Memorandum of Decision Re: Homestead Exemption

FOR THE NORTHERN DISTRICT OF CALIFORNIA In re ALLEN and CHERYL BARKER,                                       No. 1-84-00961      Debtor. ___________________________/
Memorandum and Order on Homestead Exemption
     Debtor Allen Barker has claimed his residence at 32 Perch Street, Eureka, California, as exempt in the amount of $75,000.00 pursuant to California Code of Civil Procedure section 704.710 et seq. The reason for claiming the exemption under that section (Article 4) and not the declared homestead provisions (Article 5) is unclear, as it appears that the debtor had recorded a declaration of homestead. Nonetheless, the court must decide the issue as presented. The Trustee and Allen's former spouse, Cheryl Barker, have objected on the grounds that (1) he was not residing in the Perch Street property when he filed his bankruptcy petition and (2) the maximum exemption to which he could be entitled is only $55,000.00.      The evidence taken by the court established that when the debtors filed their bankruptcy petition they resided together at the separate property home owned by Cheryl Barker. Although Allen maintained a bed at the Perch Street property, kept some clothes there, received his mail there and sometimes spent the night there, he used the Perch Street property mainly as an office and was clearly residing with his wife in her home when they filed their bankruptcy petition.      Allen's sole cite in support of his position is a 1958 California case holding that a declared homestead survives a move away. The case is inapplicable to an Article 4 claim of exemption.The controlling statute for an Article 4 claim of exemption is Code of Civil Procedure section 704.710(c), which defines "homestead" as "the principal dwelling (1) in which the debtor . . resided on the date the judgment creditor's lien attached to the dwelling, and (2) in which the judgment debtor . . . resided continuously thereafter until the date of the court determination that the dwelling is a homestead."      While Allen established that he occasionally resided at the Perch Street property, when he filed his bankruptcy petition his principal dwelling was his wife's home. The Article 4 exemption clearly does not allow a debtor to claim a homestead in property which was not his principal dwelling. Thus, it does not appear that Allen has met the requirements for a valid homestead exemption under California law.      The legislative Committee Comments regarding the 1983 amendment to section 704.710 are instructive. The amendment deleted the word "actually" before the word "resided" in order " to avoid a possible construction that a person temporarily absent (such as a person on vacation or in the hospital) could not claim a dwelling exemption . . . merely because the person is temporarily absent, even though the dwelling is the person's principal dwelling and residence." 17 Cal.L.Rev.Comm Reports 854 (1983). In this case, Allen was more than temporarily absent; while he occasionally resided at the Perch Street property, and it was his principal residence in the sense that it was the only residence he owned, it was not his principal dwelling when he filed his bankruptcy petition and therefore he is not entitled to the exemption.      It should be noted that the above statutory provisions apply only to the "automatic homestead" provisions of CCP sections 704.710 et seq.; they do not apply to the declared homestead exemption under sections 704.910 et seq. Moving away from an Article 4 homestead destroys its exempt status, but moving away from an Article 5 homestead may not; The controlling case on this issue, In re Anderson (9th Cir. 1987) 824 F.2d 754, 757, seems ambiguous. Thus, the court's ruling might be different if Allen had claimed his exemption under Article 5, depending on how Anderson is interpreted.      Because Allen's Article 4 homestead rights were completely destroyed when he moved in with his wife, the court need not decide what the amount of the homestead exemption is. It is therefore
ORDERED that the objections to the homestead exemption are sustained, with leave to amend.
Dated: April 16, 1990                                                                              _______________________                                                                                                                      Alan Jaroslovsky                                                                                                                      U.S. Bankruptcy