[00:00:13] Speaker 02:
Okay. We see Mr. Kohler. Can you hear us?

[00:00:17] Speaker 01:
Yes, I can, Your Honor.

[00:00:18] Speaker 02:
Okay. Would you like to reserve a little time for rebuttal?

[00:00:22] Speaker 01:
Yes, I would. I think five minutes is... Okay.

[00:00:25] Speaker 02:
Now, can you see a clock from where you are?

[00:00:28] Speaker 01:
Yes, I can.

[00:00:28] Speaker 02:
Okay, so I'll give you the same caveat that you can stop any time you want and you can invade your time if you want. We'll give you a gentle reminder if you're invading it, okay?

[00:00:37] Speaker 01:
Okay, I expect my opening remarks will be short.

[00:00:41] Speaker 02:
Okay.

[00:00:42] Speaker 01:
Hopefully. Well, please proceed. Okay, thank you, Your Honor.

[00:00:48] Speaker 01:
Basically, the fundamental issue here in front of the court is the issue of public policy and homestead exemptions The federal courts and state courts are very strongly in favor of the homestead exemption. And the issue before is the court made an error in denying my homestead exemption.

[00:01:14] Speaker 01:
The federal statutes, in particular, in Ray Smith's state that it did or may use Section 522F to avoid a homestead notwithstanding the waiver of a homestead exemption. I don't think that there's any evidence presented in this appeal or in the trial court that there was a waiver of a homestead exemption as required.

[00:01:44] Speaker 03:
Mr. Kohler, there wasn't a waiver, but there was a prior adjudication, which an understanding is that you, through counsel, stipulated to allow your appeal to continue. and to remain and proceed in chapter 13.

[00:02:00] Speaker 03:
So by the time you amended it, why hadn't that decision already been made?

[00:02:08] Speaker 01:
Well, I did a motion to the court that I never agreed. I never signed any document.

[00:02:14] Speaker 03:
You had a lawyer. I mean, you had a lawyer.

[00:02:17] Speaker 01:
He had a lawyer, yeah.

[00:02:20] Speaker 01:
But he flip-flops in the first hearing in August to the second hearing. He says, well, there's some agreement. But the agreement is very ambiguous as to what it is, just the way that the homestead exemption.

[00:02:32] Speaker 03:
No, it's just an agreement that an objection to your exemption will be sustained. And it is clear that that is taking out all homestead exemptions because it applies to that one and any that could be made. And that's the basis by which you go forward and then confirm your plan, which recognizes the effect of that, which is the creation of a lien prior to any interest that you had.

[00:02:56] Speaker 01:
Well, I beg your pardon, Your Honor, but apparently, as I read the record, if I hadn't agreed supposedly to this waiver of a homestead exemption, then I suppose a court would have turned the Chapter 13 into a 7.

[00:03:16] Speaker 03:
No, not necessarily, because you wanted to continue to challenge the underlying appeal for the judgment, is my understanding. You did. And it went to the Court of Appeals and then petitioned for review. So, I mean, that was kind of the deal, you know, in the court's parlance, that was the deal that was struck.

[00:03:39] Speaker 01:
Well, when the court said in the August hearing about, there was discussion about whether I should appear for the September hearing, which I had no notice of from my attorney. If you look at my motion, there's colloquially of emails that are unresponded to by my attorney. And I, at least in the state court, I can't speak for the public court, but in the state court, when something very substantive is being weighed, the court wants to hear directly from the party. And that was not done here.

[00:04:09] Speaker 01:
The requirements of the state statute for waiver of a homestead exemption were never met here. This could easily be resolved by the court issuing an order, okay, prepare the papers, for the waiver and file. And then I'll give you permission to file those papers. Those papers were never prepared. And, uh, uh, there was no waiver. There's no, any, nothing in the entire record before the court, which the, uh, creditor here has urged the court to look at. There's nothing anywhere that says I'm considering waiving my homestead exemption.

[00:04:45] Speaker 01:
Uh, we have Schwab speaking, but, but, but not me. And, uh, And I've stated under oath in my motion, I've never received anything from Mr. Schwab on this subject. I've gone over my emails, everything.

[00:05:00] Speaker 03:
Why isn't that a matter between you and your counsel then? I hate to say that, but I mean, in the system that we have, there was no appeal of the original order.

