Katherine R. Brady v. Lawrence P. Sumski, Chapter 13 Trustee

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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

U.S. District Court for the District of New Hampshire
No. 2023-0023

KATHERINE R. BRADY

v.

LAWRENCE P. SUMSKI, CHAPTER 13 TRUSTEE

Argued: June 6, 2023
Opinion Issued: August 17, 2023

Deming Law Office, of Nashua (Leonard G. Deming, II on the brief and
orally), for the plaintiff.

Lawrence P. Sumski, Chapter 13 Bankruptcy Trustee, self-represented
party, on the brief and orally.

John M. Formella, attorney general, and Anthony J. Galdieri, solicitor
general (Anthony J. Galdieri, Zachary N. Towle, assistant attorney general, and
Mary F. Stewart, attorney, on the brief, and Mary F. Stewart orally), for the
State, as intervenor.
 Ford, McDonald & Borden, P.A., of Portsmouth (Ryan M. Borden and
Edmond J. Ford on the brief), for Michael Askenaizer, Trustee for the
Bankruptcy Estates of William Linane and Debora Linane, as amicus curiae.

DONOVAN, J. Pursuant to Supreme Court Rule 34, the United States
District Court for the District of New Hampshire (McAuliffe, J.) certified two
questions of law for our consideration:

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

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?

For the reasons that follow, we conclude that RSA 480:1 (Supp. 2022)
includes an ownership requirement that applies to all real property occupied as
a homestead and a non-owning occupying spouse of another who holds a
homestead right, pursuant to the statute, does not hold a present, non-
contingent homestead right of his or her own. With respect to the district
court’s second question, we exercise our discretion under Supreme Court Rule
34 to decline to answer because a response to that question is not
“determinative of the cause then pending in the certifying court.” Sup. Ct. R.
34.

I. Facts

The following facts are taken from the district court’s order or are
otherwise undisputed. This case commenced in December 2021 when the
plaintiff, Katherine Brady, filed a Chapter 7 bankruptcy petition. At the time of
the petition, the plaintiff resided with her husband and children in a single-
family residence located in Merrimack (hereinafter, the property). The property
is titled only in the plaintiff’s name. On Schedule C of the petition, the plaintiff
claimed a homestead exemption under RSA 480:1 in the amount of $120,000.
Subsequently, the plaintiff amended her petition to claim an additional
$120,000 homestead exemption on behalf of her non-debtor, non-owner

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spouse. The Chapter 7 Bankruptcy Trustee filed an objection to the second
claimed homestead exemption.

In March 2022, the plaintiff converted her case to one under Chapter 13.
Subsequently, the plaintiff amended Schedule D of her petition to add a second
secured claim for her spouse in the amount of $120,000 based upon her
spouse’s claimed homestead exemption. The defendant, Lawrence Sumski,
Chapter 13 Bankruptcy Trustee, asserted the same homestead exemption
objection as the predecessor Chapter 7 Trustee.

In June 2022, following a hearing, the Bankruptcy Court for the United
States District Court of New Hampshire (Harwood, J.) concluded that to
maintain a homestead right pursuant to RSA 480:1, a person must
demonstrate both occupancy and ownership interests in the homestead
property. In re Brady, Bk. No. 21-10712-BAH, 2022 WL 1913497, at *4-5
(Bankr. D.N.H. June 3, 2022). The court acknowledged that although the first
sentence of RSA 480:1 does not use the word ownership or occupancy, the
second sentence of the statute makes “clear that someone must own and
occupy the manufactured housing in order to assert a homestead exemption
under RSA 480:1.” Id. at *4 (emphasis omitted). The court reasoned that it
would be “nonsensical for the homestead exemption to be more restrictive for
manufactured housing than it is for all other housing” and, consequently, that
“the statute as a whole supports an interpretation that ownership and
occupancy are required to claim a homestead exemption in all housing.” Id.
Because the plaintiff’s husband is not an owner of the property, the court
concluded that he is not entitled to a homestead exemption under RSA 480:1,
and the plaintiff could neither assert a homestead exemption on behalf of her
husband, nor claim that he possesses a lien that secures his interest in the
property. Id. at *5.

