Court Opinion

ID: 4192790
Source: CourtListenerOpinion
Date Created: 2017-08-03 17:02:40.903035+00
Date Added: 2024-06-11T14:40:21.109287
License: Public Domain

FILED
                                                                        JAN 28 2016
 1                                                                SUSAN M. SPRAUL, CLERK
                                                                    U.S. BKCY. APP. PANEL
 2                                                                  OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )       BAP No.     CC-15-1127-DKiG
                                   )
 6   EDWARD E. ELLIOTT,            )       Bk. No.     SV 11-23855-VK
                                   )
 7                  Debtor.        )
     ______________________________)
 8                                 )
     EDWARD E. ELLIOTT,            )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )       O P I N I O N
11                                 )
     DIANE C. WEIL,                )
12   Chapter 7 Trustee,            )
                                   )
13                  Appellee.      )
     ______________________________)
14
15                        Submitted on January 21, 2016
                             at Pasadena, California
16
                            Filed - January 28, 2016
17
                 Appeal from the United States Bankruptcy Court
18                   for the Central District of California
19            Hon. Victoria S. Kaufman, Bankruptcy Judge, Presiding
20
21   Appearances:     Andrew Edward Smyth argued for appellant.
                      John N Tedford, IV, Danning, Gill, Diamond &
22                    Kollitz, LLP argued for appellee.
23   Before:    DUNN, KIRSCHER AND GAN,1 Bankruptcy Judges.
24
25
26
27
28
          1
             Hon. Scott H. Gan, United States Bankruptcy Judge for the
     District of Arizona, sitting by designation.
 1   DUNN, Bankruptcy Judge:
 2
 3           The Debtor Edward E. Elliott (“Mr. Elliott”) appeals the
 4   bankruptcy court’s order following remand sustaining the chapter
 5   72 trustee’s (“Trustee”) objection to his homestead exemption
 6   claim.      We AFFIRM.
 7                  I.   FACTUAL BACKGROUND AND PROCEDURAL HISTORY
 8           This is Mr. Elliott’s third appearance before this Panel.
 9   While detailed factual background information was included in our
10   two published Opinions in Elliott v. Weil (In re Elliott), 523
11   B.R. 188 (9th Cir. BAP 2014) (“Elliott I”), and Elliott v. Weil
12   (In re Elliott), 529 B.R. 747 (9th Cir. BAP 2015) (“Elliott II”),
13   we include some of that factual background here to provide
14   context for the current decision.3
15   1.   Events in the Main Case through Elliott I
16           Mr. Elliott filed for relief in chapter 7 on December 1,
17   2011.       In his petition and schedules, signed under penalty of
18   perjury, he stated his address as Hiawatha Street in Granada
19   Hills, California; he did not list any real property in which he
20
21           2
             Unless otherwise indicated, all chapter and section
22   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.

23           3
             The parties have provided a limited record on appeal. We
     have exercised our discretion to review additional documents
24
     filed in the electronic records of Mr. Elliott’s main case, Case
25   No. SV 11-23855-VK (“Main Case”), and the related adversary
     proceeding, Case No. SV 13-01118-VK (“Adversary Proceeding”).
26   See O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887
27   F.2d 955, 957-58 (9th Cir. 1988); Atwood v. Chase Manhattan
     Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP
28   2003).

                                           2
 1   had an interest or in which creditors held secured claims; he did
 2   not claim entitlement to a homestead exemption on Schedule C; he
 3   did not disclose any ownership interest in a corporation on
 4   Schedule B; and he did not list creditors (“Judgment Creditors”)
 5   who had obtained a judgment against him in 2006 for fraud and
 6   negligent misrepresentation or any secured creditors.
 7        At his § 341(a) meeting of creditors, Mr. Elliott confirmed
 8   his address as Hiawatha Street, and he testified under oath that
 9   he had read his bankruptcy papers before he had signed them and
10   that they were true and complete to the best of his knowledge.
11   He also testified that he had listed everything of value that he
12   owned and that he had listed everyone he owed money to in his
13   schedules.   He further testified that he did not own any real
14   property and that he had not sold, transferred or given away
15   anything of value in the last four years.
16        Based on the information disclosed by Mr. Elliott in his
17   schedules and in his testimony at the § 341(a) meeting, the
18   Trustee filed a “No Distribution” report, Mr. Elliott received
19   his discharge, and the case was closed on March 13, 2012.   Less
20   than two weeks later, Lee Wong Investments, Inc. (“LWI”)
21   transferred a residential real property in Los Angeles,
22   California (the “Buckingham Property”) to Mr. Elliott by
23   quitclaim deed “as a gift.”   LWI is a Nevada corporation that Mr.
24   Elliott does not dispute he organized prepetition and controls.
25   Shortly thereafter, Mr. Elliott sent a letter to counsel for the
26   Judgment Creditors stating that he had acquired the Buckingham
27   Property after his bankruptcy and demanding that their judgment
28   liens be removed.   His letter caused the Judgment Creditors to

                                      3
 1   investigate the history of title transactions with respect to the
 2   Buckingham Property.
 3        As detailed in Elliott I, since 2006, Mr. Elliott had
 4   maintained a continuous interest in the Buckingham Property that
 5   was disguised through a series of transfers.    On the date of his
 6   bankruptcy filing, Mr. Elliott owned the Buckingham Property
 7   through his wholly-owned corporation, LWI.   However, as noted
 8   above, Mr. Elliott did not disclose any ownership interest in
 9   either the Buckingham Property or LWI in his schedules and did
10   not even disclose his judgment debt to the Judgment Creditors.
11   So, the title manipulations as to the Buckingham Property
12   remained undetected until after Mr. Elliott received his
13   discharge and his bankruptcy case was closed.
14        The Judgment Creditors moved to reopen Mr. Elliott’s
15   bankruptcy case, which motion was granted, and the Trustee was
16   reappointed to serve in the reopened case.   Mr. Elliott did not
17   amend his schedules to disclose his interest in the Buckingham
18   Property until nearly a year later.   In his amended schedules,
19   Mr. Elliott included the Buckingham Property in his amended
20   Schedule A, valued at $360,000, and stated that Bank of America
21   held a $120,826 secured claim against it.    He also claimed a
22   $175,000 homestead exemption in the Buckingham Property in his
23   amended Schedule C under Cal. Code Civ. P. § 704.730(a)(3).      He
24   neglected to list over $100,000 in outstanding real property
25   taxes assessed against the Buckingham Property.   Based on Mr.
26   Elliott’s valuation of the Buckingham Property, if his homestead
27   exemption claim were allowed, there would be nothing for his
28   bankruptcy estate.

