In Re Audrey E. Noblit, Debtor. James Fox, Successor Trustee v. Arlan Smoker, Husband and Donna Smoker, Wife
Opinion
Opinion
Norris, J.
Opinion by Judge NORRIS.
This appeal presents the threshold question whether a creditor has standing to assert the exempt status of a preferentially transferred property as a defense against avoidance. This is a question of law we review de novo. Kupetz v. United States (In re California Trade Technical Sch., Inc.), 923 F.2d 641, 645 (9th Cir.1991).
I
On May 16, 1990, debtor Audrey Noblit filed a homestead exemption for her residence pursuant to Arizona law, and recorded the exemption with the Maricopa County Recorder’s Office. Sometime after May 16, 1990, Noblit sold her residence and deposited the proceeds ($17,858.41) into a bank account. On June 25, 1990, Noblit paid appellants Arlan and Donna Smoker $11,500 of the proceeds to satisfy a debt she owed them. On July 31, 1990, Noblit filed a voluntary petition for bankruptcy under Chapter 7 of the United States Bankruptcy Code. She claimed the remaining balance in the bank account ($800) as exempt property. The Chapter 7 trustee did not file any objection to Noblit’s claim of exemption.
On March 4, 1992, the trustee filed a complaint to avoid Noblit’s preferential transfer to the Smokers. The bankruptcy court granted summary…