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Fixtures and the homestead exemption: Grucza

Posted by: Peter Scribner
November 17, 2009
Topic: Recent Cases in the bankruptcy Court Western District of New York

In re Grucza #09-11140 (Decision Sept. 9, 2009, Judge Kaplan): Is a pile of cinderblocks similar to storm windows stored in the garage or more like a not-yet-installed hot tub? Or perhaps like George Washington’s statute?  Or Cleopatra’s Needle? Judge Kaplan wrestled with the issue of when stuff becomes a fixture of real estate and, therefore, eligible for the homestead exemption.  Here the debtors’ back yard was falling off a cliff, and they bought a load of cinderblocks in order to build a retaining wall.  The petition was filed before the wall went up, and the trustee wanted to sell the block – for $7,000 – as unexempt personal property.  The judge ruled the blocks were fixtures, at least in this particular case.

Judge Kaplan reviewed colorful pre-Civil War cases which said that fixtures don’t have to be cemented to the ground; if they are heavy enough, gravity constitutes sufficient attachment (such as General Washington’s statute and the ancient Egyptian obelisk erected in Central Park and (mis)named after the last Pharaoh of the Ptolemaic dynasty.  So if the debtors here had piled their blocks one onto the other to hold back erosion, it would have been a fixture.  And things that are removed temporarily from a building, such as storm windows stored in the garage during the summer, do not lose their fixture status while unattached.  So, the Court reasoned, material intended to become fixtures, such as shingles to fix the roof, lumber to repair a wall, and the new furnace waiting to replace the clunker in the basement, would be considered fixtures as they sit on site, waiting installation.  That is, unless they are intended for extravagant improvement or aesthetic upgrade. Like a new hot tub.  Or evidence of fraudulent intent. In any case, this is a clear victory for procrastinating do-it-yourselfers.