132 Nev., Advance Opinion 80
IN THE SUPREME COURT OF THE STATE OF NEVADA
DAVID JOHN KAPLAN, No. 69065
Appellant,
vs.
CHAPTER 7 TRUSTEE, ALLEN
FILED
DUTRA, DEC 01 2016
Respondent.
;I A ilk
ETH A. BROWN
CHIEF DEPi
Certified question, pursuant to NRAP 5, concerning the
application of a statute regarding personal injury exemptions in a
bankruptcy proceeding. United States Bankruptcy Court, District of
Nevada; Gregg W. Zive, Bankruptcy Court Judge.
Question answered.
Christopher P. Burke, Reno,
for Appellant.
Michael C. Lehners, Reno,
for Respondent.
BEFORE THE COURT EN BANC. 1
1 The Honorable Nancy M. Saitta, Justice, having retired, this
matter was decided by a six-justice court.
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OPINION
By the Court, GIBBONS, J.:
In response to a certified question submitted by the United
States Bankruptcy Court for the District of Nevada, we consider whether
NRS 21.090(1)(u) allows a debtor multiple personal injury exemptions of
$16,150 or only a single, aggregate personal injury exemption of $16,150.
We conclude that under NRS 21.090(1)(u), a debtor is entitled to multiple
personal injury exemptions of $16,150 on a per-claim basis.
FACTUAL AND PROCEDURAL BACKGROUND
Appellant David John Kaplan, in pro se, filed for Chapter 11
bankruptcy, which was later converted to a Chapter 7 bankruptcy. Prior
to filing, Kaplan was involved in two personal injury cases. First, Kaplan
was involved in a dog attack that injured his back. As a result, Kaplan
had surgery on his back. Six weeks later, Kaplan was rear-ended, which
also injured his back. The second accident hampered Kaplan's recovery
from back surgery, and Kaplan underwent a second back surgery. Kaplan
filed personal injury claims for both injuries.
As part of his bankruptcy proceedings, Kaplan claimed two
personal injury exemptions under NRS 21.090(1)(u)—$16,150 for the
personal injury settlement stemming from the dog attack, and another
$16,150 exemption stemming from the automobile accident. The Chapter
7 trustee, Allen Dutra, filed an objection to Kaplan's claim of two
exemptions.
The bankruptcy court certified to this court the question of
whether a debtor is entitled to more than one personal injury exemption
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under NRS 21.090(1)(u) if the debtor has more than one personal injury
incident.
DISCUSSION
"Under NRAP 5(a), this court may answer questions of law
certified to it by federal courts when the 'answers may be determinative of
part of the federal case, there is no controlling [Nevada] precedent, and
the answer will help settle important questions of law." Savage v.
Pierson, 123 Nev. 86, 89,
157 P.3d 697, 699 (2007) (alteration in original)
(quoting Volvo Cars of N. Am. v. Ricci, 122 Nev. 746, 751,
137 P.3d 1161,
1164 (2006) (internal quotation marks omitted)). In the present case,
(1) answering the question presented by the bankruptcy court will
determine part of an ongoing bankruptcy case, (2) it appears that there is
no Nevada precedent on the question presented in this case, and (3) the
answer will settle an important question of law regarding the scope of
NRS 21.090(1)(u). Accordingly, we will address the question presented to
this court.
This certified question raises issues of statutory
interpretation. "When examining a statute, a purely legal inquiry, this
court should ascribe to its words their plain meaning, unless this meaning
was clearly not intended." Savage, 123 Nev. at 89,
157 P.3d at 699. "If,
however, a statute is subject to more than one reasonable interpretation, it
is ambiguous, and the plain meaning rule does not apply. When a statute
is ambiguous, legislative intent is the controlling factor, and reason and
public policy may be considered in determining what the Legislature
intended." Id.
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NRS 21.090(1)(u) is ambiguous
We conclude that the language of NRS 21.090(1)(u) is
ambiguous. NRS 21.090 provides that certain property is exempt from
execution. Specifically, NRS 21.090(1)(u) provides an exemption for
[p] ayments, in an amount not to exceed $16,150,
received as compensation for personal injury, not
including compensation for pain and suffering or
actual pecuniary loss, by the judgment debtor or
by a person upon whom the judgment debtor is
dependent at the time the payment is received.
The terms "payments" and "personal injury" are both
susceptible to more than one reasonable interpretation. "Payments" may
reasonably be read to include multiple personal injury payments that
result from multiple personal injury claims, in aggregate, limiting the
claimed exemption under NRS 21.090(1)(u) to a total of $16,150—
regardless of the number of claims or incidents. "Payments" may also be
read to refer to multiple payments received independently for each
incident or claim, given that the statute only refers to
"payments. . . received as compensation for personal injury" and not for
"personal injuries." NRS 21.090(1)(u) (emphasis added). Because the
statute is ambiguous, we next turn to legislative intent to determine the
meaning of the statute.
NRS 21.090(1)(u) provides for multiple personal injury exemptions, on a
per-claim basis
The legislative intent regarding NRS 21.090(1)(u) is unclear.
