Petition for Writ of Certiorari — Payne v. Wood, 106 S. Ct. 1466 (1986) (No. 85-1298)

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85-1298 i

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No.

IN THE

Supreme Court of the United States

OcTOBER TERM, 1985

JERRY PAYNE AND DEBORAH PAYNE,

Petitioners,

TO.

CHARLES R. Woop,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

GEORGE R. RIPLINGER, JR

RIPLINGER, DIXON, HOFFMAN &

VER STEEGH

2215 West Main Street

Belleville, Illinois 62223

(618) 234-2440

Counsel for Petitioners

St. Louis Law Printing Co.,Inc., 411 No. Tenth Street 63101 314-231-4477

QUESTIONS PRESENTED

1. Should a bankrupt’s children’s toys and furniture be in-

cluded as an asset of the bankrupt’s estate?

2. Should casualty insurance policies be included as an asset

of the bankrupt’s estate?

3. Is there authority in the bankruptcy code or elsewhere for

a bankruptcy court to assess a monetary penalty against a

bankrupt for omission of items of personal property from his

bankruptcy schedule without a finding of fraud, concealment or

contempt?

il

TABLE OF CONTENTS

Ee I

ot Sg a l

kav diveaves 2

measons For Granting The Writ..................... 8

1. The Decision Below Including Children’s

Property and Casualty Insurance Policies As

Assets Of A Bankrupt’s Estate Are Matters

Of First Impression In The United States;

Will Affect A Majority Of All Individual

Bankruptcies Filed; And Are Contrary To

Cg 8

to

The Decision Below Allows Bankruptcy

Courts To Assess Monetary Penalties Against

Bankrupts Who Omit Items From Their

Schedule Of Assets, Without The Necessity

For A Concomitant Finding Of Fraud, Con-

cealment Or Contempt Of Court And Does

Not Set Standards For Inclusion Of Assets,

Thus Placing All Bankrupts In A Position Of

Uncertainty As To The Specificity Required

On Such Schedules And Will Lead To Incon-

sistent Rulings Among The District Courts... 10

ES A 14

Appendix:

A - Order of the United States Bankruptcy Court for

the Southern District of Illinois, dated January 4,

iv

B- Order of the United States District Court for the

Southern District of Illinois, dated August 14, 1984

C - Opinion of the United States Court of Appeals for

the Seventh Circuit, dated October 18, 1985 ......

D - Order of the United States Court of Appeals for

the Seventh Circuit Denying Petitioners’ Petition

for Rehearing, dated November 14, 1985.........

= ea es GE Gn ek cco lel ceece cece

TABLE OF AUTHORITIES

Cases:

Burke v. Guarantee Title and Trust Company, 134 F.

tk ba OO a rye a rere eer

In Re Barker, 768 F.2d 191 (7th Cir., 1985) ...........

In Re Dorricutt, 5 B. R. 192 (N.D. Ohio, 1980) ........

In Re Elliott, 31 B.R. 33 (Bank. S.D. Ohio, 1983)......

In Re Friedrich, 100 F. 284 (7th Cir., 1900) ...........

In Re Howard, 6 B. R. 200 (Bank. S.D. Ohio, 1980). ...

In Re Rogers, 45 F. Supp. 297 (E.D. N.Y., 1942) ......

in Re Settle, 14. B.R. 31 (D.N.4., 1961)... 2 nan

In Re Snow, 21 B.R. S96 (E.D. Cal., 1962)... .. 60.45%.

Patton v. Fidelity-Philadelphia Trust Company, 246

we Me ee a.) ee re eee

Stewart v. Ganey, 116 F.2d 1010 (Sth Cir., 1940).......

A-6

A-9

13

12

Statutes:

11 USC §105

11 USC §350

11 USC §541

11 USC §727

11 USC Chapter 7

28 USC §1254(1)

Chapter 52, §13, Illinois Revised Statutes

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

JERRY PAYNE AND DEBORAH PAyNi

Petitioners,

7 o

CHARLES R. Woop,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

This is a Petition for a Writ of Certiorari to the United States

Court of Appeals for the Seventh Circuit to review the final

judgment entered in this proceeding on October 18, 1985. A

Petition for Rehearing in this proceeding was denied on

November 14, 1985,

OPINION BELOW

The opinion of the United States Court of Appeals for the

Seventh Circuit is reported at 775 F.2d 202 and appears in the

Appendix hereto.

—

JURISDICTION

The judgment of the United States Court of Appeals for the

Seventh Circuit was entered on October 18, 1985. A Petition

for Rehearing was filed on November 1, 1985 and denied on

November 14, 1985. This petition was filed within ninety (90)

days of the denial of the Petition for Rehearing. The court’s

jurisdiction is invoked under 28 USC §1254(1).

QUESTIONS PRESENTED

1. Should a bankrupt’s children’s toys and furniture be in-

cluded as an asset of the bankrupt’s estate?

2. Should casualty insurance policies be included as an asset

of the bankrupt’s estate?

3. Is there authority in the bankruptcy code or elsewhere for a

bankruptcy court to asses a monetary penalty against a

bankrupt for omission of items of personal property from his

bankruptcy schedule without a finding of fraud, concealment or

contempt?

STATEMENT OF THE CASE

On August 12, 1981, Jerry and Deborah Payne [filed their

Petition for Relief under 11 USC, Chapter 7, in the Bankruptcy

Court for the Southern District of Illinois. They were

represented by attorney, Lawrence L. Ruemmler, of the Mt.

Vernon office of the Land of Lincoln Legal Assistance Founda-

uion, Inc.

On Schedule B-2 (c) the Paynes listed: ‘ta Zenith Stereo,

$50.00; a G.E. Refrigerator, $25.00; a G.E. Washer, $15.00;

G.E. Dryer, $25.00; furniture, $615.00; household dishes and

small appliances, $100.00; and an RCA Color Television,

$250.00”. (App. 9)

Schedule B-2(e) was not itemized beyond the printed descrip-

tion of ‘‘wearing apparel, jewelry, firearms, sports equipment

ae

ind other personal possessions’? and a value of $125.00 was

nlaced on this category by the Pavnes. (App. ¥)

On Schedule B-4, the Paynes listed their clothing valued at

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$125.00 and thei Household Goods, Furniture and Ay

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mili . " wt ; ) c " sryi rst " 1% ry Ar eor \

inces’*, valued at $1,080.00, as exe under Chapte d

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abandon tf Paynes personal property aiueless c

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On February 25, 1982, the trustee filed a Complaint claiming

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ate NSUPANG TO eeds Ol tt v esta \ [ 1 TV \

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surance company had already paid $5,000.00 to the Paynes and

\ ry red tO +) tot 1) ca) 7 i7 f } ry 7 }

Wa } epa CU ) pa\ al} additional S1Z,.389 ; Or the pK SOTla

property loss. (R. 19)

msrelimyr 1) bys baat . . " ’ > . —

prelimimary injunction proniowineg Ac Insurance company Irol

paying further sums to the Paynes under their insurance policy

ee)

The Pavnes filed their answer on March 1982, and alleged

in an Affirmative Defense that $3,664.00 of said amount was

AE Re

for property acquired after the bankruptcy; that the funds

should all be paid to them since the insurance was for replace-

ment value rather than fair market value; and that, by virtue of

Chapter 52, $13, Illinois Revised Statutes, all wearing apparel

plus $1,300.00 of additional personal property was exempt in

bankruptcy.

