Bailey

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Sharp – Cartwright Wedding

Mary Ann (Bailey) and William Sharp — son of Thomas Sharp and Elizabeth Cartwright

George and Ann (Matthews) Cartwright of Misson, Nottinghamshire, and Thomas and Anne (Stennett) Sharp of Misson, Nottinghamshire, announce the marriage of their daughter Elizabeth Cartwright to Thomas Sharp on 29 December 1823 at the parish church of St John the Baptist, Misson. The witnesses were Sarah Hunt and John Parkin.

The Cartwrights and the Sharps were both Misson families. The Cartwrights had been there for generations, Elizabeth’s grandfather John Cartwright (1730–1814) and grandmother Mary Amcoats (1742–1790) had married in Misson in 1761. Her father George Cartwright was baptized there on 3 February 1774. Her mother Ann Matthews was christened 14 September 1783 in Everton, Nottinghamshire, a village approximately eight miles southeast of Misson. Ann was the daughter of Edmund Matthews of Everton and his wife Hannah Broads, a widow who had previously been married to William Wilson of Everton. Edmund and Hannah had married in Everton on 21 May 1782. George Cartwright was nine years older than Ann Matthews. Their marriage banns were published on 23 January 1803 and they married on 1 February 1803, Elizabeth was born and baptized ten months later, on 20 December 1803.

Edmund Matthews’s will, made 27 November 1810 and proved 25 February 1820, names “Ann the wife of George Cartwright of Misson” as one of his two daughters and heirs. The estate included two tenements and dwellinghouses at Everton and a close called the Clay Field Close of approximately three acres. The will also left twenty pounds and a chest of drawers to Mary Brougham, Hannah’s daughter from her first marriage to William Wilson, and Ann Matthews’s half-sister. Under the will, Hannah received the life interest in the property. Only after Hannah’s death in September 1835 would Ann and her sister Elizabeth Matthews inherit their shares. Annie Thompson records that George Beighton, whom Ann married in June 1823, gambled away her money at the Doncaster races. The timing is suggestive: Ann’s inheritance from the Matthews Everton estate would have arrived in 1835, twelve years after the Beighton marriage. If Beighton dissipated that inheritance at Doncaster, Elizabeth Cartwright Sharp, then 31 years old, would have witnessed it directly. The will is the source of the “wealth and refinement” tradition in Annie Thompson’s account, the Matthews family owned real property in Everton, modest but substantial for a labouring community.

Will of Edmund Matthews of Everton, Nottinghamshire, made 27 November 1810, proved 25 February 1820. Names “Ann the wife of George Cartwright of Misson” as heir.

The Sharps had traveled a longer road to Misson. Thomas Sharp’s father, Thomas Sharp Sr., was born on 18 September 1768 in Armthorpe, Yorkshire, a village three miles east of Doncaster. Thomas Sr was the son of John Edward Sharp (1730–1806) and Frances Fretwell (1733–1809). He married Anne Stennett on 3 November 1788 at Ewerby, Lincolnshire, approximately thirty-five miles southeast of Armthorpe. Anne had been born there on 30 July 1769, the daughter of John Barber Stennett and Lettice Housley. The family’s first children were born in Lincolnshire: Elizabeth at Ewerby on 9 July 1790, and Ann at Ewerby on 13 May 1792. By November 1794 they had moved to Stamford, in southern Lincolnshire, where a son Thomas was baptized on 1 November 1794, and then back to Ewerby, where Mary was baptized on 23 December 1794.

By approximately 1797 the family had returned northward toward Yorkshire. The Cantley parish register, held at Doncaster Archives, reference P12-1-A3, confirms Thomas Sharp Sr. and Anne in Cantley, Yorkshire by October 1799, when their daughter Mary was baptized there on 20 October 1799. Cantley lies five miles east of Doncaster, neighboring Armthorpe where Thomas Sharp Sr. had been born. George Sharp was born in Cantley on 9 May 1804 and baptized there on 22 July 1804. A Cantley christening of 5 March 1797 is almost certainly this Thomas. The family was in Cantley throughout this period, and the dates and geography align. By 1810 the family had settled in Misson, approximately ten miles south of Cantley, where Ann Sharp was baptized on 11 March 1810 and James Sharp on 7 March 1813.

Thomas Sharp Sr. died in Misson on 23 August 1847, age 78, found lying in the street by a neighbor named Elizabeth Orton. She thought he was having a fit, obtained the assistance of William Mason and John Hobson, but he died immediately. The inquest verdict was visitation of God. The inquest notice appeared in the Lincoln Rutland and Stamford Mercury on 3 September 1847.

Inquest notice for Thomas Sharpe, Lincoln Rutland and Stamford Mercury, 3 September 1847, p. 3
Death certificate for Thomas Sharp Sr., died 23 August 1847, Misson. GRO DYB565322.

His wife Anne died in Misson on 10 December 1849, age approximately 79, from a fall, and was buried three days later. Their death notices appeared in the same Lincolnshire newspaper — the family had maintained connections across sixty years and three counties.

Death certificate for Ann Sharp (née Stennett), widow of Thomas Sharp Sr., died 10 December 1849, Misson. GRO DYB565321.

Thomas Sharp, born approximately 1797, probably in Cantley, was a Labourer, as recorded on his children’s birth certificates and his own death certificate. The death certificate gives his age at death as 43 years, the burial record as 45. This two-year spread likely reflects the imprecision natural to a family where neither parent could write and where exact ages were not always known. He died of Consumption on 13 July 1841 at Misson, just weeks after the June 1841 Census recorded him in the household. His sister Ann Thickett, wife of Thomas Thickett of Blyth, Yorkshire, four miles north of Misson, was present at his death and registered it. He was buried at Misson on 15 July 1841.

Death certificate for Thomas Sharp, died 13 July 1841, Misson, of Consumption. GRO DYB541596.

Annie Thompson, writing from family tradition in 1957, describes Elizabeth as having grown up “a tall young lady, reared in an atmosphere of wealth and refinement.” Her father George Cartwright was buried at Misson on 27 February 1820, age 46, when Elizabeth was sixteen years old. Three years later, on 4 June 1823, her mother Ann remarried a widower named George Beighton at the Misson parish church, by banns, witnessed by John Robinson and John Cartwright, confirmed in the Bishop’s Transcripts in the Nottinghamshire Archives. Six months after her mother’s remarriage, Elizabeth married Thomas Sharp.

Elizabeth could not write. On both her daughter Ann’s birth certificate in 1838 and her son James’s birth certificate in 1840, she signed with an X mark.

Thomas and Elizabeth had eight children, all baptized in the Misson parish church and recorded in the Bishop’s Transcripts at the Nottinghamshire Archives. The dates below give the christening date from the Bishop’s Transcripts, the birth dates held in family tradition are noted separately where they differ, representing the difference between the event remembered by the family and the event recorded by the church.

George Sharp, christened 11 November 1824, died 15 November 1824, four days old.

Mary Sharp, baptized 27 November 1825, died in infancy. No death record has been located.

William Sharp, christened 7 January 1827, family tradition gives his birth as 10 December 1826. He would go on to help found Plain City, Utah. See Sharp-Bailey Wedding and the William Sharp Personal History.

George Sharp, baptized 13 May 1829, died 23 December 1833, age four years and seven months, buried at Misson.

Isabella Sharp, christened 15 January 1832, family tradition gives her birth as 22 December 1831. She would emigrate with William to Utah and settle in Mill Creek, Salt Lake County. See Sons of Joseph and Isabella Carlisle.

Elizabeth Sharp, baptized 11 June 1834, she remained in St. Louis and married John Quayle. See John and Elizabeth Quayle.

Ann Sharp, born 8 July 1838, baptized 29 July 1838, died 2 September 1838, eight weeks old, of convulsions. Elizabeth registered her birth with an X mark on 10 July 1838. A neighbor, Mary Laister, registered her death, Elizabeth was not the informant.

Birth certificate for Ann Sharpe, born 8 July 1838, Misson. Elizabeth signed with her X mark.
Death record for Ann Sharpe, died 2 September 1838, Misson, age 8 weeks, of Convulsions.

James Sharp, born 7 January 1840, confirmed by GRO birth certificate (BXCC548222), with Elizabeth signing as informant with her X mark on 22 January 1840. See James Sharp.

Birth certificate for James Sharp, born 7 January 1840, Misson. GRO BXCC548222. Elizabeth signed with her X mark.

By the time Thomas died in July 1841, the family had buried four children. George at four days, Mary in infancy, the second George at four and a half years, and Ann at eight weeks. The 1841 Census, taken just weeks before Thomas’s death, records the household: Thomas (40), Elizabeth (37), William (14), Isabella (9), Elizabeth (5), and James (1). Thomas Sharp Sr. was living just a few households away in the same village.

Milo Riley Sharp — grandson of Thomas Sharp and Elizabeth Cartwright

Conversion and Emigration

William Sharp was the first family member baptized into the LDS Church, or formally The Church of Jesus Christ of Latter-day Saints, on 20 June 1848. His mother Elizabeth followed on 11 August 1849, and Isabella on 16 September 1849. The Misson History Hub records that “In 1848 LDS Missionaries visited the village and several conversions apparently took place” and notes that the converted “travelled to the USA, crossed the continent and made new lives and families there.” Among the elders who lodged at Elizabeth’s home was Elder George Emery.

Elizabeth decided to emigrate with her family to Utah. Annie Thompson records the family’s resistance: “her folks tried hard to discourage her from taking the hazardous trip; they told her if you leave for the West, ‘A red Indian will eat ye.’” The ticket cost twenty-five pounds sterling. On 2 October 1850 Elizabeth (age 45), William (age 24), Isabella (age 19), Elizabeth (age 26), and James (age 10) sailed from Liverpool on the ship James Pennell, under the direction of Church leader Christopher Layton. There were 254 Latter-day Saint emigrants on board, the Fiftieth Company.

The voyage nearly ended in disaster. As the James Pennell approached the mouth of the Mississippi River, a terrible storm drove the ship back into the Gulf of Mexico, breaking the main and mizzen masts and washing part of the rigging overboard. The crippled vessel drifted for several days with provisions nearly exhausted before a pilot boat found it and guided it to the river mouth on 20 November. The Millennial Star reported simply that the James Pennell “had lost her main and mizen masts, which is all the information given of her.” The ship arrived in New Orleans on 22 November 1850, towed alongside the Joseph Badger, which had sailed from Liverpool two weeks after the Pennell. The full dramatic account is preserved in the William Sharp Personal History. The voyage is documented at Saints by Sea (BYU), where the Sharp family passengers are listed.

