Lucio Leide Foah

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: 	LUCIO LEIDE FOAH, 	No. 7-11-13550 JA
Debtor.
AMENDED MEMORANDUM OPINION1
THIS MATTER is before the Court on the Debtor’s Motion for Summary Judgment filed
by the Debtor in response to RES-GA Memorial, LLC’s objection to the Debtor’s claim of
exemption in a life insurance policy.2 In response to the Debtor’s Motion for Summary
Judgment, RES-GA Memorial, LLC (“RES-GA”), for the first time, raised an issue concerning
whether the Debtor was domiciled in New Mexico for the applicable period prescribed by 11
U.S.C. § 522(b)(3)(A).3 See Docket No. 32. 	At the final hearing on the Debtor’s Motion for
Summary Judgment, held March 1, 2012, RES-GA conceded that the Debtor satisfied the
requirements of 11 U.S.C. § 523(b)(3)(A) and is, therefore, entitled to claim exemptions under
applicable New Mexico law.
What remains at issue is the meaning of the New Mexico exemption statute, N.M.S.A.
1978, § 42-10-3, which provides an exemption in “[t]he cash surrender value of any life
1 This Amended Memorandum Opinion corrects two non-substantive errors contained in the Memorandum Opinion
entered March 12, 2012.
2 RES-GA Memorial filed it objection to the Debtor’s claim of exemption on October 13, 2011. See Docket No. 19.
The Debtor filed Motion for Summary Judgment, Memorandum in Support of Debtor’s Motion for Summary
Judgment, and Affidavit of Debtor Leide Foah in Support of Debtor’s Motion for Summary Judgment on December
15, 2011. See Docket NO. 31. RES-GA Memorial, LLC (“RES-GA”) filed an objection to the Debtor’s Motion for
Summary Judgment on January 4, 2012, and the Debtor filed its reply on January 18, 2012. See Docket No. 32 and
Docket No. 38.
3 Section 522(b)(3)(A) provides, in relevant part:
[A]ny property that is exempt under . . . State or local law that is applicable on the date of the filing of the
petition to the place in which the debtor’s domicile has been located for the 730 days immediately
preceding the date of the filing of the petition or if the debtor’s domicile has not been located in a single
State for such 730-day period, the place in which the debtor’s domicile was located for 180 days
immediately preceding the 730-day period or for a longer portion of such 180-day period than in any other
place.
11 U.S.C. § 522(b)(3)(A).
Case 11-13550-j7 Doc 49 Filed 03/13/12 Entered 03/13/12 13:30:25 Page 1 of 7

2
insurance policy . . . with any life insurance company . . . issued upon the life of a citizen or
resident of the state of New Mexico, or made by any such insurance company with such citizen .
. .” 	N.M.S.A. 1978 § 42-10-3. 	RES-GA contends that, under a plain reading of the statute,
the exemption applies only if the insured is a citizen or resident of the state of New Mexico. The
Debtor, who is the owner and beneficiary of the life insurance policy, likewise relies on the plain
meaning of the statute in support of his claimed exemption. Whether this New Mexico
exemption statute covers both 1) owners of life insurance policies who are residents or citizens
of the state of New Mexico; and 2) insured parties who are residents or citizens of the state of
New Mexico, is an issue of first impression.
After hearing and considering counsel’s argument, the Court determined at the final
hearing held March 1, 2012 that the Debtor is entitled to claim an exemption in the life insurance
policy he purchased on the life of his father, a resident of the state of Georgia. 	Consistent with
the Court’s ruling, the Court now enters the following findings of fact and conclusions of law.
SUMMARY JUDGMENT STANDARDS
Summary judgment, governed by Rule 56, Fed.R.Civ.P., will be granted when the
movant demonstrates that there is no genuine dispute as to a material fact and that the movant is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a), made applicable to contested matters
by Rule 9014, Fed.R.Bankr.P. 	In considering a motion for summary judgment, the Court must
“‘examine the factual record and reasonable inferences therefrom in the light most favorable to
the party opposing summary judgment.’” Wolf v. Prudential Ins. Co. of America, 50 F.3d 793,
796 (10 th Cir. 1995)(quoting Applied Genetics Int’l, Inc. v. First Affiliated Sec., Inc., 912 F2d
1238, 1241 (10th Cir. 1990)).
Case 11-13550-j7 Doc 49 Filed 03/13/12 Entered 03/13/12 13:30:25 Page 2 of 7

