Leah Ahn v. Michael Sanger

FILED
NOT FOR PUBLICATION
FEB 28 2020
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

In re: LEAH AHN, No. 18-16794

Debtor, D.C. No. 4:17-cv-05182-JST
______________________________

PRIYA SANGER; MICHAEL SANGER, MEMORANDUM*

Appellants,

v.

LEAH AHN,

Appellee.

Appeal from the United States District Court
for the Northern District of California
Jon S. Tigar, District Judge, Presiding

Submitted October 22, 2019**
San Francisco, California

Before: BYBEE, N.R. SMITH, and COLLINS, Circuit Judges.

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
 Priya and Michael Sanger (collectively, the “Sangers”) appeal the decision

of the district court affirming in part and reversing in part the bankruptcy court’s

denial of the Sangers’ motion to dismiss and grant of Appellee Leah Ahn’s

(“Ahn”) motion for summary judgment. We affirm.

“We review the district court’s decision on appeal from a bankruptcy court

de novo” and independently review the bankruptcy court’s decision without giving

deference to the district court. Saxman v. Educ. Credit Mgmt. Corp. (In re

Saxman), 325 F.3d 1168, 1172 (9th Cir. 2003).

1. “Absent exceptional circumstances, we generally will not consider

arguments raised for the first time on appeal, although we have discretion to do

so.” El Paso City v. Am. W. Airlines, Inc. (In re Am. W. Airlines, Inc.), 217 F.3d

1161, 1165 (9th Cir. 2000). The Sangers argue for the first time on appeal that Ahn

lacked “statutory standing” to bring her lien avoidance claim (to the extent it

challenged the validity of Sangers’ judicial lien) under 11 U.S.C. § 522(f)(1)(A).1

1
The dissent contends the Sangers raised this argument “at every stage of
these proceedings” and points to the Sangers’ argument that the bankruptcy court
lacked subject matter jurisdiction over the declaratory relief claim. See Dissent at
7. Indeed, the dissent notes that the Sangers argued that the bankruptcy court
lacked “arising under” jurisdiction over the declaratory relief claim, because
“nothing within Section 522 . . . creates a cause of action to challenge a judgment
lien on the grounds that underlie [the Declaratory Relief Claim].” However, the
identified statement explicitly challenged the bankruptcy court’s subject matter
(continued...)
2
Unlike Article III standing, which is jurisdictional, statutory standing arguments

may be forfeited or waived if not raised before the trial court. See Bilyeu v. Morgan

Stanley Long Term Disability Plan, 683 F.3d 1083, 1090 (9th Cir. 2012). “A

party’s unexplained failure to raise an argument that was indisputably available

below is perhaps the least ‘exceptional’ circumstance warranting our exercise of

1
(...continued)
jurisdiction over the declaratory relief claim. The Sangers did not, however,
advance any argument that Ahn lacked statutory standing to bring her lien
avoidance claim under 11 U.S.C. § 522. Moreover, to the extent the identified
statement may be construed as a statutory standing challenge and not a challenge
to the bankruptcy court’s subject matter jurisdiction, the Sangers provided no
authority addressing the issue of statutory standing. “The rule in this circuit is that
appellate courts will not consider arguments that are not ‘properly raised’ in the
trial courts.” O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d
955, 957 (9th Cir. 1989) (alteration adopted) (quoting Rothman v. Hosp. Serv. of S.
Cal., 510 F.2d 956, 960 (9th Cir. 1975)). While no bright line rule exists to
determine whether a litigant properly raised an argument below, “[a] workable
standard . . . is that the argument must be raised sufficiently for the trial court to
rule on it.” Id.; see also In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988,
992 (9th Cir. 2010). Here, the single sentence identified by the dissent did not
sufficiently raise the statutory standing argument such that the bankruptcy court
could rule on the issue. Finally, contrary to the dissent’s contention that the
bankruptcy court addressed and ruled on the statutory standing issue, the court
actually concluded that it lacked “arising under” and “arising in” jurisdiction over
the declaratory judgment claim, not that Ahn lacked statutory standing to bring her
lien avoidance action.

3
. . . discretion.” G & G Prods. LLC v. Rusic, 902 F.3d 940, 950 (9th Cir. 2018).

Accordingly, we decline to consider the Sangers’ statutory standing argument.2

2. The bankruptcy court had subject matter jurisdiction over Ahn’s lien

avoidance claim and could properly address the validity of the Sangers’ purported

judicial lien as a part of that claim. We review whether the lower court had subject

matter jurisdiction de novo. Coyle v. P.T. Garuda Indon., 363 F.3d 979, 984 n.7

(9th Cir. 2004).