From New Orleans the family traveled by river to St. Louis, Missouri. Shortly after arriving, Elizabeth fell ill. She died on 17 February 1851 in St. Louis, never reaching Utah. She was 47 years old. Her burial place in St. Louis has not been located. Annie Thompson gives her death as “probably late in the year 1850.” The 17 February 1851 date comes from other sources and is consistent with a November 1850 arrival and a short illness through that winter. Her children were left on their own in an unfamiliar city. Elizabeth Sharp married John Quayle and remained in St. Louis. James, aged eleven, tried to arrange passage west but the company he was to travel with turned back; he stayed in St. Louis and eventually became a partner in a meat packing business. William married the widowed Mary Ann Bailey Padley in St. Louis, and in 1853 he and Isabella, now married to Joseph Carlisle, traveled west in the Moses Clawson Company, arriving in Salt Lake Valley between 15 and 20 September 1853.

Temple Work

In December 1881 Isabella Sharp Carlisle traveled from Mill Creek, Salt Lake County, to the St. George Utah Temple, at that time the only operating temple in the world, to perform proxy ordinances for her deceased daughter Elizabeth Ann Carlisle. While there, between 20 and 23 December 1881, ordinances were completed for her father Thomas Sharp and her paternal grandfather Thomas Sharp Sr., and the sealings of both men to their wives. Ordinances were also completed for her maternal grandmother Ann Matthews Cartwright. These ordinances were completed for six people across four generations in four days.

Thomas Sharp’s sealing to Elizabeth Cartwright was completed 30 April 1920.

Sources

Primary documents: Thomas Sharp death certificate (GRO DYB541596, 13 July 1841); Thomas Sharp burial, Bishop’s Transcripts, Nottinghamshire Archives (15 July 1841); Elizabeth Cartwright baptism, Bishop’s Transcripts, Nottinghamshire Archives, FHL film #503793 (20 December 1803); Thomas Sharp and Elizabeth Cartwright marriage, Bishop’s Transcripts, Nottinghamshire Archives, page 14 (29 December 1823); Ann Sharp birth certificate (GRO, 8 July 1838); Ann Sharp death record (GRO, 2 September 1838); James Sharp birth certificate (GRO BXCC548222, 7 January 1840); 1841 Census of England and Wales, Misson, household 1612123; children’s christenings confirmed in Bishop’s Transcripts, Nottinghamshire Archives, pages 34 (George 1824), 37 (Mary 1825), 42 (William 1827), 50 (second George 1829), 60 (Isabella 1832), 69 (Elizabeth 1834); second George Sharp burial, Bishop’s Transcripts, Nottinghamshire Archives, page 32 (23 December 1833); Thomas Sharp Sr. christening, Bishop’s Transcripts, Borthwick Institute for Archives (18 September 1768, Armthorpe); Thomas Sharp Sr. death certificate (GRO DYB565322, 23 August 1847); Ann Sharp Sr. death certificate (GRO DYB565321, 10 December 1849); George Cartwright baptism and burial, Bishop’s Transcripts, Nottinghamshire Archives; Ann Matthews christening, Bishop’s Transcripts, Nottinghamshire Archives (14 September 1783); Will of Edmund Matthews of Everton, proved 25 February 1820; Death Duty Register IR27/174, The National Archives; Ann Matthews and George Cartwright marriage, Bishop’s Transcripts, Nottinghamshire Archives (1 February 1803); Ann Matthews and George Beighton marriage, Bishop’s Transcripts, Nottinghamshire Archives, page 13 (4 June 1823); Thomas Sharp Sr. christening (Armthorpe) and Thomas Sharp Sr. and Anne Stennett marriage (Ewerby, Lincolnshire), Lincolnshire Parish Registers.

Secondary sources: Annie Thompson, Life History of Elizabeth Cartwright Sharp, 27 August 1957; William Sharp Personal History; Kent Nielsen (1931–2020), a descendant of Joseph and Isabella Sharp Carlisle and thus of Thomas Sharp and Elizabeth Cartwright, contributed extensive primary source research to the FamilySearch Collaborate record for this family between 2011 and 2014. His careful documentation of the Cantley, Yorkshire connection, the GRO certificates, and the census evidence forms the foundation of the genealogical record presented here. FamilySearch Collaborate notes on Thomas Sharp (KWJ5-679) and Thomas Sharp Sr. (KP7V-4HL), 2011–2014; Saints by Sea, BYU, James Pennell voyage 2 October–23 November 1850; Misson History Hub, Written History.

For more on the Sharp family and Plain City’s founding generation, see:

Sharp-Bailey Wedding — William Sharp and Mary Ann Bailey
Sons of Joseph and Isabella Carlisle — Isabella Sharp and Joseph Carlisle
John and Elizabeth Quayle — Elizabeth Sharp and John Quayle
James Sharp — James Sharp in St. Louis
Early Settlers in Lehi, Utah, before Plain City, Utah — William Sharp (no. 68) on the Lehi consecration list
History of Plain City — the community William Sharp helped found
Sharp Family History Outreach — broader Sharp family connections

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In re McGuire, Part II

Decision: In re Richard Michael McGuire and Dolores Sue McGuire, Case No. 12-41681-JDP (Bankr. D. Idaho, 8 Sep. 2014)
Judge: Honorable Jim D. Pappas, United States Bankruptcy Judge
Counsel for Debtors: Paul Ross, Idaho Bankruptcy Law, Paul, Idaho
Trustee: Gary L. Rainsdon, Twin Falls, Idaho
Trustee’s Counsel: Daniel C. Green and Brett R. Cahoon, Racine, Olson, Nye, Budge & Bailey, Chartered, Pocatello, Idaho

Background

Richard and Dolores McGuire filed a Chapter 7 petition on 12 December 2012. The Trustee thereafter liquidated certain non-exempt assets, generating approximately $13,950. With funds on hand, the Trustee filed a notice of assets on 22 January 2013, advising creditors they had 90 days to file proofs of claim or receive nothing. No creditors filed timely claims.

On 3 June 2013 — 132 days after the Trustee’s notice — Utah Central Credit Union (“UCCU”) filed a tardy proof of claim. On 18 June 2013, the Debtors objected to the claim on several grounds, including that it was untimely. Although UCCU failed to respond to the Debtors’ objection at all, the Trustee filed a response on 25 June 2013 defending the claim and arguing that the Debtors’ own schedules established prima facie that the debt was owed. That same day the Trustee sought to employ Racine Olson as counsel.

Debtors’ counsel promptly raised a standing concern by email, questioning whether the Trustee had legal authority to defend a single creditor’s proof of claim. Trustee’s counsel had already begun researching the standing question before that email arrived — a fact reflected in the billing records — but pressed forward regardless.

The Debtors also discovered that UCCU had sold their collateral postpetition, on 27 December 2012, in apparent violation of the automatic stay. Rather than pursue a contempt action against UCCU for the stay violation, the Trustee entered into a stipulation with UCCU under which UCCU would pay the Trustee $10,100 (the proceeds of the postpetition sale) in exchange for an allowed unsecured claim of $44,265.32. The Trustee filed a motion to approve the compromise under Rule 9019.

At an August 2013 hearing, the Court questioned Trustee’s standing and ordered briefing. Before filing that brief, however, Trustee’s counsel entered into the stipulation with UCCU. At an October 2013 hearing, the Court ruled that the Trustee lacked standing to oppose the Debtors’ objection to UCCU’s claim, struck the Trustee’s response, sustained the Debtors’ objection, and disallowed UCCU’s claim. The Court also denied the Trustee’s motion for a Rule 2004 examination of the Debtors, finding no valid grounds for it. The Court indicated the proposed compromise appeared to be a frivolous endeavor in light of the disallowance but invited further briefing if additional grounds existed.

Trustee’s counsel filed a memorandum in support of the compromise that contained no reference to the law governing approval of compromises and did not provide the additional factual or legal basis the Court had requested. The Court denied the compromise. A second creditor, Bank of America, filed a claim in October 2013; the Debtors objected; Bank of America never responded; and the Court disallowed that claim as well. With no allowed creditor claims remaining, Trustee’s counsel filed an Application for Compensation seeking $5,430.00 from the estate funds generated by liquidation of the Debtors’ assets.

The Debtors objected to the Application and simultaneously requested an award of attorneys’ fees and costs against the Trustee and Trustee’s counsel. A hearing was held on 12 May 2014. On 23 May 2014, Trustee’s counsel withdrew the Application. The Court then ordered briefing on the Debtors’ fee request and, after receiving the parties’ submissions, issued its Memorandum of Decision on 8 September 2014.

The Debtors’ Request for Fees

The Debtors sought attorneys’ fees and costs they incurred in: (1) supplementing their objection to UCCU’s proof of claim; (2) opposing the Trustee’s motion for a Rule 2004 examination; (3) objecting to the Trustee’s motion to approve the stipulation; (4) responding to the Trustee’s memorandum in support of the stipulation; and (5) objecting to the Application for Compensation. They grounded their request in § 105(a) of the Bankruptcy Code and Federal Rule of Bankruptcy Procedure 9011.

Their core argument was that the Trustee and Trustee’s counsel had acted without statutory authority throughout the case, defending a single creditor’s claim to the detriment of the estate and the Debtors, filing a motion for a 2004 examination for the improper purpose of harassing the Debtors and rehabilitating UCCU’s deficient claim, and pursuing a stipulation that had been characterized by the Court itself as likely frivolous — all without any supporting law. Debtors argued that seeking remuneration for those activities constituted bad faith, and that the Application for Compensation was itself filed in bad faith.

The Trustee’s Response

Trustee’s counsel argued that the standing issue was a genuine, complex question of first impression on which no controlling authority existed, that the Court had itself requested briefing on it, and that the work performed in that connection was done in good faith. Counsel further contended that the stipulation with UCCU was a reasonable settlement at the time it was entered into, before the unforeseen circumstances — UCCU’s claim being disallowed, and the Debtors objecting to Bank of America’s subsequently filed claim — rendered it of no value to the estate. Counsel also noted that the U.S. Trustee’s Office had reviewed the Application and raised no objection to it. Finally, counsel argued that the Debtors’ fee request did not comply with Rule 9011’s procedural requirements and offered no legal basis for the award sought.