                                     4
 1         The Trustee filed a timely objection to Mr. Elliott’s
 2   claimed homestead exemption in the Buckingham Property on the
 3   basis of bad faith, and the bankruptcy court sustained the
 4   objection.   Mr. Elliott appealed the denial of his exemption
 5   claim to this Panel, and while the appeal was pending, the
 6   Supreme Court issued its decision in Law v. Siegel, 571 U.S. ___,
 7   134 S.Ct. 1188 (2014).
 8         Based on our conclusion that Law v. Siegel precluded
 9   bankruptcy courts from denying claimed exemptions or amendments
10   to claimed exemptions based on a debtor’s bad faith as a matter
11   of equity, the Panel vacated the bankruptcy court’s order denying
12   Mr. Elliott’s homestead exemption claim as to the Buckingham
13   Property but remanded for the bankruptcy court to determine if
14   Mr. Elliott’s homestead exemption claim could be denied on some
15   other basis under federal bankruptcy or California state law.
16   See Elliott I, 523 B.R. at 193-98.
17   2.   Events in the Adversary Proceeding through Elliott II
18         Meanwhile, the Trustee had filed the Adversary Proceeding to
19   revoke Mr. Elliott’s discharge and to require that the Buckingham
20   Property be turned over to the Trustee on behalf of the
21   bankruptcy estate under § 542(a).    The Trustee also conducted a
22   continued § 341(a) meeting at which Mr. Elliott admitted that he
23   lived at the Buckingham Property when he filed his bankruptcy
24   petition, that he considered it to be his home, and that he had
25   purchased it in 1989.
26         After filing a motion for an order setting aside his
27   default, Mr. Elliott filed an answer to the Adversary Proceeding
28   complaint in pro se that did not assert any affirmative defenses.

                                      5
 1   After obtaining counsel, he filed an amended answer asserting as
 2   his only affirmative defense that any “mistakes on the schedules
 3   were the result of debtor’s attorney’s mistakes.”
 4         In January 2014, the Trustee filed a motion for summary
 5   judgment (“Summary Judgment Motion”) in the Adversary Proceeding
 6   seeking revocation of Mr. Elliott’s discharge under § 727(d)(1)
 7   and turnover of the Buckingham Property.   Mr. Elliott opposed the
 8   Summary Judgment Motion.    The bankruptcy court held a hearing on
 9   the Summary Judgment Motion on March 19, 2014, at which the
10   parties appeared through counsel and argued their positions.       On
11   April 7, 2014, the bankruptcy court granted the Summary Judgment
12   Motion and entered a “Judgment Vesting Property in Trustee and
13   Revocation of Discharge.”   Mr. Elliott appealed.
14         On appeal, the Panel vacated the judgment.    It concluded
15   that the Trustee’s discharge revocation claim was barred by the
16   running of the limitations period in § 727(e)(1) and had to be
17   remanded for dismissal.    The turnover portion of the judgment
18   likewise was vacated and remanded, in light of the Panel’s prior
19   determination in Elliott I that denial of Mr. Elliott’s homestead
20   exemption claim on bad faith grounds was inappropriate, for the
21   bankruptcy court to make findings as to whether the Buckingham
22   Property was “of inconsequential value or benefit to the estate,”
23   as required under § 542(a).   See Elliott II, 529 B.R. at 754-55.
24   3.   Events in the Adversary Proceeding Following Remand
25         Following remand of the Adversary Proceeding, the bankruptcy
26   court dismissed the Trustee’s claim to revoke Mr. Elliott’s
27   discharge and established a schedule for the parties to submit
28   legal memoranda and evidence as to whether the estate’s interest

                                       6
 1   in the Buckingham Property was sufficiently consequential to
 2   warrant turnover.
 3        The Trustee submitted a brief (“Valuation Brief”) supported
 4   by the declarations of the Trustee, her counsel Aaron E. De
 5   Leest, and appraiser David S. Serber.   The Trustee had obtained
 6   appraisals of the Buckingham Property as of April 7, 2014
 7   ($580,000) and as of June 15, 2015 ($600,000).   Unpaid real
 8   property taxes and associated penalties as of June 24, 2015, for
 9   2006 through 2011 and 2013 through 2015 totaled $107,495.05.
10        The Community Development Department of the City of Los
11   Angeles (“CDD”) had a deed of trust recorded against the
12   Buckingham Property on January 10, 1986, securing an indebtedness
13   of $25,000.   Bank of America, N.A. (“B of A”) had a deed of trust
14   recorded against the Buckingham Property on November 12, 2004,
15   securing an indebtedness of $120,360.77 as of June 15, 2015.     The
16   Trustee did not contest the validity or priority of the CDD and B
17   of A trust deed liens.
18        A deed of trust in favor of Hollywood Damage Control &
19   Recovery (“HDCR”) to secure an indebtedness in the amount of
20   $800,000 was recorded on October 31, 2005.   However, the Trustee
21   had avoided and preserved the HDCR trust deed lien for the
22   benefit of the estate.   Los Angeles County (the “County”) had
23   recorded a personal property tax lien against the Buckingham
24   Property in the amount of $1,449.75 on June 9, 2005.   For
25   purposes of the Adversary Proceeding, the Trustee assumed the
26   validity of the County’s lien.
27        A judgment in the amount of $127,134.00 in favor of the
28   Inglewood Family Corporation (“IFC”) had been entered on May 13,