2
The dissent also suggests that, because Ahn, a pro se litigant, did not raise
waiver as a ground for opposing the Sangers’ argument, we must address the
merits of the Sangers’ statutory standing argument. Dissent at 9 n.4. However, we
regularly raise and apply, sua sponte, the general rule that we will not entertain an
argument raised for the first time on appeal. See, e.g., Padgett v. Wright, 587 F.3d
983, 985 n.2 (9th Cir. 2009). “This rule serves to ensure that legal arguments are
considered with the benefit of a fully developed factual record, offers appellate
courts the benefit of the district court’s prior analysis, and prevents parties from
sandbagging their opponents with new arguments on appeal.” Dream Palace v.
Cty. of Maricopa, 384 F.3d 990, 1005 (9th Cir. 2004). These rationales are
applicable to the instant case. Because the Sangers raised the statutory standing
argument for the first time on appeal, we are deprived of the benefit of the
bankruptcy and district courts’ analyses on the issue, and we are reluctant to
sanction a course of conduct that encourages litigants to “sandbag” their opponents
(especially pro se litigants) with new arguments raised for the first time on appeal.
Regardless, the Supreme Court has stated that “[t]he matter of what questions may
be taken up and resolved for the first time on appeal is one left primarily to the
discretion of the courts of appeals, to be exercised on the facts of individual cases.”
Singleton v. Wulff, 428 U.S. 106, 121 (1976). Here, we exercise our discretion and
decline to consider the Sangers’ statutory standing argument, which the Sangers
failed to raise in both the bankruptcy and district courts.
4
 “Bankruptcy courts have subject matter jurisdiction over proceedings

‘arising under title 11, or arising in or related to cases under title 11.’” Wilshire

Courtyard v. Cal. Franchise Tax Bd. (In re Wilshire Courtyard), 729 F.3d 1279,

1285 (9th Cir. 2013) (quoting 28 U.S.C. § 1334(b)). Here, the bankruptcy court

had subject matter jurisdiction over Ahn’s lien avoidance claim brought pursuant

to 11 U.S.C. § 522(f), because it was a core proceeding arising under title 11. See

28 U.S.C. §§ 1334, 157(b)(2)(K).

Further, the district court correctly determined that the bankruptcy court

could address the validity of the Sangers’ purported judicial lien as a part of Ahn’s

lien avoidance claim, because a court applies state law as the first step in a lien

avoidance action to determine whether a valid lien attached to the debtor’s

property.3 See Wolfson v. Watts (In re Watts), 298 F.3d 1077, 1080 (9th Cir. 2002).

3
The dissent argues that neither Wolfson nor Wiget v. Nielsen (In re
Nielsen), 197 B.R. 665 (B.A.P. 9th Cir. 1996) support the view that “the § 522(f)
inquiry must begin with an inquiry into the underlying validity of the lien under
state law.” Dissent at 10. However, contrary to the dissent’s protestations, both
Wolfson and Wiget contemplate that the first step in a lien avoidance action must
be to determine whether a valid judicial lien attached to the debtor’s property. See
Wolfson, 298 F.3d at 1080 (“To determine whether or to what extent [the
creditor]’s judgment lien could be avoided . . . , the bankruptcy court had to (1)
apply California law to determine whether [the creditor]’s lien attached to
Debtors’ residence . . . .” (emphasis added)); see also Wiget, 197 B.R. at 667–68
(To determine whether a lien should be avoided under § 522(f), “[t]he first step is
to utilize state law in deciding whether a valid lien attached to the debtor’s
(continued...)
5
3. The bankruptcy court erred in allowing Ahn’s lien avoidance claim to be

brought in an adversary proceeding, but that error was harmless. We review the

bankruptcy court’s interpretation of the Bankruptcy Code and applicable rules of

procedure de novo. See Cal. Franchise Tax Bd. v. Jackson (In re Jackson), 184

F.3d 1046, 1050 (9th Cir. 1999).

A lien avoidance proceeding under § 522(f) must be initiated by motion in

the bankruptcy case as provided by Rule 9014 and not by adversary proceeding.

See Fed. R. Bankr. P. 4003(d) (“A proceeding under § 522(f) to avoid a lien . . .

under the [Bankruptcy] Code shall be commenced by motion in the manner

provided by Rule 9014 . . . .”); see also Barrientos v. Wells Fargo Bank, N.A., 633

F.3d 1186, 1190–91 (9th Cir. 2011) (holding that contempt proceedings are

3
(...continued)
property.” (emphasis added)). It makes sense that a court must first ensure that a
valid lien exists, because, if no valid judicial lien attached to the debtor’s property,
then there is no lien to avoid and the lien avoidance cause of action would be moot.
In other words, if there is a question as to a lien’s validity, the bankruptcy court
would err by assuming the validity of the lien and proceeding to the merits of the
lien avoidance action, because there may be no injury in fact that the § 522(f)
action could remedy. Therefore, if the validity of a lien is disputed or becomes
disputed, the court must determine, as a necessary predicate to resolving the lien
avoidance action under § 522(f), whether there is a valid judicial lien to avoid.
Thus, the dissent’s argument that the district court could not address the validity of
the Sangers’ lien as a necessary predicate to resolving Ahn’s lien avoidance cause
of action (when there was a dispute as to the validity of the lien) is not persuasive.
6
contested matters, not adversary proceedings, and must be initiated by motion in

the bankruptcy case, not by adversary proceeding).

