INTRODUCTION

Michael P. Klein, chapter 71 trustee (“Trustee”) of the bankruptcy

estate of Jesslyn Renee Anderson (“Debtor”), appeals the bankruptcy

court’s order overruling his objection to Debtor’s homestead exemption.

Debtor was living in her homestead on the petition date, but she moved

out shortly thereafter and neither re-occupied the property nor filed a

declaration of nonabandonment within six months of moving out. Trustee

contended that, despite the fact that Debtor occupied the homestead on the

petition date, (1) she lacked the intent to reside there, and (2) under

Washington law she had abandoned the property and was thus no longer

entitled to claim the homestead exemption. The bankruptcy court

distinguished the case law cited by Trustee and ruled that the Debtor was

entitled to her homestead exemption despite the fact that she no longer

1 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532. “RCW” references are to the Revised Code of Washington.

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occupied the subject real property.

We AFFIRM.

FACTUAL BACKGROUND

Debtor filed a chapter 7 bankruptcy petition in December 2017. On

her schedules, Debtor listed a 15 percent interest in real property on Brown

Road in Ferndale, Washington (the “Property”), which she co-owns with

her parents. She valued her interest in the Property at $90,000. On Schedule

C, she claimed a homestead exemption of $125,000 under RCW §§ 6.13.010,

6.13.020, and 6.13.030. At her § 341 meeting, Debtor testified that shortly

after filing bankruptcy, she got married and moved out of the Property to

live with her husband.

In February 2018, Trustee filed an objection to Debtor’s homestead

exemption, objecting to the amount of the exemption and noting that

Debtor was no longer living in the Property. He filed an amended objection

in June 20192 in which he argued that Debtor was not entitled to a

homestead exemption in the Property because (1) as of the petition date,

she did not have a present intent to use the Property as her homestead; and

2 Debtor argued in the bankruptcy court that the June 2019 amended objection was untimely, but the bankruptcy court found that the initial objection raised the pertinent issues sufficiently so that the amended objection related back to the timely initial objection. Although Debtor argues in her brief that Trustee waived his objection to the homestead exemption with his delay, she did not cross-appeal the bankruptcy court’s finding that the amended objection was timely. We thus lack jurisdiction to consider the issue. See Leavitt v. Alexander (In re Alexander), 472 B.R. 815, 824-25 (9th Cir.

BAP 2012).

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(2) under Washington law, she had abandoned the Property post-petition

by failing to reside there for six months or to file a declaration of

homestead. Debtor responded to the objection, arguing that, under the

“snapshot rule,” bankruptcy exemptions are fixed as of the petition date

and thus the fact that she had moved out of the Property shortly after filing

was irrelevant.

The bankruptcy court held an initial hearing at which it heard

argument and took the matter under advisement. At the final hearing on

the objection held on August 22, 2019, the bankruptcy court overruled

Trustee’s objection.

Trustee timely appealed.

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(1) and (b)(2)(B). We have jurisdiction under 28 U.S.C. § 158.

ISSUE

Whether the bankruptcy court erred in overruling Trustee’s objection

to Debtor’s homestead exemption.

STANDARD OF REVIEW

The bankruptcy court’s application of state exemption law is a

question of statutory construction that is reviewed de novo. See Cisneros v.

Kim (In re Kim), 257 B.R. 680, 684 (9th Cir. BAP 2000). We also review de

novo the question of whether property is included in a bankruptcy estate.

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Id. De novo review is independent, with no deference given to the trial

court’s conclusion. Barclay v. Mackenzie (In re AFI Holding, Inc.), 525 F.3d

700, 702 (9th Cir. 2008).

DISCUSSION

Under § 522(b)(2), each state may “opt out” of the federal exemption

scheme and limit its residents to the state-created exemptions. Washington

has not “opted out.” Therefore, a debtor in Washington may choose either

the exemptions afforded under state law or the federal exemptions under

§ 522(d). Here, Debtor selected the Washington exemption scheme, which

provides, in relevant part, that a “homestead consists of the dwelling house

or the mobile home in which the owner resides or intends to reside, with

appurtenant buildings, and the land on which the same are situated . . . .

