                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

IN RE PAUL RICHARD CHERRETT;               No. 14-60079
COLLEEN COURTNEY CHERRETT,
                        Debtors,             BAP No.
                                             14-1056

ASPEN SKIING COMPANY,
                          Appellant,        OPINION

                 v.

PAUL RICHARD CHERRETT; COLLEEN
COURTNEY CHERRETT; ART
CISNEROS, Chapter 7 Trustee,
                         Appellees.


             Appeal from the Ninth Circuit
              Bankruptcy Appellate Panel
Kirscher, Dunn, and Taylor, Bankruptcy Judges, Presiding

       Argued and Submitted November 8, 2016
                Pasadena, California

                Filed October 16, 2017

      Before: Marsha S. Berzon, Morgan Christen,
       and Jacqueline H. Nguyen, Circuit Judges.

              Opinion by Judge Christen;
               Dissent by Judge Nguyen
2                         IN RE CHERRETT

                            SUMMARY*


                             Bankruptcy

    The panel affirmed the Bankruptcy Appellate Panel’s
decision affirming the bankruptcy court’s denial of a
creditor’s motion to dismiss a Chapter 7 bankruptcy petition
for abuse under 11 U.S.C. § 707(b)(1).

    Agreeing with other circuits, the panel held that the
bankruptcy court’s order was final and appealable because it
conclusively resolved the debtors’ ability to file a Chapter 7
bankruptcy petition and conclusively determined the discrete
issue whether a debt was primarily non-consumer and
therefore subject to discharge under Chapter 7.

    The panel held that the debtor’s housing loan, made by an
employer to an employee as a key part of a compensation
package, qualified as non-consumer debt. The panel held that
the bankruptcy court did not clearly err in finding that the
debtor incurred the housing loan primarily for a non-
consumer purpose connected to furthering his career.
Accordingly, § 707(b)(1), which allows the bankruptcy court
to dismiss a case filed by a debtor whose debts are primarily
consumer debts, did not apply.

    Dissenting, Judge Nguyen wrote that the correct standard
of review was de novo because the case involved undisputed
facts and the only issue was the legal conclusion to be drawn
from those facts, and the panel majority created an intra- and

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

inter-circuit split by reviewing for clear error. Judge Nguyen
wrote that under de novo review, it was clear that the housing
loan was consumer debt incurred by an individual primarily
for a personal, family, or household purpose.


                        COUNSEL

Scott Talkov (argued) and Michael G. Kerbs, Reid & Hellyer
APC, Riverside, California, for Appellant.

Kathleen J. McCarthy (argued) and Thomas H. Casey, Law
Office of Thomas H. Casey Inc., Rancho Santa Margarita,
California; Leslie Keith Kaufman, Law Offices of Kaufman
& Kaufman, Santa Ana, California; for Appellees.


                         OPINION

CHRISTEN, Circuit Judge:

    This case calls for the court to decide whether a housing
loan, made by an employer to an employee as a key part of a
compensation package, qualified as a non-consumer debt. If
the loan was a non-consumer debt, the bankruptcy court
properly denied Aspen Skiing Company’s motion to dismiss
the Cherretts’ Chapter 7 bankruptcy petition under 11 U.S.C.
§ 707(b)(1). On the other hand, if the loan was a consumer
debt, the bankruptcy court erred by denying the motion to
dismiss. The Bankruptcy Appellate Panel (BAP) affirmed the
bankruptcy court, ruling that the bankruptcy court’s order was
final and appealable and that there was sufficient evidence
that the Cherretts incurred the loan for a non-consumer
4                     IN RE CHERRETT

purpose. We have jurisdiction under 28 U.S.C. § 158(d), and
we affirm the BAP.

                    I. BACKGROUND

A. Cherrett’s Employment with Aspen

    Paul Cherrett (Cherrett) began working in the hospitality
industry in 1979. He spent approximately twenty-five years
with the Four Seasons hotel chain, including five years at the
Four Seasons in Jackson Hole, Wyoming. In December
2006, while Cherrett lived and worked in Jackson Hole, he
heard about an open managerial position at Aspen Skiing
Company (Aspen) in Colorado. He did not apply for the
position because it did not offer any new responsibilities
compared to his job at the Four Seasons. Months later, in
2007, Cherrett learned that Aspen had created a new upper-
management position with expanded responsibilities. He
expressed interest to an executive search firm and interviewed
for the job.

    Aspen offered Cherrett a position leading its hospitality
division as a senior vice president heading up the expansion
of Aspen’s “Little Nell Hotel” brand, Aspen’s prestigious
“flagship property.” Cherrett understood that if the Little
Nell Hotel expansion continued, he might have the
opportunity to oversee brand development in Jackson Hole
and move back to his home there. Cherrett also understood
that if he accepted the position with Aspen, he would need to
live near Aspen’s office in Colorado, at least initially. This
represented a challenge because his daughter had two years
of high school left, Cherrett and his wife did not want to
relocate her to a new school, and in Cherrett’s view, the
salary proposed by Aspen did not cover the high cost of
                       IN RE CHERRETT                          5

living in the Aspen area nor offer sufficient incentive to
disrupt his family’s life in Wyoming. The salary was not
enough for him to afford to buy a home in Aspen, and rentals
there were “few and far between” and also very expensive.