3
FACTS
The following facts are not subject to genuine dispute:
1. 	The Debtor filed a voluntary petition under Chapter 7 of the Bankruptcy Code on August
5, 2011 (the “petition date”).
2. 	The Debtor was domiciled in the state of New Mexico during the 730 days immediately
preceding the petition date.4
3. 	On Schedule C filed in the Debtor’s bankruptcy case, the Debtor claimed an exemption
under N.M.S.A. 1978, § 42-3-10 in a Northwestern Mutual Life Insurance Policy dated April
27, 1992 (the “Policy”).
4. 	The Debtor’s father, Mario L. Foah, is the insured under the Policy.
5. 	The Debtor at all times has been the owner and the beneficiary under the Policy,
including as of the petition date.
CONCLUSIONS OF LAW
Having been domiciled in the state of New Mexico during the 730 days immediately
preceding the petition date, the Debtor is entitled to claim exemptions under New Mexico law.
See 11 U.S.C. § 522(b)(3)(A).5 The applicable New Mexico exemption statute is N.M.S.A.
1978, § 42-10-3, which provides:
The cash surrender value of any life insurance policy, the withdrawal value of any
optional settlement, annuity contract or deposit with any life insurance company, all
weekly, monthly, quarterly, semiannual or annual annuities, indemnities or payments of
4RES-GA conceded this fact at the final hearing held March 1, 2012.
5 See also, In re Anderson, 386 B.R. 315, 328 (Bankr.D.Kan. 2008), aff’d, 406 B.R. 79 (D.Kan. 2009)(stating that
“Section 522(b)(3)(A) provides for the exemption by the debtor of property that is exempt under state or local law
applicable where the debtor is domiciled on the petition date and has been domiciled for the 730 days preceding that
date.”); In re Townsend, 2012 WL 112995, *3 (Bankr.D.Kan. Jan. 12, 2012)(explaining that “Paragraph 3(A)
provides that the state law ‘applicable’ in the Debtors’ ‘domicile’ provides exemptions the Debtors can claim so
long as their ‘domicile’ was located in that state for two full years (‘730 days’) before they filed their bankruptcy
petition.”).
Case 11-13550-j7 Doc 49 Filed 03/13/12 Entered 03/13/12 13:30:25 Page 3 of 7

4
every kind from any life, accident or health insurance policy, annuity contract or deposit
heretofore or hereafter issued upon the life of a citizen or resident of the state of New
Mexico, or made by any such insurance company with such citizen, upon whatever form
and whether the insured or the person protected thereby has the right to change the
beneficiary therein or not, shall in no case be liable to attachment, garnishment or legal
process in favor of any creditor of the person whose life is so insured or who is protected
by said contract, or who receives or is to receive the benefit thereof, nor shall it be subject
in any other manner to the debts of the person whose life is so insured, or who is
protected by said contract or who receives or is to receive the benefit thereof, unless such
policy, contract or deposit be taken out, made or assigned in writing for the benefit of
such creditor.
N.M.S.A. 1978, § 42-10-3.
RES-GA contends that this exemption statute does not apply to a life insurance policy issued on
the life of someone who is not a New Mexico citizen or resident. 	The Debtor disagrees,
pointing out that the language of the statute uses the word, “or,” followed by the words “made by
any such insurance company with such citizen.” Under the Debtor’s construction of the statute,
both insured persons who are citizens or residents of the state of New Mexico and policy owners
who are citizens or residents of the state of New Mexico are entitled to the exemption. There is
no New Mexico case law interpreting this part of the statute.
Courts interpreting this New Mexico exemption statute observe generally that “[t]he
language of the statute is broad and expansive. It does not limit the type of payment, form of
payment, or person to receive the payment.” Finch v. Schrock (In re Schrock), 119 B.R. 808, 809
(Bankr.D.N.M. 1990).6 Under the New Mexico Uniform Statute and Rule Construction Act,
when interpreting a New Mexico statute, “‘[u]nless a word or phrase is defined in the statute or
rule being construed, its meaning is determined by its context, the rules of grammar and common
usage.’” Portal, 131 N.M. at 173, 45 P.3d at 893 (quoting N.M.S.A. 1978, § 12-2A-2 (1997)).
6 See also In re Portal, 132 N.M. 171, 173, 45 P.3d 891, 893 (2002)(same, and noting further that “[i]ndeed the
language of the statue provides exemption for ‘payments of every kind from any life, accident or health insurance
policy . . . issued upon the life of a citizen . . . or made by any such insurance company with such citizen, upon
whatever form.’”)(quoting N.M.S.A. 1978 § 42-10-3).
Case 11-13550-j7 Doc 49 Filed 03/13/12 Entered 03/13/12 13:30:25 Page 4 of 7