The plaintiff appealed the bankruptcy court’s decision to the federal
district court. The district court determined that “[t]he New Hampshire
Supreme Court has yet to address the nuanced issues presented in this case”
and “resolution of those issues implicates significant public policy matters for
the State of New Hampshire.” Brady v. Sumski, 647 B.R. 835, 843 (D.N.H.
2022). Therefore, the district court certified these questions to us, which we
accepted on February 9, 2023. See Sup. Ct. R. 34.

II. Analysis

Responding to the certified questions requires us to interpret the
homestead exemption statute set forth in RSA chapter 480 (2013 & Supp.
2022). The interpretation of a statute presents a question of law that we review
de novo. See State v. Pinault, 168 N.H. 28, 31 (2015). In matters of statutory
interpretation, we interpret the words of the statute considered as a whole. See
id. We first look to the language of the statute itself, and, if possible, construe

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that language according to its plain and ordinary meaning. Id. Furthermore,
we interpret the statute as written and will not consider what the legislature
might have said or add language that the legislature did not see fit to include.
Id. Finally, we interpret statutes in the context of the overall statutory scheme
and not in isolation. Id. “Statutory homestead protections are universally held
to be liberally construed to achieve their public policy objective.” Maroun v.
Deutsche Bank Nat’l Trust Co., 167 N.H. 220, 225 (2014).

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.

RSA 480:1 (emphasis added). “The homestead right is generally exempt from
attachment or encumbrance.” Maroun, 167 N.H. at 225 (quotation omitted).
“The purpose of the homestead exemption is to secure to debtors and their
families the shelter of the homestead roof.” Id. (quotation omitted).

The first certified question asks us to determine whether, pursuant to
RSA 480:1, a non-owning, occupying spouse has a “present, vested, non-
contingent homestead right of his or her own, which is currently valued at
$120,000.” The plaintiff and, as the intervenor, the State, argue that pursuant
to RSA 480:1, a person has a present, non-contingent homestead right in the
homestead property owned by the person’s spouse, even if that person is not
on the title to the property, so long as the person occupies the property. The
defendant and the amicus curiae, Michael Askenaizer, Trustee for the
Bankruptcy Estates of William Linane and Debora Linane, argue that a person
must have an ownership interest in the homestead in order to establish a
homestead right under RSA 480:1.

We begin our analysis by considering the first sentence of RSA 480:1,
which has existed in substance, subject to dollar amount modifications, since
1851. See Laws 1851, 1089:2; C.S. 196:2 (1854). Although the first sentence
includes the word “homestead” twice, we agree with both the State and the
amicus that this repetition does not indicate redundancy. See RSA 480:1.
Rather, the statute uses the word “homestead” in the first instance as a
descriptor of a class of real property, and it uses the same word in the second
instance as a reference to the right that the statute creates. “[O]ccupancy is
essential to the existence of the homestead right.” Stewart v. Bader, 154 N.H.
75, 88 (2006) (quotation omitted). Our prior case law makes clear that, in
addition to occupancy, ownership is necessary in order to be entitled to the

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homestead right. See Beland v. Goss, 68 N.H. 257, 258 (1895) (“Ownership
and occupancy being essential for the assertion of the right, it was lost upon
the sale and removal.”).

The parties dispute whether a non-owning, occupying person, whose
spouse owns the property, has a homestead right under RSA 480:1 that is
separate and distinct from that of the owning spouse. The plaintiff argues that
the phrase “his or her interest therein” means that a “spouse who resides and
cohabits with his or her spouse has an ‘interest’ in the home which gives each
spouse a homestead interest even where one spouse does not have a title
ownership interest.” On the other hand, the terms “of his or her homestead, or
of his or her interest therein” are possessory and require that the homestead
belong to him or her.

