MCKEE V. ANDERSON, No. 22-60055 (9th Cir. 2024)
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The case in review involves Michele McKee, who claimed a homestead exemption for a property in Palm Springs where she formerly lived with her partner, Laura O’Kane. McKee argued that she should qualify for California’s homestead exemption, which partially protects the debtor’s home from creditors. However, she didn't physically reside in the property when she filed her bankruptcy petition and the court determined she didn't have the intent to return.
The United States Court of Appeals for the Ninth Circuit affirmed the decision of the Bankruptcy Appellate Panel, which affirmed the bankruptcy court's order denying McKee the homestead exemption. The court held that McKee did not meet her burden of proving that she either physically occupied the property or intended to return to it. The court did not accept McKee's argument that because her partner's abuse made it impossible for her to return to the property, her testimony that she wished to do so should be enough to establish a homestead. The court noted that McKee had demonstrated no signs of intent to return, such as leaving her personal belongings at the property or retaining its address on her driver's license, therefore she did not show entitlement to a homestead exemption.
Court Description: Bankruptcy The panel affirmed the Bankruptcy Appellate Panel’s decision affirming the bankruptcy court’s order denying chapter 7 debtor Michele McKee a homestead exemption for a Palm Springs property where she formerly lived with her partner, Laura O’Kane.
McKee claimed California’s “automatic” homestead exemption, which exempts from a bankruptcy estate a property in which a debtor resides on the date of her bankruptcy petition. The panel held that McKee did not meet her burden of proving that she either physically occupied the property or intended to return to it. The panel rejected the argument that, because O’Kane’s abuse made it impossible for McKee to go back to the Palm Springs property, her testimony that she desired to do so should be enough to establish homestead. The panel affirmed the bankruptcy court’s finding that McKee demonstrated no indicia of intent to return, such as leaving her personal belongings at the property or retaining its address on her driver’s license, and therefore did not show entitlement to a homestead exemption.
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