### NOT FOR PU BLICA TION

U NIT E D ST A T E S BA NK RU PT CYA PPE L L A T E PA N E L

OF T HE NINT H CIRCU IT In re: W ILLIA MA . LA N DES,

D eb to r. ESSEXBA N K

, A ppellant,

v. JO HN R EGER

, C hapter 7 Trustee; W ILLIA MA . LA N DES; MA RIE LA N D ES,

A ppellees. BA PN o . EC -18-1344-BGF Bk. N o . 17-22481

M E M ORA N D U M *

A rgued and Sub m itted o n O c tob er 25, 2019 at San Franc isc o, C alifo rnia Filed – Dec emb er 17, 2019 A ppeal fro m the U nited States Bankruptcy C o urt fo r the Eastern Distric t o f C alifo rnia 

# FIL ED

D EC 17 2019
SUSAN M . SPRAUL, CLERK U

. S. B KCY

. APP. PANEL O F T HE N I N T H CI RCUI T

*Thi s di s posi ti on i s not appr opr i ate for publi cati on. Although i t may be ci ted for whatev er per suasiv e v alue i t may hav e, see Fed. R. App. P. 32.1, i t has no pr ecedenti al v alue, see 9th Ci r . BAP Rule 8024-1.Ho no rab le Michael S. Mc Manus, Bankruptcy Judge, Presiding

A ppearanc es: A ppellant Essex Bank did no t appear; Michael Paul

D ac quisto argued fo r appellee Jo hn R eger, C hapter 7 T rustee.

Befo re: BRA N D, GA N and FA R IS, Bankruptcy Judges.

INT ROD U CT I ON A ppellant Essex Bank appeals an o rder appro ving the sale o f c ertain perso nal pro perty o f the estate to the deb t o r's ex-spo use under § 363(b ). 1 In
obj ec ting to the sale, Essex Bank m a intained that it held a security interest in the pro perty b eing so ld and therefo r e was entitled to the pro c eeds. In appro ving the sale, the b ankruptc y c o urt determ ined that Essex Bank did no t have a lien o n the pro perty at issue; thus, Essex Bank was entitled to no thing. A ppellees c o ntend that the appeal is statuto r ily o r equitab ly m o o t
. W e c o nc lude that the appeal is no t m o o t. Further, the b a nkruptc y c o urt
m isapplied C alifo rnia law with respec t to Essex Bank's lien under C al. C iv. C o de P. ("C C P ") § 708.410. A c c o rdingly, we R EVER SE. //// ////

1 Unless speci fi ed other wi se, all chapterand secti on r efer ences ar e to the Bankr uptcy Code, 11 U.S

. C. §§ 101-1532, and all "Rule" r efer ences ar e to the Feder al Rules of Bankr uptcy Pr ocedur e. 2I. FA CT U A L BA C K GROU ND A ND PROCE D U R A L HIST O RY

A . T he parties, E s s ex Bank' s judg m e nt and the bankruptcy filing W illiam Landes filed a chapter 7 b ankruptc y c ase o n A p ril 14, 2017. Jo hn R eger ("Trustee") was appo inted as the chapter 7 trustee. The c ase was designated as an "asset c ase." In 2011, W illiam 's estranged wife, Marie, 2 filed a petitio n fo r disso lutio n
o f m arriage in the C a lifo rnia state c o urt ("Divo rc e C ase"). The Divo rc e C ase is still pending. Prio r to the petitio n date, the divo rc e c o urt had no t appro ved an agreem ent dividing the m arital estate b etween W illiamand Marie and had
no t charac terized any pro p erty as c o m m unity o r separate. Thus, all
c o m m unity pro perty in the Divo rc e C ase at the tim e W illiam filed his petitio n was pro perty o f the b ankruptc y estate and sub jec t to adm inistratio n b y Trustee. 3 Marie is a prio rity unsec ured c r edito r in W illiam 's chapter 7 c ase, with a signific ant c laimfo r do m esticsuppo rt ob ligatio ns. She filed a pro o f o f
c laimfo r do m estic suppo r t arrears o f $186,000. A t so m e po int, Essex Bank lo aned W illiamm o ney. O n Septemb er 22, 2015, Essex Bank o

b tained a judgm ent fro mthe C a lifo rnia state c o urt against

2 We r efer to Mr . Landes as Wi lli am and Ms. Landes as Mar i e for clar i ty. No di sr espect i s intended.

3 See Dumas v. Mantle (In re Mantle) , 153 F.3d 1082, 1085 (9th Ci r . 1998) ("For pur poses of § 541(a)(2), all community pr oper ty not yet di v i ded by a state cour t at the ti me of the bankr u ptcy fi ling i s pr oper ty of the bankr u ptcy estate."). For thi s r eason, we r ej ect (as di d the bankr uptcy cour t) Essex Bank's ar gument that the sale of any per sonal pr oper ty, i ncluding the guns and ar twor k, should hav e occur red in the Di v or ce Case. 3W illiamfo r $739,994.08 ("Judgment"). Prio r to the petitio n date, Essex Bank

