Marvissa Etasha Cotton

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UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF OREGON
Introduction
This matter came before the court on the chapter 7 trustee’s objection to debtor’s claim of
exemption under ORS 18.345(1)(j).2 Debtor filed a response to the objection.3 The court held a
hearing at which the trustee and the debtor each represented herself. Although the hearing was a
nonevidentiary hearing, the parties agreed that the documents attached to debtor’s response were
the relevant documents for the court to consider in evaluating debtor’s claim of exemption and
that the issue could be decided based on the applicable law and those documents.
The court has reviewed the record and files of this case and considered the arguments
made by the parties. For the reasons set forth below, the court sustains the trustee’s objection.
1 This disposition is specific to this case. It may be cited for whatever persuasive value it may
have.
2 Trustee’s Objection to Claimed Exemptions, ECF No. 27, filed June 18, 2026 (the
“Objection”).
3 Debtor’s Response to Trustee’s Objection to Claimed Exemption, ECF No. 29, filed July 1,
2026 (the “Response”).
In re
Marvissa Etasha Cotton,
Debtor.
Case No. 26-30793-thp7
MEMORANDUM DECISION1
Below is an opinion of the court.
_______________________________________
TERESA H. PEARSON
U.S. Bankruptcy Judge
DISTRICT OF OREGON
F I L E D
October 01, 2026
Clerk, U.S. Bankruptcy Court
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Procedural History
The debtor filed her chapter 7 bankruptcy case on March 9, 2026.4 On her amended
Schedule A/B, debtor scheduled the following asset in response to question 34: “Pending
allocation under Los Angeles County AB 218 child abuse settlement (MacLaren Hall matter.)
Individual award and payment date undetermined” with an unknown value.5 On her amended
Schedule C, the debtor claimed an exemption for 100% of the fair market value of this asset
pursuant to ORS 18.345(i)(j).6
The trustee objected to this claim of exemption, asserting that the settlement “is not an
award under a crime victim reparation law as required by ORS 18.345(1)(j).”7 The debtor
responded, asserting that California’s Assembly Bill No. 218 is a crime victim reparation law
that falls within the protections of ORS 18.345(1)(j).8
Facts
The debtor asserts, and the trustee does not dispute, the following facts: The debtor was
housed at MacLaren Hall in Los Angeles County as a child after her parents lost custody.9 The
debtor is the plaintiff in litigation asserting claims for childhood sexual abuse occurring while
she was in the care, custody, placement, or supervision of Los Angeles County.10 The debtor is
one of many claimants asserting similar claims against Los Angeles County.11 The debtor’s
lawsuit was made possible because California’s Assembly Bill No. 218 extended the statute of
limitations for parties to recover damages suffered as a result of childhood sexual assault.12
The debtor, along with other plaintiffs, has reached a settlement of her claims.13 Under
the settlement, Los Angeles County will pay the total amount of $4 billion into a qualified
4 Petition, Schedules, and Statement of Financial Affairs, ECF No. 1, filed Mar. 9, 2026.
5 Amended Schedule A/B, ECF No. 25, filed June 11, 2026, p. 8.
6 Amended Schedule C, ECF No. 25, filed June 11, 2026, p. 3.
7 Objection, p. 2.
8 Response, pp. 2-3.
9 Id.
10 Id., Exh. 5, p. 1.
11 Id., Exh. 2, p. 2, Exh. 3, p. 3.
12 Assembly Bill No. 218, section 1(a).
13 Response, Exh. 5.
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settlement fund account.14 A court-appointed claims administrator will allocate the fund among
all the settling plaintiffs.15 Debtor has agreed to accept the amount that is determined by the
claims administrator.16 As of the date of the hearing on the objection, that amount had not yet
been determined.
