appeal really it's a one sentence appeal of one sentence of the bankruptcy code and there's an dangling parts to that one sentence but that it's a one sentence appeal and so in my ten minutes that i have we're going to that's we're going to focus on things i don't have time to talk about the twenty five pages of briefing my client mr wilson's seventy one years old lived in a home for twenty years files bankruptcy trustee during the proceeding takes home sells the home gets one hundred seventy thousand dollars and proceeds from the sale my client she claims the schwab exemption that just says i'm claiming one hundred percent of the proceeds from the sale of my home up to the statutory maximum allowed under washington law that's one hundred twenty five thousand but with just a minute it's my understanding that she have she claimed b one b one is homestead but this twenty thousand well but just a minute she went for the homestead secondly but first she had the while while the card is just kind of a collective aggregate interest in the property which is twelve hundred fifty dollars plus the amount of eleven thousand eight hundred fifty dollars that she hadn't already used yet and so she got thirty five hundred sixty because the aggregate interest in the property was  thirty five sixty yes that's what she put in her schedule yes then she demands yes and now she wants the language of the state homestead exemption right and the homestead exemption is the total value of the la or the sum of one hundred twenty five thousand dollars whichever is less yes so how is the aggregate interest in the property which is the wildcard exemption any different than the total net value of the lambs ok i mean i'm trying to figure out why did you even change this why was there an amendment because the wild card drops away the wild card is under the federal set of i understand it is but what's the difference in the terms if you call it if you say aggregate interest in the property which is the wild card exemption and you and you equal  t total net value of lannes which is the washington state exemption it seems to be the same value that is if you apply five twenty two a two which is you had when i say your reason i'm taking it through this is because this is pretty important to me at this point we're only talking about how is the exemption that you amended to do you change what you're really trying to do ok because after we have through changing what the exemption is yes it seems to me that i'm pretty well stuck with what's said in our case which is the ninth circuit case of in re gephardt gift that the value of the property is the value at the time of the filing and that's why i said it's a one sentence appeal because that is the correct decision in what i call your court meaning what you got it is  minute that's why i took you through ok you when you get to this time where you're going to call the exemption yes the debtor gets to have an exemption of any i'm any exemption they want they choose the exemption they want  your debtor first chose the wild card exemption you know that shows the federal set of exemptions well you can call it what you want is five twenty two d five which is the wildcard exam given which is the aggregate interest in property yeah then for some reason they changed to the washington state homestead exemption which is the net value of la one hundred twenty five thousand which ever is less ok so if you value it all at the time of the filing which is what gephardt says then it's all three thousand five hundred sixty bucks that's why that's the distinction i think the bankruptcy court now and i'm think your honor it is is an air oh i don't know what you are saying so well i'm property the state now notice that and congress can do this they do it all the time there is no limiting language in b good ok so congress knows how to do that with that but however order not withstanding the or except they knew how to do that and they could have put value that a definition and they didn't they could have said choose the wildcard exemption or choose the washington state homestead exemption if you choose the wildcard exemption it's the aggregate interest in the property at the time of the filing of the bankruptcy yes if you choose the homestead exemption it's the net value of the lands or the sum of one hundred twenty five thousand whichever is less at the time you file bankruptcy where do you see the at the time you fail because when you look at the other parts of the code it suggests five twenty two way to the fair market value as of the date of the filing of the petition or with respect to the property that becomes property of the state after such state as of the date such property becomes the property of the state if you look at eleven five forty six five forty one a six it says the post petition appreciation and nursed the bankruptcy estate so at that point if i choose to do the fair market value if i decide what the net value of the land is or the a interest in the property at of the date of the filing it's always the same thirty five hundred sixty bucks it's there i mean i  here we were in california at that point we took the california exemption amount and that wasn't that was not the value of the lands or one hundred twenty five thousand whichever is less that was an absolute forty five thousand dollars every time it doesn't matter what it is it doesn't matter what the value is you get forty five thousand every time that's not what it says in washington it says the total net value of the land or the sum of one hundred twenty five thousand whichever is less so in california we gave them forty five thousand dollars because that's all cal california said you get forty five every time if i look at it now the exemption would be seventy five thousand every time but that's not what washington says washington says no you don't get hundred twenty five every time