(1) rec o rded an Ab s t r ac t o f Judgm ent, (2) filed a N o tic e o f Judgm ent Lien ("JL-1") with the C alifo rnia Sec retary o f State, and (3) filed a N o tic e o f Lien in the Divo rc e C ase (Fo rmEJ-185) ("N o t ic e o f Lien"). The pro o f o f servic e fo r the N o tic e o f Lien indic ates that Essex Bank served b o th W illiam ' s and Marie's divo rc e c o unsel with the N o tic e o f Lien. B. Pertinent ev e n ts in the bankruptcy c as e prior to the s a le A fter the § 341(a) m eeting o f c redito rs, W illiamfiled an am ended Schedule A/B to inc lude a "fine art c o llec tio n" valued at $20,000 and "firearm s" valued at $10,000. He filed an amended Schedule C to inc lude an $8,000 exem ptio n in the artwo rk under C C P § 704.040. N o o ne objec t ed to W illiam 's c laim ed exem ptio n. Essex Bank filed a $857,159.86 sec ured pro o f o f c laimfo r the Judgm ent. A ttached were c o pies o f the Judgm ent, Ab strac t o f Judgm ent, and the JL-1. Essex Bank filed an am ended pro o f o f c laimto inc lude the previo u sly m issing
c o py o f the N o tic e o f Lien. Trustee did no t objec t to Essex Bank's claim

. C. T rus tee' s s ale m otion Trustee m o ved to sell the estate's interest in the guns and artwo rk to Marie fo r $20,000 ("Sale Mo tio n"). He m aintained that these item s were
c o m m unity pro perty o wned b y b o th W illiamand Marie. Trustee stated that W illiamdid no t schedule any liens against the perso nal pro perty at issue and that Trustee was no t aware o f any liens. W illiamwo uld rec eive his c laim ed

4exem ptio n o f $8,000 fro mthe sale pro c eeds.

Trustee asserted that the $20,000 "price [was] at o rnear the present
m axim umob tainab le pric e fo r the Pro perty" b ased o n info rm atio n pro vided b y a po tential auc tio neer. He did no t articulate ho w m any guns o r piec es o f art were invo lved in the sale, b ut a letter dated August 2, 2017, fro mMarie's divo rc e atto rney to Trustee and attached to the Sale Mo tio n indic ates that there were appro xim ately 46 guns and 36 piec es o f art. The sale was sub jec t to
o verb ids. Trustee sub m itted a b rief dec laratio n in suppo rt o f the Sale Mo t io n and
a c o p y o f the parties' b uy/sell agreem ent. The dec laratio n was silent as tothe nego tiatio n pro c ess with Marie, and Trustee did no t request a § 363(m ) go o dfaith finding o n her b ehalf. The b uy/sell agreem ent stated that the sale was "o n an 'as is' and 'where is' b asis with norepresentatio ns o r warranties o f any kind." Essex Bank o p p o sed the Sale Mo t io n. It argued that the Judgm ent was a
c o m m unity deb tfo r which b o th W illiamand Marie were respo nsib le, and that it had a lien o n the guns and artwo r k under several theo ries, inc luding the N o tic e o f Lien filed in the Divo rc e C a se. Essex Bank argued that the N o tic e o f Lien prevented W illiamfro mselling c o m m unity pro p erty to Marie with the pro c eeds go ing to so m eo ne o ther than Essex Bank. Based on W illiam 's c laim ed exem ptio n and adm inistrative expenses, Essex Bank argued that it wo uld rec eive no thing fro mthe sale. Essex Bank also

5questio ned whether the sale was nego tiated at arm s' length given that the

b u yer was W illiam ' s estranged wife. In reply, Trustee argued that Essex Bank failed toestab lish a lien o n the guns and artwo rk under its asserted theo ries. First, argued Trustee, the Judgm ent was a m o ney judgm ent o nly and did no t c reate any lien rights in favo r o f Essex Bank against the perso nal pro perty b eing so ld. Sec o nd, argued Trustee, the Ab strac to f Judgm ent c reated a judgm ent lien o n real pro perty
o nly, no t perso nal pro perty. Third, argued Trustee, the JL-1 filed with the C alifo rnia Sec retary o f State c reated a judgm ent lien o n c ertain perso nal pro perty b ut no t the guns and artwo rk b eing so ld. Finally, the sale did no t fall within the m eaning o f C C P § 708.410; 4 it was no t a "c ause o f ac t io n" fo r
m o ney o r pro p erty that was the sub jec t o f the Divo rc e C ase and was no t part
o f any judgm ent in the Divo rc e C ase. Therefo re, argued Trustee, the N o tic e o f Lien did no t pro vide Essex Bank with a lien o n the subjec t pro perty either. N o o ther b idders appeared at the sale hearing. C o unsel fo r Trustee
c o nc eded that Marie, as the highest prio rity unsec ured c redito r with her large DSO c laim, wo uld rec eive whatever sale pro c eeds were left after Trustee paid

