Court Opinion

ID: 818087
Source: CourtListenerOpinion
Date Created: 2013-02-01 22:56:22.54263+00
Date Added: 2024-06-11T15:48:09.430540
License: Public Domain

FILED
                                                           NOV 28 2012
 1                                                     SUSAN M SPRAUL, CLERK
                                                         U.S. BKCY. APP. PANEL
                                                         OF THE NINTH CIRCUIT
 2
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )        BAP No.   NV-11-1124-JuPaD
                                   )
 6   PATRICIA NIETO,               )        Bk. No.   09-26688
                                   )
 7                   Debtor.       )
     ______________________________)
 8   BAC HOME LOANS SERVICING, LP )
     f/k/a COUNTRYWIDE HOME LOANS )
 9   SERVICING, LP,                )
                                   )
10                   Appellant,    )
                                   )
11   v.                            )        M E M O R A N D U M*
                                   )
12   PATRICIA NIETO,               )
                                   )
13                   Appellee.     )
     ______________________________)
14
                        Submitted Without Oral Argument
15                           on November 15, 2012**
16                         Filed - November 28, 2012
17             Appeal from the United States Bankruptcy Court
                        for the District of Nevada
18
          Honorable Bruce A. Markell, Bankruptcy Judge, Presiding
19                       _________________________
20   Appearances:     Ariel Edward Stern, Esq. and Heidi Parry Stern,
                      Esq. of Akerman Senterfitt LLP on brief for
21                    appellant BAC Home Loans Servicing; David M.
                      Crosby, Esq. and Troy S. Fox, Esq. of Crosby &
22                    Associates on brief for appellee Patricia Nieto.
                           _________________________
23
24
          *
            This disposition is not appropriate for publication.
25   Although it may be cited for whatever persuasive value it may
26   have (see Fed. R. App. P. 32.1), it has no precedential value.
     See 9th Cir. BAP Rule 8013-1.
27
          **
            This case was submitted without oral argument pursuant to
28   a stipulation by the parties.

                                      -1-
 1   Before:     JURY, PAPPAS, and DUNN Bankruptcy Judges.
 2
 3            BAC Home Loans Servicing, LP (“BAC”) appeals the bankruptcy
 4   court’s determination of Debtor Patricia Nieto’s (“debtor”)
 5   principal residence pursuant to 11 U.S.C. § 1322(b)(2)1, arguing
 6   that the pertinent date for determining principal residence is
 7   the loan origination date.     The bankruptcy court held that plan
 8   confirmation was the proper date for determination of a debtor’s
 9   principal residence.     While this appeal was pending, this Panel
10   decided that the petition date was the correct date for
11   determination of a debtor’s principal residence.     Benafel v. One
12   West Bank, FSB (In re Benafel), 461 B.R. 581 (9th Cir. BAP
13   2011).     While the bankruptcy court applied an incorrect legal
14   rule to resolve the issues in this appeal, because we agree with
15   the outcome, we AFFIRM.
16                                   I. FACTS
17            Debtor’s ex-husband purchased the residence at 816 Orr
18   Avenue, North Las Vegas, Nevada in February 1990.       Debtor began
19   to occupy the residence at that time.      In June 2000, as a result
20   of her divorce, debtor’s ex-husband transferred title of the
21   residence to debtor as her sole and separate property.      In April
22   2006, debtor refinanced the residence with SFG Mortgage.      BAC is
23   successor in interest to SFG Mortgage.
24            On June 1, 2006, debtor purchased a second residence at
25   5308 Coleman Street, North Las Vegas, Nevada (“Coleman
26
27
          1
            Unless otherwise indicated, all chapter and section
28   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.