On April 2, 1982, the Ina State Bank filed a Petition to In-

tervene in the cause claiming an interest in the insurance pro-

ceeds on the house due to a second mortgage. This claim was

settled by the par*ies prior to trial by payment of the entire claim

from the insurance proceeds on the residence.

The Paynes also filed a Motion to File a Counterclaim against

Country Mutual Insurance Company on November 11, 1982,

regarding the loss of their residence. They filed a Motion to File

an Amended Counterclaim against the insurance company ad-

ding additional claims under the personal property provision on

December 9, 1982. The Bankruptcy Court has not ruled on

these motions to date.

[he claim of the trustee as to the personal property insurance

proceeds was tried in a bench trial before the Honorable J.D.

Trabue on November 17, 1982.

At trial, the insurance adjuster for Country Companies

testified that, under the Paynes’ policy of insurance, the in-

surance adjuster, Bruce Solesby, took the list submitted by the

Paynes (Exhibit ‘‘B’’) and figured it at ‘‘actual cost value’’

which he defined as ‘‘new cost less depreciation for age, wear

and tear, or general condition’’ (R. 13-15). He did not actually

look at all the items (R. 14-17) and only viewed the items to

verify the Paynes’ list. (R. 25)

The company has a general list of items indicating how much

to deduct from the cost of each item as supplied by the insured

per year for its life expectancy shown on the list. (R. 14, 27-30)

He used this book for all items that were destroyed and a repair

a, pon

book for repairable items. For items that were not listed in the

book he found a similar item of similar cost and extrapolated

from that. (R. 20-25) All of his appraisals had been made using

the book and the only adjustments were made in negotiations

with an insured. (R. 22)

The Paynes’ attorney objected to the testimony of the ad-

juster on the basis that his evaluation testimony was irrelevant

and immaterial in that it did not pertain to what the ‘‘tair

market value’’ of the items were, but only to what amount the

insurance company would pay based upon a depreciation book

designed by some unknown employee of the insurance company

(R. 36-37), and that the adjuster had not been shown to be

qualified to testify to the only material fact: ‘‘fair market

value’’. (R. 15-16)

Jerry Payne testified that he listed the items on his Schedule

in the groupings that he used on the advice of his attorney (R.

39-40) and that he locked through the local newspaper to at-

tempt to determine values. (R. 40)

The Paynes then called Norman Gillette to testify as to the

fair market value of their personal property. Gillette has been a

professional auctioneer for 25 years and testified that he ap-

praised personal property 80 to 90 times per year for auctions

and for inheritance taxes for banks and attorneys. (R. 49-50)

He then testified that he examined all of the property of the

Paynes and made an appraisal of its fair market value; meaning

ihe price that a willing buyer would pay to a willing seller under

no duress. (R. 50-51) His appraisal totaled $1,935.00. (R. 52)

The basis of Gillette’s valuation was his knowledge over the

years of the prices similar items brought in the used personal

property market. (R. 53)

The valuation can be further broken down as follows:

Children’s toys and furniture contained in their rooms:

Gillette appraisal, $242.50; insurance proceeds, $3,706.13.

Par

— eo

Furniture: Gillette appraisal, $492.00; insurance pro-

ceeds, $3,682.40.

Household goods: Gillette appraisal, $533.00; insurance

proceeds, $5,339.45.

Minor appliances: Gillette appraisal, $52.50; insurance

proceeds, $319.00.

Major appliances: Gillette appraisal, $452.00; insurance

proceeds, $3,249.24.

(full itemization appears in the Appendix)

The balance of the appraisal and insurance proceeds are at-

tributable to property acquired after the Paynes’ discharge in

bankruptcy and to their clothing which has previously been

awarded to them and is not a subject of appeal at this time.

Paynes’ counsel renewed his Motion to Strike the Testimony

of Bruce Solesby at the end of the trial. The Judge said he

would take it under advisement. (R. 61)

On January 4, 1983, the Bankruptcy Judge ruled that the deb-

tors were entitled to receive a total of $6,114.29 of the insurance

proceeds payable due to their personal property loss.

This figure was arrived at by awarding the Paynes t.1e in-

Surance value of their property acquired post-bankruptcy of

$3,664.00; $1,610.29, the insurance value of the personal pro-

perty specifically itemized in their bankruptcy schedule; and

$840.00, the fair market value listed by the Paynes in their

bankruptcy schedule rather than the insurance value of the non-

specific categories of ‘‘furniture’’, ‘‘househoid dishes and small

appliances’’ and ‘‘other personal property’’.

The balance of the insurance proceeds, $11,275.18, was to be

paid to the trustee in bankruptcy for distribution to the

creditors of the debtors.

The Paynes appealed the decision of the Bankruptcy Court to

the District Court for the Southern District of Illinois, which,

on August 14, 1984, affirmed the decision of the Bankruptcy

Court.

Che decision of the District Court was appealed to the United

States Court of Appeals for the Seventh C ircuit which reversed

the District Court in so far as the District Court had ruled that

the insurance proceeds attributable to the Paynes’ clothing

should not be awarded to them and affirmed the remainder of

the District Court’s decision. The Paynes’ Petition for Rehear-

ing was denied on November 14, 1985.

a ew

REASONS FOR GRANTING THE WRIT

1. The Decision Below Including Children’s Property And

Casualty Insurance Policies As Assets Of A Bankrupt’s Estate

Are Matters Of First Impression In The United States; Will Af-

fect A Majority Of All Individual Bankruptcies Filed; And Are

Contrary To The Public Interest.

A. Children’s Property

Many, if not most individual bankrupts have minor children

who reside in their homes. These children have possessions

ranging from the beds they sleep in to their toys and radios. The

Paynes’ children were no different. The contents of their rooms

are listed in the Appendix. The fair market value of these items

was $242.50. The insurance proceeds attributable to those items

is $3,706.13.

The children are not bankrupt, their parents are. As a prac-

tical matter, would any trustee seize these items? The answer

must be no. Children may own property and that property right

should be respected and the children should not be forced to

further suffer their parents’ misfortune.

This issue was raised but not specifically ruled upon by the

Court of Appeals. The result, however, of the court’s failure to

rule and the refusal to rehear this case upon this issue results in

the insurance proceeds attributable to the children’s property

being turned over to the trustee for the benefit of the parents’

creditors.

Petitioners could find no other case reported dealing with this

question. Logic and public policy would, however, seem to

militate in favor of restoring the children to the pre-bankruptcy

Status quo.

B. Casualty Insurance

The Court of Appeals’ decision has held as a matter of first

impression that the Paynes’ homeowners’ insurance policy was

=

an asset of the bankruptcy estate to the extent of its “‘cash sur-

render value’’.

This casualty policy, like all other casualty insurance policies,

for example, automobile, boat, homeowners or umbrella

policies, does not have a ‘‘cash surrender value’”’ as that term is

commonly defined in the insurance industry. If a policy 1s

cancelled, there may be a return of unearned premium which

could then become an asset of the bankrupt’s estate.

The Court of Appeals cited several cases in support of its

holding. Patton v. Fidelity-Philidelphia Trust Company, 246 F.

