In re: Patrick Heath Caldwell
NV-15-1074-JuKiD
| 9th Cir. BAP | Feb 24, 2016Background
- Debtor Patrick Caldwell and his wife bought a Nevada residence in 1994 and continuously occupied it, paying mortgage, taxes, and insurance.
- Title to the property was transferred several times among Caldwell Family 1998 Trust (trust), Caldwell Family Investments II, LLC (LLC; formed 2008), and the Caldwells; transfers were claimed estate‑planning, no consideration.
- The LLC recorded a homestead declaration in April 2011; the Trust recorded a homestead declaration (abandoning the LLC’s) on October 10, 2011.
- Debtor filed chapter 7 on September 5, 2014, claiming a $550,000 Nevada homestead exemption on the property (equity ≈ $548,198).
- Trustee objected under 11 U.S.C. § 522(p)(1), arguing Debtor “acquired” an interest within 1215 days when title transferred from the LLC to the Trust on October 10, 2011, so homestead exemption must be capped at $155,675; bankruptcy court sustained the objection.
- The BAP reversed: it held Debtor retained sufficient equitable interest and householder status throughout the transfers, so § 522(p)(1) did not limit his Nevada homestead exemption.
Issues
| Issue | Plaintiff's Argument (Caldwell) | Defendant's Argument (Nelson) | Held |
|---|---|---|---|
| Whether § 522(p)(1) limits Caldwell’s Nevada homestead because he "acquired an interest" within 1215 days when title moved from LLC to Trust | Caldwell retained beneficial/equitable interest continuously (sole trustee/member, continuous possession/use, paid mortgage/taxes/insurance), so no new interest was acquired in the 1215‑day window | LLC was separate legal owner under Delaware/Nevada law; Debtor had no ownership interest while LLC held title, so transfer to Trust constituted acquisition of an interest within 1215 days | Reversed: no limit. Debtor retained sufficient equitable interest/householder status pre‑dating 1215 days, so § 522(p)(1) did not apply |
Key Cases Cited
- Butner v. United States, 440 U.S. 48 (property rights are governed by state law)
- Greene v. Savage (In re Greene), 583 F.3d 614 (9th Cir. 2009) (filing a homestead declaration does not itself trigger § 522(p)(1))
- Savage v. Pierson, 157 P.3d 697 (Nev. 2007) (Nevada homestead "equity" requires more than a general possessory interest; contemplates ownership)
- I.H. Kent Co. v. Busscher, 277 F.2d 901 (9th Cir. 1960) (Nevada homestead declaration must be filed of record)
- Goldfield Mohawk Mining Co. v. Frances–Mohawk Mining & Leasing Co., 102 P. 963 (Nev. 1909) (definition of "householder" — actual possession/occupier)