                                                         FILED
 1                         ORDERED PUBLISHED               FEB 28 2014

 2                                                   SUSAN M. SPRAUL, CLERK
                                                        U .S . B K CY. A P P . P A NE L
                                                        O F T H E N IN T H C IR C U IT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL

 4                            OF THE NINTH CIRCUIT

 5

 6   In re:                        )      BAP No.      AZ-13-1273-KuDPa
                                   )
 7   AMADO G. CALDERON,            )      Bk. No.      4:12-bk-16880-EWH
                                   )
 8                  Debtor.        )
     ______________________________)
 9                                 )
     AMADO G. CALDERON,            )
10                                 )
                    Appellant,     )
11                                 )
     v.                            )      O P I N I O N
12                                 )
     BETH LANG, Chapter 7 Trustee, )
13                                 )
                    Appellee.      )
14   ______________________________)

15
                    Argued and Submitted on January 23, 2014
16                             at Tempe, Arizona

17                         Filed – February 28, 2014

18             Appeal from the United States Bankruptcy Court
                        for the District of Arizona
19
        Honorable Eileen W. Hollowell, Bankruptcy Judge, Presiding
20

21
     Appearances:     Barry W. Rorex argued for appellant Amado G.
22                    Calderon; Trudy A. Nowak argued for appellee Beth
                      Lang, chapter 7 trustee.
23

24

25   Before:   KURTZ, DUNN and PAPPAS, Bankruptcy Judges.

26

27

28
 1   KURTZ, Bankruptcy Judge:

 2

 3                              INTRODUCTION

 4        In his chapter 7 1 bankruptcy case, debtor Amado Calderon

 5   claimed as exempt his former family residence.       Chapter 7 trustee

 6   Beth Lang objected to Calderon’s homestead exemption claim

 7   because, at the time of Calderon’s bankruptcy filing, Calderon no

 8   longer was living at the residence, nor was he storing his

 9   personal possessions there.   Instead, Calderon was living

10   elsewhere and renting out the residence.

11        The bankruptcy court sustained the trustee’s objection and

12   disallowed Calderon’s homestead exemption claim, opining that

13   Arizona law did not permit Calderon to hold and retain a

14   homestead exemption in the residence based solely on a vaguely

15   expressed intent to return someday to the property.       Calderon

16   appealed.

17        We disagree with the bankruptcy court’s interpretation of

18   Arizona homestead exemption law.       Arizona law permits debtors to

19   move out of their homesteads for up to two years and retain

20   preexisting homestead exemption rights, so long as they don’t

21   manifest a clear intent for their absence from the homestead to

22   be permanent.   Because the bankruptcy court incorrectly

23   interpreted Arizona homestead exemption law, we VACATE AND

24   REMAND.

25

26        1
           Unless specified otherwise, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     all "Rule" references are to the Federal Rules of Bankruptcy
28   Procedure, Rules 1001-9037.

                                        2
 1                                    FACTS

 2           Calderon and his wife Sheri purchased the residence in 2002,

 3   and Calderon lived in the residence until he and Sheri divorced

 4   in 2011.     Pursuant to the couple’s divorce settlement, Sheri

 5   conveyed her interest in the residence to Calderon in March 2011,

 6   and he thereafter became the sole owner of the residence.        In

 7   April or May 2011, Calderon moved out of the residence and moved

 8   into a different house that he rented from a man named Paul

 9   Berkley (“Berkley House”).     Meanwhile, Calderon rented out the

10   residence to a couple named Brian and Lisa Torma.     The Tormas and

11   Calderon entered into a written twelve-month lease agreement that

12   commenced on May 1, 2012 and was scheduled to end on April 30,

13   2013.     However, the lease agreement also contained an annual

14   renewal option, which the Tormas apparently exercised.

15           Calderon commenced his bankruptcy case in July 2012.     In the

16   initial version of his schedules, Calderon listed his ownership

17   interest in the residence, but identified the Berkley House as

18   his home address and the location where he kept all of his

19   personal property.     Calderon also scheduled the income he derived

20   from renting the residence as $1,895 per month and his monthly

21   mortgage expense for the residence, referred to in Schedule J as

22   his “rental property,” as $2,209 per month.     Even though

23   Calderon’s monthly mortgage payments for the residence exceeded

24   the rental income he was receiving from the residence, Calderon

25   filed a statement of intention indicating that he desired to keep

26   the residence.

