                                                             FILED
                                                               MAR 12 2018
 1                         NOT FOR PUBLICATION
 2                                                        SUSAN M. SPRAUL, CLERK
                                                            U.S. BKCY. APP. PANEL
                                                            OF THE NINTH CIRCUIT
 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
                              OF THE NINTH CIRCUIT
 4
 5   In re:                        )      BAP No.     NV-16-1387-BHTa
                                   )
 6   LEONARD A. MANCUSO, II,       )      Bk. No.     2:16-bk-10769-BTB
                                   )
 7                  Debtor.        )
     ______________________________)
 8                                 )
     LEONARD A. MANCUSO,           )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      MEMORANDUM*
11                                 )
     RICK A. YARNALL, Chapter 13   )
12   Trustee; VICTORIA L. NELSON, )
     Chapter 7 Trustee,            )
13                                 )
                    Appellee.      )
14   ______________________________)
15                  Argued and Submitted on December 1, 2017
                              at Las Vegas, Nevada
16
                             Filed – March 12, 2018
17
               Appeal from the United States Bankruptcy Court
18                       for the District of Nevada
19    Honorable Bruce T. Beesley, Chief Bankruptcy Judge, Presiding
20
     Appearances:     Thomas Edmund Crowe argued for appellant Leonard
21                    A. Mancuso, II; Daniel Riggs argued for appellee
                      Rick A. Yarnall, Chapter 13 Trustee.
22
23   Before:   HOULE,** TAYLOR, and BRAND, Bankruptcy Judges.
24
25        *
             This disposition is not appropriate for publication.
26   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
27   See 9th Cir. BAP Rule 8024-1(c)(2).
28        **
             The Hon. Mark D. Houle, United States Bankruptcy Judge
     for the Central District of California, sitting by designation.
 1        Less than 730 days before filing bankruptcy, Leonard
 2   Mancuso (“Debtor”) moved from Florida to Nevada. After filing
 3   bankruptcy in Nevada, Debtor selected Nevada state exemptions in
 4   his bankruptcy schedules. The Chapter 71 Trustee filed a motion
 5   seeking an order: (1) disallowing Debtor’s claim of Nevada
 6   exemptions; and (2) holding that Debtor was only eligible to use
 7   the § 522(d) federal exemptions. Debtor responded by arguing
 8   that, if Debtor was ineligible to use Nevada state exemptions,
 9   Debtor should be permitted to use Florida state exemptions
10   (although Debtor had not yet amended his schedules to seek
11   Florida exemptions). The bankruptcy court granted the motion of
12   the Chapter 7 Trustee, and Debtor appealed. Within an hour of
13   the entry of the bankruptcy court’s order, Debtor’s case was re-
14   converted to Chapter 13, and, as a result, the Chapter 13
15   Trustee is the Appellee in this appeal. For the reasons outlined
16   below, we AFFIRM.
17                I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
18        In July 2014, Debtor relocated from Florida to Nevada, and,
19   on May 7, 2015, purchased real property located in Las Vegas,
20   Nevada. On February 22, 2016, Debtor filed a Chapter 13
21   voluntary petition. Debtor later converted his case to
22   Chapter 7.
23        The Chapter 7 Trustee filed an objection to Debtor’s
24   claimed Nevada exemptions on the basis that Debtor had not
25
          1
             Unless otherwise indicated, all chapter and section
26   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
27   All “Rule” references are to the Federal Rules of Bankruptcy
     Procedure. All “Civil Rule” references are to the Federal Rules
28   of Civil Procedure.