4 S peci fi cally, CCP § 708.410 (a) pr ov i des that a j udgment cr edi tor who has a money j udgment agai nst a j udgment debtor who i s a par ty to a pendi ng acti on or speci a l pr oceeding may obtai n a li en, to the extent r equi r ed to sati sfy the j udgment cr edi tor 's money j udgment, on ei ther : (1) any cause of acti on of such j udgment debtor for money or p r oper ty that i s the subj ect of the acti on or pr oceeding; or (2) the r i ghts of such j udgment debtor to money or pr oper ty under any j udgment subsequently pr ocur ed in the acti on or pr oceeding. 6W illiamhis $8,000 exem ptio n and adm inistrative expenses.

A fter the sale hearing, the b ankruptc y c o urt entered its C ivil Minutes granting the Sale Mo tio n. The c o urt ruled that Essex Bank had failed to estab lish c o llusio n o r that W illiamsho u ld no t b e paid o n ac c o unt o f his
unchallenged c laim ed exem ptio n. The c o urt alsofo und that Essex Bank had failed to estab lish a security interest in the guns o r artwo r k under any lien theo ry it raised. A c c o rdingly, as an unsecured c redito r, Essex Bank wo uld
rec eive no thing fro mthe sale b ec ause Marie's DSOc laim had to b e paid ahead o f o ther unsec ured c laim s under § 507. Essex Bank timely appealed the
c o urt's later written o rder ("Sale O rder"). D . Pos t-appeal ev ents Essex Bank did no t seek a stay o f the Sale O r der pending appeal. A ltho ugh the sale has b een c o nsum m ated, c o unsel fo r Trustee c o nfirm ed that he is ho lding the pro c eeds pending the o utc o m e o f the appeal. II. JU RISD I CT ION The b ankruptc y c o urt had jurisdic t io n under 28 U .S.C . §§ 1334 and 157(b )(2)(K ) and (N ). Subjec t to o ur discu ssio n o f m o o tness b elo w, we have jurisdic tio n under 28 U .S.C . § 158. III. ISSU E S 1. Is the appeal m o o t? 2. Did the b ankruptc y c o urt ab use its disc retio n in granting the Sale Mo t io n?

7I V . ST A ND A RD S OF RE V IE W

W e review de no vo o ur o wn jurisdic tio n, inc luding the questio n o f
m o o tness. S uter v. Go edert , 504 F.3d 982, 985 (9th Cir. 2007); Ellis v. Y u (In re Ellis) , 523 B.R . 673, 677 (9th C ir. BA P 2014). The questio n whether a purchaser is a go o d faith purchaser under § 363(m ) is a questio n o f fac t we review fo r c lear erro r . Tho m a s v. N a m ba (In re Tho m a s) , 287 B.R . 782, 785 (9th C ir. BA P 2002). W e review § 363 sale o rders fo r an ab use o f disc retio n. F itzgera ld v. N inn W o rx S r, Inc. (In re F itzgera ld) , 428 B.R . 872, 880 (9th C ir. BA P 2010). A b a nkruptc y c o u rt ab u s es its disc retio n if it applies the wro ng legal standard,
m isapplies the c o rrec t legal standard, o rm a kes fac tual findings that are illo gic al, im plausib le, o r witho ut suppo rt in inferenc es that m ay b e drawn fro mthe fac ts in the rec o rd. S ee Tra fficS cho o l.co m, Inc. v. Edriver Inc. , 653 F.3d 820, 832 (9th C ir. 2011) (c iting United S ta tes v. Hinkso n , 585 F.3d 1247, 1262 (9th C ir. 2009) (en b anc )). V . D ISCU S SION A . T he appeal isnot m oot. Trustee argues that the appeal is statuto rily m o o t under § 363(m ), b ec ause Essex Bank failed toseek a stay pending appeal. A lternatively, he argues that the appeal is equitab ly m o o t, b ec ause Essex Bank failed toseek a stay, the sale has b een c o nsum m ated, and it wo uld b e "extrem ely diffic ult" to unwind it. W e c o nc lude that the appeal is neither statuto rily m o o t no r

8equitab ly m o o t.

