Court Opinion

ID: 9363879
Source: CourtListenerOpinion
Date Created: 2023-01-17 21:00:32.919237+00
Date Added: 2024-06-11T17:15:34.693828
License: Public Domain

NOT FOR PUBLICATION                         FILED
                    UNITED STATES COURT OF APPEALS                       JAN 17 2023
                                                                    MOLLY C. DWYER, CLERK
                                                                      U.S. COURT OF APPEALS
                            FOR THE NINTH CIRCUIT

In re: ROUHEL FEINSTEIN,                       No.   20-56279

             Debtor,                           D.C. No. 2:19-cv-10534-SVW
______________________________                 Central District of California,
                                               Los Angeles
TAMMY R. PHILLIPS; TAMMY R
PHILLIPS, A PROF. LAW CORP.,                   ORDER

                Appellants,

 v.

ROUHEL FEINSTEIN,

                Appellee.

Before: NGUYEN and H.A. THOMAS, Circuit Judges, and FITZWATER,*
District Judge.

      The memorandum disposition filed on December 16, 2022, is amended as

follows.

      On page 2, line 15, delete <2007> and insert the following text: <2008>.

      On page 2, line 20, delete  and insert the following text: .

      *
            The Honorable Sidney A. Fitzwater, United States District Judge for
the Northern District of Texas, sitting by designation.
      The petition for panel rehearing, Dkt. No. 65, is otherwise DENIED, and no

further petitions for rehearing will be accepted. Pursuant to Federal Rule of

Appellate Procedure 40(a)(3), the response to the petition for panel rehearing, Dkt.

No. 66, is STRUCK.

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                            NOT FOR PUBLICATION
                                                                         FILED
                    UNITED STATES COURT OF APPEALS
                                                                          JAN 17 2023
                            FOR THE NINTH CIRCUIT                     MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS

In re: ROUHEL FEINSTEIN,                        No.    20-56279

             Debtor,                            D.C. No. 2:19-cv-10534-SVW
______________________________

TAMMY R. PHILLIPS; TAMMY R                      AMENDED MEMORANDUM*
PHILLIPS, A PROFESSIONAL LAW
CORPORATION,

                Appellants,

 v.

ROUHEL FEINSTEIN,

                Appellee.

                   Appeal from the United States District Court
                       for the Central District of California
                   Stephen V. Wilson, District Judge, Presiding

                          Submitted November 15, 2022**
                              Pasadena, California

Before: NGUYEN and H.A. THOMAS, Circuit Judges, and FITZWATER, ***
District Judge.
      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
            The Honorable Sidney A. Fitzwater, United States District Judge for
the Northern District of Texas, sitting by designation.
      Appellants-Creditors Tammy R. Phillips and Tammy R. Phillips, A

Professional Law Corporation (“Creditors”) appeal the district court’s judgment

affirming the bankruptcy court’s order allowing Appellee-Debtor Kevan Harry

Gilman (“Gilman”) to claim a homestead exemption under California Code of

Civil Procedure section 704.730. As the parties are familiar with the facts and

procedural history of this case, we do not provide a detailed accounting here.

Reviewing the bankruptcy court’s conclusions of law de novo and factual findings

for clear error, In re Hawkeye Ent., LLC, 49 F.4th 1232, 1235–36 (9th Cir. 2022),

we affirm.

      We first considered this case in 2018. See In re Gilman, 887 F.3d 956 (9th

Cir. 2018) (“Gilman I”). In Gilman I, we held that for Gilman’s residential

property to qualify for a homestead exemption under California law, he would

have to show that two things were true on the day he filed a bankruptcy petition:

(i) that he was residing in the relevant property, and (ii) that he intended to

continue residing in the property. See id. at 965–66. We then remanded for the

bankruptcy court to make a factual finding concerning Gilman’s intent. Id. at 966.

      On remand, the bankruptcy court found that Gilman had the requisite intent

on the day he filed his bankruptcy petition and that he therefore qualified for a

homestead exemption at the time of filing. See In re Gilman, 608 B.R. 714, 721

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(Bankr. C.D. Cal. 2019) (“Gilman II”). The district court affirmed that decision,

and Creditors filed the instant appeal.

