                                                            FILED
                                                             AUG 03 2012
 1
                                                         SUSAN M SPRAUL, CLERK
                                                           U.S. BKCY. APP. PANEL
 2                                                         OF THE NINTH CIRCUIT


 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )         BAP No.   ID-11-1592-JuMkH
                                   )
 6   DAVID B. RAMSEY and DONNA R. )          Bk. No.   11-00977-TLM
     RAMSEY,                       )
 7                                 )
                    Debtors.       )
 8   ______________________________)
     JEREMY J. GUGINO, Chapter 7   )
 9   Trustee,                      )
                                   )
10                  Appellant,     )
                                   )
11   v.                            )         M E M O R A N D U M*
                                   )
12   DAVID B. RAMSEY; DONNA R.     )
     RAMSEY,                       )
13                                 )
                    Appellees.     )
14   ______________________________)
15                    Argued and Submitted on June 14, 2012
                                 at Boise, Idaho
16
                             Filed - August 3, 2012
17
                 Appeal from the United States Bankruptcy Court
18                          for the District of Idaho
19            Honorable Terry L. Myers, Bankruptcy Judge, Presiding
                          ______________________________
20
     Appearances:      Matthew Todd Christensen, Esq. of Angstman,
21                     Johnson & Associates, PLLC argued for appellant,
                       Jeremy J. Gugino, Chapter & Trustee; Howard R.
22                     Foley, Esq. of Foley Freeman, PLLC argued for
                       appellees, David and Donna Ramsey.
23                       ______________________________
24   Before:     JURY, MARKELL AND HOLLOWELL, Bankruptcy Judges.
25
26        *
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.

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 1            Chapter 71 trustee, Jeremy J. Gugino, appeals the
 2   bankruptcy court’s order overruling his objection to the
 3   homestead exemption claimed by debtors, David and Donna Ramsey,
 4   in unimproved real property.
 5            The trustee’s objection raised the question whether debtors
 6   had the “actual intent” to make the unimproved real property
 7   their “homestead” within the meaning of Idaho Code § 55-1001(2).
 8   After an evidentiary hearing, the bankruptcy court ruled in
 9   favor of debtors and allowed their homestead.       We AFFIRM.
10                                   I. FACTS
11            On April 7, 2011, debtors filed their chapter 7 petition.
12   Gugino was appointed the trustee.
13            In Schedule A, debtors listed real property located on
14   Palmetto Drive in Eagle, Idaho (the “Palmetto Property”) with a
15   current value of $250,000 and encumbered by secured claims in
16   the total amount of $394,184.63.        They also listed an unimproved
17   five acre lot located forty-five miles from Boise, Idaho (the
18   “Elk Meadows Property”) with a value of $37,000 and
19   unencumbered.      In Schedule C, debtors claimed the Elk Meadows
20   Property exempt as their homestead under Idaho Code §§ 55-1001,
21   55-1102, and 55-1103.2     Debtors’ Statement of Intention showed
22
23
          1
            Unless otherwise indicated, all chapter and section
24   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 and
     “Rule” references are to the Federal Rules of Bankruptcy
25
     Procedure.
26        2
            These statutes authorize married debtors to claim a
27   $100,000 homestead exemption in unimproved land as long as they
     intend to place a house on the property and make it their
28   principal residence.

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 1   that they would surrender the Palmetto Property.
 2        The Trustee’s Objection To Debtors’ Homestead Exemption
 3            On May 7, 2011, the trustee objected to debtors’ exemption
 4   on the grounds that they could not meet the “actual intent”
 5   requirement to make the Elk Meadows Property their “homestead”
 6   under Idaho Code § 55-1001(2).     The objection was based on
 7   debtors’ testimony at the § 341 meeting of creditors.3      Debtors
 8   testified that they planned on residing in the Palmetto Property
 9   until it went into foreclosure and then rent a residence in
10   Boise until they could start building a house on the Elk Meadows
11   Property.     The trustee argued that debtors’ ability to build the
12   house was predicated on them finding work and receiving
13   financing to actually build the house.     These plans, the trustee
14   asserted, were “too speculative” to demonstrate “actual intent”.
15   Finally, the trustee pointed out that debtors had been trying to
16   sell the Elk Meadows Property off and on since 2009, which was
17   inconsistent with their professed intent to build a house and
18   make it their principal residence.
19                           The Evidentiary Hearing
20            After further briefing from the parties, the bankruptcy
21   court held an evidentiary hearing on September 26, 2011, at
22   which debtors and their real estate agent, Vern Mathie,
23   testified.
24            Debtors’ testimony can be summarized as follows:
25            In 2002, debtors purchased the Palmetto Property and had
26
27
          3
            The transcript of the § 341 meeting is not part of the
28   record on appeal.