1. T he appeal isnot s tatutorily m oot. Sec tio n 363(b )(1) perm its a b ankruptc y trustee, after no tic e and a hearing, to "use, sell, o r lease, o ther than in the o rdinary c o urse o f b usiness, pro perty o f the estate." Further, § 363(m ) pro vides that reversal o r m o d ific atio n o n appeal o f an autho rizatio n under [§ 363(b )] o f a sale o r lease o f pro perty do es no t affec t the validity o f a sale or l e a s e under such autho rizatio n t o an entity that purchased o r leased such pro perty in go o d faith

. . . unless such autho rizatio n and such sale o r lease were stayed pending appeal. In sho rt, § 363(m ) pro tec ts the interests o f go o d faith purchasers who b uy pro perty pursuant to a sale autho rized under § 363(b ) when a party in interest has failed to stay the sale pending appeal. Ho wever, "[e]ven tho u gh an appeal fro man o r der appro ving a sale is
m o o t if the sale has no t b een stayed and is c o nsum m ated, there are several
exc eptio ns. One exc eptio n to the m o o tness rule is fo r appeals questio ning whether the purc haser purchased the pro perty in go o d faith." In re F itzgera ld, 428 B.R

. at 880 (c iting S w . Pro ds., Inc. v. D urk in (In re S w. Pro ds., Inc.) , 144 B.R

. 100, 102-03 (9th C ir. BA P 1992)). Ago o d faith purchaser is "o ne who b uys 'in go o d faith' and 'fo r value.'" Ewell v. D iebert (In re Ewell), 958 F.2d 276, 281 (9th C ir. 1992). The N inth C ircu it has "defined lac k o f go o d faith as 'fraud,
c o llusio n . . . o r an attem p tto take gro s sly unfair advantage o f o ther b idders.'" O no uli-K o na La nd Co . v. Esta te o

f R icha r ds (In re O no uli-K o na La nd Co .) , 846 F.2d

91170, 1173 (9th C ir. 1988) (quo tingC m ty. Thrift & Lo a n v. S uchy (In re S uchy) , 786 F.2d 900, 902 (9th Cir. 1985)). Essex Bank argues that the sale here lacked go o d faith, b ec ause the assets were sub jec t to a lien that was readily apparent to anyo ne do ing a m inim al am o unt o f due diligenc e; the N o tic e o f Lien filed in the Divo rc e C ase is a m atter o f pub licrec o rd. "Go o d faith" is a fac tual determ inatio n we review fo r c lear erro r. In re Tho m a s , 287 B.R

. at 785. The b ankruptc y c o urt's fac tual finding m u st b e suppo rted b y evidenc e in the rec o rd. In re F itzgera ld, 428 B.R . at 880-81. "[P]arties who desire the pro t ec tio n o f sec tio n 363(m ) [m ust] estab lish an evidentiary rec o rd fo r the b ankruptc y c o urt to m ake the nec essary findings o f fac t and c o nc lusio ns o f law. C o rrelatively, the o p po nent o f go o d faith do es
no t have the b urden to dem o nstrate the ab senc e o f go o d faith." T.C . Inv'rs v. Jo seph (In re M

Capita l Co rp.) , 290 B.R . 743, 745 (9th C ir. BA P 2003). Trustee did no t request, no r did he suppo rt with evidenc e in the rec o rd, a finding that Marie was a "go o d faith" purchaser under § 363(m ). A nd the b a nkruptc y c o u rt m ade no such finding. R ather, the b ankruptc y c o urt fo und that Essex Bank had failed toestab lish any c o llusio n b etween the parties. Ho wever, Trustee had the b urden o f pro o f o n the issue o f go o d faith as the pro po nent o f the sale. Id. at 747. While no b ankruptc y judge wo uld appro ve a sale that do es no t appear to b e in go o d faith, and an ac tual finding o f "go o d faith" is no t an essential elem ent o f a sale under § 363(b ), "[u]nless and until 'go o d faith' had b een determ ined, the appeal is no t m o o t under § 363(m )." In