The Court’s Ruling

Judge Pappas denied the Debtors’ request for attorneys’ fees and costs in full.

Section 105(a). The Court acknowledged its inherent authority under § 105(a) to sanction parties and attorneys for misconduct in bankruptcy proceedings, but emphasized that this power must be exercised with restraint and may be invoked only upon an explicit finding of bad faith or willful misconduct — something more egregious than mere negligence or recklessness. While the Court found the Trustee’s conduct at times overzealous and displaying a lack of prudence and good judgment — particularly the decision to liquidate non-exempt assets and solicit creditor claims when no timely claims had been filed, and the continued pursuit of the UCCU stipulation after the claim was disallowed — it declined to conclude that those actions rose to the level of bad faith or willful misconduct. A trustee’s primary statutory duty under § 704(1) is to collect and reduce estate property to money, and the Court was not prepared to penalize the Trustee after the fact for zeal in performing that duty. The § 105(a) request was denied.

Rule 9011. Rule 9011 requires that a motion for sanctions be made separately from other motions and that the moving party provide a 21-day safe harbor notice before filing the motion with the Court. The Debtors had done neither — their fee request appeared within their objection to the Application for Compensation, not in a separate motion, and no safe harbor notice was given. Because those requirements are mandatory rather than discretionary, the Court declined to award sanctions under Rule 9011.

Why This Matters

  1. A Chapter 7 trustee’s decision to liquidate non-exempt assets is committed to the trustee’s discretion. The Court expressly declined to penalize the Trustee for liquidating assets before knowing whether any creditors would file allowed claims. Courts will generally not second-guess a trustee’s administration decisions after the fact, even when the economic reality later makes those decisions look unwise.

  2. Overzealous conduct is not the same as bad faith. Section 105(a) sanctions require an explicit finding of bad faith or willful misconduct — something more than negligence or recklessness. A trustee and counsel who press losing arguments in good faith, even arguments the court finds lacking in prudence and judgment, are unlikely to face § 105(a) sanctions.

  3. Rule 9011 procedures are mandatory, not discretionary. A party seeking sanctions under Rule 9011 must file a separate motion and provide a 21-day safe harbor notice before bringing that motion to the Court. Embedding a sanctions request inside another filing will not suffice, and courts will not overlook the procedural deficiency even when the underlying conduct is arguably sanctionable.

  4. A trustee who lacks standing to defend a creditor’s claim may still not face fee-shifting. Despite the Court having found that the Trustee lacked standing to oppose the Debtors’ objection to UCCU’s proof of claim, the Court declined to treat that lack of standing as evidence of bad faith. Counsel had genuinely researched the question, found no controlling authority, and presented it to the Court as an issue of first impression — which is precisely the kind of good-faith conduct that defeats a sanctions claim.

  5. The § 9011 safe harbor is essential to any sanctions strategy. Practitioners who believe opposing counsel is acting improperly must issue a written safe harbor notice, wait 21 days, and then — if the conduct is not corrected — file a standalone motion. The requirement is not a formality to work around by framing the request as part of a larger objection.


Full Decision: Available on PACER, Case No. 12-41681-JDP, Doc. 85 (Bankr. D. Idaho 8 Sep. 2014)

Decision re Atty FeesDownload
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In re McGuire, Part I

Decision: In re Richard Michael McGuire and Dolores Sue McGuire, Case No. 12-41681-JDP (Bankr. D. Idaho, 4 Oct. 2013)
Judge: Honorable Jim D. Pappas, United States Bankruptcy Judge
Counsel for Debtors: Paul Ross, Idaho Bankruptcy Law, Paul, Idaho
Chapter 7 Trustee: Gary L. Rainsdon, Twin Falls, Idaho
Trustee’s Counsel: Brett R. Cahoon and Daniel C. Green, Racine, Olson, Nye, Budge & Bailey, Chtd., Pocatello, Idaho

Background

Richard and Dolores McGuire filed a Chapter 7 petition on 12 December 2012. Their schedules listed two vehicle deficiency debts: $24,265 to Chartway Federal Credit Union and $48,363 to Utah Central Credit Union, the latter being a division of Chartway. At the time of filing, the Debtors believed the collateral — a 2005 McKenzie Medallion trailer repossessed by Utah Central on 21 September 2012 — had long since been sold. In January 2013, having liquidated non-exempt assets of the estate (principally cash value from the Debtors’ life insurance policies), the Trustee filed a Notice of Assets directing creditors to file proofs of claim by 22 April 2013. The estate held approximately $13,951.

Utah Central filed its proof of claim on 3 June 2013 — forty-two days after the claims bar date — asserting a deficiency of $34,165.32 and attaching only an account printout to the filing. It was the only proof of claim filed in the case. When the Debtors received the claim documents, they discovered for the first time that Utah Central’s auction yard had sold the trailer on 27 December 2012 — eleven days after the Bankruptcy Noticing Center had mailed Utah Central and Chartway notice of the bankruptcy filing, and fifteen days after the automatic stay had taken effect.

The Debtors’ Objection

Debtors filed an objection to Utah Central’s proof of claim on 18 June 2013, raising three grounds for disallowance. First, the claim was tardily filed in violation of Federal Rule of Bankruptcy Procedure (“FRBP”) 3002(c), which stripped it of prima facie validity under FRBP 3001(f) and the analysis in In re Parrott Broadcasting Ltd. Partnership, 492 B.R. 35 (Bankr. D. Idaho 2013). Second, the claim lacked the written loan documents, security agreement, and UCC disposition notices required by FRBP 3001(c), further defeating any presumption of validity. Third, and most significantly, Utah Central had sold the collateral in violation of the automatic stay — an act that was void under In re Schwartz, 954 F.2d 569 (9th Cir. 1992) — and had done so without providing the Debtors with the notice of disposition required under Idaho Code § 28-9-611, rendering the sale commercially unreasonable and precluding any deficiency claim under Idaho Code § 28-9-626.

On that last point, Debtors relied on the presumption codified in Idaho Code § 28-9-626(c)–(d): where a secured creditor cannot establish that its disposition of collateral was commercially reasonable, the value of the collateral is presumed to equal the outstanding debt, eliminating the deficiency. In re Walter B. Scott & Sons, Inc., 436 B.R. 582 (Bankr. D. Idaho 2010). Because Utah Central’s sale was both void as a stay violation and deficient for lack of notice to the Debtors, the deficiency claim was unenforceable under § 502(b)(1) as a matter of applicable Idaho law. Debtors amended Schedules B, C, and F to reflect the claim as disputed and unliquidated in light of the post-petition sale.

The Trustee’s Response and the Standing Dispute

Utah Central filed no response to the Debtors’ objection. The Trustee, however, filed his own response on 25 June 2013, arguing that the claim should be allowed as a tardy general unsecured claim under § 726(a)(3) and that the Debtors were judicially estopped from contesting a debt they had sworn to in their schedules.

The Trustee also moved for a Rule 2004 examination of the Debtors, seeking testimony and documents to rehabilitate the claim. Debtors objected to both the Trustee’s response and the 2004 motion, filing a detailed Supplement on 22 August 2013 raising the Trustee’s lack of standing to defend a creditor’s proof of claim. At the 27 August 2013 hearing, Judge Pappas questioned the Trustee’s counsel directly from the bench: whether the Trustee had any legal authority to step into a creditor’s shoes and defend its proof of claim over the Debtors’ objection when the creditor itself had declined to respond. Unable to identify a statute or case squarely on point, Trustee’s counsel conceded that if other creditors were in the case, the Trustee would likely not be taking the same position. The Court ordered supplemental briefing on the standing issue.

Before briefing was complete, the Trustee negotiated a stipulation with Utah Central by which Utah Central agreed to turn over the $10,100 in post-petition sale proceeds to the Trustee in exchange for allowance of an increased unsecured claim of $44,265.32 — the original deficiency plus the proceeds returned. The Trustee moved to approve the compromise under Rule 9019, arguing the standing issue was now moot. The Trustee further argued that his expectation of a § 326 commission gave him a constitutionally protected property interest sufficient to confer standing, and that his authority under § 501(c) to file claims on a creditor’s behalf provided an analogous basis to defend them.

Debtors objected to both the standing argument and the proposed compromise. On standing, Debtors invoked Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416 (1972), and its three-factor framework — lack of statutory authority, absence of a derivative estate right, and inconsistency with the creditor’s own interests — as well as Williams v. California 1st Bank, 859 F.2d 664 (9th Cir. 1988), and In re Folks, 211 B.R. 378 (B.A.P. 9th Cir. 1997), for the proposition that a trustee may not assert particularized creditor rights. On the compromise, Debtors argued that retroactive annulment of the stay was improper under In re Schwartz and In re Franck, 171 B.R. 893 (Bankr. D. Idaho 1994), that the Trustee lacked standing to seek stay relief belonging to Utah Central, and that even with annulment the claim remained independently defective on timeliness, documentation, and UCC notice grounds.

The Court’s Ruling

Judge Pappas issued an oral ruling on 4 October 2013, describing the case as “truly an extraordinary” one that “borders on the bizarre when it comes to the bankruptcy world.” The ruling resolved all pending matters against the Trustee.

On mootness. The Court rejected the Trustee’s argument that the stipulation mooted the standing dispute. Citing Powell v. McCormack, 395 U.S. 486 (1969), the Court found the Debtors retained a live, legally cognizable pecuniary interest in the outcome of their objection — specifically, the potential for a surplus return of the estate funds to them — that the contingent, unapproved stipulation did not extinguish.

On the Debtors’ standing. The Court confirmed that Debtors had standing to object. While Chapter 7 debtors ordinarily lack standing to contest creditor claims because they have no pecuniary interest in the outcome, the potential surplus here gave the Debtors a direct money interest, satisfying the requirements identified in In re Lona, 393 B.R. 1 (Bankr. N.D. Cal. 2008), and the Ninth Circuit’s analysis in Menick v. Hoffman, 205 F.2d 365 (9th Cir. 1953).