you get the value of the lands or that whichever is less but you're reading in i think improperly reading  well that i value it at the time of the filing of the bankruptcy but value with the defined term that at the time of the bankruptcy yes that's not used in this states when you take the state's seen it it's a defined value look at deed it says a value not to exceed thirty seven hundred dollars in a car a value not to exceed two hundred dollars per item and personal property value value value now you write you then looked over to the state law and state law and we quoted a whole bunch of washington supreme court cases in washington state the value is determined when you sell it let me ask you this i you went to the sales price in california when you say you can't even foreclose on the property unless you can give the person the exam value yes that's forty five land now you have a new wash unlike you actually have to post the bond for one hundred twenty five thousand well but you have a given only the net value of the land it doesn't matter what it is and all we're talking about then is the sale we're talking now about what value do we have in the bankruptcy at the point that we are addressing the issue yes and i have well i have a supreme court's case that suggests the value of the exemption is frozen as of the date of the filing of the petition that's myers versus matley i have another supreme court case white v stump which says the value of the exemptions is been fixed as of the date of the filing of the petition there we are i am giving you every value you can have if you want to take the wild card exemption i'll give you that value if you want to take that state homestead exemption i'll give you that but it's whichever is less but court just said a minute ago and it says and any other property in this state that comes into the estate post petition  rent that's not increase in value of the land no it hasn't rents no no that's appreciation you know it is there's nothing in there that says appreciation no case says appreciation  yes why because they don't give you appreciation the appreciation in the land is as i told you as it relates and get part any post value appreciation in the worst to the estate look at the states we have but this court's decision in hyman where it says sampson's on the day that the sale of the property we're talking about what do they get when they sell the property they're after but if you're going to take what the exemption is in washington the exemption was a stablished when you filed the bankruptcy that totaled net value of the lands or this one hundred twenty five thousand whichever is less if you went to california the exemption is always going to be forty five thousand and so even if the value of the land is less than forty five thousand of the time of the filing you'll still get the forty five thousand because that's the example amount in i in washington it doesn't say that it says the total net value or the sum whichever is less that's true but it talks about at the time of the sale of the property if i'm a judgment creditor and i get a judgment against the debtor in washington it's not the value of the property at that date in the judgment i can sit on the judgment for ten years and you come up with the total net value of the land or one hundred twenty five thousand and then that has to be paid to the debtor before the show conducts the sale washington law is it the time of the sale not the time of the judgment or the time of the filing and the bankruptcy there is no time at the filing of a bankruptcy under r c wus a six point one three all those sections on the homestead and the protection of the homestead and the protection of the value of the lands is that how you did the time of the execution so when i am in washington and i want to execute on a debtors home there's a process under the six point one three way go down and i asked the court to appoint it an appraiser to value the land just what it court said dahlia the property now there's only eighty thousand dollars equity at that time so they would have to post a payment of eighty thousand the value of the property at the time of the seo so order your theory and all i'm just taking your theory to its and under your theory until the value of the homes gets too until the value that the net value of the land gets so that you get a hundred twenty five you'll get the first two hundred twenty five yes and  even though your net value on the homestead is only that total value or this whichever is less yes but what you're doing then is you're trying to use that one hundred twenty five figure to be the same as california's forty five thousand dollar figure which doesn't say anything about the net value of the land or the forty five thousand whichever is last you're trying to use of the same you know you can expand a little bit t because the homestead exemption zero with thirteen point zero three zero is in the context of execution on homestead property so i wish to end that so when you go in to sell it first hundred twenty five thousand so you never see a foreclosure sale and property in florida you probably never see one ever because they have an unlimited homestead even the vet is very generous they think of five hundred fifty invoke the washington exemption up to one hundred twenty five thousand dollars could you could you put that on her schedule and said i don't want to put a value want to because i'm not sure of the value of the home but i want i want everything i'm entitled to it in two thousand and fifteen claiming one hundred percent of the value up to the statutory maximum allowed by the statute one twenty five and oh yes and how does two thousand how they're not you know how does that work today is that is that they everybody  the forms and i'm sorry which supreme court washing washing is a us supreme court but then bankruptcy forms are you know that