Brady v. Sumski

UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Katherine R. Brady,
Debtor/Appellant
v. 	Case No. 22-cv-272-SM
Opinion No. 2023 DNH 004
Lawrence P. Sumski,
Chapter 13 Trustee,
Appellee
CERTIFICATION ORDER
Pursuant to Rule 34 of the Rules of the Supreme Court of
New Hampshire, the United States District Court for the District
of New Hampshire hereby certifies the following questions of New
Hampshire law, which may be determinative of causes pending
before it and as to which there appears to be no controlling
precedent in the decisions of the Supreme Court:
1. 	Does the ownership requirement described in the
second sentence of RSA 480:1 apply to all real
property occupied as a homestead, or does it
apply only to manufactured housing occupied as a
homestead?
That is to say, assuming the homestead is real
property other than manufactured housing, does
the non-owning occupying spouse of one who holds
a homestead right pursuant to RSA 480:1 also have
a present, vested, non-contingent homestead right
of his or her own, which is currently valued at
$120,000? and
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2. 	Does a non-owning spouse who occupies (as a
homestead) a manufactured housing unit with an
owning spouse have a present, non-contingent, and
enforceable homestead right with respect to that
home, which is currently valued at $120,000?
Statement of Relevant Facts
The material facts are undisputed and more fully described
in the attached order in Brady v. Sumski, 2022 WL 17360707, 2022
DNH 150 (Dec. 1, 2022). 	For the Court’s convenience, a copy of
the underlying opinion of the Bankruptcy Court is also attached.
In short, the relevant facts are as follows. 	To protect a
portion of the equity in her home, a debtor in bankruptcy sought
to invoke not only her own state homestead exemption, but also
that of her non-debtor husband. 	But, because only the debtor
held title to the couple’s home, the Bankruptcy Court concluded
that her husband had no present homestead right under N.H. Rev.
Stat. Ann. (“RSA”) 480:1. 	Instead, pointing to RSA 480:3-a, the
Bankruptcy Court held that the non-owning husband’s homestead
right was contingent and would fully vest only upon the death of
his title-holding spouse.1
1 	RSA 480:3-a provides that, “The owner and the husband or
wife of the owner are entitled to occupy the homestead right
during the owner’s lifetime. 	After the decease of the owner,
the surviving wife or husband of the owner is entitled to the
homestead right during the lifetime of such survivor.” (emphasis
supplied).
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RSA 480:1 provides that: “Every person is entitled to
$120,000 worth of his or her homestead, or of his or her
interest therein, as a homestead. 	The homestead right created
by this chapter shall exist in manufactured housing, as defined
by RSA 674:31, which is owned and occupied as a dwelling by the
same person but shall not exist in the land upon which the
manufactured housing is situated if that land is not also owned
by the owner of the manufactured housing.” (emphasis supplied).
Resolution of the dispositive questions of New Hampshire law
turns on both the scope and meaning of the “owned and occupied”
language in the second sentence of that statute. 	If the “owned
and occupied” limitation applies universally — that is, to all
real property — then the Bankruptcy Court was correct: the
debtor’s husband holds no fully-vested homestead right by virtue
of RSA 480:1 because he does not hold joint title to the
couple’s home. 	If, on the other hand, that “owned and occupied”
language applies only to manufactured housing, then the
Bankruptcy Court reached the wrong conclusion under state law,
and the debtor is entitled to invoke her husband’s $120,000
homestead exemption.
The circumstances under which the spouse of one who holds
sole title to the couple’s homestead may exercise his or her own
independent homestead right presents a dispositive question of
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New Hampshire law with regard to which the Supreme Court of New
Hampshire should be accorded deference by this Court.
Accordingly, the Justices of the Supreme Court of New Hampshire
are respectfully requested to resolve the matter according to
New Hampshire law.
SO ORDERED.
____________________________
Steven J. McAuliffe
United States District Judge
January 12, 2023
cc: 	Leonard G. Deming, II, Esq.
Mary F. Stewart, Esq.
Attachments: Brady v. Sumski, 2022 WL 17360707, 2022 DNH 150
(Dec. 1, 2022)
In re: Brady, 2022 WL 1913497, 2022 BNH 003 (Bankr.
D.N.H. June 3, 2022)
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UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Katherine R. Brady,
Debtor/Appellant
v. 	Case No. 22-cv-272-SM
Opinion No. 2022 DNH 150
Lawrence P. Sumski,
Chapter 13 Trustee,
Appellee
O R D E R
Katherine Brady appeals from a decision of the Bankruptcy
Court holding that she was not entitled to claim a homestead
exemption on behalf of her non-debtor husband. 	The Bankruptcy
Court determined that because Brady’s husband did not have an
ownership interest in the couple’s home, any homestead interest
he had was, under New Hampshire law, at best contingent, and
then enforceable only upon Katherine’s death.
Reasonable people can certainly interpret New Hampshire’s
ill-defined statutory provisions related to the homestead right
in contradictory ways. 	But the Bankruptcy Court’s construction
of those statutes, while reasonable, still seems to be at odds
with New Hampshire Supreme Court precedent. 	That circumstance,
in turn, gives rise to a degree of uncertainty that may prove
particularly disruptive in administering the homestead right in
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many contexts. 	Establishing the nature and scope of the state’s
homestead exemption presents issues of particular importance to
New Hampshire, as evidenced by the New Hampshire Attorney
General’s amicus appearance in opposition to the Bankruptcy
Court’s construction. 	And, because reconciling ambiguous and
possibly contradictory statutory provisions, which necessarily
implicates policy choices, is a matter best left within the
authoritative province of the New Hampshire Supreme Court, the
court proposes to certify dispositive questions of law in this
case to the New Hampshire Supreme Court.
