Daily Development for
Tuesday, August 29, 2000
By: Patrick A. Randolph,
Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu
HOMESTEAD EXEMPTION: Minnesota
homestead exemption statute does not apply to land that is not contiguous to
the land on which the debtor's residence is located.
Michels v. Kozitza, 610
N.W.2d 368 (Minn. Ct. App. 2000).
In 1999, the sheriff
levied and attached against 20 acres of property owned by debtor in
satisfaction of a judgment owed to creditors. Although 20acre parcel consisted
of smaller noncontiguous parcels, entire 20 acres were classified as homestead
for the purpose of property taxation.
Debtor moved for an
injunction to stop the sale of the entire 20 acre parcel, asserting that the 20
acres was homestead property, and thus exempt under Minnesota constitution, as
codified under Minn. Stat. =A7 510.01. The court held that noncontiguous
parcels did not qualify for the exemption, relying on the plain language of the
statute, which states that the exemption applies to the debtor's dwelling
"together with the land upon which it is situated." Acknowledging
that the plain language of the statute is not well suited to serve farmers in
rural areas, the court concluded its discussion of this issue by stating that
the Debtor's "commonsense argument is suited for presentation to the
legislature, but we cannot change the statute by judicial fiat."
The debtor had attempted
to argue that other definitions of "homestead" in Minnesota's
property tax laws permitted recognition of non contiguous property, and that
there was as a consequence a useful public definition that the court could
apply. The court was clearly sympathetic with the argument, but felt
constrained to deny the application of the other statute because of the clear
language of the one before it.
Comment 1: The court cited
a 1907 case in which two parcels were "contiguous" only because they
touched at one corner. The court in that case concluded that, even though the
owner's home and all related buildings were located on only one of the parcels,
both were part of the homestead. But the court concluded that the obvious
policy involved in that decision to protect the farmer's livelihood as part of
the homestead cannot extend to noncontiguous property under the legislative language
now in effect.
Comment 2: The editor's
first impulse was to disagree with the case. Clearly court have some discretion
to read broadly the language of century old statutes to comport with modern
conditions. But to conclude that noncontiguous farm property, since it can be
farmed as a single unit, ought to constitute a "homestead," either
gets the court into an impossible task of interpreting what is and is not
"farming as a single unit" or, in the alternative, makes it possible
for a landowner in Minnesota to claim agricultural property all over the state
as a homestead just because that landowner lives on and farms one parcel. Neither
approach appears very appetizing, and borrowing a state tax policy designed for
entirely distinct purposes to solve the problem also seems to be stretching.
Comment 3: In sum, the
court's right it's a legislative issue. Compared to many other jurisdictions,
farmers in Minnesota already get a huge break on the homestead computation. Until
recently, the Minnesota homestead exemption was unlimited in value. A few years
ago the statute was amended. Currently, the homestead exemption is limited to
$200,000, unless its primary use is>agricultural, then it is limited to $500,000.
See 510.02.
Readers are urged to respond, comment, and argue with the daily
development or the editor's comments about it.
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