                                      7
 1   2005, against Mr. Elliott and another entity and had been
 2   recorded as a judgment lien against the Buckingham Property.
 3   However, the judgment was not renewed by IFC within 10 years
 4   after it was entered.   Accordingly, under Cal. Code Civ. P.
 5   § 683.020, the judgment was no longer enforceable, and the
 6   judgment lien was extinguished.   The Judgment Creditors also had
 7   obtained judgment liens against the Buckingham Property, but by
 8   stipulation with the Trustee approved by the bankruptcy court,
 9   the Judgment Creditors had agreed that the Buckingham Property
10   could be sold free and clear of their judgment liens, and their
11   claims would be treated as nonpriority unsecured claims in the
12   Main Case.   Finally, the Trustee projected 8% costs of sale
13   (including a 6% real estate commission) with respect to the
14   Buckingham Property.
15        The Trustee recognized that she bore the burden of proof to
16   establish that the estate was entitled to turnover of the
17   Buckingham Property, but argued that Mr. Elliott had the burden
18   to establish that the property had no consequential value or
19   benefit for the estate.    Then, through various calculations, the
20   Trustee ultimately presented a demonstration that if the
21   Buckingham Property were valued at $600,000, after payment of
22   priority liens, the net value for the estate would be $297,694.43
23   (allowing for payment of the County’s personal property tax lien)
24   or $299,144.18 (if the County’s personal property tax lien were
25   treated as subordinate).   In either event, the Trustee argued
26   that the Buckingham Property had “consequential value and benefit
27   to the estate.”
28        Mr. Elliott opposed (“Opposition”).    He had obtained an

                                       8
 1   appraisal for the Buckingham Property as of April 15, 2014
 2   valuing it at $450,000.    Deducting costs of sale and the
 3   uncontested liens of CDD, B of A and for real property taxes,
 4   totaling approximately $252,856, would leave a balance of
 5   approximately $197,144.    Ignoring the Trustee’s argument that she
 6   stepped into the shoes of the avoided HDCR trust deed lien, Mr.
 7   Elliott argued that if he prevailed on his homestead exemption
 8   claim, there would be no significant payout to unsecured
 9   creditors.    He further requested a continuance to obtain a
10   current appraisal of the Buckingham Property.
11           The bankruptcy court heard the issue as to whether
12   consequential value to the estate supported turnover as claimed
13   by the Trustee at a hearing (“Turnover Hearing”) on July 22,
14   2015.    At the Turnover Hearing, counsel for Mr. Elliott requested
15   time to obtain an update of his appraisal of the Buckingham
16   Property, agreeing with counsel for the Trustee that the
17   bankruptcy court should make its determination based on the
18   current value of the property as at June 15, 2015.      That request
19   was granted, but ultimately, Mr. Elliott agreed with the
20   Trustee’s $600,000 valuation for the property.
21           Following the Turnover Hearing, the bankruptcy court issued
22   written findings of fact and conclusions of law (“Findings”) on
23   August 13, 2015.    In its Findings, the bankruptcy court found
24   that the lien for unpaid real property taxes and the trust deed
25   liens of CDD and B of A amounted to $107,495.05, $25,000, and
26   $120,360.77, respectively, for a total of approximately
27   $252,855.82 as of June 15, 2015.       At the Turnover Hearing,
28   counsel for Mr. Elliott represented that nothing was owed to HDCR

                                        9
 1   and that Mr. Elliott had obtained a reconveyance of HDCR’s trust
 2   deed.    For purposes of determining whether the Buckingham
 3   Property was of inconsequential value or benefit to the estate,
 4   the bankruptcy court assigned a value of $0.00 to the HDCR trust
 5   deed lien.    Based on the absence of evidence other than as
 6   reflected in the Trustee’s preliminary title report for the
 7   Buckingham Property dated June 15, 2015, the bankruptcy court
 8   valued the County’s personal property tax lien at $1,449.75.        As
 9   for IFC’s judgment lien, since it was unenforceable under
10   California law, the bankruptcy court assigned it a value of
11   $0.00.    Because of the Trustee’s approved stipulation with the
12   Judgment Creditors, the bankruptcy court assigned a value of
13   $0.00 to their judgment liens.
14           Based on the record of evidence and arguments made by the
15   parties, the bankruptcy court determined the net value of the
16   Buckingham Property for the benefit of the estate, exclusive of
17   Mr. Elliott’s homestead exemption claim, as $297,694.43,
18   calculated as follows:
19           Value                                         $600,000.00
             Less:
20           Estimated costs of sale (8% of gross value)   $ 48,000.00
             Real property taxes and penalties              107,495.05
21           CDD lien                                        25,000.00
             B of A lien                                    120,360.77
22           HDCR lien                                            0.00
             County personal property tax lien                1,449.75
23           IFC judgment lien                                    0.00
             Judgment Creditors judgment liens                    0.00
24
             Total Net Value                               $297,694.43
25
26   Recognizing that Mr. Elliott still was pursuing a homestead
27   exemption claim for $175,000, the bankruptcy court found that
28   even if Mr. Elliott prevailed on his homestead exemption claim,

                                       10
 1   subtracting $175,000 from $297,694.43 would leave $122,694.43 of
 2   net value available to the estate.    Accordingly, with or without
 3   allowing a homestead exemption, the Buckingham Property was not
 4   of “inconsequential value or benefit to the estate.”   The
 5   bankruptcy court noted that this Panel’s decision in Elliott II
 6   had not disturbed its prior determinations that 1) the Buckingham
 7   Property was property of Mr. Elliott’s bankruptcy estate;
 8   2) title to the Buckingham Property was vested in the Trustee;
 9   and 3) the Buckingham Property could be used, sold or leased by
10   the Trustee under § 363.    Accordingly, the bankruptcy court would
11   enter a judgment requiring Mr. Elliott to turn over the
12   Buckingham Property to the Trustee.
13         One day later, on August 14, 2015, the bankruptcy court
14   entered a judgment (“Turnover Judgment”) on the Trustee’s
15   § 542(a) claim consistent with its Findings, determining that the
16   Buckingham Property was property of Mr. Elliott’s bankruptcy
17   estate, vested in the Trustee, and requiring that Mr. Elliott
18   “immediately deliver and turn over possession of the Buckingham
19   Property to the Trustee.”   The Turnover Judgment was not
20   appealed.
21   4.   Events in the Main Case following remand
22         Following remand in the Main Case under Elliott I, the
23   bankruptcy court established a briefing schedule for the parties
24   to submit further legal memoranda and supporting evidence on the
25   issues as to whether the Trustee’s objection to Mr. Elliott’s
26   claimed homestead exemption could be sustained 1) under
27   § 522(g)(1), or 2) based on Mr. Elliott’s failure to satisfy the
28   California state law requirement for an “automatic Article 4”

