                                                            FILED
                                                             AUG 26 2015
 1                        NOT FOR PUBLICATION            SUSAN M. SPRAUL, CLERK
                                                           U.S. BKCY. APP. PANEL
                                                           OF THE NINTH CIRCUIT
 2
 3
                    UNITED STATES BANKRUPTCY APPELLATE PANEL
 4
                              OF THE NINTH CIRCUIT
 5
     In re:                        )     BAP Nos.     CC-14-1222-KiTaPa
 6                                 )                  CC-14-1223-KiTaPa
     ROBERT FERRANTE,              )                  (Related Appeals)
 7                                 )
                    Debtor.        )     Bk. No.      8:10-10310-TA
 8                                 )
                                   )     Adv. No.     8:12-01330-TA
 9   ROBERT A. FERRANTE; RICHARD C.)
     SHINN, Trustee of the 518     )
10   Harbor Island Drive Trust;    )
     ARMANI FERRANTE; GIANNI       )
11   FERRANTE; CHANEL FERRANTE,    )
                                   )
12                  Appellants,    )
                                   )
13   v.                            )     M E M O R A N D U M1
                                   )
14   THOMAS H. CASEY, Chapter 7    )
     Trustee; STEVEN FENZL; MARIA )
15   FERRANTE aka MIA FERRANTE,    )
                                   )
16                  Appellees.     )
     ______________________________)
17
                    Argued and Submitted on March 19, 2015
18                          at Pasadena, California
19                          Filed - August 26, 2015
20             Appeal from the United States Bankruptcy Court
                   for the Central District of California
21
          Honorable Theodor C. Albert, Bankruptcy Judge, Presiding
22
23   Appearances:    Arash Shirdel of Pacific Premier Law Group argued
                     for appellants Robert A. Ferrante and Richard C.
24                   Shinn, Trustee of the 518 Harbor Island Trust;
                     Owen Kaye of Law Office of Givner & Kaye argued for
25
26
          1
            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. See 9th
28   Cir. BAP Rule 8024-1.
 1                   appellants Armani Ferrante, Chanel Ferrante and
                     Gianni Ferrante; and Thomas A. Vogele of Thomas
 2                   Vogele & Associates, APC argued for appellee Thomas
                     H. Casey, Chapter 7 Trustee.
 3
 4   Before:   KIRSCHER, TAYLOR and PAPPAS, Bankruptcy Judges.
 5
 6        Appellants, chapter 72 debtor Robert Ferrante ("Debtor"), his
 7   three children Chanel Ferrante, Gianni Ferrante and Armani
 8   Ferrante ("Ferrante Children") and Richard C. Shinn (“Shinn”), as
 9   trustee of the 518 Harbor Island Drive Trust agreement
10   ("518 Trust")(collectively "Appellants") appeal an order granting
11   partial summary adjudication to the chapter 7 trustee, Thomas H.
12   Casey ("Trustee"), determining the revocability of a qualified
13   personal residence trust as a matter of law by a trustee in
14   bankruptcy or, alternatively, the revocability of the 518 Trust
15   for its failure to comply with IRS regulations.    Appellants also
16   appeal the order denying reconsideration of partial summary
17   adjudication in favor of Trustee on these issues.   We conclude
18   that the 518 Trust terminated pursuant to provisions in the law
19   and express terms in the 518 Trust.   We AFFIRM.
20              I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
21   A.   Prepetition events
22        1.    Qualified Personal Residence Trust
23        A brief explanation of a qualified personal residence trust
24   or "QPRT" assists us in gaining a better understanding of the
25   issues in these related appeals.
26
          2
            Unless specified otherwise, all chapter, code and rule
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. The
28   Federal Rules of Civil Procedure are referred to as “Civil Rules.”

                                     -2-
 1           A QPRT, as a creation of statute and IRS regulation, provides
 2   a tax savings mechanism through which, for example, a parent may
 3   transfer a residence to a child at a dramatically reduced estate
 4   and gift tax cost.    A QPRT is an effective estate planning
 5   technique to transfer a personal residence at a reduced gift and
 6   estate tax cost from one generation to another.      Jon D. Lallo,
 7   Qualified Personal Residence Trusts: An Estate Planning Fad Gone
 8   Bad?, 46 R.I.B.J. 17 (Jan. 1998).       With a QPRT, the grantor or
 9   "term holder" transfers (gifts) a residence to the QPRT and
10   retains the right to live in and use the residence for a specified
11   term of years ("QPRT Term"), usually five to twenty years.      During
12   the QPRT Term, the property is held for the sole benefit of the
13   grantor; the grantor has full use of the property and is
14   responsible for all expenses associated with it.      With minor
15   exceptions, including working capital to maintain the residence
16   and pay trust expenses, no other property can be contributed to a
17   QPRT.    Treas. Reg. § 25.2702-5(c)(5)(ii) (as amended in 1997).
18           At the end of the QPRT Term, the trust terminates and the
19   assets are distributed to the grantor's beneficiaries without any
20   further gift or estate tax consequences.      Thus, any appreciation
21   in the residence's value after it is transferred to the QPRT
22   avoids estate or gift tax and inures to the benefit of the
23   remainder beneficiaries.    If the grantor dies before the end of
24   the QPRT Term, the assets revert to the grantor's estate and are
25   subject to estate tax.    Treas. Reg. § 20.2036-1(a).
26           A compliant QPRT has very specific features and requirements.
27   For example, a QPRT must be irrevocable, a transfer of real
28   property to a QPRT must be a completed gift, and a QPRT grantor

