                     FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT


 IN RE EDWIN EARL ELLIOTT,                         No. 18-17421

                                                     D.C. No.
 EDWIN EARL ELLIOTT,                              3:18-cv-00416-
                                Appellant,              VC

                     v.
                                                     OPINION
 PACIFIC WESTERN BANK, a
 California state-chartered bank,
                              Appellee.

        Appeal from the United States District Court
          for the Northern District of California
         Vince Chhabria, District Judge, Presiding

           Argued and Submitted February 6, 2020
                 San Francisco, California

                     Filed August 12, 2020

Before: Richard A. Paez and Carlos T. Bea, Circuit Judges,
         and Lynn S. Adelman, * District Judge.

                     Opinion by Judge Paez

     *
       The Honorable Lynn S. Adelman, United States District Judge for
the Eastern District of Wisconsin, sitting by designation.
2                          IN RE ELLIOTT

                          SUMMARY **


                           Bankruptcy

    The panel affirmed the district court’s judgment
summarily affirming the bankruptcy court’s dismissal for
failure to state a claim of a chapter 7 debtor’s adversary
proceeding seeking to exempt retirement funds from the
bankruptcy estate.

    Pacific Western Bank declared a default on a loan on
which the debtor was either the borrower or guarantor. The
Bank obtained a state court judgment against the debtor and
a writ of execution, and it instructed the sheriff to levy on
the debtor’s individual retirement account, creating an
execution lien. After the sheriff levied on the debtor’s
individual retirement account, he filed for bankruptcy. The
debtor claimed all assets in his IRA were exempt from
creditors under a California statute and 11 U.S.C.
§ 522(b)(3)(C), which exempt retirements funds from being
used to satisfy a money judgment. He sought avoidance of
the transfer of his levied IRA funds to the Bank under
§ 522(h) or (f).

    The panel held that the debtor failed to state a claim
under § 522(h), which allows a debtor to step into the role of
the bankruptcy trustee and avoid certain transfers of exempt
property made before the filing of the bankruptcy petition.
The panel concluded that because the judicial lien was
satisfied prior to the petition date, it was not voidable under
§ 522(f). Because it was not voidable, the debtor could not

    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                       IN RE ELLIOTT                        3

succeed on his separate § 522(f) claim nor establish that the
transfer of his IRA funds was a preferential transfer under
11 U.S.C. § 547. The debtor having failed to allege the
elements of a preferential transfer, the bankruptcy court
correctly concluded that he failed to state a claim under
§ 522(h).


                        COUNSEL

David M. McKim (argued), Law Offices of David M.
McKim, Santa Rose, California, for Appellant.

J. Alexandra Rhim (argued), Hemar Rousso & Heald LLP,
Encino, California, for Appellee.


                         OPINION

PAEZ, Circuit Judge:

    A little over three months after a sheriff levied on Edwin
Earl Elliott’s individual retirement account (“IRA”) funds,
Elliott filed for chapter 7 bankruptcy. During the liquidation
of his bankruptcy estate and later in the present adversary
proceeding, Elliott claimed that his retirement funds were
exempt from the bankruptcy estate.

    In dismissing the adversary complaint for failure to state
a claim, the bankruptcy court held that Elliott could not
reclaim his retirement funds because he filed the bankruptcy
petition after the execution lien had been satisfied. The
district court summarily affirmed. Largely for the reasons
stated by the bankruptcy court, we affirm the district court’s
judgment.
4                        IN RE ELLIOTT

                                I.

    Pacific Western Bank (“the Bank”)’s predecessor in
interest issued a loan on which Elliott was either the
borrower or guarantor. The Bank eventually declared a
default on the loan, at least in part because of nonrepayment.
To recover the amount owed, the Bank sued Elliott in
California Superior Court for the County of San Mateo and
obtained a judgment in its favor. Following entry of the
state-court judgment, the Bank obtained a writ of execution
and instructed the San Mateo County Sheriff to levy on IRA
Trust Services Company, which held Elliott’s IRA funds. 1
The parties agree that this levy created an execution lien
under California law. See Cal. Civ. Proc. Code (“CCP”)
§ 697.710.