10re Tho m a s , 287 B.R . at 785. The appellate c o urt will no t m ake a finding o f go o d

faith (o r lac k thereo f) in the first instanc e o n appeal, "b ec ause determ inatio n
o f sec tio n 363(m ) go o d faith is the pro vinc e o f the trial c o urt." In re M Capita l Co rp. , 290 B.R . at 747; s ee id. a t 752 ("W itho ut such affirm ative findings, the
ram ific a tio ns sho uld b e ob vio us; no safe harb o r[.]"). W e therefo r e c o nc lude that the appeal is no t statuto rily m o o t under § 363(m ). 2. T he appeal isnot equitably m oot. Equitab le m o o tness applies when a c o m prehensive c hange o f
c irc um stanc es has o c c urred soas torender it inequitab le fo r a c o urt to
c o nsider the m erits o f the appeal. Mo to r V e hicle Ca s. Co . v. Tho rpe Insula tio n Co . (In re Tho rpe Insula tio n Co .) , 677 F.3d 869, 880 (9th Cir. 2012). Equitab le
m o o tness is particularly influential in b ankruptc y pro c eedings "where pub lic po licy values the finality o f b a nkruptc y judgm ents b ec a use deb to rs, c redito rs, and third parties are entitled to rely o n a final b a nkruptc y c o urt o rder." Id. (c iting In re O no uli-K

o na La nd Co . , 846 F.2d at 1172). Fo r an appeal to b e equitab ly m o o t, "[t]he questio n is whether the c ase presents transac tio ns that
are so c o m plex o r diffic ult to unwind that the do c trine o f equitab le m o o tness
wo uld apply." Id. (internal quo tatio n m a r ks and c itatio n o m itted). S e e C lea r Cha nnel O utdo o r, Inc. v. Knupfer (In re PW , LLC ), 391 B.R . 25, 33 (9th C ir. BA P 2008) (c o urts exam ine "the c o nsequenc es o f the rem edy and the numb er o f third parties who have changed their po sitio n in relianc e o n the o r der that is

11b eing appealed."). "'Ultim ately, the dec isio n whether to unsc ramb le the eggs

turns o n what is prac t ic al and equitab le.'" Id. (c itatio n o m itted). The N inth C irc uit fo llo w s a fo ur-step pro c ess todeterm ine whether an appeal is equitab ly m o o t: W e will lo o k first at whether a sta y wa s s ought, fo r ab s ent that a party has no t fully pursued its r ights. If a stay was so ught and no t gained, we then will lo o k to whether sub stantial c o nsum m atio n o f the plan has o c c urred. N ext, we will lo ok to the effec t a rem edy m ay have o n third parties no t b efo re the c o urt. Finally, we will lo o k at whether the b ank ru p t cy c o urt c an fashio n effec tive and equitab le relief witho ut c o m pletely kno c king the pro ps o ut fro m u n d e r the plan and the r eb y c reating an unc o ntro llab le s ituatio n fo r the b a nkruptc y c o u rt. In re Tho r

pe Insula tio n Co . , 677 F.3d at 881. Altho ugh Tho rpefo c used o n plan
c o nsum m atio n, we b elieve the sam e general princ iples apply to any equitab le
m o o tness analysis, inc luding appeals o f o rders c o nc erning sales under § 363. S e e Bo nnett v. Gillespie (In re Irish Pub-Arrowhea d, LLC) , BA PN o . A Z -13-1024- PaKuD, 2014 WL 486955, at *5 (9th Cir. BA P Feb . 6, 2014) (applying Tho rpeto a § 363(f) sale o rder). Trustee argues that the appeal is equitab ly m o o t b ec ause (1) Essex Bank failed to seek a stay o f the Sale O rder and (2) the sale has b een c o nsum m ated and wo u ld b e "extrem ely diffic ult" to unwind. Trustee has no t m et his b u rden. While it is undisputed that Essex Bank failed toseek a stay o f the Sale O rder, which weighs in favo r o f m o o tness, this is no t nec essarily fatal toits
12appeal. N inth C irc uit autho r ity o n this issue dem o nstrates that while an

appellant's failure to seek a stay pending appeal, at least witho ut an adequate
exc u se, m ay render an appeal equitab ly m o o t and require dism issal, "there
m ust alsob e so m e sub sequent event that wo uld render c o nsideratio n o f the issues o n appeal inequitab le, and thereb y trigger an equitab le m o o tness analysis." The Z uercher Tr. o f 1999 v. K