    In negotiations regarding compensation, Aspen eventually
offered a $500,000 housing loan (Housing Loan) in addition
to an annual salary of $300,000. The Housing Loan was
interest-only for the first ten years and it was coupled with a
bonus plan providing Cherrett a guaranteed annual bonus of
up to $33,750 to cover the interest payments on the loan. The
annual bonuses were timed to coincide with the date the
annual interest payments were due, ensuring that, for the first
ten years, Cherrett would have no out-of-pocket expenses
related to the loan. If Cherrett left his position for any reason
other than death or disability within two years, he would have
to repay the loan and pay Aspen an additional $140,000. He
would have to pay $120,000 for leaving within three to four
years; $100,000 for leaving within five to six years; and
$80,000 for leaving within seven to eight years. Cherrett
would not have to repay any additional interest on the loan if
he continued to work for Aspen through 2015. Aspen
estimated the value of the plan at $330,750 over a period of
ten years.

    Only with the Housing Loan did Cherrett find Aspen’s
offer attractive enough to accept. He left his job and family
in Jackson Hole, and purchased a condominium near Aspen
for $995,000. The Housing Loan covered $500,000 of the
purchase price, and Cherrett financed $417,000 with a loan
from a market-rate lender.

    Cherrett’s wife and daughter remained at the family home
in Jackson Hole so that his daughter could finish high school
6                     IN RE CHERRETT

there. The condominium in Colorado was smaller than the
family home in Jackson Hole and did not have enough space
to accommodate Cherrett’s wife and two children. With
hopes of relocating back to Jackson Hole to develop the Little
Nell Hotel brand, Cherrett considered the Colorado
condominium a “place holder” and only moved clothing and
personal items there. He visited his home and family in
Jackson Hole “at every opportunity,” returning for holidays,
birthdays, anniversaries, and his daughter’s prom and high
school graduation. He continued using financial institutions
in Wyoming, and kept his vehicle registration there.

    In 2008, the economy crashed and Aspen abandoned
plans to expand the Little Nell Hotel brand. It became clear
that Aspen would not be relocating Cherrett back to Jackson
Hole. So in 2009, after Cherrett’s daughter graduated from
high school and moved away to college, his wife joined him
in Colorado and they sold their home in Jackson Hole. In
2011, four years after joining Aspen, Cherrett resigned from
his position.

B. Bankruptcy Proceedings

    Cherrett and his wife filed a voluntary Chapter 7
bankruptcy petition on August 30, 2013. They owed Aspen
$550,000 under the terms of the Housing Loan. Aspen filed
a motion to dismiss the Chapter 7 petition for abuse under
11 U.S.C. § 707(b)(1). The statute allows a court to “dismiss
a case filed by an individual debtor under this chapter whose
debts are primarily consumer debts . . . if it finds that the
granting of relief would be an abuse of the provisions of this
chapter.” 11 U.S.C. § 707(b)(1). Aspen argued that because
the Cherretts incurred the Housing Loan to purchase a
personal residence, the debt was a consumer debt, and they
                          IN RE CHERRETT                               7

were not entitled to Chapter 7 relief in light of their ability to
pay their creditors in a hypothetical Chapter 13 plan.1

    The bankruptcy court held an evidentiary hearing to
determine whether the debt owed to Aspen qualified as
consumer debt. After hearing testimony from Cherrett, the
bankruptcy court found that Aspen offered Cherrett the
Housing Loan to entice him “to leave a secured position,” and
that Cherrett purchased the Colorado property so he could
“make more money” and “work at a very prestigious, top of
the line” resort. The bankruptcy court thus determined that
the Housing Loan “was incurred for a business purpose” and
did not constitute consumer debt. The bankruptcy court
denied Aspen’s motion to dismiss.

    Aspen appealed to the BAP. The BAP concluded that the
order denying Aspen’s motion was final and appealable, and
also concluded that the bankruptcy court’s finding that
Cherrett incurred the Housing Loan for a non-consumer
purpose was subject to clear error review. Based on the
testimony and facts presented to the bankruptcy court, the
BAP ruled that there was sufficient evidence to find that
Cherrett obtained the Housing Loan primarily “for a business
purpose with respect to his employment with Aspen.” The
BAP therefore affirmed the bankruptcy court’s order denying
Aspen’s motion to dismiss under 11 U.S.C. § 707(b)(1).




    1
     The Cherretts do not dispute that they would be ineligible to file a
Chapter 7 bankruptcy petition based on means if they incurred primarily
consumer debts.
8                     IN RE CHERRETT

              II. STANDARD OF REVIEW

    “Decisions of the BAP are reviewed de novo.” Carrillo
v. Su (In re Su), 290 F.3d 1140, 1142 (9th Cir. 2002). “We
independently review a bankruptcy court’s ruling on appeal
from the BAP.” Id. “We review the bankruptcy court’s
conclusions of law de novo and its factual findings for clear
error.” Id.

                    III. DISCUSSION

A. We Have Jurisdiction Over This Appeal.

    The bankruptcy court’s ruling must be final for this court
to exercise jurisdiction under 28 U.S.C. § 158(d). Zolg v.
Kelly (In re Kelly), 841 F.2d 908, 911 (9th Cir. 1988). Here,
the bankruptcy court denied Aspen’s motion to dismiss, and
the BAP affirmed. Ordinarily, orders denying a motion to
dismiss would not constitute final, appealable orders because
they do not “end[] the litigation on the merits and leave[]
nothing for the court to do but execute the judgment.”
Sahagun v. Landmark Fence Co. (In re Landmark Fence
Co.), 801 F.3d 1099, 1102 (9th Cir. 2015) (quoting Firestone
Tire & Rubber Co. v. Risjord, 449 U.S. 368, 373–74 (1981)).