27           Calderon did not attempt to claim as exempt his equity in

28   the residence in the initial version of his schedules.        However,

                                        3
 1   he filed an amended Schedule C in September 2012 in which he

 2   claimed a homestead exemption in his interest in the residence

 3   under Arizona Revised Statutes (“A.R.S.”) § 33-1101(A).

 4   According to his amended Schedule C, the residence was worth

 5   roughly $300,000, and he had roughly $84,000 in equity in the

 6   residence, in which he claimed the exemption.

 7        The trustee filed an objection to Calderon’s homestead

 8   exemption claim, asserting that Calderon could not claim a

 9   homestead exemption in the residence under A.R.S. § 33-1101

10   because he had moved out of the residence in May 2011 and because

11   he was renting the residence to the Tormas.

12        Calderon filed a response opposing the objection.     Calderon

13   disputed that he had abandoned his homestead.   He claimed that he

14   moved out of the residence and was renting it as a temporary

15   measure to reduce his housing expenses.   He further claimed that

16   he intended to return to the residence as soon as his lease with

17   the Tormas expired.

18        The bankruptcy court scheduled the matter for an evidentiary

19   hearing on May 1, 2013.   In addition to setting the hearing date,

20   the court’s scheduling order contained deadlines for completing

21   various aspects of pre-hearing procedure, including a deadline

22   for exchanging lists of witnesses and exhibits and a deadline for

23   submitting to the court a joint pre-hearing statement.     The

24   court’s scheduling order further warned the parties that

25   sanctions might be imposed if either party failed to cooperate or

26   comply with the pre-hearing procedures.

27        The trustee duly filed a list of witnesses and exhibits and

28   a unilateral pre-hearing statement.   The trustee also filed a


                                      4
 1   legal brief in support of her objection.      Calderon, on the other

 2   hand, did not participate in the filing of the required joint

 3   pre-hearing statement, nor did he otherwise comply with the

 4   court’s pre-hearing requirements.      The only thing Calderon filed

 5   in advance of the hearing was a one-page motion, filed two days

 6   before the hearing, seeking to convert his bankruptcy case from

 7   chapter 7 to chapter 13.     The trustee opposed the motion to

 8   convert, contending that it was part of Calderon’s bad-faith

 9   tactics aimed at obstructing the resolution of the trustee’s

10   exemption claim objection.

11        The bankruptcy court held the hearing on the exemption claim

12   objection on May 1, 2013, as scheduled.      As a sanction for

13   Calderon’s noncompliance with the scheduling order, the

14   bankruptcy court prohibited Calderon from presenting any evidence

15   or argument in support of his exemption claim. 2    As a result, the

16   bankruptcy court relied entirely on the evidence and testimony

17   presented by the trustee.    The trustee was the sole witness to

18   testify, and her testimony largely consisted of what she learned

19   from various documents of Calderon’s, including his bankruptcy

20   schedules, his tax returns, his divorce settlement with his wife

21   and his lease with the Tormas.

22        The trustee’s evidence tended to show that Calderon was the

23
          2
24         Calderon did not challenge in his appeal brief the
     propriety of the bankruptcy court’s sanction excluding him from
25   presenting any evidence. As a result, he has forfeited the
26   issue, and we will not address it. See Christian Legal Soc’y
     Chapter of Univ. of Cal. v. Wu, 626 F.3d 483, 487–88 (9th Cir.
27   2010); Brownfield v. City of Yakima, 612 F.3d 1140, 1149 n.4 (9th
     Cir. 2010) (citing Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir.
28   1994)).

                                        5
 1   sole owner of the residence but that he was not living there;

 2   rather, he was living at the Berkley House and was renting out

 3   the residence.    According to the trustee’s testimony, her

 4   exemption claim objection was based on the fact that Calderon no

 5   longer lived at the residence.     At the same time, the trustee

 6   conceded during cross-examination that Calderon had been living

 7   at the residence through April 2011.     The trustee further

 8   conceded that Calderon, through his counsel, had expressed a

 9   generalized intent “to move back into [the residence] at some

10   point.” 3   Hr’g Tr. (May 1, 2013) at 31:14-22.