                                       -2-
 1   Property”).   Shortly thereafter, debtor moved into the Coleman
 2   Property and began to rent out the residence.   On September 6,
 3   2009, debtor filed for bankruptcy.   On the petition date, debtor
 4   resided in the Coleman Property.
 5        On September 9, 2009, debtor filed her Chapter 13 plan.
 6   BAC objected to debtor’s plan on grounds that the value of the
 7   residence stated in the plan was too low and that the plan
 8   failed to provide any evidence of value.   On December 31, 2009,
 9   debtor filed a Motion to Value Collateral for the residence.
10   Debtor sought to reduce BAC’s secured claim to the appraised
11   value of the residence.   BAC opposed the motion, contending the
12   residence was debtor’s principal residence exempt from
13   modification pursuant to § 1322(b)(5).   BAC argued that a
14   debtor’s principal residence is determined on the date the
15   creditor takes an interest in the property, and because debtor
16   listed the residence as her principal residence when she filled
17   out her loan application in 2006, BAC’s contractual rights were
18   exempt from modification pursuant to § 1322(b)(5).
19        On October 25, 2010, the bankruptcy court granted debtor’s
20   Motion to Value Collateral, holding the critical date for
21   determining a debtor’s principal residence under § 1322(b)(5) is
22   the plan confirmation date.   On March 1, 2011, the bankruptcy
23   court issued an order confirming debtor’s Chapter 13 plan, which
24   relied in part on the valuation order.   BAC timely appealed the
25   bankruptcy court’s confirmation order.
26        After BAC and debtor submitted their briefs on appeal, this
27   Panel held in a different appeal that the petition date was the
28   correct date for determination of a debtor’s principal

                                    -3-
 1   residence.    Benafel, 461 B.R. 581.    BAC and debtor were asked to
 2   supplement their briefs in light of Benafel.
 3                               II. JURISDICTION
 4           The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
 5   §§ 1334 and 157(b)(1).     This Panel has jurisdiction under
 6   28 U.S.C. § 158.
 7                                  III. ISSUE
 8           Whether the bankruptcy court erred in permitting debtor to
 9   modify BAC’s rights in the residence.
10                            IV. STANDARD OF REVIEW
11           We review the bankruptcy court’s construction of the
12   Bankruptcy Code de novo.     Educ. Credit Mgmt. Corp. v. Mason
13   (In re Mason), 464 F.3d 878, 881 (9th Cir. 2006).     We may
14   consider any issue evident on the record and may affirm on any
15   basis supported by the record.     O’Rourke v. Seaboard Sur. Co.
16   (In re E.R. Fegert, Inc.), 887 F.2d 955, 957 (9th Cir. 1989).
17   We do not reverse for errors not affecting substantial rights of
18   the parties, and as noted, may affirm for any reason supported
19   by the record.    Williams v. Levi (In re Williams), 323 B.R. 691,
20   696 (9th Cir. BAP 2005).
21                                V. DISCUSSION
22           In Benafel, this Panel answered the legal question
23   presented in this appeal, deciding that the proper date for
24   determination of a debtor’s principal residence is the petition
25   date.    461 B.R. 581.   The only question remaining then is
26   whether the bankruptcy court’s decision that the proper date is
27   the plan confirmation date constitutes reversible error.
28           On October 25, 2010, the bankruptcy court issued a

                                       -4-
 1   memorandum of decision.    Therein, the bankruptcy court found,

 2   “[w]hen she filed for bankruptcy, debtor was living in the

 3   Coleman [Property] . . . .”    BAC’s opening brief also

 4   acknowledges debtor resided in the Coleman Property on the

 5   petition date.    For example, BAC states, “[o]n June 1, 2006,

 6   Debtor purchased a second residence . . . . Debtor apparently

 7   moved to the Coleman property and began to rent out the

 8   [residence] around this time.”     Given these statements, and with

 9   no evidence to the contrary, the record supports a determination

10   that debtor did not reside in the residence on the petition

11   date.    As a consequence, Benafel controls the outcome of this

12   appeal.

13                               VI. CONCLUSION

14           While the bankruptcy court applied an incorrect legal rule,

15   because debtor did not reside in the residence on the petition

16   date, the bankruptcy court’s decision does not constitute

17   reversible error.    We AFFIRM.

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