Background
The debtor, Katherine Brady, filed an individual Chapter 7
bankruptcy petition in December of 2021. 	Initially, she listed
among her assets a single-family home in Merrimack, New
Hampshire. 	Although her husband and children lived with her in
that home, she alone held title to it. 	She valued the property
at approximately $235,000. 	On Schedule C, Brady listed her
$120,000 homestead exemption pursuant to New Hampshire Revised
Statutes Annotated (“RSA”) 480:1. 	On Schedule D, she listed a
mortgage deed of approximately $180,000 and no other secured
claims. 	In February of 2022, Brady amended her bankruptcy
schedules by increasing the value of her home to roughly
$345,000. 	She also asserted an additional $120,000 homestead
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exemption on behalf of her non-debtor husband (who, as noted
above, did not share title to the couple’s home). 	The Chapter 7
Trustee objected to the husband’s homestead exemption and sought
its disallowance.
In March of 2022, the court granted Brady’s motion to
convert her case to one under Chapter 13. 	Subsequently, Brady
amended Schedule D to her petition to add a second secured
claim: that of her husband, in the amount of $120,000 (this
appears to have been another way for Brady to assert her
husband’s claimed homestead exemption). 	The Trustee objected to
that amendment as well. 	On May 2, 2022, the Bankruptcy Court
held a hearing on both of the Trustee’s objections. 	In a
written decision, the Bankruptcy Court concluded that, under New
Hampshire law, a person must both occupy and have an ownership
interest in the underlying homestead to be entitled to a
present, enforceable, homestead right under RSA 480:1. 	In re
Brady, No. BR 21-10712-BAH, 2022 WL 1913497, at *5 (Bankr.
D.N.H. June 3, 2022). 	The court also determined that although a
non-owner spouse does have a homestead right (arising under RSA
480:3-a), that right is contingent in nature and is enforceable
only upon the death of the owner-spouse. 	Id.
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Because Brady’s husband did not hold any legal title to the
couple’s home, the Bankruptcy Court concluded that he held no
current enforceable homestead right under RSA 480:1. 	And,
because his spouse, Brady, had obviously not predeceased him,
that court concluded that he held no present homestead right
under RSA 480:3-a — at least not one of any monetary value.
Consequently, Brady was not entitled to claim a homestead
exemption on his behalf on Schedule C of her bankruptcy
petition. 	For the same reasons, the court concluded that
Brady’s husband did not hold a secured lien on the couple’s home
and, therefore, Brady was unable to list such a lien on Schedule
D.
Discussion
It is appropriate to begin by identifying what is not at
issue in this case. 	First, there is no dispute that the
dispositive question of law — whether Brady’s husband currently
holds a non-contingent $120,000 homestead right in the couple’s
home — is governed by New Hampshire law. 	Second, all seem to
agree — indeed, the Trustee concedes — that if Brady’s husband
had held joint title to the couple’s home, the couple would have
been “entitled to a combined exemption of $240,000,” Appellee’s
Brief (document no. 8) at 5, and, presumably, Brady would have
been entitled to list her husband’s homestead exemption on
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Schedule C to her bankruptcy petition. 	The sole legal issue
presented, then, is whether, under New Hampshire law, Brady’s
non-owning husband has a present (i.e., non-contingent)
homestead interest in the couple’s home, valued at $120,000.
I. 	New Hampshire’s Statutory Provisions.
A person’s homestead right is established and governed by
RSA chapter 480. 	Two sections of that statute are particularly
relevant in this case, and they provide as follows:
RSA 480:1 - Amount
Every person is entitled to $120,000 worth of his or
her homestead, or of his or her interest therein, as a
homestead. 	The homestead right created by this
chapter shall exist in manufactured housing, as
defined by RSA 674:31, which is owned and occupied as
a dwelling by the same person but shall not exist in
the land upon which the manufactured housing is
situated if that land is not also owned by the owner
of the manufactured housing.
RSA 480:3-a - Duration
The owner and the husband or wife of the owner are
entitled to occupy the homestead right during the
owner’s lifetime. 	After the decease of the owner, the
surviving wife or husband of the owner is entitled to
the homestead right during the lifetime of such
survivor.
(emphasis supplied).
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II. 	The Bankruptcy Court’s Decision.
The Bankruptcy Court concluded that the “owned and
occupied” requirement imposed in the second sentence of RSA
480:1 applies not just to manufactured housing but, instead, to
all real property occupied as a homestead. 	In re Brady, 2022 WL
1913497, at *4. 	Consequently, it found that because Brady’s
husband did not hold joint title to the couple’s home, he did
not have any homestead right under RSA 480:1.
The Court is cognizant that RSA 480:1 does not use the
word “owner” or “owned” in the first sentence of the
statute but rather refers to a homestead and an
“interest therein.” 	However, the second sentence of
the statute does refer to property that “is owned and
occupied as a dwelling.” 	With respect to manufactured
housing, the statute is clear that someone must own
and occupy the manufactured housing in order to assert
a homestead exemption under RSA 480:1. 	It is not
enough to simply occupy it. 	From a public policy
standpoint, it would be nonsensical for the homestead
exemption to be more restrictive for manufactured
housing than it is for all other housing. 	Thus, the
statute as a whole supports an interpretation that
ownership and occupancy are required to claim a
homestead exemption in all housing. 	To interpret the
statute otherwise would discriminate against owners of
manufactured housing.
In re Brady, 2022 WL 1913497, at *4. 	Moreover, the Bankruptcy
Court reasoned that its interpretation of New Hampshire’s
homestead right was consistent with principles of fairness and
equity:
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[A] couple has the right to decide that only one of
them will own the family homestead, perhaps as [a]
means to shield the family home from claims that lie
solely against the non-owner. 	But . . . such a choice
has consequences, and one consequence is that the non-
owner is unable to assert a homestead exemption under
RSA 480:1. 	If it were otherwise, the non-owner would
be getting the benefit of non-ownership, e.g., not
subjecting the family home to potential liens and
attachments by third-party creditors, but would not be
experiencing the burden of it, i.e., having no
homestead exemption under RSA 480:1. 	That strikes the
Court as both inequitable and inconsistent with the
provisions of the statute.
Id. at *3.
In further support of its interpretation of RSA 480:1, the
Bankruptcy Court pointed to RSA 480:8-a, which provides that to
“establish” the homestead right, “the owner of a homestead or
the wife or husband surviving such owner,” may file a petition
with the superior court. 	Thus, said the court,
to pursue an action in state court to establish a
homestead right, one must be the ‘owner’ of the
homestead property or the ‘surviving spouse’ of such
owner. 	This provision makes a distinction between
ownership and non-ownership, supporting the view that
RSA 480:1 only protects an owner’s homestead right.