The debtor’s settlement agreement describes the payments to be made under the
settlement as follows:
25. Compensation for Injuries: The payments under this Settlement
Agreement are deemed as compensation on account of personal injury and
physical sickness of the Plaintiff arising from an occurrence, within the meaning
of Section 104(a)(2) of the Internal Revenue Code of 1986, as amended. The
payments under this Settlement Agreement are not intended by the Parties to
constitute punitive damages, lost wages, or economic damages, in part or in
whole. In this regard, Plaintiff hereby expressly releases and holds the Settling
Defendants and the other Defendant Releasees harmless from any liability arising
from Plaintiffs expressed intent, characterization, or tax treatment of this
Settlement Agreement. In addition, the Parties agree that in any subsequent
trial between any of the Plaintiffs and any Non-Settling Defendant, the Non-
Settling Defendant shall not be bound by the characterization of the settlement
funds referred to herein, and the trial court or jury will be free to determine the
allocation between the economic damages and non-economic damages
compensated for by the settlement monies paid pursuant to this Settlement
Agreement. Plaintiff, for and on behalf of himself/herself/theirself, his/her/their
spouse (if any), and his/her/their successors-in-interest, hereby waives any and all
claims or causes of action that may have arisen to date against any and all Settling
Defendants and the other Defendant Releasees for punitive, exemplary, loss of
earnings, and/or economic damages of any type arising from, connected with, or
in any way relating to the damages or injuries alleged in the Action.17
In other words, for purposes of this settlement, the damages as between the settling parties are
agreed to be non-economic damages, although the debtor has reserved the right to assert some of
the damages are economic damages in any claims against any non-settling defendant. The
record does not indicate that any such non-settling defendant exists.
14 Id., Exh. 5, p. 1, ¶ 4, p. 2, ¶ 7.
15 Id., Exh. 5, p. 1, ¶ 4.
16 Id.
17 Response, p. 40 (Settlement Agreement p. 7 of 10) (emphasis added).
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Analysis
Oregon law provides that the “debtor’s right to receive, or property that is traceable to, an
award under any crime victim reparation law”18 is exempt. This case presents the question of
whether payment pursuant to debtor’s settlement agreement is an award under a crime victim
reparation law. That in turn requires an examination of what qualifies as an award under a crime
victim reparation law.
Under Oregon law, to interpret a statute, the court must look first to the text and context
of the statute.19 Next, the court may consider any legislative history the parties may proffer,
though textual ambiguity in the statute is not a prerequisite to consulting the legislative history.20
However, the most persuasive evidence of the legislature’s intent is the language of the statute
itself.21 Finally, if the legislature’s intent remains unclear, the court may resort to general
maxims of statutory construction.22 It is appropriate to consider the statutory context of how the
Oregon Legislature writes its exemption laws when determining whether a specific statute
creates an exemption.23
In her Response, the debtor asserts that the exemption provided by ORS 18.345(1)(j) is
not limited to recoveries under Oregon’s own crime victim reparation laws but can encompass an
award under a California crime victim reparation law. The court agrees. The plain language of
the statute says that an exemption is provided under “any” crime victim reparation law and does
not limit the exemption to awards under Oregon’s crime victim reparation laws. A California
crime victim reparation law would comfortably fall under the term “any” crime victim reparation
law.
18 ORS 18.345(1)(j).
19 State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042, 1050-51 (2009).
20 Id. In this case, neither party provided any briefing or any legislative history, and the court has
independently examined the materials discussed herein.
21 Gaines, 346 Or. at 171, 206 P.3d at 1050.
22 Id.
23 See Yaden v. Robinson (In re Robinson), 241 B.R. 447, 448-49 (9th Cir. BAP 1999) (relying
on context and assembling a “three-piece puzzle” of three different Oregon statutes to determine
whether one of them provides for a particular exemption).
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The more difficult question is: what is a crime victim reparation law? Although
ORS 18.005 defines many of the terms used in Chapter 18, the term “crime victim reparation
law,” or any portion of that phrase, is not among them. Therefore, the court has looked to
existing case law and the legislative history and context of this statute.