ra vitz(In re Z uercher Tr. o f 1999) , BA P N o . N C -13-1299-PaJuK u, 2014 WL 7191348, at *7 (9th Cir. BA P Dec . 17, 2014) (string c itatio n o m itted). S ee a lso Y a ng Jin Co . v. M i ller (In re K o ng) , BA P N o . C C -15-1371-KiTaL, 2016 WL 3267588, at *6 (9th Cir. BA P June 6, 2016) (discussingR ev Op Grp. v. ML Ma nager LLC (In re Mo rtgs., Ltd.) , 771 F.3d 1211, 1214 (9th C ir. 2014) and reasoning that it do es no t stand fo r the pro po sitio n that an appeal is a lways equitab ly m o o t if the appellant fails to seek a stay). While Essex Bank o ffers no exc u se fo r failing to seek a stay, no sub sequent event has o c c urred here that wo uld render c o nsideratio n o f the issues o n appeal inequitab le. Even tho u gh the sale has b een c o m pleted, Trustee has no tdistrib uted the pro c eeds. Further, there are no third parties who wo uld have rec eived any pro c eeds if distrib uted, and the parties that
c o uld c o nc eivab ly b e affec ted b y any m o dific a t io n to the Sale O rder are b efo re the Panel. Marie, as the largest prio r ity unsec ured c redito r, wo uld b e the o nly c redito r paid o ut o f the pro c eeds after adm inistrative expenses. Finally, the transac t io n at issue here — the exchange o f m o ney fo r guns and artwo rk — is no t c o m p lex o rdiffic ult to unwind, much less "extrem ely

13diffic ult" as Trustee c o ntends. Marie c o u ld return the guns and artwo rk to the

b a nkruptc y estate, and Trustee c o uld return the $20,000 to Marie. In sho rt, no
c o m prehensive c hange o f c irc um stanc es has o c c urred in this c ase to render reversing the Sale O rder inequitab le. A c c o rdingly, we c o nc lude that the appeal is no t equitab ly m o o t. B. T he bankruptcy c ourt abus ed its dis c retion in g ranting the Sale M otion. Essex Bank o p p o sed the Sale Mo t io n b a sed o n its purpo rted lien o n the guns and artwo rk b eing so ld. The b a nkruptc y c o urt b egan its ruling b y
no ting that the Sale Mo tio n did no t ask fo r a sale free and c lear o f liens, b ut it then pro c eeded to find that Essex Bank did no t have a lien o n the subjec t perso nal pro perty under any o f its alleged theo ries. W e agree with the b ankruptc y c o urt that the Ab s trac t o f Judgm ent did
no t give Essex Bank a lien o n any perso nal pro perty o f the estate. S ee C C P § 697.310(a) ("Except as o therwise pro vided b y statute, a judgm ent lien o n rea l property is c reated under this sec tio n b y rec o r ding an ab strac t o f a m o ney judgm ent with the c o unty rec o rder.") (em phasis added). Essex Bank argues that so m e o f the guns o r artwo rk m ight b e "fixtures" attached to the real pro perty, thus m aking the item s real pro perty. Essex Bank failed toraise that argum ent b efo re the b ankruptc y c o u rt and therefo re has waived it o n appeal. S e e O rr v. Plum b , 884 F.3d 923, 932 (9th Cir. 2018) (usual rule is that arguments raised fo r the first tim e o n appeal are deem ed fo rfeited). Further, whether the guns o r artwo rk are "fixtures" is a fac tual issue, and the rec o rd is insuffic ient
14to m ake that finding. S ee Briggs v. K ent (In re Pro

f’l Inv. Props. o

f Am .) , 955 F.2d 623, 625 (9th C ir. 1992) (appellate c o urt m a y c o nsider an issue raised fo r first tim e o n appeal where "the issue presented is purely o ne o f law and either do es no tdepend o n the fac tual rec o rd develo ped b elo w, o r the pertinent
rec o rd has b een fully develo ped"). W e also agree with the b ankruptc y c o urt that the JL-1 did no t c reate a lien o n the guns and artwo rk. In C alifo rnia, a JL-1 lien is sim ilar to a U C C -1 lien and pro vides a judgm ent lien o n a variety o f perso nal pro perty. S eeC C P § 697.530. 5 Essex Bank argued at the sale hearing that the b uy/sell agreem ent
c o nstituted an "ac c o unts rec eivab le" to W illiam, which was c o vered b y its JL1 lien. The c o u rt disagreed, finding that the po stpetitio n c o ntrac t b etween Trustee o n b ehalf o f the b ankruptc y estate and Marie was no t a c o ntrac t o r
rec eivab le o f W illiam . A nd even if it was, the JL-1 lien did no t enc umb er

5 CCP § 697.530 pr ov i des: (a) A j udgment li en on per sonal p r oper ty i s a li en o n a l l i n ter ests in the following per sonal pr oper ty that ar e su bj e c t t o enfor cement of the money j udgment agai n st the j udgment debtor p ur suant to Ar ti cle 1 (commencing wi th S ecti on 695.010) of Chapter 1 at the ti m e when the li en i s cr eated i f the per sonal pr oper ty i s, at that ti me, any of the followi ng: (1) Accounts r ecei v able, and the j udgment debtor i s located in thi s state. (2) Tangible chattel p aper, as defin ed in par agr aph (79) of subdiv i si on (a) of Secti on 9 102 of the Commer ci al Code, and the j udgment debtor i s located in thi s state. (3) Equi pment, located wi thi n thi s state. (4) Far m pr oducts, located wi thi n thi s state. (5) Inv entor y, located wi thi n thi s state. (6) Negoti able documents of ti tle, located wi thin thi s state. 15po s tpetitio n assets. § 552(a).