Property included in the homestead must be actually intended or used as

the principal home for the owner.” RCW § 6.13.010(1). Washington has two

methods for claiming a homestead. Arkison v. Gitts (In re Gitts), 116 B.R.

174, 178 (9th Cir. BAP 1990), aff’d, 927 F.2d 1109 (9th Cir. 1991). “Property

described in RCW 6.13.010 constitutes a homestead and is automatically

protected by the exemption described in RCW 6.13.0703 from and after the

time the property is occupied as a principal residence by the owner . . . .”

3 RCW § 6.13.070 provides, in relevant part: “[T]he homestead is exempt from attachment and from execution or forced sale for the debts of the owner up to the amount specified in RCW 6.13.030.”

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RCW § 6.13.040(1). In other words, if the owner resides on the property as

her principal residence, the property is automatically protected by the

homestead exemption. Alternatively, if the owner is not residing in the

property, she may establish a homestead by recording a declaration of

homestead stating that she intends to reside on the premises and, if

applicable, by recording a declaration of abandonment of any automatic

homestead or any existing declared homestead. In re Gitts, 116 B.R. at 178;

RCW § 6.13.040.

Washington law also provides that “[a] homestead is presumed

abandoned if the owner vacates the property for a continuous period of at

least six months.” RCW § 6.13.050. The owner may avoid the presumption

of abandonment by filing a declaration of nonabandonment of homestead

with the appropriate county recorder. Id.

Washington exemption statutes are liberally construed in favor of

protecting family homes. See Jefferies v. Carlson (In re Jefferies), 468 B.R. 373,

380 (9th Cir. BAP 2012) (citing In re Dependency of Schermer, 169 P.3d 452,

465-66 (Wash. 2007); Pinebrook Homeowners Ass’n v. Owen, 739 P.2d 110, 113

(Wash. Ct. App. 1987)).

When the homeowner files bankruptcy, her right to claim an

exemption is fixed as of the petition date; this is often referred to as the

“snapshot rule.” Wolfe v. Jacobson (In re Jacobson), 676 F.3d 1193, 1199 (9th

Cir. 2012) (citing White v. Stump, 266 U.S. 310, 313 (1924)); see also Hopkins v.

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Cerchione (In re Cerchione), 414 B.R. 540, 548 (9th Cir. BAP 2009) (“A debtor’s

entitlement to claimed exemptions generally is determined as of the date of

such debtor’s bankruptcy filing.”). Under § 522(b)(3)(A), exemptions are to

be determined in accordance with the state law applicable on the date of

filing. In re Jacobson, 676 F.3d at 1199. The entire state law applicable on the

filing date is determinative of whether an exemption applies. Id. (citing

Zibman v. Tow (In re Zibman), 268 F.3d 298, 304 (5th Cir. 2001)). See also In re

Wieber, 347 P.3d 41, 44 (Wash. 2015) (court must consider the entire

homestead exemption chapter to answer certified question of whether

homestead applies extraterritorially to real property in other states).

In his appellate brief, Trustee did not dispute that, as of the petition

date, Debtor was living in the Property and was thus entitled to the

automatic homestead exemption on that date, and he seemed to have

abandoned any argument that she was required to have an intent to

continue to reside there. At oral argument on appeal, however, counsel for

Trustee argued that because Debtor moved out shortly after the petition

date, she could not have intended to continue living in the Property on that

date. But, as the bankruptcy court aptly noted in its oral ruling, the plain

language of Washington’s homestead statute reflects that Debtor was

entitled to an automatic homestead exemption on the petition date, so long

as she was occupying the Property as her principal residence, regardless of

her future plans: “Property included in the homestead must be actually

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intended or used as the principal home for the owner.” RCW § 6.13.010(1)

(emphasis added). In other words, if the owner is occupying the homestead

property as of the petition date, the inquiry ordinarily ends there; intent

comes into play only if the owner does not occupy the property. Trustee

has cited no cases to the contrary, nor have we found any.4

But Trustee’s primary argument on appeal is that under Washington

law, Debtor’s right to claim the homestead exemption was conditional

upon her remaining in the Property or filing a declaration of

nonabandonment and, because she did not, she automatically lost the right

to the exemption after six months had passed.

