                                                                            FILED
                           NOT FOR PUBLICATION
                                                                            OCT 04 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS


                            FOR THE NINTH CIRCUIT

FIRST CITIZENS BANK AND TRUST                    No.   15-35526
COMPANY,
                                                 D.C. No. 2:14-cv-01842-JCC
              Appellant,

 v.                                              MEMORANDUM*

DEBRA LEA WILSON,

              Appellee.

                    Appeal from the United States District Court
                      for the Western District of Washington
                   John C. Coughenour, District Judge, Presiding

                     Argued and Submitted September 1, 2017
                              Seattle, Washington

Before: HAWKINS and McKEOWN, Circuit Judges, and FOOTE,** District
Judge.

      First Citizens Bank and Trust Company appeals the district court’s reversal of

the bankruptcy court’s partial grant of summary judgment in its favor in its action to

deny debtor Debra Wilson (“Wilson”) a discharge for failing to disclose two property


      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Elizabeth E. Foote, United States District Judge for the
Western District of Louisiana, sitting by designation.
transfers on her bankruptcy petition.       The district court held that Wilson had

established a material issue of fact as to whether these transfers were “in the ordinary

course of the business or financial affairs” of debtor’s real estate investment business

and thus not required to be disclosed. We affirm and remand with instructions to

remand to the bankruptcy court for further proceedings.

      Question 10 of the Statement of Financial Affairs instructs debtors to list all

property “other than property transferred in the ordinary course of the business or

financial affairs of the debtor” within two years preceding the commencement of the

bankruptcy case. “Ordinary course of business” is not defined in the Bankruptcy

Code, but we have adopted two tests for determining if a transaction is within the

ordinary course. The “vertical dimension test” views the transaction from the vantage

point of a hypothetical creditor and asks “whether the transaction subjects a creditor

to economic risks of a nature different from those he accepted when he decided to

extend credit.” In re Straightline Investments, Inc., 525 F.3d 870, 879 (9th Cir. 2008).

The “horizontal dimension test” asks whether the transaction is “of a type that other

similar businesses would engage in as ordinary business.” Id. at 880-81.

      We have further indicated that “ordinary” refers to the conduct of similarly

situated businesses facing the same or similar problems. “If the terms in question are

ordinary for industry participants under financial distress, then that is ordinary for the


                                            2
industry.” In re Jan Weilert R.V., Inc., 315 F.3d 1192, 1197 (9th Cir. 2003).

Additionally, we have also recognized that even a first-time transaction may be in the

ordinary course: “Obviously every borrower who does something in the ordinary

course of her affairs must, at some point, have done it for the first time.” In re Ahaza

Systems, Inc., 482 F.3d 1118, 1125 (9th Cir. 2007).

      Applying these precedents, and viewing the evidence in the light most favorable

to the nonmoving party, as we must, we agree with the district court that Wilson has

raised a genuine issue of material fact as to whether the disputed transactions were in

the ordinary course of her real estate investment business. Even though Wilson did

not receive cash in exchange for the properties at issue, she was able to unload heavily

encumbered and underperforming properties, thereby actually improving her overall

net worth. She also produced an expert opinion that in the real estate market that

existed at that time, and in a time of financial distress (as Wilson’s business was due

to the failed Renton project), this was a sound business decision, as “increasing net

worth and liquidity are goals experienced real estate investors pursue as an ordinary

course of their business.” Wilson’s overall balance sheet improved, and thus the

creditor was not exposed to economic risks of a nature different from those accepted

when it decided to extend credit.

      AFFIRMED AND REMANDED FOR FURTHER PROCEEDINGS.



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