                                       -3-
 1   must retain certain rights therein, including the right to live in
 2   the QPRT property rent free for the QPRT Term and the right to
 3   income from the property.    The governing instrument of the QPRT
 4   must also provide that:
 5   •    any income of the trust be distributed to the term holder at
 6        least annually (Treas. Reg. § 25.2702-5(c)(3) (1992));
 7   •    the trustee may not distribute trust principal to any
 8        beneficiary other than the term holder until the expiration
 9        of the QPRT Term (Treas. Reg. § 25.2702-5(c)(4) (1992));
10   •    the trust may not hold any assets other than one personal
11        residence (Treas. Reg. § 25.2702-5(c)(5) (1992));
12   •    the term holder's interest in the QPRT cannot be prepaid
13        (also known as "commutation") (Treas. Reg. § 25.2702-5(c)(6)
14        (1992));
15   •    the trust ceases to be a QPRT if the residence ceases to be
16        used or held as a personal residence of the term holder
17        (Treas. Reg. § 25.2702-5(c)(7) (1992));
18   •    within 30 days after the date on which the trust has ceased
19        to be a QPRT, either:
20        •    the assets are distributed outright to the term holder;
21        •    the assets are converted to and held for the balance of
22             the QPRT Term in a separate share trust meeting the
23             requirements of a qualified annuity interest, such as a
24             grantor retained annuity trust or "GRAT"; or
25        •    the trustee may elect to comply with either of these
26             alternatives (Treas. Reg. § 25.2702-5(c)(8) (1992)); and
27   •    the term holder may not re-acquire the personal residence
28        (i.e., the trust is prohibited from selling or transferring

                                      -4-
 1        the residence, directly or indirectly, to the grantor (and
 2        certain others) during the QPRT Term or at any time after the
 3        QPRT Term (Treas. Reg. § 25.2702-5(c)(9) (as amended in
 4        1997)).3
 5        For purposes of a QPRT, a "personal residence" is:      (a) the
 6   "principal residence" of the term holder; (b) one "other"
 7   residence of the term holder; or (c) an undivided fractional
 8   interest in either.    Treas. Reg. § 25.2702-5(b)(2) and (c)(2)
 9   (1992).   The definition of "principal residence" is self-
10   explanatory; the grantor can have only one principal residence.
11   For a property to qualify as an "other" residence, often a
12   vacation property, the grantor must either use the property as a
13   residence for 14 days during the calendar year or, if rented out
14   for a portion of the year exceeding 140 days, the grantor must use
15   the property as a residence for a number of days at least equal to
16   10% of the number of days it is rented out.    Treas. Reg.
17   § 25.2702-5(c)(2)(i)(B) (1992) (referencing I.R.C. § 280A(d)(1)
18   for definition of "other" residence).
19        Another IRS regulation, Treas. Reg. § 25.2702-5(c)(7)(i)
20   (1992), specifically discusses "cessation of use as a personal
21   residence."     Under that provision, a "residence is held for use as
22   a personal residence of the term holder so long as the residence
23
24        3
            On December 23, 1997, the IRS adopted this regulation,
     26 C.F.R. § 25.2702-5(c)(9), and it applies to trusts created
25   after May 16, 1996. The preamble to the regulations, however,
     states: “Treasury and the IRS wish to clarify that the IRS will
26   apply these regulations only to post-effective date trusts.
     Nevertheless, Treasury and the IRS have the authority to apply
27   established legal doctrines to disqualify a pre-effective date
     trust in cases where the statutory purpose has clearly been
28   violated.”