The operative language in ORS 18.345(1)(j) was originally enacted in 1981.24 A few
years before that, in 1976, the Oregon Supreme Court defined the term “reparation,” which was
used in what was then ORS 137.540(10). At that time, the Oregon Supreme Court distinguished
between restitution and reparations, defining each of those terms as follows:
“We construe the term ‘restitution’ to mean the return of a sum of money, an
object, or the value of an object which a defendant wrongfully obtained in the
course of committing the crime. ‘Reparation’ is a somewhat broader term which
has been defined as ‘(a) repairing or being repaired; restoration to good
condition.’ We think it is consistent with the concept of ‘repairing’ to construe
‘reparation’ as encompassing only reimbursement for the victim's liquidated or
easily measurable damages resulting from the charged offense. This construction
would embrace medical expenses, wages actually (not prospectively) lost, and
reimbursement for easily measurable property damage.”25
In short, Stalheim limited those remedies to the return of wrongfully obtained property or
compensation for readily measurable losses, damages that are economic in nature.
While instructive, it is unlikely that this definition of “reparation” is dispositive in
evaluating the meaning of ORS 18.345(1)(j) for two reasons. First, in Stalheim, the Supreme
Court was interpreting the term “reparation” as a matter of criminal procedure, not as a matter of
civil exemption law.26 Second, shortly after this decision, in 1977 the Oregon Legislature
amended ORS chapter 137 to reverse the Stalheim decision (at least to the extent that the statute
limited recovery to the direct victim of a criminal offense, and apparently for the purpose of
24 1981 Or. Laws. 1456, c. 903 § 2 (House Bill 2506). The statute was originally codified at
ORS 23.160(j)(A).
25 State v. Stalheim, 275 Or. 683, 687-88, 552 P.2d 829, 832 (1976) (citing Webster’s New 20th
Century Dictionary (Unabridged Second Edition) for the definition of “reparation.”) (footnotes
omitted), superseded by statute as noted in State v. Barkley, 315 Or. 420, 434-36, 846 P.2d 390,
398-99 (1993).
26 Stalheim, 275 Or. at 687-90, 552 P. 2d at 831-33.
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allowing recovery for the victim’s family and other injured third parties).27 The amendments
deleted the term “reparation” from the statute in favor of a broader definition of the term
“restitution.”28 The statutory amendments to ORS chapter 137, however, continued to limit
recovery to pecuniary (economic) damages.29
In 1977, the Oregon Legislature also adopted provisions for the state to compensate crime
victims.30 The types of losses that were compensable were economic—medical and hospital
expenses, loss of earnings, rehabilitation costs, burial expenses, and loss of support to
dependents, up to specified amounts.31 Compensable losses did not include pain and suffering or
property damage.32
In 1978, Congress adopted the Bankruptcy Code.33 Prior to adoption of the Bankruptcy
Code, exemptions were generally invoked under state law and non-bankruptcy federal law.34
The Bankruptcy Code changed that, and allowed debtors to assert exemptions established under
the federal Bankruptcy Code, but only if the applicable state where debtor was domiciled
allowed the use of those federal Bankruptcy Code exemptions.35 This provision of the
Bankruptcy Code became effective on October 1, 1979.36
The 1981 regular Oregon legislative session was the first time that the Oregon
Legislature met in regular session after the Bankruptcy Code became effective. House Bill 2506,
which contained the substance of the language presently found in ORS 18.345(1)(j), was
introduced in the 1981 regular session at the request of the Oregon Bankers Association.37 From
27 Barkley, 315 Or. at 434-36, 846 P.2d at 398-99.
28 Compare ORS 137.540(10) (1975) with ORS 137.540(j) (1977) and ORS 137.106 (1977).
29 ORS 137.103(2) and (3) (1977) and ORS 137.106(1) (1977).
30 ORS Chapter 147 (1977).
31 ORS 147.035(1) (1977).
32 ORS 147.035(2) (1977).
33 Public Law 95-598 (Nov. 6, 1978).
34 Robert M. Ujevich, Sectional Analysis of the Major Provisions and Principal Operative
Chapters of the Bankruptcy Reform Act of 1978, (Public Law 95-598, 92 Stat. 2549, Codified as
Title 11 of the United States Code), Congressional Research Service Report No. 80-225 A
744/23 (Dec. 23, 1980), pp. 63-65.
