1, 2. Hrg. Rec.

1:43:30. The Debtor asserted this as a basis to support her position that her only (or at least

primary) damages in connection with the Malpractice Claim were emotional distress damages.

The Court evaluates below the foregoing facts under the Code, the Bankruptcy Rules, and

Maryland law.

D. Legal Analysis and Conclusions of Law

An individual debtor’s ability to claim exemptions is an important component of a debtor’s

fresh start. Without proper exemptions, a debtor may not have adequate financial stability after

bankruptcy and may experience more, rather than less, financial distress. For those and other

reasons, exemptions are generally construed in favor of the debtor, and the party objecting to an

exemption bears the burden of proof. See In re Hurst, 239 B.R. 89, 91 (Bankr. D. Md. 1999)

(“Under Maryland law exemptions are to be liberally construed to effect the purpose for which

they were enacted. See Muhr v. Pinover, 67 Md. 480, 487, 10 A. 289 (1887); In re Taylor, 312

Md. 58, 71 n. 5, 537 A.2d 1179, 1185 n. 5 (1988).”); Fed. R. Bankr. P. 4003(c) (“In any hearing

under this rule, the objecting party has the burden of proving that the exemptions are not properly

claimed.”).

10 Each of these exhibits was admitted into evidence without objection. The Debtor also listed as a potential exhibit,

but did not offer, the Complaint filed in the Maryland circuit court with respect to the Malpractice Claim. Although

the Court permitted the Trustee to examine the Debtor regarding the Complaint at the Hearing, it does not consider

either the Complaint or the related testimony herein. The Court further notes that the Hearing Witness/Exhibit List

and Exhibits filed by the Debtor were not timely filed under the Evidentiary Protocol entered by the Court. ECF 120,

135. The Court, however, also notes that the United States Court of Appeals for the Fourth Circuit has “repeatedly

expressed a strong preference that, as a general matter, defaults be avoided and that claims and defenses be disposed

of on their merits.” Colleton Prep. Academy, Inc. v. Hoover Univ., Inc., 626 F.3d 413, 417 (4th Cir. 2010).

1. Burden of Proof

Section 522(l) of the Code provides that “[u]nless a party in interest objects, the property

claimed as exempt on such list is exempt.” 11 U.S.C. § 522(l). Bankruptcy Rule 4003(c) then

places the burden of showing that an exemption “is not properly claimed” on the objecting party.11

The Trustee objected to the Debtor’s amended Schedule C, arguing that the schedule failed to

adequately support an exemption of the Malpractice Claim under Md. Code Ann., Cts & Jud. Proc.

§ 11-504(b)(2).

Bankruptcy courts have developed at least three different approaches to the analysis of

objections to claims of exemptions under Bankruptcy Rule 4003. First, some courts hold that the

burden of proof (both the burden of production and persuasion) rest fully on the objecting party.

Second, other courts have found that Bankruptcy Rule 4003(c) offends the Rules Enabling Act,

and the burden of proof provided therein is invalid.12 Last, some courts posit that Bankruptcy Rule

4003(c) creates a burden shifting framework, in which an objector need only make an initial

showing that an exemption is not properly claimed, after which the burden shifts to the debtor to

establish that the property was properly exempted.13

11 The Supreme Court has noted that, under Bankruptcy Rule 4003(b) and Section 522(l), an exemption cannot be

contested out of time, even if the debtor has no “colorable statutory basis for claiming it.” Taylor v. Freeland & Kronz,

503 U.S. 638, 643 (1992). Thus, a trustee must object to an exemption within the time frame set by Bankruptcy

Rule 4003(b), which in this case, was 30 days from the filing of the amended Schedule C. No party contests the

timeliness of the Trustee’s Objection in this matter.

12 See, e.g., In re Tallerico, 532 B.R. 774, 778 (Bankr. E.D. Cal. 2015) (“Rule 4003(c) offends the Bankruptcy Rules

Enabling Act with respect to state-law exemptions and must give way to the state statute.”); In re Lerner, 611 B.R.

409 (Bankr. D. Kan. 2019) (agreeing with Tallerico); and In re Diaz, 547 B.R. 329 (B.A.P. 9th Cir. 2016)

(affirmatively citing Tallerico).