On the Trustee’s standing. The Court held the Trustee lacked both constitutional and prudential standing to defend Utah Central’s claim. The Trustee failed to establish injury in fact, as his expectation of a § 326 commission was an unvested property interest not protected by the Fifth Amendment under Board of Regents v. Roth, 408 U.S. 564 (1972). More fundamentally, the Trustee was asserting the individual rights of a creditor — not a right of the bankruptcy estate — in violation of the prudential standing requirement that a litigant assert only its own legal rights. In re Veal, 450 B.R. 897 (B.A.P. 9th Cir. 2011). The Court drew on the U.S. Trustee’s Handbook and its own decision in In re Wisdom, 478 B.R. 394 (Bankr. D. Idaho 2012), for the principle that a Chapter 7 trustee is a fiduciary for all estate beneficiaries — creditors and debtors alike — and may not advocate for a single creditor contrary to the debtors’ interests solely to generate a commission. The Court also followed In re Lyon, a 2011 Western District of North Carolina decision questioning a trustee’s standing to rehabilitate nonresponsive creditors’ claims, and In re Padget, 119 B.R. 793 (D. Colo. 1990), for the proposition that a trustee has no duty to protect creditors against the consequences of filing late or insufficient claims. Section 501(c), the Court held, was simply inapplicable: it permits a trustee to file a claim when a creditor does not, but Utah Central had filed its own claim, making the statute’s conditions inapplicable and its rationale impossible to extend by analogy. The Trustee’s response was stricken.

On the merits of the objection. With the Trustee’s response stricken and the creditor having filed none of its own, the Court turned to the merits. The claim was denied on two independent grounds. First, the post-petition sale of the collateral was void as a violation of the automatic stay. Because § 502(b)(1) disallows claims that are unenforceable under applicable law, and because a void sale cannot support a deficiency, the claim failed at the threshold. Second, Utah Central bore the burden under Idaho Code § 28-9-626 to demonstrate a commercially reasonable disposition, and it had supplied no proof — no loan documents, no security agreement, no UCC disposition notices — that its sale met that standard. The § 28-9-626 presumption therefore applied: the collateral was deemed worth the full amount of the debt, leaving nothing to support a deficiency.

On the Rule 2004 motion. Because the Trustee’s stated purpose for the examination was to gather evidence in support of Utah Central’s claim, and the claim had been disallowed, the motion lacked any valid basis. It was denied.

On the compromise. With the claim disallowed, the Court found the proposed arrangement — recovering $10,100 from Utah Central, taking a commission, and immediately distributing the proceeds back to that same creditor on an allowed claim — would generate no benefit for any party other than the Trustee. The Trustee was given seven days to either withdraw the motion or provide additional briefing showing good cause for approval; he subsequently filed additional briefing, which the Debtors opposed, and a final Order Denying the Motion to Approve Compromise was entered on 7 January 2014.

Why This Matters

  1. A Chapter 7 trustee lacks standing to defend a creditor’s proof of claim against a debtor’s objection. No statutory provision — not § 501(c), not § 704(a)(5), not FRBP 3007 — confers authority on a trustee to rehabilitate a creditor’s claim. The trustee’s duty runs to the estate as a whole, not to individual creditors. Defending a particular creditor’s claim is the mirror image of the trustee’s actual duty under § 704(a)(5): to examine claims and object to those that are improper.
  2. A trustee’s expectation of a § 326 commission is not a constitutionally protected property interest. An unvested expectation of future compensation does not satisfy the injury-in-fact requirement for constitutional standing and is not property protected by the Fifth Amendment. A trustee who accepts an appointment accepts the risk that distributions — and commissions — may be zero.
  3. A sale of collateral in violation of the automatic stay is void and cannot support a deficiency claim. Under In re Schwartz and its progeny, post-petition collection actions taken without stay relief are void ab initio. A deficiency claim premised on a void disposition is unenforceable under § 502(b)(1) and applicable state law regardless of whether the creditor received notice of the bankruptcy.
  4. Failure to provide UCC disposition notice to the debtor bars a deficiency claim. Idaho Code § 28-9-611 requires the creditor to send the debtor reasonable authenticated notification before disposing of collateral. Where the Debtors received no such notice and no post-default waiver existed, the § 28-9-626 presumption applied — the collateral was deemed worth the full outstanding debt — and the deficiency was eliminated.
  5. A tardily filed proof of claim lacking required documentation is not entitled to prima facie validity. FRBP 3001(f) affords prima facie effect only to claims filed in accordance with the applicable rules. A claim filed after the bar date and without the writings required by FRBP 3001(c) carries no presumption of validity, shifting the full burden to the claimant — a burden a nonresponsive creditor cannot meet.
  6. Debtors in a surplus estate have standing to object to creditor claims. Where disallowance of a claim would produce a surplus returned to the debtors, the debtors have a direct pecuniary interest sufficient to confer standing as parties in interest. Practitioners with asset Chapter 7 cases should evaluate whether surplus potential gives clients this otherwise-unavailable right.
  7. A Rule 9019 compromise that generates no net benefit to the estate should not be approved. A compromise that recovers funds from a creditor only to pay a trustee commission and distribute the remainder back to that same creditor on an allowed claim fails the In re A & C Properties, 784 F.2d 1377 (9th Cir. 1986), requirement that a compromise be fair and equitable and serve the paramount interest of creditors.

Full Decision: Oral ruling transcribed, Case No. 12-41681-JDP (Bankr. D. Idaho 4 Oct. 2013); Order Re Pending Matters, Doc. 57 (4 Oct. 2013); Order Denying Trustee’s Motion to Approve Compromise Under Rule 9019, Doc. 73 (7 Jan. 2014)

Transcript – DecisionDownload
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Evelyn Carlisle Sharp

Several months after her parents arrived at the new settlement of Plain City, Weber, Utah, on 17 March 1859, Evelyn Carlisle Sharp was born in a wagon box on 12 October 1859. She always noted she was born on Columbus Day and the first white girl born in Plain City. Her father was William Sharp, stonemason and cornet player, one of the founders of Plain City. Her mother was Mary Ann Bailey Sharp, seamstress and dressmaker, who had crossed the plains with an ox team in the early 1850s.

Evelyn Carlisle Sharp and Victorine Mary Sharp

Evelyn’s own account of her early life was preserved in the Utah Pioneers Biography, Vol. 28, Pages 6–7, copied by Maurice L. Howe of Ogden, Utah. It is nice to have some first-person voices from Plain City’s founding generation. The marriage notice from the Ogden Standard Examiner of 22 January 1881 and her Oregon death certificate of 19 April 1941 are limited records, in my possession, of her long life.

Evelyn Sharp Taylor and Victorine Sharp Maw

Pioneer Personal History of Mrs. Evelyn Sharp Taylor

Copied from Utah Pioneers Biography, Vol. 28, Pages 6–7, by Maurice L. Howe, Ogden, Utah.

Mrs. Evelyn Sharp Taylor, Widow of James Henry Taylor, has the distinction of being the first white girl born in Plain City. Her family was one of the early subscribers to the Standard Examiner and after her marriage she and her husband subscribed for many years before they moved from Ogden.

Mrs. Sharp Taylor is now a resident of Portland, Oregon. In relating some of the incidents of Pioneer days Mrs. Taylor said: “I was born on Columbus Day, October 12, 1859 in a wagon box in what is now Plain City — at that time it was just wilderness. My father was William Sharp and my mother was Mary Anne Bailey. They crossed the plains with an ox team in the fifties.

“When they moved up to Plain City, father set to work to build a log and adobe house and during that time the family lived in the wagon box placed in the ground. There were two white boys born previously in Plain City.

“I was the first white girl born there. After I grew up I married James Henry Taylor, who was one of the first white children born in old Binghams Fort on West Second Street at Five Points.

“My parents used to tell me about one of the first trips I ever made to Ogden. I was just a baby in arms and my mother and father went to town with their ox team and wagon. It was winter time and when they got home that night the sky was so dark and the roads so drifted over with snow that they lost their way when they were nearly home.

“Finally they discovered the wagon was on a big patch of ice where the river had overflowed. Try as they would they could not find their way so they unhooked the oxen and let them find their way the best they could. Father and Mother said I cried with cold. The wolves howled around the wagon all night while we were huddled there nearly frozen.

“When morning came my parents discovered we were only a short distance from our house. We used to see lots of Indians in those times.

“My family used to take the Ogden paper by mail in the early Seventies. I enjoy getting back to Ogden to meet my friends again.

“My husband in Weber Co. for a time, then we moved to Eureka, Utah where he worked in the mines. Later we moved to Baker City, Oregon and since his death lived in Portland.

“I am surprised at the mildness of the winters here in recent years. When I was young we never used to be able to see a fence for months because the snow covered them up. Snow 2 to 4 feet deep was not uncommon here in early days.”

The Taylor–Sharp Marriage

Evelyn married James Henry Taylor on Sunday, 16 January 1881, at the Taylor residence in Plain City. The ceremony was officiated by Rev. J. L. Gillogly. James Henry Taylor was the youngest son of John Taylor, and had himself been born in old Binghams Fort on West Second Street at Five Points in Ogden. About forty invited guests attended and partook of bountiful refreshments.

The notice in the Ogden Standard Examiner of 22 January 1881 — apparently updated or annotated years later — adds that Mr. and Mrs. Taylor were then nearly 70 years of age, “having reared and married off 12 children — and yet they both seem as full of life and viracity as ever.” Together they raised twelve children, eventually settling in Oregon.

Death and Survivors

Evelyn Sharp Taylor died on Saturday, 19 April 1941, at her home at 345 Third Avenue, Seaside, Clatsop County, Oregon, at 6:10 in the evening. She was 81 years, 6 months, and 7 days old. The cause of death was recorded as apoplexy, due to senile changes. She had lived in Oregon for 38 years.

Her obituary, headed “Weber Woman Dies in Oregon,” identified her as “the first white child born at Plain City.” She was survived by three sons and three daughters in Oregon, and by her sister Mrs. Victorine Maw of Ogden — Victorine Mary Sharp, born 8 April 1862 in Plain City, who had married Robert Edward Maw, son of Plain City pioneer Robert Maw. The last two surviving daughters of William and Mary Ann Sharp, separated by nearly three thousand miles.

Funeral services were held Wednesday in Portland. Evelyn was cremated at the Portland Crematorium; the funeral was conducted by E.B. Hughes Mortuary of Astoria, Oregon.