11        At the conclusion of the trustee’s presentation of evidence,

12   the bankruptcy court announced its ruling sustaining the

13   trustee’s exemption claim objection, and the court later reduced

14   its oral ruling to a written order, which contains the court’s

15   holding and its key reasoning.     According to the court, the

16   totality of the evidence demonstrated that the debtor was not

17   then living in the residence and had not done so “for the better

18   part of the last two years.”     Order (May 29, 2013) at 2:6.    The

19   court further noted that, after he moved out of the residence,

20   Calderon had been using the property as income-producing property

21   by renting it out.

22        Based on these facts, the court reasoned, Arizona law did

23
          3
24         Of course, this is hearsay and probably double hearsay.
     But no one objected to the trustee’s testimony regarding what
25   Calderon’s counsel told her about Calderon’s intent to move back
     into the residence. Moreover, the bankruptcy court apparently
26   credited this testimony, as the bankruptcy court posited that
     Calderon had a vague intent to return to the property. We found
27
     no other evidence in the record specifically addressing
28   Calderon’s intent to return to the property.

                                        6
 1   not permit Calderon to hold and retain a homestead exemption in

 2   the residence, even though he had moved out of the residence less

 3   than two years prior to his bankruptcy filing and even though he

 4   might have had, as the court described it, a vague intent to

 5   return to the property at some unspecified future point.     As

 6   stated in the bankruptcy court’s order sustaining the trustee’s

 7   exemption claim objection:

 8        The Arizona homestead exemption set forth in A.R.S.
          § 33-1101(A) is not so broad as to allow the Debtor a
 9        homestead exemption, even if within two years of his
          filing date, when his intent to return to the Property
10        is vague[.]

11   Order (May 29, 2013) at 1:20-22.

12        The bankruptcy court entered its order sustaining the

13   trustee’s exemption claim objection on May 29, 2013, and Calderon

14   timely filed his notice of appeal on June 10, 2013.

15                                JURISDICTION

16        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

17   §§ 1334 and 157(b)(2)(B).    We have jurisdiction under 28 U.S.C.

18   § 158.

19                                   ISSUE

20        Did the bankruptcy court correctly interpret Arizona

21   homestead exemption law in the process of disallowing Calderon’s

22   homestead exemption claim?

23                           STANDARD OF REVIEW

24        We review de novo the bankruptcy court’s interpretation of

25   state exemption laws.   See Hopkins v. Cerchione (In re

26   Cerchione), 414 B.R. 540, 545 (9th Cir. BAP 2009).     Under the de

27   novo standard of review, “we consider a matter anew, as if no

28   decision had been rendered previously.”     Mele v. Mele (In re


                                        7
 1   Mele), 501 B.R. 357, 362 (9th Cir. BAP 2013).

 2                                 DISCUSSION

 3        The commencement of a bankruptcy case creates a bankruptcy

 4   estate consisting of all of the debtor’s property.     See § 541;

 5   Wolfe v. Jacobson (In re Jacobson), 676 F.3d 1193, 1198 (9th Cir.

 6   2012); Gaughan v. Smith (In re Smith), 342 B.R. 801, 805 (9th

 7   Cir. BAP 2006).   The debtor may exempt property from the estate

 8   to extent permitted by applicable law.     See § 522(b); In re

 9   Jacobson, 676 F.3d at 1198.     Typically, the debtor’s entitlement

10   to an exemption is determined based on the facts as they existed

11   at the time of the debtor’s bankruptcy filing.     See In re

12   Jacobson, 676 F.3d at 1199; Ford v. Konnoff (In re Konnoff),

13   356 B.R. 201, 204-05 (9th Cir. BAP 2006). 4   And the trustee bears

14   the burden of proof to establish that the debtor is not entitled

15   to the claimed exemption.     See Rule 4003(c); In re Cerchione, 414

16   B.R. at 548-49.

17        Because Arizona has opted out of the federal bankruptcy

18   exemption scheme, Arizona residents are limited to those

19

20
          4
           We are aware of the holding in In re Jacobson, and in
21   England v. Golden (In re Golden), 789 F.2d 698, 700 (9th Cir.
     1986), that the bankruptcy court must consider postpetition
22
     events when: (1) the debtor claims an exemption in the proceeds
23   from the sale of the debtor’s homestead, (2) the applicable
     homestead exemption law requires the debtor to reinvest the sale
24   proceeds in another homestead within a fixed amount of time, and
     (3) the time period for reinvestment has not yet run at the time
25   of the debtor’s bankruptcy filing. But In re Jacobson and In re
26   Golden are inapposite. As explained below, Calderon’s homestead
     exemption was not subject to an absolute, fixed time limitation.
27   Rather, the key to Calderon’s retention of his homestead
     exemption was whether he intended to permanently remove himself
28   from the residence. See A.R.S. § 33-1104(A)(3).

