N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT
GREGOR

Y O. GAR

M ONG, Appe lla

nt,
v. C HAPTER 7 TR

USTEE, Appe lle e , LINDA L. GAR

M ONG, Interve nor - Appe lle e . No. 12-15604 D.C . No. 3:11-c v-00357-LRHW GC
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Distric t of Ne v a da Larry R . Hic ks, Distric t Judge , Pre s iding Argue d an d Subm i tte d De c e m be r 6, 2013 San Fran c isc o , C a lifornia B e fore : GOULD a

nd PAEZ, C irc uit Judge s, a nd B UR N S, Distric t Judge
. ** 

# FIL ED
JAN 13 2014 M OLLY C. DW Y ER, 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 9th C ir. R . 36-3. ** The Honora

ble La rry A. B urns, Distric t

Judge for the U.S. Distric t C ourt for the Southe rn Distric t of C a lifornia , sitting by de signa tion.Gre gory Ga rm o ng a ppe a ls 1 the distric t c ourt’ s orde r a ffirm ing the ba nkruptc y c ourt’ s de nia l of a

n atte m pte d truste e sa le of C h a

p te r 7 de btor Linda Garm o ng’ s lim ite d life e sta te 2 in the form e r c ouple ’ s hom e . W e have jurisdic tion unde r 28 U.S.C . §§ 158(d)(1) a nd 1291, a

nd we a ffirm
. Whe n a de btor file s a

ba nkruptc y pe tition, the

truste e a c quire s inte re sts no gre ate r tha

n thosehe ld by the de btor. 11 U.S.C
. § 541(d); In reC oupon C le aring Se rv ., Inc
. , 113 F.3d 1091, 1099 (9th C ir. 1997). Unde r the form e r c ouple ’ s divorc e a gre e m e nt, Linda Garm ong’ s limite d life e sta te wa s not a

n e q uity inte re st, 3
and she wa s re s tric t e d from tra nsfe rring he r lim ite d life e sta te to a ny pa rty . 4 Linda Garm o ng’ s lim ite d life e sta te only pe rm itte d he r to oc c upy

and posse ss the prope rty . The ba

nkruptc y c ourt c orre c t ly c onc lude d tha t the truste e did not ha

ve the p owe r to tra

nsfe r Linda

Ga rm ong’ s limite d life e sta

t e to Gre gory

Ga rm ong.

1 The truste e did not a

p pe a l the ba

nkruptc y c o urt’ s de nia l of its M otion to Se ll Limi te d Life Esta

te . 2 Linda Ga rm ong’ s limi te d life e sta

te inte re st wa s c re ate d unde r the form e r c ouple ’ s 2007 divorc e a gre e m e nt.

3 The ba nkruptc y c ourt de nie d a

n atte m pt to e xe m

pt Linda Ga rm ong’ s lim ite d life e sta

te a s a de btor’ s “ dwe lling”unde r Ne v . R e v. Stat . § 21.090(1)(m ), whic h re quire s an

e q uity inte re st in thea sse t. Gre gory Ga rm ong owns the unde rly ing prope rty

and it is not a

n a sse t of Linda Ga rm ong’ s e sta

t e . 4 While Linda

Ga rm ong ha d no a

bility to se ll or tra

nsfe r he r lim ite d life e sta te inte re st, thedivorc e a gre e m e nt provide d tha t Gre gory Ga rm ong ha d

the right to purc ha se he r lim i te d life e sta te inte re st a

t a ny tim e for $250,000. -2-Eve n if Linda Ga rm ong’ s limite d life e sta

te c ould be sold a s a

n a sse t of he r e sta te , the truste e did not inve stiga te the a sse t’ s va lue , 5 and wa s not a ware of the
re stric tions c re ate d by

the form e r c ouple ’ s divorc e a gre e m e nt. W e do not de fe r to
a truste e ’ s busine s s judgm e nt whe re the truste e doe s not in fa c t e xe rc ise suc h judgm e nt. Se e In reLahijani , 325 B .R . 282, 288-89 (B .A.P. 9th C ir. 2005). The ba nkruptc y c ourt did not a

buse its disc re tion whe n it de te rm ine d tha t the truste e would im prope rly e xe rc ise its busine ss judgm e nt in se lling Linda Ga rm ong’ s lim ite d life e sta

te without a

ny inde p e nde nt a

na ly sis of the fa c t

ua l or le ga l issue s surrounding the

a sse t . AFFIRM E D
.

5 The truste e wa s prom

pte d to filethe M otion to Se l l Lim ite d Life Esta te by a le tte r from Gre gory

Ga rm o ng’ s c ounse l, whic h offe re d to pa y the e sta te $2,500 and a ssum e prope rty

m a inte na n c e obliga

tions in e xc ha

nge for te rm ination of Linda Garm o ng’ s lim ite d life e sta te . -3-