                                       2
 1   resided in Nevada for the entirety of the previous 730 days.
 2   Debtor responded by arguing that, if he were ineligible to
 3   select Nevada exemptions, he should be allowed to claim Florida
 4   exemptions –   the state where he resided prior to moving to
 5   Nevada –   including Florida’s homestead exemption, even though
 6   at the time of the bankruptcy filing Debtor’s homestead was
 7   located in Nevada.
 8        The bankruptcy court ultimately sustained Trustee’s
 9   objection, holding that Debtor was only entitled to claim the
10   § 522(d) exemptions. The bankruptcy court’s oral conclusions of
11   law at the hearing on September 28, 2016, indicate that the
12   bankruptcy court implicitly found that Florida exemptions were
13   limited to Florida residents. Because the bankruptcy court
14   concluded that the Code prohibited Debtor from using Nevada
15   exemptions and that Florida law precluded Debtor from using
16   Florida exemptions, the bankruptcy court concluded that Debtor
17   was only entitled to use § 522(d) exemptions. On the day of this
18   ruling, Debtor re-converted his case to Chapter 13, and, two
19   weeks later, appealed the bankruptcy court’s order sustaining
20   the Trustee’s objection.
21                              II. JURISDICTION
22        Subject to the discussion below, the bankruptcy court had
23   jurisdiction under 28 U.S.C. §§ 1334 and 157(b)(2)(B).   We have
24   jurisdiction under 28 U.S.C. § 158.
25                                III. ISSUES
26        1. Is this appeal moot due to Debtor’s failure to claim
27   Florida exemptions prior to entry of the applicable order?
28        2. Is Debtor eligible to select Florida exemptions despite

                                       3
 1   not being a resident of the state of Florida as of the petition
 2   date?
 3        3. If Debtor can select the Florida homestead exemption,
 4   can Debtor utilize such exemption to exempt a homestead located
 5   outside the state of Florida?
 6                       IV. STANDARDS OF REVIEW
 7        We review the bankruptcy court’s legal conclusions de novo.
 8   See, e.g., Graves v. Myrvang (In re Myrvang), 232 F.3d 1116,
 9   1120 (9th Cir. 2000). “We review . . . mootness de novo.” United
10   States v. Montes-Ruiz, 745 F.3d 1286, 1289 (9th Cir. 2014). The
11   disallowance of an exemption is subject to de novo review. See,
12   e.g., Lieberman v. Hawkins (In re Lieberman), 245 F.3d 1090,
13   1091 (9th Cir. 2001).
14                            V. DISCUSSION
15        A.   The appeal is not moot or premature.
16        In Trustee’s Appellee’s brief, Trustee suggests that
17   because “[t]he crux of this appeal revolves around whether
18   Debtor can apply Florida’s homestead exemption to his Nevada
19   property,” the appeal may be moot, since, at the time of the
20   appeal, Debtor had only requested, but not yet formally claimed,
21   Florida exemptions. An appeal is moot if, due to events that
22   occurred after the filing of the appeal, the reviewing court is
23   unable to offer effectual relief. See, e.g., Church of
24   Scientology of Cal. v. United States, 506 U.S. 9, 13 (1992).
25   Here, the appeal is clearly not moot because an order finding
26   Debtor is entitled to claim Florida exemptions would allow
27   Debtor to claim Florida exemptions in his pending bankruptcy
28   case.

                                     4
 1        To the extent that Trustee’s argument could be
 2   characterized as an argument that the appeal is premature, we
 3   reject the contention. The bankruptcy court issued an order
 4   prohibiting Debtor from selecting any exemptions other than
 5   federal exemptions and, therefore, Debtor’s request to be
 6   allowed to select Florida exemptions is ripe.
 7        B.   Legal Background
 8        11 U.S.C. § 522(b)(1)-(3)(A)(2016) states, in part:
 9        (b)(1) Notwithstanding section 541 of this title, an
          individual debtor may exempt from property of the
10        estate the property listed in either paragraph (2) or,
          in the alternative, paragraph (3) of this section.
11        . . .
12        (2) Property listed in this paragraph is property that
          is specified under subsection (d), unless the State
13        law that is applicable to the debtor under paragraph
          (3)(A) specifically does not so authorize.
14
          (3) Property listed in this paragraph is –
15             (A) subject to subsections (o) and (p), any
               property that is exempt under Federal law, other
16             than subsection (d) of this section, or State or
               local law that is applicable on the date of the
17             filing of the petition to the place in which the
               debtor’s domicile has been located for the 730
18             days immediately preceding the date of the filing
               of the petition or if the debtor’s domicile has
19             not been located in a single State for such 730-
               day period, the place in which the debtor’s
20             domicile was located for 180 days immediately
               preceding the 730-day period or for a longer
21             portion of such 180-day period than in any other
               place[.] . . .
22
23        Debtor and Trustee agree that Debtor’s domicile was not
24   located in a single state for the 730-day period prior to the
25   petition date, and also agree that Debtor’s domicile was located
26   in Florida for the 180 days immediately preceding the 730 days
27   prior to the petition date.
28