5
The New Mexico exemption statutes do not define “such citizen,” so the Court must interpret the
meaning of that phrase using the rules of grammar and common usage. 	Only if the meaning is
not clear may the Court look beyond the plain language of the statute itself to aid in its
interpretation of the statute.7
Upon close examination of the statutory language, the Court finds that “such citizen” is
not restricted to a citizen of the State of New Mexico who is also the insured. The applicable
language in the statute states: [t]he cash surrender value of any life insurance policy . . . issued
upon the life of a citizen or resident of the state of New Mexico, or made by any such insurance
company with such citizen.” N.M.S.A. 1978, § 42-10-3 (emphasis added). Use of the
disjunctive word “or” means that there are two alternatives.8 Either the life insurance policy is
issued on the life of a citizen or resident of the state of New Mexico, or the policy is made with a
citizen or resident of the State of New Mexico. In other words, the statute exempts the cash
value of any life insurance policy as to both 1) insured persons who are citizens or residents of
the State of New Mexico; and 2) policy owners who are citizens or residents of the State of New
Mexico.
7See State v. Rivera, 134 N.M. 768, 770, 82 P.3d 939, 941 (2003)(“Under the plain meaning rule of statutory
construction, ‘[w]hen a statute contains language which is clear and unambiguous, we must give effect to that
language and refrain from further statutory interpretation.’”)(quoting State v. Jonathan M., 109 N.M. 789, 790, 791
P.2d 64, 65 (1990)); Martinez v. Cornejo, 146 N.M. 223, 227, 208 P.3d 443, 447 (Ct.App. 2008)(“This plain
meaning rule requires us to give effect to the statute’s language and refrain from further interpretation when the
language is clear and unambiguous.”)(citation omitted). See also, U.S. v. Ron Pair Enterprises, Inc., 489 U.S. 235,
242, 109 S.Ct. 1026, 1031, 103 L.Ed.2d 290 (1989)(“The plain meaning of legislation should be conclusive, except
in the ‘rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the
intention of its drafters.’ In such cases, the intention of the drafters rather than the strict language controls.”)(quoting
Griffin v. Oceanic Contractors, inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 3250, 73 L.Ed.2d 973 (1982)); United
Resource Systems, Inc. v. Meinhart (In re Meinhart), 211 B.R. 750, 753 (Bankr.D.Colo. 1997)(“Where the language
of the statute is clear, it must be followed. Court construction is only required when there is an ambiguity.”).
8 See Long v. Board of Governors of the Federal Reserve System, 117 F.3d 1145, 1157 (10 th Cir. 1997)(“we have
determined the use of a disjunctive in a statute generally indicates alternatives were intended.”)(citing Knutzen v.
Eben Ezer Lutheran Hous. Ctr., 815 F.2d 1343, 1349 (10 th Cir. 1987)); In re TCR of Denver, LLC, 338 B.R. 494,
499-500 (Bankr.D.Colo. 2006)(observing that, “[g]enerally, courts presume that ‘or’ is used in a statute disjunctively
unless there is a clear legislative intent to the contrary.”). See also, State v. Tsosie, 150 N.M. 754, 266 P.3d 34, 41
(Ct.App. 2011)(“as a rule of statutory construction, the word ‘or’ should be given its normal disjunctive meaning
unless the context of the statute demands a different meaning.”)(citing State v. Johnson, 2001-NMSC-001, ¶30, 130
N.M. 6, 15 P.3d 1233 (2000)).
Case 11-13550-j7 Doc 49 Filed 03/13/12 Entered 03/13/12 13:30:25 Page 5 of 7