35 11 U.S.C. § 522(b)(1) (1978).
36 Public Law 95-598 (Nov. 6, 1978), § 402(a).
37 Minutes of the House Committee on Judiciary, Jan. 28, 1981, p. 4.
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the plain text of the bill it appears that there were two purposes for House Bill 2506: (1) to make
explicit that residents of Oregon were not authorized to use the exemptions established under the
federal Bankruptcy Code, and (2) to update and revise the Oregon state law exemptions.
Section 1 of the bill directly addressed the first purpose.38 The remainder of the bill added
several new exemptions39 and increased the amount of many existing Oregon state law
exemptions.40 Three of the new exemptions were patterned on Bankruptcy Code exemptions:
the new exemptions for awards under any crime victim reparation law, payments on account of
personal bodily injury, and payments on account of loss of future earnings.41 The language of
House Bill 2506, providing an exemption for “[t]he debtor’s right to receive, or property that is
traceable to: (A) an award under any crime victim reparation act,” was virtually identical to the
language of the new Bankruptcy Code, which provided an exemption for “[t]he debtor’s right to
receive, or property that is traceable to—(A) an award under a crime victim’s reparation law[.]”
The close correspondence between these provisions supports consulting the federal exemption’s
origins when interpreting the Oregon provision.
Given that history and language, it is useful to consider what a “crime victim’s reparation
law” meant under the Bankruptcy Code. “The federal exemptions found in section 522 of the
Bankruptcy Code were largely derived from the Uniform Exemptions Act.”42 The Bankruptcy
Code adopted the exemption for rights under a crime victims reparation law from the section
5(6) of the Uniform Exemptions Act.43 That exemption stated in relevant part that “[a]n
individual is entitled to exemption of the following property: . . . (6) an award under a crime
38 1981 Or. Laws. 1456, c. 903 § 1.
39 1981 Or. Laws. 1456, c. 903 § 2.
40 1981 Or. Laws. 1456, c. 903 §§ 2-9.
41 Elizabeth L. Perris and Linda Johannsen, Exemptions, Creditors’ Rights and Remedies
(Oregon CLE 2002 and Supp. 2006), § 9.27.
42 Gary M. Keenan, Comment, Bankruptcy - A Comparison of State and Federal Exemptions,
10 N.M. L. Rev. 431 (1980), p. 432.
43 Table of Derivation of H.R. 8200, Subcommittee on Civil and Constitutional Rights of the
Committee on the Judiciary, House of Representatives, Ninety-Fifth Congress, First Session
(July 1977), p. 12.
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victim’s reparation act.”44 In the commentary to Section 5(6) of the Uniform Exemptions Act,
the drafters the Uniform Exemptions Act, in turn, referred to the Uniform Crime Victim
Reparations Act to determine what type of award would qualify for the exemption. Comment
number 6 notes that “[t]he exemption provided by paragraph (6) covers an award under a statute
like the Uniform Crime Victim’s Reparation Act.”45 Based on this history, it is apparent that the
drafters of the Bankruptcy Code intended to provide an exemption for awards of the type
described in the Uniform Crime Victim’s Reparation Act.
Section 2 of the Uniform Crime Victim’s Reparation Act provides for awards of
reparations for economic loss, but not for non-economic detriment.46 Those terms were defined
in Section 1(g) of that act as follows:
(g) “Economic loss” means economic detriment consisting only of allowable
expense, work loss, replacement services loss, and, if injury causes death,
dependent’s economic loss and dependent’s replacement services loss.