                                    5
 1        C.   The bankruptcy court was correct in concluding that
 2             Debtor could not use Florida exemptions to exempt his
 3             residence located in Nevada.
 4        Trustee next argues that Debtor is not permitted to claim a
 5   Florida homestead exemption in a homestead located outside the
 6   state of Florida. As is noted by Trustee, this proposition has
 7   been repeatedly accepted by the courts. As one bankruptcy court
 8   stated:
 9        Florida courts have construed the Florida Constitution
          to require that a homestead be located within the
10        State of Florida for the Florida homestead exemption
          to be applicable. In doing so, Florida adopts the
11        majority view that in order to utilize a state’s
          homestead exemption, the property claimed must be
12        located within that state. Holding that the Florida
          homestead exemption has no extraterritorial effect
13        discourages debtors from forum shopping to take
          advantage of Florida’s generous homestead exemption.
14        This position also recognizes that state exemption
          laws are drafted to protect the homes of families
15        located within the state and should not be applied
          with extraterritorial force.
16
17   In re Schlakman, No.05-36921-BKC-PGH, 2007 WL 1482011 at *3
18   (Bankr. S.D. Fla. Jan. 16, 2007) (citations and footnotes
19   omitted) (collecting cases); see also In re Sanders, 72 B.R.
20   124, 125 (Bankr. M.D. Fla. 1987) (“Article 10, § 4(a)(1) of the
21   Florida Constitution as amended in 1972 governs homestead
22   exemptions. Implicit within that section is the requirement that
23   the property being claimed as exempt homestead be located in the
24   State of Florida.”).
25        Debtor has not provided a case in which a court concluded
26   that Florida did not require the homestead to be located within
27   the state of Florida. Instead, Debtor has advanced two arguments
28   in support of his request that the Panel deviate from the

                                    6
 1   traditional interpretation of the Florida homestead exemption,
 2   which can be characterized as follows: (1) an implicit
 3   requirement regarding the location of the homestead is
 4   incompatible with the policy of liberally construing exemptions;
 5   and (2) continuing to impose a residency requirement would
 6   impose unintended consequences after the BAPCPA2 amendments to
 7   § 522(b).
 8        Regarding the first argument, Debtor cites Drenttel v.
 9   Jensen-Carter (In re Drenttel), 403 F.3d 611 (8th Cir. 2005) and
10   Arrol v. Broach (In re Arrol), 170 F.3d 934 (9th Cir. 1999), in
11   which the courts allowed homestead exemptions in out-of-state
12   property under Minnesota and California law, respectively. These
13   cases, however, are distinguishable from the present
14   circumstance because the Eighth and Ninth Circuits relied on
15   Minnesota and California law and found that those states have
16   consistently espoused a liberal, broad construction of the
17   applicable homestead exemption, supporting an extension of the
18   exemption to a homestead located out of state. One bankruptcy
19   court recently explained its process of determining whether
20   exemption laws apply extraterritorially:
21        Accordingly, if the language of a state’s homestead
          statute restricts its application to property located
22        within the state, the statute cannot be given
          extraterritorial effect by this Court. If the plain
23        language of a state’s homestead statute is silent as
          to its extraterritorial effect, the Court will look to
24        that state’s case law precedent to determine if the
          state’s homestead statute can be applied to property
25        outside of the state. If the state’s homestead statute
          is silent as to its extraterritorial effect, and there
26
27        2
             Bankruptcy Abuse Prevention and Consumer Protection Act
28   of 2005, Pub. L. 109-8, 119 Stat. 23 (2005) (“BAPCPA”).

