- C.A. 9th Cir. Case No. 11-56076
- Judge Barry G. SIlverman wrote the opinion on behalf of the panel. Pursuant to Fed. R. App. P. 34(a)(2), the panel unanimously determined that no oral argument was needed in this case. Even though the District Court reversed and remanded this matter to the Bankruptcy Court, the Appellate Court determined that the issue of whether Cal. Civ. Proc. Code Sec. 703.140(b)(5) extends to a debtor's motor vehicle is purely legal. The Appellate Court affirmed the District Court's ruling that Cal. Civ. Proc. Code Sec. 703.140(b)(5) can be utilized on a motor vehicle; stating that "any" property means any; thus luxury vehicles are not excluded. Relying on In re Taylor, 861 F.2d 550 (9th Cir. 1988), the Appellate Court affirmed the District Court's ruling that a lien on a motor vehicle can be avoided pursuant to 11 U.S.C. Sec. 522(f)(1)(B) as a tool of the Debtor's trade. Although the Court of Appeals affirmed the District Court ruling, there was no determination whether the Debtor's vehicle qualified as a "tool of her trade". This factual issue was remanded to the Bankruptcy Court for further determination.
- Procedural context:
- Appealed from U.S. District Court for the C.D. of California to the Ninth Circuit Court of Appeals.
- In November 2006, the Debtor, a real estate agent, borrowed $22,160.00 from Orange County’s Credit Union ("OC") and used her Mercedes as collateral. OC properly perfected its non-possessory, non-purchase money lien on the Mercedes. Debtor petitioned for relief under Chapter 7 of Title 11 of the United States Code. The Debtor asserted that, as of the Petition Date, the Mercedes was valued in the amount of $5,350.00 and there was a balance in the amount of $12,715.50 owed to OC. Debtor asserts that the Mercedes is exempt under Cal. Civ. Proc. Code Sec. 703.140(b)(5) or California's "wild card" exemption. The Bankruptcy Court ruled that Debtor's use of the "wild card" exemption could not be applied to the Debtor's Mercedes because there are other California exemptions that specifically deal with vehicles. The Debtor additionally sought avoidance of OC's lien pursuant to 11 U.S.C. Sec. 522(f)(1)(B). Debtor is asserting that, as a realtor, her Mercedes is a tool of her trade as a realtor. The Bankruptcy Court ruled that the Debtor could not use 11 U.S.C. Sec. 522(f) to avoid the lien on her Mercedes because the legislative history did not support avoiding liens on luxury items.
- Alex Kozinski, Chief Judge; Barry G. Silverman, Circuit Judge; and Jed S. Rakoff, Senior District Judge.
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