Regardless, we review a bankruptcy court’s decision to hear a matter that

should be brought as a contested matter, but is brought in an adversary proceeding,

under the harmless error standard. Cf. Austein v. Schwartz (In re Gerwer), 898 F.2d

730, 734 (9th Cir. 1990) (finding the creditor was not “harmed” by the bankruptcy

court’s treatment of the issue in a contested matter). Here, the Sangers were not

prejudiced by the bankruptcy court hearing the lien avoidance claim in an

adversary proceeding, because they had a full opportunity to present their

arguments concerning the validity of the lien.

4. The bankruptcy court did not err in finding that the Sangers’ recorded

abstract of judgment did not create a valid judicial lien under California law. We

“review the bankruptcy court’s grant of summary judgment de novo.” Gill v. Stern

(In re Stern), 345 F.3d 1036, 1040 (9th Cir. 2003) (italics omitted).

“State law controls the validity and effect of liens in the bankruptcy

context.” Tr. Corp. of Mont. v. Patterson (In re Copper King Inn, Inc.), 918 F.2d

1404, 1407 (9th Cir. 1990). California law provides, in relevant part, that an

abstract of judgment “shall contain . . . [t]he name and address of the judgment

creditor.” Cal. Civ. Proc. Code § 674(a)(4). One purpose of this statute is to

7
provide third parties constructive notice of a judgment lien. Stout v. Gill, 294 P.

446, 448 (Cal. Ct. App. 1930).

The relevant inquiry, however, is “not whether there was notice of the lien,

but whether the [Sangers’] abstract complied with statutory provisions enacted to

insure [sic] notice.” Keele v. Reich, 215 Cal. Rptr. 756, 758 (Ct. App. 1985). The

text of section 674(a)(4) is plain and unambiguous and requires the judgment

creditor’s name and address appear on the abstract of judgment. See Cal. Civ. Proc.

Code § 674(a)(4). The substantial compliance standard has only been applied

where “all of the required data was included,” and “[n]o court has validated a

judgment lien where mandated information was omitted from an abstract.”4 Keele,

215 Cal. Rptr. at 758–59.

Here, the Sangers’ address does not appear on the abstract of judgment and

nothing identifies the Sangers as the judgment creditors. Therefore, the Sangers’

abstract of judgment does not comply with section 674(a)(4). See Keele, 215 Cal.

4
After Keele, one state appellate court determined that the omission of
mandated information was not fatal to an abstract of judgment where the error was
a clerical error that could be corrected. See Commonwealth Land Title Co. v.
Kornbluth, 220 Cal. Rptr. 774, 781 (Ct. App. 1985). However, Kornbluth is not
applicable here, because, even if the failure to identify the judgment creditors and
the omission of the judgment creditors’ address were clerical errors, the Sangers
may not correct these errors due to the operation of the discharge injunction. See
11 U.S.C. § 524(a); see also Alcove Inv., Inc. v. Conceicao (In re Conceicao), 331
B.R. 885, 892 (B.A.P. 9th Cir. 2005).
8
Rptr. at 757, 759 (finding an abstract of judgment did not substantially comply

with section 674(a) where it omitted the debtor’s social security number, which

was known to the judgment creditor); see also Ellrott v. Bliss, 195 Cal. Rptr. 446,

448 (Ct. App. 1983) (holding an abstract of judgment inadequate and its recording

a nullity where “[t]he amount of the judgment [could not] be ascertained from the

abstract recorded in th[e] case”); cf. Longview Int’l, Inc. v. Stirling, 247 Cal. Rptr.

3d 793, 795 (Ct. App. 2019) (“For a judgment lien to be valid, an abstract of

judgment must be properly recorded and contain all the information required by

statute.”).

The Sangers argue that their abstract of judgment substantially complies

with section 674(a)(4), because: (1) although their names do not appear in the box

entitled “Judgment Creditor (name and address),” their names do appear elsewhere

on the abstract of judgment; and (2) the abstract of judgment contains the mailing

address of their attorney of record. The Sangers’ arguments are not persuasive.

First, the Sangers are listed nowhere on the abstract as the judgment

creditors. The Sangers are listed as plaintiffs on the abstract, but that cannot

constitute substantial compliance where nothing on the abstract informs third

parties with any certainty that the Sangers are the judgment creditors. See Ellrott,