                                       -5-
 1   is not occupied by any other person and is available at all times
 2   for use by the term holder as a personal residence."
 3        The above noted amendatory regulation prohibited any grantor
 4   buy-back provision and required proper modification of the QPRT to
 5   preserve its QPRT qualification.    Even if the IRS delayed
 6   implementation of this amendatory regulation to QPRTs created
 7   after May 16, 1996, Treas. Reg. § 25.2702-5(b)(1)(third sentence)
 8   (1992), as noted by the bankruptcy court and in effect prior to
 9   the 1997 amendment, provides “[a] trust does not meet the
10   requirement of this section if, during the original duration of
11   the term interest, the residence may be sold or otherwise
12   transferred by the trust or may be used for a purpose other than a
13   personal residence of the term holder.”
14        2.     The QPRT at issue
15        In 1994, Debtor, who holds a law degree and has previously
16   practiced law, created the 518 Trust as a QPRT pursuant to Treas.
17   Reg. §§ 2702 and 25.2702-5 for a residence located in Newport
18   Beach, California (the "518 Property") for the benefit of the
19   Ferrante Children.    It provided for a twenty-year QPRT Term, to
20   end in 2014.    Debtor served as the initial trustee.   At one time
21   his former father-in-law served as trustee.    His long-time friend,
22   Shinn, serves as the current trustee.    The 518 Property is a
23   5,500 square foot luxury waterfront home with fifty feet of bay
24   frontage.    It features high coffered ceilings, a pool and spa, a
25   wine cellar, a gaming parlor, a custom kitchen, a rooftop deck
26   with panoramic views and Winston Churchill's personal fireplace
27   mantel.   The 518 Property is currently listed for sale at
28   $7.495 million.

                                      -6-
 1        The issue before us requires a careful analysis of the IRS
 2   regulations for a QPRT and the 518 Trust provisions.     The
 3   following trust provisions are pertinent:
 4        Paragraph II: Irrevocability. This trust and all
          interests in it are irrevocable, and the grantor has no
 5        power to alter, amend, revoke, or terminate any trust
          provision or interest whether under this instrument or
 6        any statute or rule of law.
 7        Paragraph III A.4.: Option to Purchase Residence. The
          Grantor shall have the option to acquire all or part of
 8        the Residence from the trust immediately prior to the
          expiration of the trust. The option price will be the
 9        then fair market value of the Residence then held by
          this Trust.
10
          Paragraph III B. When the Trust Terminates. The Trust
11        terminates only as provided in this paragraph:
12        3.      Cessation of Personal Residence Trust Status.
                  Unless the Trustee makes a timely election under
13                subparagraph III [C.], this trust shall terminate
                  when it ceases to be a Qualified Personal
14                Residence Trust ("QPRT"), and on such termination
                  the Trustee shall distribute all of the trust
15                assets to the Grantor . . . .
16        4.      The date on which the Residence . . . ceases to be
                  used or held for use as a personal residence shall
17                be known as the "Cessation Date."
18        Paragraph III C. Conversion to a Grantor Retained
          Annuity Trust. Within thirty (30) days from the date
19        on which this trust would otherwise terminate under
          subparagraph III [B.3.], the Trustee may elect to
20        convert the trust to a Grantor Retained Annuity Trust
          ("GRAT") . . . .
21
22   Paragraph III A.4. is referred to by the parties as the "buy-back"
23   provision.
24        3.      Prior state court litigation against Debtor and the
                  518 Trust
25
26        In 2004, William Seay ("Seay"), a former trustee of the
27   518 Trust who loaned Debtor money, obtained a default judgment
28   against Debtor for approximately $2.4 million and recorded an

                                       -7-
 1   abstract of judgment in Orange County.   In 2008, Seay filed an
 2   action in the probate court against the 518 Trust to revoke it, to
 3   obtain the 518 Property and to satisfy his money judgment.     Seay
 4   contended that Debtor created the 518 Trust as a sham to avoid
 5   creditors’ claims and that Debtor had reserved the power to revoke
 6   the trust.   The probate court dismissed Seay's action on the
 7   motion of Debtor's former wife, Maria a/k/a Mia Ferrante ("Mia"),
 8   as guardian for the 518 Trust remainder beneficiaries, the
 9   Ferrante Children.
10        In an unpublished opinion, the California Court of Appeal
11   affirmed the probate court and held the 518 Trust was irrevocable
12   and protected from judgment execution.   Importantly, the appellate
13   court noted that Seay did not seek to reach Debtor’s beneficiary,
14   life estate or reversionary interest.    The appellate court
15   dismissed any argument of trust revocability on the basis that a
16   judgment creditor cannot establish that an irrevocable trust is
17   revocable based on subsequent conduct of the settlor (citing
18   Laycock v. Hammer, 141 Cal. App. 4th 25, 30-31 (2006)).
19   B.   Postpetition events
20        Debtor filed a chapter 7 bankruptcy case on January 11, 2010.
21   He received a discharge in January 2012.
22        Subsequently, Trustee filed an adversary complaint against
23   Debtor, the 518 Trust and others for turnover of estate property,
24   declaratory relief and for revocation of Debtor's discharge.
25   Trustee later filed a first amended complaint and then a second
26   amended complaint, the operative complaint at issue.   While the
27   first amended complaint was pending, Trustee filed two motions
28   seeking to declare the 518 Trust revocable and to sell the