Trustee has not cited any controlling or analogous case law involving

the specific provision of the Washington exemption statute at issue here,

nor have we found any. Trustee relies on Ninth Circuit cases holding that,

although exemption rights are fixed as of the petition date, those rights are

subject to whatever contingencies may be placed upon them by other

applicable provisions of state homestead law. See In re Jacobson, 676 F.3d

1193; In re Gitts, 116 B.R. 174; and England v. Golden (In re Golden), 789 F.2d

4 As discussed below, the Ninth Circuit in In re Jacobson held that a debtor lost her homestead exemption, despite having apparently lived in the homestead on the petition date, when she failed to reinvest the proceeds of a post-petition judicial sale within the six-month period prescribed under California law. But Jacobson appears to be an outlier in holding that post-petition events may impact a debtor’s right to an exemption. In any event, that case is both factually and legally distinguishable from the matter presented here. Importantly, the debtor’s intent (or lack thereof) was not at issue in Jacobson.

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698 (9th Cir. 1986).

In Golden, the debtor had sold homestead property pre-petition and

declared the proceeds exempt under California law, but failed to reinvest

the proceeds within six months as required under California exemption

statutes, as interpreted by California courts. 789 F.2d at 700 (citing Thorsby

v. Babcock, 36 Cal. 2d 202 (1950)). After that period expired, the bankruptcy

court granted the chapter 7 trustee’s motion for turnover of the proceeds.

The Ninth Circuit affirmed, citing the California reinvestment requirement,

and holding that “when the debtor fails to reinvest homestead proceeds

within a period of six months in which the debtor has control of those

proceeds, the proceeds should revert to the trustee.” Id. The court noted

that the policy behind requiring reinvestment is to “prevent the debtor

from squandering the proceeds for nonexempt purposes. Acceptance of the

debtor’s position would frustrate the objective of the California homestead

exemption and the bankruptcy act itself, which limits exemptions to that

provided by state or federal law.” Id.

In Jacobson, the Ninth Circuit expanded Golden to the situation where

the homestead was sold post-petition. There, a chapter 7 debtor claimed a

California homestead exemption in property that was her residence on the

petition date. The bankruptcy court lifted the stay for a judgment creditor

to foreclose on the residence, and the debtor received the amount of her

homestead exemption from the proceeds of the sale. As in Golden, the

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debtor did not reinvest the proceeds within six months, and the chapter 7

trustee sought turnover of the proceeds to the estate. The bankruptcy court

denied the trustee’s motion, reasoning that the exemption was fixed as of

the petition date, and this Panel affirmed. The Ninth Circuit Court of

Appeals reversed. It reasoned that, under Golden, the debtor’s right to a

homestead exemption was contingent on the proceeds being reinvested

within six months of receipt. Because the debtor did not abide by that

condition, the Circuit held that she had forfeited the exemption. In re

Jacobson, 676 F.3d at 1199.

Trustee also cites In re Gitts, a case decided under Washington

exemption law. There, chapter 7 debtors did not reside in their intended

homestead as of the petition date because they were in the process of

renovating it, but they nevertheless claimed an exemption in it and, one

day post-petition, filed a declaration of homestead for that property. The

chapter 7 trustee filed an objection to the exemption, which the bankruptcy

court overruled. This Panel affirmed, reasoning that, as of the petition date,

the debtors had the right to file a declaration of homestead for their

intended residence and

thus create a valid homestead exemption against a judgment creditor up to the date of an execution sale. Under Myers [v. Matley, 318 U.S. 622 (1943)] which looks at the rights of the debtor on the filing date to make and record the necessary declaration of homestead and which holds that the trustee has no greater rights than a state law judgment creditor, the

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debtors’ post-petition declarations are sufficient to create a homestead exemption under Washington law which is valid against the trustee.

Id. at 180 (footnotes omitted).

