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United States Court of Appeals,Ninth Circuit.

IN RE: Angie M. GARCIA, AKA Angel Garcia, AKA Angie Marie Garcia, Debtor. Orange County's Credit Union, Appellant, v. Angie M. Garcia, Appellee, United States Trustee and Charles W. Daff, Chapter 7 Trustee, Trustees.

No. 11–56076.

    Decided: March 05, 2013

Before: ALEX KOZINSKI, Chief Judge, BARRY G. SILVERMAN, Circuit Judge, and JED S. RAKOFF, Senior District Judge.**Robert M. Dato and Joseph M. Welch, Buchalter Nemer, Irvine, CA, for Creditor–Appellant. Anerio V. Altman, Lake Forest, CA, for Debtor–Appellee.


We hold today that a motor vehicle, even a Mercedes, may fall within California's so-called “wildcard” or “grubstake” exemption. Cal.Civ.Proc.Code § 703.140(b)(5). We also hold that if an exempt vehicle is a tool of the debtor's trade and is secured by a nonpossessory, nonpurchase-money lien, the debtor can avoid the lien pursuant to 11 U.S.C. § 522(f)(1)(B). The district court so ruled and remanded the case to the bankruptcy court to determine whether the vehicle in question, a 2001 Mercedes 320E sedan, was in fact a tool of the debtor's trade as a real estate agent, or just a sweet ride. The lien-holder appealed. We affirm.


In November 2006, Angie Garcia, a real estate agent, borrowed $22,160 from Orange County's Credit Union and used her Mercedes as collateral. The credit union perfected a nonpossessory, nonpurchase-money lien on the vehicle.

Garcia filed for Chapter 7 bankruptcy and listed the outstanding balance of the loan as $12,715.50. She claimed that the car, valued at $5,350, was exempt from her bankruptcy estate under California Civil Procedure Code § 703.140(b)(5). That section allows a debtor to exempt up to $18,350 in “any property.”1 Garcia also moved to avoid the lien on the car pursuant to 11 U.S.C. § 522(f)(1)(B). That section allows debtors to avoid nonpossessory, nonpurchase-money liens on exempt property that is a tool of the debtor's trade.2

The bankruptcy court ruled that the California wildcard exemption could not be used for vehicles like Garcia's because other sections of the California exemption statutes deal with them explicitly. It also ruled that Garcia could not use the lien avoidance provisions of 11 U.S.C. § 522(f)(1)(B) because motor vehicles were explicitly mentioned in other portions of the statute, (e.g., § 522(d)(2)), and because the legislative history behind § 522(f) did not support avoiding liens on luxury items.

The district court reversed. As for the California wildcard exemption, the district court ruled that “any property” means just that—any property—up to the statutory amount. Quoting In re Taylor, 861 F.2d 550, 553 (9th Cir.1988), the court also ruled that “[l]ien avoidance on motor vehicles as tools of the debtor's trade ․ is generally allowed in situations where the vehicle is necessary to the debtor's trade, and the state has opted out of the federal laundry list.” The court remanded the case to the bankruptcy court for further factual findings to determine whether Garcia's Mercedes is indeed a tool of her trade.


We have jurisdiction to hear appeals from a district court's ruling on a bankruptcy court's final order, judgment, or decree under 28 U.S.C. § 1291. Although the district court's order reversed and remanded to the bankruptcy court for further factual findings, we may exercise jurisdiction if the issues on appeal are legal “in nature and [their] resolution either (1) could dispose of the case or proceedings and obviate the need for factfinding; or (2) would materially aid the bankruptcy court in reaching its disposition on remand.” In re Scovis, 249 F.3d 975, 980 (9th Cir.2001) (citing Lundell v. Anchor Constr. Specialists, 223 F.3d 1035, 1038 (9th Cir.2000)).

Here, the issues are purely legal. On appeal, we consider whether California Civil Procedure Code § 703.140(b)(5) permits the exemption of a motor vehicle and whether 11 U.S.C. § 522(f)(1)(B) permits lien avoidance on the same. As the district court noted, the bankruptcy court resolved these issues as a matter of law and made no factual findings.

We review de novo the district court's decision, In re AFI Holding, Inc., 525 F.3d 700, 702 (9th Cir.2008), and the bankruptcy court's interpretation of the Bankruptcy Code, Blausey v. U.S. Trustee, 552 F.3d 1124, 1132 (9th Cir.2009).


Generally, when a debtor files Chapter 7 bankruptcy, all of the debtor's property becomes the property of the bankruptcy estate. 11 U.S.C. § 541. Federal law, however, provides avenues for the debtor to exempt certain property. 11 U.S.C. § 522(d). This exemption scheme can be supplanted by states that choose to provide their own menu of exemptions. 11 U.S.C. § 522(b)(2); see also In re Granger, 754 F.2d 1490, 1490, 1492 (9th Cir.1985) (“[A] state that has opted out has considerable freedom in creating exemptions and eligibility requirements for those exemptions.”). California is one such state, providing its own exemption scheme in California Civil Procedure Code §§ 703.130 and 703.140.

We agree with the district court that as a purely legal matter Garcia is not prevented from exempting a motor vehicle up to the maximum allowable amount under California Civil Procedure Code § 703.140(b)(5). Section 703.140(b)(5) permits a debtor to exempt her “aggregate interest, not to exceed in value nine hundred twenty-five dollars ($925) plus any unused amount of the exemption provided under paragraph (1), in any property.” Cal.Civ.Proc.Code § 703.140(b)(5) (2010) (emphasis added). Paragraph (1) states that a debtor can exempt up to $17,425 in certain types of real or personal property. Id. § 703.140(b)(1) (2010). Thus, these two paragraphs combine to allow a debtor to exempt up to $18,350 in “any property.” “Any” means any, and fancy cars are not excluded.

The final question is whether a lien on a motor vehicle can be avoided under 11 U.S.C. § 522(f)(1)(B) as a tool of the debtor's trade. As the district court correctly ruled, the answer is “yes.” In re Taylor, 861 F.2d at 553.

It remains to be seen whether Garcia's car qualifies as a tool of her trade. We affirm the district court's remand to the bankruptcy court for that factual determination, and likewise affirm the district court's ruling in all other respects.


SILVERMAN, Circuit Judge:

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