In re Cerchione
| Decision Date | 08 September 2009 |
| Docket Number | Bankruptcy No. 08-40655-JDP.,BAP No. ID-09-1069-DJuMk. |
| Citation | 414 B.R. 540 |
| Parties | In re Guy Taylor CERCHIONE and Carla Marie Cerchione, Debtors. R. Sam Hopkins, Chapter 7 Trustee, Appellant, v. Guy Taylor Cerchione; Carla Marie Cerchione, Appellees. |
| Court | U.S. Bankruptcy Appellate Panel, Ninth Circuit |
Jim Spinner (Attorney for R. Sam Hopkins, Ch. 7 Trustee) Service, Spinner & Gray, Pocatello, ID, for Appellant(s).
Allen B. Ellis (Attorney for Guy and Carla Cerchione), Boise, ID, for Appellee(s).
Before: DUNN, JURY and MARKELL, Bankruptcy Judges.
Guy and Carla Cerchione (the "Cerchiones") filed a chapter 71 bankruptcy case and claimed a homestead exemption in a home under construction. The trustee objected to their homestead exemption claim on the grounds that the Cerchiones had not occupied the home property and had not executed and recorded a declaration of homestead with respect to the home property at any relevant time. The bankruptcy court overruled the trustee's objection to the Cerchiones' claimed homestead exemption. We AFFIRM.
The Cerchiones formerly lived in Meridian, Idaho. Mr. Cerchione was employed as a home builder, and when the housing market went into decline, he sought other employment, ultimately accepting a job in Idaho Falls. On October 15, 2007, the Cerchiones closed the sale of their former home in Meridian and moved to Idaho Falls. The net proceeds to the Cerchiones from the sale were $144,629.94.
After several offers to buy existing homes in the Idaho Falls area were not accepted, the Cerchiones decided to build a new home. While their new home (the "Property") was under construction, the Cerchiones lived in the home of Mr. Cerchione's mother.
The Cerchiones bought the lot on which they planned to build their new home on May 23, 2008. At about the same time, the Cerchiones obtained a construction loan ("Loan") from the Bank of Commerce ("Bank"). Under the terms of the Loan, the Cerchiones were required to contribute $100,000 as a down payment for construction of their home on the Property. The balance of the costs of construction, as well as the purchase price for the homesite lot, were to be advanced by the Bank, in an amount totaling approximately $163,500.
The Cerchiones filed their chapter 7 petition on July 31, 2008. In their schedules, they claimed an exemption in the Property of $100,000, the maximum allowed under Idaho Code § 55-1003. The Cerchiones claimed an ownership interest in the Property in their Schedules A and D, and valued it at $280,000, subject to the Bank's secured claim in the amount of $165,000. Their petition, however, stated their address as on Cypress Avenue in Idaho Falls, the home of Mr. Cerchione's mother.
The chapter 7 trustee, R. Sam Hopkins ("Trustee"), objected to the Cerchiones' claimed exemption in the Property on the grounds that they did not reside at the Property and they had not made and recorded a Declaration of Homestead with respect to the Property.
The Cerchiones responded to the Trustee's objection, purporting to amend Schedule C to claim an exemption in the Property pursuant to Idaho Code §§ 55-1003 and 55-1008. Idaho Code § 55-1008 provides in relevant part:
The proceeds of the voluntary sale of the homestead in good faith for the purpose of acquiring a new homestead . . . up to the amount specified in section 55-1003, Idaho Code, shall likewise be exempt for one (1) year from receipt, and also such new homestead acquired with such proceeds.
The Cerchiones also claimed an exemption in certain appliances to be installed at the Property that had not yet been delivered.2 The Cerchiones also filed a motion to compel abandonment of the Property by the Trustee.
The Trustee filed a further objection to the Cerchiones' "Amended Claim of Exemptions." Among the grounds for objecting to the Cerchiones' amended exemption claims, the Trustee asserted that, "Debtors do not reside, and did not reside in the [Property], on the date of filing of the bankruptcy or any other relevant period of time, and unless they recorded a Declaration of Homestead as required by Idaho Code § 55-1004, prior to filing for bankruptcy, the exemption should be disallowed." The Trustee also objected to the Cerchiones' motion to compel abandonment.
The bankruptcy court conducted an evidentiary hearing ("Hearing") on the Trustee's objection to the Cerchiones' amended exemption claim on November 4, 2008. At the Hearing, the Cerchiones provided uncontradicted testimony that: 1) they had paid $100,000 of the proceeds from the sale of their Meridian, Idaho residence to the Bank for construction of a new home on the Property in May, 2008, prior to their bankruptcy filing; 2) they intended to reside at the Property; and 3) they had obtained a certificate of occupancy for the Property. The Trustee elicited testimony from the Cerchiones that: 1) on the date of their bankruptcy filing and through the date of the Hearing, they never had resided at the Property, and 2) they never had signed and recorded a Declaration of Homestead with respect to the Property. Following the Hearing, the bankruptcy court took the matter under advisement.
After supplemental briefing by the parties, but prior to issuing its decision, the bankruptcy court held a status hearing on the matter on December 2, 2008. The record of proceedings for the status hearing reflects that the Cerchiones' counsel agreed to file an amended Schedule C to conform the Cerchiones' schedules to their amended exemption claim, and the Trustee's filed objection would be deemed an objection to the Cerchiones' homestead exemption claim in their amended Schedule C. The Cerchiones filed their amended Schedule C on December 11, 2008, claiming a homestead exemption in the Property under Idaho Code § 55-1008 in the amount of $95,700.