Supp. 1015, 1016 (E.D. Pa., 1965); In Re Rogers, 45 F.Supp.

297, 298 (E.D. N.Y., 1942); In Re Elliott, 31 B.R. 33 (Bank.

S.D. Ohio, 1983); and /n Re Howard, 6 B.R. 200, 221 (Bank.

S.D. Ohio, 1980). None of these cases so hold, nor do any

others that petitioners could find.

Each of the cited cases dealt with life, endowment or

retirement policies, which do have a cash surrender value. It is

submitted to this court that there are significant public policy

considerations for differentiating between life, endowment and

retirement policies and casualty policies.

Life, endowment and retirement insurance policies are similar

to savings accounts. They are optional purchases made by in-

dividuals. As time progresses and more premiums are paid they

become increasingly more valuable. They are also solely for the

benefit of the policy holder or his family. They may be cashed

in, borrowed upon, or, finally, drawn upon at maturity for the

benefit of the bankrupt or his family’s benefit.

Casualty policies, on the other hand, are as much for the

benefit of the public as for the policy holder. Homeowners’

policies protect those going upon the bankrupt’s property as

well as the bankrupt himself. Similiar protection is afforded to

the public by automobile, boat and umbrella policies. Many

states require auto insurance as a condition of driving, which

aa eae

often times is a necessity for continued employment. Also,

most lenders, for their own protection, require coverage as a

condition of financing an automobile, home, boat, or other

property, and will hold the debtor in default if the policy is for

any reason cancelled.

The premiums do not build up equity, but are consumed dur-

ing the policy period in return for the protection afforded the

bankrupt and the public or creditors. They protect the status

quo rather than altering it as do the former type of insurance

policies.

Casualty type policies of insurance should be excluded from

the bankrupt’s estate so that the bankrupt does not have to

make an election to use a part of his exemption to maintain

them, or cancel them to the detriment of the public and

creditors.

2. The Decision Below Allows Bankruptcy Courts To Assess

Monetary Penalties Against Bankrupts Who Omit Items From

Their Schedule Of Assets, Without The Necessity For A Con-

comitant Finding Of Fraud, Concealment Or Contempt Of

Court And Does Not Set Standards For Inclusion Of Assets,

Thus Placing All Bankrupts In A Position Of Unceriainty As

To The Specificity Required On Such Schedules And Will Lead

To Inconsistent Rulings Among The District Courts.

The bankruptcy court found that the Paynes omitted from

their list of assets, several major appliances in their house.

Neither the bankruptcy judge nor the district court judge made

a finding that the Paynes were guilty of fraud, concealment of

assets Cr contempt of court.

Based upon that finding alone the Court of Appeals has

upheld the bankruptcy judge’s ruling which allowed the Paynes

to receive the insurance proceeds for the few specifically listed

items and then only allowed them to keep the market value,

rather than the insurance proceeds, for their admittedly proper-

a | oo

ly, generically listed items on their exemption schedule: viz. fur-

niture, household goods and appliances. The Court of Appeals

called that ‘‘rough justice’? (Payne, at 208). It is submitted

that allowing the Paynes $715.00 from insurance proceeds total-

ing $7,833.15 for their generic, unsaleable items is a miscarriage

of justice and without statutory or other authority and amounts

to a penalty where there has been no finding of wrongdoing.

Under the law, the bankruptcy judge may reopen the

bankrupt estate if it is found that there have been omissions

from the list of assets. 11 USC §350.

Under the law, the bankruptcy judge may deny discharge if

he finds that the bankrupt has been guilty of fraud or conceal-

ment of assets. 11 USC §727. Concealment and omission are

quite different; omission may be innocent.

Under the law, it is also clear that the bankruptcy judge may

order omitted items included in the estate upon discovery, since

all property owned by the bankrupt at the time of filing the peti-

tion is property of the estate. 11 USC §541.

The Paynes have been unable to find any authority for the

bankruptcy court to otherwise penalize a bankrupt unless there

is a finding of contempt of court under the court’s general

powers. 11 USC §105.

The Court of Appeals has previously held in /n Re Barker,

768 F.2d 191, 196 (7th Cir., 1985) that ‘*...personal property ex-

emption statutes should be liberally construed in order to carry

out the legislative purpose in enacting them - to protect debtors.

(Citations omitted) This clear legislative intent to grant protec-

tions to debtors and the court’s liberal construction of exemp-

tion statutes convince us that in a case such as this one, where an

exemption statute might be interpreted either favorably or un-

favorably vis-a-vis a debtor, we should interpret the statute in a

manner that favors the debtor.’’ This decision is in conflict with

that principal.

Rae |. gone

Here the debtor had a fire at their home, after discharge,

which virtually destroyed all of their possessions. The estate

was reopened by the trustee when the insurance company told

him of insurance proceeds of $17,389.47. It was then found

that several major appliances had been omitted from the

Paynes’ list of assets. The Paynes had replacement value

homeowner’s insurance.

The Court of Appeals’ opinion did agree with the great

weight of authority that ‘‘[i]t would be silly to require a debtor

to itemize every dish and fork...’’ Payne, at 205, and that

[T]he aggregation of ‘furniture’ and ‘dishes’ and small ap-

pliances’ therefore ordinarily would be enough to exempt all

items in these categories. Payne, at 206.

Here the Paynes listed in their exemption: household goods,

furniture and appliances, $1,080.00. These items had the

following fair market values according to the Paynes’ appraiser:

household goods, $533.00; minor appliances, $52.50; furniture

$492.00; total $1,077.50. (Defendant’s Exhibit ‘‘2’’, see ‘‘Ap-

pendix’ hereto for itemization). The insurance proceeds ap-

plicavle to these items is as follows: household goods,

$5,339.45; minor appliances, $319.00; furniture, $3,682.40:

total $9,340.85. There is not a single item in this entire list

valued by the Paynes’ appraiser at more than $75.00 and most

are valued at less than $20.00 per item. The debtors should be

given the benefit of the doubt considering the nature of these

items, their lack of saleability and the inexact nature of an ap-

praisal. It surely cannot be seriously contended that these items

would have been seized prior to discharge and before the fire.

The trustee simply would not have done so. It is respectfully

submitted that the courts and the trustee have been blinded in

their reasonable analysis of this situation by the cash from the

insurance proceeds. The Paynes properly listed these items

under generic title and are entitled to the fire insurance pro-

ceeds. In Re Snow, 21 B.R. 598, 601 (E.D. Cal., 1982). In

Snow, the court allowed the debtors to retain full insurance

—,

replacement value of $19,834.00 on items originally listed on

their bankruptcy schedule at $1,500.00 after a fire destroyed

their house.

The cases cited by the Court of Appeals in support of its posi-

tion are, in fact, either supportive of the Paynes’ position, or,

are not supportive of the Court of Appeal’s position. In Re

Friedrich, 100 F. 284, 285 (7th Cir., 1900) deals with an involun-

tary business petition which was subject to considerably dit-

ferent rules at the time of its decision and, as it refers to volun-

tary petitions in dicta, does not require the specificity required

by the Court of Appeals nor provide any authority for the

penalty exacted. Neither do Stewart v. Ganey, 116 F. 2d 1010

(Sth Cir., 1940); In Re Sertie, 14 B.R. 31 (D.N.H., 1981); In Re

Elliott, 31 B.R. 33 (S.D. Ohio, 1983) nor In Re Dorricutt, 5

B.R. 192 (N.D. Ohio, 1980) provide any such support for

penalties as assessed by the bankruptcy court. They are, at best,

authority for including omitted assets in the estate. As they ap-

ply to fraud or concealment, they are inapplicable as there were

no such findings here.