    In bankruptcy appeals, however, we have recognized
“that the fluid and sometimes chaotic nature of bankruptcy
proceedings necessitates a degree of jurisdictional
flexibility.” Id. A bankruptcy court’s order that is affirmed
or reversed by the BAP is final and appealable where the
order: “1) resolves and seriously affects substantive rights
and 2) finally determines the discrete issue to which it is
addressed.” SS Farms, LLC v. Sharp (In re SK Foods, L.P.),
                      IN RE CHERRETT                         9

676 F.3d 798, 802 (9th Cir. 2012) (quoting Dye v. Brown (In
re AFI Holding), 530 F.3d 832, 836 (9th Cir. 2008)).

    We have not expressly decided whether a bankruptcy
court’s order denying a motion to dismiss under 11 U.S.C.
§ 707(b) constitutes a final, appealable order. The majority
of circuits that have addressed the issue have concluded that
orders on motions to dismiss for abuse of Chapter 7 are
appealable. See Morse v. Rudler (In re Rudler), 576 F.3d 37,
43 (1st Cir. 2009) (collecting cases); but see Barben v.
Donovan (In re Donovan ), 532 F.3d 1134, 1137 (11th Cir.
2008) (holding that an order denying a motion to dismiss a
Chapter 7 case under an earlier version of § 707(b) was not
appealable). These circuits recognize that the current version
of § 707(b), part of the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005, “manifest[s] a
congressional policy to police all Chapter 7 cases for abuse at
the outset of a Chapter 7 proceeding” as well as “pragmatic
considerations that indicate that the denial of a § 707(b)
motion to dismiss is different from the denial of other
motions to dismiss.” McDow v. Dudley, 662 F.3d 284, 288
(4th Cir. 2011).

    We have often concluded that other bankruptcy court
orders are final and appealable based on “policies of judicial
efficiency and finality.” Kelly, 841 F.2d at 911; see also
Meyer v. U.S. Trustee (In re Scholz), 699 F.3d 1167, 1170
(9th Cir. 2012). These policies apply in this case. As the
Fourth Circuit explained:

       Section 707(b) creates a statutory gateway
       based on whether the case is abusive, and an
       order denying that motion to dismiss as
       abusive, in effect, finally and conclusively
10                        IN RE CHERRETT

         resolves the issue. If the denial of a § 707(b)
         motion to dismiss cannot be appealed
         immediately . . . , the Chapter 7 proceedings
         would have to be completed before it could be
         determined whether the proceedings were
         abusive in the first place.

McDow, 662 F.3d at 289–90. Here, the bankruptcy court’s
order resolved the Cherretts’ ability to file a Chapter 7
bankruptcy petition. The order conclusively determined the
discrete issue whether the Cherretts’ debt was primarily non-
consumer and therefore subject to discharge under Chapter 7.
We thus hold that the bankruptcy court’s order denying
Aspen’s motion to dismiss under § 707(b) was final and
appealable to this court.2

B. The Bankruptcy Court Did Not Err by Finding that
   the Housing Loan Was a Non-Consumer Debt.

     1. We Review for Clear Error the Bankruptcy
        Court’s Findings Regarding the Purpose of the
        Debt.



     2
       On December 3, 2014, after Aspen filed a notice of appeal in this
court, the bankruptcy court issued a discharge of the Cherretts’ debts.
Aspen argues that the bankruptcy court did not have jurisdiction to enter
the discharge and that this court should vacate it. But Aspen did not
appeal the discharge to the BAP, seek a stay of proceedings pending
appeal, or amend its notice of appeal. The record does not show any
exceptional circumstances for failing to appeal the issue to the BAP or a
district court. Thus, whether the discharge was erroneously issued is not
properly before us. See Int’l Union of Bricklayers & Allied Craftsman
Local Union No. 20 v. Martin Jaska, Inc., 752 F.2d 1401, 1404 (9th Cir.
1985).
                       IN RE CHERRETT                         11

    If the bankruptcy court applied fact to law in a way that
“‘requires an inquiry that is essentially factual,’ we review it
as if it were a factual finding,” but if the bankruptcy court
applied fact to law in a way that “requires reference to ‘the
values that animate legal principles,’ we review it as if it were
a legal finding.” United States v. Hinkson, 585 F.3d 1247,
1259 (9th Cir. 2009) (quoting United States v. McConney,
728 F.2d 1195, 1202 (9th Cir. 1984) (en banc), abrogated on
other grounds as recognized by Teutscher v. Woodson,
835 F.3d 936, 942 (9th Cir. 2016)). Inquiries that are
essentially factual “include[] questions such as motive, intent,
and negligence.” Id. at 1260. “[M]ixed questions of law and
fact” are those “in which the historical facts are admitted or
established, the rule of law is undisputed, and the issue is
whether the facts satisfy the statutory standard, or to put it
another way, whether the rule of law as applied to the
established facts is or is not violated.” Pullman-Standard v.
Swint, 456 U.S. 273, 289 n.19 (1982). “Mixed questions are
typically reviewed de novo, but, depending on the nature of
the inquiry involved, may be reviewed under a more
deferential clearly erroneous standard.” United States v.
Lang, 149 F.3d 1044, 1047 (9th Cir. 1998), amended by
157 F.3d 1161 (9th Cir. 1998) (emphasis added).

    Aspen argues that because the parties do not dispute the
underlying facts concerning the use of the Housing Loan, de
novo review applies. Aspen further argues that a debt
incurred to purchase a personal residence is a consumer debt
as a matter of law. Aspen cites our holding in Zolg v. Kelly
(In re Kelly), 841 F.2d 908 (9th Cir. 1988), in support of its
arguments.

   The debtors in Kelly filed a Chapter 7 bankruptcy petition
with multiple mortgages against their home. Id. at 910. The
12                    IN RE CHERRETT

bankruptcy court found that the debt was primarily consumer,
but the BAP reversed on the basis that debts secured by real
estate mortgages categorically do not qualify as consumer
debt. Id. at 911. On appeal to this court, the debtors
continued to argue that debts secured by real property can
never be consumer debt. Id. at 912. We disagreed and held
that consumer debt can include mortgages. Id. at 912–13. In
doing so, we reviewed the BAP’s ruling de novo because the
question whether mortgages could ever qualify as consumer
debt was purely one of law. Id. at 911; see also id. at 911–12
(concluding that legal issues predominated where “the Kellys
argue[d] that debts secured by real property are never
consumer debts, relying on floor statements made in the
House and Senate prior to the enactment of the 1978 Act”).