                                        8
 1   exemptions permitted by Arizona law.     See In re Smith, 342 B.R.

 2   at 805 (citing A.R.S. § 33–1133).    Consequently, we must

 3   interpret and apply Arizona law to determine whether Calderon was

 4   entitled to claim a homestead exemption in the residence.        See

 5   id.; see also Renner v. Ariz. Dept. of Econ. Sec. (In re Renner),

 6   822 F.2d 878, 879 n.1 (9th Cir. 1987).

 7        When we interpret state law, we are bound by the decisions

 8   of the applicable state’s highest court.     Kekauoha-Alisa v.

 9   Ameriquest Mortg. Co. (In re Kekauoha-Alisa), 674 F.3d 1083, 1087

10   (9th Cir. 2012) (citing Sec. Pac. Nat’l Bank v. Kirkland (In re

11   Kirkland), 915 F.2d 1236, 1238 (9th Cir. 1990)).     And when, as

12   here, the state’s highest court has not interpreted the

13   dispositive state law, we do our best to predict how that state’s

14   highest court would decide the issue.    See In re Kekauoha-Alisa,

15   674 F.3d at 1087-88.   Accord White v. Brown (In re White), 389

16   B.R. 693, 701 (9th Cir. BAP 2008).

17        In interpreting Arizona statutes, the Arizona Supreme Court

18   has stated that its duty is to determine the intent of the

19   legislature at the time of enactment.    Jackson v. Phoenixflight

20   Prods., Inc., 700 P.2d 1342, 1345 (Ariz. 1985).     “Where the

21   language of the Legislature is clear and leaves no opportunity

22   for interpretation, the language must be followed.”     Id.   And

23   “clear language in a statute is given its usual meaning unless

24   impossible or absurd consequences would result.”     In re Marriage

25   of Gray, 695 P.2d 1127, 1129 (Ariz. 1985).

26        Specifically with respect to Arizona’s homestead exemption

27   statutes, the Arizona Supreme Court has stated that these laws

28   should be liberally interpreted to carry out their fundamental

                                      9
 1   purpose, which is to protect the claimant and the claimant’s

 2   family from the forced sale of their homestead property by

 3   creditors.     See First Nat’l Bank of Mesa v. Reeves, 234 P. 556,

 4   558 (Ariz. 1925). 5    The Arizona Supreme Court further has stated:

 5        [Arizona] Homesteads are purely creatures of the
          statute, and we must, therefore, look to our own
 6        statutes to find out what that term or designation
          means. If the language is plain, it is the duty of the
 7        court to give it effect by following it; if its meaning
          be doubtful, we may look to the reasoning of other
 8        courts upon similar statutes, if there be any, to aid
          us in the construction of our statute.
 9

10   Wuicich v. Solomon–Wickersham Co., 157 P. 972, 972 (Ariz. 1916).

11        The trustee asserts that the resolution of this appeal is

12   governed by the residency requirement necessary to establish a

13   homestead exemption under Arizona law.     See A.R.S. § 33-1101. 6

14   Because Calderon was not living at the residence when he filed

15
          5
16         At the time Reeves was decided, the exclusive focus of
     Arizona’s homestead exemption was the claimant’s family; the
17   Arizona homestead exemption statutes did not protect individuals.
     See Phlegar v. Elmer, 325 P.2d 881, 882 (Ariz. 1958). More
18
     recently, however, the Arizona legislature broadened Arizona’s
19   homestead exemption laws to provide homestead exemptions to
     individuals as well as families. See First Nat’l Bank of Dona
20   Ana Cnty. v. Boyd, 378 F. Supp. 961, 963 (D. Ariz. 1974).

21        6
              In relevant part, A.R.S. § 33-1101 provides:
22
          A. Any person the age of eighteen or over, married or
23        single, who resides within the state may hold as a
          homestead exempt from attachment, execution and forced
24        sale, not exceeding one hundred fifty thousand dollars
          in value, any one of the following:
25

26        1. The person’s interest in real property in one
          compact body upon which exists a dwelling house in
27        which the person resides.

28   (Emphasis added.)