     On December 2, 2016, the Sheriff levied $28,870.19
from Elliott’s IRA account with IRA Trust Services. Before
the Sheriff released the funds to the Bank, Elliott filed a
claim of exemption in state court. He argued that the funds
should be treated as a needs-based exemption under CCP
§ 704.115. That section shields from money judgments
private retirement plans, profit-sharing plans designed for
retirement purposes, and other forms of retirement assets.
See CCP § 704.115(a)–(b). IRAs are exempt under the
statute “only to the extent necessary to provide for the
support of the judgment debtor when [he] retires . . . taking
into account all resources that are likely to be available[.]”
McMullen v. Haycock, 54 Cal. Rptr. 3d 660, 660 (Ct. App.
2007) (internal quotation marks omitted).



    1
      The Bank also recorded its notice of lien with the California
Secretary of State.
                       IN RE ELLIOTT                       5

    The superior court denied Elliott’s exemption claim the
following month.        Shortly thereafter, on or about
February 15, 2017, the San Mateo County Sheriff’s Office
released the levied funds to the Bank. The parties agree that
the present litigation concerns only the levied funds; the
balance of Elliott’s IRA account consists of illiquid assets
which remain in the possession of IRA Trust Services. The
Bank claims no interest in those assets.

    On March 13, 2017, Elliott filed his chapter 7 bankruptcy
petition. He claimed all assets in his IRA were exempt from
creditors under a different section of the California’s
exemption statutes, CCP § 703.140(b)(10)(E), and a
provision of the Bankruptcy Code, 11 U.S.C.
§ 522(b)(3)(C). Both sections exempt certain retirement
funds from being used to satisfy a money judgment. Section
703.140(b)(10)(E) provides that a debtor in a bankruptcy
proceeding (like Elliott) may exempt his right to receive a
“payment under a stock bonus, pension, profit-sharing,
annuity, or similar plan or contract on account of illness,
disability, death, age, or length of service[.]” Section
522(b)(3)(C) of the Bankruptcy Code exempts “retirement
funds to the extent that those funds are in a fund or account
that is exempt from taxation under” various provisions of the
Internal Revenue Code.

    The Bank did not object to Elliott’s claimed exemptions
because, in its view, “the Bank had completed its prepetition
levy” on the IRA funds, and therefore the funds no longer
“constitute[d] property of the Debtor or the estate.” The
Bank maintains that when the funds were paid to the Sheriff,
the lien expired under CCP § 700.140, effectively
terminating any rights Elliott had to the funds. Thus, the
Bank argues, Elliott cannot claim an exemption on assets
6                          IN RE ELLIOTT

that were neither his nor part of the bankruptcy estate. See
In re Hernandez, 483 B.R. 713, 720 (B.A.P. 9th Cir. 2012).

    The chapter 7 trustee eventually filed a no-distribution
report, and the bankruptcy court closed the case on June 21,
2017. Elliott filed the present adversary proceeding shortly
thereafter. Before the bankruptcy court, he argued he could
avoid the transfer of his levied IRA funds to the Bank under
sections 522(h) or (f) of the Bankruptcy Code.

    The Bank moved to dismiss the adversary complaint. It
argued that Elliott could not state a claim under either section
522(h) or (f) and, even if he could, the action was time-
barred under section 550(f) or should be dismissed for lack
of subject-matter jurisdiction under Federal Rule of
Bankruptcy Procedure 7012(b)(1). Elliott then moved to
reopen the bankruptcy case, which the court granted. The
bankruptcy court mentioned the time-bar argument but, in
ruling for the Bank, rested its holding entirely on Elliott’s
failure to state a claim under sections 522(h) or (f). 2 On
appeal, the district court summarily affirmed the dismissal.