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 1   been living in the house continuously ever since.   In December
 2   2005, debtors purchased the Elk Meadows Property.   At that time,
 3   debtors were gainfully employed and their plan was to pay off
 4   the mortgages on both properties and then build a vacation home
 5   on the Elk Meadows Property.
 6        The Elk Meadows Property had utilities (electric and
 7   telephone), road access, and was subject to CC&R’s.   At some
 8   point, debtors began the process of having a builder draw up
 9   house plans.   They also requested a variance from the Elk
10   Meadows CC&R’s to set the house closer to the road, which was
11   granted in 2006.
12        In 2009, debtors’ income became unstable and the Palmetto
13   Property required substantial repairs.   As a result, debtors
14   listed the Elk Meadows Property for sale with two different real
15   estate agents in 2009 and 2010.
16        In 2010 debtors lost their jobs.    Thereafter, they
17   collected unemployment and struggled to make the mortgage
18   payments on the Palmetto Property which totaled $3100 per month.
19   They drew down on IRA and pension money to make their payments.
20        In January 2011, debtors obtained the house plans for the
21   Elk Meadows Property, which were admitted into evidence.
22   Debtors estimated that it would cost between $165,000 and
23   $175,000 to build the house.
24        On March 15, 2011, debtors requested their real estate
25   agent, Vern Mathis, to add to the MLS listing that debtors would
26   be willing to carry a note on the Elk Meadows Property.
27        In early to mid-March 2011, debtors decided to allow the
28   Palmetto Property to go into foreclosure.   At that same time,

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 1   they also decided to declare the Elk Meadows Property as their
 2   permanent residence.    As a result, they recorded a declaration
 3   abandoning their automatic homestead in the Palmetto Property on
 4   March 21, 2011.    On the same day, they recorded a declaration of
 5   homestead and non-abandonment with respect to the Elk Meadows
 6   Property.    A few weeks later, debtors filed their chapter 7
 7   petition.    At the time of their filing, Debtors did not have
 8   financing lined up to build the house on the Elk Meadows
 9   Property nor did they have specific plans for when they would
10   start construction.
11           Debtors also testified that when the Palmetto Property was
12   foreclosed upon, they would live and work in Boise.     Boise is
13   approximately forty-five miles from the Elk Meadows Property.
14           Mr. Mathis then testified.   He stated that the Elk Meadows
15   Property had no improvements and that no construction of any
16   kind had taken place on the property.     He further testified that
17   on March 15, 2011, debtors had asked him to make changes to the
18   MLS listing to carry back a note on the property to facilitate a
19   sale.    According to Mr. Mathis, three days later, on March 18,
20   2011, debtors cancelled the listing.     Finally, Mr. Mathis opined
21   that construction loans were very difficult to arrange.
22           At the end of the hearing, debtors’ counsel stipulated with
23   the trustee that he met with debtors on March 17, 2011.
24           In closing argument, the trustee urged the bankruptcy court
25   to adopt objective factors for determining what constitutes
26   “actual intent” under Idaho exemption law with respect to
27   unimproved property.    Those factors, the trustee argued, should
28   require a debtor to show that he or she has concrete plans to

