634 B.R. 80
9th Cir. BAP2021Background
- Debtor Jaswinder Bhangoo purchased the Wild Rogue Property in 2011; judgment liens from two creditors attached in 2015–2016.
- In 2018 Bhangoo and his family moved to a larger rented home (Cimarron) to accommodate in‑laws; Wild Rogue was leased to tenants thereafter.
- A tenant (Brown) began a one‑year lease in September 2019, later defaulted, and was evicted in February 2021 after COVID‑related delays.
- Bhangoo filed Chapter 7 on January 8, 2021, listed Wild Rogue as his residence on the petition but actually lived at Cimarron, and claimed a $300,000 California automatic homestead exemption under CCP § 704.730.
- Creditors objected, arguing the absence was not "temporary" and therefore Bhangoo failed the continuous‑residency requirement of CCP § 704.710(c); the bankruptcy court sustained the objection and denied the exemption.
- The BAP affirmed, holding Bhangoo failed to prove a continuous intent to return to the Wild Rogue Property during the absence.
Issues
| Issue | Bhangoo's Argument | Creditors' Argument | Held |
|---|---|---|---|
| Whether Bhangoo met CCP § 704.710(c)'s continuous‑residency requirement for California's automatic homestead (i.e., whether his absence was "temporary") | Absence was temporary; he intended to return once tenant defaulted or repairs were complete; maintained Wild Rogue as address on license | Renting the property and living elsewhere for years shows no continuous intent to return; renting transfers possession/control inconsistent with temporary absence | BAP affirmed: absence not temporary because debtor failed to demonstrate continuous intent to return; exemption denied |
Key Cases Cited
- Phillips v. Gilman (In re Gilman), 887 F.3d 956 (9th Cir. 2018) (California law controls the validity of state homestead exemptions in bankruptcy and courts should liberally construe homestead protections for debtors)
- Redwood Empire Prod. Credit Ass'n v. Anderson (In re Anderson), 824 F.2d 754 (9th Cir. 1987) (absences that substitute one principal dwelling for another are not temporary for homestead purposes)
- Cal. Coastal Comm'n v. Allen, 167 Cal. App. 4th 322 (Cal. Ct. App. 2008) (leasing the property while residing elsewhere over an extended period does not constitute a temporary absence)
- Diaz v. Kosmala (In re Diaz), 547 B.R. 329 (9th Cir. BAP 2016) (temporary‑absence doctrine allows a non‑occupying debtor to claim an automatic homestead only if intent to return is established)
- In re Bruton, 167 B.R. 923 (Bankr. S.D. Cal. 1994) (objective evidence of intent to return, such as frequent returns and retained belongings, supports finding a temporary absence)
- In re Pham, 177 B.R. 914 (Bankr. C.D. Cal. 1994) (temporary absence found where debtors regularly returned and maintained significant indicia of residence)
- In re Dodge, 138 B.R. 602 (Bankr. E.D. Cal. 1992) (employment‑related, short absences with regular returns can be temporary)
- Retz v. Samson (In re Retz), 606 F.3d 1189 (9th Cir. 2010) (appellate review standard: factual findings, including intent, reviewed for clear error)