    2
       The bankruptcy court did not address the Bank’s jurisdictional
argument in its order. The Bank argued in its motion to dismiss that the
court lacked jurisdiction under the Rooker-Feldman doctrine, which
prevents federal district courts from reviewing the “final determinations
of a state court in judicial proceedings.” Worldwide Church of God v.
McNair, 805 F.2d 888, 890 (9th Cir. 1986). “In apparent contradiction
to the Rooker-Feldman theory,” however, “bankruptcy courts are
empowered to avoid state judgments, to modify them, and to discharge
them.” In re Gruntz, 202 F.3d 1074, 1079 (9th Cir. 2000) (citations
omitted). For this reason, “final judgments in state courts are not
necessarily preclusive in United States bankruptcy courts.” Id. We agree
this adversary proceeding constitutes a core proceeding over which the
bankruptcy court had jurisdiction pursuant to 28 U.S.C. § 157(b).
                        IN RE ELLIOTT                        7

    Elliott appeals the district court’s and bankruptcy court’s
rulings, arguing that the bankruptcy court erred in
concluding that the transfer of the IRA funds was not
avoidable under sections 522(h) or (f).

                              II.

                              A.

    We have jurisdiction over the district court’s order
affirming the bankruptcy court’s judgment under 28 U.S.C.
§ 158(d)(1). The Bank sought dismissal of the adversary
complaint under Federal Rule of Bankruptcy Procedure
7012(b)(1) and (b)(6), which incorporate Federal Rules of
Civil Procedure 12(b)(1) and (b)(6). We review de novo a
district court’s decision on appeal from a bankruptcy court.
In re Smith’s Home Furnishings, Inc., 265 F.3d 959, 962–63
(9th Cir. 2001).

                              B.

    We first address whether the district court erred in
affirming the bankruptcy court’s determination that Elliott
failed to state a claim under 11 U.S.C. § 522(h). When a
trustee does not seek avoidance of transferred property, a
debtor may step into the role of the trustee under section
522(h) of the Bankruptcy Code and attempt to avoid certain
transfers of exempt property. In re DeMarah, 62 F.3d 1248,
1250 (9th Cir. 1995).

    Under section 522(h), a debtor may “avoid,” i.e., undo, a
transfer of exempt property made before the filing of a
bankruptcy petition. Section 522(h) states:

       The debtor may avoid a transfer of property
       of the debtor or recover a setoff to the extent
8                      IN RE ELLIOTT

       that the debtor could have exempted such
       property under subsection (g)(1) of this
       section if the trustee had avoided such
       transfer, if—

           (1) such transfer is avoidable by the
           trustee under section . . . 547. . . of this
           title . . . ; and

           (2) the trustee does not attempt to avoid
           such transfer.

    We have explained that section 522(h) requires a debtor
to establish five conditions to shield his property from the
bankruptcy estate:

       (1) the transfer cannot have been a voluntary
       transfer of property by the debtor; (2) the
       debtor cannot have concealed the property;
       (3) the trustee cannot have attempted to avoid
       the transfer; (4) the debtor must exercise an
       avoidance power usually used by the trustee
       that is listed within § 522(h); and (5) the
       transferred property must be of a kind that the
       debtor would have been able to exempt from
       the estate if the trustee (as opposed to the
       debtor) had avoided the transfer pursuant to
       one of the statutory provisions in § 522(g).
       See 11 U.S.C. §§ 522(g) and (h).

In re DeMarah, 62 F.3d at 1250. The first four factors are
not in dispute: Elliott did not voluntarily transfer the IRA
funds, there is no evidence he attempted to conceal it or that
the trustee attempted to avoid the transfer, and Elliott’s
avoidance power—assuming the money at issue can still be
                        IN RE ELLIOTT                         9

considered his property—is one the trustee could have
exercised under section 522(h).