                                      11
 1   homestead exemption, i.e., that Mr. Elliott have resided at the
 2   Buckingham Property continuously from the time a judgment
 3   creditor’s lien attached to the property until the court could
 4   determine that the subject dwelling was in fact a homestead.
 5        On February 13, 2015, the Trustee filed her memorandum in
 6   support of Trustee’s objection to Mr. Elliott’s claimed homestead
 7   exemption (“Trustee Memorandum”), supported by Mr. Elliott’s
 8   petition filed in the Main Case; transcripts of his testimony
 9   under oath at the original and subsequent § 341(a) meetings; a
10   transcript of Mr. Elliott’s deposition testimony; and a copy of
11   the declaration of Juanita Jehdian, Mr. Elliott’s fiancee.    The
12   Trustee began her argument with respect to the application of
13   § 522(g)(1) by quoting the relevant provisions of the statute:
14        Notwithstanding sections 550 and 551 of this title, the
          debtor may exempt under subsection (b) of this section
15        property that the trustee recovers under section
          510(c)(2), 542, 543, 550, 551, or 553 of this title, to
16        the extent that the debtor could have exempted such
          property under subsection (b) of this section if such
17        property had not been transferred, if –
               (1)(A) such transfer was not a voluntary transfer
18             of such property by the debtor; and
                (B)the debtor did not conceal such property . . . .
19
20   The Trustee then posited that it was clear that Mr. Elliott
21   concealed the Buckingham Property both from the Trustee and from
22   the bankruptcy court, relying on a portion of the analysis from
23   this Panel in Elliott I:
24        The essence of Elliott’s appeal in utilizing Law v.
          Siegel to shield his misconduct from functioning as
25        lawful grounds to deny his homestead exemption has led
          to, as Trustee bluntly but accurately asserts, Elliott
26        practically admitting he concealed the asset and acted
          in bad faith. Indeed, Elliott does not dispute that he
27        failed to disclose his interest in the Buckingham
          Property in his original schedules. He admits claiming
28        Hiawatha Street as his “street address” on his petition

                                    12
 1        even though he knew he did not live there. Elliott
          further acknowledges that at the § 341(a) meeting he
 2        claimed his forms were true and complete, all the while
          knowing the bankruptcy court had no knowledge of the
 3        Buckingham Property he allegedly resides in and
          controlled through LWI.
 4             Accordingly, we conclude that § 522(g)(1) is
          applicable and an important limitation on Elliott’s
 5        claimed homestead exemption for the bankruptcy court to
          consider on remand.
 6
 7   Elliott I, 523 B.R. at 198.
 8        With respect to Mr. Elliott’s automatic homestead claim
 9   under California law, the Trustee admitted that “continuous
10   residency, rather than continuous ownership, controls the Article
11   4 analysis.”   The Trustee then surveyed the available evidence
12   from Mr. Elliott’s petition and schedules; his § 341(a) meeting
13   testimony; his deposition testimony; and the declaration of
14   Juanita Jehdian.   The Trustee noted that from the outset of the
15   Main Case, Mr. Elliott asserted that his address was on Hiawatha
16   Street; he did not disclose any interest in the Buckingham
17   Property or the corporation that nominally held title to the
18   Buckingham Property; and he asserted without qualification that
19   his bankruptcy papers were true and complete.   Only after the
20   Main Case was reopened at the behest of the Judgment Creditors
21   did he begin to temporize.    Following reopening, Mr. Elliott
22   amended his schedules to include the Buckingham Property and
23   assert a homestead exemption in it, and he testified at the
24   second § 341(a) meeting that he lived there; he considered it his
25   home; and he purchased it in 1989.    However, when the Trustee
26   asked him about the Hiawatha Property, Mr. Elliott testified,
27   “That was a uh place where my fiancé [sic] and her son and I was,
28   would come over there quite a bit.”   At his deposition, Mr.

                                      13
 1   Elliott was asked and answered the following questions:
 2        Q.    “[Y]ou said you were living in and out of the Hiawatha
 3   Street; is that correct?”
 4        A.    “That’s correct.”
 5        Q.    “How long did you live there before moving back to
 6   Buckingham [Property]?”
 7        A.    “It was not a permanent address for me.”
 8        In her declaration, Ms. Jehdian stated that she had been a
 9   frequent visitor to the Buckingham Property and that she knew
10   that Mr. Elliott resided there in December 2011.
11        The Trustee recognized that claimed exemptions are
12   presumptively valid, and the objecting party bears the burden of
13   proving that an exemption is not properly claimed.    See, e.g.,
14   Carter v. Anderson (In re Carter), 182 F.3d 1027, 1029-30 n.3
15   (9th Cir. 1999).   However, once the Trustee produces evidence to
16   rebut the presumption, the burden shifts to Mr. Elliott to
17   present “unequivocal evidence to demonstrate the exemption is
18   proper.”   Id.   The Trustee’s analysis of the evidence in Mr.
19   Elliott’s case was that the bankruptcy court was “clearly placed
20   in a vexed position to decide which of [Mr. Elliott’s] lies are
21   to be believed and how to determine credibility of his
22   inconsistent statements and filings.”   In these circumstances,
23   the Trustee argued that Mr. Elliott simply could not present
24   unequivocal evidence to establish that his homestead exemption
25   claim in the Buckingham Property was appropriate, and her
26   objection to the claimed homestead exemption should be sustained.
27        In his opposing response (“Response”), Mr. Elliott argued
28   that § 522(g)(1) simply was not applicable because “[t]here is no