A Note on the Family

Evelyn was the sixth child of William Sharp and Mary Ann Bailey Sharp, and the first born in Plain City. Her brother Milo Riley Sharp — my great-great-grandfather — had been born two years earlier, on 23 July 1857, in Lehi, Utah, while the family still lived there before the move north. Younger sister Victorine Mary Sharp was born on 8 April 1862, also in Plain City.

The Personal History of William Sharp — a separate document in this family record — places the family’s arrival at Plain City on 17 March 1859, traveling with the large body of Lehi colonists who left on 10 March. It describes the journey vividly: seven days of cold, muddy travel, the wagons doubled-teamed through the muddy flats, arriving at about five o’clock in the afternoon with the ground covered in snow. The wagons were lined up and sagebrush piled behind them as a windbreak against the north wind. They dug a hole in front and built a campfire. This is the scene into which Evelyn was born seven months later.

William Sharp built the adobe home in Plain City that was later used by the Edward Sharp family — Dean Sharp lived in it as a child — and built the first Episcopal Church building, which still stands today as the Plain City Lions Civic Center, designated a historical site, its original bell refurbished and sitting atop the building. He played the cornet in Plain City’s first band. He served on the board of directors of the cooperative store organized at Plain City in 1869. He and Mary Ann divorced on 19 May 1876. William later married a widow named Charlotte Elizabeth Earl and moved to Ogden’s Mound Fort District, where he died on 22 December 1900 and was buried in the Ogden Cemetery.

Mary Ann Bailey Sharp lived on in Plain City until her death on 30 October 1913, and was buried there. She had been born on 28 November 1828 in Mattersey, Nottinghamshire, England — a village less than ten miles from Misson, where William was born.

For more on the Sharp family and Plain City’s founding generation, see:

Early Settlers in Lehi, Utah, before Plain City, Utah — Wayne E. Clark’s 2017 research on the Lehi consecration deeds, including William Sharp (no. 68)
Sharp-Bailey Wedding — William and Mary Ann’s story
Sharp-Stoker Wedding — Milo Riley Sharp and Lillie Stoker
History of Plain City — a multi-part series on Plain City’s founding families
1895 Plain City Student Body — the founding generation’s children
Sharp Family History Outreach — the broader Sharp family connections

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Sharp – Bailey Wedding

Mary Ann and William Sharp

James and Sarah Goodlad Bailey are pleased to announce the marriage of their daughter Mary Ann Bailey to William Sharp, son of Thomas and Elizabeth Cartwright Sharp. William and Mary Ann were married at Loup Fork, Howard, Nebraska on 10 July 1853. (Loup Fork appears to have been a crossing of the Loup River, somewhere between Fullerton and Palmer Nebraska, in order to go turn south to rejoin trail along the Platte River.)

William is mason and farmer. They will make their home wherever they are called to settle once they arrive in the Utah Territory.

Due to the circumstances of this family, it is pretty unlikely an announcement would have ever been written. Everything about these families was in motion. Family members on both sides were strewn all over two continents and their lives were still recovering from a number of personal blows. While this was probably a high point, they knew there was a long road still ahead of them. All four of their parents had passed before their marriage.

William was born the third of eight children born to Thomas and Elizabeth Cartwright Sharp 10 December 1826 in Misson, Nottinghamshire, England. His baptism is recorded on 7 January 1827 at Misson Anglican church, confirmed by the Bishop’s Transcripts at Nottinghamshire Archives. He spent his life as a mason but kept a farm. We do not know where or how he learned how to be a mason. His father, Thomas, is listed as “Ag Lab”, which is probably an agricultural laborer on the 1841 English Census. Thomas died in 1841 after the census was taken.

In 1848, the LDS missionaries came to visit in Misson. William was the first in his family, that we know, to join the church on 20 June 1848. His mother followed 11 August 1849 and his sister Isabella 16 September 1849. The records available do not show that William’s siblings, Elizabeth and James joined the church, but they came with the family to the United States on their way to Zion. The family story tells the family was friendly and open towards the missionaries. One of the missionaries was a George Emery (the only potential George Emery I could find appears to have lived 1792 – 1867).

Elizabeth Sharp was determined to emigrate with her family to Utah. Her family attempted to discourage her by warning her about the dangers of the American Indians. Nevertheless, she departed with William, Isabella, Elizabeth, and James. The other four children had died as infants before leaving England. The family purchased tickets at 25 pounds sterling in Liverpool. The family set sail on the “James Pennell” on 2 October 1850 commanded by Captain James Fullerton. The LDS leaders on board were Christopher Layton (1821–1898) and William Lathrop Cutler (1821–1851) leading the company all the way to Zion. Right before hitting the waters of the Mississippi the ship encountered a storm where the masts were broken and the ship drifted for a couple of days. Luckily, a pilot boat found them and another ship (that left two weeks later from Liverpool) tugged them to New Orleans, Louisiana. The ship arrived at dock on 22 November 1850. The family struggled with sea sickness and chills and fevers that beset them in New Orleans and St. Louis. From there the entire group boarded the “Pontiac” and continued to St. Louis, Missouri where they found work and spent the winter. Despite having crossed the Atlantic, Elizabeth, the mother of the family, died 17 February 1851 in St. Louis and was buried in Bellefontaine Cemetery.

Among the fellow passengers on the James Pennell were the Singleton family of Misson. The Singletons were neighbors in Nottinghamshire. William Singleton (1793–1850) sailed with his children, including Thomas Singleton (1825–1885) and Charles Singleton (1838–1907). Tragically, William Singleton died in St. Louis on 16 December 1850, just three weeks after the ship docked. His son Thomas pressed on, becoming one of Plain City’s 1859 founding pioneers, where he worked as a carpenter and band leader alongside William Sharp. Thomas Singleton is listed among those excommunicated alongside William Sharp on 31 January 1879. Generations later, Thomas’s grandson Bert Elmer Singleton (1918–1995), born and raised in Plain City, became one of Utah’s most celebrated baseball players, pitching in the major leagues over 28 seasons. The Sharps and Singletons, neighbors in Misson, remained neighbors in Plain City across the generations.

Elizabeth’s death left the four siblings to fend for themselves. William and Isabella both still desired to move on with the Saints to Utah. William became fast friends with Mary Ann Bailey Padley, a widow who had lost her husband before leaving England. They were such good friends that Anne Elizabeth Padley (she went by Sharp her whole life though) was born 31 October 1852. Isabella married Joseph Carlisle, who had arrived two years earlier, 18 May 1853, in St. Louis. That same day the Moses Clawson Company, “St. Louis Company,” departed from St. Louis. Joseph and Isabella Carlisle, along with William Sharp and Mary Padley (with her son Lorenzo Padley and new infant Anne), left with the company. Joseph and William were well respected because they were apparently very good athletes and challenged anyone to a wrestling match.

The Sharps and Carlisles drove a wagon for William Jennings, a Salt Lake City merchant and freighter. The outfitting was done in Keokuk, Iowa. The company for traveling over the plains was formally organized in Kanesville, Iowa. On the trail, William and Mary Ann Padley were married 10 July 1853 in Loup Fork, Nebraska. The company arrived in Salt Lake City between the 15th and 20th of September the same year.

Mary Ann was born the first of seven children born to James and Sarah Goodlad Bailey on 28 November 1828 in Mattersey, Nottinghamshire, England. Her baptism is recorded on 8 December 1828 at Mattersey Anglican church, confirmed by the Bishop’s Transcripts at Nottinghamshire Archives. James was a blacksmith. The Bailey family were practicing members of the Church of England, described by a later family history as “very sincere and devout in their religion.” Mary Ann attended school and obtained training in millinery and sewing. Sarah died in 1843 and James remarried to a lady named Harriet. We don’t have a death date for James at this time.

Shortly before her 18th birthday, Mary Ann met missionaries of The Church of Jesus Christ of Latter-day Saints and converted. She was baptized 20 October 1846. Her father and Harriet dismissed her from the home for becoming a Mormon. She soon met William Padley, another LDS member and a tailor who lived on Allen Street in Sheffield, and married him on 4 February 1847 at the Church of St Peter and St Paul (now a cathedral) in Sheffield.

Padley – Bailey marriage record

William Padley was born 22 September 1826 in Morton, Lincolnshire, just across the River Trent from Mattersey, and they may well have known each other from their home area before both moved to Sheffield. They had a son, Lorenzo Joseph Padley, born in December 1847. William became ill when Lorenzo was born and died 22 February 1850 in Morton, Lincolnshire. Left alone with a new son, Mary Ann went back to her parents, who would have nothing to do with her unless she gave up her religion. She would not, and instead decided to join the Saints in Utah.

Mary Ann and Lorenzo sailed from Liverpool on 8 January 1851 on the “Ellen” with James Willard Cummings (1819–1883) as the leader of the company. The ship had a difficult passage with measles and what others thought was whooping cough. She arrived in New Orleans 14 March 1851. On the 19th they left for St. Louis on the “Alleck Scott” and arrived on the 26th. Mary Ann and Lorenzo stayed in St. Louis while the company moved on, and it was there that she met William Sharp and his family.

William and Mary Ann grew close during their time in St. Louis. A daughter, Anne Elizabeth, was born to them on 31 October 1852. Both were still determined to join the Saints in Utah. They arranged to drive a freight wagon west for William Jennings, a Salt Lake City merchant and freighter, as the means of joining the Moses Clawson Company. On the trail, William and Mary Ann were married on 10 July 1853 at the crossing of Loup Fork in present-day Howard County, Nebraska. The company arrived in Salt Lake City between the 15th and 20th of September that year.

They settled in Lehi, Utah, Utah for a couple of years but had a number of issues with range for the cattle and some other minor squabbles. Water was also not found to be very dependable in the Lehi area. During this time, William and Mary Ann gave birth to two children, William and Isabella in 1854 and 1856, but both died as infants. Milo Riley was born in Lehi 23 July 1857. I have written of Milo and his family previously at this link: Sharp-Stoker Wedding.

William learned of land north near Ogden, Weber, Utah that was going to be opened up from some of the Saints passing through Lehi (abandoning Salt Lake City before the arrival of Johnson’s Army). These Lehi Saints were told of ample land and good water that was available west of Ogden. A scouting expedition went to search out the area in the fall of 1858 and visited with Lorin Farr (1820–1909) who told them of the available plain to the west.