The Court of Appeals has correctly recognized the long-

standing position of the courts that ‘‘[T]hese forms were not

designed to effect any change under the law. They are ‘forms’,

and nothing more...’’ and that the law does not require minute

itemization. Burke v. Guarantee Title and Trust Company, 134

F. $62, 563-564 (3d Cir., 1905). Finally, after recognizing

previous authority, the Court of Appeals chose to ignore it, and

since a few items were omitted by the debtors, decided thai they

should not receive the insurance proceeds for any of the items

beyond those which were specifically itemized. This is contrary

to the holding in Stewart v. Ganey, 116 F. 2d 1010, 101 1-1012

(Sth Cir., 1940} where the court, after a finding of concealment,

still allowed the debtor to select his exemptions from the con-

cealed property, holding that if there is no fraud, no restriction

may be imposed upon the debtor’s right to select his exemp-

tions.

a

To allow such an opinion to stand will leave future bankrupts

without guidance as to the degree of specificity required in their

schedules of assets. They must list every single item they possess

or risk that the bankruptcy judge before whom they appear

might order all other assets or the proceeds therefrom seized for

the benefit of creditors.

It will further lead to conflicting decisions from district to

district and even within districts, since the Court of Appeals

provided no standards or other guidance to the lower courts for

the application of this rule.

Finally, listing every possession is burdensome upon the

bankrupt and the courts with no concomitant benefit to the

bankruptcy system.

CONCLUSION

For the foregoing reasons, this Petition for Writ of Certiorari

should be granted.

Respectfully submitted,

George R. Ripplinger, Jr.

Ripplinger, Dixon, Hoffman &

Ver Steegh

2215 West Main Street

Belleville, Illinois 62223

Phone: (618) 234-2440

Counsel for Petitioners

APPENDIX

APPENDIX A

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF ILLINOIS

In Bankruptcy No. BK 81-40190

| Adversary No. 82-0086

| In Re:

Jerry Payne and Deborah Payne,

Debtors.

Charles R. Wood, Jr., Trustee,

Plaintiff,

VS.

Jerry Payne, Deborah Payne and Country Mutual

Insurance Company,

Defendants.

ORDER

(Filed January 4, 1983)

At East St. Louis, in said District, this matter having come

before the Court pursuant to notice on a complaint filed by

Charles R. Wood, Jr., Trustee of the estate of the above named

debtors by Joel Kunin, his attorney, an answer and affirmative

defense having been filed by the above named debtors by

George Riplinger, their attorney, a motion to intervene having

been filed by the Ina State Bank by Terry Sharp, its attorney,

the matter having come on for trial and the Trustee having ap-

peared by his attorney and the debtors having appeared in per-

son and by their attorney, and the Court, having heard the

testimony of the witnesses and having reviewed the exhibits

and having researched the law and otherwise being fully advised

in the matter, finds as follows:

1. On August 12, 1981, the above named debtors filed a

voluntary petition in Chapter 7 Bankruptcy;

ne Me aes

2. On Schedule B-2 of the debtors’ bankruptcy schedules, the

debtors listed the following personal property:

Zenith Stereo 8 years old $ 50.00

G. E. Refrigerator 9 years old 25.00

G. E. Washer 8 years old 15.00

G. E. Dryer 8 years old 25.00

Furniture 615.00

Household Dishes and Small Appliances 100.00

RCA Color Television 250.00

Other Personal Property 125.00

Ford 12 Horsepower Riding Mower 1,000.00

3. On Schedule B-4, the debtors claimed as exempt their

clothing, household goods and furnishings and appliances in the

total amount of $1,205.00.

4. On or about December 15, 1981, there was a fire at the

debtors’ home which destroyed all or virtually all of the debtors’

personal property;

5. The debtors had homeowners insurance with the Country

Mutual Insurance Company;

6. The insurance policy called for payment of replacement

cost of the destroyed goods;

7. The debtors then filed a claim with the insurance company

listing a very extensive and detailed list of personal property

which was destroyed or damaged in the fire.

8. Pursuant to the insurance policy and the debtors’ claim the

Country Mutual Insurance Company paid the debtors

$5,000.00, and stands ready to pay an additional $12,389.47 for

damage done by the fire to the debtors’ personal property;

9. Some of the property destroyed in the fire was obtained by

the debtors after the filing of the petition in bankruptcy;

me a on

10. The amount of the property destroyed in the fire that was

acquired post-bankruptcy as alleged in the debtors’ answer, was

$3,664.00.

The principal question facing the Court in this case is whether

the debtors or the Trustee in Bankruptcy is entitled to certain in-

surance proceeds payable as a result of a fire at the debtors

residence. The facts and law applicable to this case make it clear

that the debtor should retain $6,114.29 of the insurance pro-

ceeds, with the balance of the funds to be turned over to the

Trustee in Bankruptcy for distribution to the estate of the deb-

tors.

The first consideration facing the Court in this matter is that

some of the property destroyed in the fire was acquired by the

debtors after the filing of the petition in bankruptcy. The deb-

tors’ answer claims that the property acquired post-bankruptcy

that was destroyed in the fire had a value of $3,664.00. This

evidence of value of after-acquired property was not con-

tradicted at trial. It is clear that this after-acquired property is

not property of the estate, and as such the Trustee does not have

any claim to the insurance proceeds in this amount;

The balance of the insurance proceeds post more significant

problems. The Bankruptcy Court for the Middle District of

Pennsylvania was faced with almost identical facts in the case of

In Re Lewis, 6 CBC2d 1142 (B.C., M.D. Pa. 1982). In the

Lewis case, the Court held that the debtors were only entitled to

insurance proceeds in the amount of the property disclosed to

the Court on their schedules and properly claimed as exempt.

This Court feels that the logic and holding of Lewis is proper

and should be applied to this case.

The Court in Lewis held that if the debtors do not fully

disclose the nature and extent of their personal property on their

schedules in bankruptcy, the Court may, by exercise of its

equitable powers, limit the share of proceeds to be paid to the

=.

debtors to an amount actually disclosed to the Court on the

schedules. This is an appropriate and equitable approach to

take. Otherwise, a debtor may be able to profit by his failure to

specifically list his assets on the schedules in bankruptcy.

The only difference between this case and Lewis is that in this

case the debtors had a replacement value policy, while in Lewis

that did not appear. As such, an adjustment should be made to

reflect the value received by the debtor for the property actually

listed. The amounts the debtors received for the items

specifically listed is as follows:

Zenith Stereo $ 206.10

Washer 224.37

Dryer 155.62

Refrigerator 665.00

Color T.V. 359.20

$1,610.29

The debtors should be allowed the insurance proceeds actually

received for the items specifically listed. In addition, the deb-

tors should be allowed the value claimed on their bankruptcy

schedules for the items not specifically listed. These items are as

follows:

Furniture $615.00

Household Dishes and smail

appliances 100.00

Other personal property 125.00

$840.00

This means the debtors are entitled to insurance proceeds in

the amount of $6,114.29. This amount is the value of the pro-

perty acquired after the filing of the petition in bankruptcy, plus

the amount of insurance proceeds for items specifically listed on

the schedules in bankruptcy, plus the amount of the general

——

property claimed on the debtors’ schedules. The balance of any

funds should be turned over to the Trustee in Bankruptcy.