    We did not hold that all debts secured by real property are
consumer debt. In fact, we expressly left open the possibility
that some are not: “While secured debt is not automatically
excluded from consumer debt, it is not automatically included
either. We must look to the purpose of the debt in
determining whether it falls within the statutory definition.”
Id. at 913 (emphasis added). Kelly acknowledged that in
most cases “the purchase of a home and the making of
improvements thereon” will meet the statutory definition of
consumer debt, but it did not fashion a bright line rule. Id.
Aspen’s argument—that because most debts used to purchase
homes are consumer debts, all mortgages must be consumer
debts—is contrary to our case law.

    We have never, as Aspen and the dissent suggest, held
that debts used to purchase homes are consumer debts as a
matter of law, and unlike in Kelly, where there was no dispute
regarding the purpose of the loan, the parties here dispute
whether Cherrett incurred the Housing Loan primarily for a
                           IN RE CHERRETT                               13

business purpose. Whether Cherrett’s primary purpose
satisfies the statutory requirements for a Chapter 7
bankruptcy filing is a mixed question of law and fact.
Although we would typically review such a question de novo,
the bankruptcy court’s weighing of Cherrett’s multiple
motives for incurring the Housing Loan was primarily a
factual, rather than legal, inquiry. See Ornelas v. United
States, 517 U.S. 690, 702 (1996) (“Where a trial court makes
. . . commonsense determinations based on the totality of
circumstances, it is ordinarily accorded deference.”). In this
case, the purpose of the Housing Loan is the sort of
“essentially factual” inquiry that we review for clear error,
United States v. Hinkson, 585 F.3d 1247, 1259 (9th Cir.
2009),3 but we would reach the same result on de novo
review.


    3
      Courts are split on this standard of review. The Eighth Circuit BAP
is in accord with our conclusion that the purpose of a debt is a factual
finding reviewed for clear error. See Lapke v. Mut. of Omaha Bank (In re
Lapke), 428 B.R. 839, 842 (B.A.P. 8th Cir. 2010). The Tenth and Fifth
Circuits have reached the opposite conclusion. See Stewart v. U.S.
Trustee (In re Stewart), 175 F.3d 796, 803 (10th Cir. 1999); Matter of
Booth, 858 F.2d 1051, 1053 n.5 (5th Cir. 1988). But like our decision in
Kelly, the Fifth Circuit’s decision in Booth turned on whether an entire
category of debt must always be consumer or non-consumer, a legal rather
than factual question. See Booth, 858 F.2d at 1055 (“Similarly, the district
court erred in its determination that a signature loan, no matter what use
to which it is put, is always consumer debt.” (emphasis added)). The
same is true of IRS v. Westberry (In re Westberry), 215 F.3d 589 (6th Cir.
2000) and Cypher Chiropractic Ctr. v. Runski (In re Runski), 102 F.3d
744 (4th Cir. 1996), unilluminating cases the dissent suggests we
overlook. The sole issue presented in Westberry was legal: “whether
federal income and self-employment taxes should be considered consumer
debt” categorically. Westberry, 215 F.3d at 590. Runski also addressed
a categorical question: whether medical equipment used at the debtor’s
business was nevertheless intended primarily for personal use solely
because it was titled in the debtor’s name. Runski, 102 F.3d at 747.
14                           IN RE CHERRETT

     2. The Bankruptcy Court Did Not Clearly Err by
        Finding That Cherrett Incurred the Housing Loan
        Primarily for a Non-Consumer Purpose.

    “Consumer debt” is defined as “debt incurred by an
individual primarily for a personal, family, or household
purpose.” 11 U.S.C. § 101(8). We have held that “[d]ebt
incurred for business ventures or other profit-seeking
activities is plainly not consumer debt.” Kelly, 841 F.2d at
913. Courts determine the debtor’s purpose as of the time the
debt was incurred. See Bushkin v. Singer (In re Bushkin),
BAP No. CC-15-1285-KiKuF, 2016 WL 4040679, at *7
(B.A.P. 9th Cir. July 22, 2016).4

    Evidence that a debtor incurred a debt “purely or
primarily as a business investment, albeit an investment in
herself or himself, much like a loan incurred for a new
business,” can serve as an important factor in determining the
debtor’s purpose. Stewart v. U.S. Trustee (In re Stewart),
215 B.R. 456, 465 (B.A.P. 10th Cir. 1997), aff’d, 175 F.3d
796 (10th Cir. 1999) (discussing how courts should determine
a debt’s purpose in the context of student loans). To
determine the purpose of a home loan, it is not sufficient that
a debtor hoped that the asset purchased with it would
appreciate in value. See Cox v. Fokkena (In re Cox),
315 B.R. 850, 855 (B.A.P. 8th Cir. 2004) (holding that it is
insufficient that debtors “subjectively hope[] that [a]
Residence [will] appreciate in value” when “the objective
evidence in the record amply supports the bankruptcy court’s
finding that Debtors incurred the debts primarily for family
or household purposes under § 101(8)”). Instead, it is

     4
         The appeal in Bushkin is currently stayed pending resolution of this
case.
                       IN RE CHERRETT                        15

appropriate to consider all the circumstances indicative of the
debtor’s primary purpose. Westberry, 215 F.3d at 593
(“[W]hile the profit motive analysis may assist in the
determination of which debts are not consumer debt, it does
not prohibit other debts from falling outside of the category
of consumer debt.”); Kestell v. Kestell (In re Kestell), 99 F.3d
146, 149 (4th Cir. 1996) (determining that a debt owed
pursuant to a divorce judgment was consumer debt because
it was not incurred “with a profit motive or in connection
with a business transaction” (emphasis added)) .