    To establish the fifth condition, Elliott argues that “the
transferred property [was] of a kind that [he] would have
been able to exempt from the estate,” id., because the
transfer would have been avoidable by the trustee under
section 547. See 11 U.S.C. § 522(h)(1).

    Section 547 allows the bankruptcy trustee (or, the debtor,
when he is acting in the place of the trustee) to set aside
“preferential” transfers and recapture the transferred
property. To establish a preferential transfer, the trustee or
debtor must show that the transfer, among other things,
“enables such creditor to receive more than such creditor
would receive” if (A) “the case were a case under chapter 7”
of the Bankruptcy Code; (B) “the transfer had not been
made”; and (C) “such creditor received payment of such debt
to the extent provided by the provisions” of the Bankruptcy
Code. 11 U.S.C. § 547(b)(5). The bankruptcy court held
that Elliott failed to establish a preferential transfer because
“the Bank did not receive more than it would have received
in liquidation, a prerequisite to any preferential transfer
liability.”

                              1.

    We must evaluate, then, whether Elliott can establish that
the Bank received more from the prepetition levy than it
would have received from his chapter 7 liquidation. The
section 547(b)(5) inquiry is called the “greater amount test.”
In re Tenderloin Health, 849 F.3d 1231, 1235 (9th Cir.
2017). It requires “‘the court to construct a hypothetical
chapter 7 case and determine what the creditor would have
received if the case had proceeded under chapter 7’ without
the alleged preferential transfer.” Id. (quoting In re LCO
10                     IN RE ELLIOTT

Enters., 12 F.3d 938, 941 (9th Cir. 1993)); see also Palmer
Clay Prods. Co. v. Brown, 297 U.S. 227, 229 (1936).

    Elliott argues that the Bank would have received nothing
in the ordinary course of his chapter 7 liquidation, because
the lien is voidable under an entirely separate provision,
section 522(f). If Elliott can indeed avoid the fixing of the
lien under section 522(f), then the funds may be exempt
under 547(b)(5). See In re Washkowiak, 62 B.R. 884, 887
(Bankr. N.D. Ill. 1986) (“If the lien can be avoided, [the
creditor], in effect, retroactively becomes unsecured and
payments to a nonpriority unsecured creditor on the eve of
bankruptcy are almost inevitably voidable as preferences.”).

                             2.

    We then consider whether the execution lien is avoidable
under section 522(f) of the Bankruptcy Code. In relevant
part, section 522(f) states that

       (1) . . . the debtor may avoid the fixing of a
           lien on an interest of the debtor in
           property to the extent that such lien
           impairs an exemption to which the debtor
           would have been entitled under
           subsection (b) of this section, if such lien
           is –

           (A) a judicial lien, other than a judicial
               lien that secures a debt of a kind that
               is specified in section 523(a)(5);

The parties do not dispute that an execution lien under CCP
section 697.710 is a judicial lien; they dispute only whether
the lien can be avoided despite its satisfaction prior to the
petition date.
                           IN RE ELLIOTT                            11

    To avoid a lien under section 522(f), the lien in question
must “impair[] an exemption as of the bankruptcy petition
date.” In re Wilding, 475 F.3d 428, 433 (1st Cir. 2007); see
also In re Ricke, 84 B.R. 408, 410 (Bankr. W.D. Pa. 1988)
(“§ 522(f) cannot be construed to allow avoidance of a lien
no longer in existence at the date of bankruptcy.”) Whether
the lien impaired an exemption as of the petition date
depends in part on whether Elliott maintained any
outstanding property interest in the levied funds on the date
he filed for bankruptcy. See In re Camacho, 18 B.R. 967,
968–69 (Bankr. D. Neb. 1982).