The Nevada Legislature amended NRS 21.090 to include the personal
injury exemption, NRS 21.090(1)(u), during the seventy-second regular
session. S.B. 70, 72d Leg. (Nev. 2003). S.B. 70 was initially introduced to
increase the amount of the homestead exemption and did not include
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any other changes to NRS 21.090. See Hearing on S.B. 70 Before the
Senate Judiciary Comm., 72d Leg. (Nev., Feb. 13, 2003). The bill was
later amended to include other exemptions under NRS 21.090, including
the personal injury exemption. See Hearing on S.B. 70 Before the
Assembly Judiciary Comm., 72d Leg. (Nev., May 2, 2003). However, there
is scant evidence in the legislative history to suggest the Legislature's
intent regarding whether NRS 21.090(1)(u) was intended to provide for a
single exemption or multiple exemptions. For that reason, we look to
reason and public policy to inform our decision regarding the
interpretation of NRS 21.090(1)(u).
We conclude that reason and public policy suggest NRS
21.090(1)(u) should be read to provide for multiple personal injury
exemptions on a per-claim basis. This court has previously noted that
"[w] e liberally and beneficially construe our state exemption statutes in
favor of the debtor." In re Christensen, 122 Nev. 1309, 1314,
149 P.3d 40,
43 (2006). "The purpose of Nevada's exemption statutes is to secure to the
debtor the necessary means of gaining a livelihood, while doing as little
injury as possible to the creditor." Savage, 123 Nev. at 90,
157 P.3d at 700
(internal quotation marks omitted).
While discussing the amendment that included the personal
injury exemption, the Legislature explained that the policy of the
bankruptcy chapter is "to exempt the basics so someone can go on with
their life." Hearing on S.B. 70 Before the Assembly Judiciary Comm., 72d
Leg. at 26 (Nev., May 2, 2003). The personal injury exemption provides a
debtor with the ability to exempt an amount of the funds received as
compensation for personal injury that does not include pain and suffering
or pecuniary loss. This indicates that the purpose of the exemption is to
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allow a debtor to retain funds that are necessary to his or her recovery
from the injury sustained such that the debtor can regain a livelihood.
Should a debtor sustain multiple injuries, limiting the personal injury
exemption to an aggregate $16,150 would defeat the purpose of securing to
the debtor the necessary means of gaining a livelihood, as multiple
injuries sustained as a result of different events would likely result in a
higher cost of recovery to the debtor. Thus, reason and public policy
dictate that NRS 21.090(1)(u) entitles a debtor to an exemption for each
personal injury claim, on a per-claim basis.
Split of authority
Though we base our holding on Nevada law and the legislative
history of NRS 21.090(1)(u), we note that a split of authority exists on this
issue at the federal level. Federal courts are split as to whether the
federal personal injury exemption, 11 U.S.C. § 522(d)(11)(D) (2012),
entitles a debtor to an exemption up to the statutory maximum for each
personal injury action or only to a single, aggregate personal injury
exemption regardless of the number of separate injuries and have relied
on various theories and tools of statutory construction to reach different
conclusions. Compare In re Comeaux, 305 B.R. 802 (Bankr. E.D. Tex.
2003), with In re Phillips, 485 B.R. 53 (Bankr. E.D.N.Y. 2012).
Some federal courts found the federal personal injury
exemption applied to each personal injury claim individually. See, e.g.,
Comeaux, 305 B.R. at 807; See also In re Marcus,
172 B.R. 502, 504
(Bankr. D. Conn. 1994). In Comeaux, the debtors claimed three separate
personal injury exemptions for injuries sustained in three separate and
distinct accidents. 305 B.R. at 803. The Comeaux court based its
conclusion on the following: (1) the general rule of construction that
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exemption statutes are to be liberally construed in favor of the debtor;
(2) Congress demonstrated its ability to utilize numeric and aggregate
limits elsewhere in § 522 and chose not to do so in § 522(d)(11)(D); and
(3) as a policy matter, debtors who suffer personal bodily injuries from
multiple accidents should be afforded the small degree of protection the
personal injury exemption affords. Id. at 807.
Alternatively, other courts have determined that the federal
personal injury exemption only entitles a debtor to claim a single
exemption for personal bodily injury, in aggregate, regardless of the
number of payments, incidents, or accidents that have occurred or how
many injuries were sustained. See, e.g., Phillips, 485 B.R. at 61-62; see
also In re Christo, 228 B.R. 48, 53 (B.A.P. 1st Cir.), affd,
192 F.3d 36 (1st
Cir. 1999). The bankruptcy court in Phillips concluded the federal
personal injury exemption applied to all injuries and payments in
aggregate, determining that a single exemption was a more natural
reading of 11 U.S.C. § 522(d)(11)(D). Phillips,
485 B.R. at 61-62. The
Phillips court relied on 11 U.S.C. § 102(7), which provides that the federal
bankruptcy code should be read such that "the singular includes the
plural." Id. at 57. Accordingly, the Phillips court reasoned that the terms
"a payment" and "injury" included both singular and multiple payments
and injuries and should therefore be read to apply to all payments and
injuries in the aggregate. Id.
We agree with the Comeaux court's analysis of federal law,
and reach a similar result here. We hold that NRS 21.090(1)(u) should be
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construed in favor of the debtor and that the statute entitles a debtor to an
exemption for each personal injury claim, on a per-claim basis.
Gibbons
, C.J.
Parraguirre
J.
Hardesty
1
Douglas
)Aly/l_r\
Cherry
J.
Pickering
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