Id. (emphasis supplied).2
2 	The Bankruptcy Court also relied upon the opinion in In re
Visconti, 426 B.R. 422 (Bankr. D.N.H. 2001) to support its
interpretation of RSA 480:1. 	That reliance, however, seems
misplaced. 	In Visconti, the court disallowed the debtor’s
invocation of his homestead right because, on the date the
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In light of those findings, the court concluded that a
different section of the statute — RSA 480:3-a — creates and
sets the terms of the homestead rights of non-owning spouses:
[U]under RSA 480:3-a, the Court finds that the non-
owner spouse’s $120,000 homestead exemption arises
only upon the death of the owner. 	In other words, the
Debtor’s spouse’s interest is contingent. 	Upon the
Debtor’s death, the non-owner spouse will be able to
step into the shoes of the owner spouse. 	At that
time, the non-owner spouse will be able to assert a
$120,000 homestead exemption. 	Until then, while the
non-owner spouse may have a homestead right that can
be protected by an exemption under RSA 480:3-a, the
value of that exemption is $0. 	The couple is not
allowed to “double-dip” and claim $240,000 as exempt.
Otherwise, the ownership requirement of RSA 480:1
would be irrelevant.
Id. at *5 (emphasis supplied).
In short, it is fair to say that the Bankruptcy Court
concluded that RSA 480:1 requires a person to both occupy and
debtor filed his petition, he neither owned the couple’s
homestead nor was he still married to its owner. 	Consequently,
the Bankruptcy Court held, somewhat unremarkably, that, “No
homestead may be claimed in property owned by an individual to
whom the person is not married, even if they occupy the
property. 	Ownership must exist either in the person claiming
the homestead or in that person’s spouse. 	On the petition date,
the Debtor could not claim any such ownership interest.” 	Id. at
426 (emphasis supplied). 	While some broad dicta in Visconti can
be read to support the Bankruptcy Court’s reading of RSA 480:1,
the holding does not resolve the parties’ current dispute. 	In
this case, Brady’s husband was married to her and he occupied
the homestead when Brady filed her bankruptcy petition.
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have an ownership interest it the homestead in order to hold a
homestead right. 	In the Bankruptcy Court’s view, RSA 480:3-a,
not RSA 480:1, establishes and sets the terms of the homestead
right in a non-owning spouse, vesting the $120,000 homestead
right only upon the death of the owner spouse.
III. Countervailing Considerations.
The Bankruptcy Court’s decision is clear, thoughtful, and
logical in its reconciliation of ill-defined statutory language.
Still, there are compelling legal arguments that give reason to
doubt its conclusions. 	As importantly, much of the Bankruptcy
Court’s opinion relies on policy preferences, equity
assessments, and assumptions regarding potential discrimination
against owners of manufactured housing. 	Those preferences and
assumptions are not clearly rooted in expressions of legislative
intent or in identified principles of New Hampshire’s common
law. 	Such value judgments are best left to the authoritative
province of the New Hampshire Supreme Court.
Among factors weighing against the Bankruptcy Court’s
interpretation of a non-owning spouse’s homestead right is this:
the New Hampshire Supreme Court has noted that, as its title
suggests (“Duration”), “RSA 480:3–a . . . merely establishes the
duration of the homestead right; it does not define the nature
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of the right itself.” 	Boissonnault v. Savage, 137 N.H. 229,
232–33 (1993) (emphasis supplied). 	That point undermines the
Bankruptcy Court’s opinion, which rests on the contradictory
conclusion that RSA 480:3-a actually creates and defines the
homestead rights of non-owner spouses.
Additionally, a separate New Hampshire statutory provision
can certainly be read to imply that non-owning spouses do have a
present, non-contingent, and vested homestead right in the
couple’s home. 	That statute, which governs levies and
executions, provides that, “[a]ll real estate, except the
homestead right, may be taken on execution, and may be appraised
and set off to the creditor at its just valuation in
satisfaction of the execution . . ..” 	RSA 529:1. 	It goes on to
state that, “Notice of the time and place of sale shall be given
to the debtor, or left at his abode if he resides in the state.”
RSA 529:20. 	With regard to the homestead right, that statute
provides, in relevant part, that,
Along with the notice required under RSA 529:20, the
party in whose name the execution has issued shall
provide to any person who resides or appears to reside
on the real estate to be sold, the following notice by
certified mail:
NOTICE
IF YOU OR YOUR SPOUSE OWNS AND RESIDES IN THIS
PROPERTY, YOU AND/OR YOUR SPOUSE MAY BE ENTITLED TO A
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HOMESTEAD EXEMPTION PURSUANT TO RSA 480:1. 	THIS
EXEMPTS $120,000 FOR A SINGLE PERSON AND $240,000 FOR
A MARRIED COUPLE.
529:20-a (emphasis supplied). 	While arguable either way
perhaps, the statutorily required terms of the notice seem to be
more easily read to suggest that a spouse need not hold title to
the homestead in order to have a present (and valuable)
homestead right in it. 	Rather, provided the person is married
to the owner and resides at the property, the notice requirement
appears to assume that he or she has a non-contingent homestead
right in the amount of $120,000.
Finally, the New Hampshire Supreme Court’s recent opinion
in Sabato v. FNMA, 172 N.H. 128 (2019) stands in contradiction
to the Bankruptcy Court’s conclusions. 	The facts presented in
Sabato are somewhat complex, but simplified they are as follows.
A husband and wife occupied a home in Pelham, but only the wife
held legal title to the property. 	In 2002, the wife refinanced
her purchase money mortgage and secured her loan by giving a
first mortgage deed that was eventually assigned to Federal
National Mortgage Association (“FNMA”). 	The wife released her
homestead right, but her husband did not sign the mortgage deed
or otherwise release his homestead right. 	So, the non-owning
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husband’s homestead right had priority over FNMA’s first
mortgage deed. 	See generally RSA 480:4.