      Gilman died while the appeal was pending. Gilman’s executor, Rouhel

Feinstein, argues that Gilman’s death rendered his estate ineligible for a homestead

exemption and that this appeal is therefore moot. Feinstein is mistaken. The

exemption issue is still live. See Fed. R. Bankr. P. 1016 (stating, in part, that when

a debtor dies, “the estate shall be administered and the case concluded in the same

manner, so far as possible, as though the death . . . had not occurred”).

      Though Feinstein does not address any of the issues Creditors raise in this

appeal, all of Creditors’ arguments fail.

      Creditors raise arguments concerning (i) the appropriate amount of the

homestead exemption, and (ii) Gilman’s intent before the petition date. Both

arguments rest on the assumption that the homestead exemption was triggered not

by Gilman’s filing of the bankruptcy petition in 2011, but by Creditors’ recording

of abstracts of judgment against the relevant property in 2008. We reject this

assumption. When we considered Gilman I in 2018, we accepted—and Creditors

did not dispute—the bankruptcy court’s conclusion that Gilman’s bankruptcy

petition had triggered an automatic homestead exemption. 887 F.3d at 965. We

have no reason to revisit that conclusion here, and Creditors have forfeited any

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challenge to the exemption amount by failing to raise that issue on remand. See In

re Cellular 101, Inc., 539 F.3d 1150, 1155 (9th Cir. 2008).

      Creditors also urge us to find that Gilman did not intend to continue living in

the relevant property on the day he filed his bankruptcy petition. The bankruptcy

court considered the factual arguments raised by Creditors and rejected them. See

Gilman II, 608 B.R. at 721 & n.4. The record does not show that the court clearly

erred in reaching its conclusion. See In re Hawkeye, 49 F.4th at 1236.

      Creditors’ remaining arguments also fail:

      (i)    Gilman did not lose his right of possession when he agreed to sell the

             property, see Wilson v. Sanchez, 254 P.2d 594, 597 (Cal. Dist. Ct.

             App. 1953) (holding that under California law, a seller retains the

             right of possession until legal title passes to the purchaser, unless the

             parties agree otherwise);

      (ii)   the bankruptcy court did not abuse its discretion in declining to reduce

             the exemption amount based on unclean hands, since (a) Creditors

             failed to bring analogous case law to the bankruptcy court’s attention,

             and (b) Creditors did not show they were prejudiced by Gilman’s

             alleged misconduct, see Kendall-Jackson Winery, Ltd. v. Superior Ct.,

             90 Cal. Rptr. 2d 743, 749 (Ct. App. 1999) (stating that relief under the

             unclean hands doctrine depends on the existence of analogous case

                                           3
        law, the nature of the alleged misconduct, and the relationship of the

        misconduct to the alleged injuries), as modified on denial of reh’g

        (Jan. 3, 2000);

(iii)   the bankruptcy court did not abuse its discretion in declining to deny

        the homestead exemption based on equitable estoppel, since

        (a) Gilman’s statement that he intended to sell the property was not a

        misrepresentation, and (b) Creditors did not explain how they relied

        on any such misrepresentation, see Behnke v. State Farm Gen. Ins.

        Co., 127 Cal. Rptr. 3d 372, 387 (Ct. App. 2011) (noting that the

        elements of a valid equitable estoppel claim include a knowing

        misrepresentation of the material facts, intention to induce the reliance

        of an ignorant party, and reliance);

(iv)    Eleven U.S.C. Section 365(a) did not preempt the exemption in this

        case, since that statute concerns a trustee’s right to “assume or reject

        any executory contract or unexpired lease of the debtor,” but there is

        no evidence that the trustee in this case desired to proceed with the

        sale of Gilman’s property and was precluded from doing so by

        California’s homestead law; and

(v)     the bankruptcy court did not abuse its discretion in denying Creditors’

        request to move for summary judgment on remand, see Fed. R. Bankr.

                                     4
             P. 7056; Fed R. Civ. P. 56(b) (providing that bankruptcy courts have

             discretion to fix the timing of summary judgment motions).

      Creditors’ motion to enlarge the record is denied for failure to comply with

Federal Rule of Appellate Procedure 27(a)(2)(A), which provides that “[a] motion

must state with particularity the grounds for the motion . . . and the legal argument

necessary to support it.”

      AFFIRMED.

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