                                    7
 1        is no case law precedent determining the property of
          its extraterritorial application, the Court believes
 2        it is appropriate to interpret the state’s homestead
          law to apply extraterritorially based upon the strong
 3        policy of liberally construing exemptions in favor of
          the debtor as espoused by the Eighth and Ninth Circuit
 4        Courts of Appeal.
 5   In re Jevne, 387 B.R. 301, 304-05 (Bankr. S.D. Fla. 2008). In
 6   contrast to Drenttel and Arrol, in which the respective courts
 7   found applicable case law did not directly address the issue,
 8   and therefore continued to consider policy concerns, here, as
 9   discussed in the beginning of this section, a review of case
10   law3 interpreting Florida law reveals a clear restriction of the
11   Florida homestead exemption to property located within the state
12   of Florida. Therefore, the Panel declines to adopt Debtor’s
13   position that the legislative silence regarding the
14   extraterritorial application of Florida homestead law should be
15   deemed to permit such application.
16        Debtor’s second argument is that a prohibition on
17   extraterritorial application of Florida’s homestead exemption
18   would be inconsistent with the Code. 11 U.S.C. § 522(b)(3)(A)
19   operates, in the default situation, to require the application
20   of the law of a debtor’s domicile as of the petition date, to
21   the factual situation of a debtor as of the petition date. If a
22   debtor has not been domiciled in a single state for the previous
23   730 days, then the provision contains an exception, reaching
24   back to apply the law of the state where debtor was domiciled
25
          3
             There do not appear to be Florida state court decisions
26   directly on point. Bankruptcy courts analyzing Florida law,
27   however, have uniformly found that the Florida homestead
     exemption only applies to property located within the state of
28   Florida.

                                    8
 1   for the majority of the 180 days prior to the 730 day period
 2   preceding the petition date. But while the BAPCPA amendment
 3   temporally changes the applicable law, it does not contain any
 4   language that would produce the same effect on a debtor’s
 5   factual situation (i.e. the language of the statute does not
 6   change the state of a debtor’s domicile). If Congress, however,
 7   had desired that the residency determination, or the
 8   determination of any other factual issue, also be determined by
 9   looking to the facts as existed 730 days prior to the petition
10   date, it could easily have drafted the appropriate instructions.
11        While the Panel cannot conclude that the clear purpose of
12   § 522(b)(3)(A) is to treat a debtor not residing in his current
13   jurisdiction for more than 730 days as if he were a resident of
14   the state he resided in for the 180 days prior to that period,
15   there may exist equitable and policy grounds that may support
16   Debtor’s argument. Specifically, given that the alternative
17   federal exemptions contain only a relatively insignificant
18   homestead exemption, a debtor who has significant equity in a
19   home and has moved to a different state in the previous two
20   years may be, from a practical perspective, significantly
21   prejudiced in filing a Chapter 7 petition, depending on the
22   exemptions allowed in the state the debtor previously resided
23   in. As noted earlier, however, the Panel concludes that any such
24   equitable concerns must defer to the relevant state’s (here
25   Florida) interpretation of their own exemption laws. And, as
26   more fully discussed below, the Panel concludes that such
27   equitable concerns cannot save Debtor’s preemption argument.
28        The court in In re Fernandez, No. EP-11-CV-123-KL, 2011 WL