The Sharp family left with other Lehi Saints on 10 March 1859 to travel to this new area. The group of about 100 arrived 17 March 1859 at what is present day Plain City, Weber, Utah. The company arrived at about 5 PM during the middle of a snowstorm. The company lined up the wagons to protect them from the wind and dug a hole in the ground for the campfire. Reports indicate that snow was deep and conditions uncomfortable. Plain City apparently lived up to its name with sagebrush that rose over 4 feet tall from the high water table beneath the soil.

William Sharp put his carpentry and masonry skills to work making adobe brick and helping build the first homes in Plain City. William and Mary Ann lived in one of these homes. William served in the Plain City band, on the Plain City Z.C.M.I. board, acting as a builder, and also serving as a city leader. William and Mary Ann’s daughter, Evelyn, was the first girl born in Plain City, on 12 October 1859. Victorine Mary was born 8 April 1862 and was their last child. Mary Ann kept busy sewing and making suits, coats, and other jobs. Each of her daughters learned to become dressmakers.

William and Mary Ann each received their initiatory and endowment on 17 August 1861 at the Endowment House. On the same day, Mary Ann was sealed by proxy to her deceased first husband William Padley, with William Sharp himself standing proxy for the man Mary Ann had first married. As a woman already sealed to another man, she could not be sealed to William Sharp during their marriage, as the church did not permit women to be sealed to more than one husband at that time. The Sharp children’s sealing situation caused considerable family angst as all children born to Mary Ann after the 1861 sealing were born in the covenant to William Padley rather than William Sharp.

Lorenzo Joseph Padley died 24 July 1866 at Plain City, aged 18 years, 7 months and 11 days, putting his birth approximately 13 December 1847 in Mattersey, Nottinghamshire, England. He had grown up to become a valued member of the Plain City Music and Dramatic Association, which mourned him as a true friend and gifted musician. His remains were followed to their last resting place by a very large number of citizens, preceded by the brass band of the Association. The notice requested the Millennial Star in England to copy — a reminder that Mary Ann’s roots, and Lorenzo’s birthplace, lay in Nottinghamshire. The photo we have of him is pretty scratched, but here is a cleaned up photo, but it is not perfect. It is hard to tell what is his nose and what was deformities in the photo.

Anne Elizabeth married Daniel Claiborne Thomas Jr. on 29 January 1872 in Salt Lake City at the Endowment House, where they also received their initiatory, endowment, and sealing the same day. Daniel had been born 14 July 1850 on the Platte River in Nebraska on the trail to Utah. His father, Daniel Claiborne Thomas Sr., had been converted to the church by his brother Preston while on a mission to the Southern States, and the family had come to Utah in 1850, settling in Sulphur Springs (later named Lehi) among the earliest settlers there, before joining the Plain City founding group in March 1859. They settled in Plain City and had six children: Claiborne William (1872), Francis Milo (1875), LeRoy Bertrand (1878), Estella Inez (1884), Delbert (1888), and Elizabeth La Vieve (1889). Anne Elizabeth died 29 July 1891 in Plain City at thirty-eight, leaving six children ranging in age from two to nineteen. Daniel outlived her by thirty-eight years, dying in Ogden on 2 September 1929, and was buried beside her in Plain City Cemetery.

After several instances of desertion, Mary Ann moved out of their home on Christmas Eve 1875 and utterly refused to go back to William. William sued for divorce and Franklin Dewey Richards (1821–1899) granted the divorce (in probate court) on 19 May 1876.

At this time, it is possible that Bishop Lewis Warren Shurtleff (1835–1922), branch president 1870–1877, bishop 1877–1883, extended himself beyond what the members felt was right — going so far as to dictate how much everyone should pay in tithing — and some families were very vocal in expressing their discontent. William Sharp began construction on St. Paul’s Episcopal Church in 1877, and many disaffected members found a religious haven in this new faith. The building still stands today, owned by the Lions Club in Plain City. A significant group of members were excommunicated on 31 January 1879, including William Sharp, Mary Ann Sharp (listed separately because of the divorce), William Skeen, Edwin Dix, George Musgrave (father of their future daughter-in-law), Thomas Musgrave, Thomas Singleton, Thomas Davis, George W Harris, Jonathan Moyes, John Moyes, Winfield Spiers, James Wadman, Robert Davis, John Davis, and Thomas Robson. These lists also have “and wife” as well as “and family” which seems to indicate that spouses and families were included. Many of these families returned to the church after time away, some individuals never did. Milo Ross’s 1997 oral history interview offers one family perspective on the causes of the split.

This same year, William remarried to the widow of Charles McGary, Charlotte Elizabeth Earl, about 1879. We do not know exactly when or where.

Milo Riley married Mary Ann Stoker (aka Lillian or Lilly Musgrave) 11 May 1879 in Plain City in the little church William built. He died in 1916 in Plain City. Read about them here.

Evelyn Carlisle married James Henry Taylor 16 January 1881 in Plain City. She died in 1941 in Oregon.

Victorine Mary married Robert Edward Maw on 8 April 1883 in Plain City, her twenty-first birthday. Robert had been born in Plain City on 15 October 1859, the son of Robert Maw, one of Plain City’s founding pioneers who had consecrated his Lehi property in January 1857 and arrived in Plain City on 17 March 1859, the same day as the Sharp family. William Sharp had built the elder Robert Maw’s adobe house in those early Plain City years and had played cornet alongside Abraham Maw in Plain City’s first band. The marriage of Victorine Sharp and Robert Edward Maw united two of Plain City’s founding families. They had seven children: Ruby Ada (1884), Alice (1885), Jessie (1886), Florence Eveline (1888), Grace (1890), Edith Louise (1893), and Edward Clyde (1896). On the morning of 23 April 1897, a snow slide struck the Consolidated Mining and Smelting Company’s Garfield Mine in Gibbs Canyon, four miles north of Brigham City. Robert was killed. The Brigham City Bugler reported the disaster that week, noting that he was a married man who left a widow and seven children. Victorine was thirty-four years old. Her youngest child, Edward Clyde, was barely a year old. She did not remarry, living in Plain City and later Ogden until her death on 18 March 1945. She is buried in Plain City Cemetery.

Mary Ann Bailey Sharp

Mary Ann continued to work as a dressmaker until she could not do so any more due to age. She lived with her Granddaughter Elizabeth Taylor from before 1900 and even moved with her to Baker City, Baker, Oregon. Mary Ann moved back to Plain City not long after Beth married.

Evelyn & Victorine Sharp

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Evelyn and Victorine Sharp

William died at 950 Washington Ave in Ogden on 22 December 1900 at 74 years and was buried two days later in the Ogden cemetery. Mary Ann died 30 October 1913 in Plain City at 84 years and was buried there three days later.

Mary Ann Bailey Sharp death certificate

William and Mary Ann both died outside the church.

In December 1933, fifty-four years after the excommunication, three of Isabella Sharp Carlisle’s sons — Joseph Carlisle, James Carlisle, and Harvey Carlisle — wrote to LDS Church President Heber J. Grant requesting proxy reinstatement for their Uncle William and his former wife Mary Ann. Their letter described William as “honest, virtuous and kind” and was addressed care of Mrs. James S. Thompson — Annie Thompson, who would later write the 1957 history of Elizabeth Cartwright Sharp, and who was the daughter of James Carlisle. The letter explicitly identified William as “born 10 Dec. 1826, Misson, Notts., England, and later settled in Plain City, Utah.”

President Grant responded on 16 December 1933, consenting to proxy baptism for both William and Mary Ann. He noted that since they had previously received their endowments on 17 August 1861, those ordinances would need to be restored by proxy as well, and authorized Elder George F. Richards, President of the Salt Lake Temple, to officiate. On 3 February 1934, proxy baptism and confirmation were performed for both William and Mary Ann at the Salt Lake Temple, with William’s sealing to parents following on 2 July 1934. The restoration of William Sharp and his wife to the church, by the hands of his sister Isabella’s sons, closed that chapter.

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In re Lugo

Decision: In re Jason Josue Lugo, Case No. 15-40121-JDP (Bankr. D. Idaho, 25 Jun. 2015)
Judge: Honorable Jim D. Pappas, United States Bankruptcy Judge
Counsel for Debtor: Paul Ross, Idaho Bankruptcy Law, Paul, Idaho
Chapter 13 Trustee: Kathleen A. McCallister, Meridian, Idaho
Trustee’s Counsel: Holly Roark, Office of Kathleen A. McCallister, Meridian, Idaho

Background

Jason Josue Lugo and his wife Lori married in 1996. In December 2003, Lugo acquired real property in Declo, Idaho, and in March 2004 conveyed it to himself and Lori by quitclaim deed. The couple built a home on the property that year and moved in with their family, establishing an automatic homestead exemption by virtue of their occupancy as a principal residence under Idaho Code § 55-1004(1).

In July 2012, Lugo moved out of the marital home due to irreconcilable differences. His family remained in the home. He did not record a declaration of non-abandonment. Under Idaho Code § 55-1006, six months of continuous vacancy creates a presumption of abandonment — meaning Lugo’s automatic homestead was presumed abandoned by January 2013. On 12 September 2013, a stipulated divorce decree was entered awarding Lori sole possession of the property, subject to the two existing mortgages and a $40,000 obligation to Lugo’s father. Under the decree, Lori was to refinance the mortgages within seven months and pay Lugo’s father in installments; if she could not refinance, the property was to be sold and the proceeds used to satisfy the parties’ debts. The decree did not expressly grant Lugo any continuing interest in the property. Pending refinance or sale, Lori was responsible for the first mortgage payments and Lugo for the second.

On 17 February 2015, before filing his bankruptcy petition later that same day, Lugo recorded a Declaration of Homestead on the Declo property with Cassia County. He then filed a Chapter 13 bankruptcy petition claiming the property exempt as his homestead in the amount of $49,401.93 — the estimated equity — under Idaho Code §§ 55-1001, 55-1002, and 55-1003. His Chapter 13 plan proposed to sell the property and pay the secured creditors, with any nonexempt proceeds distributed to unsecured creditors. Lugo acknowledged he could not afford to continue making the second mortgage payments.