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 1   construct and occupy a house on the unimproved property as well
 2   as the financial means to do so.     The bankruptcy court took the
 3   matter under advisement.
 4                     The Bankruptcy Court’s Ruling
 5        On October 4, 2011, the court issued its findings of fact
 6   and conclusions of law in an oral decision.    In making its
 7   decision, the bankruptcy court set forth the following general
 8   standards applicable to deciding the issue of intent:
 9   (1) Idaho’s exemption laws are to be construed liberally in
10   favor of debtors; (2) the trustee, as the party objecting to
11   debtors’ exemption, had the burden of proof and the ultimate
12   burden of persuasion; (3) exemptions are determined as of the
13   bankruptcy filing date; and (4) the question of debtors’ intent
14   is a factual one that can be proven by direct or circumstantial
15   evidence.   With respect to this later point, the bankruptcy
16   court recited the evidence it considered in making its decision.
17        For the trustee:
18        (1) debtors listed the Elk Meadows Property for sale
          multiple times and even eventually as recently as
19        March 2011, one month before they filed their
          petition;
20
          (2) debtors continued to reside in the Palmetto
21        Property and expressed an intention to stay there
          until foreclosure;
22
          (3) debtors never commenced construction of a home on
23        the Elk Meadows Property despite the length of their
          ownership;
24
          (4) debtors did not have the financial ability to
25        build a home;
26        (5) assuming debtors would secure jobs in Boise,
          debtors would double their commute time by living on
27        the Elk Meadows Property; and
28        (6) debtors cancelled the listing on the Elk Meadows

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 1        Property and filed their homestead declaration just
          days after meeting with their bankruptcy attorney.
 2
          For the debtors:
 3
          (1) debtors professed their intent to reside on the
 4        Elk Meadows Property in the future through the filing
          of their declaration of homestead;
 5
          (2) debtors offered the January 2011 house plans into
 6        evidence as well as the variance they secured for the
          property;
 7
          (3) debtors’ testimony indicated that at the time they
 8        filed their petition, they knew they would not be able
          to stay permanently in the Palmetto Property and that
 9        they intended to eventually build a home on the Elk
          Meadows Property.
10
11        The court gave weight to the fact that debtors’ Statement
12   of Intention filed with their petition corroborated their
13   testimony to surrender the Palmetto Property.   In addition, the
14   bankruptcy court found that debtors’ decision to abandon the
15   Palmetto Property as their homestead and establish the Elk
16   Meadows Property as their homestead was due to their changing
17   circumstances, which culminated in discussions with their
18   bankruptcy attorney.    The court decided that those discussions,
19   which occurred on the eve bankruptcy, were not sufficient
20   grounds to impeach debtors’ testimony.   In the end, the court
21   found debtors’ testimony credible.
22        Having received and evaluated the weight and credibility of
23   all the evidence offered by the parties, the bankruptcy court
24   found that the trustee had not met his burden of proof of
25   showing, by a preponderance of the evidence, that debtors lacked
26   the intent to make the Elk Meadows Property their homestead as
27   required under Idaho exemption law.
28        On the same day it issued its oral ruling, the bankruptcy

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 1   court entered the order overruling the trustee’s objection.         The
 2   trustee timely appealed.
 3                             II.    JURISDICTION
 4        The bankruptcy court had jurisdiction over this proceeding
 5   under 28 U.S.C. §§ 1334 and 157(b)(2)(B).         We have jurisdiction
 6   under 28 U.S.C. § 158.
 7                                   III.    ISSUE
 8        Whether the bankruptcy court erred in allowing debtors’
 9   homestead exemption in the unimproved Elk Meadows Property.
10                       IV.    STANDARDS OF REVIEW
11        We review questions of fact, such as the bankruptcy court’s
12   ultimate decision regarding debtors’ intent to make the Elk
13   Meadows Property their homestead, under the clearly erroneous
14   standard.   Kelley v. Locke (In re Kelley), 300 B.R. 11, 16 (9th
15   Cir. BAP 2003).   “A [factual] finding is clearly erroneous when
16   there is no evidence in the record supportive of it and also,
17   when, even though there is some evidence to support the finding,
18   the reviewing court, on review of the record, is left with a
19   definite and firm conviction that a mistake has been made in the
20   finding.”   United States v. Gypsum Co., 333 U.S. 364, 395
21   (1948).   We affirm the bankruptcy court’s factual findings
22   unless its interpretation of the facts was “illogical,
23   implausible, or without support in inferences that may be drawn
24   from the facts in the record.”          United States v. Hinkson,
25   585 F.3d 1247, 1261-62 & n.21 (9th Cir. 2009) (en banc).
26        We review a bankruptcy court’s conclusions of law,
27   including its interpretation of state law, de novo.         Hopkins v.
28   Cerchione (In re Cerchione), 414 B.R. 540, 545 (9th Cir. BAP