[00:05:11] Speaker 03:
The Chapter 13 went on for a considerable amount of time. There was no action taken at either of those times to raise these matters. Why aren't they final and done?

[00:05:23] Speaker 01:
Because even if you sign the declaratory homestead exemption, the automatic exemption cannot be defeated by the trustee. I mean, that's why the state came up with the automatic homestead exemption to protect the debtor in these circumstances.

[00:05:40] Speaker 03:
I think the court would really have liked to have known that at the time that the agreement or the stipulation was entered and the order was then entered.

[00:05:49] Speaker 01:
Well, there's no stipulation signed by me.

[00:05:53] Speaker 01:
And if you look at, carefully at the transcript, Mr. Schwab basically bows out and lets Mr., the other attorney, I can't think of his name at the moment, speak for what kind of agreement there's been. Mr. Schwab doesn't say that I've waived the homestead exemption. He leads up to the, You're opposing counsel.

[00:06:25] Speaker 01:
I just think the ambiguities in that hearing do not justify throwing the homestead exemption away against the public policy that we have so strongly for it.

[00:06:43] Speaker 01:
The main argument I receive in looking at these papers is a continuing argument that somehow I've committed fraud. when a judge who heard evidence for two days said twice in his decision in the state court, said twice that I did not commit fraud, there's no malice.

[00:07:01] Speaker 01:
I understood that I owned those fees and the court ruled them to, contrary to the Reynolds case, that he could latch on to the Board of Attorneys fees on defending the cross-complaint apply those to the complaint. And you can't do that.

[00:07:26] Speaker 03:
But the fraud wasn't any basis for the stipulation to sustain the objection in the Chapter 13 prior to conversion of the Chapter 7.

[00:07:37] Speaker 03:
In the first order, that never really was elevated to having to be an issue because you three counsel agreed.

[00:07:49] Speaker 01:
I don't know who the third council is that agreed. I didn't agree to it. You did through your council.

[00:07:57] Speaker 01:
I don't think the council can take the baby and throw the baby out with the bathwater. I don't think that's our law.

[00:08:06] Speaker 03:
Well, except that you were in bankruptcy court.

[00:08:08] Speaker 01:
Maybe it's the bankruptcy court.

[00:08:14] Speaker 01:
The hearing on the discharge, the judge completely ignored his own decision But that's not before us either, sir.

[00:08:20] Speaker 03:
I mean, I don't mean to be contrary, but it seemed pretty clear that this issue was raised within the 13 between your counsel, which we presume was in consultation with you, and enter an order sustaining the objection for the express purpose of elevating the lien that was given to a head of your interest.

[00:08:44] Speaker 03:
And that's a final order.

[00:08:45] Speaker 01:
Okay.

[00:08:48] Speaker 01:
I wasn't aware of that order.

[00:08:50] Speaker 01:
In later papers filed in the court, I'm asking to the court reaffirm that I have a homestead exemption because I never heard from my lawyer about making sure that we have that homestead exemption.

[00:09:02] Speaker 01:
I don't think a lawyer who's supposedly representing the debtor can go ahead and waive his homestead exemption without clear documentation before the court that this is done. The state court doesn't permit that. The state court says that the lawyer has to be in conformance with the way that the matter was recorded in the first place. They have those standards. And those standards don't mean anything if the court would affirm the trial court, I mean, the bankruptcy court.

[00:09:38] Speaker 01:
And I don't think that's the intent of the bankruptcy court law.

[00:09:50] Speaker 02:
If you want to pause now, you could, and we can hear from the appellee, and you can reserve a little more time if you'd like to do that.

[00:09:59] Speaker 01:
Well, I just... The code on it, the bankruptcy code, as I understand it, prohibits exemption waivers executed in favor of an unsecured...

[00:10:20] Speaker 01:
That was the case at this time. They were an unsecured creditor, and this proceeding here, under 11 U.S.C. 522, you can't, the waiver's no good.

[00:10:38] Speaker 02:
Okay, you're right at your five minutes if you want to pause for a little while.