under the rules and the rules are promulgated by the washes the u s supreme court and the supreme court pramod gates forms and rules and then it goes if congress doesn't object after whatever becomes the rules so the supreme court's four moves now that are incorporated into the software  now have the schwab box x back in two thousand and thirteen we didn't but the it doesn't change the scenario is that we can without putting a value we don't have to now put a value we can just say we're claiming the equity in the property up to up to the statutory allowed maximum that's what happens now in washington in bankruptcy court yes it in all states use of the swap decision yes sure let me have different view of the california being different than the washington judge smith says under california every time the delegates forty five thousand dollars that's only if there's equity to pay the forty five thousand dollars that the week of yeah and so if it sells for extra dollars and the net proceeds are thirty thousand dollars the exemption his thirty thousand dollars you get with it the homestead sale right yes well that's not other assets no not at all so there isn't it so there's no guarantee of every time a forty five thousand dollars you could have it am i correct the trustees am i correct yes and it is trustees i mean i my clients house the day after i filed we'd get thirty five dollars but but if in california you cannot even for plough and sell the property unless you give the person forty but washington is very very similar you can have a valuation hearing you determine if there is a equity in the property that exceeds one hundred twenty five thousand then the court authorizes the sheriff to allowed and the law if this sale produces less then the valuation hearing the valuation hearing produces a value to the court of less than one hundred twenty five thousand the the judge don't even allow the sale because they say you're not going to realize any money out of this sale that exceeds the debtors exam action i'm not going to approve the sale to the sheriff come back when the value goes up so you wait a couple more years a value goes up to one seventy and now you go down the shaft have your valuation hearing and or c w six point one three now it's one seventy your honor and the judge says ok now you've exceeded your one twenty five go ahea a property worth x at filing which is less than the exemption that appreciates during the bankruptcy proceedings to the extent that it now exceeds yes the exemption the question is who's entitle to the my my there for my time is up i'm sorry my time's up we conclude that the controlling ninth circuit authority involving state homestead exemptions which holds the bank of the state is entitle to post petition prop appreciation in excess of the maximum allowed permitted to be exempted under the statutory authority invoked by the debtor in property the state so that's that was my closing arguments was schappell you're right and i apologize for trying to jump in to say you're right because that was in fact my closing chappell said that i think it's  necessities to cover life after bankruptcy such as housing and that's why we have this long tradition both in the ninth circuit and elsewhere in the country that we interpret property exemptions and five twenty two elsewhere is liberally as possible in order to protect those very important exemptions and i think that's the important starting point when looking at all of these different provisions of section five twenty two how do we interpret this in order to protect the exemption as much as possible  trustees approach does here is is a radical and quite frankly unprecedented departure from the way this is historically worked you know quite frankly so far i have not seen a case that's directly on point that supports this particular issue on exemptions but i want to focus on a particular example that i think is especially important under this particular point after after the appreciation after the trustee gets to let me let me rephrase that the trustee able to capture all of that appreciation and at the same time disregard th accord however with the past holdings of this court which is stablish that what is frozen as of the date of the filing of the petition is the value of the debtors exemption not the fair market value of the property claimed as examples right and i'll be riding high man right and i'll be honest i think that language is tricky and poorly worded to say the least but i think it's direct and if we look back to i don't know that it stick to because it absolutely goes to what they had to do in the party in order to the side how to deal with the property and whether it could be property of state or not right and they said there was probably it was property of the state because of appreciated during the time it was in the bankruptcy and so therefore it had to stay in the estate until the sale and then they said as i quoted that what is stablished is that the date of the filing of the petition is the value of the debtors exemption not the fair market value of the second question is ok now that we've got that property in the estate can the debtor a certain exemption to it because that's what an exemption is that yes that is property of the a state's but this is  i'm reclaiming my right to it and that if we have anything to do with what i quoted because now we're talking not about what exemption i can claim that's wild card vs home state homestead exemption this language talks about the battle you of the exemption and it says it's the value of the filing of the titian it does say that and the problem is that the court wasn't addressing the value of an exemption i don't see how that would be how could it be not it says what is frozen as of the date of the filing is the value of the appreciation would go to the debtor up to the extent of the exemption so it seems to me you