13 See, e.g., In re Man, 428 B.R. 644, 653 (Bankr. M.D.N.C. 2010); In re Holt, 357 B.R. 917, 921 (Bankr. M.D. Ga.

2006); In re Peacock, 292 B.R. 593, 596 (Bankr. S.D. Ohio 2002); In re Davis, No. 99–00358, 1999 WL 33486078

at *2 (Bankr. D.S.C. May 28, 1999); In re Bennett, 192 B.R. 584, n. 9 (Bankr. D. Me. 1996); In re Hodgson, 167 B.R.

945, 950 (D. Kan. 1994).

Some of the “burden shifting” courts have held that, although Bankruptcy Rule 4003(c)

creates a burden shifting framework, an objector must “produce evidence to rebut the

presumptively valid exemption[,]” after which the burden of production “shifts to the debtor to

come forward with unequivocal evidence to demonstrate that the exemption is proper. The burden

of persuasion, however, always remains with the objecting party.” Carter v. Anderson (In re

Carter), 182 F.3d 1027, n. 3 (9th Cir. 1999) (internal citations omitted). Other of the “burden

shifting” courts have determined that an objecting party need only make a “prima facie” case to

shift the burden of production to the debtor to show that the exemption is properly claimed. See,

e.g., In re Branscum, 229 B.R. 32 (Bankr. M.D. Fla. 1999); In re Davis, No. 99–00358, 1999 WL

33486078 at *2 (Bankr. D.S.C. May 28, 1999).

In considering which approach to adopt, the Court is mindful of the policy objectives

underlying exemption statutes, including section 522 of the Code, and chapter 13 of the Code. The

Court strives here to allow debtors to maintain assets permissible under exemption statutes and

necessary to facilitate the debtor’s rehabilitation and fresh start, while protecting the integrity of

the system and discouraging abuse. In this regard, the Court is guided, as it must be, by the

language of the Code and the duties imposed thereunder on both debtors and parties objecting to

exemptions.

A debtor may not simply list an asset and identify an exemption statute without some

context or indication of why or how the asset is exempt under applicable law. For example, a

debtor who is an accountant by trade should not be able to list an electric saw under a tools of the

trade exemption without explaining the application of the chosen exemption to the identified asset.

In such a scenario, a timely objection that notes the inadequacy of the claimed exemption is a

facially valid objection, without requiring more—at that point—from the objecting party. Whether

this approach is called a “facially valid objection” or a “facially invalid exemption,” the result is

the same and akin to the burden shifting approach described above.

Under such an approach, when a debtor’s claim of exemption is found to be “facially

invalid” (in other words, the debtor has failed to identify the kind or amount of property plainly

recognized as exempt under the exemption statute), objecting parties can point to the applicable

statutory language to sustain their initial burden of proof under Bankruptcy Rule 4003. See, e.g.,

In re Massey, 465 B.R. 720 (B.A.P. 1st Cir. 2012) (discussing an objection to claim of exemption

of “100% of FMV”). The Massey decision is instructive here.

In Massey, the court addressed the adequacy of a claimed objection at 100% of fair market

value under an exemption statute that limited the amount of the exemption. Although the

deficiency in the debtor’s claimed exemption differs from that asserted in this case, the court’s

analysis and application of relevant Supreme Court decisions apply with equal force.14 The Massey

court determined that an objection to an exemption may be facially valid if supported by the

language of the Code and deficiencies in the debtor’s exemption schedule. The court found its

holding consistent with Supreme Court precedent, noting that “the only burdens [the Supreme

Court’s] conclusion [in Schwab] imposes are burdens the Code itself prescribes, specifically, the

burdens the Code places on debtors to state their claimed exemptions accurately and to conform

such claims to statutory limits.” Massey, 465 B.R. at 728.

14 See Schwab v. Reilly, 560 U.S. 770 (2010); Taylor v. Freeland & Kronz et al., 503 U.S. 638 (1992).

The Court is persuaded by the discussion in Massey and those cases applying a shifting

approach to the burden of production.15 An objecting party must establish in the first instance that

the exemption is not properly claimed by making a prima facie case that the objection should be

sustained.16 A showing that the claimed exemption is facially invalid meets this standard. A debtor

then may provide additional evidence to support the validity of the claimed exemption, which if

done, leaves the ultimate burden of persuasion on the objecting party. Such an approach is

consistent with the language of the Code and the Bankruptcy Rules,17 the parties’ respective duties

thereunder,18 and appropriate policy considerations.