The debtors have already received $5,000.00 in this case. As

such, they are entitled to $1,114.29 of the funds held by the in-

surance company, and the rest of the funds should be paid to

the Trustee in Bankruptcy.

WHEREFORE, IT IS ORDERED, ADJUDGED AND

DECREED that the debtors are entitled to insurance proceeds

in the amount of $6,114.29 for the loss of their personal proper-

ty, with the balance of the funds payable because of loss of per-

sonal property to be turned over to the Trustee in Bankruptcy;

IT IS FURTHER ORDERED that since the debtors have

already received $5,000.00 in settlement of the loss of their per-

sonal property, the Country Mutual Insurance Company should

pay them $1,114.29, with the balance of the funds for the settle-

ment of personal property to be turned over to the Trustee in

Bankruptcy.

U.S. BANKRUPTCY JUDGE

ENTERED: January 4, 1983

ee

The second ground for error claimed was the finding of the

Bankruptcy Court that the debtors failed to fully itemize their

personal property. There was evidence on the record from

which Judge Trabue could conclude that the debtors failed to

disclose certain assets on their bankruptcy schedule. The Court

does not consider Judge Trabue’s finding in this regard to be

clearly erroneous. The Bankruptcy Court’s decision to limit the

insurance proceeds paid to the debtors based on what they

disclosed on their schedules and what the Court found to be

property acquired after the filing of bankruptcy was within the

bankruptcy judge’s equitable discretion. This Court does not

find any reason to second guess Judge Trabue’s determination

which undoubtedly took into consideration, among other

things, the credibility of those who testified at trial.

Accordingly, the decision of the Bankruptcy Court is hereby

AFFIRMED.

IT IS SO ORDERED.

DATED: August 14, 1984

/s/ James L. Foreman

Chief Judge

Se

APPENDIX C

IN THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

No. 84-2565

Jerry Payne and Deborah Payne,

Debtors-A ppellants,

v.

Charles R. Wood, Jr.,

Plaintiff-A ppellee.

Appeal from the United States District Court for the

Southern District of Illinois, Benton Division.

No. 83-C-4042—James L. Foreman, Chief Judge.

Argued October 1, 1985—Decided October 18, 1985

Before Cudahy and Easterbrook, Circuit Judges, and Pell,

Senior Circuit Judge.

Easterbrook, Circuit Judge. In 1981 Jerry and Deborah

Payne made two lists of their household possessions. The first

list recited that they owned a 9-year-old refrigerator worth $25,

and 8-year-old stereo worth $50, furniture worth $615,

household dishes and small appliances worth $100, clothing

worth $125, a color television set worth $250, no books, no

firearms or sports equipment, and no insurance. The aggregate

value of personal property on this list was $1,205, including the

clothing. The second list recited that they had two year-old

— A-10 —

stereo systems and some additional speakers, a 3-year-old

refrigerator, three TV sets, a 2-year-old air conditioner, a

3-year-old encyclopedia, a pistol, a bow, and quite a bit more.

The Paynes filed the first list with a bankruptcy court in August

1981. They presented the second list to the Country Mutual In-

surance Co. in December 1981, after their house burned down.

Country Mutual sent an investigator and decided that the pro-

perty was worth $17,389.47. The Paynes want the money. So

does the bankruptcy trustee.

The bankruptcy court first apportioned to the Paynes the

$3,664 in proceeds attributable to property they acquired atter

their discharge in bankruptcy. Further steps were complicated

by the nature of the insurance policy, which compensated the

Paynes for the original cost of the property less depreciation,

rather than for the price for which the used property could have

been sold. The Paynes’ policy also allowed them to replace

destroyed items within six months, in which case Country

Mutual would pay the full replacement cost.

The bankruptcy judge divided the Paynes’ property into three

classes. Proceeds from items that had been listed (for example,

one color TV set) would go to the Paynes. Proceeds from

durable goods that had not been listed (for example, the air con-

ditioner) would go to the trustee. Proceeds from goods that had

been listed by category (the furniture, dishes, and clothing)

would go to the Paynes in the amount they had listed as the

value of these goods, then to the trustee to the extent Country

Mutual paid more. The Paynes thus received $665 for the

refrigerator, $359.20 for one color TV, $125 for clothing, $615

for furniture, andso on. The total was $6,114.29 to the Paynes,

the balance to the trustee. The district court affirmed. Only the

Paynes appeal.

Under the Bankruptcy Act all property of the debtor becomes

part of the estate available to satisfy the creditors’ claims. 11

U.S.C. §541(a). The debtor then may remove some of the pro-

on And) =

perty by claiming exemptions under 11 U.S.C. §522(b).

Anything properly exempted passes through bankruptcy; the

rest goes to the creditors. The debtor must file ‘‘a list of proper-

ty that the debtor claims as exempt’’, and ‘‘[uJnless a party in

interest objects, the property claimed as exempt on such list is

exempt.’’ 11 U.S.C. §522(1). If the debtor does not claim an ex-

emption with respect to particular property, the rule of inclu-

sion stated in §541 controls, and the property goes to the

creditors. /n re Friedrich, 100 F. 284 (7th Cir. 1900); Gardner vy.

Johnson, 195 F.2d 717 (9th Cir. 1952); In re Guerrero, 30 B.R.

463 (N.D. Ind. 1983); /n re Elliott, 31 B.R. 33 (Bankr. S.D.

Ohio 1983).' Once property enters the estate, it does not matter

whether the property changes form. 11 U.S.C. §541({a)(6); H.R.

Rep. No. 95-595, 95th Cong., Ist Sess. 368 (1977). If the debtor

sells a piece of the creditors’ property, he must turn over the

proceeds; here, to the extent the contents of the house belonged

to the creditors, they get the proceeds.

Our initial inquiry therefore is: What did the Paynes’ list

remove from the estate? Illinois has exercised its right under

§522(b)(1) to establish the nature and maximum amount of ex-

emptions. The rule in force today permits a debtor to keep

“necessary wearing apparel, bible, school books, and family

pictures’’ without regard to value, plus the ‘‘debtor’s equity in-

terest, not to exceed $2,000 in value, in any other property.”’ Ill.

Rev. Stat. ch. 110 §§12-1001(a) and (b). Illinois law also allows

exemptions concerning vehicles and homes, see Jn re Barker,

768 F.2d 191, 194-95 (7th Cir. 1985), that are not pertinent here.

The Paynes claimed their exemption for clothing and $1,080

worth of other property, most lumped under the headings ‘‘fur-

niture’’ ($615) and ‘thousehold dishes and small appliances”’

' Friedrich and Gardner interpret the 1898 act rather than the cur-

rent version, but the mechanics of exemption, as opposed to the

substance of what may be exempted, were not changed in the 1978

revisions.

— A-1l2 —

($100). A close reading shows that they were not claiming

anything else except a new color TV and four appliances 8-9

years old: a washer, a dryer, a refrigerator, and a stereo system.”