195 Cal. Rptr. at 448. Indeed, as the bankruptcy court correctly recognized:

9
“[t]here could well be other plaintiffs . . . as the space next to the word ‘Plaintiff’ is

not large enough to accommodate more than one or two names. It would not be

unreasonable to conclude that the judgment creditor might be another plaintiff,

whose name does not appear on the [a]bstract . . . .”5

Second, the inclusion of the Sangers’ attorney’s address on the abstract of

judgment does not constitute substantial compliance with section 674(a)(4)’s

requirement that the abstract contain the judgment creditor’s address. Section 674

requires that abstracts of judgment include “[t]he . . . address of the judgment

5
The dissent accuses us of baselessly speculating that the space next to the
word “Plaintiff” on the EJ-001 form is not large enough to accommodate more
than one or two names, but turns around and speculates that there is “plenty of
space on the form, next to and under the names of the Sangers, to list additional
plaintiffs (or include ‘et al.’).” Dissent at 13–14. The dissent misses the point.
Nothing on the Sangers’ abstract of judgment informs third parties with any
certainty that the Sangers are the judgment creditors. Rather, the manner in which
the Sangers completed the abstract of judgment requires any third party to assume
that the individuals listed next to “Plaintiff” are, in fact, the judgment creditors.
The dissent also points to Item 7, which appears in the clerk’s portion of the form
and provides that “[a]ll judgment creditors and debtors are listed on this abstract.”
However, reliance on the language in Item 7 forces third parties to further assume
the box entitled “Judgment Creditor (name and address)” was left intentionally
blank and that the judgment creditors’ names, in fact, appear somewhere else on
the abstract. Under the dissent’s view, a third party would be forced to search the
abstract, locate the Sangers’ names listed as plaintiffs, and assume that the Sangers
were, in fact, the judgment creditors when nothing on the abstract of judgment
indicates that the Sangers were the judgment creditors. In short, the dissent’s
argument is unpersuasive, because, as the bankruptcy court noted, “[t]he manner in
which the Sangers completed their Abstract forces third parties to make too many
assumptions.”
10
creditor.” Cal. Civ. Proc. Code. § 674(a)(4) (emphasis added). Thus, the plain

language of section 674 requires the address of the judgment creditor, not the

address of the judgment creditor’s attorney. A contrary finding would run afoul of

the Keele court’s clear directive that “the application of a liberal construction [of

section 674(a)] would frustrate legislative intent regarding the specific contents of

abstracts.”6 Keele, 215 Cal. Rptr. at 759.

Further, substantial compliance “means actual compliance in respect to the

substance essential to every reasonable objective of the statute.” Assembly v.

Deukmejian, 639 P.2d 939, 946 (Cal. 1982) (quoting Stasher v. Harger-Haldeman,

372 P.2d 649, 652 (Cal. 1962)). Here, if the purpose of the statute is to provide

third parties the specific information enumerated in section 674(a), which the

legislature determined is necessary to ensure constructive notice, third parties

should not be required to search the abstract of judgment to locate information that

may or may not lead to the mandated information—the judgment creditor’s name

6
The dissent argues that we read section 674(a)(4) as requiring the Sangers
to list only their “home address and not any other address, such their attorney’s
address.” Dissent at 14. The dissent suggests that “nothing in the statutory text
supports that narrow reading.” Id. at 15. However, the language of section 674 is
clear and unambiguous and requires the address of the judgment creditor, not the
address of the judgment creditor’s attorney. Therefore, because the abstract omits
mandated information (the Sangers’ address), it does not substantially comply with
section 674(a). See Keele, 215 Cal. Rptr. at 758–59. The dissent’s arguments to the
contrary are unpersuasive.
11
and address. An interpretation of section 674(a) that makes the inclusion of

mandated information discretionary would introduce uncertainty as to what

information is required for a valid abstract of judgment and would “frustrate

legislative intent regarding the specific contents of abstracts.” Keele, 215 Cal. Rptr.

at 759. Therefore, the Sangers’ abstract of judgment does not substantially comply

with section 674(a)(4), because it does not identify the judgment creditors and

omits the judgment creditors’ address.

AFFIRMED.

12
 FILED
Sanger v. Ahn (In re Ahn), No. 18-16794 FEB 28 2020

COLLINS, Circuit Judge, dissenting: MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

In my view, the underlying validity of the Sangers’ lien is not properly

before us, but if it were, I would conclude that the Sangers’ abstract of judgment

was sufficient under California law to create a valid lien. Because the majority

concludes otherwise as to both points, I respectfully dissent.

I

This case comes to us in a singularly peculiar procedural posture, which is a

good indication that something is seriously amiss. In the proceedings below, Ahn

asserted two claims in her adversary complaint: (1) a declaratory relief claim

seeking a declaration that the Sangers’ abstract of judgment did not create a valid

lien under California law; and (2) a claim that, in the event the lien was valid, it

should be avoided under 11 U.S.C. § 522(f) to the extent that it impaired her

homestead exemption. The district court reversed the bankruptcy court’s grant of

summary judgment to Ahn on her declaratory relief claim, holding that the

bankruptcy court lacked subject matter jurisdiction over that cause of action. As to

Ahn’s lien avoidance cause of action under § 522(f), the district court affirmed the

bankruptcy court’s dismissal of that claim. Thus, the nominal result of the district

court’s ruling was that Ahn lost on both of her causes of action. Nonetheless,

somehow the Sangers are the appellants in this court, and Ahn is the appellee. This

1
upside-down posture resulted from the district court’s fundamentally flawed

conception of the issues properly raised by Ahn’s request to avoid the Sangers’ lien

under § 522(f).