have to read all this language and that the prism through the lens of chapel  appreciation that they gave the full exemption from the proceeds so is that is that how you interpret the language is exactly how i interpret the language because i think when you look at it in a vacuum without that background it doesn't quite frankly don't think it berg we got a different statute we've got a california statute which has a forty five thousand dollar exemption not an exemption which is the value of the property or forty five thousand whichever is less it's forty five period and at that point we said you get your forty five we've got a different statute here and that's the worry now i put it i asked questions i mean frankly i think my colleague makes a good point i'm trying to figure out you're an expert here you tell me if this is what we're supposed to be doing do i just automatically say ok in every washington bankruptcy you get a hundred twenty five thousand dollars because that isn't what it's saying is it says what it's never is less right it's jones with regard to that question would you respond  further on in that same decision gephardt decision following the quoted language they say riley has reaffirmed certain of the understand under lying principles in these cases in clarified that with respect to how exam property is defined there reading is  not just to the california exemptions again but to all statutes that limit the value of the exemption to an interest in a property cap and a dollar value right now so they're all treated the same cording to get hard right and that's my interpretation of it too  you don't have the proper you don't get the property as in florida you get all the property there but it's an interest in the property up to a certain limited amount that's that's the way i read the exemptions because washington is capped at one twenty five yeah right right and that sort of vexing questions about you know prior to schwab don't don't our decisions compel us to take the amount that she put in as of the time that she filed the petition for me may give us a different rule or different proceeding that is that will allow us to simply check a box and say i want i want to the amount the total amount of the exemption allowed by law right well so i was twenty ten right decided twenty two that sounds correct and champ it was decided in two thousand and seven correct i was pretty yes that was in that case they allow not only the amendment to increase the claim but also allow the donor to have the appreciated value that was created over the period of time during the bankruptcy to have up to the maximum amount of the capped exemption up to that amount of the so that now the answer is yes by this question i would suggest that swap did make a difference in this case because always basically since two thousand  with would judge smith referenced in terms of the question of the appellant's in this case you're exactly right that that washington statute is different than the california statute and it's different but the result is not any different is it  not every debtor gets forty five thousand dollars in california has there has to be equity to pay so what it really says is the debtor gets an exemption up to but no more than forty five thousand dollars and the reality is it only gets received what is actually the proceeds from the sale so if the proceeds from the sale show ten thousand dollars that's forty five thousand dollars now is ten thousand dollars is not the way it works and if you're talking about execution sales and a member of the california statute with the unique and homeowner in washington you have a proceeding where you can you have to show to the trial court the judgment creditor now you think you need to make a distinction i will do this and later the were not the trustee is not a judgment creditor and when he's selling the property he has the right of the will go to the creditors in the correct that's correct they work but that's not the proceeds in california are only ten thousand dollars that's all they are get right one that would be a point is that is that correct that would be potentially that that could be correct i have to know more about the facts of the particular case is the simple fact that they sell the property it generates only ten thousand dollars there's no guarantee that the creditor is going to get i mean the debt is going to get forty five thousand dollars because it isn't forty five thousand dollars and so then when the question be why would the debt the trustee sell that probably would so exactly right and then the debtor get the property we wouldn't even be having this discussion right but you know instance can you say that in every instance the debtor gets forty five thousand dollars you know you can't depend on the senate budget for clothes in california you could not foreclose in california without getting the debt or the forty five at that point in other words it didn't matter what your situation the bank in california could not foreclose unless the property owner got the forty five thousand dollars and all you're trying to do as i understand it is distinguish washington from that any factual distinction particular chapel where they specifically talked about the right to amend to increase the earlier claim to exemption to reflect the appreciation and the issues that very clearly and in those cases it was really an issue about who's in time and to what portion of the appreciation but what they did all those cases they divided according to whatever the example maximum vention was the dinner got everything else the credit for the credit you got through the state here's how you distinguish chappell from this case ok the trustee didn't object to those issues but the drug debt are made in terms of the amendment that in object there's lots of case law that says if there's not a timely objection to the exit to the