    Here, the bankruptcy court found that Cherrett primarily
had a business purpose—not a personal, family, or household
purpose—for incurring the Housing Loan. Cherrett testified
that he accepted Aspen’s offer and the Housing Loan so that
he could “grow in salary and responsibility” and have the
opportunity to oversee expansion of the Little Nell Hotel
brand. The bankruptcy court found that Cherrett incurred the
debt “so he could work at a very prestigious, top of the line,
equal to the Four Seasons, equal to the best hotels in the
world,” resort. The record leaves little doubt that the Housing
Loan helped entice Cherrett to “leave a secured position.”

    Cherrett further testified that when he incurred the
Housing Loan, his family did not intend to relocate to
Colorado with him, and he considered the condominium a
“place holder.” He lived alone in the condominium for two
years, moving only his clothing and some personal effects
from Wyoming. It is clear that the Housing Loan did not go
toward the purchase of a primary residence, or even a
secondary vacation residence, for his family. Indeed, the
condominium did not even accommodate his family of four.
At the time Cherrett incurred the debt, he did not intend to
remain in Colorado for any substantial length of time. In fact,
16                         IN RE CHERRETT

he hoped that he would get the chance to relocate back to
Jackson Hole to spearhead the Little Nell Hotel brand
development there.

    Cherrett purchased the Colorado condominium using the
Housing Loan and relied on the annual bonus of $33,750 for
interest payments.5 The Housing Loan was a below-market-
rate loan that Cherrett likely could only have obtained from
his employer. The lender that originated the loan was an
affiliate of Aspen, controlled by one of Aspen’s principals,
and later transferred the debt to Aspen itself. Without
Aspen’s assistance, Cherrett could not have afforded to buy
real estate close enough to work at Aspen’s Colorado office.
Cherrett also testified that renting a home was not an option
based on both availability and price. The Housing Loan was
a key component of Cherrett’s compensation, made through
his employer, which covered all of his annual out-of-pocket
expenses related to its financing for the first ten years through
bonuses and continued employment. No evidence suggests
the Housing Loan would have been commercially available
on the terms Cherrett received. This is not the ordinary
situation where a person takes out a loan to move closer to a
job for convenience or better schools, for example. This is


     5
      Correspondence confirming Cherrett’s acceptance of Aspen’s job
offer memorialized that Cherrett’s compensation included a “deferred
compensation/executive bonus plan” that was guaranteed to provide
annual bonuses timed to coincide with “the date upon which annual
interest on the [Housing Loan] [was] due.” This arrangement was
designed “to ensure that [Cherrett had] no annual out of pocket expenses
related to the financing of [the] loan” for its first ten years. Before the
bankruptcy court, Aspen’s lawyers characterized this arrangement as the
employer “provid[ing] a bonus to the employee equivalent to the interest
on the loan, pay[ing] itself the interest from that bonus, and pay[ing] the
employee the taxes on that income at the assumed tax rate of 35%.”
                      IN RE CHERRETT                        17

the unusual situation where a person accepts a loan from his
employer as part of a larger transaction to further his career.
On these facts, the bankruptcy court did not clearly err when
it found the Housing Loan and the annual bonus were part of
Cherrett’s negotiated compensation package, undertaken for
a business purpose connected to furthering his career, rather
than a personal, family, or household expense. See Bushkin,
2016 WL 4040679, at *8 (explaining that in this case, “the
home loan had a business purpose” because “it was an
integral part of the business arrangement between the
parties”).

                    IV. CONCLUSION

   We affirm the BAP’s judgment on the order denying
Aspen’s motion to dismiss.

   AFFIRMED.



NGUYEN, Circuit Judge, dissenting:

    The majority applies the wrong standard of review,
creating a circuit split in the process, and with undue
deference to the Bankruptcy Appellate Panel’s (“BAP”)
erroneous decision, affirms it. When a case involves
undisputed facts and the only issue is the legal conclusion to
be drawn from those facts, review is de novo. As for the
substantive law, it’s clear: When you take out a loan to buy
property at which you plan to reside for at least two years
without renting it out or otherwise profiting from it, the loan
is consumer debt. I therefore dissent.
18                     IN RE CHERRETT

                               I.

    According to the majority, “whether Cherrett incurred the
Housing Loan primarily for a business purpose” is an
“essentially factual” dispute. Maj. Op. at 12–13. That simply
isn’t true. The parties agree that there are no factual disputes,
including Cherrett’s subjective intent in obtaining the
Housing Loan. Compare Aspen’s Opening Br. at 7 (asserting
that “[t]he only facts found to be relevant by any prior court
are undisputed” while acknowledging Cherrett’s contention
“that other, undisputed facts . . . are also relevant”), with
Cherrett’s Br. at 6 (“None of the facts in this case are in
contention . . . . Aspen has not asserted that any mistake was
committed by the Bankruptcy Court in its findings of fact.”).

    What the parties contest is whether these undisputed
facts—including, to the extent relevant, Cherrett’s various
reasons for obtaining the Housing Loan—render the Loan
“debt incurred by an individual primarily for a personal,
family, or household purpose.” In re Kelly, 841 F.2d 908,
912 (9th Cir. 1988) (quoting 11 U.S.C. § 101(8)). Kelly held
in no uncertain terms that when “the underlying facts are not
disputed,” the question of “whether [a particular debt]
qualifies as a ‘consumer debt’ under” the Bankruptcy Code
“is one in which legal issues predominate and is thus subject
to de novo review.” Id.