The Trustee’s Objection

The Trustee objected to the homestead exemption claim on two grounds: Lugo did not reside at the property — his petition listed his residence in Rupert, Idaho — and his Chapter 13 plan proposed to sell it, which the Trustee argued evidenced a lack of any intent to reside there. The Trustee contended that Lugo therefore did not qualify for the homestead exemption under either Idaho’s automatic or declared homestead provisions, and that the claim should be disallowed in its entirety.

The Debtor’s Response

Debtor’s counsel filed a response arguing that the homestead exemption was valid and that the Trustee had not met the burden of proof required to overcome it.

Counsel acknowledged that Lugo had vacated the property in 2012 and had not filed a declaration of non-abandonment, which created a rebuttable presumption of abandonment of the automatic homestead under Idaho Code § 55-1006. Counsel argued, however, that Lugo had done precisely what Idaho law provides as an alternative: he recorded a Declaration of Homestead with Cassia County, invoking the second track of homestead protection under Idaho Code § 55-1004. That provision permits an owner who is not currently occupying a property as a principal residence to establish a homestead by recorded declaration, provided the declaration states an intent to reside there. Lugo’s declaration did so, and the technical requirements of the statute were met.

On the plan-to-sell issue, counsel argued that the Trustee’s position ignored Idaho Code § 55-1008, which exempts proceeds from the voluntary sale of a homestead for up to one year when the debtor intends to acquire a new homestead. Lugo wished to preserve the equity in the property for use in acquiring a new home, and the homestead exemption should follow the proceeds accordingly.

The Court’s Ruling

Judge Pappas sustained the Trustee’s objection and disallowed the homestead exemption.

The Court began by tracing the two tracks through which Idaho law permits a homestead to be established. The first — the automatic or “springing” homestead — arises by operation of law from the moment a debtor occupies property as a principal residence, without any filing or formality. Idaho Code § 55-1004(1). The second — the declared homestead — permits an owner who is not presently occupying property as a residence to establish a homestead by recording a declaration stating an intent to reside there. Idaho Code § 55-1004(2). Both tracks were relevant here.

Lugo had unquestionably established an automatic homestead when he moved into the Declo property in 2004. But he vacated in July 2012 without filing a declaration of non-abandonment, and under Idaho Code § 55-1006 that homestead was presumed abandoned by January 2013. No automatic homestead survived. Lugo therefore could not rely on the first track and turned to the second.

The recorded Declaration of Homestead was facially sufficient. It satisfied each technical requirement of Idaho Code § 55-1004(3): it stated an intent to reside on the property, included a legal description, and provided an estimated cash value, and it had been properly recorded before the bankruptcy petition was filed. Under normal circumstances, that would be enough. The declared homestead is a recognized and legitimate mechanism, and the Court acknowledged that recording a declaration before filing is a conventional and proper way to establish a homestead exemption.

But the Court held that satisfying the statutory checklist does not end the inquiry when the exemption is contested. When an objecting party challenges the declaration, the Court must look behind its face and assess the quality and genuineness of the proof supporting it — in particular, whether the stated intent to reside is real. Here, because the parties proceeded on stipulated facts alone, with no live testimony from Lugo, the record was fixed. And that record told a story that was flatly inconsistent with any genuine intent to reside at the Declo property.

The divorce decree, entered more than a year before the bankruptcy filing, awarded Lori sole possession of the property and contemplated only two outcomes: refinancing or sale. No scenario in the decree provided for Lugo’s return. His bankruptcy plan reinforced the same conclusion — it proposed to sell the property, and if the sale failed, to surrender it. Lugo acknowledged he could not afford the mortgage. Nothing in the record suggested any realistic pathway by which he could or would live at the Declo property again. The declaration’s statement of intent to reside, the Court concluded, was not supported by the facts.

The Court also rejected the § 55-1008 sale-proceeds argument. That provision exempts proceeds from the voluntary sale of a homestead for the purpose of acquiring a new homestead — but it presupposes a valid homestead exemption in the first place. Because no valid homestead had been established, there was nothing to carry forward into the proceeds. Moreover, the record contained no evidence that Lugo intended to use any sale proceeds to purchase a replacement homestead. The Court found his true aim was to preserve equity against distribution to unsecured creditors — an understandable goal, but not one the homestead statutes were designed to serve.

Why This Matters

  1. Idaho’s two-track homestead system offers a genuine alternative to the automatic exemption. When an owner vacates a property and loses the automatic homestead through presumed abandonment, Idaho Code § 55-1004 provides a second path: recording a declaration of intent to reside. That mechanism is legitimate and used, and a properly recorded declaration ordinarily establishes the exemption. This case illustrates, however, that the declared homestead is not a rubber stamp. When the exemption is contested, the Court will look beyond the four corners of the declaration and assess whether the stated intent is genuine.

  2. The divorce decree can be the most important document in the file. A stipulated divorce decree that awards possession of the property to the other spouse and contemplates only refinancing or sale effectively closes the door on any claimed intent to return. Where no scenario in the decree provides for the debtor’s residency, that decree will be powerful — perhaps decisive — evidence against the homestead claim. Counsel evaluating a client’s homestead position after a divorce should read the decree carefully before advising that a recorded declaration will succeed.

  3. Failing to file a declaration of non-abandonment has lasting consequences. Idaho Code § 55-1006 gives a debtor who plans a long absence without intent to abandon the homestead a clear tool: record a declaration of non-abandonment. Lugo did not do so when he left in 2012, and by the time he filed for bankruptcy in 2015 the automatic homestead had been presumed abandoned for over two years. Practitioners advising clients who are leaving a marital home during separation or divorce proceedings should consider this step immediately.

  4. Live testimony on intent may be essential. The Court explicitly noted that because the parties stipulated to the facts and no live testimony was offered, Lugo had no opportunity to address his subjective intent to return to the property. Stipulated facts are efficient but inflexible — they cannot be supplemented after the fact. Where a homestead exemption contest turns on intent, practitioners should consider whether proceeding by stipulation forecloses testimony that might have been outcome-determinative.

  5. Idaho Code § 55-1008 requires both a valid underlying homestead and a genuine intent to acquire a replacement. The sale-proceeds exemption does not operate independently. It presupposes that the property being sold was validly exempt as a homestead. A debtor who cannot establish the underlying exemption cannot use § 55-1008 to protect sale proceeds. And even where the underlying exemption is valid, the proceeds exemption requires evidence of intent to use them to acquire a new homestead — a plan to sell, pay creditors, and retain equity does not qualify.

Full Decision: Available on PACER, Case No. 15-40121-JDP, Doc. 32 (Bankr. D. Idaho 25 Jun. 2015)

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James Sharp

James Sharp

James Sharp was born 7 January 1840 in Misson, Nottinghamshire, England to Thomas Sharp and Elizabeth Cartwright Sharp. His birth is confirmed by a certified copy of his birth certificate from the General Register Office (BXCC548222). It records his birth on 7 January 1840 in Misson, Sub-district of Bawtry, Doncaster. His father is listed as Thomas Sharp, Labourer, and his mother as Elizabeth Sharp, formerly Cartwright — who was herself the informant, registering the birth on 22 January 1840. I wrote about James’ parents, the family’s conversion to the LDS faith, and the trip to America in his brother William’s biography, Sharp-Bailey Wedding.

Birth certificate of James Sharp, GRO certified copy, BXCC548222, Misson, 7 January 1840.

The Sharp family emigrated to America aboard the ship James Pennell, which sailed from Liverpool on 2 October 1850 under the direction of Christopher Layton and William L. Cutler, carrying 291 Latter-day Saint passengers. After a difficult voyage that included a severe storm near the mouth of the Mississippi that disabled the ship and nearly exhausted the provisions on board, the James Pennell arrived at New Orleans on 23 November 1850. The passengers continued up the Mississippi River to St. Louis, where they found employment and shelter. The passenger manifest lists James Sharp, age 10, traveling with his mother Elizabeth Cartwright Sharp (age 45), brother William (age 24), and sisters Isabella (age 19) and Elizabeth (age 26). Their mother died in St. Louis on 17 February 1851, just months after their arrival. The account of the voyage is preserved at Saints by Sea.

Siblings William and Isabella eventually continued west with the Moses Clawson Company in May 1853, while James stayed behind with his sister Elizabeth in St. Louis. (Read more about Elizabeth here.) James and Elizabeth did not join the LDS faith with their mother (Elizabeth), William, and Isabella.

James married Eudora Elvira Mann 3 March 1863 in Nashville, Davidson, Tennessee. Eudora “Dora” was born 1 May 1845 in Nashville. We do not know much of the life story, so how he met Dora and married her in Nashville we may never know. The two made their home in St. Louis though. James worked as a pork packer and initially started out in business with Patrick Muldoon around 1870. Here is the run down of the St. Louis directories.

1869 [FHL #980635] James Sharp with Muldoon and Sharp at 1612 Biddle.
1870 [Gould’s p. 797] shows the same.
1871 [Gould’s p. 601] the same, but also lists Sharp, James pork packer r[esident?] at 1119 N 17th. {FHL #980,636]
1872 shows Muldoon and Sharp at 1015 N 17th [N 17th goes from 1701 Market North to Angelica.]
1875 [p. 1171] Muldoon and Sharp, Pork Packers and Provision Dealers, 904 B’way.
1885 Sharp, James, Muldoon and Sharp 904 to 912 S 2d, r 2715 Mills. [There are now 7 pork packers listed, only 1 in 1875.]
1887, James C. Sharp is listed as a clerk at Muldoon and Sharp.
1888 is Sharp, James and Co., same address, te no. 2208.
1890 James Sharp and Co. now includes Sharp, James C. as cashier and Sharp, George as Clerk. All 3 at 3641 Finney Ave.
1895 Shows both James Sharp and James C. Sharp as packers, George W. Sharp as Manager and William M. Sharp as Clerk at James Sharp and Co., 904 S 2d. James C. now resides at 4354 Morgan, the other 3 still at 3641 Finney.
1896 and 1897 now show William M. as manager and George W. as supt.; James and James C. simply identified as with Co. 1898 directory is missing.
1899 Company not listed. James C. (same address) is broker; George W. is just listed, at 1811 Laflin; William M. and James are just listed, still living at 3641 Finney.
1900 James C. at Sharp and Westcott; George W., clerk at Manewal Lange Bakery, 3204 Morgan; William M. litho., at home.
1901 James Sharp now resident at 4573 Page boul; James C. com. mer. 736 Bayard av; George W. still clerk at Manewal-Lange Bakery, resident at 3009 Easton. [William M. not listed]
1902 James C. mngr. Sharp Mnfg Co., 411 Fullerton bldg., r. 736 Bayard av; George W. and William M. are both clerks, residing at 3156 Easton av.
1903 James still at 4573 Page boulevard; James C., ins., 721 Olive, r. 3732 Washington Boul.