Subsequently, the wife and husband gave a second mortgage
deed to secure a $65,000 home equity line of credit, by which
they both released their homestead rights. 	Approximately nine
years later, the second mortgage lender foreclosed its mortgage
deed. 	That set up the following somewhat odd lien priority:
First position: second mortgage lender up to the value
of the non-owning husband’s $120,000 homestead right
(which, because FNMA never obtained a release of that
right, had priority over FNMA’s first mortgage); then
Second position: FNMA up to the value of its loan;
then
Third position: second mortgage lender for the balance
of its loan, if any, in excess of $120,000.
At the foreclosure sale, the property was sold for $65,000.
Because that was less than the husband’s homestead interest
($120,000) the second mortgage lender was lawfully entitled to
retain all sale proceeds up to the value of its outstanding loan
(which happened to be $65,000, so second mortgage lender was
fully paid). 	Then, the “unused” balance of the husband’s
homestead exemption ($55,000) retained its priority over FNMA’s
mortgage. 	So, when FNMA subsequently bought the property from
the foreclosure purchaser, it held sole title to that property
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subject to the non-owning husband’s remaining $55,000 homestead
exemption.
For purposes of this case, the critical point of Sabato is
this: the New Hampshire Supreme Court treated the non-owning
spouse’s homestead right as valid, enforceable, and valued at
the then-current statutory amount of $120,000. 	That is to say,
the non-owning husband held a present, non-contingent homestead
right and it had a statutorily prescribed value. 	To exercise
that right and assert its $120,000 value, he did not have to
wait for his spouse to pass, nor did he have to “step into the
shoes of the owner.” 	Brady 2022 WL 1913497 at *5.
Consequently, the Sabato opinion is at odds with the Bankruptcy
Court’s conclusion that the “owned and occupied” language in the
second sentence of RSA 480:1 applies generally to all real
property. 	Indeed, several years ago, the Bankruptcy Court
(Yacos, J.) had a different perspective, noting that the
limiting language in RSA 480:1 applies exclusively to
manufactured housing:
The New Hampshire statutory provision on homestead
exemptions in RSA 480:1 (Supp. 1985) is quite brief:
“Every person is entitled to $5,000 worth of his
homestead, or of his interest therein, as a homestead
. . ..” 	The remainder of this statutory provision
sets forth special rules regarding manufactured
housing, i.e., mobile homes, which are not pertinent
here.
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In re Eckols, 63 B.R. 523, 524 (Bankr. D.N.H. 1986) (emphasis
supplied).
The foregoing certainly suggests that, under New Hampshire
law, except perhaps with respect to manufactured housing,3 a
spouse need not hold title to the underlying homestead in order
to have a vested, non-contingent homestead right; it is
sufficient if that person occupies the homestead and is married
to the title-holder.
IV. 	The “Owned and Occupied” Requirement of RSA 480:1.
As should now be clear, the dispositive issue turns on the
meaning and scope of the “owned and occupied” language in the
second sentence of RSA 480:1. 	If that limitation applies
universally — that is, to all real property — then the
Bankruptcy Court was correct: Brady’s husband holds no homestead
right by virtue of RSA 480:1 because he does not hold title to
the couple’s home. 	If, on the other hand, that “owned and
occupied” language applies only to manufactured housing, then
3 	The court says “perhaps” with respect to manufactured
housing because, as discussed more fully below, one plausible
interpretation of RSA 480:1 suggests that even with respect to
manufactured housing, a person need not hold title to the
property in order to have a homestead right in it, provided he
or she occupies it as a homestead and is married to the owner.
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the Bankruptcy Court reached the wrong conclusion under state
law, and Brady is entitled to invoke her husband’s $120,000
homestead exemption.
In 1983, the New Hampshire legislature added the “owned and
occupied” language in the second sentence of RSA 480:1 as part
of a larger bill that was designed to redefine the way New
Hampshire law treated manufactured housing (or “mobile homes,”
as they had been known). 	See An Act Relative to a Transfer Tax
on Mobile Homes, Chapter 230 (HB 63), 1981-82 Special Session at
202-09 (effective Aug. 17, 1983). 	Historically, manufactured
housing had been treated as personal property. 	Chapter 230’s
amendments to various chapters in New Hampshire’s Revised
Statutes Annotated changed that and provided, going forward,
that manufactured housing would be treated as real property.
The overarching goal of those amendments was straightforward: to
subject the sale of manufactured housing to New Hampshire’s real
estate transfer tax.
Given the purpose of Chapter 230’s statutory amendments, it
seems unlikely that the legislature intended to modify existing
law as it related to the homestead right, except to provide that
the homestead right would be available to those who owned and
occupied manufactured housing as a homestead (perhaps — though
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not necessarily — on a more restricted basis). 	The legislative
history on that point, however, remains murky and the proper
interpretation of the “owned and occupied” language of RSA 480:1
is unresolved.
There is a plausible interpretation of the 1983 amendments
to RSA 480:1 that does not require both occupancy and ownership
for the homestead right to vest (either in manufactured housing
specifically or, more generally, in any real estate occupied as
a homestead). 	Because manufactured housing is often situated on
property owned by a third party (a developer, park owner, or
homeowners’ association for example), the legislature may have
employed the “owned and occupied” language as a means to make
clear that the homestead right typically attaches only to the
manufactured housing unit and not the underlying real estate
upon which it is set (unless, of course, the same entity holds
title to both). 	That is to say, the homestead right attaches to
manufactured housing when an occupant holds title to the unit
and occupies it as a dwelling; the owner of the underlying real
estate may not claim the homestead right unless that person also
holds title to the manufactured housing unit and occupies it as
a homestead. 	There may have been no legislative intent to alter
the then-current statutory scheme which seems to have afforded a
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present, non-contingent homestead right to both the owner of the
homestead and his or her non-owning (but occupying) spouse.
Similarly, there is a plausible interpretation of RSA
480:8-a (upon which the Bankruptcy Court relied) that does not
compel the conclusion that non-owning spouses have no present
homestead right under RSA 480:1. 	To be sure, that statute
provides that only the “owner” of the homestead or the surviving
spouse of the owner may petition the superior court to
“establish” the homestead right.