                                       10
 1   bankruptcy, the trustee reasons, he did not qualify for a

 2   homestead exemption under A.R.S. § 33-1101.     According to the

 3   trustee, Calderon’s continued occupancy of the residence was a

 4   prerequisite for him to be entitled to claim a homestead

 5   exemption in the residence, and any such entitlement

 6   automatically and immediately ceased when Calderon moved out and

 7   began using the residence as a rental property.

 8        The trustee’s assertion lacks merit.     It is undisputed here

 9   that Calderon had been living in the residence and occupying it

10   as his home between 2002 and 2011.   This prolonged period of

11   residency was more than sufficient to establish the residence as

12   Calderon’s homestead by operation of law.     See A.R.S. §§ 33-1101,

13   33-1102; see also In re Allman, 286 B.R. 402, 403-04 (Bankr. D.

14   Ariz. 2002) (holding that debtor, by operation of law,

15   established his homestead in a mobile home by residing in the

16   mobile home).   Once Calderon’s homestead was established by

17   operation of law, the controlling question shifted from whether

18   Calderon established a homestead in the residence to whether he

19   abandoned his homestead in the residence.

20         Accordingly, this appeal hinges on the meaning of A.R.S.

21   § 33-1104, which governs abandonment of homesteads and which

22   provides in relevant part as follows:

23        A. A homestead may be abandoned by any of the following:

24        1. A declaration of abandonment or waiver.

25        2. A transfer of the homestead property by deed of
          conveyance or contract for conveyance.
26
          3. A permanent removal of the claimant from the
27        residence or the state. A claimant may remove from the
          homestead for up to two years without an abandonment or
28        a waiver of the exemption.

                                     11
 1        It is undisputed that Calderon did not execute and record a

 2   declaration of abandonment or waiver.     Nor did he transfer away

 3   his homestead by a deed or contract of conveyance.     Thus, we are

 4   only concerned here with paragraph 3 of § 33-1104(A), which deals

 5   with the “permanent removal of the claimant from the residence or

 6   the state.”   (Emphasis added.)   In accordance with the Arizona

 7   Supreme Court’s rules of construction, we presume that the

 8   Arizona legislature intended the word “permanent” to have its

 9   usual meaning, which is: “Continuing or designed to continue or

10   last indefinitely without change; abiding, enduring, lasting;

11   persistent.   Opposed to temporary.”    Oxford English Dictionary

12   Online (http://www.oed.com/search?searchType=dictionary&q

13   =permanent&_searchBtn=Search) (last visited February 24, 2014);

14   see also Merriam-Webster Online (http://www.merriam-webster.com/

15   dictionary/permanent) (last visited February 24, 2014).

16        So stated, the usual meaning of the word “permanent”

17   introduces an element of intent into the statutory inquiry.        This

18   focus on intent for purposes of determining whether debtors have

19   permanently abandoned their homestead is consistent with the

20   consideration of intent for purposes of determining debtors’

21   “residence” under Arizona’s homestead exemption laws.     As one

22   Arizona bankruptcy court decision put it, “under Arizona law, the

23   intent of the individual is the critical factor in determining

24   where an individual resides and . . . the individual need not be

25   present at the residence on a day-to-day basis.”     See In re Elia,

26   198 B.R. 588, 598-99 (Bankr. D. Ariz. 1996) (citing Garcia v.

27   Garcia (In re Garcia), 168 B.R. 403, 408 (D. Ariz. 1994)).

28        We also must consider the import of the second sentence of

                                       12
 1   A.R.S. § 33-1104(A)(3).   That sentence states: “A claimant may

 2   remove from the homestead for up to two years without an

 3   abandonment or a waiver of the exemption.”    Read in a vacuum,

 4   this sentence arguably means that, for up to two years, debtors

 5   can live somewhere other than their homesteads without being

 6   deemed to have abandoned their homesteads.    And by negative

 7   implication, this sentence also could be read in isolation to

 8   mean that, after two years living elsewhere, debtors are deemed

 9   to have automatically abandoned their homesteads.