[00:10:48] Speaker 01:
I'll just add, exactly. I'M JUST QUOTING HERE FROM LOVER VERSUS MENNICK, 341, FED SECOND, 682. EXEMPTION RIGHTS ARE TO BE DETERMINED UPON THE BASIS OF CONDITIONS EXISTING AT THE TIME OF FILING THE BANKRUPTCY POSITION. AND THE TRUSTEE DOESN'T HAVE THE AUTHORITY TO GO AHEAD AND THROW MY AUTOMATIC HOMESTEAD EXEMPTION OUT.

[00:11:11] Speaker 01:
I'LL WAVE ANY FURTHER TIME ON THE OPENING. THANK YOU.

[00:11:15] Speaker 02:
OKAY. THANK YOU.

[00:11:17] Speaker 02:
OKAY. APPLELEASE COUNCIL, DO YOU WANT TO GO AHEAD?

[00:11:20] Speaker 00:
Good morning, Your Honor. It's Gabriel Herrera on behalf of the Chapter 7 trustee, Jeffrey Richards, and the appellee in this matter. I may please the court. This is a case that has a long and drawn-out history in which the debtor has attempted to tort a creditor who has a judgment for conversion and elder abuse from being able to collect.

[00:11:40] Speaker 00:
There have been many appeals, trials, and petitions to the California Supreme Court that have been unsuccessful. And really, Your Honors, the sole issue on this matter is whether the bankruptcy court properly sustained the trustee's objection to the debtor's claim of exemption after the debtor struck a deal with the creditor at issue to resolve numerous issues, including objection to a claim of exemption, motions to convert, and objection to the confirmation of a Chapter 13 plan.

[00:12:14] Speaker 00:
And the answer, Your Honor, is that the bankruptcy court's decision should be affirmed. The deal was a deal that was struck for which the debtor received significant benefits. And as the bankruptcy court noted, a deal is a deal, particularly when it is backed by a federal court order. And I think it's monumental to have an understanding of the procedural background in this proceeding, and I believe – Judge Spraker has referenced many of the facts that were belied the situation when this deal occurred.

[00:12:45] Speaker 00:
In addition to the resolution of the objections and the motion to convert, it's important to stress that there were other issues that were plaguing this case and for which the debtor was attempting to receive benefits from. This was the second bankruptcy case that the debtor filed. And in this second bankruptcy case, the debtor was attempting to appeal the judgment that was entered in favor of the creditors. And in order to appeal, the debtor had to obtain a bond.

[00:13:17] Speaker 00:
And he tried to obtain a waiver of the bond, which was denied, which predicated this bankruptcy proceeding. And as part of the deal that was struck – the appeal bond was waived so that Mr. Kohler could appeal because originally the state court had denied the request to have the appeal bond waived because there was significant equity in the subject property that's at issue. And so he was able to, through this bankruptcy proceeding and through the deal that was struck with the creditor, to have that appeal bond waived because he agreed that the objection to the claim of exemption was, would be sustained and any further claim of exemption would be sustained and not allowed.

[00:14:01] Speaker 00:
And so it's pivotal to have that understanding because the debtor received significant benefit and was able to appeal the judgment that occurred and make petitions to the court, to the California Supreme Court, which were again unsuccessful. And in the end, had the debtor not obtained or entered into this deal, inevitably he would have had to obtain an appeal bond, which that a bond would be required to have some sort of collateral, which presumably would be the subject property at issue, which then when he was unsuccessful, the creditors at issue could make a claim to the bond.

[00:14:39] Speaker 00:
And then the bond would then turn to the collateral, which again, presumably would be the subject property because that's what had significant equity in this case.

[00:14:47] Speaker 00:
Um, There is a reference by the debtor on this appeal and in his argument that there's no evidence in the record that he understood that he was waiving his exemption or that the exemption was sustained. And I'll note for the court that the debtor signed declarations that were proffered to the court recognizing that he had entered into this deal. And that's why when there's the Chapter 13 plan, sustained it includes non-standard provisions which recognizes that he doesn't have a homestead exemption and the the appeal was going to be played out um and then pending that appeal his property would have to be sold or he would have to be refinanced to pay the creditor um which inevitably didn't happen and resulted in the conversion of the case to the chapter seven so again i agree with judge spricker's statement that um the debtor didn't know.