Because Ahn has not filed a cross-appeal from the district court’s

determination that “the bankruptcy court lacked subject matter jurisdiction over

Ahn’s declaratory judgment cause of action,” the only issue properly before us is

the disposition of Ahn’s second cause of action for avoidance under § 522(f). See

Lee v. Burlington N. Santa Fe Ry. Co., 245 F.3d 1102, 1107 (9th Cir. 2001) (party

that seeks “‘to change’” the judgment must file a cross-appeal). The district court

affirmed the dismissal of Ahn’s § 522(f) claim based on its conclusions that

(1) such a claim necessarily required the court to address the underlying validity of

the Sangers’ lien; and (2) because the Sangers’ lien was invalid under California

law, it could not be said to impair Ahn’s homestead exemption. But the district

court’s threshold premise was wrong, because a § 522(f) motion is not the proper

vehicle for challenging the validity of a lien. 1 I therefore would vacate the district

1
As the majority correctly notes, a request for avoidance of a lien under § 522(f)
must be brought by motion rather than by adversary proceeding. See FED. R.
BANKR. P. 4003(d). It is not clear to me, however, that the expanded § 522(f)
claim that the district court recognized here (which embraces the issue of the
underlying validity of the lien) is within the contemplation of this rule. But given
that I do not think that this expanded § 522(f) claim exists, I have no occasion to
address whether, if it did exist, it would need to be raised by way of an adversary
proceeding rather than a motion.

2
court’s dismissal of Ahn’s § 522(f) claim and remand.

A

In requesting relief under § 522(f), Ahn sought to avoid the lien created by

the abstract of judgment on the ground that it purportedly impaired her homestead

exemption in light of “the amount of the consensual liens” on the property.

Because the bankruptcy court granted declaratory relief holding that the abstract of

judgment was invalid under California law, it then dismissed the § 522(f) claim as

moot (which it would have been if the lien were invalid). The district court,

however, reversed the grant of declaratory relief on subject matter jurisdiction

grounds, thereby vitiating the bankruptcy court’s mootness ruling concerning the

§ 522(f) claim. But rather than vacate the dismissal of the § 522(f) claim and

remand to the bankruptcy court, the district court instead held that it had authority

to address the underlying validity of the lien in the guise of adjudicating the

§ 522(f) claim. I agree with the Sangers that, in doing so, the district court erred.

The district court proceeded on the premise that “the first step in deciding

whether a lien should be avoided is to determine whether the lien is valid.” That is

wrong. As the district court correctly recognized, a bankruptcy court cannot grant

a motion to avoid a lien under § 522(f) when that lien is wholly invalid; in such a

case, the motion must be denied as moot. But what follows from that premise is

that a § 522(f) motion is not a proper vehicle for contesting the validity of the

3
underlying lien. Because a movant cannot properly file a motion for the sole

purpose of having it denied, a movant cannot properly use a motion under § 522(f)

as a vehicle for challenging the validity of the lien. Ahn herself seemed to

recognize as much, because she filed her challenge to the lien as a freestanding

claim separate and apart from her § 522(f) cause of action. By improperly

recasting Ahn’s § 522(f) cause of action as embracing the underlying validity of

the Sangers’ lien, the district court effectively placed Ahn in the peculiar position

of affirmatively asking for her § 522(f) cause of action to be dismissed on the

ground that the lien was invalid. Indeed, after agreeing with Ahn that the lien was

invalid, the district court then nominally ruled against Ahn by “affirm[ing] the

bankruptcy court’s dismissal of Ahn’s second cause of action.”

Despite the obvious procedural oddity, the district court held that it had

authority to address the underlying validity of the abstract of judgment because

Wiget v. Nielsen (In re Nielsen), 197 B.R. 665, 667–68 (B.A.P. 9th Cir. 1996),

states that the “first step” in the § 522(f) avoidance inquiry “is to utilize state law

in deciding whether a valid judicial lien attached to the debtor’s property.” But the

inquiry Wiget undertook is very different from what the district court did here. It

makes sense, in deciding whether a lien impairs the debtor’s homestead exemption,

to begin by first analyzing how and to what extent, under state law, the lien will

attach to whatever equity might be in the relevant property, and that is the inquiry

4
that Wiget undertook. Id. at 668–69; see also Wolfson v. Watts (In re Watts), 298

F.3d 1077, 1080–83 (9th Cir. 2002) (undertaking a comparable inquiry).

Reflecting a similar focus, Ahn’s argument in her § 522(f) claim was not that the

Sangers’ lien was invalid but rather that the amount of that lien, when added to the

amount of the preexisting liens on the property, caused the Sangers’ lien to impair

her homestead exemption. Accordingly, neither Wiget nor Wolfson supports the

view that a § 522(f) claim provides an occasion for seeking to declare liens to be

completely void under state law based on underlying alleged defects in the creation

or recording of the lien. As the Sangers aptly put the point, § 522(f) “was not

enacted to protect the interests of a debtor who argues that a creditor’s judgment

lien does not exist because it was never properly created under applicable state

law.”