                                     -8-
 1   518 Property for the benefit of creditors.    Appellants opposed
 2   both motions, but the bankruptcy court never ruled on them.
 3        1.   Trustee's motion for summary judgment or, alternatively,
               for partial summary adjudication
 4
 5        Trustee then filed a motion for summary judgment or,
 6   alternatively, for partial summary adjudication, seeking an order
 7   revoking the 518 Trust and turning the property over to Debtor's
 8   bankruptcy estate (“MSJ”).    Specifically, Trustee contended the
 9   518 Trust was revocable, despite the irrevocability language
10   contained in Paragraph II.    Under Paragraph III B.3., the
11   518 Trust would lose its QPRT status once the 518 Property ceased
12   to be Debtor’s personal residence or ceased to be held by the
13   trustee for Debtor’s use as a personal residence.    And, once the
14   518 Trust lost its QPRT status, the trust terminated and all trust
15   assets reverted to Debtor.
16        Trustee argued that Ferrante could revoke the 518 Trust
17   simply by not using the 518 Property as his personal residence,
18   which was solely within his control.    This "back door" provision
19   gave Debtor the power to revoke the 518 Trust at will, thereby
20   rendering it a revocable trust under California law and property
21   of the estate.    Trustee disputed Appellants' argument that
22   compliance with QPRT regulations absolved Debtor and the trust
23   from liability.
24        Alternatively, Trustee argued that the 518 Trust terminated
25   in March 2009, when Debtor actually ceased using the 518 Property
26   as his personal residence.    Under Paragraph III B.4., the
27   518 Trust terminated on the date on which the 518 Property ceased
28   to be held for use as Debtor's personal residence.    On March 1,

                                      -9-
 1   2009, a former trustee of the 518 Trust executed a lease for the
 2   518 Property with Shinn, making it Shinn's "exclusive" residence
 3   for two years.   This lease directly contradicted Treas. Reg.
 4   § 25.2602-5(c)(7)(i) (1992) that the residence not be "occupied by
 5   any other person" and be "available at all times for use by the
 6   term holder."    Thus, argued Trustee, because the 518 Property was
 7   not “held for use" as Debtor's personal residence, the 518 Trust
 8   ceased to be a QPRT.   As a result, the 518 Property revested in
 9   Debtor and became property of Debtor’s estate.
10        Additionally, the Trustee argued that noncompliance with the
11   amended regulations prohibiting a buy-back provision terminated
12   the QPRT qualification of the 518 Trust, requiring the QPRT
13   trustee to elect a timely conversion to a GRAT, which did not
14   happen.   Consequently, the termination required the trustee to
15   distribute the 518 Property to the Debtor.
16        Appellants opposed the MSJ.   They contended that termination
17   of the 518 Trust could occur only upon (1) Debtor's death,
18   (2) expiration of the twenty-year QPRT Term or (3) cessation of
19   its QPRT status, and none of these "terminating events" had
20   occurred.   Appellants disputed Trustee's contention that the
21   518 Trust terminated if Debtor ceased to live in the 518 Property.
22   They argued that QPRT regulations did not require Debtor to
23   actually live in the 518 Property for it to be deemed his personal
24   residence; he simply had to have the "right" to occupy the
25   property or live there for a minimum of fourteen days a year.
26   Thus, so long as Debtor could reside at the 518 Property for
27   fourteen days annually, it qualified as his "personal residence,"
28   and the 518 Trust retained its QPRT status.   As for the 2009 Shinn

                                      -10-
 1   lease, Debtor contended it was never effectuated and did not
 2   terminate the 518 Trust.
 3        Appellants further argued that because the 518 Trust complied
 4   with all QPRT regulations, and because QPRTs are irrevocable as a
 5   matter of law, the irrevocability of the 518 Trust survived and
 6   the 518 Property did not constitute property of Debtor's
 7   bankruptcy estate.   As for the requirement under 26 C.F.R.
 8   § 25.2702-5(c)(9) — that the trust may not sell or transfer the
 9   residence to the grantor during or after the QPRT Term — Debtor
10   contended that even though the 518 Trust contained the now-
11   prohibited "buy-back" language, this regulation, promulgated in
12   1997, occurred after creation of the 518 Trust and did not apply.
13   Appellants additionally contended that under California law Debtor
14   could not turn an irrevocable trust into a revocable one with his
15   post-creation conduct; it could only be set aside by petition of
16   all beneficiaries.
17        2.   The bankruptcy court's ruling on the MSJ
18        Prior to the MSJ hearing, the bankruptcy court issued a
19   lengthy tentative ruling, which it adopted as its final ruling and
20   incorporated into its order.     The bankruptcy court found in favor
21   of Trustee on two independent grounds.    First, after carefully
22   analyzing the requirements for and nature of QPRTs, the court
23   reasoned that QPRTs are not irrevocable trusts, unlike spendthrift
24   trusts, because a grantor can terminate QPRT status by ceasing to
25   reside in the trust property.4    Further, according to the
26
          4
27          The bankruptcy court acknowledged the IRS’s letter at
     26 C.F.R. § 601.201 Rev. Proc. 2003-42, which sets forth an
28                                                        (continued...)