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 1   2009).
 2                               V.   DISCUSSION
 3        When debtors filed their chapter 7 petition, all of their
 4   assets became “property of their bankruptcy estate under § 541,
 5   subject to their right to reclaim certain property as exempt.”
 6   Schwab v. Reilly, __ U.S. __, 130 S.Ct. 2652, 2656-58 (2010).
 7   “Property a debtor claims as exempt will be excluded from the
 8   bankruptcy estate ‘[u]nless a party in interest’ objects.”           Id.
 9   (citing § 522(l)).    Whether property qualifies as exempt is to
10   be determined as of the date of the filing of debtors’ chapter 7
11   petition.   White v. Stump, 266 U.S. 310, 313 (1924); In re
12   Cerchione, 414 B.R. at 548.
13        Section 522(b) allows debtors to choose the exemptions
14   afforded by state law or the federal exemptions listed under
15   § 522(d).   Idaho has elected to “opt out” of the federal
16   exemptions.     Idaho Code § 11–609.    Therefore, debtors were
17   limited to the exemptions allowed under Idaho state law.          In re
18   Steinmetz, 261 B.R. 32, 33 (Bankr. D. Idaho 2001).        Idaho
19   exemption statutes are to be liberally construed in favor of the
20   debtor.   Id.
21        In Idaho, the homestead can be established automatically by
22   occupying a home as one’s principal residence or by recording a
23   proper declaration of homestead.        Idaho Code § 55-1004.   To
24   claim a homestead exemption in bare land or improved property
25   which he or she does not yet occupy, the debtor must record a
26   proper declaration.    Idaho Code § 55–1004(2).     In the case of a
27   debtor who owns more than one parcel of property and who desires
28   to claim a homestead exemption in a parcel he or she does not

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 1   yet occupy, the debtor must execute and record two different
 2   declarations: a declaration of homestead as to the unoccupied
 3   property, and a declaration of abandonment as to the occupied
 4   property.
 5        The trustee does not dispute that debtors complied with the
 6   technical requirements for declaring a homestead with respect to
 7   the Elk Meadows Property and abandoning their automatic
 8   homestead in the Palmetto Property.    Rather, the trustee asserts
 9   that to prove they “actually intended” to make the Elk Meadows
10   Property their homestead within the meaning of Idaho Code § 55-
11   1001(2), debtors need more than a mere declaration of homestead.
12        Idaho Code § 55-1001(2) states:
13        “Homestead” means and consists of the dwelling house
          or the mobile home in which the owner resides or
14        intends to reside, with appurtenant buildings, and the
          land on which the same are situated and by which the
15        same are surrounded, or improved; or unimproved land
          owned with the intention of placing a house or mobile
16        home thereon and residing thereon . . . . Property
          included in the homestead must be actually intended or
17        used as a principal home for the owner.
18   According to the trustee, proof of “actual intent” under the
19   statute should require evidence of objective criteria such as a
20   debtor’s concrete plans to build a house on the bare land within
21   a reasonable amount of time and the financial ability to do so.
22   However, the plain language of the “homestead” definition does
23   not include conditions regarding timing, financial ability, or
24   otherwise.   In re Conley, 1999 WL 33490228, at *12 (Bankr. D.
25   Idaho 2001) (“The statute requires only that, in addition to an
26   intent to reside, the debtor own or be purchasing the property
27   and, thus, have a present interest in such property.”).
28   Although the Idaho Supreme Court has not provided guidance on