    As a three-judge panel, we aren’t free to disregard our
prior holdings. See Miller v. Gammie, 335 F.3d 889, 899 (9th
Cir. 2003) (citing the “unassailable” proposition “that a three-
judge panel may not overrule a prior decision of the court”).
Not only that, it’s beyond debate that “where no facts are in
dispute our entire review is de novo.” Norcia v. Samsung
Telecomms. Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017)
                       IN RE CHERRETT                         19

(quoting Davis v. Nordstrom, Inc., 755 F.3d 1089, 1091 (9th
Cir. 2014)); see also In re Crawford, 194 F.3d 954, 957 (9th
Cir. 1999) (“Because the relevant facts here are undisputed,
our review focuses on the bankruptcy court’s legal
conclusions, which are subject to de novo review.”). This
firmly settled standard is an outgrowth of the principle,
fundamental to Anglo-American jurisprudence, that “it is the
province of the trial court to decide questions of fact, [and] of
the appellate court to decide questions of law . . . .” Reay v.
Butler, 30 P. 208, 209 (Cal. 1892); see Bose Corp. v.
Consumers Union of U.S., Inc., 466 U.S. 485, 501 (1984)
(recognizing “an appellate court’s power to correct errors of
law, including those that may infect a so-called mixed finding
of law and fact, or a finding of fact that is predicated on a
misunderstanding of the governing rule of law”); Wiscart v.
D’Auchy, 3 U.S. (3 Dall.) 321, 329 (1796) (“[T]he law directs
that in cases of appeal, part shall be decided by one tribunal,
and part by another; the facts by the court below, and the law
by this court. Such a distribution of jurisdiction has long
been established in England.”); cf. In re McLinn, 739 F.2d
1395, 1400 (9th Cir. 1984) (en banc) (rejecting as “unsound”
the “assumption that the district judge has some particular
knowledge or experience in the field of law in issue that is to
be given great weight apart from the authorities presented by
the parties or articulated by the district judge”).

    This principle is, for example, the reason why
“[d]ecisions of the BAP are reviewed de novo.” Maj. Op. at
8 (quoting In re Su, 290 F.3d 1140, 1142 (9th Cir. 2002)).
The BAP acts in an appellate capacity, deciding questions of
law based on facts determined in the bankruptcy court.
Because we also review legal questions de novo, it makes no
difference whether we formally review the BAP’s
determinations or the bankruptcy court’s, for “we are in as
20                      IN RE CHERRETT

good a position as the BAP to review bankruptcy court
rulings.” In re Findley, 593 F.3d 1048, 1050 (9th Cir. 2010)
(quoting In re Taggart, 249 F.3d 987, 990 (9th Cir. 2001));
see In re Burley, 738 F.2d 981, 986 (9th Cir. 1984).

    “[B]ecause the application of law to fact will generally
require the consideration of legal principles, . . . most mixed
questions will be reviewed independently,” i.e., under a de
novo standard. United States v. McConney, 728 F.2d 1195,
1204 (9th Cir. 1984) (en banc), abrogated on other grounds
by Pierce v. Underwood, 487 U.S. 552, 557–63 (1988). An
“application of the rule of law to the facts” is an “essentially
factual” inquiry if it is “founded ‘on the application of the
fact-finding tribunal’s experience with the mainsprings of
human conduct,’” id. at 1202 (quoting Comm’r v. Duberstein,
363 U.S. 278, 289 (1960)), or if “some of the elements that
bear upon [the legal question] may be known only to the
district court,” Pierce, 487 U.S. at 560. That isn’t the case
here. Like the BAP, we are determining whether certain
agreed-upon facts fall within a statutory definition.

    Nor is this a case that involves “a multifarious and novel
question, little susceptible . . . of useful generalization,” id. at
562. The majority isn’t publishing our decision today
because of its importance to Cherrett—though he will
undoubtedly be relieved to avoid his debt obligation. Rather,
the majority understands that other debtors will find
themselves in similar circumstances and will need guidance
as to the legal characterization of their debt.

    The majority asserts that “[c]ourts are split on this
standard of review.” Maj. Op. at 13 n.3. They aren’t, aside
from the wayward Eighth Circuit BAP decision that the
majority cites. Every circuit (including our own in Kelly) to
                         IN RE CHERRETT                            21

review a bankruptcy court’s ruling on whether a particular
obligation is “consumer debt” has done so de novo. The
majority acknowledges two such cases: In re Stewart,
175 F.3d 796, 803 (10th Cir. 1999), and In re Booth, 858 F.2d
1051, 1053 n.5 (5th Cir. 1988). There are others. See In re
Westberry, 215 F.3d 589, 590 (6th Cir. 2000) (“The issue
presented here, whether federal income taxes should be
considered consumer debt for purposes of 11 U.S.C. § 1301,
is a question of law, which we review de novo.”); In re
Runski, 102 F.3d 744, 745, 747 (4th Cir. 1996) (“determining
whether debt is for ‘personal, family, or household purposes’
under § 101(8)” to “aid in determining the proper meaning of
the nearly identical language found in § 722” and appearing
to treat the question as a matter of statutory construction,
“subject to plenary review”). Today the majority needlessly
creates an intra- and inter-circuit split.1

                                 II.