                                       -11-
 1   518 Trust, once QPRT status was lost the trust terminated and all
 2   assets were to be distributed to Debtor.   Therefore, if Debtor
 3   could terminate the 518 Trust at his discretion, so could Trustee,
 4   as that power belonged to the estate.   Ultimately, in the court's
 5   opinion, QPRTs are gift and estate tax delay devices, not estate
 6   planning or creditor protection devices.
 7        Alternatively, the bankruptcy court found that the now-
 8   prohibited "buy-back" provision allowing Debtor to purchase the
 9   518 Property from the trust immediately prior to the end of the
10   QPRT Term violated QPRT requirements and established revocability
11   or terminability.   Accordingly, because the court considered the
12   518 Trust to be a revocable or terminable trust, Trustee could
13   revoke or terminate it for the benefit of creditors.
14        During oral argument at the MSJ hearing, counsel for Debtor
15   and the 518 Trust asked the bankruptcy court what effect, if any,
16   the California appellate court decision in Seay v. Ferrante had in
17   this case.   The bankruptcy court opined that it had no preclusive
18   effect on the estate, because no one represented the estate in
19   that action.   The court also distinguished the two non-controlling
20   cases cited by Appellants that reviewed QPRTs in bankruptcy and
21   determined them to be irrevocable and not property of the estate.
22   In the court's opinion, those cases focused on different issues,
23   such as fraudulent conveyance, and did not engage in any real
24
25
          4
           (...continued)
26   example of a sample QPRT document containing irrevocability
     language not unlike the 518 Trust. The court reasoned that even
27   though the IRS indicates it will not contest an instrument
     containing those provisions, this IRS decision was not the same as
28   a statutory requirement.

                                     -12-
 1   analysis of "what exactly does it mean to be 'irrevocable' in this
 2   context with the teaching that anything the Debtor . . . could do
 3   so can his trustee."    Hr’g Tr. (Jan. 23, 2014) 25:12-26:17.
 4        The bankruptcy court entered an amended order granting
 5   partial summary adjudication to Trustee on the issue of
 6   revocability of the 518 Trust on March 5, 2014 ("MSJ Order").5
 7        3.   The motion to reconsider the MSJ Order
 8        Appellants timely moved for reconsideration of the MSJ Order
 9   ("Motion to Reconsider").   Appellants first contended the
10   bankruptcy court erred in determining that QPRTs are not
11   irrevocable trusts, when IRS regulations mandate that all QPRTs
12   are irrevocable despite the word "irrevocable" not appearing in
13   the statutes.   In sum, argued Appellants, QPRT statutes apply only
14   to completed gifts.    Therefore, a QPRT must be an irrevocable
15   trust or a completed gift to it could not be made.
16        Appellants contended the bankruptcy court further erred in
17   determining that since QPRTs terminate upon cessation of QPRT
18   status, QPRTs are not irrevocable trusts.   Debtor argued that when
19   a trust ceases to qualify as a QPRT, the trustee (not the grantor)
20   may elect to convert it to a GRAT — another type of irrevocable
21   retained interest trust — as opposed to distributing the trust
22   assets outright.   The GRAT then makes annuity payments to the
23   grantor as specified in the trust document, with the balance of
24   the corpus to be paid to the beneficiaries at the end of the
25   stated term.    Finally, Debtor argued that his ability to buy back
26
          5
            The bankruptcy court entered an initial order granting
27   partial summary adjudication to Trustee on January 29, 2014. The
     court later entered the amended order because the tentative ruling
28   from January 23 was not attached to the January 29 order.