exemption even if it's not  issue will be termed separately rather we decide only how much of the remaining proceeds which were theirs all of the appreciation all bergson time to receive versus how much the state is entitle to receive again the appreciated amount more than dollars so that no and i mean title that you know exactly right and that case the the trustee objected to that and went to the court to the court said even though originally there was not enough equity to pay the max amount the and at the time the proces existed it was forty five thousand washington's different washington you look at the time of filing when the debtor finally where does it say anywhere in any statute that that's the case it's that we thought it in our brief destroyed as applied to public use the proceeds of sale or what the exemptions claimed in that was that was california statute seven zero four seven two zero that's been amended now but even that with the law at the time so that exemption doesn't even come into a proceed statute we just have a statute that fix the exemption in the property at and it would be fixed at the time of filing which in this case was that thirty five sixty judge smith is correct it doesn't change whether he men's or not under either statute i mean it's that number doesn't say at the time of filing and it doesn't say at the time of sale does either one of those things doesn't the state statute yeah correct ok but what what controls here isn't the state statute on this question it's the federal statu said the maximum amount allowed you know the show are good could be entitled to one twenty five now the trustee has a has an obligation at that point to decide what to do about that right and if the trustee says but your prop said the property is two hundred thousand right and the mortgage is one hundred suppose she files today and we have the facts that we have here that is that everybody's best guess is that she's got about thirty five hundred dollars in equity and then there's a dramatic value increase in the value of the property over the next next year you know bless everyone it looks like everybody's going to come out better the creditors are going to come out better and maybe she will to she get the one twenty five under the under the new procedures well if it wasn't objected to she would if it's contested well then the court would have to but i would there why would there in the sixty's why would there be an objection if all she's saying is i want a full i want the equity in my house up to the one twenty five i'm entitled to under washington and if you sell it tomorrow then i get i guess i get to thirty five hundred dollars bummer right but if you sell it two years from now maybe it'll be worth more and if it turns out to be one twenty five for her and another you know fifty thousand for the creditors looks like looks like i was going to win with him because you have to figure out that who does the appreciation belong to and the courts this court's been very clear publicly titian appreciation belongs to the state ok and that would be that would be true even today if she filed today and check the schwab on that yes it would still we would still have to value it as of today the if the trustee doesn't object then she would be entitled to the full amount she would when when i go to the amount of the exemption correct and that's even here that would be that and after that it would go to the estate objections here a lot of the cases there were that you're looking at the objections there isn't worth there were objections here why would they have checked it was that she was only asking for thirty five hundred dollars but we objected to the amendment which is where they tried to just kind of check the schwab box and we've said no you that the the appreciation goes into the estate for ect but all the cases it goes into the estate like all property goes into the estate subject to being revisited or turned back to the to the dinner correct correct yes that's the complete statement and it goes into the estate because it becomes estate property subject to the exemption so when these when these courts say it's property of the estate it says nothing with regard to who's entitle to what portion of the jersey the district court case in new jersey all of which said even though the the kept them out of the exemption paper only as a result of the appreciation that the debtor is entitle to the full amount every one of those cases say that well because but you could distinguish them chappell wasn't objected to by the trustee also work with the old california statute where proceeds don't come up until the property sold and we have that we have this court saying you say that but that's not what the statute says that it gives an exemption and that's that's because that's a judgment debtor situation that has now put on the on the template of a bankruptcy proceeding right but the concept is the same that who's entitle to the appreciation when it appreciates more than the equity at the time of filing and every one of these cases that had held straight up on that issue have held that because what you say there objected to or not objected to and i'm assuming the trustees doing his job issues about what the value of the property was at filing and whether or not there was sufficient forty five correct what happened the judge decided what those what those issues were decided what the value was in the value was at the time of the filing there was not sufficient equity to pay the exemption correct correct yes and then it was the numbers and then after paying all of the liens in taking into consideration the appreciation there was more equity then was existing originally enough to pay the whole exemption but i get more it's part of the property this part of it is valued at the time of the filing the potential particularly you say that the appreciation itself they