                                    9
 1   3423373 (W.D. Tex. Aug. 5, 2011) identified, and extensively
 2   discussed, the two4 approaches to the extraterritorial
 3   application of state exemption laws post BAPCPA: (1) “the state-
 4   specific interpretation”; and (2) “the preemption view.” Id. at
 5   6; see Extraterritorial Application of State’s Homestead
 6   Exemption Pursuant to Bankruptcy Code § 522, 47 A.L.R. FED. 2d
 7   335 (2010) for a summary of different approaches. The former
 8   approach mirrors the approach taken in Jevne and requires the
 9   court to look to state law to determine whether extraterritorial
10   application is warranted. The Fernandez court cites In re
11   Garrett, 435 B.R. 434 (Bankr. S.D. Tex. 2010) as an example of
12   the latter approach, an approach that Debtor appears to request
13   that the Panel adopt here.
14        Although not cited by either party, the court in In re
15   Camp, 396 B.R. 194 (Bankr. W.D. Tex. 2008) adopted the approach
16   advocated by Debtor, holding that residency restrictions in
17   Florida law relating to exemptions (in Camp, Florida’s opt-out
18   provision) were preempted by § 522(b). The Camp court, in
19   explaining its holding, stated the following:
20        But the general rule has limited application, where
          (as here) § 522(b)(3)(A) requires the application of
21        the exemption laws of a state other than the state of
          the debtor’s residence. For example, if thirty days
22        before filing bankruptcy a debtor moved from Texas to
          Louisiana and purchased a home, § 522(b)(3)(A)
23        requires the bankruptcy court to “disregard the
          element of reality” of the actual state of the
24        debtor’s residence (Louisiana), and instead engage in
          the fiction of considering the state of his or her
25
26        4
             The court in Fernandez   actually noted three approaches.
27   The third approach, adopted in   the bankruptcy court decision
     under review in Fernandez, was   rejected on appeal and does not
28   appear to have been adopted in   any other decision.

                                      10
 1        former residence (Texas) to be the state where he or
          she currently resides. If the debtor chooses state
 2        exemptions, Texas exemption laws would apply to the
          debtor’s home and other property located within the
 3        state – in this case, within “Louisiana qua Texas.”
          This is not, however, the extraterritorial application
 4        of Texas’s exemption laws. It is not under the
          authority of the State of Texas that its exemption
 5        laws are being applied to property outside Texas.
          Rather, it is a federal choice of law statute –
 6        § 522(b)(3)(A) – that has expressly provided that the
          exemption laws of a particular state – Texas – are
 7        applicable to a debtor who, by definition, is no
          longer a domiciliary of that state and so whose
 8        property is almost certainly no longer located within
          that state.
 9
10   Id. at 201-02; see also id. at 200 (“In this case,
11   § 522(b)(3)(A) evidences a strong policy in favor of treating a
12   recently departed debtor as if he had not moved for purposes of
13   determining what property he may claim as exempt.”). The
14   approach in Camp directly contradicts the approach to Florida
15   homestead exemptions adopted by the court in In re Adams,
16   375 B.R. 532 (Bankr. W.D. Mo. 2007).
17        The Panel cannot embrace the gymnastics engaged in by the
18   Camp decision, which represents the minority approach to the
19   issue. See In re Fernandez, 2011 WL 3423373 (W.D. Tex. 2011)
20   (discussing “state-specific interpretation” and the “preemption
21   view”). Specifically, the reasoning in the Camp excerpt above
22   appears incomplete. The Camp court reasons that because
23   § 522(b)(3)(A), in some situations, requires debtors to use the
24   exemptions of a state where they do not reside, that provision
25   preempts residency requirements. There is a fundamental problems
26   with this conclusion, however, because if a state does not have
27   residency restrictions, then the hanging paragraph of § 522(b)
28   explicitly provides a solution by guaranteeing the debtor

                                    11
 1   federal exemptions. Section 522 does not appear to conflict with
 2   state exemption laws at all, but, rather, it harmonizes with
 3   those laws.
 4        The second step taken by Camp, implicitly extending
 5   preemption from residency restrictions to restrictions on the
 6   location of the property, implicates additional issues. That
 7   reasoning, applied to the situation here, would have the Panel
 8   look to two years before the petition date to find the proper
 9   exemption laws and the residency status of Debtor, essentially
10   requiring the Panel to treat “the recently departed debtor as if
11   he had not moved for purposes of determining what property he
12   may claim as exempt.” In re Camp 396 B.R. at 200. But,
13   simultaneously, the Panel is required to treat the Debtor as if
14   he had moved for purposes of determining what property he may
15   claim as exempt, for, if Debtor had not moved, there would be no
16   Nevada property to exempt, and it certainly would not be
17   Debtor’s homestead. The preemption view essentially mandates
18   this logically inconsistent approach be adopted because by
19   classifying Debtor as a resident of Florida, it would preclude a
20   debtor from selecting federal exemptions, constraining the
21   debtor to a state’s exemption scheme that would be partially
22   inapplicable.
23        Instead, the Panel concludes that the majority approach,
24   the state-specific approach, is the more logically coherent
25   analysis. As is evidenced by Drenttel and Arrol, this approach
26   may lead a court to permit the extraterritorial application of
27   state homestead exemption laws. When interpreting Florida
28   homestead laws, however, such extraterritorial application is