Read together, these cases support Trustee’s position that the right to

a homestead exemption is subject to whatever rights and limitations are

provided by the particular state’s exemption statutes. But that conclusion

does not lead to the result Trustee proposes. He urges us to read RCW

§ 6.13.0505 as expressly conditioned on the owner using the property as a

dwelling, or if an owner cannot show occupancy and use, recordation of a

declaration of nonabandonment. Under Trustee’s interpretation, once

Debtor moved out of the Property and failed to file a declaration of

nonabandonment, her interest in the Property reverted to the estate after

six months passed.

We decline to read the statute so broadly, particularly in light of the

principle that Washington exemption statutes are to be interpreted liberally

5 RCW § 6.13.050 provides, in relevant part:

A homestead is presumed abandoned if the owner vacates the property for a continuous period of at least six months. However, if an owner is going to be absent from the homestead for more than six months but does not intend to abandon the homestead, and has no other principal residence, the owner may execute and acknowledge, in the same manner as a grant of real property is acknowledged, a declaration of nonabandonment of homestead and file the declaration for record in the office of the recording officer of the county in which the property is situated.

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in favor of protecting family homes. Schermer, 169 P.3d at 465. The

provision does not impose a requirement or condition; it simply creates an

evidentiary presumption, which may be rebutted. See Fed. R. Evid. 301.

Moreover, the cases cited by Trustee are all distinguishable. In Golden and

Gitts, the debtors did not reside in their homesteads as of the petition date,

and in Jacobson, although the debtors resided in their homestead on the

petition date, the sale of the home brought into play the California

reinvestment requirement, which is a “peculiar temporal exemption

statute” that does not mandate the result called for by Trustee under the

facts presented here. See In re Kim, 257 B.R. at 686 (noting that Golden was

decided under the specific California reinvestment requirement and its

holding is thus limited to its facts).

Debtor resided in the Property as her principal residence on the

petition date, and under Washington exemption law, this was sufficient to

confer automatic protection of the homestead. As such, the fact that she

moved out of the Property shortly after filing and failed to return is simply

irrelevant to the determination of whether she is entitled to claim the

homestead exemption in her chapter 7 case. Trustee cites no policy that

would be served by denying Debtor her exemption under these facts.

Unlike the “reinvestment of proceeds” scenario, here there is no danger

that Debtor will squander her homestead funds on nonexempt property.

She cannot access the funds representing the exemption without a sale,

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which is made more complicated here by the fact that she co-owns the

Property with her parents, who may or may not have the ability to buy out

her interest. Further, a debtor’s right to a homestead exemption in a

chapter 7 case should not be predicated on the happenstance of how long

the case remains pending. We thus AFFIRM the bankruptcy court’s

conclusion that Debtor is entitled to claim a homestead exemption in the

Property.

As for the amount of the exemption, Trustee requests that if we

affirm the bankruptcy court’s ruling that Debtor is entitled to the

homestead exemption, we should find that the bankruptcy court erred in

not sustaining Trustee’s objection to the amount of Debtor’s exemption.

Trustee contends the exemption should have been limited to $90,000, the

amount of her claimed equity in the Property, citing Wilson v. Rigby, 909

F.3d 306, 312 (9th Cir. 2018), in which the Ninth Circuit held that the value

of the exemption is limited to the value that lawfully may be claimed as of

the petition date. But the bankruptcy court did not make a finding as to the

proper amount of the exemption. In fact, Trustee’s counsel conceded at the

final hearing in the bankruptcy court that although the issue had been

raised in the objection, it had not been properly brought before the court.

As such, the issue is not properly before us. See O’Rourke v. Seaboard Surety

Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957 (9th Cir. 1989) (ordinarily,

federal appellate courts will not consider an issue not raised sufficiently for

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the trial court to rule upon it). In any event, in the bankruptcy court’s

October 31, 2019 order granting a limited stay pending appeal, it explicitly

reserved the issue of the value of the claimed homestead exemption.

CONCLUSION

The bankruptcy court did not err in ruling that Debtor was entitled to

a homestead exemption under Washington law. Accordingly, we AFFIRM.

We leave the question of the appropriate amount of the exemption for

determination by the bankruptcy court.

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