Because the list did not include any other appliances, books,

sports equipment, and the like, all this became part of the

estate.

With respect to the property in the estate, the difference bet-

ween market value insurance and replacement value insurance is

a distraction. The fire turned physical assets of the estate into

insurance proceeds; the trustee gets whatever these proceeds

happen to be. Similarly, the Paynes get whatever the proceeds

happen to be for the property that was exempted. The Paynes

argue that they should be entitled to the proceeds on all proper-

ty that could have been put within the limit in Illinois, but this is

not so.’ The partition between debtors and estate depends on

> Bankruptcy schedule B-2 requires debtors to list all their personal

property. The Paynes itemized five large appliances and $100 for

‘‘dishes and small appliances;”’ the residual claim is for ‘‘furniture,”’

so the list claims no other large appliance. One line item on schedule

B-2 calls for the value of ‘‘wearing apparel, jewelry, firearms, sports

equipment, and other personal possessions.’’ The Paynes wrote

‘$125.00"’ on this line. On another schedule they claimed that their

clothing was exempt and worth $125. This means that they were

claiming that they owned no ‘‘jewelry, firearms, sports equipment,

and other personal possessions’’. Another line item calls for ‘‘in-

terests in insurance policies (itemize surrender or refund values of

each)’; the Paynes wrote ‘‘0.00’’ here. Still another item requires the

value of ‘books, pictures, and other art objects, stamp, coin, and

other collections.’’ The Paynes wrote ‘‘0.00’’ on this line too.

Because the Paynes denied that they had any books, we need not con-

sider whether the encyclopedia could have been exempted as ‘‘school

books’’ under the Illinois statute.

‘ The parties assume that the limit in Illinois is $2,000. Bui until the

end of 1981 the limit was only $1,000. See Ill. REv. Stat. ch. 52

§13-1(b) (1981). This may explain why the Paynes filed a list claiming

only $1,080 in exempt property even though, they now tell us, they

could have put more within the $2,000 allotment. We need not pursue

the point.

— A-13 —

what was actually exempted, not what could have been exemp-

ted.*

The Paynes have not tried to amend their list of exemptions,

and alihough amendments before discharge are liberally allow-

ed it is most unlikely that the Paynes would be permitted to

amend. The Paynes’ omissions from the initial list suggest that

they meant to hide assets if they could get away with it; Jerry

Payne testified that he omitted the encyclopedia, for example,

because ‘‘[i]f they come in on it later you have to release it.’’ The

operation of the bankruptcy system depends on honest repor-

ting. If debtors could omit assets at will, with the only penalty

that they had to file an amended claim once caught, cheating

would be altogether too attractive. The omission of assets may

be a good reason to deny or revoke a discharge. 11 U.S.C. §727:

Thomas H. Jackson, The Fresh-Start Policy in Bankruptcy

Law, 98 Harv. L. Rev. 1393, 1440-46 (1985). When it is hard to

detect an effort to evade the law, the penalty must exceed the

protits of the evasion. So, here, it is too late for the Paynes to

Start over and ask the court to apportion the proceeds as if they

* This makes it unnecessary for us to decide whether there is a dif-

ference between ‘‘market value,’’ to which the Paynes’ expert

testified, and ‘‘original price less depreciation,’’ to which the trustee’s

expert testified. The Paynes argue that market value is the price that

could have been realized at a distress sale, and that this is the Illinois

measure of value. This dispute would be pertinent only if the

bankruptcy court needed to determine just how much property could

have been squeezed into the limit, but it did not need to do this even

on the parties’ assumption (see note 3, supra) that the limit was

$2,000. Cf. Alan Schwartz, The Enforceability of Security Interests in

Consumer Goods, 26 J.L. & Econ. 117, 124-39 (1983) (discussing

whether creditors maximize the price of assets on which they realize).

- A-14 —

had filed a complete schedule in the first instance.* See Sfewart

v. Ganey, 116 F.2d 1010 (Sth Cir. 1940); /n re Elliott, supra; In

re Settle, 14 B.R. 31 (Bankr. D.N.H. 1981); /” re Dorricott, 5

B.R. 192 (Bankr. N.D. Ohio 1980)

Although the trustee receives the full proceeds for property

that was not claimed as exempt—and which therefore never left

the estate—the question remains just what was claimed as ex

empt. The claim of ‘‘clothing’’ worth $125 exempts all of the

Paynes’ clothing. Illinois law allows the exemption ol

‘necessary wearing apparel’? without regard to value. The

trustee does not say that any of the Paynes’ clothing is not

‘necessary,’ cf. Jn re Deacon, 27 F. Supp. 296 (S.D. Ill. 1934),

so no clothing is left in the estate. The bankruptcy court

nonetheless gave the Paynes only $125 in proceeds for clothing,

leaving the rest for the estate. It should have given the Paynes

the full proceeds for their clothing, for the same reason it gave

the trustee the full proceeds for the air conditioner. The pro

ceeds go to the owner of the property.

ee

The treatment of ‘‘furniture’’ and ‘‘dishes and small ap-

pliances’’ is more difficult. A debtor may not exempt all pro-

perty in these categories; these count against the limit, so a

general listing of ‘‘furniture’’ does not necessarily keep all fur

niture out of the estate. The treatment of these claims depends

in part on how specific a claim of exemption must be.

It would be silly to require a debtor to itemize every dish and

fork, even to list the electric knife separately from the crock

‘ Lewis v. Thompson, 28 B.R. 351, modified, 30 B.R. 741 (Bankr.

M.D. Pa. 1983), on which both parties and the bankruptcy court

relied, involved an initial list of exemptions hastily filed and quickly

amended; the court accepted the amendments. This did not happer

here. Cf. In re Snow, 21 B.R. 598, 601 (Bankr. E.D. Cal. 1982) (if

property is listed on the claim of exemption, the debtor gets its full in-

sured value even if that value exceeds the market price on the

schedule).

— A-1$ —

pot. The necessary degree of specificity varies with the vaiue of

separate listings. The lower the value of the items, the less

reason to identify each. But it does not follow that a generic

listing always encompasses the low-value items within a

category. The requirement that the debtor list the property

serves at least two functions. One is to settle claims of title, so

that on the day of discharge everyone knows who owns what.

The other is to allow the trustee to decide which claims to

chailenge. Debtors are not perfectly trustworthy, and unless the

claim of exemption contains sufficient detail to put the trustee

on notice of questionable assertions, it will not be possible to

administer the statutory scheme. Cf. Jn re Friedrich, supra, 100

F. at 286 (‘much abuse of the beneficent law allowing exemp-

tions might arise if, with respect to a general stock of goods, the

debtor should be permitted to place upon selected articles his

own estimate of value’’).

A court may not let the debtor be the sole estimator of market

value, which would be the outcome of unrestrained categorical

asseruons of exemption. At the same time, a court may not an-

nounce a specific rule such as: ‘*List separately each item that a

trustee might think could be sold for $25 or more.’’ When

writing the bankruptcy code Congress had to choose between a

specific set of rules, such as a $25 line of demarcation, and a

more general standard. The code selects a standard rather than a

rule, and a court may 10ot reverse this choice just because the

rule seems more easily administrable. The degree of specificity

must be left in the charge of those who draft the bankruptcy

schedules, and so far they have allowed many items to be

lumped together for a single valuation. Cf. Burke v. Guarantee

Title & Trust Co., 134 F. 562 (3d Cir. 1905) (it is not necessary

to itemize exempted property separately from the bankruptcy

schedule).

