Schoenmann v. Doore

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-1-	MEMORANDUM DECISION
UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re
RALPH F. DOORE,
Debtor.
E. LYNN SCHOENMANN, Trustee,
Plaintiff,
vs.
RALPH F. DOORE,
Defendant.
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Case No. 04-33224 TCLS
Chapter 7
Adv. Proc. No. 07-3107 TC
MEMORANDUM DECISION
The above-entitled action came to trial on September 30, 2008.
Kristina Pollak appeared for Plaintiff Trustee. 	Defendant appeared
in pro per. 	Upon due consideration, the court hereby issues the
following decision, which shall constitute its findings of fact and
conclusions of law.
FACTS
Debtor filed a chapter 7 petition on November 17, 2004. 	In
Signed and Filed: October 07, 2008
________________________________________
THOMAS E. CARLSON
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
October 07, 2008
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 07-03107 Doc# 34 Filed: 10/07/08 Entered: 10/07/08 12:38:03 Page 1 of 4

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1 Debtor claimed the Property exempt under Cal. C.C.P.
§ 703.140(b)(1), which at the time the petition was filed provided
for an exemption in the amount of $17,425 in real property used as
a residence.
-2-	MEMORANDUM DECISION
his schedules, Debtor listed a 1/6 interest, subject to a life
estate, in real property in Port Angeles, Washington (the
Property). 	Debtor claimed an exemption in the Property in the
amount of $13,000, and listed the value of the Property as $13,000.
Trustee did not file an objection to this claim of exemption.
Trustee alleged that she notified Debtor at the meeting of
creditors in December 2004 that she claimed an interest in the
Property to the extent the value exceeded the claimed exemption,
but at trial Trustee introduced no evidence of such a warning.
Trustee also alleged that she sent Debtor a letter to the same
effect in February 2005, but introduced no evidence of such a
letter at trial. 	Debtor received a discharge in February 2005.
In September 2005, Debtor sold his 1/6 interest in the
Property to a co-owner (Debtor’s aunt) for $44,024. 	In April 2007,
Trustee conducted a Rule 2004 examination of Debtor, at which
Debtor admitted that he had sold the Property, and at which he said
he had spent all of the sale proceeds. 	Trustee then brought the
present action, in which she seeks to revoke Debtor’s discharge and
to recover the amount by which the sale proceeds exceed the
exemption claimed.
DISCUSSION
Debtor is liable for the excess sale proceeds. 	Debtor listed
the Property in his schedules. 	The Property was exempt to the
extent of the exemption claimed. 	Because Debtor invoked an
exemption that is limited to a dollar amount 1, the estate is
entitled to any proceeds of sale that exceed the amount of the
Case: 07-03107 Doc# 34 Filed: 10/07/08 Entered: 10/07/08 12:38:03 Page 2 of 4

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28 	2 The wildcard exemption in effect when Debtor filed
bankruptcy equaled $17,425. 	Cal. C.C.P. § 703.140(b)(1). 	Debtor
used only $16,300 of this amount.
-3-	MEMORANDUM DECISION
exemption. 	Hyman v. Plotkin, 967 F.2d 1316 (9th Cir. 1992); In re
Morgan-Busby, 272 B.R. 257, 265 (9th Cir. BAP 2002). 	Thus, Debtor
is liable for the $29,899 by which the sale proceeds exceed the
$13,000 claimed exemption plus $1,125 that Debtor was entitled to
claim as exempt but did not. 2 	Debtor’s testimony that the Property
was not worth the full $44,024 for which he sold the Property is
not helpful to Debtor. 	He is obligated to the estate for the
amount received for the Property, less the claimed exemption.
Debtor’s testimony that he could have arranged to sell the Property
to his aunt for $13,000 and have her make him a gift of the
additional $29,899 is also unpersuasive. 	The aunt did not testify,
and there is no evidence that any portion of the $44,024 received
was in fact a gift rather than payment for the Property.
Debtor’s discharge should not be revoked. 	Debtor did convert
property of the estate. 	But such an act is not a basis for
revocation of discharge unless it was done with fraudulent intent.
11 U.S.C. § 727(a)(2), (d)(2)-(3). 	Debtor claimed the Property as
fully exempt. 	Trustee did not file any objection to that claim of
exemption. 	The evidence presented at trial indicates that Debtor
believed the Property was his to do what he wished with, and that
Debtor therefore did not act fraudulently in selling the Property
and spending the proceeds.
The court declines to award attorney fees on the record
presented.
**END OF MEMORANDUM DECISION**
Case: 07-03107 Doc# 34 Filed: 10/07/08 Entered: 10/07/08 12:38:03 Page 3 of 4

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Court Service List
Ralph F. Doore
2 Hillview Court
San Francisco, CA 94124-2487
Kristina Pollak, Esq.
Stromsheim and Associates
201 California Street, Suite 350
San Francisco, CA 94111
Case: 07-03107 Doc# 34 Filed: 10/07/08 Entered: 10/07/08 12:38:03 Page 4 of 4