said the appreciation comes into the state by virtue of five four when a city so it's not but it's not new it's like a like which used the growing then it's continued valuation but that but it's a property of the estate at the time of filing and it would be part of the value of the property at that time because here's the grand bargain the debtor gets the discharge and the trustee gets the bankruptcy the state property to liquidate for the benefit of the creditors that it becomes and says in essence the owner and appreciation is an element of ownership aspect of ownership that goes with it and it's always the exemption so the question is when you determine what those are and what the value is and that's wh you get the five twenty two and you have five twenty two a two that says at the time of filing exempt this section talks about the time of filing unless you post filing property and then it's when arizona did the exact same thing but what i'm saying is that the this court used five twenty two way to determine the time of the value of the exemption with a state court exemption and mr hart's exemption with one hundred twenty five like ours but he only had  independent of whether there's a it does make it contingent on well there's an objection but but but if you but that's what the basis of the objection would be if you claim more than you're entitled to at the time that that would be the trustees objections like you can't claim one hundred twenty five thousand because there's no equity for you for that in the property you only get fifty seven if you don't object to the one twenty five objection or claim that it will pass through there's lots of cases that say if you don't timely object they're going to be but those exemption claims even if improper even in excess of the amount to check the slum box post petition and when you get back to the grand bargain i mean all the cases say the post petition appreciation belongs to the state ok if the state is not a judgment creditor executing the propert you don't get to use the time of sale to determine what the exemption claim of the debtor is visited the estate it's when they file because from then when the because now that the seller of the property is the estate for example who pays the capital gains tax when that property get found it's not the debtor if it was an execution that would be the case it's the bankruptcy estate the new tax payer they take on the capital gains this is not an execution like sale you don't get to equate what under five twenty two and under the state or federal exemption scheme in this case it was thirty five sixty and that's what the bankruptcy court held and just what judge jones affirmed and we would urge that this court affirms well thank you thank you mr feinstein i'm going to give you one minute we i think we've heard quite a bit of argument and we were very generous in our time so i'm really only looking for anything that needs to be corrected i think i was going to take just one minute thirty seconds which is going to be a pellet procedure one zero one two not over talk a judge when the judges ask me a question i apologize such but when he mentioned schapelle that was my big finish and my time was up me we were going on r c w six point one three zero three zero the homestead one twenty five and i think we were both asking about procedure six point one three one  i think that was a question they judge by b as you get you get it appraised and then if it comes in excess of the homestead then you get your order authorizing the seo and otherwise no well owner he steps into the shoes of the creditors that the hypothetical judge i understand that he says i don't have to follow the execution procedure of the state in this regard i am the new owner of the property and as the new owner of the property i can sell the property anytime i want i don't i don't agree that there's you know the trustees go down and have ownership well they have they have five forty one creates in the state of which this is property and it's subject to debtors rights of exemptions that subject to other interest i mean there's if it's a property of now we're back up in five forty one have to follow that statute or not does he have to get an appraisal six point thirteen point one hundred is that what it was yes it's one hundred i'm not sure that he has to follow this state execution but if there's if the procedure does assail fall of the state execution laws and the state execution law you want to bind him is not appropriate yes but we're talking only we're talking over here it the exemption statue not be the property statue we're talking about when we get to exempt so we this is kind of hypothetical we get to exempt what's exempt under washington law and what the exempt under washing law here's a process how you determine it you look at zero three  you look at one one hundred youth you look at value you look at what if there's equity or not equity you look at chapelle them who and then you determine whether or not when the trustee went to sell the property he has to file a motion notice hearing under section three sixty three he has to go into the bankruptcy judge to get approval for the sale if at prove all of the sale produces less then the exemption debtors community project in the bankruptcy judges don't agree executing on the property in the washington law yes so that the situation and the bankruptcy court does not need to go through the same procedure that the washington law  there's only twenty five hundred dollars equity that the debtors applied for exemption of thirty five hundred but we still want to sell it just because it's a nice day out today the judge won't allow the sale because he doesn't exceed the exemption amount so he implicitly implies the state statue even though he doesn't have to follow the state's statute he just says i'm not going to approve the sale because is no equity here th