On January 6, 2009, the bankruptcy court issued its Memorandum of Decision ("Memorandum Decision")3 and order sustaining the Trustee's objection to the Cerchiones' claim of exemption in appliances, but overruling the Trustee's objection to the Cerchiones' claimed exemption in the Property. The Trustee filed a motion for additional findings and an amended order ("Post-Hearing Motion") and a supporting memorandum, raising the issue whether the Cerchiones' claimed exemption in the Property expired a year after the sale of their Meridian, Idaho residence, when they did not yet occupy the home. The Cerchiones opposed the Post-Hearing Motion, arguing that the Trustee had not shown any manifest error of law or fact that would justify the relief requested.
The bankruptcy court heard the Post-Hearing Motion on February 11, 2009. At the hearing, counsel for the Cerchiones confirmed that the Cerchiones had moved into the new home on the Property.4 Following argument, the bankruptcy court declined to make further fact findings and stated its legal conclusions orally, determining that its prior legal conclusions stated in the Memorandum Decision were not clearly erroneous. The bankruptcy court entered its order denying the Post-Hearing Motion on the same date.
The Trustee filed a timely Notice of Appeal on February 20, 2009.
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and 157(b)(2)(B). We have jurisdiction under 28 U.S.C. § 158.
1. Whether the bankruptcy court erred in determining that the Cerchiones could claim an Idaho homestead exemption in the Property when they had not occupied the Property and had not signed and recorded a Declaration of Homestead with respect to the Property "at any relevant time."
2. Whether the bankruptcy court erred in declining to find that even if the Cerchiones were entitled to claim a homestead exemption in the Property when they filed their bankruptcy case, their exemption claim expired one year after the sale of their Meridian, Idaho residence.
3. Whether the bankruptcy court erred in not addressing the temporary exemption and reversionary rights issues with respect to the Cerchiones' exemption claim in the Property raised by the Trustee.
We review a bankruptcy court's conclusions of law, including its interpretations of provisions of the Bankruptcy Code and state law, de novo. New Falls Corp. v. Boyajian (In re Boyajian), 367 B.R. 138, 141 (9th Cir.BAP2007), aff'd, 564 F.3d 1088, 1090 (9th Cir.2009). We review mixed questions of law and fact de novo. Wechsler v. Macke Int'l Trade, Inc. (In re Macke Int'l Trade, Inc.), 370 B.R. 236, 245 (9th Cir.BAP2007). Such issues are reviewed de novo "because they require consideration of legal concepts and the exercise of judgment about the values that animate legal principles." Murray v. Bammer (In re Bammer), 131 F.3d 788, 792 (9th Cir.1997).
A bankruptcy court's decision to deny a motion for additional findings, reconsideration or an amended order or judgment is reviewed for abuse of discretion. Weiner v. Perry, Settles & Lawson, Inc. (In re Weiner), 161 F.3d 1216, 1217 (9th Cir.1998); Hansen v. Moore (In re Hansen), 368 B.R. 868, 875 (9th Cir. BAP2007); Nunez v. Nunez (In re Nunez), 196 B.R. 150, 155 (9th Cir.BAP1996). A bankruptcy court necessarily abuses its discretion if it bases its decision on an erroneous view of the law. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990). Under the abuse of discretion standard, we must have a definite and firm conviction that the bankruptcy court committed a clear error of judgment in the conclusion it reached before reversal is appropriate. AT & T Universal Card Svcs. v. Black (In re Black), 222 B.R. 896, 899 (9th Cir. BAP 1998).
On appeal, we may affirm the bankruptcy court on any ground supported by the record, even if it differs from the bankruptcy court's stated rationale. Pollard v. White, 119 F.3d...
To continue reading
Request your trial
-
Marciano v. Fahs (In re Marciano)
...discretion. Weiner v. Perry, Settles & Lawson, Inc. (In re Weiner), 161 F.3d 1216, 1217 (9th Cir.1998); Hopkins v. Cerchione (In re Cerchione), 414 B.R. 540, 545 (9th Cir. BAP 2009).E. Standards of Review Relating to the Summary Judgment Order and the Order for Relief. Whether there is a “b......
-
In re Heilman
...court's legal conclusions, including its interpretation of the bankruptcy code and state law, de novo. Hopkins v. Cerchione (In re Cerchione), 414 B.R. 540, 545 (9th Cir. BAP 2009). We may affirm the bankruptcy court on any basis supported by the record. Steckman v. Hart Brewing, Inc., 143 ......
-
In re Wolfe
... ... RCW 6.13.070(2). This ... comports with the snapshot rule, which holds that exemptions ... are fixed as of the petition date. See White v ... Stump , 266 U.S. 310, 313, 45 S.Ct. 103, 69 L.Ed. 301 ... (1924) (1924; see also In re Cerchione , 414 B.R ... 540, 548 (B.A.P. 9th Cir. 2009). Consequently, Debtor's ... right to a homestead exemption is subject to whatever rights ... and limitations were provided by RCW 6.13 as of August 16, ... 2022. See In re Anderson , 613 B.R. at 282 ... ...
-
State v. Blixseth (In re Blixseth)
...We review a bankruptcy court's conclusions of law de novo and its factual findings for clear error. Hopkins v. Cerchione (In re Cerchione), 414 B.R. 540, 545 (9th Cir. BAP 2009). Unless there are pertinent factual disputes, a bankruptcy court's interpretation of the venue statutes and its d......