[00:15:45] Speaker 00:
And it was waived through counsel. And if there were issues related to counsel, that's between the debtor and his counsel. That is not something that was before the bankruptcy court. And if you note that in the opposition of the trustee's objection to the debtor's claim of exemption, the opposition doesn't submit any evidence. And so there was nothing before the bankruptcy court on that issue, other than the bankruptcy court being well aware that of the procedural backgrounds in this case, which resulted in the confirmation of the plan, the sustaining of the debtor's claim of exemption originally, and then it resulted in the conversion of the Chapter 7 inevitably and then the trustee's objection.

[00:16:26] Speaker 00:
So I will submit that there is evidence.

[00:16:30] Speaker 00:
The debtor also makes claims that 11 U.S.C. Section 522E states, I think prevents a waiver of an exemption for an unsecured creditor. And I'll submit to the court, I believe the application of 11 U.S.C. Section 522E applies to waivers that occurred prior to bankruptcy, not deals that occur in the bankruptcy process that are backed by a federal court order, which was done by the bankruptcy court. So again, Your Honors, I believe that the bankruptcy court's order should be properly sustained.

[00:17:05] Speaker 00:
or affirmed in this matter.

[00:17:07] Speaker 00:
I think the last issue is that this is a declared exemption, which has no application of bankruptcy proceedings. But at the end of the day, a deal is a deal, as the bankruptcy court noted, and the debtor received the benefits of that deal, and now he has to reap the consequences.

[00:17:28] Speaker 00:
Unless the court has anything to add, I have nothing to add here.

[00:17:31] Speaker 02:
Okay, Judge Spraker. Okay, thank you very much. I think we'll turn back to the appellant for a few minutes of rebuttal.

[00:17:43] Speaker 01:
I've said in my papers, and I think I said earlier, I have not waived my homestead exemption. There's no evidence I've waived it.

[00:17:52] Speaker 01:
The one, putting all that aside, homestead exemptions are a very serious matter.

[00:18:03] Speaker 01:
And proceedings in the bankruptcy court are very serious. There was an amended plan filed that says I waived the homestead exemption. I have attacked that, that I never signed that document. I did a motion to this court to strike the arguments based upon that document that I waived the homestead exemption.

[00:18:23] Speaker 01:
The amended plan says I did. I never signed that document. I attached to my motion emails requesting information from my attorney. I don't have those right in front of me at the moment, but I've documented my position. I never signed this homestead waiver. I would never give up my home 50 years.

[00:18:48] Speaker 01:
I still had my appellate rights with the court.

[00:18:51] Speaker 01:
Whether this was granted or not, there hadn't been a decision by the appellate court at the time.

[00:18:56] Speaker 01:
So there was no consideration for this waiver.

[00:19:02] Speaker 01:
I just think the bankruptcy law, as I've documented in my brief, is very strong that there's no waiver. But I would submit to the court that the court should look at that document and ask Mr. Herrera here, for the trustee, come up with a signed document that I ever signed, a waiver of my homestead exemption. And the purported amended bankruptcy plan and the two declarations that he argues about all incorporate that amended plan and the statements in there.

[00:19:38] Speaker 01:
I never signed that document.

[00:19:41] Speaker 01:
And this is a, forgive me, but this goes to nefarious practices in the court. And I don't think the court can throw out a homestead exemption based upon these nefarious practices, and the court should confirm for itself or the trial court, the bankruptcy court, order that document to be produced and examined as to whether I signed it or not.

[00:20:12] Speaker 01:
He's supposed to retain that document.

[00:20:15] Speaker 01:
So if the court, I would suggest to the court, the standards for review here the homestead can't be thrown away waived based upon an s slash s filing and no and no original documentation to support that that's why the lawyer is under obligation to retain the original document for three years i've asked them to send me a copy of that it seems to me it's the trustees burden here if they want to sustain this bankruptcy uh waiver of my homestead to come up with a signed document.

[00:20:57] Speaker 01:
And that would, if it turned out that I didn't sign that document, which is the fact, that would be the end of this. And it seems to me if I signed it, that would be the end of it too. So I think that's more important than the words back and forth between me and Mr. Herrera. Thank you.

[00:21:16] Speaker 02:
Okay. Any questions? No, thank you. All right. Thank you very much. It's under submission. We'll do our best to get your written decision as soon as we can. Thank you. Okay. May we call the next matter, please?