The use of the term “interest therein” first appeared in the 1867 version
of the homestead statute, although a similar construction of the phrase
appears as early as 1851. See Laws 1867, 124:1 (“The wife, widow, and
children of every debtor who is owner of a homestead or of any interest therein
occupied by himself and his family, shall be entitled to so much of said
homestead or interest as shall not exceed in value five hundred dollars . . . .”
(emphasis added)); Laws 1851, 1089:2; C.S. 196:2 (1854). In the nineteenth
century, our case law used the phrase “his interest therein” to indicate that an
individual retains some amount of ownership over an item or parcel of land.
See, e.g., Fife v. Ford, 67 N.H. 539, 539 (1893); Holbrook v. Bowman, 62 N.H.
313, 321 (1882); White v. Brooks, 43 N.H. 402, 407-08 (1861); George v. Green, 13 N.H. 521, 524 (1843); Bellows v. Dewey, 9 N.H. 278, 281 (1838).

Specifically in the context of a person exercising the homestead right, we
have considered that a person’s “interest therein” is possessory and refers to an
ownership interest in the homestead property. For example, in Libbey v.
Davis, we held that, prior to receiving title, the plaintiffs could claim a
homestead right in their property after they purchased the property by taking a
bond for a deed. Libbey, 68 N.H. 355, 355-56 (1895) (“A right to receive a
conveyance by virtue of a contract is an interest in land upon which creditors
may levy, and which may be subject to a homestead right.”). We have also held
that the equitable right to redemption constitutes an interest in which the
statute provides a homestead right. Savings Bank of Walpole v. French, 105
N.H. 407, 409 (1964); Fellows v. Dow, 58 N.H. 21, 22-23 (1876). Here, our
longstanding interpretation of the statute without any subsequent amendment
by the legislature is evidence that our interpretation conforms to the legislative
intent. See Ichiban Japanese Steakhouse v. Rocheleau, 167 N.H. 138, 143
(2014) (“Significantly, it has been sixteen years since we decided Galloway, and,
in that time, the legislature has not amended RSA 275:53, III. Thus, we
assume that our holding conforms to legislative intent.”); cf. New Hampshire
Retail Grocers Ass’n v. State Tax Comm’n, 113 N.H. 511, 514 (1973) (“It is a

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well[-]established principle of statutory construction that a longstanding
practical and plausible interpretation given a statute of doubtful meaning by
those responsible for its implementation without any interference by the
legislature is evidence that such a construction conforms to the legislative
intent.”).

Further, we have characterized the homestead right itself, not as an
“interest,” but as a “personal privilege.” See Currier v. Sutherland, 54 N.H.
475, 486 (1874) (“The exemption of a homestead from attachment or levy is a
personal privilege which the law gives to the owner, in order that he or his
family may occupy it.”). As defined by statute, the nature of that privilege is an
exemption from attachment, levy, execution, and encumbrances subject to
certain exceptions, see RSA 480:4 (Supp. 2022), for a defined duration, see
RSA 480:3-a (2013). Accordingly, we conclude that the phrase “his or her
interest therein” is possessory and requires an ownership interest in the
homestead property.

The history of the homestead statute further supports our conclusion
that RSA 480:1 does not provide a non-owning spouse with a vested, non-
contingent interest in the homestead right that is separate and apart from that
of the owning spouse. Prior versions of the homestead statute that addressed
the distribution of a married person’s property valued the homestead parcel at
the applicable dollar amount and distributed that sum jointly to the two
spouses. For example, the 1851 and 1854 versions permitted the sale of the
homestead property when, “in the opinion of the appraisers,” the homestead
property “cannot be divided without injury and inconvenience.” Laws 1851,
1089:4; C.S. 196:4 (1854). In such a situation, the owner was entitled to, “out
of the proceeds of such sale” and