Establishing Right. 	The superior court, upon petition
of the owner of a homestead or the wife or husband
surviving such owner, or upon petition of a judgment
creditor and such notice as it may order, may appoint
appraisers and cause the homestead right to be set
off, and a record of the proceedings being made in the
registry of deeds, the right shall be established as
against all persons.
RSA 480:8-a (emphasis supplied). 	As noted above, the Bankruptcy
Court found that provision to be supportive of its conclusion
that the spouse of the homestead owner has no present homestead
right of any value and that his or her valuable right vests only
upon the owning spouse’s death. 	But it is also reasonable to
read RSA 480:8-a as merely establishing a standing priority in
the owning spouse with regard to bringing a petition in Superior
Court in the first instance. 	That is to say, the legislature
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may have deemed it best to have the owner of the underlying
homestead property file any such petitions and, only if that
owner had died, to allow the surviving spouse to file such a
petition. 	Again, however, the legislative intent and the reason
for the language employed in that statute remain unclear.
V. 	Certification to the N.H. Supreme Court.
When, in situations such as this, a federal court is called
upon to apply state law, it “must take state law as it finds it:
not as it might conceivably be, some day; nor even as it should
be.” 	Kassel v. Gannett Co., 875 F.2d 935, 950 (1st Cir. 1989)
(citation and internal punctuation omitted). 	When state law has
been authoritatively interpreted by the state’s highest court,
this court’s role is clear: it must apply that law according to
its tenor. 	See Id. 	When the law is unclear but the signposts
are only modestly blurred, the federal court may assume that the
state court would adopt an interpretation of state law that is
consistent with logic and supported by reasoned authority. 	See
Moores v. Greenberg, 834 F.2d 1105, 1107 n.3 (1st Cir. 1987).
However, this court is and should be hesitant to blaze new,
previously uncharted state-law trails. 	Accordingly, when a
dispositive legal question is novel and the state’s law in the
area is unsettled, certification is often appropriate. 	See
Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974); Arizonans for
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23
Official English v. Arizona, 520 U.S. 43, 76 (1997). 	See also
Acadia Ins. Co. v. McNeil, 116 F.3d 599, 605 (1st Cir. 1997)
(“[W]hen the meaning of a state law depends on the
decisionmaker’s ability to discern the state legislature’s
intent from an array of mixed signals, considerations of
federalism, comity, and practicality suggest that the state’s
highest tribunal is best positioned to make an informed and
authoritative judgment.”). 	The signposts here are more than
modestly blurred and the Bankruptcy Court’s decision exposes the
array of mixed signals found in the state’s statutes and
judicial precedent.
The New Hampshire Supreme Court has yet to address the
nuanced issues presented in this case. 	Moreover, resolution of
those issues implicates significant public policy matters for
the State of New Hampshire. 	Indeed, the New Hampshire
Department of Justice, Consumer Protection Division, has
asserted that resolution of the issues presented in this case
“will have a broad impact on the ability of New Hampshire
consumers to obtain a fresh start through bankruptcy and may
endanger home ownership for married consumers outside of
bankruptcy . . ..” 	Amicus Brief (document no. 5) at 1.
Accordingly, the prudent course at this stage is to certify the
dispositive questions of state law. 	Otherwise, our Court of
Case 1:22-cv-00272-SM Document 11 Filed 01/12/23 Page 23 of 31

24
Appeals would likely have to revisit the question of
certification — a situation that does not represent an efficient
use of either judicial or the litigants’ resources. 	And, even
if the Court of Appeals decided to resolve the matter on the
merits, lingering doubt would still remain until the New
Hampshire Supreme Court authoritatively construed New
Hampshire’s statutes and reconciled New Hampshire legal
precedent. 	In the meantime, uncertainty and disruption and a
risk of conflicts in the administration of legal claims related
to the homestead right could continue unabated.
Conclusion
The court proposes to certify the following questions of
law to the New Hampshire Supreme Court:
1. 	Does the ownership requirement described in the second
sentence of N.H. Rev. Stat. Ann. 480:1 apply to all real
property occupied as a homestead, or does it apply only to
manufactured housing occupied as a homestead?
That is to say, assuming the homestead is real property
other than manufactured housing, does the non-owning
occupying spouse of one who holds a homestead right
pursuant to RSA 480:1 also have a present, vested, non-
contingent homestead right of his or her own, which is
currently valued at $120,000? and
2. 	Does a non-owning spouse who occupies a manufactured
housing unit with an owning spouse have a present (i.e.,
non-contingent) and enforceable homestead right with
respect to that home, which is currently valued at
$120,000?
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25
See generally N.H. Supr. Ct. R. 34. 	If any party objects to the
form of the questions the court proposes to certify, a written
objection, along with suggested alternative language, shall be
filed on or before December 15, 2022. 	The court proposes to
submit to the New Hampshire Supreme Court, as its statement of
facts, the facts as presented in this order. 	If any party
objects or wishes the court to supplement that statement of
facts, that party shall file an objection and a proposed
statement of supplemental facts by the same date.
SO ORDERED.
____________________________
Steven J. McAuliffe
United States District Judge
December 1, 2022
cc: 	Counsel of Record
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In re Brady, Slip Copy (2022)
2022 BNH 003
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 	1
2022 WL 1913497
United States Bankruptcy Court, D. New Hampshire.
IN RE: Katherine R. BRADY, Debtor Bk. No. 21-
10712-BAH
|
Signed June 3, 2022
Attorneys and Law Firms
Leonard G. Deming, II, Esq., Deming Law Office, Nashua,
New Hampshire, Attorney for Debtor.
Lawrence P. Sumski, Esq., Merrimack, New Hampshire,
Chapter 13 Trustee.
MEMORANDUM OPINION
Bruce A. Harwood, Chief Bankruptcy Judge
I. INTRODUCTION
*1 The Court has before it an objection to the Debtor's claim of
homestead 	exemption 	(Doc. 	No. 	19) 	(the 	“Homestead
Exemption Objection”) and an objection to the Debtor's
amendment to Schedule D (Doc. No. 47) (the “Schedule D
Objection”) (together, the “Objections”). The Court held a
hearing on the Objections on May 20, 2022, and took the
matters under advisement.