10        But the Arizona Supreme Court requires us to consider this

11   sentence in context and not in isolation.    See Adams v. Comm’n on

12   App. Ct. Appointments, 254 P.3d 367, 374 (Ariz. 2011).     And that

13   context includes the first sentence of A.R.S. § 33-1104(A)(3),

14   which focuses on the intended permanency of the removal from the

15   homestead.   That context also includes the Arizona homestead

16   exemption statutes as a whole, their intended purpose, and the

17   requirement that we construe the homestead exemption statutes

18   liberally to effectuate their intended purpose.     As a result,

19   when read in context, we are convinced that the Arizona

20   legislature did not intend for the second sentence of A.R.S.

21   § 33-1104(A)(3) to create an absolute temporal bar, that on the

22   second anniversary of removal from their homesteads, debtors

23   automatically are deemed to have abandoned their homesteads for

24   exemption purposes.   To the contrary, our contextual reading of

25   A.R.S. § 33-1104(A)(3) leads us to conclude that the temporal

26   aspect of the statute simply was meant to aid courts in

27   determining the intended permanency of the removal from the

28   residence.   In other words, the Arizona legislature meant to make

                                     13
 1   it harder for debtors to abandon their homesteads simply by

 2   moving out of their homes for less than two years, but easier for

 3   them to abandon their homesteads if they have been living

 4   elsewhere for two years or more.    Regardless of the amount of

 5   time elapsed, the controlling question always remains the intent

 6   of the debtors – whether they intended for their removal to be

 7   permanent. 7

 8        Once so understood, the statute is not particularly

 9   difficult to apply in bankruptcy cases.    On the petition date, if

10   the debtor has been living elsewhere for less than two years,

11   only evidence of a clear intent of permanent removal will suffice

12   to permit the bankruptcy court to find that the debtor has

13   abandoned his homestead exemption under Arizona law.    On the

14   other hand, on the petition date, if the debtor has been living

15   elsewhere for two years or more, then the debtor is presumed to

16   intend for the removal to be permanent, and only evidence of a

17   clear intent for the removal to be temporary will overcome that

18   presumption.

19        Arizona case law encourages us to consider precedent from

20   other states with similar homestead exemption laws, especially

21
          7
           If the Arizona legislature had intended a create a per se
22
     rule of abandonment based on two years removal from the
23   residence, it easily could have done so by stating in the statute
     something like the following: “A homestead may be abandoned by
24   any of the following . . . a removal from the residence of two
     years or more.” Notably, the Arizona legislature did not employ
25   such language. Instead, it provided for abandonment to turn on
26   the intended permanency of the removal and also provided that:
     "[a] claimant may remove from the homestead for up to two years
27   without an abandonment.” (Emphasis added.) We find it
     significant that the Arizona legislature used permissive language
28   in the statute rather than prohibitive or preemptory language.

                                    14
 1   when there are no binding Arizona cases on point.     See Wuicich,

 2   157 P. at 972.   But we have not found a homestead abandonment

 3   statute from another state with a similar combination of both

 4   intent and temporal components.

 5        Nonetheless, it is instructive to note that many

 6   jurisdictions fall into one of two “camps” regarding the nature

 7   of proof required to establish that debtors intended to abandon

 8   their existing homesteads.   The first camp requires evidence of a

 9   clear intent not to return to the homestead.     See, e.g., Thomas

10   v. Graham Mortg. Corp., 408 S.W.3d 581, 589 (Tex. App. 2013)

11   (holding that there must be a clear intent not to use the subject

12   property as a homestead again); In re Wells, 132 B.R. 966, 968

13   (Bankr. D.N.M. 1991) (holding that debtor who moved out of her

14   homestead but did not manifest “an absolute and unequivocal

15   intent to abandon” the homestead did not abandon the homestead);

16   see also Jones, Givens, Gotcher & Bogan, P.C. v. Berger, 46 P.3d

17   698, 702 (Okla. 2002) (stating that temporary absence from the

18   homestead and occupancy of another property does not necessarily

19   demonstrate an intent to abandon the homestead and that renting

20   out some or all of the homestead does not as a matter of law

21   demonstrate abandonment); In re Beebe, 224 B.R. 817, 820 (Bankr.

22   N.D. Fla. 1998) (“For a debtor to abandon homestead property, a

23   debtor must state an intention to abandon the property and have

24   an intent of not returning to the property.”).

25        In contrast, the second camp considers the homestead

26   abandoned unless there is evidence of a clear intent to return to

27   the property at a fixed time.     See, e.g., In re Nguyen, 332 B.R.