Noneconomic detriment is not loss. However, economic detriment is loss
although caused by pain and suffering or physical impairment.
(1) “Allowable expense” means reasonable charges incurred for
reasonably needed products, services, and accommodations, including those
for medical care, rehabilitation, rehabilitative occupational training, and other
remedial treatment and care. The term includes a total charge not in excess of
$500 for expenses in any way related to funeral, cremation, and burial. It does
not include that portion of a charge for a room in a hospital, clinic,
convalescent or nursing home, or any other institution engaged in providing
nursing care and related services, in excess of a reasonable and customary
charge, for semi-private accommodations, unless other accommodations are
medically required.
(2) “Work loss” means loss of income from work the injured person would
have performed if he had not been injured, and expenses reasonably incurred
by him in obtaining services in lieu of those he would have performed for
income, reduced by any income from substitute work actually performed by
44 Unif. Exemptions Act § 5(6) (Unif. Law Comm’n, amended 1979).
45 Unif. Exemptions Act § 5 cmt. 6 (Unif. Law Comm’n, amended 1979).
46 Uniform Crime Victims Reparations Act, § 2, made part of the record in Hearings before the
Subcommittee on Criminal Justice of the Committee on the Judiciary House of Representatives,
Ninety-Fourth Congress, First and Second Sessions on Victims of Crime Compensation
Legislation, Serial No. 39 (1975 and 1976), p. 53.
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him or by income he would have earned in available appropriate substitute
work he was capable of performing but unreasonably failed to undertake.
(3) “Replacement services loss” means expenses reasonably incurred in
obtaining ordinary and necessary services in lieu of those the injured person
would have performed, not for income but for the benefit of himself or his
family, if he had not been injured.
(4) “Dependent’s economic loss” means loss after decedent’s death of
contributions of things of economic value to his dependents, not including
services they would have received from the decedent if he had not suffered the
fatal injury, less expenses of the dependents avoided by reason of decedent’s
death.
(5) “Dependent’s replacement services loss” means loss reasonably
incurred by dependents after decedent’s death in obtaining ordinary and
necessary service in lieu of those the decedent would have performed for their
benefit if he had not suffered the fatal injury, less expenses of the dependents
avoided by reason of decedent’s death and not subtracted in calculating
dependent’s economic loss.
(h) “Non-economic detriment” means pain, suffering, inconvenience, physical
impairment, and other non-pecuniary damage.47
Based on its review of the history set forth above, the court concludes that an exemption
for an award under a crime victim reparation act is limited to awards of economic damages.
In this case, the Settlement Agreement is explicit that debtor’s award is not for economic
damages. Although debtor’s settlement agreement does not preclude her from establishing that
the award is a recovery for economic damages in claims against any non-settling defendant, there
is nothing in this record that such a non-settling defendant exists or that the plaintiff has any
economic damages. Because the exemption for awards under a crime victims reparation act
covers only economic damages, and the award under the Settlement Agreement is not for
47 Uniform Crime Victims Reparations Act, § 1, made part of the record in Hearings before the
Subcommittee on Criminal Justice of the Committee on the Judiciary House of Representatives,
Ninety-Fourth Congress, First and Second Sessions on Victims of Crime Compensation
Legislation, Serial No. 39 (1975 and 1976), p. 52.
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economic damages, the debtor cannot claim an exemption in the award under her Settlement
Agreement under 11 U.S.C. § 522(d)(11)(A).48
Conclusion
For the reasons set forth above, the court concludes that the debtor cannot claim an
exemption for the proceeds of the settlement under ORS 18.345(1)(j). The court will enter an
order sustaining the trustee’s objection. The order will be without prejudice to the debtor
amending her exemptions to claim any other appropriate exemption in the settlement proceeds.
# # #
48 The court makes no ruling regarding whether this award may qualify for other exemptions,
such as those for payments for personal injury or any available “wildcard” exemption, should
debtor choose to amend her claims of exemption.
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