This Court has jurisdiction of the subject matter and the
parties pursuant to 	28 U.S.C. §§ 1334 and 157(a) and Local
Rule 77.4(a) of the United States District Court for the District of
New Hampshire. This is a core proceeding in accordance
with 	28 U.S.C. § 157(b).
II. FACTS AND PROCEDURAL BACKGROUND
The Debtor filed an individual chapter 7 bankruptcy petition
on December 17, 2021. On Schedule A/B, she listed
an ownership interest in a single-family home located in
Merrimack, New Hampshire (the “Property”). The Property is
owned solely by the Debtor pursuant to a deed dated June 2,
2014. On the petition date, the Debtor resided at the Property
with her husband and their two children. She valued the
Property as being worth $236,100.
On Schedule C, the Debtor claimed a $120,000 homestead
exemption pursuant to New Hampshire Revised Statute
Annotated (“RSA”) 480:1. On Schedule D, she listed a
mortgage claim totaling $178,445.61 and no other secured
claims.
On January 25, 2022, Edmond Ford, chapter 7 trustee (the
“Chapter 7 Trustee”), conducted the section 341 meeting of
creditors. Thereafter, on February 1, 2022, the Debtor amended
Schedules A/B and C. She increased the value of the Property to
$346,700, and she asserted an additional $120,000 homestead
exemption for her “Non-owner Husband” (as she described
him in her Notice of Amended Schedules) pursuant to RSA
480:1:
On February 4, 2022, the Chapter 7 Trustee retained counsel to
investigate and potentially liquidate assets. On February 9,
2022, the Debtor moved to convert her case to chapter 13. A
hearing on the motion to convert was scheduled for March 9,
2022.
Before the hearing on the motion to convert was held, the
Chapter 7 Trustee filed the Homestead Exemption Objection,
which was scheduled for hearing on March 23, 2022. The
Chapter 7 Trustee objected to the Debtor's claim of a second
homestead exemption under RSA 480:1 in the amount of
$120,000 on behalf of her non-debtor, non-owner husband,
and sought disallowance of the exemption.
On March 9, 2022, the Court converted the Debtor's case to a
chapter 13 case.
On March 23, 2022, the Court held a hearing on the Homestead
Exemption Objection at which Lawrence P. Sumski, the
chapter 13 trustee (the “Chapter 13 Trustee”), appeared. The
Chapter 13 Trustee indicated he intended to pursue the
Homestead Exemption Objection. The Court ordered the
Chapter 13 Trustee to file a supplemental objection by April
25, 2022. The parties indicated their willingness to file a joint
stipulation of facts, which the Court ordered the parties to file
by May 2, 2022.
*2 The parties filed a joint statement on facts on April 1, 2022.
That same day, the Debtor amended Schedule D to include the
following secured claim of her non-debtor, non- owner
husband:
26
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In re Brady, Slip Copy (2022)
2022 BNH 003
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 	2
On April 5, 2022, the Chapter 13 Trustee objected to this
amendment. The Court scheduled a hearing on the Schedule D
Objection for May 20, 2022, the same day as the hearing on
the Homestead Exemption Objection.
The Chapter 13 Trustee and the Debtor both filed memoranda
of law in support of their positions. The Court held a hearing
on May 20, 2022, and took the Objections under advisement.
III. DISCUSSION
A. Homestead Exemption
“The purpose of the homestead exemption is to secure to
debtors and their family the shelter of the homestead roof.”
Deyeso v. Cavadi, 165 N.H. 76, 79 (2013). Courts are to
construe the homestead liberally. In re Myers, 323 B.R. 11, 13
(Bankr. D.N.H. 2005). The Bankruptcy Code and Rules set
forth the framework for asserting and objecting to a debtor's
claim of exemption in a bankruptcy case. 	Federal Rule of
Bankruptcy Procedure 4003(a) provides that “[a] debtor shall
list the property claimed as exempt under § 522 of the Code on
the schedule of assets required to be filed by Rule 1007.”
Subsection 522(b)(1) of the Bankruptcy Code provides in
relevant part that “an individual debtor may exempt from
property of the estate property listed in ... paragraph (3) of this
subsection.” Subsection 522(b)(3) provides that “[p]roperty
listed in this paragraph is ... any property that is exempt under
... State or local law that is applicable on the date of the filing of
the petition in 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 ...” Accordingly, the Debtor asserted New
Hampshire's exemptions on Schedule C.
New Hampshire's homestead exemption is set forth in RSA
480:1, which states:
Every person is entitled to $120,000 worth of his or her
homestead, or of his
or her interest therein, as a homestead. 	The
homestead right created by this chapter shall exist in
manufactured housing, as defined by RSA 674:31,
which is owned and occupied as a dwelling by the
same person but shall not exist in the land upon
which the manufactured housing is situated if that
land is not also owned by the owner of the
manufactured housing.
RSA 480:3-a provides further that:
The owner and the husband or wife 	of the owner
are entitled to occupy the homestead right during the
owner's lifetime. After the decease of the owner, the
surviving wife or husband of the owner is entitled to
the homestead right during the lifetime of such
survivor.
“[A] party in interest may file an objection to the list of
property claimed as exempt within 30 days after the meeting of
creditors held under § 341(a) is concluded or within 30 days after
any amendment to the list or supplemental schedules is
filed, whichever is later.” 	Fed. R. Bankr. P. 4003(b)(1). The
party objecting to an exemption bears the burden of proof.
Fed. R. Bankr. P. 4003(c).
The Chapter 13 Trustee objects to the Debtor's assertion of a
homestead exemption pursuant to RSA 480:1 on behalf of her
non-debtor spouse, who resides at the Property but has
no ownership interest in it. 1 In support of his position, the
Chapter 13 Trustee cites various court decisions from this
district, including In re Visconti, 426 B.R. 422 (Bankr. D.N.H.
2010), where the Court clearly stated that “the homestead
exemption under RSA 480:1 requires both occupancy and
ownership.” Id. at 426 (emphasis added). The Court explained
further that “a spouse who does not hold an ownership interest
does have a right to occupy the homestead during the owner-
spouse's lifetime and can claim a homestead right for their life
after the death of the owner-spouse.” Id. (citing RSA 480:3-a).