B

The majority makes two points in concluding that the district court properly

addressed the validity of the lien, but neither is persuasive.

1

First, seizing on the fact that the Sangers characterized the point as one of

“statutory standing,” the majority declares that the Sangers waived any such

statutory standing argument by supposedly failing to raise it below. See Mem.

Dispo. at 2–4. This holding is difficult to fathom. The issue of “statutory

5
standing” is simply “whether a legislatively conferred cause of action encompasses

a particular plaintiff’s claim,” Lexmark Int’l, Inc. v. Static Control Components,

Inc., 572 U.S. 118, 127–28 & n.4 (2014), and here the majority does decide that

issue, because it expressly agrees with the district court that “the first step in a lien

avoidance action must be to determine” the validity of the lien. See Mem. Dispo.

at 5 n.3 (emphasis added). Consequently, I am at a loss to understand what the

majority thinks has been waived here.

Moreover, to the extent that the parties’ arguments concerning the elements

of a § 522(f) claim have come into sharper focus on appeal, that is attributable to

Ahn and to the district court. Ahn’s complaint below never took the position that

her § 522(f) cause of action for avoidance encompassed any issue concerning the

validity of the lien. Rather, Ahn’s complaint challenged the lien only in her

separate, first cause of action for declaratory relief. The bankruptcy court

followed suit, addressing the validity of the lien only under the guise of Ahn’s

declaratory relief claim. It was the district court that, after concluding it had no

jurisdiction over the declaratory relief claim, went on to hold that it could refashion

Ahn’s § 522(f) cause of action so as to now include the lien-validity issue, even

though the § 522(f) claim had not been pleaded that way in the operative

complaint. Given that the Sangers properly responded to the claims as pleaded,

they cannot be said to have waived any legal objection to the district court’s

6
reworking of Ahn’s § 522(f) claim in its final decision. In all events, given that the

majority concedes that the relevant legal issue—i.e., whether the validity of a lien

is an element of a § 522(f) claim—is properly before us, there is no basis for

asserting that that any legal sub-argument in support of that point (such as the

Sangers’ “statutory standing” argument) has been waived. See Yee v. City of

Escondido, 503 U.S. 519, 534 (1992) (once a claim is properly preserved, “a party

can make any argument in support of that claim [on appeal]; parties are not limited

to the precise arguments they made below”).

Further, the majority is simply wrong in asserting that the Sangers are

raising any new issue for the first time on appeal. On the contrary, the Sangers

have consistently maintained, at every stage of these proceedings, that Ahn’s

challenge to the underlying validity of the lien is not a part of her § 522(f) claim—

indeed, this contention underlay their ultimately successful challenge to the lower

courts’ jurisdiction over Ahn’s first cause of action for a declaration that the lien

was invalid. For example, in their memorandum supporting their motion to

dismiss the operative complaint, the Sangers specifically argued that, because

“[n]othing within Section 522 . . . creates a cause of action to challenge a judgment

lien on the grounds that underlie Count One,” the bankruptcy court lacked “arising

7
under” jurisdiction over the declaratory relief claim.2 The majority claims that this

argument was not sufficiently developed “such that the bankruptcy court could rule

on the issue,” Mem. Dispo. at 3 n.1, but that is belied by the fact that the

bankruptcy court did rule on this issue and expressly agreed with the Sangers on

that point: “The court agrees with Defendants as to ‘arising in’ and ‘arising under’

jurisdiction.” 3

In addition, when the bankruptcy court went on to hold that it could assert

“related to” bankruptcy jurisdiction (or, alternatively, supplemental jurisdiction)

over the declaratory relief claim, the Sangers vigorously challenged that ruling in

the district court, arguing that because there was no legal overlap between the

2
As the district court summarized, bankruptcy courts have original jurisdiction
over “all civil proceedings arising under title 11, or arising in or related to cases
under title 11.” 28 U.S.C. § 1334(b). “Proceedings ‘arising under’ title 11 involve
causes of action created or determined by a statutory provision of that title.”
Wilshire Courtyard v. California Franchise Tax Bd. (In re Wilshire Courtyard),
729 F.3d 1279, 1285 (9th Cir. 2013). “Similarly, proceedings ‘arising in’ title 11”
are those not “created or determined by the bankruptcy code, but which would
have no existence outside of a bankruptcy case.” Id. Finally, proceedings are
“related to” title 11 if “the outcome of the proceeding could conceivably have any
effect on the estate being administered in bankruptcy.” Id. at 1287 (citations and
internal quotation marks omitted).
3
It is likewise irrelevant that this issue—whether a § 522(f) claim includes within
it an inquiry into the underlying validity of the lien—arose below in the context of
the Sangers’ challenge to the lower courts’ subject matter jurisdiction over Ahn’s
declaratory relief action. See Mem. Dispo. at 2 n.1. That was the only way it
could properly have arisen below given that Ahn did not challenge the validity of
the lien in her § 522(f) cause of action.