with the written consent of his wife, the sum of five hundred dollars;
provided, however, if the wife of such debtor shall not consent to such
payment, the sheriff or officer having such proceeds shall deposit said
sum of five hundred dollars in some savings institution in this State, to
the credit of said debtor and wife; and the same may be withdrawn
therefrom only by the joint order of the husband and wife . . . .
C.S. 196:4 (1854) (italics in original); see also Laws 1851, 1089:4.
In other words, the statute provided that the owner and his wife would
jointly receive the sum of the value of the homestead property — at the time
worth $500. Similar provisions existed in subsequent versions of the
homestead statute. See, e.g., Laws 1867, 124:10-17; Laws 1878, 138:18-19.
Notably, the Laws of 1891, 1901, and 1925, all of which adopted virtually the
same language creating the homestead right that exists today in RSA 480:1,
including “of his interest therein,” nevertheless distributed the value of the
homestead parcel jointly to the owner and the non-owning spouse following a
sheriff’s sale. Laws 1891, 138:1, 11; Laws 1901, 138:1, 11; Laws 1925, 215:1,

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11. This statutory history supports our interpretation that the homestead right
of an owner and his or her non-owning spouse is valued at the amount set
forth in the homestead statute — currently $120,000. See RSA 480:1.

The plaintiff and the State argue that the phrase “his or her interest
therein” as it appears in RSA 480:1 does not mandate ownership and instead,
as the State explains, “refers to the interest a non-owning spouse has in the
homestead estate/the homestead right held by the owning spouse.” For
support, the plaintiff and the State point to RSA 529:20-a (2021), which
addresses the process by which creditors seeking to execute on a homestead
property must give notice. RSA 529:20-a provides 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 HOMESTEAD
EXEMPTION PURSUANT TO RSA 480:1. THIS EXEMPTS $120,000 FOR
A SINGLE PERSON AND $240,000 FOR A MARRIED COUPLE.
The plaintiff contends that this provision “suggests that both spouses,
regardless of ownership, have a homestead exemption.” We disagree. RSA
529:20-a neither creates nor defines the homestead right, but, rather, sets
forth the notice requirements that must be provided to debtors and occupants
of the home to apprise them of the fact that they might be entitled to a
homestead exemption. The use of “may” as it appears in “you and/or your
spouse may be entitled to a homestead exemption” implies that the homestead
right is not automatic; each spouse may have a homestead right, but, subject
to the definition of the homestead right set forth in RSA 480:1, only if the
spouse is an owner. See RSA 529:20-a (emphasis added; capitalization
omitted). Similarly, the reference to $240,000 does not mean that every
married couple is entitled to a homestead right valued at $240,000, but,
rather, informs the recipient that certain married couples may be entitled to
$240,000 if both spouses own the property. See id.

The plaintiff and the State also point to our decisions in Sabato v.
Federal National Mortgage Association, 172 N.H. 128 (2019), and Maroun to
support their interpretation. Both of these cases concern RSA 480:5-a (2013).
RSA 480:5-a provides that “[n]o deed shall convey or encumber the homestead
right, except a mortgage made at the time of purchase to secure payment of the
purchase money, unless it is executed by the owner and wife or husband, if
any, with the formalities required for the conveyance of land.” (Emphasis
added.) In Sabato, the plaintiff’s wife owned the subject property. Sabato, 172

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N.H. at 129. A year after purchasing the property, the wife refinanced the
original mortgage and executed a new mortgage (hereinafter, first mortgage),
which the plaintiff did not sign. Id. Several years later, the wife executed a
second mortgage with the plaintiff’s signature. Id. Subsequently, the
mortgagee for the second mortgage foreclosed on its mortgage, purchased the
property, and then sold its interest in the property to the defendant, the
mortgagee for the first mortgage. Id. at 129-30. The defendant then sought to
evict the plaintiff from the property, at which point the plaintiff asserted a
homestead right. Id. at 130. The issue in Sabato was whether the defendant
took title to the property subject to plaintiff’s homestead exemption. Id. at 130-
31. We concluded that, although the plaintiff waived his homestead right as to
the second mortgage, “because the plaintiff did not sign the first mortgage,
which was not made at the time of purchase, that mortgage did not comply
with RSA 480:5-a, and, therefore, did not convey or encumber his homestead
interest in the property.” Id. at 132. Accordingly, we held that the plaintiff
retained a homestead interest in the property. Id. at 134.