27
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In re Brady, Slip Copy (2022)
2022 BNH 003
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 	3
The Court reiterated the ownership requirement in its recent
decision in In re St. Laurent, 2022 BNH 002, when it stated:
*3 RSA 480:1 provides in relevant part that “[e]very person is
entitled to $120,000 worth of his or her homestead, or of his or
her interest, therein as a homestead.” The New Hampshire
Supreme Court has held that the homestead right must be
established by actual physical possession of a property with the
intent to occupy it as a home. Currier v. Woodward, 62 N.H.
63, 64 (1882). However, “occupancy alone does not preserve
the homestead right—it also requires ownership.” Visconti,
426 B.R. at 425-26 (citing Gerrish v. Hill, 66 N.H. 171 (1890)
(no homestead right when the debtors sold a farm
but continued to live on it); 	Beland v. Goss, 68 N.H. 257
(1895) (homestead right was lost when the property was sold
and the debtors moved out); Stewart v. Bader, 154
N.H. 75, 89 (2006) (defendant lost homestead right by lack of
occupancy but court also noted that the property was sold several
years before)). Thus, “the homestead exemption under RSA
480:1 requires both occupancy and ownership.” Visconti, 426
B.R. at 426.
Id. at 4. Despite these clear pronouncements, the Debtor
contends there is no ownership requirement to claim a
homestead exemption under RSA 480:1, arguing that the
statute protects a “homestead interest” and that the Court's
statements in Visconti were merely dicta. The Court disagrees.
Judge Deasy found that the debtor in Visconti was not entitled to
a homestead exemption in the property because (1) the debtor
did not have an ownership interest in the property, and (2) the
debtor was not married to someone who had an ownership
interest in the property. Visconti, 426 B.R. at 426. The finding
that the debtor did not own the property was critical to Judge
Deasy's analysis.
The Debtor argues that her spouse has an “interest” in the
Property that is protected by RSA 480:1. The Chapter 13
Trustee agrees that a non-debtor, non-owner spouse may have
an “interest” in the Property. For example, a spouse may have
a tenancy interest, an inheritance right, or an interest 	in the
property as part of a marital estate in a state court divorce
proceeding. The Chapter 13 Trustee asks, though: if he
offered the non-owner spouse money for any of those
“interests,” what would he get? Would he be able to occupy
the home? Would a third party be able to obtain a lien or
attachment against that interest in state court? The Chapter 13
Trustee argues no, and the Court agrees.
The Chapter 13 Trustee acknowledges that a couple has the
right to decide that only one of them will own the family
homestead, perhaps as means to shield the family home from
claims that lie solely against the non-owner. But the Chapter
13 Trustee argues that such a choice has consequences, and
one consequence is that the non-owner is unable to assert a
homestead exemption under RSA 480:1. If it were otherwise,
the non-owner would be getting the benefit of non- ownership,
e.g., not subjecting the family home to potential liens and
attachments by third-party creditors, but would not be
experiencing the burden of it, i.e., having no homestead
exemption under RSA 480:1. That strikes the Court as both
inequitable and inconsistent with the provisions of the statute.
*4 The Court is cognizant that RSA 480:1 does not use the
word “owner” or “owned” in the first sentence of the statute
but rather refers to a homestead and an “interest therein.”
However, the second sentence of the statute does refer to
property that “is owned and occupied as a dwelling.” With
respect to manufactured housing, the statute is clear that
someone must own and occupy the manufactured housing in
order to assert a homestead exemption under RSA 480:1. It is
not enough to simply occupy it. From a public policy
standpoint, it would be nonsensical for the homestead
exemption to be more restrictive for manufactured housing
than it is for all other housing. Thus, the statute as a whole
supports an interpretation that ownership and occupancy are
required to claim a homestead exemption in all housing.
To interpret the statute otherwise would discriminate against
owners of manufactured housing.
If ownership is not a requirement for asserting a homestead
exemption under RSA 480:1, the Court questions whether
there is any limit to the exemption's scope. What if a
homeowner has several adult children who live in the family
homestead? Is every adult child who lives in the home able to
assert a $120,000 exemption? What about a common law
spouse or a live-in girlfriend, boyfriend, or partner? Can they
assert a $120,000 homestead exemption? After all, it is their
home too, is it not? The Debtor argues that the exemption in
RSA 480:1 does not extend that far, but she does not articulate
any principled limitation on her construction of the homestead
exemption statute.
The Court notes further that RSA 480:8-a provides:
28
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In re Brady, Slip Copy (2022)
2022 BNH 003
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 	4
The superior court, upon petition of the owner of a
homestead or the wife or husband surviving such
owner, or upon petition of a judgment creditor and
such notice as it may order, may appoint appraisers
and cause the homestead right to be set off, and a
record of the proceedings being made in the registry
of deeds, the right shall be established as against all
persons. (Emphasis added).
Thus, to pursue an action in state court to establish a homestead
right, one must be the “owner” of the homestead property or
the “surviving spouse” of such owner. This provision makes a
distinction between ownership and non- ownership, supporting
the view that RSA 480:1 only protects an owner's homestead
right.
The Debtor also argues that § 522 does not restrict the scope of
its application to purely the “debtor's exemptions,” and,
therefore, the Debtor may “use New Hampshire exemptions to
their full extent which includes an exemption in the non-
owner spouse.” While it may be true that § 522 does not limit
its application to a debtor's exemptions, 2 that proposition
does not resolve a fundamental issue presented by the facts of
this case: what exemption does a non-owner spouse have in a
family homestead?
The First Court of Appeals stated in Deutsche Bank Nat'l Trust
v. Pike, 916 F.3d 60, 68 (1st Cir. 2019):
When a married couple resides together in a home, the
homestead right “extends to ... both spouses, even when only
one spouse legally owns the homestead.” Maroun
v. Deutsche Bank Nat'l Tr. Co., 167 N.H. 220, 109 A.3d 203,
208 (2014) (citing N.H. Rev. Stat. Ann. § 480:3-a); see also
N.H. Rev. Stat. Ann. § 529:20-a. The homestead right of a
property owner's spouse is established once he or she
physically occupies the subject property. Walbridge
v. Estate of Beaudoin, 163 N.H. 804, 48 A.3d 964, 966
(2012).