8
declaratory relief action and the § 522(f) claim, there was no basis for either form

of jurisdiction even though there was “some . . . factual overlap.” As a result, the

Sangers argued, any challenge to the validity of the lien had to be brought in state

court. While the district court ultimately agreed with the Sangers that there was no

jurisdiction over the declaratory relief action, it then rewrote Ahn’s § 522(f) claim

to include within it the lien validity issue—even though Ahn herself had not

pleaded it that way—and the Sangers have properly objected to that ruling in this

court. There was no waiver. 4

2

Second, the majority contends that in any event the district court correctly

concluded that the issue of the underlying validity of the lien is an essential part of

4
The majority’s invocation of waiver is all the more unwarranted because Ahn
herself did not raise waiver as a ground for opposing the Sangers’ statutory
standing argument. That alone should have been dispositive, because we have
repeatedly held that “[t]his court will not address waiver if not raised by the
opposing party.” United States v. Schlesinger, 49 F.3d 483, 485 (9th Cir. 1994);
see also United States v. Garcia-Lopez, 309 F.3d 1121, 1123 (9th Cir. 2002);
United States v. Doe, 53 F.3d 1081, 1082–83 (9th Cir. 1995). The majority
nonetheless asserts that its sua sponte invocation is appropriate because Ahn, “a
pro se litigant,” should not be “‘sandbag[ged]’” by new arguments and because this
court has been “deprived of the benefit of the bankruptcy and district courts’
analyses on the issue.” Mem. Dispo. at 4 n.2. As the above discussion makes
clear, neither of these assertions has any basis in the record. Indeed, we know
exactly why the district court thought that the § 522(f) claim includes the lien-
validity issue. And if anyone was sandbagged, it was the Sangers, who defeated
the declaratory relief cause of action in the district court only to be confronted with
a transmogrified § 522(f) claim.

9
Ahn’s § 522(f) claim. Mem. Dispo. at 4–5. The majority’s reasoning, however,

does not withstand scrutiny.

The majority claims that applicable precedent establishes that “the first step

in a lien avoidance action must be to determine whether a valid judicial lien

attached to the debtor’s property.” Mem. Dispo. at 5 n.3 (emphasis altered). But

as explained earlier, the cited cases addressed the entirely separate question of

whether and to what extent the lien attached to the property in question, and that is

an essential element of determining whether the homestead exemption in that

property has been “impaired” within the meaning of § 522(f). See Wolfson, 298

F.3d at 1080–83; Wiget, 197 B.R. at 668–69. The fact that Wiget (but not Wolfson)

framed the issue as being whether a “valid lien attached,” id. at 668, does not mean

that the § 522(f) inquiry must begin with an inquiry into the underlying validity of

the lien under state law. Wiget did not involve a challenge to the validity of the

lien, nor did the court undertake such an inquiry. Id. at 669 (“Neither party

disputes that Wiget’s lien attached to Nielsen’s property in the amount of any

surplus equity after deducting all prior liens and the homestead exception. . . .

What is disputed is the existence of any surplus equity at all.”). Wiget thus

provides no support for the view that § 522(f) empowers a bankruptcy court to

adjudicate the underlying validity of the lien.

The majority is likewise wrong in contending that subsuming validity into a

10
§ 522(f) motion “makes sense.” Mem. Dispo. at 5 n.3. As the upside-down

procedural posture of this case shows, it makes no sense at all. Under the

majority’s view, a debtor who wants to invalidate a lien in toto—and not merely to

avoid the lien to the extent it impairs an exemption—can simply file a § 522(f)

motion and then ask the court to deny her own motion on the grounds that the lien

is wholly invalid. Nothing in the case law, the statute, or common sense supports

such a peculiar procedure. While it is true that a determination of invalidity would

moot a § 522(f) motion, see id., that does not mean that a motion under § 522(f) is

itself the proper vehicle for making that entirely separate determination. It clearly

is not. 5

As Ahn herself apparently recognized in how she originally framed her

complaint, her challenge to the Sangers’ lien “for reasons outside the ambit of

§ 522(f)(1) should [have been] pursued as an adversary proceeding,” In re Ruck,

451 B.R. 128, 133 n.23 (Bankr. D. Kan. 2011) (emphasis added), rather than as

part of a § 522(f) claim (which must be brought by motion). Here, however, the

district court concluded that it lacked jurisdiction over that freestanding claim. The

5
The majority suggests that Ahn would lack Article III standing to request
avoidance if the lien were invalid, see Mem. Dispo. at 5 n.3, but that cannot justify
what the majority has done here. Because a plaintiff filing a claim must
affirmatively allege and establish her standing to bring it, see Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992), a plaintiff cannot properly file a claim for the
purpose of affirmatively asking that it be denied on the ground that the plaintiff
herself contends that she lacks Article III standing to bring it.

11
district court then erred in concluding, in effect, that Ahn’s motion under § 522(f)

is a proper vehicle for seeking such a declaration, thereby evading the very limits it

had just recognized on its own jurisdiction.