                                      14
 1   Court order in this case setting aside a transfer.”    He also
 2   submitted his own supporting declaration with evidence that he
 3   continuously resided at the Buckingham Property and was living
 4   there on the petition date.
 5        The bankruptcy court heard the matter at a hearing on March
 6   19, 2015 (“Exemption Objection Hearing”).   The bankruptcy court
 7   posted a tentative ruling in advance of the Exemption Objection
 8   Hearing sustaining the Trustee’s objection to Mr. Elliott’s
 9   homestead exemption claim based on the application of
10   § 522(g)(1).   The tentative ruling was not included in Mr.
11   Elliott’s excerpts of record, but it is included as item number
12   94 on the Main Case docket, and we have reviewed it.    At the
13   Exemption Objection Hearing itself, after hearing arguments from
14   counsel, the bankruptcy court announced its ruling denying a
15   homestead exemption to Mr. Elliott applying § 522(g)(1) based on
16   the following analysis:
17        [The Buckingham Property] was property of the estate
          subject to turnover. The residence was subject to
18        turnover because [Mr. Elliott] held it in a wholly-
          owned corporation which he didn’t disclose in his
19        schedules or at his 341(a). He concealed that that’s
          where he lived. He didn’t put it on his petition. He
20        didn’t inform the [Trustee] during his 341(a) that’s
          where he lived. He didn’t list his interest in the
21        corporation that held the property. He then three
          weeks after he got his discharge . . . transferred the
22        property back to himself in his own name, and then
          wrote a letter to creditors about how their liens
23        against the property weren’t good because it was after
          acquired and he had gotten a discharge. So, they
24        couldn’t have liens against this property that he had
          always held in his own corporation and hadn’t disclosed
25        as his residence.
26        . . . .
27        So, I mean, the point is that he – I mean, he doesn’t even
          dispute that he concealed it. He’s just saying that, well,
28        that the turnover action isn’t sufficient to satisfy

                                     15
 1        522(g)(1), but, I mean, 542 satisfies, and we have a
          judgment. And I guess if it gets reversed then we’ll have
 2        to revisit it, but it’s not reversed yet, and we’re going to
          say he doesn’t get a homestead exemption based on 11 U.S.C.
 3        Section 522(g)(1).
 4   March 19, 2015 Hr’g Tr., at 9:21-10:23.
 5        Counsel for the Trustee submitted an order (“Exemption
 6   Denial Order”) consistent with the bankruptcy court’s oral ruling
 7   sustaining the Trustee’s objection to Mr. Elliott’s homestead
 8   exemption claim that the bankruptcy court signed and entered on
 9   April 8, 2015.    Mr. Elliott filed a timely appeal.
10                          II.    JURISDICTION
11        The bankruptcy court had jurisdiction under 28 U.S.C.
12   §§ 1334 and 157(b)(2)(B).      An order denying a debtor’s exemption
13   claim is a final order.       Preblich v. Battley, 181 F.3d 1048, 1056
14   (9th Cir. 1999).    We have jurisdiction under 28 U.S.C. § 158.
15                          III.    ISSUES
16        1.     Did the bankruptcy court err in denying Mr. Elliott’s
17   claimed homestead exemption under § 522(g)(1), by its terms or as
18   a result of the Supreme Court’s decision in Law v. Siegel?
19        2.     Did the bankruptcy court err in failing to rule on Mr.
20   Elliott’s entitlement to a homestead exemption claim under
21   California law?
22                          IV.    STANDARDS OF REVIEW
23        The denial of a debtor’s exemption claim presents questions
24   of law that we review de novo.      Kelley v. Locke (In re Kelley),
25   300 B.R. 11, 16 (9th Cir. BAP 2003).         De novo review means that
26   we review a matter anew, as if no decision previously had been
27   rendered.    Dawson v. Marshall, 561 F.3d 930, 933 (9th Cir. 2009).
28        We review the bankruptcy court’s fact findings underlying

                                         16
 1   its legal conclusions for clear error.    Bronitsky v. Bea (In re
 2   Bea), 533 B.R. 283, 285 (9th Cir. BAP 2015).     We must affirm the
 3   bankruptcy court’s fact findings unless we determine that those
 4   findings are “(1) ‘illogical,’ (2) ‘implausible,’ or (3) without
 5   ‘support in inferences that may be drawn from the facts in the
 6   record.’” United States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir.
 7   2009) (en banc), quoting Anderson v. City of Bessemer City, N.C.,
 8   470 U.S. 564, 577 (1985).
 9           We may affirm the decision of the bankruptcy court on any
10   basis supported by the record.     ASARCO, LLC v. Union Pac. R.R.
11   Co., 765 F.3d 999, 1004 (9th Cir. 2014); Shanks v. Dressel, 540
12   F.3d 1082, 1086 (9th Cir. 2008).
13                          V.   DISCUSSION
14           As in Elliott I, Mr. Elliott brandishes the Supreme Court’s
15   decision in Law v. Siegel as a talisman to ward off the Trustee’s
16   objection to his homestead claim in the Buckingham Property.    So
17   we commence our analysis by considering exactly what the Supreme
18   Court decided and did in Law v. Siegel and what it did not do.
19   A.   Law v. Siegel and its implications in this appeal
20           Stephen Law filed a chapter 7 case and claimed a homestead
21   exemption in his residence property (“Residence”).    The trustee
22   did not object, and Mr. Law’s homestead exemption was allowed.
23   Mr. Law also listed two liens against the Residence: a first deed
24   of trust for $146,156.52 in favor of Washington Mutual Bank and a
25   second deed of trust for $156,929.04 in favor of “Lin’s Mortgage
26   & Associates,” securing an alleged debt to a person named “Lili
27   Lin.”    After lengthy and expensive litigation over a period of
28   years, the bankruptcy court found that “no person named Lili Lin