28   393, 395 (Bankr. W.D. Mo. 2005) (stating that “a vague and

                                       15
 1   indefinite intention to return at some future time under certain

 2   conditions is not sufficient to rebut the presumption of

 3   abandonment”); In re Patterson, 275 B.R. 578, 584 (Bankr. D.

 4   Colo. 2002) (stating that a vague intention to return and resume

 5   residency will not preserve a claimant’s homestead); see also

 6   Wagenbach v. PHI Fin. Servs., Inc. (In re Wagenbach), 232 B.R.

 7   112, 114 (Bankr. C.D. Ill. 1999) (“A removal from the homestead

 8   premises will be taken as an abandonment unless it clearly

 9   appears that there is an intention to return and occupy them. . .

10   .   Such intention must be unequivocal, for an equivocal intention

11   to return is not sufficient.”).

12         In light of our contextual reading of A.R.S. § 33-

13   1104(A)(3), Arizona appears to have one foot firmly planted in

14   each camp.   And which camp’s law is helpful in a particular case

15   in determining whether the debtors have abandoned their Arizona

16   homestead will depend on how long the debtors have been removed

17   from their homestead at the time of their bankruptcy filing.

18         The trustee claims that it is “ridiculous” to suppose that

19   debtors subject to Arizona homestead exemption law may absent

20   themselves from their homestead for up to two years without

21   losing a homestead previously established by their prior

22   residence.   But this is what A.R.S. § 33-1104(A)(3) explicitly

23   contemplates, and we see nothing ridiculous or absurd in the

24   application of A.R.S. § 33-1104(A)(3) as worded.   The statute’s

25   temporal dividing line simply represents the Arizona

26   legislature’s attempt to enact a clear-cut guideline for courts

27   having to interpret what debtors’ absence from their homestead

28   means for purposes of determining whether they intended to

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 1   permanently remove themselves from their homestead.

 2        As indicated above, the trustee also argues that we don’t

 3   need to reach the issue of abandonment because there was no

 4   homestead to abandon in the first place.     Because Calderon moved

 5   out of the residence and was renting out the residence when he

 6   filed bankruptcy, the trustee reasons, he could not qualify for a

 7   homestead exemption, let alone abandon a homestead exemption,

 8   under A.R.S. § 33-1101.   However, if a homestead established by

 9   operation of law under A.R.S. §§ 33-1101 and 33-1102 can be

10   automatically extinguished by a debtor living elsewhere for less

11   than two years, then the second sentence of A.R.S. § 33-

12   1104(A)(3) would be rendered meaningless.     In short, we reject

13   the trustee’s argument because it would deprive a significant

14   portion of A.R.S. § 33-1104(A)(3) of any meaning.

15        Even though Calderon, at the time of his bankruptcy filing,

16   had been absent from the residence for less than two years, the

17   bankruptcy court interpreted Arizona’s homestead exemption

18   statutes as requiring proof that Calderon held more than a vague

19   intent to return someday to the residence.     When, as here, the

20   bankruptcy court has applied an incorrect legal standard, we

21   typically vacate the bankruptcy court’s decision and remand so

22   that the bankruptcy court can apply the correct law to the facts

23   of the case.   See Hopkins v. Asset Acceptance LLC (In re

24   Salgado–Nava), 473 B.R. 911, 922 (9th Cir. BAP 2012).

25        On occasion, this Panel has declined to remand and instead

26   has, itself, applied the correct law to the facts previously

27   found when the record has been fully developed on the critical

28   issues and there is no doubt as to the outcome.     See, e.g., id.

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 1   In this instance, we are not wholly convinced that the record was

 2   fully developed and the outcome beyond doubt regarding the key

 3   issue of Calderon’s intent.    While the bankruptcy court’s written

 4   decision included a finding on this point, the evidence presented

 5   was thin, even assuming the hearsay statements in the record

 6   regarding Calderon’s intent were admissible.    We leave it to the

 7   bankruptcy court to determine, in the first instance, whether the

 8   record should be reopened to allow the presentation of additional

 9   evidence on the issue of Calderon’s intent, or whether the

10   correct interpretation of Arizona law should be applied to the

11   facts previously found on an as-is basis.    We express no opinion

12   on how the bankruptcy court should decide this issue.

13                                 CONCLUSION

14        For the reasons set forth above, we VACATE the bankruptcy

15   court’s order sustaining the trustee’s exemption claim objection,

16   and we REMAND for further proceedings consistent with this

17   decision.

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