6
Each word and phrase used in a statute should be accorded meaning, so that a statute
ought not to “be construed in a way that renders phrases meaningless, redundant, or
superfluous.” Meinhart, 211 B.R. at 753 (citing Rake v. Wade, 508 U.S. 464, 471-472, 113 S.Ct.
2187, 2192, 124 L.Ed.2d 424 (1993)(remaining citations omitted)).9 RES-GA’s interprets “such
citizen” to refer back to the phrase “issued upon the life of a citizen or resident of the state of
New Mexico,” so that the exemption applies only to insured parties who are citizens or residents
of the state of New Mexico. 	This Court disagrees. To read “such citizen” as further qualified
by the phrase “insured upon the life of a citizen ore resident” renders the alternative phrase “or
made by any such insurance company with such citizen” superfluous. A citizen or resident who
is also the insured would always satisfy the first alternative condition, in which case there would
be no need for the statute to include “or made by any such insurance company with such citizen.”
Construction of the statute as analyzed above entitles Debtor to claim the exemption.
The facts not subject to genuine dispute establish that the Debtor, who is a resident or citizen of
the state of New Mexico, is the owner of the Policy. Consequently, he is entitled to claim an
exemption in the Policy under N.M.S.A. 1978 § 42-10-3. 	RES-GA’s argument that the Debtor
is not entitled to summary judgment because his statement of undisputed facts did not include a
statement regarding the citizenship or residency of the insured party under the Policy is
unavailing. Because the Debtor qualifies under the second, alternative category of persons
entitled to claim an exemption under N.M.S.A. 1978 § 42-10-3, it was unnecessary to establish
whether the insured party under the Policy is a citizen or resident of the state of New Mexico.
9 See also, TRW Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001)(“It is a ‘cardinal principle
of statutory construction’ that a ‘statute ought, upon the whole, to be so construed that, if it can be prevented, no
clause, sentence, or word shall be superfluous, void, or insignificant.’”)(quoting Duncan v. Walker, 533 U.S. 167,
174, 121 S.Ct. 2120, 150 L.Ed.2d 251 (2001)(internal quotation marks omitted); United States v. Menasche, 348
U.S. 528, 538-539, 75 S.Ct. 513, 99 L.Ed. 615 (1955)(“It is our duty ‘to give effect, if possible, to every clause and
word of a statute.’”)(quoting Inhabitants of Montclair Tp. v. Ramsdell, 107 U.S. 147, 152, 2 S.Ct. 391, 27 L.Ed. 431
(1883)).
Case 11-13550-j7 Doc 49 Filed 03/13/12 Entered 03/13/12 13:30:25 Page 6 of 7

7
CONCLUSION
Based on the foregoing, the Court concludes that summary judgment should be granted in
favor of the Debtor. 	The plain language of the statute extends the exemption in the cash
surrender value of a life insurance policy to insured parties who are citizens or residents of the
state of New Mexico, and to owners of life insurance policies who are citizens or residents of the
state of New Mexico. 	Because the purpose of the New Mexico statutory exemptions is “to
provide a debtor with a fresh start . . . their broad and expansive language is to be liberally
construed.” 	Portal, 132 N.M. at 174, 45 P.3d at 894. This result comports with that intended
purpose. 	The Court will enter a separate order consistent with this Memorandum Opinion.
__________________________________________
ROBERT H. JACOBVITZ
United States Bankruptcy Judge
Date entered on docket: 	March 13, 2012
COPY TO:
George M. Moore
Arin Berkson
Attorneys for Debtor
PO Box 7459
Albuquerque, NM 87194
William F. Davis
Andrea Steiling
Attorneys for RES-GA Memorial, LLC
6709 Academy NE, Suite A
Albuquerque, NM 87109
Case 11-13550-j7 Doc 49 Filed 03/13/12 Entered 03/13/12 13:30:25 Page 7 of 7