                                        17
 1   ever made a loan to [Mr. Law] in exchange for the disputed deed
 2   of trust,” and “the loan was a fiction, meant to preserve [Mr.
 3   Law’s] equity in his residence beyond what he was entitled to
 4   exempt” by perpetrating “a fraud on his creditors and the court.”
 5   Law v. Siegel, 134 S.Ct. 1188, 1193 (2014).      Consistent with
 6   applicable Ninth Circuit law at the time, see Latman v. Burdette,
 7   366 F.3d 774 (2004), the bankruptcy court “surcharged” Mr. Law’s
 8   homestead exemption to pay a portion of the trustee’s attorney’s
 9   fees.
10           Mr. Law appealed, and this Panel and the Ninth Circuit
11   affirmed the bankruptcy court, but the Supreme Court granted
12   certiorari and reversed.    It concluded that although bankruptcy
13   courts have authority under § 105(a) to “issue any order,
14   process, or judgment that is necessary or appropriate to carry
15   out the provisions” of the Bankruptcy Code, § 105(a) “does not
16   allow the bankruptcy court to override explicit mandates of other
17   sections of the Bankruptcy Code.”      Id. at 1194, quoting 2 Collier
18   on Bankruptcy ¶ 105.01[2], p. 105-06 (16th ed. 2013).
19   Specifically, in Mr. Law’s case, the Supreme Court held that
20   surcharging Mr. Law’s homestead exemption under § 105(a) or under
21   the bankruptcy court’s inherent sanctioning authority was invalid
22   in light of § 522(k)’s specific directive that property that a
23   debtor properly exempts generally “is not liable for payment of
24   any administrative expense.”    Law v. Siegel, 134 S.Ct. at 1195.
25           The Supreme Court did not stop there in Law v. Siegel.
26   Underlining its larger point that “whatever equitable powers
27   remain in the bankruptcy courts must and can only be exercised
28   within the confines of” the Bankruptcy Code, id. at 1194, quoting

                                       18
 1   Norwest Bank Worthington v. Ahlers, 485 U.S. 197, 206 (1988), the
 2   Supreme Court went on to state that “§ 522 does not give courts
 3   discretion to grant or withhold exemptions based on whatever
 4   considerations they deem appropriate.”   Law v. Siegel, 134 S.Ct.
 5   at 1196.    It concluded that the Bankruptcy Code does not confer
 6   on bankruptcy courts “a general, equitable power . . . to deny
 7   exemptions based on a debtor’s bad-faith conduct.”   Id.   We
 8   listened, and that was the basis for our decision to vacate and
 9   remand in Elliott I, founded on our conclusion that Law v. Siegel
10   “abrogated our authority to deny exemptions or amendments to
11   exemptions based on a debtor’s bad faith.”   Elliott I, 523 B.R.
12   at 193.
13        However, the Supreme Court also recognized that “§ 522 sets
14   forth a number of carefully calibrated exceptions and limitations
15   [to debtors’ exemptions], some of which relate to the debtor’s
16   misconduct.”   Id.   Law v. Siegel does not evince any overweening
17   affection or solicitude for dishonest debtors in bankruptcy by
18   the Supreme Court.   In fact, the Supreme Court has repeatedly
19   emphasized that “[t]he principal purpose of the Bankruptcy Code
20   is to grant a ‘fresh start’ to the ‘honest but unfortunate
21   debtor.’”   Marrama v. Citizens Bank of Mass., 549 U.S. 365, 367
22   (2007), quoting Grogan v. Garner, 498 U.S. 279, 286 (1991), and
23   Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934) (emphasis
24   added).    But, the Supreme Court in Law v. Siegel sent a clear
25   message: “The Code’s meticulous – not to say mind-numbingly
26   detailed – enumeration of exemptions and exceptions to those
27   exemptions confirms that courts are not authorized to create
28   additional exceptions.”   Law v. Siegel, 134 S.Ct. at 1196, citing

                                      19
 1   Hillman v. Maretta, 133 S.Ct. 1943, 1953 (2013); and TRW Inc. v.
 2   Andrews, 534 U.S. 19, 28-29 (2001).
 3         Among those detailed exceptions is § 522(g)(1).   We noted in
 4   Elliott I that § 522(g)(1) might apply to support denial of Mr.
 5   Elliott’s homestead exemption claim in the Buckingham Property,
 6   see Elliott I, 523 B.R. at 197-98, and the bankruptcy court in
 7   fact based its decision to deny Mr. Elliott’s homestead exemption
 8   claim following remand on § 522(g)(1).   Accordingly, we proceed
 9   to review application of § 522(g)(1) in this case.
10   B.   Section 522(g)(1) – its terms and application
11         Section 522(g)(1), in relevant part, provides:
12         [T]he debtor may exempt under subsection (b) of this
           section property that the trustee recovers under
13         section 510(c)(2), 542, 543, 550, 551, or 553 of this
           title, to the extent that the debtor could have
14         exempted such property under subsection (b) of this
           section if such property had not been transferred, if –
15              (1)(A) such transfer was not a voluntary transfer
           of such property by the debtor; and
16              (B) the debtor did not conceal such property . . . .
17         We begin our analysis by focusing, as we must, on the
18   operative terms of the statute.    “The starting point in
19   discerning congressional intent is the existing statutory text.”
20   Lamie v. United States Trustee, 540 U.S. 526, 534 (2004), citing
21   Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438 (1999).     “It
22   is well established that ‘when the statute’s language is plain,
23   the sole function of the courts – at least where the disposition
24   required by the text is not absurd – is to enforce it according
25   to its terms.’”   Lamie v. United States Trustee, 540 U.S. at 534,
26   quoting Hartford Underwriters Ins. Co. v. Union Planters Bank,
27   N.A., 530 U.S. 1, 6 (2000).
28         As stated in Collier’s, § 522(g) “allows the debtor to

                                       20
 1   exempt property that the trustee recovers under [various sections
 2   of the Bankruptcy Code, § 542 being relevant in this case] as
 3   long as the transfer was involuntary and the property was not
 4   concealed by the debtor.”   4 Collier on Bankruptcy ¶ 522.12[1]
 5   (Alan N. Resnick & Henry J. Sommer, eds., 16th ed.) (hereinafter
 6   cited as Collier on Bankruptcy) (emphasis in original).    There is
 7   no real dispute here about concealment.   “The debtor might be
 8   found to have concealed the property if the debtor takes
 9   affirmative action to mislead creditors about whether particular
10   property existed.”   4 Collier on Bankruptcy ¶ 522.12[2][b].
11        When Mr. Elliott filed his bankruptcy petition and
12   schedules, he stated under penalty of perjury that he had no
13   interest in the Buckingham Property or the corporation that held
14   title to the Buckingham Property.    He further did not schedule
15   any secured or judgment lien creditors whose lien claims might
16   have alerted the Trustee to Mr. Elliott’s connection to the
17   Buckingham Property.
18        While Mr. Elliott quibbles in his opening brief that he
19   included the Hiawatha Street address as his “street address”
20   rather than his “residence” in his petition and never stated at
21   the initial § 341(a) meeting that he resided at Hiawatha Street,
22   he concedes that he failed to disclose in his schedules:   1) his
23   ownership interest in the Buckingham Property; 2) his ownership
24   interests in two corporations that he controlled and owned; and
25   3) the claim of at least one judgment creditor.   He further
26   concedes that he stated under oath at his § 341(a) meeting that
27   he did not own any real property and that he did not sell or give
28   away anything of value in the previous four years.   Appellant’s

