Credit One Corpv. Naoom ( In re Naoom)

Case Type:
Case Status:
BAP NO. SC-16-1066, Bk. No. 15-02484-LT7 (9th Circuit, Feb 01,2017) Not Published
The BAP affirms the Bankruptcy Court's determination on the value of the property at $600,000 and partially avoided Credit One's lien pursuant to section 522(f)(1) of the Bankruptcy Code.
Procedural context:
Credit One argues on appeal that the Bankruptcy Court failed to consider evidence at trial that would value the property at a higher amount. In reviewing decisions of the bankruptcy court, the panel reviews legal conclusions de novo, factual findings of facts for clear error, and mixed questions of law and fact de novo.
Debtors filed a Chapter 7 petition listing the property in issue with a value of $450,000. the property was leased to two different entities. The property was encumbered by a first deed of trust in favor of Wells Fargo Bank, N.A. , a judicial lien by Credit One, and a lien for delinquent property taxes. the debtor's also claimed the property as exempted. debtor's provided an appraisal that valued the property at $450,000 and filed a motion to avoid Credit One's lien under section 522(f)(1) of the Bankruptcy Code. Credit One opposed the valuation and the court held an evidentiary hearing after granting Credit One an opportunity to obtain an appraisal. Credit One submitted an appraisal and two supporting declarations valuing the property at $600,00. before the evidentiary hearing Credit One filed a supplemental brief and declaration asserting that the value should be $653,091.20 since debtors provided incorrect information regarding the longevity of the leasehold interests and the correct rent roll information. At the closing testimony after the two day evidentiary hearing Credit One argued that the property should be valued at $680,320. It based the value on its appraiser's testimony at the stand calculating the value using the correct rent roll information. The court issued an oral ruling where made various factual findings, weighed the exhibits and the testimony presented at trial, accepted the first written appraisal filed by Credit One and rejected the Debtor's appraisal. As a resulted valued the property at $600,000 and partially avoided Credit One's judicial lien. the bankruptcy court determined that was unwilling to accept a higher appraised valued by solely accounting for additional rent and expense figure; instead, it will have only considered a full re-appraisal of the property taking into account all valuation factors, something Credit One did not provide. The panel affirms since considered that the ruling is plausible in light of the record viewed in its entirety.
Jury, Faris, and Yun

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