    “It is difficult to conceive of any expenditure that serves
a ‘family . . . or household purpose’ more directly than does
the purchase of a home . . . .” Kelly, 841 F.2d at 913. The
condo that Cherrett purchased with the Housing Loan may
not have felt to him like a “home” in an emotional sense
given that his wife and children were living in a different
state for much of the time. That Cherrett’s heart was in
Wyoming shows only that his Colorado condo may not have
been his legal domicile, i.e., that “true, fixed, principal, and
permanent home, to which [a] person intends to return and
remain even though currently residing elsewhere.” Domicile,


    1
      There’s no reason for the majority’s oddly deferential approach.
The majority acknowledges that it would reach the same result under de
novo review. Maj. Op. at 13.
22                    IN RE CHERRETT

Black’s Law Dictionary (10th ed. 2014). It was, however, his
“home” in the legal sense of being his “dwelling place,”
Home, Black’s Law Dictionary (10th ed. 2014), or “principal
residence,” 11 U.S.C. § 101(13A). A “temporary home” (as
Cherrett described it), perhaps—but still a home. Cherrett
intended to live there for at least two years. Cf. Stolk v.
Comm’r, 40 T.C. 345, 356 (1963) (holding that New York
apartment where taxpayer moved to be near his office was his
“principal residence” for a year notwithstanding weekend and
holiday trips to his Virginia farm where he and his wife
planned to settle).

    I agree with the majority that the Housing Loan’s
classification as consumer or non-consumer debt should be
based on the purpose of the debt at the time Cherrett incurred
it. And the majority properly rejects any contention that the
debt was for a business purpose merely because Cherrett
expected eventually to profit from the “skyrocketing” housing
prices in the Aspen area. In re Cherrett, 523 B.R. 660, 672
(B.A.P. 9th Cir. 2014). Virtually all homebuyers in certain
regions of the country expect to profit when they sell their
homes.

    But the majority conflates Cherrett’s purpose in moving
to Colorado with his purpose in taking out the Housing Loan.
The fact that he moved to Colorado primarily if not
exclusively for business purposes proves too little. Under the
majority’s analysis, a person could move her family across
town in order to be closer to a new job and, if she takes out a
home loan to finance her new residence, it would be for a
business rather than a personal, family, or household purpose.
It makes no difference that this hypothetical move is out of
convenience and Cherrett’s was arguably out of necessity. A
person’s primary purpose in making a decision isn’t
                      IN RE CHERRETT                       23

dependent on the existence of alternative options. Moreover,
how is a court even to determine whether it’s necessary to
purchase a new home for work purposes? Here, for example,
there’s no evidence that Cherrett needed to take a new job out
of state. He made $225,000 a year in Wyoming and “was
very happy in [his] position.”

    This line of reasoning ignores the statutory text. The
statute defines “consumer debt” as “debt incurred by an
individual primarily for a personal, family, or household
purpose.” 11 U.S.C. § 101(8) (emphasis added). It is the
purpose of the debt—i.e., what the debt is used for—that
matters. The debtor’s indirect purposes are irrelevant.

     Until now, this is the approach we have taken. See In re
Price, 353 F.3d 1135, 1139 (9th Cir. 2004) (“Under Kelly,
whether or not a particular secured debt is excluded from
inclusion as ‘consumer debt’ under § 707(b) depends on the
purpose of the debt.”). In Price, we explained that “Price’s
personal residence was secured by two mortgages. The first
. . . [was] incurred to purchase the home; the second . . .
incurred to finance household improvements.” Id. Thus,
there was “no question that the secured debt at issue was
incurred ‘primarily for a personal, family or household
purpose’ and must be considered ‘consumer debt’ for the
purposes of § 707(b).” Id. We did not examine Price’s
motivation for purchasing a personal residence and making
improvements to it.
24                         IN RE CHERRETT

    The legislative history supports this interpretation.2
Congress adapted the Bankruptcy Code’s definition of
“consumer debt” from the consumer protection laws—in
particular the Truth in Lending Act (“TILA”), 15 U.S.C.
§ 1602(i), which contains a similar definition. See In re
Booth, 858 F.2d 1051, 1054 (5th Cir. 1988). Compare
11 U.S.C. § 101(8) (“The term ‘consumer debt’ means debt
incurred by an individual primarily for a personal, family, or
household purpose.”), with 15 U.S.C. § 1602(i) (“The
adjective ‘consumer,’ used with reference to a credit
transaction, characterizes the transaction as one in which the
party to whom credit is offered or extended is a natural
person, and the money, property, or services which are the
subject of the transaction are primarily for personal, family,
or household purposes.”). For that reason, courts interpreting
the Bankruptcy Code’s definition of “consumer debt” look to
TILA and cases interpreting it. See Booth, 858 F.2d at 1054;
In re Almendinger, 56 B.R. 97, 99 (Bankr. N.D. Ohio 1985).

    In determining whether a transaction is commercial or
personal for the purposes of TILA, we generally consider the
factors employed by the Federal Reserve Board under
Regulation Z, 12 C.F.R. pt. 226 supp. I, subpt. A, § 226.3(a).
See Bloom v. I.C. Sys., Inc., 972 F.2d 1067, 1069 (9th Cir.
1992). Crucially, “[c]redit extensions by a company to its
employees” are “consumer-purpose” loans under the
regulations “if the loans are used for personal purposes.” Id.