                                      -13-
 1   the 518 Property prior to the expiration of the QPRT Term did not
 2   terminate its QPRT status, as such regulations did not exist when
 3   Debtor created the 518 Trust in 1994.     In conclusion, Debtor
 4   contended that, because he had no dominion or control over the
 5   518 Trust, neither did Trustee.
 6        In opposition, Trustee argued that the 518 Trust, although
 7   created in 1994, still had to comply with the IRS's prohibition
 8   against any buy-back provisions in accordance with 26 C.F.R.
 9   § 25.2702-5(c)(9).   On December 23, 1997, the Department of
10   Treasury issued 62 Fed. Reg. 66988 adding 26 C.F.R.
11   § 25.2702-5(a)(2), which provides that a trust created before
12   January 1, 1997, that does not comply with the requirements under
13   paragraph (b) or (c), would still be treated as a QPRT if
14   modified, but the reformation had to be commenced within ninety
15   days after December 23, 1997, and had to be completed within a
16   reasonable time after commencement.      No evidence existed showing
17   that Debtor modified the 518 Trust or began any compliance
18   modification.   As a result, argued Trustee, the buy-back provision
19   alone invalidated the 518 Trust’s QPRT status.     Trustee further
20   argued that the 518 Trust could not be converted to a GRAT when it
21   ceased to be a QPRT because its terms did not comply with
22   26 C.F.R. § 25.2702-5(c)(8)(C)(ii), which prohibits additional
23   contributions to the trust; the 518 Trust contained no such
24   prohibition.
25        In response to Appellants' newly-raised argument that a QPRT
26   must be an irrevocable trust or a completed gift to it could not
27   be made, Trustee contended that in looking at the substance of the
28   518 Trust, Debtor did not part with dominion and control and

                                       -14-
 1   retained power to change the disposition of the trust.   QPRT
 2   regulation 26 C.F.R. § 25.2511-2(c) specifies that "a gift is
 3   incomplete in every instance in which a donor reserves the power
 4   to revest the beneficial title to the property in himself."
 5   Trustee argued that this reservation of power by Debtor, to either
 6   purchase the 518 Property prior to the expiration of the QPRT Term
 7   or by ceasing to use it as his personal residence, rendered the
 8   gift incomplete and the 518 Trust revocable or terminable.
 9        In reply, Appellants argued that Debtor's right to purchase
10   the 518 Property just prior to the end of the QPRT Term did not
11   make the 518 Trust revocable or, even if it did, the 518 Trust
12   would have converted to a GRAT on the trustee's timely election to
13   do so.   Moreover, argued Appellants, the 518 Trust's failure to
14   comply with 26 C.F.R. §   25.2702-5(a)(2) to modify the trust did
15   not cause it to lose its QPRT status and terminate.   Submitted
16   with Appellants' reply was a declaration from Mortimer Laski, the
17   attorney who drafted the 518 Trust.    He stated that it constituted
18   an irrevocable trust and did not terminate if it deviated from
19   QPRT laws.
20        In its tentative ruling, the bankruptcy court expressed its
21   intent to deny the Motion to Reconsider on the basis that
22   Appellants had failed to show manifest error.   The court analyzed
23   and rejected each of Appellants’ arguments, including those raised
24   for the first time in the motion.    After hearing oral argument
25   from the parties, the court adopted its tentative ruling as its
26   final ruling.   The court agreed to certify the MSJ order under
27   Civil Rule 54(b) so it could be appealed, but denied Debtor's oral
28   request for a stay pending appeal.

                                     -15-
 1        The bankruptcy court entered an order denying the Motion to
 2   Reconsider and certifying the MSJ Order for appeal under Civil
 3   Rule 54(b) on April 16, 2014 ("Reconsideration Order").     These
 4   timely related appeals followed.6
 5                               II. JURISDICTION
 6        The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334
 7   and 157(b)(2)(E) and (O).    It entered the MSJ Order on fewer than
 8   all claims asserted by Trustee.     Ordinarily, an appeal from such a
 9   judgment would be interlocutory, but the bankruptcy court ruled
10   that the partial summary adjudication was final under Civil
11   Rule 54(b), as incorporated by Rule 7054.      In actions involving
12   multiple claims, Civil Rule 54(b) permits a court to direct entry
13   of a final judgment as to one or more (but fewer than all) of the
14   claims, but "only if the court expressly determines there is no
15   just reason for delay."   No party appealed the Civil Rule 54(b)
16   certification.   We have jurisdiction under 28 U.S.C. § 158.
17                                 III. ISSUES
18   1.   Did the bankruptcy court err in ruling that the 518 Trust was
19        a revocable or terminable trust because it contained the
20        "buy-back" provision?
21   2.   Did the bankruptcy court err in ruling that QPRTs are
22        revocable trusts as a matter of law?
23   3.   Did the bankruptcy court abuse its discretion in denying the
24        Motion to Reconsider?
25
26
27        6
            On May 7, 2014, we issued an order granting a temporary
     stay pending appeal. On Trustee’s request to reconsider that
28   order, we dissolved the temporary stay on June 3, 2014.