                                    12
 1   not permitted. While Drenttel and Arrol concluded that under the
 2   state laws of Minnesota and California, respectively, homestead
 3   exemptions were to be liberally applied, such an application is
 4   not adopted by Florida courts. Courts have repeatedly deferred
 5   to the individual states’ preferences for their exemption
 6   schemes, even when such schemes result in a lack of uniformity.
 7   See, e.g., Storer v. French (In re Storer), 58 F.3d 1125 (6th
 8   Cir. 1995); see also Owen v. Owen, 500 U.S. 305, 308 (1991)
 9   (“Nothing in subsection (b) (or elsewhere in the Code) limits a
10   state’s power to restrict the scope of its exemptions; indeed,
11   it could theoretically accord no exemptions at all.”). Debtor’s
12   request, that this Panel adopt a more liberal interpretation of
13   the Florida homestead exemption than the interpretation adopted
14   by Florida courts, is in contravention of the above-mentioned
15   principle.5
16        D.   We decline to determine whether Debtor is eligible to
17             select Florida personal property exemptions.
18        The bankruptcy court order states that: “The Debtor shall
19   only be entitled to claim the exemptions set forth under Section
20   522(d),” which implicitly prevents Debtor from selecting any
21   Florida exemptions, real property or personal property. A review
22   of the record, however, establishes that the parties essentially
23   limited their briefing to the issue of the extraterritorial
24   application of Florida homestead’s exemption; Debtor’s
25
          5
             Furthermore, the Court does not agree with Debtor’s
26   contention that the BAPCPA amendments evince Congressional
27   desire for courts to adopt more generous interpretations of
     state homestead exemption laws; BAPCPA amendments were for the
28   explicit purpose of preventing abuse of the bankruptcy system.

                                    13
 1   eligibility to select Florida personal property exemptions was
 2   not directly briefed or argued before the Panel. On the record
 3   before us, the Panel declines to determine whether Debtor is
 4   entitled to select Florida personal property exemptions.
 5        E.     We do not reach Debtor’s new argument first raised on
 6               appeal.
 7        Debtor also asserted a new theory at oral argument relating
 8   to Debtor’s ability to exempt the proceeds of the sale of his
 9   Florida real property in whatever form those proceeds currently
10   exist. “[I]n general, ‘a federal appellate court does not
11   consider an issue not passed upon below.’” Mano-Y&M, Ltd. v.
12   Field (In re Mortg. Store, Inc.), 773 F.3d 990, 998 (9th Cir.
13   2014) (quoting Singleton v. Wulff, 428 U.S. 106, 120 (1976)).
14   And a “litigant may waive an issue by failing to raise it in a
15   bankruptcy court.” Id. That said, we “have discretion to
16   consider arguments raised for the first time on appeal, but do
17   so only if there are ‘exceptional circumstances.’” Id. (quoting
18   El Paso City of Tex. v. Am. W. Airlines, Inc. (In re Am. W.
19   Airlines), 217 F.3d 1161, 1165 (9th Cir. 2000)). Here, Debtor
20   did not even raise the issue in his opening brief, but, instead,
21   waited until oral argument. We decline to exercise discretion to
22   consider this new theory first raised on appeal at oral
23   argument.
24                              VI. CONCLUSION
25        In accordance with the foregoing, the Panel finds that the
26   Florida homestead exemption cannot be applied to a homestead
27   located outside the state of Florida. Therefore, the bankruptcy
28   court order is AFFIRMED.

                                      14