Sabato involved the waiver of the homestead right and stands for the fact
that, pursuant to RSA 480:5-a, the homestead right cannot be waived without
the consent of the non-owning spouse. See id. at 132; RSA 480:5-a. This
conclusion makes sense, given that “the homestead laws were primarily
enacted for the protection of the non-owner spouse and dependent children.”
Maroun, 167 N.H. at 229. Indeed, we said as much in Sabato when we
explained that “‘[t]he statutory protection of the homestead right’ applies not
only to the homeowner, but ‘also extends to spouses who occupy the
homestead but are not title owners of the property.’” Sabato, 172 N.H. at 132
(quoting Maroun, 167 N.H. at 226). Such statutory protections that extend to
a non-owning spouse include, for example, the protections set forth in RSA
480:3-a (2013), see Maroun, 167 N.H. at 226, and the right to waiver set forth
in RSA 480:5-a. Our resolution of the issues implicated by a waiver of the
homestead right under RSA 480:5-a, however, is not dispositive as to whether
a non-owning spouse possesses a homestead right that is separate and distinct
from that of the owning spouse.1 For similar reasons, Maroun is also not
instructive in resolving this issue. See Maroun, 167 N.H. at 225-30
(concluding that the husband no longer had a homestead right he could assert
against future creditors after he executed an affidavit in which he explained
that he intended to release his homestead rights when he conveyed the deed to
his wife).

The plaintiff looks to RSA 480:3-a to support her argument that the
homestead right that RSA 480:1 grants is “clarified to be preserved in the non-

1 Although language in Sabato v. Federal National Mortgage Association, 172 N.H. 128, 132-33,

137 (2019), may appear to suggest that the plaintiff possessed a homestead right valued at
$120,000, the issue in Sabato was whether the plaintiff waived the homestead right — not
whether the plaintiff possessed a homestead right independent of his spouse, see id. at 130-32.

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owner spouse pursuant to [RSA 480:3-a] should the owner spouse predecease
[the non-owning spouse] prior to their conveying the homestead.” RSA 480:3-a
provides that “[t]he 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.” Consequently, RSA
480:3-a “merely establishes the duration of the homestead right; it does not
define the nature of the right itself,” Boissonnault v. Savage, 137 N.H. 229, 232
(1993), in a similar way that RSA 529:20-a establishes notice requirements but
does not define the nature of the homestead right itself.

Finally, the plaintiff and the State attempt to distinguish the second
sentence of RSA 480:1, which establishes a homestead right in manufactured
homes, from the first sentence of RSA 480:1, which establishes a homestead
right in traditional “brick and stick” homes. Specifically, the plaintiff and the
State, in response to the bankruptcy court’s opinion, assert that the phrase
“owned and occupied,” as it appears in the second sentence, does not extend to
the first sentence and is limited to manufactured homes. See In re Brady,
2022 WL 1913497, at *4. However, we have concluded that the first sentence
of RSA 480:1 plainly requires ownership in order to establish a homestead
right. We reject the notion that the second sentence of RSA 480:1 undermines
our conclusion.

III. Conclusion

Accordingly, for the foregoing reasons, we answer the first certified
question in the negative and hold that ownership is required in order to
establish a homestead right pursuant to RSA 480:1. Given that the answer to
the district court’s second question is not “determinative of the cause then
pending in the certifying court” because the residence at issue is not a
manufactured home, we exercise our discretion under Supreme Court Rule 34
and decline to answer the second question. Although we are bound to apply
the statute as written, the legislature is, of course, free to amend the statutory
scheme should it disagree with the conclusion that we reach today. See
Eldertrust of Fla. v. Town of Epsom, 154 N.H. 693, 707 (2007).

Remanded.

MACDONALD, C.J., and HICKS, BASSETT, and HANTZ MARCONI, JJ.,
concurred.

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