Ho wever, we disagree with the b ankruptc y c o urt's ruling that the N o tic e o f Lien did no tc reate a lien o n the guns and artwo rk and that Essex Bank was a general unsecu r ed c r edito r and no t entitled to any o f the sale pro c eeds. The b ankruptc y c o urt c o nc luded that C C P § 708.410 liens dono t apply to m arital disso lutio n pro c eedings, and therefo re Essex Bank c o uld no t have had a lien o n the subjec tpro perty. W e review this questio n o f law de
no vo . W e b egin b y discussing this type o f C a lifo rnia lien. If a judgm ent c redito r has a m o ney judgm ent against a judgm ent deb to r who is a party toa pending ac tio n o r spec ial pro c eeding, the c redito rm ay
ac quire a lien to the extent nec essary to satisfy the judgm ent o n (a) any c ause
o f ac tio n o f the deb to r fo rm o ney o r pro perty that is the subjec t o f the ac tio n
o r pro c eeding, and (b ) the rights o f the deb to r to m o ney o r pro p erty under any judgm ent sub sequently pro c ured in the ac tio n o rpro c eeding. C C P § 708.410(a); 8 Witkin, C al. Pro c ., Enfo rcem ent o f Judgm ent§ 297 (5th ed. 2008). The judgm ent deb to r c an b e the plaintiff o r the defendant. F leet Credit Co rp. v. TM L Bus. S a les, Inc. , 65 F.3d 119, 121 (9th Cir. 1995). An ac tio n o r pro c eeding
rem ains "pending" until the tim e fo rappeal expires o r an appeal is finally determ ined. C C P § 708.410(d). To ob tain this type o f lien, the judgm ent c redito r files in the pending
ac tio n o r pro c eeding a no tic e o f lien and an ab strac t o r c ertified c o py o f the judgm ent c redito r's m o ney judgm ent. C C P § 708.410(b ). The judgm ent

16c redito r m ust alsoserve a c o py o f the filed no tic e o f lien o n all o f the parties

to the "ac t io n o r spec ial pro c eeding. . . . " C C P § 708.410(a). The no tic e o f lien
m ust c o ntain c ertain language, which serves as a no tic e to the judgm ent deb to r o f his o r her rights. C C P § 708.420. 6

6 CCP § 708.420 pr ov i des: The noti ce of li en under S ecti on 708.410 shall contain all of the following: (a) A statement that a li en has been cr eated under thi s ar ti cle a nd the ti tle of the cour t and the cause and number of the pendin g acti on or p r oceeding in whi ch the noti ce of li en i s fi led. (b) The name and last known addr ess of the j udgment debtor

. (c) The name and addr ess of the j udgment cr edi tor
. (d) The ti tle of the c o u r t wher e the judgment cr edi tor 's money j udgment i s enter ed a nd the cause and number of the acti on, t h e date of entr y of the j udgment, and the date of a n y subsequent r enewals, and wher e enter ed in the r ecor ds of the cour t. (e) The amount r equi r ed to sati sfy the j udgment cr edi tor 's money j udgment at the ti me the noti ce of li en i s fi led in the acti on or pr oceedin g. (f) A statement that the li en attaches to any cause of acti on of the j udgment debtor t ha t i s the subj ect of the acti on or pr oceedin g and to the j udgment debtor 's r i ghts to money or pr oper ty under any j udgment s u bsequently pr ocur ed in the acti on or pr oceedin g. (g) A statement that n o compr omi se, di smi ssal, settlement, or sati sfacti on of the pending acti on or pr oceedin g o r any of the j udgment debtor 's r i ghts to money or p r oper ty under any j udgment pr ocur ed ther ein m a y be enter ed into by o r o n b ehalf of the j udgment debtor , and that the j udgment debtor may not enfor ce the j udgment debtor 's r i ghts to money or p r oper ty under any judgment pr ocur ed in the a cti on or pr oceeding by a wr i t or other wi se, unless one of the following r equi r ements i s sati sfi ed: (1) The pr i or appr ov al by or der of the c o u r t in whi ch the acti on or pr oceeding i s pending has been obtain ed. (2) The wr i tten consent of the j udgment cr edi tor has been obtai ned or the j udgment cr edi tor has r eleased the li en. (continued...) 17A ssum ing the judgm ent c redito r has c o m plied with the nec essary

