Elliott v. Weil (In re Elliott)

no official cite as of yet
The Bankruptcy Appellate Panel for the Ninth Circuit affirmed the bankruptcy court's decision to deny the debtor's claim for homestead exemption pursuant to s. 522(g)(1) and rejected the Debtor's position that California exemption laws apply.
Procedural context:
This the third in a series of opinions from the 9th Cir. BAP concerning the Debtor's claim for a homestead exemption on his real property. The bankruptcy court's decision on whether the Debtor should be denied his homestead exemption was appealed to the BAP after the court denied the exemption based on s. 522(g)(1). Standard of review on appeal was de novo on the issue of denial of the Debtor's exemption. Findings of fact are reviewed for clear error.
Mr Elliot's saga begins with his chapter 7 petition in 2011 when he failed to list a real property he owned commonly referred to as the "Buckingham Property." Debtor transferred the property to a company he owned prepetition, failed to disclose it in his petition, and upon receiving his discharge, transferred ownership back to himself. The trustee, discovering what has occurred and reopened Debtor's chapter 7 case to administer the "Buckingham Property" through a series of motions and an adversary proceeding against the Debtor. Debtor challenged the Trustee's efforts throughout. The first of such challenges was an appeal to the BAP of the bankruptcy court's decision denying the Debtor's claim for a homestead exemption on the Buckingham Property based on bad faith for the Debtor's concealment of the property from creditors. While the issue was on appeal, the Supreme Court rendered its decision in Law v. Siegel which the BAP believed applied to Mr. Elliot's case. The BAP vacated the bankruptcy court's decision and remanded the matter for further determination on the issue of whether an exemption can be denied on a separate basis other than a debtor's bad faith. The second challenge was an appeal to the BAP of the bankruptcy court's summary judgment in favor of the Trustee revoking the Debtor's discharge under s. 727. The BAP reversed the bankruptcy court based on the applicable statute of limitations and ordered the dismissal of the adversary proceeding. This is the Debtor's third challenge to the Trustee's efforts to administer the Buckingham Property for the benefit of his creditors. In response to the BAP's mandate to revisit the issue of whether a separate basis exist to deny the Debtor's homestead exemption claim, the bankruptcy court granted the Trustee's renewed motion that sought denial of the Debtor's discharge pursuant to s. 522(g)(1) finding that the Debtor undoubtedly concealed the Buckingham Property from his chapter 7 case. Relying on s. 522(g)(1), the bankruptcy court found that a debtor can only exempt property recovered by a trustee under s. 542 if the debtor did not voluntary transfer such property and the debtor did not conceal such property. Finding that the trustee recovered the property under s. 542 after granting the trustee's motion for a turnover of the Buckingham Property previously, the bankruptcy court also found that the debtor did not satisfy the two requirements under s. 542(g)(1) thereby precluding him from claiming the homestead exemption. On appeal, the BAP agreed with the bankruptcy court.
BAP judges DUNN and KIRSCHER AND bankruptcy judge GAN (sitting by designation); appeal from a decision rendered by Judge Victoria Kaufman.

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