This Court also addressed the issue in In re Hopkins, 2021
BNH 004, and found that “the exemption in RSA 480:3-a is
for spouses who do not have an ownership interest in their
residence at the time of the homeowner's death.” Id. at 6. Upon
the homeowner's death, surviving spouses are entitled to both
occupy the homestead during their lifetime and to protect
$120,000 of their interest in the family home.
*5 In this case, the Debtor has not asserted a homestead
exemption under RSA 480:3-a on Schedule C on behalf of her
non-debtor, non-owner spouse, but only an exemption
pursuant to RSA 480:1, 3 which is not proper, as her spouse is
not an owner of the Property. But even if she had asserted an
exemption under RSA 480:3-a, the Court finds that the non-
owner spouse's $120,000 homestead exemption arises only
upon the death of the owner. In other words, the Debtor's
spouse's interest is contingent. Upon the Debtor's death, the
non-owner spouse will be able to step into the shoes of the
owner spouse. At that time, the non-owner spouse will be able to
assert a $120,000 homestead exemption. Until then, while the
non-owner spouse may have a homestead right that can be
protected by an exemption under RSA 480:3-a, the value of
that exemption is $0. The couple is not allowed to “double-
dip” and claim $240,000 as exempt. Otherwise, the ownership
requirement of RSA 480:1 would be irrelevant.
Because the Debtor's spouse is not an owner of the Property,
he is not entitled to claim an exemption under RSA 480:1.
Accordingly, the Debtor is unable to assert such an exemption in
Schedule C. For that reason, the Homestead Exemption
Objection must be sustained.
B. Amendment to Schedule D
Federal Rule of Bankruptcy Procedure 1009(a) permits a
debtor to amend schedules “as a matter of course at any time
before the case is closed.” A bankruptcy court has the
discretion to deny an amendment to schedules based up a
showing of either:
1. Bad faith; or
2. Prejudice to creditors or third parties.
Wood v. Premier Capital, Inc. (In re Wood), 291 B.R.
219, 228 (B.A.P. 1st Cir. 2003).
The Chapter 13 Trustee filed the Schedule D Objection stating
simply:
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In re Brady, Slip Copy (2022)
2022 BNH 003
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 	5
The issue of the appropriateness of a second
homestead exemption filed by the debtor on behalf
of a nondebtor, non-co-owner of her residential real
estate is currently before the Court. The debtor
through her counsel has expressed a legal theory that
the non- debtor, non-co-owner husband, Daniel
J. Brady, already has a legal interest of some sort in
the 	property, 	and 	so the debtor has filed an
amended Schedule D to assert the “lien” that he has
on the residential property. The issue is squarely
before the Court but to make sure it is preserved for
the scheduled hearing the undersigned 	hereby
objects to the amendment to Schedule D to show the
fictional lien in the amount of $120,000.00.
The Chapter 13 Trustee does not explicitly contend that the
amendment was made in bad faith or that it would prejudice
creditors or third parties. Rather, his objection goes to the
merits of the non-owner spouse's legal rights, i.e., whether he
holds a secured claim against the Property.
The Debtor contends that the non-owner spouse's interest in
the Property is “an encumbrance upon the family home which
is separate from the Debtor's own homestead exemption right.”
The Debtor has listed this “encumbrance” on Schedule
D and described it as a “statutory lien” and “lien on property.”
The Debtor has cited no legal authority (other than RSA 480)
for the proposition that the non-owner's interest in the
Property is protected by a “statutory lien” or “lien on property”
as asserted in Schedule D. The Court is aware of none. In the
Court's view, the non-owner spouse does not have any lien
rights in the Property. Rather, as explained above, a non-owner
spouse may be able to assert a homestead exemption in the
Property pursuant to RSA 480:3-a. But, that interest in the
Property is not a secured claim that should be listed on
Schedule D. Because the Court finds that the non-debtor, non-
owner spouse does not have a lien on the Property as asserted
by the Debtor, the Debtor's amendment to Schedule D must be
denied.
IV. CONCLUSION
For the reasons set forth in this opinion, the Court finds
that the Debtor's assertion of a homestead exemption under
RSA 480:1 on behalf of her non-owner spouse is improper as
is her amendment to Schedule D asserting that her non- owner
spouse possesses a lien that secures his interest in the
Property. Accordingly, the Court will issue a separate order
sustaining the Homestead Exemption Objection and the
Schedule D Objection. This opinion constitutes the Court's
findings of fact and conclusions of law in accordance with
Federal Rule of Bankruptcy Procedure 7052.
*6 ENTERED at Concord, New Hampshire.
All Citations
Slip Copy, 2022 WL 1913497, 2022 BNH 003
Footnotes
1 In chapter 13, exemptions are relevant as they affect the “best interest of creditors test” set forth in 	11
U.S.C. § 1325(a)(4), which provides that a plan can be confirmed if “the value as of the effective date of the plan, of
property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount
that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date.”
The Debtor filed a chapter 13 plan on April 10, 2022. She proposes to pay $31,500 over the life of her plan at the rate
of $525 per month for 60 months, which will result in an estimated dividend of 66% toward estimated unsecured claims
of $42,218. The liquidation analysis in the plan reflects that unsecured creditors will receive 0% in chapter 7, based on
the Debtor inclusion of $240,000 in homestead exemptions under RSA 480:1. If only the Debtor's $120,000
exemption were included, there would be $48,254 available for creditors (less
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In re Brady, Slip Copy (2022)
2022 BNH 003
© 2023 Thomson Reuters. No claim to original U.S. Government Works. 	6
chapter 7 administrative expenses) resulting in a greater dividend in a chapter 7 case than that proposed by the
Debtor in her plan. For that reason, the Debtor's plan would not meet the “best interest of creditors test.”
2 The Court will assume this is true without deciding it.
3 While the Debtor has also cited 	RSA 480:2 in Schedule C, that section of the statute was repealed in 1973.
End of Document 	© 2023 Thomson Reuters. No claim to original U.S. Government Works.
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