requirem ents to ob tain and perfec t the lien, and the lien has no t b een term inated fo r any reaso n, "no c o m pro m ise, dism issal, settlem ent, o r satisfac tio n" o f the ac tio n o r pro c eeding m ay b e entered into b y o r o n b ehalf
o f the deb to r, unless (a) the c o urt in which the ac tio n o rpro c eeding is pending has given prio r appro val, (b ) the c redito r has c o nsented in writing o r has released the lien, o r (c ) the c redito r's m o ney judgm ent has b een satisfied. C C P § 708.440(a), (b ). If the c o urt determ ines that a party (o ther than the deb to r) with no tic e o f the lien has transferred pro perty subjec t to the lien o r paid an am o unt to the deb to r that was sub jec t to the lien, the c o urt must render judgm ent against the party equal to the lesser o f (a) the value o f the deb to r's interest in the pro perty o r the am o unt paid, o r (b ) the am o unt o f the
c redito r's lien. C C P § 708.470(c ). It is undisputed, and the rec o rd estab lishes, that Essex Bank did everything required to ob tain and perfec t a lien under C C P § 708.410. It filed the N o tic e o f Lien, whic h c o ntained the nec essary language under C C P § 708.420, and a c o p y o f the Ab strac t o f Judgm ent in the Divo rc e C ase. It also served the N o tic e o f Lien o n the parties to the Divo rc e C ase, inc luding Marie

6 ( ...conti nued) (3) The money judgment of the j udgment cr edi tor h as b een sati s fi ed. (h) A statement that the judgment debtor may c lai m a n exempti on for all or any por ti on of the money or pr oper ty wi thi n 30 days after the j udgment debtor has noti ce of the cr eati on of the li en a nd a statement t h a t, i f the exempti on i s n ot clai med wi thi n the ti me a llowed, the exempti on i s wai v ed. 18and her divo rc e c o unsel. N o o ne has asserted that W illiamso ught o r ob tained

an exem ptio n fro mthe lien in ac c o rdanc e with C C P § 708.450. 7 Thus, the lien appears tob e prim a fac ie valid. Trustee pro c eeded under the b elief that no liens existed o n the perso nal pro perty at issue in the sale. When he learned o f o ne thro ugh Essex Bank's
o ppo sitio n to the Sale Mo tio n, he m ade no attem pt to sell the pro perty free and c lear o f liens under § 363(f), o r to file an adversary pro c eeding to determ ine the validity and extent o f the lien, o r b o th; he sim ply argued that the lien did no t exist. Trustee's c o unsel m aintained at o ral argum ent b efo re us that this was no ta "free and c lear" sale, and that if Essex Bank had a lien, it
rem ains attached to the pro perty. The b ankruptc y c o urt c o uld have o rdered that the sale was sub jec t to Essex Bank's lien. Ho wever, it went further and ruled, witho ut c iting any autho rity, that Essex Bank did no t have a C C P § 708.410 lien on the guns and artwo rk b eing so ld, b ec ause the Divo rc e C ase was no t a "c ause o f ac tio n . . . fo r m o ney o r pro perty" as c o ntem plated b y the statute; it was "an actio n fo r the disso lutio n o f m arriage." That was the only b asis fo r the c o u rt's ruling, and it was erro neo us. While a m arital disso lutio n pro c eeding m ight no t seemlike a "c ause o f
ac tio n" that wo u ld fall under the statute, C alifo rnia c o urts have ruled that

7The j u dgment debtor can clai m all or a por ti on of the money or pr oper ty subj ect to the li en exempt, but must do so wi thi n 30 days of r ecei v ing noti ce of cr eati on of the li en. CCP § 708.450. 19C C P § 708.410 liens doapply in such pro c eedings. S ee In re Ma rria ge o f K a tz, 234 C al. A pp. 3d 1711, 1719-21 (1991) (ruling that C C P § 708.410 liens and the
asso c iated rem edies apply in m arital disso lutio n pro c eedings and that wife's transfer to husb and o f m o re than o ne-half o f c o m m unity pro perty interest during disso lutio n pro c eeding gave rise to liab ility to judgm ent c redito r under C C P § 708.470(c )); In re Ma rria ge o f K e rr , 185 C a l. A pp. 3d. 130 (1986) (applying C C P § 708.410 in m arital disso lutio n). The b ankruptc y c o urt erred, and thus ab used its disc retio n, in ruling as
a m atter o f law that Essex Bank did no t have a C C P § 708.410 lien on the guns and artwo rk sim ply b ec ause the N o tic e o f Lien was filed in a m arital disso lutio n pro c eeding. A c c o rdingly, we m ust R EVER SE the Sale O rder. V I. CONCL U S ION Fo r the reaso ns stated ab o ve, we R EVER SE.

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