15 See, e.g., In re Man, 428 B.R. 644, 653 (Bankr. M.D.N.C. 2010) (“While the Trustee retains the burden of proof

throughout (it does not shift), once the objecting party produces evidence to rebut the claimed exemption, the burden

of production shifts to the debtor ‘to come forward with unequivocal evidence to demonstrate that the exemption is

proper.’ In re Carter, 182 F.3d 1027, n. 3 (9th Cir.1999)) (internal citations omitted). The burden of production shifting

approach has been adopted by numerous courts. See supra note 13.

16 Black’s Law Dictionary defines prima facie case in relevant part as “[a]t first sight; on first appearance but subject

to further evidence or information.” Prima facie, Black’s Law Dictionary (11th ed. 2019).

17 The Court notes that a burden shifting approach as provided in this Opinion gives proper deference to state law

while following the procedure for claiming, and initiating an objection to, an exemption under section 522(l) of the

Code and Bankruptcy Rule 4003. 11 U.S.C. § 522(l); Fed. R. Bankr. P. 4003(a), (b), (c). Indeed, under state law, a

debtor (as the party claiming the exemption) would bear the burden of proof. Maryland-National Capital Park and

Planning Com’n v. State Dep’t of Assessments and Taxation, 110 Md. App. 667, 690 (Md. Ct. Spec. App. 1996) (“The

burden of showing that an exemption is allowed under the law falls upon the claimant. Pittman v. Housing Auth., 180

Md. 457, 460, 25 A.2d 466 (1942).”). Here, the Court does not dismiss state law but rather situates it within the

procedural framework of the Bankruptcy Rules and the statutory language of section 522 of the Code. The Court finds

that this approach is proper under applicable law and avoids the issues addressed by the cases cited supra note 12. See

also Hanna v. Plumer, 380 U.S. 460, 464 (1965) (“‘The test must be whether a rule really regulates procedure,—the

judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and

redress for disregard or infraction of them.’ Sibbach v. Wilson & Co., 312 U.S. 1, 14, 61 S.Ct. 422, 426, 85 L.Ed.

479.”); Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 407 (2010). Cf. Raleigh v. Illinois

Dep’t of Revenue, 530 U.S. 15, 22 and n. 2 (2000) (recognizing that Congress may alter entitlements in bankruptcy

and defer certain aspects to be addressed by the Bankruptcy Rules but that the Code and the Bankruptcy Rules were

silent on the issue before the Supreme Court).

In addition, and for purposes of completeness, the Court observes that the approach adopted herein also

strives to reconcile and respect the various objectives articulated by the Fourth Circuit in In re Nguyen, 211 F.3d 105,

110 (4th Cir. 2000) (collecting cases) and Johns Hopkins Hosp. v. Post, 321 Fed. Appx. 259, 262–263 (4th Cir. 2009).

Based on the entirety of the Court’s review, applying a shifting burden of production in the exemption

objection context thus respects applicable law and is a fair and appropriate allocation of the burden in exemption

objection litigation.

18 See, e.g., In re Massey, 465 B.R. 720, 728 (B.A.P. 1st Cir. 2012) (noting that the Code places the burden on debtors

to properly claim exemptions).

The Court thus agrees, as an initial matter, with the Trustee’s position in the Objection.

The Debtor’s amended Schedule C provides no information that would explain why or how a legal

malpractice claim qualifies for a personal injury exemption under state law. Indeed, the Debtor’s

amended Schedule C does not either “expressly or impliedly characterize” the legal malpractice

claim as a claim for personal injury. In re Hurst, 239 B.R. 89 (Bankr. D. Md. 1999). Likewise,

nothing in the Debtor’s other schedules would suggest a personal injury claim in this case.

The Trustee has met his burden to establish that “the exemption is not properly claimed[,]”

as the subject claim of exemption is invalid on its face.19 Fed. R. Bankr. P. 4003(c). The amended

Schedule C filed by the Debtor identifies only a “Malpractice claim against [former counsel]

related to Case Number 17-18147[.]” ECF 99. Although the ultimate burden remains with the

Trustee, the Debtor must first identify an asset that appears to be covered by an exemption under

Maryland law.20 To find otherwise would tip the scale too far in a debtor’s favor and would expose

the system to potential fraud and abuse.21 Because the Debtor’s claim of exemption is facially

invalid, the Debtor’s motion for judgment on partial findings is denied.