                                       -16-
 1                         IV. STANDARDS OF REVIEW
 2        The bankruptcy court's order granting partial summary
 3   adjudication is reviewed de novo.    Shahrestani v. Alazzeh
 4   (In re Alazzeh), 509 B.R. 689, 692-93 (9th Cir. BAP 2014).
 5   "Viewing the evidence in the light most favorable to the
 6   non-moving party, we must determine 'whether there are any genuine
 7   issues of material fact and whether the trial court correctly
 8   applied relevant substantive law.'"      New Falls Corp. v. Boyajian
 9   (In re Boyajian), 367 B.R. 138, 141 (9th Cir. BAP 2007)(citation
10   omitted).
11        We review denial of a motion for reconsideration for abuse of
12   discretion.   Ta Chong Bank Ltd. v. Hitachi High Techs. Am., Inc.,
13   610 F.3d 1063, 1066 (9th Cir. 2010); Collect Access LLC v.
14   Hernandez (In re Hernandez), 483 B.R. 713, 719 (9th Cir. BAP
15   2012).   Accordingly, we reverse where the bankruptcy court applied
16   the incorrect legal rule or where its application of the law to
17   the facts was illogical, implausible or without support in
18   inferences that may be drawn from the record.     Ahanchian v. Xenon
19   Pictures, Inc., 624 F.3d 1253, 1258 (9th Cir. 2010)(citing United
20   States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)(en banc)).
21                              V. DISCUSSION
22   A.   Summary judgment standards
23        A party is entitled to judgment as a matter of law when no
24   genuine dispute exists as to any material fact.     Civil Rule 56(a),
25   as incorporated by Rule 7056.   When a properly supported motion
26   for summary judgment is made, the adverse party "must set forth
27   specific facts showing that there is a genuine issue for trial."
28   Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).     The

                                       -17-
 1   court "shall then grant summary judgment if there is no genuine
 2   issue as to any material fact and if the moving party is entitled
 3   to judgment as a matter of law."   Id.   A "genuine" issue exists if
 4   the evidence is such that a reasonable jury could return a verdict
 5   for the nonmoving party.   Id. at 248.
 6        Ninth Circuit law permits a court to interpret unambiguous
 7   contracts in the context of a motion for summary judgment.    Miller
 8   v. Glenn Miller Prods., Inc., 454 F.3d 975, 990 (9th Cir. 2006)
 9   (citing S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885, 888–89
10   (9th Cir. 2003)).   No party has contended that the 518 Trust is an
11   ambiguous document; we do not perceive it to be.
12   B.   Analysis
13        1.   The bankruptcy court did not err in ruling the 518 Trust
               was revocable or terminable.
14
15        Appellants spend a great deal of time arguing that the
16   bankruptcy court erred in ruling that QPRTs are revocable trusts.
17   As for the bankruptcy court's alternative ruling — that the
18   518 Trust failed to comply with QPRT regulations — Appellants
19   relegate their argument to a mere footnote.   Appellants contend
20   that even if the 518 Trust failed to comply with subparagraph
21   (c)(9) after its enactment in December 1997, that noncompliance
22   does not negate the completed gift of the 518 Property to the
23   518 Trust in 1994 or compel its irrevocability in 1994.   They
24   further argue that neither 26 C.F.R. § 25.2702-5(c)(7) nor any
25   other regulation, nor any paragraph of the 518 Trust, indicates
26   that a trust compliant with QPRT regulations subsequently
27   terminates if the laws are later changed or modified.   Appellants
28   raised these arguments during the hearing on the MSJ motion.     Hr’g

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 1   Tr. at 6:1-22.
 2           Appellants concede the 518 Trust contains the "buy-back"
 3   language, which is prohibited under 26 C.F.R. § 25.2702-5(c)(9).
 4   They continue to argue that this regulation does not apply because
 5   it was added in 1997, after creation of the 518 Trust in 1994.
 6   We, as did the bankruptcy court, recognize this argument, given
 7   the imposed effective dates specified in Treas. Reg. § 25.2702-7.
 8   The analysis, however, does not end with the imposed effective
 9   date.    QPRT paragraph III A.4. provides “[t]he grantor shall have
10   the option to acquire all or part of the Residence from the trust
11   immediately prior to the expiration of the trust.    The option
12   price will be the then fair market value of the Residence then
13   held by this Trust.”    The third sentence of Treas. Reg.
14   § 25.2702-5(b)(1) provides “[a] trust does not meet the
15   requirement of this section if, during the original duration of
16   the term interest, the residence may be sold or otherwise
17   transferred by the trust or may be used for a purpose other than
18   as a personal residence of the term holder.”    The 1997 amendments
19   added the fourth through eighth sentences of this regulation and
20   Treas. Reg. § 25.2702-5(c)(9), which specifically prohibited any
21   sale or transfer to the grantor.    We conclude that the QPRT
22   provision at paragraph III A.4. is contrary to the requirement
23   contained in the third sentence of Treas. Reg. § 25.2702-5(b)(1)
24   as it allows the grantor to exercise an option to acquire the
25   Residence immediately prior to the expiration of the trust in
26   violation of the regulation defining “personal residence trust” as
27   such regulation specifies that the trust does not meet the
28   requirements of the section if during the original duration of the