     2
      To be fair, there is support in the legislative history that “consumer
debt does not include a debt to any extent the debt is secured by real
property.” 124 Cong. Rec. 32,393 (1978) (statement of Rep. Edwards).
However, Kelly and “most [other] courts have declined to follow this
legislative history and instead include home mortgages in the
determination of whether a debtor has primarily consumer debts.”
6 Collier on Bankruptcy ¶ 707.04[2][b] (16th ed. 2017).
                       IN RE CHERRETT                        25

pt. 226, supp. I, subpt. A, § 226.3(a)(3)(iii)(A). That’s
precisely the situation here. Aspen subsidized Cherrett’s
condo loan, but the condo itself was used for a personal
purpose—Cherrett lived there. “[D]ebt incurred to purchase
the debtor’s principal residence . . . is a ‘consumer debt’
under [11 U.S.C.] § 101(8).” In re Fadel, 492 B.R. 1, 15
(B.A.P. 9th Cir. 2013) (citing Kelly, 841 F.2d at 913); see
also 15 U.S.C. § 1602(x) (defining “residential mortgage
transaction” as “a transaction in which a . . . consensual
security interest is created or retained against the consumer’s
dwelling to finance [its] acquisition”); cf. Slenk v. Transworld
Sys., Inc., 236 F.3d 1072, 1076 (9th Cir. 2001) (looking to
“the actual use to which [a] backhoe was put” in concluding
that its financing was consumer debt under the similarly
worded Fair Debt Collection Practices Act, 15 U.S.C.
§ 1692a(5), because “the backhoe was used strictly for
personal use, and was never used by [the owner’s
company]”).

    The majority theorizes that Cherrett’s debt is work-related
because he incurred it as an incident of his employment; even
though the loan money was directly used to purchase his
residence, it was indirectly used as a means of extracting
more income from his employer in the form of subsidized
interest. The majority emphasizes that Cherrett could not
have afforded to live close to his new job without this
housing assistance. Maj. Op. at 16.

       The Tenth Circuit rejected a similar argument about a
loan’s ultimate purpose in Stewart. The debtor borrowed
$320,000 from his former in-laws, which “his ex-wife used
. . . to support their family, including use for house payments,
groceries, pre-school, children’s activities, moving expenses,
and family vacations” while he pursued a medical degree so
26                     IN RE CHERRETT

that he could earn more money for his family. 175 F.3d at
807. The Tenth Circuit concluded that “the main purpose of
these loans was [not] to finance [the debtor’s] actual
educational expenses. Rather, [he] used the money to support
his family because he did not earn enough for his family to
live comfortably.” Id. The Tenth Circuit also concluded that
“a substantial portion of [the debtor’s $200,000 in] student
loan debt is indeed ‘consumer debt’” because it “went toward
his family’s expenses.” Id. In short, Stewart repudiated the
idea that a loan could be for a particular purpose just because
it indirectly facilitated that goal.

    To see the difficulties the majority’s analysis entails, one
need look no further than the instant case. Cherrett’s
purposes were several: He needed a place in Colorado to live
and sleep when not at work or visiting his family in
Wyoming. That’s a consumer purpose. Cherrett’s reason for
being in Colorado was to take a new job, which is a business
purpose. But the “primary driver” for Cherrett in accepting
the new job was that he might “end up” in Jackson Hole with
his family “for the mid to long term” if and when Aspen
expanded its operations there. That’s a personal purpose.
Under the majority’s holding, any of these purposes could
have been found controlling. The characterization of
Cherrett’s loan as business debt turned only on the whims of
the bankruptcy court.

     The majority contends that this was not an “ordinary”
home loan because Cherrett’s employer “covered all of his
annual out-of-pocket expenses related to its financing for the
first ten years” so long as Cherrett remained in his job. Maj.
Op. at 16. That is enormously inaccurate.
                           IN RE CHERRETT                              27

    Aspen didn’t pay the interest that Cherrett owed on the
debt. Aspen merely compensated him for the interest
payments that he was contractually obligated to make to the
lender—a third party—on commercially reasonable terms.3
Although from Cherrett’s perspective, Aspen’s bonuses made
his obligation to make interest payments relatively painless,
the two were legally unrelated. Home mortgage interest
payments potentially reduce one’s tax liability, whereas the
bonuses from Aspen increased Cherrett’s tax burden. For that
very reason, Aspen provided Cherrett with additional
compensation to cover most (but not all) of his assumed 35%
tax liability on the bonuses.4

    This compensation for interest and taxes, a total of
$33,750 per year, isn’t at issue. What’s at issue is Cherrett’s
indebtedness on the loan. Cherrett wasn’t entitled to the
housing compensation unless “[t]he proceeds of the loan
[were] used to acquire [the] condominium.” And so they
were.

    The majority’s holding today does not help debtors so
much as create massive uncertainty for lenders in gauging the
riskiness of home loans, thereby imposing greater financing
costs on homebuyers. The majority replaces Kelly’s
straightforward standard—all loans to purchase a home are
consumer debt—with an unworkable one that requires lenders

    3
       The $500,000 note, secured by a second deed of trust in favor of
Areljay, L.P., the lender, required interest payments at a rate of 5% per
year during the loan’s 10-year term. Cherrett agreed to repay the principal
at the end of the loan term or it would be subject to a 10% annual interest
rate thereafter.
    4
      Cherrett was out of pocket about $3,000 per year in uncompensated
taxes based on the assumed tax rate of 35%.
28                      IN RE CHERRETT

to assess a homebuyer’s amorphous purposes in changing
residences.    Since lenders cannot easily make this
determination, interest rates for all homebuyers will rise.
Lenders unable to predict whether particular homebuyers can
potentially abuse the bankruptcy process to write off
mortgage debt will face higher risks for which they must be
compensated.

                               III.

    Properly classifying the Housing Loan as consumer debt
would not preclude Cherrett from obtaining bankruptcy relief.
“[T]he existence of primarily consumer debt alone does not
result in dismissal under § 707(b), because the bankruptcy
court must still make a finding of substantial abuse.” Price,
353 F.3d at 1139. This factual finding is based on a number
of case-specific factors, and the bankruptcy court is
appropriately afforded considerable discretion in making it.
See id. at 1140. “Consequently, a debtor truly in need of a
fresh start will not be subject to dismissal” just because the
majority of his debt is a home loan. Id. at 1139 (citing Kelly,
841 F.2d at 913).

     I respectfully dissent.
