Davis v. Davis (In re Davis)

170 F.3d 475 (5th Cir. 1999)

 

RULE:

The Supremacy Clause enables Congress to override state laws if it so intends. Deference to federalism counsels a presumption that areas of law traditionally reserved to the states, like police powers or property law, are not to be disturbed absent the clear and manifest purpose of Congress. But preemption may be implied if state and federal laws conflict or a state law thwarts the accomplishment and execution of congressional intent. Moreover, if Congress has passed a pervasive federal legislative scheme leaving states no room to supplement, then state law will also be preempted.

FACTS:

When appellant and appellee divorced, they executed a property settlement, support and child custody agreement, and divorce judgment. Appellee remarried and the couple purchased a house and lot. Appellee stopped making payments to appellant as required by the divorce judgment and filed for bankruptcy relief. Appellee's lien-free home was claimed as exempt property. A decision that appellant could not levy against the property under 11 U.S.C.S. § 522(c)(1) was affirmed. Appellant sought review and the court affirmed the decision denying levy because appellee was entitled to exempt his homestead from claims of creditors and the bankruptcy exemption statute was not an execution statute and did not preempt relevant state law.

ISSUE:

Was appellant's assertion correct that  § 522(c)(1) of the Bankruptcy Code preempted the Texas homestead exemption, thus subjecting appellee's homestead to seizure and sale?

ANSWER:

No.

CONCLUSION:

The provision in § 522(c)(1) for continuing liability for certain debts applied equally to both federal and state exemption schemes. Appellant's proffered construction of § 522(c) did not merely withhold any special protection offered by bankruptcy law, but overrode non-bankruptcy law and had the effect of denying appellee even exemptions that would have been available outside of bankruptcy. Sec. 522(c)(1) did not create liability of exempt property for specified debts following bankruptcy. The policy of strengthening enforcement of family support obligations was a weak argument for implied preemption. There was no direct conflict between compliance with the Bankruptcy Code and the Texas homestead law.

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