2. Identification of an Appropriate Exemption

The conclusion that the Trustee has made a prima facie case does not end the Court’s

inquiry. Rather, the Court next considers whether the Debtor’s claim of exemption regarding the

19 See supra notes 4, 18.

20 In re Hurst, 239 B.R. 89 (Bankr. D. Md. 1999) (“As long as the Debtor either expressly or impliedly characterizes

the settlement as falling within the exempt category, the Trustee retains the burden of proof and must present evidence

to the court if he wishes to prevail on his objection.”) (quoting In re Lester, 141 B.R. 157, 162 (S.D. Ohio 1991)).

Here, the Debtor did not “either expressly or impliedly characterize[] the settlement as falling within the exempt

category.” See also Maryland-National Capital Park, 110 Md. App. at 690.

21 The Court is not herein suggesting that the Debtor's claimed exemption on the amended Schedule C is fraudulent

or an abuse of the system; rather, the Debtor simply has not provided sufficient information or evidence at this stage

of the case. In addition, the Court’s ruling herein should not be read as a means to catch and penalize honest or

inadvertent mistakes by debtors trying to identify exemptions and complete Schedule C. The underlying purpose and

importance of exemptions to individual debtors should guide any analysis of exemption deficiencies and amendments.

Malpractice Claim under Md. Code Ann., Cts. & Jud. Proc. § 11-504(b)(2) is appropriate. This

approach shifts the burden of production temporarily to the Debtor to show that her claim of

exemption is proper.22 If the Debtor provides adequate support, the Court turns back to the Trustee

to meet his ultimate burden of persuasion.

With respect to the Debtor’s evidence, the Debtor demonstrated that she filed litigation

against her former counsel and that such litigation was settled for $25,000.00. The Debtor’s

testimony, which was uncontroverted, also established that she was distraught and affected by the

conduct of her former counsel and the related issues with her home. The Court does not doubt that

the Debtor’s experience was unsettling and very difficult to manage.

On the record before it, however, the Court cannot find that the Debtor’s claim would

qualify as an exempt personal injury recovery under Maryland law.23 The Court notes that

emotional distress may, in certain instances, rise to the level of physical injury and that Maryland

law does not appear to preclude emotional distress damages in the context of a legal malpractice

22 See Hurst, 239 B.R. at 92 (“Once the Trustee meets his burden, the debtor has an opportunity to show that the

exemption is valid.”); In re Davis, No. 99-00358-W, 1999 WL 33486078 at *2 (Bankr. D.S.C. May 28, 1999) (finding

that the burden shifts to the debtor after the objecting party makes a prima facie case). In addition, the United States

Court of Appeals for the Ninth Circuit has explained:

A claimed exemption is presumptively valid.... Once an exemption has been claimed, it is the

objecting party’s burden ... to prove that the exemption is not properly claimed. Initially, this means

that the objecting party has the burden of production and the burden of persuasion. The objecting

party must produce evidence to rebut the presumptively valid exemption. If the objecting party can

produce evidence to rebut the exemption, the burden of production then shifts to the debtor to come

forward with unequivocal evidence to demonstrate that the exemption is proper. The burden of

persuasion, however, always remains with the objecting party.

In re Byrne, 541 B.R. 254, 256 (Bankr. D.N.J. 2015) (quoting Carter v. Anderson (In re Carter), 182 F.3d 1027, 1029

n. 3 (9th Cir. 1999)) (internal quotation marks and citations removed). See also In re Man, 428 B.R. 644 (Bankr.

M.D.N.C. 2010).

23 See, e.g., In re Barton, Case No. 05-41280 DK, 2006 WL 4667120, at *2 (Bankr D. Md. June 26, 2006) (“With

respect to the Claim Against Ford, the court finds that the claimed exemption must be disallowed. The caselaw in this

district is clear in setting forth that the exemption available under Maryland Code Ann. Cts. & Jud. Proc. § 11–

504(b)(2) is limited to ‘money that was awarded to a person for sickness, accident, injury or death’ and that

compensates the debtor for an injury to the physical person. See In re Hurst, 239 B.R. 89, 91 (Bankr. D. Md. 1999).”).

claim.24 Nevertheless, the Debtor did not offer any evidence to suggest a physical injury resulting

from emotional distress.25 For example, the Debtor did not produce any evidence of doctor or

therapist bills, time off from work, or the testimony of others who observed the physical

manifestation of the distress. The Court acknowledges the Debtor’s own testimony regarding how

the situation and emotional distress affected her, but that testimony alone cannot suffice. Indeed,

Maryland courts require “objective evidence” of emotional distress damages “to guard against

feigned claims.” Vance v. Vance, 408 A.2d 728, 733 (Md. 1979).26

In addition, the Court observes that the settlement between the Debtor and her former

counsel is silent regarding the exact nature of the claims being settled or the allocation of the

monies being paid under the settlement. If the Debtor had offered adequate evidence of an

emotional distress claim under Maryland law, the terms of the settlement might be less relevant.

