N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
In re : R UDY EB ER TO FUENTES, De btor,

------------------------------ DAVID M . GOODRIC H, C ha pte r 7 Truste e , Appe lla

nt,
v. R UDY EB ER TO FUENTES,

Appe lle e . No. 15-56618 D.C . No. 2:15-c v-02080-M W F
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia M ic h a e l W . Fitz ge ra ld, Distric t Judge , Pre siding

Subm itte d

April 7, 2017 * * Pa sa de n a , C a l ifornia 

# F IL ED APR 17 2017 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public at ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.

* * The pa

ne l una nim ously c onc lude s this c a se is suita ble for de c ision without oral a

rgum e nt. Se e Fe d. R . App. P. 34(a)(2).B e fore : M . SM ITH a nd N.R . SM ITH, C irc uit Judge s, a nd FEINER

M AN. *** David Goodric h a

ppe a ls the distric t c ourt’ s orde r (a ffirm ing the ba nkruptc y
c ourt) pe rm itting R

udy Fue nt e s to c la im

a hom e ste a d

e xe m ption in a pie c e of re a l prope rty loc ate d in C ovina , C a lifornia , (“ the Prope rty ” ) in his C ha p te r 7 ba nkruptc y . Fue nte s re side d the re with his wife and c hildre n. W e hav e jurisdic tion to he ar this a

ppe a l, 28 U.S.C . § 158(d)(1), a nd we a ffirm
. 1. “ A C ha p te r 7 ba nkruptc y pe tition c re ate s a

n e sta te to sa tisfy c re ditors’
c la im s.” W

olfe v . J a c obson (In re

J ac obson) , 676 F.3d 1193, 1198 (9th C ir. 2012). C a lifornia “ opte d out of the fe de ra l e xe m ption sc he m e , ” an d inste a d pe rm its de btors to sta

tutorily e xe m

pt som e of the ir prope rty

from the ir ba nkruptc y e sta te s. Id. Unde r C a lifornia ’ s sta tutory sc he m e , the re are two diffe re nt hom e ste a d
e xe m ptions a va ila ble
. Re dw ood Empire

Prod. C re dit Ass’n v . Ande r

son (In re Ande rson) , 824 F.2d 754, 756 (9th C ir. 1987). The first ty pe , the “ de c la

re d hom e ste a d e xe m

ption,” re q

uire s a re c orde d de c la

ration of hom e ste a d a

nd prote c t s the p roc e e ds of the volunta ry sa le of a de c l are d hom e ste a d. Id. at 757; C a l. C iv. Proc . C ode §§ 704.920, 704.960. The de c la re d hom e ste a d e xe m

p tion is not a

t issue he re , a s Fue nte s ha s not file d a hom e ste a d de c la

ration for thePrope rty . The

* * * The Honora

ble Ga ry Fe ine rm an for the Northe rn Distric t of Illinois, sitting by de s igna tion. 2se c o nd ty

pe , the “ a utom at ic hom e ste a d e xe m ption,” a pplie s without a prior de c la ration of hom e ste a d a

nd only prote c ts the proc e e ds of the forc e d sa le of a hom e ste a d. In re Ande rson , 824 F.2d a t 757. Thea

pplic ation of the a

utom atic hom e ste a d e xe m

ption is a t issuein this c a se . The a utom atic hom e ste a d e xe m ption “ is not a

n a b solute right to re ta i n the hom e ste a d itse lf.” Sc hw abe r v . Re e d (In reRe e d) , 940 F.2d 1317, 1321 (9th C ir. 1991). R athe r, it is “ a

de btor’ s right to re t a in a

c e rta in sum

of m one y whe n the
c ourt orde rs sa le of a hom e ste a d in orde r to e nforc e a m o ne y judgm e nt.” Id. C a lifornia C ivil Proc e dure C o de se c tion 704.730 provide s the m one ta ry va lue of a de btor’ s hom e s te a d e xe m ption, ba se d on the de b tor’ s fam ily sta tus, a ge , phy sic a l
and m e nta l a

bility , a nd inc om e . Howe ve r, a

judgm e nt de btor’ s hom e ste a d c an only be sold if a

“ bid is re c e ive d

at a sa le of [the ] hom e s te a d pursua nt to a c ourt orde r for sa le tha

t e xc e e ds the am ount of the hom e ste a d e xe m p t ion plus a

ny
a dditional a

m ount ne c e ssa

ry to sa tisfy a l l lie ns a

nd e n c um branc e s on theprope rty . . . .” C a l. C iv. Proc . C ode § 704.800(a). In orde r to qua lify

a s a “ hom e ste a d” unde r the a utom at ic hom e ste a d
e xe m ption, c e rta in re s ide nc y