    “The nature and extent” of a debtor’s interest in
purportedly exempt property is a question controlled by non-
bankruptcy law. In re Hernandez, 483 B.R. at 720; see also
Stead v. United States, 419 F.3d 944, 947 (9th Cir. 2005).
Under California law, Elliott’s ownership interest in the
funds either terminated when the funds were paid to the
sheriff, see CCP § 700.140(f), or after Elliott’s state-court
exemption claim was denied and the funds were released to
the Bank, see CCP §§ 703.580(d)–(f), 703.610; In re
Hernandez, 483 B.R. at 720–22; In re Neilson’s Estate,
5 Cal. Rptr. 542, 545 (Ct. App. 1960). Either way, however,
the lien terminated prior to the date Elliott filed for
bankruptcy. At the latest, Elliott’s ownership interest
terminated on or about February 15, 2017, the date on which
the sheriff’s office released the funds to the Bank. 3 Elliott


    3
      It is unclear when IRA Trust Services transferred the funds to the
Sheriff. The Sheriff served the levy request on IRA Trust Services on
December 2, 2016. Elliott filed his state-court exemption claim on
December 8. A Memorandum of Garnishee in the record indicates that
the funds were still in Elliott’s IRA account on January 5, 2017, albeit
with a hold placed on them pending the state court’s ruling on the claim
of exemption. The state court entered an order denying the exemption
12                          IN RE ELLIOTT

filed his petition for bankruptcy on March 13, 2017, almost
one month after the funds were released to the Bank. The
Bank has since abandoned any claim to assets other than the
levied funds. Elliott cites no authority supporting the
proposition that he can avoid a lien that was satisfied prior
to the filing of his bankruptcy petition.

                               *    *     *

     Because the judicial lien was satisfied prior to the
petition date, it is not voidable under section 522(f). Because
it is not voidable, Elliott cannot succeed on his separate
522(f) claim nor establish that the transfer of his IRA funds
was a preferential transfer under section 547 of the
Bankruptcy Code. Having failed to allege the elements of a
section 547 preferential transfer, the bankruptcy court
correctly concluded that Elliott failed to state a claim under
section 522(h). 4

                                   III.

    To successfully claim his IRA funds as exempt and avoid
their transfer to the Bank under section 522, Elliott has an
additional deadline to overcome. A debtor who successfully
avoids a preferential transfer “may recover in the manner
prescribed by, and subject to the limitations of, section


claim on January 20, and the funds were released to the Bank by
February 15.

     4
      In dismissing Elliott’s adversary proceeding, the bankruptcy court
also briefly noted the Bank’s alternate ground for dismissal, that the lien
was perfected outside of the 90-day time limit imposed by section
547(b)(4). Because Elliott failed to demonstrate that the Bank received
more than it would have in liquidation—an independent requirement for
establishing a preference—we do not discuss the 90-day requirement.
                        IN RE ELLIOTT                        13

550[.]” 11 U.S.C. § 522(i)(1). Section 550(f) states that an
action or proceeding under section 522 “may not be
commenced after the earlier of – (1) one year after the
avoidance of the transfer on account of which recovery
under this section is sought; or (2) the time the case is closed
or dismissed.”

    As the bankruptcy court noted, we have not yet
addressed whether the re-opening of Elliott’s bankruptcy
proceeding re-starts the clock for purposes of the deadline
imposed by section 550. For this reason, the bankruptcy
court did not rest its holding on section 550 grounds; “[b]oth
parties cite[d] opposing non-binding authority,” and the
court fully resolved the motion to dismiss on substantive
grounds.

    Because we affirm the district and bankruptcy courts’
holding on substantive grounds, it is unnecessary to resolve
the section 550 issue and we do not address it here.

                              IV.

    The perfected lien on Elliot’s IRA funds is not voidable
under section 522(f) because the lien did not impair an
interest in his property on the date he filed his chapter 7
bankruptcy petition. Without demonstrating that the lien is
voidable under section 522(f), he cannot establish a section
547 preference or state a claim under section 522(h). For
these reasons, we affirm the district court’s dismissal of
Elliott’s adversary complaint.

   AFFIRMED.