Death notice of James Sharp, St. Louis Globe-Democrat, 24 February 1908.

As you can probably tell from the information above, James put his children to work and included them in the business. James retired at 55 and turned the business over to his boys. By 1898 they had run the business in the ground, supposedly because of their like for being horsey (horse-racing).

James and Dora had 5 children.

Eudora Mann Sharp born 13 January 1864 and died 11 January 1938, both in St. Louis. She married Alexander A Bryden, who worked in the coal business.

Ida Lee Sharp born 8 October 1866 and died 23 December 1946, both in St. Louis. She was unmarried. She worked as a school teacher.

James Carlisle Sharp born 26 December 1868 in St. Louis and died 4 November 1952 in Valley Park, St. Louis, Missouri. He married Emma Manewal (and divorced) and Madeline C Grimm. He had a department store. Emma was the daughter of August Manewal, one of the confederation of bakers who formed the National Biscuit Company (NABISCO).

George W Sharp born 10 March 1871 in St. Louis and died in 1964 in Sand Springs, Tulsa, Oklahoma. Apparently he married a lady named Effie Olive, but we know nothing more about his life or her. He was badly disfigured after being kicked in the head by a horse at 3 years old.

William Muldoon Sharp born 4 October 1874 and died 24 March 1915, both in St. Louis. He also remained unmarried.

Eudora died 3 March 1894 of cerebral meningitis. She was listed as living at 3641 Finney Avenue. She was buried in the Bellefontaine Cemetery 5 March 1894.

James died suddenly on Monday morning, 24 February 1908, at the residence of his son-in-law Alexander A. Bryden at 4573 Page Boulevard, St. Louis, at the age of 68. The St. Louis Post-Dispatch reported that he was a retired pork packer who was killed by a street car on Saturday night, 22 February 1908, at Page Boulevard and West End Avenue. He died two days later from his injuries. The funeral was held Wednesday afternoon from his late residence at 4582 Page Boulevard, conducted by Rev. Dr. William Elmer of St. Philip’s Episcopal Church — a further confirmation, alongside Annie Thompson’s account, that James never joined the LDS Church. He was interred at Bellefontaine Cemetery on 26 February 1908. The death notice in the same paper, published 24 February, gave his age as 68 years, consistent with his 1840 birth year confirmed by the birth certificate.

James was a founder of St. George’s Society and served as treasurer for several years. He was also a member of the Merchants’ Exchange and a veteran member of the St. Louis Lodge No. 5, I.O.O.F.

Funeral notice of James Sharp, St. Louis Post-Dispatch, February 1908.

For more on the Sharp family, see:

Elizabeth Cartwright Sharp — James’s mother, written by Annie Thompson
Sharp-Bailey Wedding — James’s brother William and Mary Ann Bailey
John and Elizabeth Quayle — James’s sister Elizabeth who also remained in St. Louis
Sons of Joseph and Isabella Carlisle — James’s sister Isabella who went on to Utah

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In re Cantu

Decision: In re Rebecca Cherie Cantu and Alejandro Cantu, Case No. 14-40254-JDP (Bankr. D. Idaho, 26 Aug. 2014)
Judge: Honorable Jim D. Pappas, United States Bankruptcy Judge
Counsel for Debtors: Paul Ross, Idaho Bankruptcy Law, Paul, Idaho
Chapter 7 Trustee: Gary L. Rainsdon, Twin Falls, Idaho
Trustee’s Counsel: Brett R. Cahoon and Daniel C. Green, Racine, Olsen, Nye, Budge & Bailey, Chtd., Pocatello, Idaho

Background

Rebecca and Alejandro Cantu filed a Chapter 7 bankruptcy petition on 20 March 2014. In the months leading up to their filing, two creditors — NCO Financial and Bonneville Billing and Collections — had been garnishing their wages pursuant to state court judgments. NCO, collecting on student loans, garnished 15% of Ms. Cantu’s wages each pay period under federal law. Bonneville garnished an additional 10% under state law. Idaho only allows a maximum of 25% to be garnished from an individual’s wages. Over the 90-day preference period preceding the petition date, the two creditors combined had garnished a total of $1,536.93 from the Debtors’ paychecks.

On their amended Schedule B, Debtors listed the garnished funds as personal property and claimed $1,500 of that amount exempt under Idaho Code § 11-605(12) — a wage exemption statute enacted by the Idaho Legislature in 2010, and one that, as Judge Pappas noted, had never been interpreted by any court.

The Trustee’s Objections

The Chapter 7 Trustee filed two objections in sequence. The first, argued simply that the garnished funds were not “disposable earnings receivable” because they had already been paid to the creditors prior to the bankruptcy filing. When the Debtors amended their Schedule C to increase the claimed exemption from $1,086.53 to the statutory maximum of $1,500, the Trustee withdrew the first objection and filed a more detailed second objection through retained counsel.

The second objection raised two grounds. First, the Trustee argued the garnished funds were avoidable preferences under 11 U.S.C. § 547(b) — transfers made within 90 days of filing to specific creditors on account of antecedent debt — and that the Debtors were therefore barred from exempting them under § 522(g), which limits a debtor’s ability to exempt property recovered by the trustee to situations where the debtor could have exempted the property absent the transfer. Second, the Trustee contended that because the Debtors had received a benefit from the garnishments — reduction of their judgment debts — the funds had effectively been “paid” to them, and thus did not qualify as unpaid wages under Idaho Code § 11-605(12).

The Debtors’ Responses

This firm filed two responses on behalf of the Debtors, tracking the Trustee’s evolving objections.

On the statutory interpretation question, Debtors argued that Idaho Code § 11-605(12) means exactly what it says: the exemption applies to earnings that “have been earned but have not been paid to the individual.” The garnished funds were unquestionably earned by Ms. Cantu through her personal services, and they were never paid to her — they were diverted directly to her creditors via the sheriff. The statute does not require that funds be “receivable,” nor does it specify where the funds must be held. The Trustee’s position that the funds were “effectively paid” to the Debtors because they reduced outstanding debts stretched the statutory language beyond its plain meaning.

On the § 522(g) issue, Debtors argued that the garnishments were not voluntary transfers — they were compelled by court order — and that the funds had not been concealed, as they were fully disclosed on Schedule B and the Statement of Financial Affairs. Because the property could have been exempted under Idaho Code § 11-605(12) had it remained with the employer and not yet been paid, the Debtors were entitled to claim the exemption on any funds recovered by the Trustee under § 522(h).

The Court’s Ruling

Judge Pappas ruled in favor of the Trustee and sustained the objection, disallowing the exemption. The Court’s analysis turned entirely on the meaning of the phrase “have not been paid to the individual” in Idaho Code § 11-605(12).

The Court acknowledged that the statute had never been interpreted by any court since its enactment in 2010, and that the phrase “paid to the individual” was arguably ambiguous. However, the Court concluded that reading the statute in context — as required under Idaho rules of statutory construction — compelled the conclusion that the garnished wages had been paid.

The Court’s reasoning proceeded on several fronts:

From the employer’s perspective, the wages were indisputably paid. The employer transferred the full amount owed to Debtors — some directly to them, and the garnished portion to the sheriff on their account — satisfying its payroll obligation in full.

From the Debtors’ own perspective, the Court found the wages had likewise been paid. The garnished sums reduced the Debtors’ outstanding judgment debts, conferring a direct financial benefit. To hold otherwise, the Court noted, would potentially require employers to pay the garnished amounts twice — once to the sheriff, and again to the debtor following a successful exemption claim — a result the Idaho Legislature could not have intended.

The Court also rejected the Debtors’ reading as internally inconsistent with Idaho’s garnishment statutes. Idaho Code § 8-509(b) expressly directs an employer-garnishee to “pay” the earned wages to the sheriff for the creditor’s benefit. Treating those same wages as simultaneously “paid” for garnishment purposes and “unpaid” for exemption purposes would create an irreconcilable conflict between the two statutes. As the Court observed, while exemption statutes are to be construed liberally in favor of debtors, statutory language should not be “tortured” in the name of liberal construction.

Because it resolved the case on the § 11-605(12) issue, the Court declined to reach the Trustee’s alternative argument under § 522(g).

Why This Matters

1. A case of first impression on Idaho Code § 11-605(12). The Court explicitly noted that no prior case had interpreted this 2010 wage exemption statute. This decision remains the leading — and only — authority on its meaning and scope. Idaho practitioners advising debtors on wage garnishment situations should be aware of its limitations.

2. “Paid to the individual” means paid on the individual’s account, not just into their hands. The Court’s construction of the statute is broad: wages diverted to a creditor through garnishment are treated as paid for exemption purposes, even though the debtor never personally received them. Debtors who suffer pre-petition garnishments cannot use § 11-605(12) to recapture those funds in bankruptcy.

3. The interplay between § 547 preferences and § 522(g) exemptions is complex. Where a trustee seeks to avoid a pre-petition garnishment as a preference, the debtor’s ability to claim an exemption in the recovered funds depends on whether the property could have been exempted in the first instance. This case illustrates how critical it is to identify viable exemption authority before asserting the right to avoid a transfer under § 522(h).

4. Debtors should assert wage exemptions in state court before filing. The Court noted, in a footnote, that Idaho Code § 8-519 permitted the Debtors to have raised an exemption claim in state court at the time of the garnishment. No such claim was made. Practitioners should advise clients facing wage garnishment to promptly evaluate available exemptions under state law — before funds leave the employer’s hands.

5. Liberal construction has limits. Idaho courts construe exemption statutes in favor of debtors, but that principle does not authorize courts to rewrite statutory language. Where plain meaning and statutory context point clearly in one direction, liberal construction will not overcome them.

Full Decision: Available on PACER, Case No. 14-40254-JDP, Doc. 51 (Bankr. D. Idaho 26 Aug. 2014)

Exemption DecisionDownload