re quire m e nts m

ust be satisfie d. C a l. C iv. Proc . C ode § 704.710(c ). If the re side nc y re quire m e nts a

re satisfie d, a

judgm e nt de btor c an
c la im a hom e ste a d e xe m

ption in the

inte re st he or she ha s in theprope rty , 3“ re ga

rdle ss of whe the r the judgm e nt de btor’ s inte re st is a fe e , le a se hold, or le sse r inte re s t.” C a l. C iv. Proc . C o d e § 704.820 La w R e vision C om

m ission C om

m e nts to 1982 Addition; s e e also Elliott v . W e il (In re Elliott) , 523 B .R . 188, 196 (B .A.P. 9th C ir. 2014) (“ [T] he [C a lifornia ] a utom atic hom e ste a d e xe m ption a pplie s to any inte re s t in theprope rty

if the de btor sa

tisfie s the c ontinuous re side nc y
re quire m e nt.” ). The pa rtie s do not dispute

tha t Fue nte s ha s sa

tisfie d the se re side nc y
re quire m e nts. In a ddition, Fuente s holds a posse ssory

inte re st in thePrope rty , whic h is a

n inte re s t in re a l prope rty tha t C a lifornia

la w re c ogniz e s. Se e

, e .g. , C a l. R e v. & Tax. C o de § 107; C a l. C ode R e gs. tit. 18, § 20. B e c a use Fue nte s ha s
satisfie d the re side nc y

re quire m e nts, he c a

n c la i m a hom e ste a d

e xe m ption in his ba nkruptc y for the posse ssory

inte re st tha

t he holds in the

Prope rty . Howe v e r, this posse s sory

inte re st c an be sold by

his c re ditors unle ss “ no bid is re c e ive d at a sa le of [the posse ssory

inte re s t] pursua

nt to a c ourt orde r for sa le tha

t e xc e e ds the
am ount of thehom e ste a d e xe m ption plus a

ny a d ditiona l am ount ne c e s sa ry to
satisfy a ll lie ns a

nd e nc um branc e s on theprope rty . . . .” C a l. C iv. Proc . C ode § 704.800(a). Furthe r, Fue nte s ’ s posse ssory inte re st is still subje c t to a ll othe r provisions of C a lifornia

and fe de ra l la

w, whic h m ay “ e xtinguish[] . . . [his] e quita b le 4posse s sory

inte re sts in the

re a l prope rty

at issue .” 1 Se e Ede n Plac e , LLC v . Pe rl (In
rePe rl) , 811 F.3d 1120, 1128 (9th C ir. 2016). 2. W ithout “ a

va lid sta tutory ba s is for doing so,” we c annot “ re fuse to honor” Fue nte s’ s c la i m e d hom e ste a d e xe m ption. Law

v . Sie ge l , 134 S. C t. 1188, 1196 (2014). Title

11, se c tion 522(g) of the Unite d State s C ode doe s not pre ve nt Fue nte s from

c la im ing a hom e ste a d e xe m ption in the Prope rty , be c a use the pa rtie s
a gre e tha t Fue nte s ne ithe r transfe rre d the Prope rty nor c onc e a le d the Prope rty . Se e Glass v . Hitt (In re

Glass) , 60 F.3d 565, 568–69 (9th C ir. 1995) (e xpla ining wha t is
re quire d for 11 U.S.C . § 522(g)(1) to a pply ). C a lifornia ’ s Uniform Voida ble Transa c t ions Ac t a lso doe s not pre ve nt Fue nte s from c la im ing a hom e ste a d
e xe m ption in the

Prope rty , be c a

use Fue nte s did not tra

nsfe r the Prope rty . S

e e C a l. C iv. C ode § 3439.04(a)(1) (“ A tra n sfe r m a de . . . by

a de btor is voida

ble a s to a
c re d itor . . . if the

de btor m a de the tra

nsfe r . . . [w] ith a c tua l inte nt to hinder, de la y , or de fraud a

ny c re ditor.” ).

1 Although wec o nc lude tha t fe de ra l ba

nkruptc y la w doe s not provide

a ba sis for disa llowing Fue nte s’ s hom e ste a d e xe m ption, wenote tha

t Fue nte s is not gua ran te e d to re c e ive any

pa rtic ula r am ount of m one y

if a ny othe r inte re st (be side s his posse ssory

inte re s t) in thePrope rty

is sold. 5Appe lla nt ha s fa i l e d to ide ntify

any othe r va lid fe d e ra l or sta

te la wground for “ re fus[ing] to honor”Fue nte s’ s c la im e d hom e ste a d e xe m ption. Se e Law , 134 S. C t. at 1196. AFFIRM E D.

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