’

The aggregation of ‘‘furniture’’ and ‘“‘dishes and small ap-

pliances’’ therefore ordinarily would be enough to exempt all

items in these categories. Yet ordinarily is not always. The deb-

— A-16 —

tor must furnish enough information to put the trustee on notice

of the wisdom of further inquiry. The trustee, who protects the

interests of the creditors, then may make a calculation of the

benefits of more detailed listing in each case, and he may ask the

bankruptcy court to require the debtor to do more. If a

bankruptcy schedule should list $10,000 in new appliances and

only $615 in furniture, the trustee might be startled by the im-

| balance and make further inquiry. When the schedule shows on-

| ly eldeily appliances of minimal value, a small claim for fur-

niture, dishes, and small appliances does not invite inquiry.

When the debtor’s listing withholds information that the trustee

—-

may find helpful in deciding to make such a request, a

categorical claim of exemption should not be honored beyond

the value the debtor attached to the category. After all, proper-

ty passes to the estate automatically, and it is the debtor’s

burden to make out the claim of exemption with adequate

: specificity.

|

The Paynes’ list did not put the trustee on notice. The

schedule contained only old appliances and one new TV;

nothing would have caught the trustee’s eye. A more accurate

listing might have provoked investigation. The Paynes concede

| that even by their methods of valuation an accurate schedule

would have revealed more than $2,000 of assets and that the

trustee might well have found it worthwhile to take and sell

= ee ee ee,

several items (see also note 3, supra). By filing an incomplete

. form, the Paynes forestalled an inquiry they knew lay in store.

The legal result is a limitation on the value they may receive for

assets in these categories.

Rough justice, no doubt. Even if all of the Paynes’ furniture,

. dishes, and small appliances were worth no more than $715 in

August 1981, their insurance policy would have paid more. But

} any other principle would encourage the making of excessively

general claims in the hope that if omissions should be

discovered, the debtors could argue that the omitted property

BAT

was “‘really’’ in some broadly worded category. The roughness

of this justice does not always hurt debtors, either. The omis-

sions from their schedule of assets might have been grounds to

set aside the discharge; the trustee settled for a lesser remedy.

The bankruptcy court might have concluded that the large ap-

pliances had been misdescribed (all were newer than the

schedule asserted) and reduced the payments on that account.

And the bankruptcy court might have decided that the policy

itself is an asset of the estate, which would have directed all of

the proceeds to the trustee. The policy was property of the deb-

tors, but they did not list it among the items for which they

claimed exemption. If the property was insured in December

1981 because of a premium paid before August 1981, the trustee

might have claimed the policy.° Other cases have held that the

failure to list a policy of insurance means that the trustee gets

the proceeds. Pation v. Fidelity-Philadelphia Trust Co., 246 F.

Supp. 1015S, 1018-20 (E.D. Pa. 1965); In re Rogers 45 F. Supp.

297 (E.D.N.Y. 1942); In re Elliott, supra; In re Howard, 6 B.R.

220 (Bankr. S.D. Ohio 1980).

No bankrupt will itemize every possession; none should.

Every bankrupt must do enough itemizing to enable the trustee

to determine whether to investigate further; the Paynes did not.

It was not possible in this case—it will not be possible in any

other—to determine with assurance which items passed through

bankruptcy as exempt. Because there must be imprecision in

any case of this sort, we do not disturb the bankruptcy judge’s

decision to limit the recovery to $715 for furniture, dishes, and

small appliances. We remand this case with instructions to

determine how much of the insurance proceeds is attributable to

clothing and to award that to the Paynes. The judgment is af-

firmed in all other respects. Costs to appellee.

* The cash surrender value of the policy was an asset of the estate. In

order to keep the policy, the Paynes should have charged the sur-

render value against their maximum exclusion.

— A-18 —

Cudahy, Circuit Judge, dissenting in part. I agree that honest

reporting is very important for the successful operation of the

bankruptcy system. But the majority seems to have lost sight of

the fact that the purpose of insurance is to permit replacement

of the articles destroyed. Had there been no fire, the bankrupts

would in all probability have been able to continue housekeep-

ing with their existing furniture, dishes and small appliances.

Now they must somehow replace these items for $715 or eat

with their fingers off the floor.

I cannot accept the speculation of the majority that a more

accurate listing of major appliances would have led the trustee

to doubt the value placed on furniture, dishes and small ap-

pliances. It is not fair to engage in guesswork which simply

results in a windfall to the creditors because the small household

goods burned up in a fire. The bankrupts, not the creditors,

had the foresight to get the insurance and to pay the premiums.

Since there is no plausible theory under which the debtors are

not entitled to the furniture, dishes and small appliances, they

are entitled to the funds to replace those essential household

items.' They are certainly entitled to this much of a ‘‘fresh

start.’’ | therefore respectfully dissent as to the matters discuss-

ed.’

‘In fact, the majority concedes that, ‘‘the Paynes get whatever the

proceeds happen to be for the property that was exempted.’’ Slip op.

at 4.

> In addition, under Rule 1009 of the Federal Rules of Bankruptcy

Procedure a debtor may amend any schedule ‘‘as a matter of course at

any time before the case is closed,’’ including lists of exempt property.

Lucius v. McLemore, 741 F.2d 125, 127 (6th Cir. 1984) (per curiam).

Of course, the debtor must make a request to invoke Rule 1009. Such

an amendment would, in my view, meet the majority’s concern as to

what items are attributable to the categorical listing of furniture,

dishes and small appliances, as well as its query about those other

items that property could be claimed as exempt (e.g., the en-

cyclopedia). The debtors may well be entitled to additional proceeds

under this approach.

— |

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

— A-20 —

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Chicago, Illinois 60604

November 14, 1985

Before

Hon. Richard D. Cudahy, Circuit Judge

Hon. Frank H. Easterbrook, Circuit Judge

Hon. Wilbur F. Peil, Jr., Senior Circuit Judge

Jerry Payne and Deborah Payne,

Debtors-Appellants,

VS;

No. 84-2565

Charles R. Wood, Jr.,

Plaintiff-Appellee.

Appeal from the United States District Court

for the Southern District of Iilinois,

Benton Division.

No. 83-C-4042

James L. Foreman, Chief Judge

ORDER

Debiors-appellants filed a petition for rehearing and sugges-

tior, of rehearing en banc on November 1, 1985. No judge in

regular active service has requested a vote on the suggestion of

rehearing en banc, and a majority of the judges on the panel

have voted to deny rehearing.* The petition for rehearing is

therefore DENIED.

* Circuit Judge Cudahy voted to grant the petition for rehearing.