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 1   the intent requirement, numerous decisions by bankruptcy courts
 2   and this Panel fill that gap.
 3        Generally, determining a debtor’s intent to establish a
 4   homestead on property is a factually intensive endeavor.    See
 5   In re Kelley, 300 B.R. at 16; In re Moore, 269 B.R. 864, 868
 6   (Bankr. D. Idaho 2001); In re Conley, 1999 WL 33490228, at *12
 7   (Bankr. D. Idaho 2001) (finding that the debtor’s decade long
 8   litigation concerning the unimproved property was indicative of
 9   his subjective intent to make the property his homestead).      As
10   the trier of fact, the bankruptcy court had to determine which
11   witnesses it found credible, which of the permissible competing
12   inferences it would draw, and ultimately whether the party with
13   the burden of persuasion — here the trustee — had persuaded it
14   that the requisite facts showing intent or lack thereof were
15   proven.
16        We have no doubt that the bankruptcy court performed this
17   function properly.   The bankruptcy court summarized the evidence
18   in support of the trustee’s position and debtors’ countervailing
19   evidence that it considered.    The court explicitly credited
20   debtors’ testimony and permissibly drew inferences from their
21   testimony and documentary evidence (house plans, the variance
22   from the CC&R’s, and their Statement of Intention).   “When
23   factual findings are based on determinations regarding the
24   credibility of witnesses, we give great deference to [those]
25   findings.”   Wolfe v. Jacobsen (In re Jacobsen), 676 F.3d 1193,
26   1201 (9th Cir. 2012).
27        Despite the factual questions raised by the trustee as to
28   whether debtors could reasonably expect to occupy the Elk

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 1   Meadows Property, we conclude that the bankruptcy court did not
 2   clearly err in finding that debtors’ had the actual intent to
 3   make the Elk Meadows Property their homestead.    The record as a
 4   whole, particularly in light of the credibility finding,
 5   supports the bankruptcy court’s inferences and findings.     “Where
 6   there are two permissible views of the evidence, the
 7   factfinder’s choice between them cannot be clearly erroneous.”
 8   Anderson v. City of Bessemer City, N.A., 470 U.S. 564, 574-75
 9   (1985).
10        In light of our conclusion, it is unnecessary for us to
11   conduct an exhaustive review of non-binding case law
12   interpreting other state’s homestead exemption laws.   Suffice it
13   to say that we are not persuaded by the bankruptcy court’s
14   reasoning in In re Roberts, 280 B.R. 540 (Bankr. D. Mass. 2001).
15   Extrapolating from case law that recognizes the constructive
16   occupancy exception, the Roberts court held that “to establish
17   the requisite intent, a debtor must demonstrate that the future
18   occupancy is in the near future and is capable of measurement
19   given whatever steps a debtor must take to achieve occupancy.    A
20   declaration of interest alone is insufficient.”   Id. at 546.
21        In those jurisdictions that recognize constructive
22   occupancy, the underlying homestead statute has been construed
23   to require actual occupancy.   As a result, to avoid harsh
24   results, the courts have fashioned a narrow exception that
25   requires a manifestation of the intent to occupy the land as a
26   homestead, and actual occupation within a reasonable time
27   thereafter.   In re Roberts, 280 B.R. at 545 (citing In re
28   Schissler, 250 B.R. 697, 700 (Bankr. W. D. Mo. 2000)); Sec.

                                    -12-
 1   State Bank of Scott City v. Coberly, 623 P.2d 544, 545 (Kan. Ct.
 2   App. 1981); and Brodsky v. Maloney, 105 N.W.2d 911, 913 (S.D.
 3   1960).   The constructive occupancy exception and its requirement
 4   of actual occupation within a reasonable time make sense in the
 5   context of those cases.   However, under Idaho law, physical
 6   presence on undeveloped land is immaterial to a homestead by
 7   declaration under Idaho Code § 55-1004(2).   In re Conley, 1999
 8   WL 33490228, at *11.
 9                             VI.   CONCLUSION
10        Having found no error of fact or law, we AFFIRM.
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