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In re Mooney

United States District Court, M.D. Georgia, Albany Division

February 26, 2015

IN RE: DENISE E. MOONEY, Debtor. DENISE E. MOONEY, Appellant,
v.
JOY R. WEBSTER, TRUSTEE, Appellee.

ORDER

W. LOUIS SANDS, Sr., District Judge.

Presently pending before the Court is Appellant Denise E. Mooney's appeal of United States Bankruptcy Judge James D. Walker, Jr.'s January 3, 2014 Memorandum Opinion sustaining the Trustee's objection to Appellant's exemption of her health savings account. ( See Doc. 1.) For the reasons discussed below, Judge Walker's Opinion is AFFIRMED.

BACKGROUND

On June 27, 2013, Appellant Denise E. Mooney filed a voluntary Chapter 7 Bankruptcy Petition in the United States Bankruptcy Court for the Middle District of Georgia. (Doc. 1 at 2.) On August 29, 2013, Chapter 7 Trustee Joy R. Webster ("the Trustee") objected to Mooney's $17, 570.92 claim of exemption under Ga. Code Ann. §§ 44-13-100(a)(2)(C) & (E) for a Health Savings Account ("HSA"). (Id. at 2-3.) The Bankruptcy Court held a hearing on the objection, heard evidence, and directed the Parties to file supplemental briefs. (Id. at 3-4.) On January 3, 2014, Judge Walker issued a memorandum opinion sustaining the Trustee's objection to Mooney's claimed exemption for her HSA. (Id. at 4.) This appeal followed.

DISCUSSION

I. Standard of Review

This Court has jurisdiction to hear appeals from final judgments, orders, and decrees of the Bankruptcy Court. 28 U.S.C. § 158(a). The Bankruptcy Court's determinations of law are subject to de novo review. In re Goerg, 930 F.2d 1563, 1565 (11th Cir. 1991) (citing In re Sublett, 895 F.2d 1381, 1383 (11th Cir. 1990)). Factual findings, however, are subject to the "clearly erroneous" standard of review. Id. at 1566. " A factual finding is not clearly erroneous unless [the Court of Appeals], after reviewing all of the evidence, [is] left with the definite and firm conviction that a mistake has been committed.'" In re Farris, 365 F.Appx. 198, 199 (11th Cir. 2010) (citing Lykes Bros., Inc. v. U.S. Army Corps of Eng'rs, 64 F.3d 630, 634 (11th Cir. 1995)).

II. Analysis

Section 541 of the Bankruptcy Code defines "property of the estate." Subject to a few specifically enumerated exceptions, the estate consists of all legal and equitable interests in property a debtor has at the commencement of a Chapter 7 case. See 11 U.S.C. § 541. Certain property may be exempted from the bankruptcy estate. See 11 U.S.C. § 522. The "purpose of... exemption laws has been to protect a debtor from [her] creditors, to provide [her] with the basic necessities of life so that even if [her] creditors levy on all of [her] non-exempt property, the debtor will not be left destitute and a public charge." In re Morehead, 283 F.3d 199, 206 (4th Cir. 2002) (citing H.R. Rep. No. 95-595, at 126 (1977), reprinted in 1978 U.S.C.C.A.N. at 6087). In other words, the exemptions are designed to "reliev[e] the honest debtor from oppressive indebtedness and permit[ ] [her] to start afresh." Wright v. Union Central Life Ins. Co., 304 U.S. 502, 514 (1938).

Federal exemptions are codified at 11 U.S.C. § 522. Georgia "opted out" of the federal exemptions and codified its own exemptions at Ga. Code Ann. § 44-13-100. In re Shef-field, 507 B.R. 400, 406 (Bankr. S.D. Ga. 2014). As a result, Georgia debtors may only ex-empt property under federal law other than § 522(d) and state law. Id. Mooney argues that her HSA is exempted under the following provision of the Georgia Code:

(a) In lieu of the exemption provided in Code Section 44-13-1, any debtor who is a natural person may exempt, pursuant to this article, for purposes of bankruptcy, the following property:
...
(2) The debtor's right to ...

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