— A-2] —

APPENDIX E

List of Debtors’ Assets

CHILDREN’S POSSESSIONS

Bunk Beds (2)

Mattress (2) Posturepedic

Springs

Twin Size Sheet Set

Blankets

Books

Bedspread

Pillows

Stuffed Animals

Sheets

Floor Pillow

Bookcase (Sears)

Children’s Bible Story

Book Set

2 pe. Children’s Dictionary

& Encyclopedia

Bookcase nic-nacs

Desk Accessories

Frog Door Stopper

Wood Stereo Stand

8 track AM-FM radio

Records

Wall Placques

Roller Skates

Alarm Clock (Big Ben)

Sleeping Bags

Toys

Waste can

Encyclopedia Americana

Little Professor and Little

Genius Calculator

Plastic Models

Guitar

Record Case

8 Track Case

Flashlight

Baseball Bat

Baseball Glove

Nylon Pup Tent

Story Teller Set

Chair

Bookend Sets (Ships)

Rolltop Desk

Desk Light

Wicker Clothes Hamper

Stereo & 2 Speakers (Zenith)

Turn Table

Wooden Toy Chest

Metal Shelf Unit

Strobe Light

Ceramic Horse and Eagle

Tumbling Exercise Mat

Games, Checkers, Dominos

etc.

Boys Jewelry Box

ee

FURNITURE

Lighted Table Typewriter Table

Encyclopedia Stand Metal Shelf Unit

Book Case Slotted (K-Mart Book Case (Broyhill)

Brand)

Fiberglass Electric Fireplace Chair to Typewriter Desk

Coffee Table End Table

Couch Chair (Swivel)

China Cabinet Curio Stand

Dining Room Chairs Wood Curio Cabinet

Rattan Swinging Chair Brass Bed (Queen Size)

(hanging)

Mattress and Springs Chair

Dresser (Triple Drawers) Wooden Lamp

Dresser Marble Bedside Tables (2)

Chest (Cedar Lined) Wooden Storage Cabinet

APPLIANCES

Electric Griddle Corn Popper

Blender Hair Dryer

Blow Dryer Electric Curlers (G.E.)

Electric Curling Iron Electric Curling Brush

Electric Heater Lather Machine

Facial Sauna Radio

Decor Telephone (Sears) Toaster

Gas Grill Iron

MAJOR APPLIANCES

Penny’s Color TV AM-FM Radio Cassette

(Zenith)

GE Washer (heavy duty) GE Dryer (3 cycle)

AC-DC Black & White TV Floor Model Stereo

Refrigerator Air Conditioner

Amber Wood Burning Stove Speakers

Movie Projector & Camera Pistol H & R Standard

Cassette Player Stalker Bow

—

HOUSEHOLD GOODS

Drapes

Gun Case

Drapes (Sliding Door)

Swag Lamps

Bowie Knife

Cook Books

Roll-A-Matic Sponge Mop

Cleaning Materials

Ironing Board

Garbage Can

Clothes Pin Bag & Pins

Kirby Accessory Parts

Key Rack

Wood Magazine Rack

Scenery Pictures

Lighted Sunset Picture

Sheers

Small Wood Lamps

Crystal Candy Dish

Wood Stove Accessories

Coal Bucket

Ceramic Nic Nacs

Ornaments, Garland, “ights

Basket & Dried Flowers

Smoke Detector

Mugs

Duhasa Dinnerware

(Service of 4)

Silverware (Service of 4)

Wood Salt & Pepper Shakers

Wine Table & Wine Rack

4 Bottles of Wine

Crystal Bell

Ceramic Vase

Smoke Detector

Small Decorator Mirror

Drapes (Back Door)

Bookends

Lantern

Dust Mop & Broom & Dust

Pan

Laundry Materials

Clothes Baskets

Curtains

Canned Goods

Plastic Clothes Hamper

Leather Lead Halter

Wood Plant Stand

Plaques Spaniards

Wood Shelf Mantel

Drapes

Curtain to Door

Digital Clock

Throw Rug

Bellow

Afghan

Mountain Christmas Tree

Tree Stand

Wooden Vase

Barometer, Temperature

Humidity Set

Duhasa Glasses

Red Glass

Crystal Glasses

Silk Flower Arrangement

Wine Decanter & 4 Glasses

Kerosene Oil Lamp

Crystal Bowl

Princess House Bowl

~ At

Sea Shell Wind Chimes

3 Pairs Priscilla Curtains

Black Glass Honey Dish

Napkin Holders (Wood)

Elephant Decanter

Soup Bow! with Ladel

Coach Lamps

Wall Plaques

Placement Setting

Tray

Basket Weave Plate Holder

Towel Set

Wicker Wall Shelf

Flower Arrangements

Bath Shag Rugs

First Aid Items

Bath Towels

Wash Cloths

Sheets (Twin)

Blankets

Macrame Holder

Pillows

Full Length Mirror

Cleaning Material

Wicker Toothbrush Holder

Clean Machine

Window

Vanity Bench

Bedspread (Master BR)

Drapes (Master BR)

Quilt (Master BR)

Sewing Basket

Wall Arrangement

Picture

Clock

Eye Glasses

Red Hanging Lamp

Black Glass Urn

Tablecloth

Throw Rug

Marble Candle Holders

Candy Dish

Pictures

Steak Knives

Cloth Napkins

Nut Cracker Set

Pecan Butcher Block

Kleenex Holder

Ceramic Dish

Shower Curtain

Toiletries

Scale

Hand Towels

Metal Shelf Unit

Sheets (Queen)

Hair Curlers

Pictures and Plaques

Pea Shell Ornament

Toilet Plunger

Marble Soap Dish

Tank Covers

House Window

Rattan Cosmetic Tray

Pillows (Master BR)

Blanket (Master BR)

Sheets (Master BR)

Sheets-Queen Size

Silk Flower Arrangement

Nic-Nacs

Wash Basin S

Pitcher & Bow! Basin

Pyrex Bowl Set

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Salad Bowl

Spices

Tupperware Serving Bowls

Glassware

Custard Bowls

Food

Hot Plate pad

Tupperware Mixing Bowls

Tupperware Meat Marinator

Tupperware Storage

Container

Tupperware Vegetable

Crisper

Tupperware Parfait Cups

Tupperware Large Storage

Container

Metal Coaster

Vegetable Slicer

Cooking Utensils

Knives

Steak Knives

Cake Cooling Racks

Iron Skillets lg & sm

Grater

13 X 9 Cake Pan

Loaf Pan

Wilton Square Cake Pan

Cookware

Crock Pot

Curtains

Salt & Pe ers

spoon Arrangement

Bread Box (Wood)

Grape Arrangement

Candy Dish

Papertowel Holder

Tupperware Cereal

Keeper

Dinnerware for 4

Pitchers

Soup Bow!s w/ Handies

Pot Holders

Silverware Tray

Tupperware Egg Tray

Tupperware Bun Storer

Tupperware Lunchmeat

Keeper

Tupperware Ice Cream

Keeper

Tupperware Cracker Keeper

Tupperware Medium Storage

Container

Baking Dish Corningware

Baking Cups & Spoons

Cutlery Set

Foil, Saran Wrap etc.

Glass Serving Tray

Flour Sifter

Strainer

Pie Pan

Wilton Doll Pan

Oblong Cake Pan

Corningware Cooking Pans

Throw Rug

Wood Napkin Holder

Mushroom Spoon & Fork

Telephone Stand

Bird House, (Wall Plaque)

Fondue

Cookie Canister

Bin on Wheels

— A-26 —

Dish Rack & Drainboard Kitchen Table Unit

Porch Swing (Oak) Hanging Pots & Macrame

Wooden Planter Box

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