                                       -19-
 1   term interest the Residence may be sold or transferred.
 2        On December 23, 1997, the Department of Treasury promulgated
 3   regulations prohibiting QPRT documents from allowing the sale of
 4   the residence to the grantor during the QPRT Term or at any time
 5   after the QPRT Term that the trust is a grantor trust.    See
 6   62 Fed. Reg. 66988 (Dec. 23, 1997), adding 26 C.F.R.
 7   § 25.2702-5(c)(9).   This regulation also added 26 C.F.R.
 8   § 25.2702-5(a)(2), which provides in relevant part:
 9        Modification of trust. A trust that does not comply with
          one or more of the regulatory requirements under
10        paragraph (b) or (c) of this section will, nonetheless,
          be treated as satisfying these requirements if the trust
11        is modified, by judicial reformation (or nonjudicial
          reformation if effective under state law), to comply with
12        the requirements. . . . In the case of a trust created
          before January 1, 1997, the reformation must be commenced
13        within 90 days after December 23, 1997 and must be
          completed within a reasonable time after commencement.
14
15        Thus, in order to comply with QPRT regulations, modification
16   of the 518 Trust needed to "commence" within 90 days after
17   December 23, 1997, and had to be completed "within a reasonable
18   time from commencement."   The Trustee never modified the 518 Trust
19   to comply with the third sentence of Treas. Reg. 25.2702-5(b)(1),
20   which disqualified the 518 Trust as a QPRT if the Residence could
21   be sold or transferred during the original term of the 518 Trust.
22   The parties do not dispute that the Trustee never modified the
23   518 Trust.   Because of this failure to modify the 518 Trust to
24   eliminate the disqualifying language in paragraph III B.4. that is
25   contrary to the third sentence of Treas. Reg. § 25.2702-5(b)(1),
26   the 518 Trust does not comply with QPRT regulations and ceased to
27   be a QPRT.
28        Paragraph III B.3. in the 518 Trust provides that the "trust

                                     -20-
 1   shall terminate when it ceases to be a [QPRT], and on such
 2   termination the Trustee shall distribute all of the trust assets
 3   to the Grantor."   Although Paragraph III.C. of the 518 Trust
 4   provides that within thirty days of the trust’s termination the
 5   trustee may elect to convert it to a GRAT, this was not done.
 6   Thus, the 518 Trust terminated in 1998 and its terms required
 7   distribution of the trust assets, including the 518 Property, to
 8   Debtor at that time.   As a result, these assets are property of
 9   Debtor’s bankruptcy estate.   § 541(a)(7).   We reject Debtor's
10   argument that failing to comply with QPRT regulations did nothing
11   to change the fact that Debtor transferred a completed and
12   irrevocable gift of property to the 518 Trust in 1994.
13        Thus, we conclude the bankruptcy court did not err in
14   granting partial summary adjudication to Trustee on the basis that
15   the 518 Trust failed to comply with QPRT regulations.    Because we
16   are able to affirm the MSJ Order on that basis, we need not
17   address Appellants' other argument that the bankruptcy court erred
18   in ruling that the 518 Trust is, and QPRTs in general are,
19   revocable trusts as a matter of law.
20        2.   Appellants assert no argument with respect to the
               Reconsideration Order.
21
22        Although Appellants appealed the Reconsideration Order, they
23   do not assert any argument that the bankruptcy court abused its
24   discretion in denying the Motion to Reconsider.   Therefore, any
25   such argument has been abandoned.   City of Emeryville v. Robinson,
26   621 F.3d 1251, 1262 n.10 (9th Cir. 2010)(appellate court in this
27   circuit will not review issues which are not argued specifically
28   and distinctly in a party's opening brief).

                                     -21-
 1        In any event, we fail to see any proper grounds on which it
 2   could have been granted.   Appellants essentially rehashed old
 3   arguments or raised new ones that could have been raised in
 4   opposition to the MSJ.   Exxon Shipping Co. v. Baker, 554 U.S. 471,
 5   486 (2008)(motions under Civil Rule 59(e) may not be used to
 6   relitigate old matters or to raise arguments that could have been
 7   raised prior to the entry of judgment); McDowell v. Calderon,
 8   197 F.3d 1253, 1255 (9th Cir. 1999)(same).   Our review of the
 9   record shows Debtor did not meet the burden of showing any
10   manifest error by the bankruptcy court in its ruling on the MSJ.
11                              VI. CONCLUSION
12        Based on the foregoing reasons, we AFFIRM.
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