                                     21
 1   Opening Brief, at 9-10.   At the Exemption Objection Hearing, Mr.
 2   Elliott’s counsel conceded that Mr. Elliott “did not disclose the
 3   company.   He did not disclose the property.”   We conclude that
 4   the bankruptcy court did not err in finding that Mr. Elliott
 5   concealed his interest in the Buckingham Property for purposes of
 6   § 522(g)(1)(B).
 7        The bankruptcy court found that the Trustee’s judgment in
 8   his § 542(a) turnover action constituted a recovery under § 542
 9   for purposes of § 522(g).4   This Panel previously considered the
10   meaning of the term “recover” in the context of § 522(g) in Hitt
11   v. Glass (In re Glass), 164 B.R. 759, 763 (9th Cir. BAP 1994),
12   aff’d, 60 F.3d 565 (9th Cir. 1995):
13        As to everyday usage, Webster’s defines “recover’ as
          “to get back” or “to regain.” Webster’s New World
14        Dictionary 1122 (3d ed. 1988). In the legal context,
          “recover” is defined as above, but is also defined as
15        “to be successful in a suit, to collect or obtain
          amount, to have judgment, to obtain favorable or final
16        judgment, to obtain in any legal manner in contrast to
          voluntary payment.” Black’s Law Dictionary 1147 (5th
17        ed. 1979).
18        In the Exemption Denial Order, the bankruptcy court made the
19   following specific findings:
20        On June 4, 2013, Trustee filed a turnover action
          against [Debtor] for the . . . [Buckingham] Property
21        under § 542. Trustee has succeeded in that action.
          Hence, this constitutes a “recovery” as contemplated by
22        § 522(g), which then brings the . . . Property within
          the scope of the § 522(g)(1) limitation on [Mr.
23        Elliott’s] right to claim an exemption in property he
          voluntarily transferred and concealed.
24
25
          4
             The judgment that existed at the time the bankruptcy
26   court made that finding subsequently was vacated in Elliott II.
27   However, following remand and further proceedings in the
     Adversary Proceeding, the corresponding Turnover Judgment was
28   entered, was not appealed and is final.

                                     22
 1
     Exemption Denial Order, at 5.
 2
          Mr. Elliott does not contest that the Trustee made a
 3
     “recovery” under § 542 in the Adversary Proceeding.   He could not
 4
     do so credibly.   Mr. Elliott opposed the Trustee’s claim for
 5
     turnover of the Buckingham Property at every stage of the
 6
     Adversary Proceeding up to the entry of the Turnover Judgment.
 7
     His apparent defense was based on the argument that unpaid real
 8
     property taxes coupled with consensual liens, with or without his
 9
     claimed homestead exemption, ate up the entire value of the
10
     Buckingham Property, leaving nothing for the bankruptcy estate.
11
     The bankruptcy court ultimately rejected that argument, finding
12
     total value of the Buckingham Property net of tax liens and
13
     allowable consensual liens to be $297,694.43.   Even if Mr.
14
     Elliott prevailed on his $175,000 homestead exemption claim,
15
     $122,694.43 of “consequential” net value would remain for the
16
     estate.   As noted above, the Turnover Judgment based on these
17
     findings was not appealed.5
18
19
          5
20           Interestingly, as late as the Exemption Objection
     Hearing, Mr. Elliott’s counsel asserted that the $800,000 HDCR
21   trust deed lien, which “the [Trustee] says it’s phony,” was “way
22   too old to get rid of, therefore there [is] no equity.” Yet, in
     the Opposition to the Trustee’s Valuation Brief, Mr. Elliott did
23   not even mention the HDCR trust deed lien. And, in its Findings,
     the bankruptcy court noted that counsel for Mr. Elliott
24
     represented at the Turnover Hearing that nothing was actually
25   owed to HDCR, and Mr. Elliott had obtained a reconveyance of
     HDCR’s trust deed. On this record, one might reasonably conclude
26   that HDCR was Mr. Elliott’s “Lili Lin.” Fortunately, we do not
27   have to consider this matter further in the disposition of this
     appeal.
28

                                     23
 1        Mr. Elliott does argue that § 522(g)(1) is inapplicable to
 2   deny his homestead exemption claim because the Trustee did not
 3   recover property that was “transferred” for the benefit of the
 4   estate in his § 542 action, and “the reference to Section 542 [in
 5   § 522(g)(1)] describes one of the mechanisms for recovering a
 6   transfer.”   We disagree with Mr. Elliott’s argument for the
 7   following reasons.
 8        First, in § 522(g) itself, there is no explicit link between
 9   the language   “property that the trustee recovers under section
10   . . . 542” and “to the extent that the debtor could have exempted
11   such property . . . if such property had not been transferred.”
12   The statute by its terms does not require that the recovery be of
13   or from a transfer.
14        Section 542(a), pursuant to which the Trustee obtained the
15   Turnover Judgment, provides in relevant part:
16        [A]n entity . . . in possession, custody, or control,
          during the case, of property that the trustee may use,
17        sell, or lease under section 363 of this title, or that
          the debtor may exempt under section 522 of this title
18        shall deliver to the trustee, and account for, such
          property or the value of such property, unless such
19        property is of inconsequential value or benefit to the
          estate.
20
21   “Possession, custody or control” is not a defined term in the
22   Bankruptcy Code, but the statute requires that the subject
23   property must have been in the possession, custody or control of
24   a third party “during the case.”     5 Collier on Bankruptcy
25   ¶ 542.02[1].   “‘During the case’ has been held to include the
26   pendency of the overall bankruptcy case and not just the
27   adversary proceeding seeking turnover.”    Id.   See Beaman v.
28   Vandeventer Black, LLP (In re Shearin), 224 F.3d 353, 356 (4th