But on the current record, the Court has no evidence of a personal injury resulting from emotional

distress and no indication of a settlement of that kind of claim. The Court rejects the Debtor’s

24 See Schafer v. Young, No. Civ. JFM-03-16, 2004 WL 162961, at * 1 (D. Md. Jan. 22, 2004) (“It is true, as Schafer

contends, that in Roebuck the court did not hold that as a matter of law emotional distress damages are not recoverable

in a legal malpractice case involving underlying property or commercial damage. Rather, it held only that the

plaintiff’s evidence was insufficient to establish emotional distress.”).

25 See, e.g., Standard Constr. & Coatings LLC v. Chrysso C. Plato Tr., No. 1172, Sept. term, 2018, 2020 WL 602349,

at *18 (Md. Ct. Spec. App. Feb. 7, 2020) (“A plaintiff seeking an award of non-economic damages in tort must prove

a ‘physical injury’ that is ‘objectively ascertainable.’ Hoffman v. Stamper, 385 Md. 1, 34 (2005); see also Exxon Mobil

Corp. v. Albright, 433 Md. 303, 352 (2013) (a ‘physical injury’ must be ‘capable of objective determination’); Vance

v. Vance, 286 Md. 490, 498–501 (1979) (recovery for mental distress exists if it results in ‘physical injury’). To recover

non-economic damages, that physical injury must also be ‘clearly apparent and substantial,’ more than something

merely distressing. Roebuck v. Steuart, 76 Md. App. 298, 315–16 (1988) (plaintiff failed to show ‘some clearly

apparent and substantial physical injury’ where the sole evidence of her ‘mental anguish’ was her testimony that she

saw a psychologist); see also Faya v. Almaraz, 329 Md. 435, 455–56 (1993) (recovery of damages was limited to the

period when plaintiffs had reasonable ‘fear and its physical manifestations’).”); see also Exxon Mobil Corp. v.

Albright, 433 Md. 303, 350, 71 A.3d 30, 59, on reconsideration in part, 433 Md. 502, 71 A.3d 150 (Md. 2013) (“After

noting that mental distress alone cannot be an independent cause of action and that recovery cannot be obtained for

mental distress without ‘physical impact,’ we expressed concern that emotional distress may be feigned easily.”).

26 See also Wheeling v. Selene Fin. LP, 250 A.3d 197, 222 (Md. 2021) (quoting Hoffman v. Stamper, 381 Md. 1 (Md.

2005)); Exxon Mobil Corp. v. Albright, 71 A.3d 30 (Md. 2013); Belcher v. T. Rowe Price Found., 329 Md. 709 (Md.

1993).

attempt to cast the broad language of the release as sufficient. Again, finding an allowable

exemption based on the current record would subject the process to potential fraud and abuse and

not adequately “guard against feigned claims.” Vance, 408 A.2d at 733.

E. Conclusion

A debtor should be able to exempt property under applicable state law and section 522 of

the Code by identifying the property and an exemption that properly covers such property on the

debtor’s Schedule C. The process should be straightforward and help to facilitate the debtor’s

rehabilitation and fresh start. A debtor should not, however, be able to identify just any property

as exempt and must, at a minimum, set forth a facially valid exemption on the Schedule C.

In this case, the Debtor may in fact be able to identify a proper exemption under Md. Code

Ann., Cts & Jud. Proc. § 11-504(b)(2), but she has not yet done so. The Trustee’s objection to the

claimed exemption on amended Schedule C is facially valid and sufficient to sustain the Trustee’s

initial burden. Given the Debtor’s ability to amend her bankruptcy schedules and the important

role played by exemptions in any bankruptcy case, the Court will allow the Debtor to further amend

her Schedule C to properly claim any available exemptions under state law, including under Md.

Code Ann., Cts & Jud. Proc. § 11-504(b)(2).

Accordingly, the Court will deny the Debtor’s motion for judgment on partial findings,

sustain the Objection, and grant the Debtor leave to further amend her Schedule C. The Court will

enter a separate order consistent with this Memorandum Opinion.

cc: Debtor

Debtor’s Counsel

Chapter 13 Trustee

END OF MEMORANDUM OPINION