WARFIELD V. NANCE
- Summarized by Jonathan Batiste , Rensselaer Polytechnic Institute
- 4 months 1 week ago
- Case Type:
- Consumer
- Case Status:
- Reversed and Remanded
- Citation:
- No. 24-2745 (9th Circuit, Oct 14,2025) Published
- Tag(s):
-
- Ruling:
- There can be no claim preclusion of state and federal claims of exemption because § 522(b)(1) and Schedule C prohibit raising state and federal homestead exemptions on a single schedule. The claim identity prong of claim preclusion requires claims to arise out of the same transactional nucleus of facts. Whether claims arise from the same nucleus of facts depends on whether they could conveniently be tried together. Federal and state homestead exemptions do not have the same claim identity because the law prohibits presenting parallel state and federal exemption claims in a single filing.
- Procedural context:
- Debtor filed a chapter 7 bankruptcy petition and sought the exemption of property under Arizona homestead exemption law. The trustee objected to the Arizona exemption, and Debtor amended his schedule to claim an exemption under Washington law. The trustee then objected to the Washington exemption, and the bankruptcy court sustained both objections. Debtor amended his Schedule C for a second time about a month later, claiming a homestead exemption under federal law. The bankruptcy court allowed Debtor to claim the exemption, and the trustee appealed to the district court. The district court reversed the bankruptcy court’s ruling, and Debtor appealed to the circuit court.
- Facts:
- Johnie Lee Nance (“Debtor”) filed a chapter 7 bankruptcy petition in May 2022 in the U.S. Bankruptcy Court for the District of Arizona. Debtor identified a recreational vehicle (“RV”) and real property in Arizona as exempt property under Arizona homestead exemption law. Debtor amended his Schedule C to claim exemptions under federal law when the trustee objected to Debtor’s exemption claims under Arizona and Washington law. The bankruptcy court allowed the exemption under federal law and for Debtor to use the remainder of the federal homestead exemption for his RV under Section 522(d)(5) of the Bankruptcy Code. The bankruptcy judge calculated that Debtor was entitled to $27,900 as a homestead exemption, and Debtor claimed $5,000 of that exemption for his real property. That left $22,900 in unused homestead exemption, which the bankruptcy court allowed Debtor to use to exempt the RV. The trustee appealed the bankruptcy court’s decisions to the district court, and the district court reversed the bankruptcy court’s ruling. Debtor then appealed to the circuit court, and the circuit court reversed the district court’s ruling. The principles underlying the bankruptcy code make the bankruptcy court’s application of the wildcard exemption permissible despite Debtor’s failure to point to the wildcard exemption as a basis for exempting the RV.
- Judge(s):
- Berzon, Bennett, and Lefkow
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