                                     24
 1   Cir. 2000), cert. denied, 531 U.S. 1149 (2001); and Boyer v.
 2   Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A. (In re USA
 3   Diversified Prods., Inc.), 100 F.3d 53, 55-56 (7th Cir. 1996).
 4   There is no dispute that on the petition date, LWI rather than
 5   Mr. Elliott held title to the Buckingham Property.
 6        In the Exemption Denial Order, the bankruptcy court made the
 7   following findings:
 8        Debtor [Mr. Elliott] voluntarily transferred title to
          the [Buckingham] Property to a corporation owned by the
 9        son of Debtor’s business partner. Later, Debtor again
          transferred the Property to a corporation that was
10        wholly owned by Debtor. In his bankruptcy petition and
          schedules and during his § 341(a) meeting of creditors,
11        Debtor concealed these transfers and his interest in
          the Property. After he received his discharge, Debtor
12        transferred the Property back into his name.
13   Exemption Denial Order, at 5.   Mr. Elliott does not dispute those
14   findings.   So, on the petition date, the transfer to LWI was
15   still in effect.   Based on the schedules Mr. Elliott filed, he
16   could not claim an exemption in the Buckingham Property because
17   he affirmed under penalty of perjury that he did not have an
18   exemptible interest in the property.   “If the exempt property is
19   transferred, the debtor has in essence waived the
20   exemption . . . .”    Fox v. Smoker (In re Noblit), 72 F.3d 757,
21   758 (9th Cir. 1995).   And as Mr. Elliott admits, exemptions are
22   determined as of the petition date.    See § 522(b)(3)(A);
23   4 Collier on Bankruptcy ¶ 522.05[1]; Wolfe v. Jacobson (In re
24   Jacobson), 676 F.3d 1193, 1199 (9th Cir. 2012), citing White v.
25   Stump, 266 U.S. 310, 313 (1924); In re Dore, 124 B.R. 94, 98
26   (Bankr. S.D. Cal. 1991).
27        This Panel and the Ninth Circuit faced a similar situation
28   in Glass v. Hitt (In re Glass), 164 B.R. 759 (9th Cir. BAP 1994),

                                      25
 1   aff’d, 60 F.3d 565 (9th Cir. 1995).   In Glass, prior to filing
 2   his chapter 7 bankruptcy petition, the debtor (“Mr. Glass”) had
 3   transferred title to his residence to his son for “love and
 4   affection.”   Mr. Glass did not list the residence as an asset in
 5   his schedules and did not disclose the transfer in his statement
 6   of financial affairs.   He further did not claim a homestead
 7   exemption in the residence.   Glass, 60 F.3d at 567.    At the
 8   § 341(a) meeting of creditors, a creditor told the trustee about
 9   the prepetition transfer of the residence property.     Id.
10   Thereafter, Mr. Glass amended his schedules to list a fee
11   interest in the residence and claimed a homestead exemption.     Id.
12        The trustee objected to Mr. Glass’ homestead exemption
13   claim, contending that since Mr. Glass did not claim any interest
14   in the residence in his original schedules and had voluntarily
15   conveyed the residence to his son for no consideration, § 522(g)
16   “precluded [Mr. Glass] from relying on the homestead exemption
17   authorized by § 522(b).”   Glass, 164 B.R. at 760-61.   In
18   addition, in the objection, the trustee stated his intent to seek
19   avoidance of the conveyance as a fraudulent transfer under § 548.
20   Id. at 761.   Before such an adversary proceeding was filed (and
21   even before a demand for turnover had been made), Mr. Glass’ son
22   reconveyed the residence to Mr. Glass, again in consideration of
23   “love and affection.”
24        The bankruptcy court overruled the trustee’s objection
25   “holding [Mr.] Glass was entitled to claim the homestead
26   exemption under section 522(b) because the trustee did not direct
27   any action against the transferee son to achieve reconveyance of
28   the residence to the estate, and thus, the trustee did not

                                     26
 1   ‘recover’ any property.”   Glass, 60 F.3d at 567.   This Panel
 2   reversed, and the Ninth Circuit affirmed the reversal, quoting
 3   with approval this Panel’s holding that, “The purpose of § 522(g)
 4   is to prevent a debtor from claiming an exemption in recovered
 5   property which was transferred in a manner giving rise to the
 6   trustee’s avoiding powers, where the transfer was voluntary or
 7   where the transfer or property interest was concealed.”   Id. at
 8   568-69.   See also Greenwood v. Clark (In re Greenwood), 593 F.
 9   App’x 680 (Feb. 13, 2015).
10          In this case, the Trustee recovered the Buckingham Property
11   under § 542(a) through the Turnover Judgment in the Adversary
12   Proceeding.   Mr. Elliott could have exempted the Buckingham
13   Property in his original schedules on the petition date if he had
14   disclosed it as real property in which he claimed an interest,
15   despite its transfer to LWI, but he did not disclose an
16   exemptible interest in the property.   Mr. Elliott’s transfers of
17   the Buckingham Property were voluntary, and he concealed his
18   interest in the Buckingham Property in his petition and schedules
19   and in his testimony at the § 341(a) meeting. On this record, we
20   conclude that the bankruptcy court did not err in sustaining the
21   Trustee’s objection to Mr. Elliott’s claimed homestead exemption
22   in the Buckingham Property under § 522(g)(1).
23   C.   No need to rule on California exemption law
24          Mr. Elliott argues that the bankruptcy court erred in
25   failing to analyze whether Mr. Elliott’s misconduct warranted
26   denial of his homestead exemption claim under California state
27   law.   Since the bankruptcy court appropriately denied Mr.
28   Elliott’s claimed homestead exemption under an applicable

                                      27
 1   Bankruptcy Code provision, § 522(g)(1), it fully resolved the
 2   Trustee’s objection and was not required to proceed further to
 3   analyze Mr. Elliott’s homestead exemption claim under state law.
 4                              CONCLUSION
 5        Based on the foregoing analysis and conclusions, we AFFIRM.
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