Accordingly, I would not reach the merits of the lien’s validity under

California law. Instead, I would vacate the district court’s dismissal of the § 522(f)

cause of action on the merits and would remand the matter to that court with

instructions to remand the case to the bankruptcy court with instructions to dismiss

that cause of action without prejudice to refiling a proper motion under § 522(f).

II

Were I to reach the merits, as the majority concludes we may do, I would

hold that the Sangers’ abstract of judgment substantially complied with the

applicable requirements of California law.

The majority concludes that the Sangers’ abstract of judgment failed to

substantially comply with the statutory requirements that any such abstract must

contain the “name and address of the judgment creditor.” CAL. CODE CIV. P.

§ 674(a)(4). I disagree. Section 674 does not require that any particular format be

used to identify the names and address of the judgment creditors, so long as that

information is in fact included in the abstract. It thus is not dispositive that the

Sangers, in completing the abstract of judgment form, left blank item 3 (“Judgment

creditor (name and address)”). The form requires that the lawsuit in which the

12
judgment was obtained be identified (and that was done here), and it is obvious

that the creditors in the judgment resolving that very lawsuit against defendant

Leah Ahn (who was correctly identified as the judgment debtor) are the plaintiffs.

And here, the plaintiffs were properly listed as “Priya Sanger, Michael Sanger.” 6

As for the judgment creditors’ address, the Sangers’ attorney’s address is listed,

and he is expressly identified as the attorney for the “judgment creditor.” Because

“all of the required data was included,” even though it was listed differently than

the standard form suggested, the Sangers’ notice was in “substantial compliance”

with § 674(a)(4). Keele v. Reich, 215 Cal. Rptr. 756, 758–59 (Cal. Ct. App. 1985).

The majority nonetheless concludes that the abstract creates uncertainty as to

who the judgment creditors are because, given that “‘the space next to the word

‘Plaintiff’ [on the form] is not large enough to accommodate more than one or two

names,’” there might be plaintiffs other than the Sangers who were not listed.

Mem. Dispo. at 10 (quoting bankruptcy court ruling). There is actually plenty of

space on the form, next to and under the names of the Sangers, to list additional

plaintiffs (or to include “et al.”), and so any speculation about supposed missing

6
The majority is therefore quite wrong in contending that “nothing on the abstract
of judgment indicates that the Sangers were the judgment creditors.” Mem. Dispo.
at 10 n.5. The majority’s reasoning ultimately rests on the view that the Sangers
were required to use item 3 (the “box” marked “Judgment Creditor”), see id., but
that rigid position ignores, rather than applies, California’s substantial compliance
standard.

13
additional plaintiffs is baseless. (The same speculation would equally have applied

if the Sangers’ names and address had been squeezed into the relatively small

space provided in item 3 for listing the names and addresses of the judgment

creditors.) The majority claims that I am the one who is speculating when I assert

that that there is space to list additional plaintiffs or “et al.,” see Mem. Dispo. at 9

n.5, but that is wrong. One does not need to take my word for it—here is the box

from the Sangers’ abstract of judgment:

On top of all this, the form contains a box (item 4) that is to be checked if

additional space is needed for “[i]nformation on additional judgment creditors,”

and that box was not checked. Finally, the clerk’s portion of the form contains a

certification that “[a]ll judgment creditors and debtors are listed on this abstract,”

and the clerk signed the form, thereby making that certification.

In light of the actual content of the Sangers’ abstract of judgment, it would

be entirely “‘unreasonable to conclude that the judgment creditor might be another

plaintiff, whose name does not appear on the [a]bstract.’” See Mem. Dispo. at 10

(quoting bankruptcy court ruling) (alteration in original) (emphasis added).

As to the address, the majority concludes that “address” means only home

address and not any other address, such as an attorney’s or an agent’s address or

14
even a P.O. box. See Mem. Dispo. at 10–11 & n.6. But nothing in the statutory

text supports that narrow reading. See, e.g., BLACK’S LAW DICTIONARY (11th ed.

2019) (“address” simply means “[t]he place where mail or other communication is

sent”). Moreover, as the majority notes, substantial compliance is judged by

whether the information listed provides “‘the substance essential to every

reasonable objective of the statute,’” Assembly v. Deukmejian, 639 P.2d 939, 946

(Cal. 1982) (citation omitted), and the address provided by the Sangers meets that

standard. The only conceivable objective for listing the judgment creditors’

address is to provide a means for contacting them if necessary for any purpose

related to the enforcement of the judgment. But any “notice, order, or other paper”

concerning enforcement of the judgment that is required to be served on the

judgment creditor “shall be served on the judgment creditor’s attorney of record

rather than on the judgment creditor if the judgment creditor has an attorney of

record.” CAL. CODE CIV. P. § 684.010 (emphasis added). Because we construe

statutes to harmonize with each other, listing the judgment creditors’ attorney’s

address thus fully satisfies the statutory objective of § 674. The Sangers’ listing of

their attorney’s address substantially complied with the statutory requirement to

list their “address.”

I respectfully dissent.

15