In Re Andrew Westhem and Emily Westhem, Bankrupts. C. Douglas Wikle v. Andrew Westhem and Emily Westhem

642 F.2d 1139 7 Bankr.Ct.Dec. 1246 In re Andrew WESTHEM and Emily Westhem, Bankrupts. C. Douglas WIKLE, Plaintiff-Appellant, v. Andrew WESTHEM and Emily Westhem, Defendants-Appellees. No. 79-3127. United States Court of Appeals, Ninth Circuit. Argued and Submitted Dec. 3, 1980. Decided March 23, 1981. C. Douglas Wikle, Wikle & Henry, Los Angeles, Cal., for plaintiff-appellant. Richard M. Moneymaker, Los Angeles, Cal., for defendants-appellees. Appeal from the United States District Court for the Central District of California. Before GIBSON * , SNEED and POOLE, Circuit Judges. SNEED, Circuit Judge: 1 This case raises the question whether under the circumstances of this case a diamond ring having a fair market value of more than $3000 and described as "one emerald cut diamond of approximately four (4) carats in weight with two side diamonds" is exempt property pursuant to 11 U.S.C. § 24 (now 11 U.S.C. § 522 (b)) and Cal.Civ.Proc.Code § 690.1. The bankruptcy judge held it was not, but on appeal from this decision the district court reversed and held that it was. In re Westhem, 459 F.Supp. 556 (C.D.Cal.1978). We affirm the district court. 2 As the district court…

This case raises the question whether under the circumstances of this case a diamond ring having a fair market value of more than $3000 and described as “one emerald cut diamond of approximately four (4) carats in weight with two side diamonds” is exempt property pursuant to 11 U.S.C. § 24 (now 11 U.S.C. § 522 (b)) and Cal.Civ.Proc. Code § 690.1. The bankruptcy judge held it was not, but on appeal from this decision the district court reversed and held that it was. In re Westhem, 459 F.Supp. 556 (C.D.Cal.1978). We affirm the district court.

As the district court pointed out, the facts are not substantially disputed. Emily Westhem’s original engagement ring had belonged to Andrew Westhem’s grandmother. A number of years ago it was stolen and the insurance proceeds were used to purchase the ring here in question. In this manner the ring which we hold to be exempt is linked to a former ring of great sentimental value. Emily Westhem also wears a wedding band which the trustee in bankruptcy has not put in issue.

The present section 690.1 of the California Code of Civil Procedure exempts “[njecessary household furnishings and appliances and wearing apparel, ordinarily and reasonably…

dissenting.

It is with considerable reluctance and trepidation that I dissent from my. colleagues on an issue of California law, but in my view a replacement diamond engagement ring valued in excess of $3000 should not be included within California’s bankruptcy exemption as “necessary ... wearing apparel, ordinarily and reasonably necessary to, and personally used by, the debt- or and his resident family.” Cal.Civ.Proc. Code § 690.1.

The replacement diamond ring was purchased for $6800 over thirteen years ago with the insurance proceeds received after the theft of Mrs. Westhem’s heirloom engagement ring. The replacement ring’s diamond weighs four carats. Given inflation and the recent increase in the value of diamonds as collectibles, Mrs. Westhem’s ring represents a substantial investment asset, valued well in excess of $3000.

At the time Mr. Westhem filed for bankruptcy, he was earning over $50,000 per year as an executive of an insurance company. At that time he was leasing a Mercedes and a Datsun 280Z, while owning a Pontiac Firebird. Apparently, Mr. West-hem’s bankruptcy resulted from the purchase of stock on margin in a firm that did not live up to his expectations.

The…