In re: Isha Deen

CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedJune 7, 2022
DocketSC-21-1035-BSF
StatusUnpublished

This text of In re: Isha Deen (In re: Isha Deen) is published on Counsel Stack Legal Research, covering United States Bankruptcy Appellate Panel for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Isha Deen, (bap9 2022).

Opinion

FILED NOT FOR PUBLICATION JUN 7 2022 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

In re: BAP No. SC-21-1035-BSF ISHA DEEN, Debtor. Bk. No. 19-05815-CL13

ISHA DEEN; KEVIN KHWAJA, Adv. No. 19-90151-CL Appellants, v. MEMORANDUM∗ CHODRY DEEN; SANA DEEN; SIDRAH DEEN, Appellees.

Appeal from the United States Bankruptcy Court for the Southern District of California Christopher B. Latham, Chief Bankruptcy Judge, Presiding

Before: BRAND, SPRAKER, and FARIS, Bankruptcy Judges.

INTRODUCTION

Isha Deen ("Isha") 1 and Kevin Khwaja appeal an order granting appellees'

motion to reopen an adversary proceeding and remand what was a removed

action to the state court. During Isha's bankruptcy, she and Khwaja removed a

pending state court action to the bankruptcy court. After Isha dismissed her

∗ This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential value, see 9th Cir. BAP Rule 8024-1. 1 Because Ms. Deen and appellees share the same surname, we refer to each of the

Deens by his or her first name to avoid any confusion. No disrespect is intended. 1 bankruptcy case, and after no one timely requested a continuance of the

adversary proceeding, the clerk administratively closed the removed and

undecided adversary proceeding, essentially leaving the state court action in

limbo. Months later, appellees moved to reopen the adversary proceeding and

asked that the state court action be remanded to the state court for decision.

Over Isha and Khwaja's objection, the bankruptcy court granted both requests.

Seeing no reversible error, we AFFIRM.

FACTS

A. The state court action

The facts pertinent to this appeal are undisputed. Isha, Sana, and Sidrah

are sisters. Chodry, now deceased, was their father. Khwaja is Isha's husband.

The six-year dispute between the parties centers on ownership interests in a

residence known as the El Brazo property, where the parties reside together, or

at least did at one time. On one side of the dispute is Isha and Khwaja, on the

other is Sana and Sidrah (and perhaps Chodry's estate).

In 2016, Isha and Khwaja filed suit against Chodry, Sana, and Sidrah

(collectively, the "Deen Family") in the state court alleging various claims

concerning the El Brazo property, including quiet title. The Deen Family

responded with a cross-complaint which included, among other things, a

competing claim for quiet title (the "State Court Action"). The state court

bifurcated the State Court Action, setting for trial only the cross-claim for quiet

title. After a bench trial, the state court issued a decision regarding quiet title,

which the parties appealed. The cross-appeal of the quiet title order was

dismissed as interlocutory. A civil jury trial for the remaining claims in the State 2 Court Action was to begin in November 2019 but did not go forward due to

Isha's bankruptcy filing.

B. The bankruptcy filing and removal of the State Court Action

Isha filed a chapter 132 bankruptcy case on September 28, 2019. She and

Khwaja filed a notice of removal of the State Court Action, thereby commencing

Adv. No. 19-90151. The Deen Family filed a Statement of Nonconsent in

response to the removal and stated their intent to also file a motion to remand.

Prior to the deadline for the Deen Family to file a remand motion, Isha

moved to dismiss her bankruptcy case. The bankruptcy court granted her

request and entered an order dismissing the case on April 9, 2020. The main

case was closed on June 8, 2020.

On April 10, 2020, the day after Isha's bankruptcy case was dismissed, the

clerk issued a Notice to Parties under Local Rule 7041-2 in the adversary

proceeding:

NOTICE IS HEREBY GIVEN that the Bankruptcy Case No. 19- 5815-CL13 has been dismissed and no further proceedings are to be taken in connection therewith. Pursuant to Local Bankruptcy Rule 7041-2(a), this adversary proceeding will likewise be closed unless a party files a motion seeking continuation of the adversary proceedings within seven (7) days of the entry of this notice.

(Emphasis added). No one sought a continuation of the adversary proceeding

by the deadline. The clerk closed the adversary proceeding on May 18, 2020.

2 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, all "Rule" references are to the Federal Rules of Bankruptcy Procedure, and all "Civil Rule" references are to the Federal Rules of Civil Procedure. 3 Several months later, Isha allegedly filed a document in the state court

claiming that she had unilaterally dismissed the State Court Action in her

bankruptcy, and therefore the state court lacked jurisdiction. This prompted the

chain of events which led to this appeal.

C. The motion to reopen and remand the State Court Action

The Deen Family then filed a Request for Remand to State Court and

Order for Remand. The next day, the bankruptcy court clerk issued a notice of

error stating that the "case" was closed and instructing the Deen Family to file a

motion under Rule 5010 to reopen it.

The Deen Family then filed a Motion to Reopen Case under Rule 5010 and

a Request for Remand to State Court and Order for Remand ("Motion to Reopen

and Remand"). They argued that, due to an "administrative error" by the clerk,

the adversary proceeding was closed before a remand motion could be heard.

The Deen Family argued that they thought the State Court Action automatically

resumed at the state court upon the dismissal of Isha's bankruptcy case, so with

that understanding, they argued, they had no reason to continue the adversary

proceeding as instructed in the Notice to Parties.

The Deen Family argued that the adversary proceeding needed to be

reopened for the purpose of obtaining a remand order, and that several factors

weighed in favor of remand: (1) the removal was based solely on Isha's

bankruptcy filing and was done for the purpose of forum shopping; (2) the

claims at issue were state-law claims and the state court had expertise in those

matters; (3) the State Court Action was a non-core, related-to proceeding; and

4 (4) the state court had spent years with the case and issued numerous related

decisions, orders, and judgments.

Isha and Khwaja opposed the Motion to Reopen and Remand and

requested a hearing. They argued that the Deen Family failed to provide any

basis for the bankruptcy court to reopen the "dismissed" adversary proceeding

months after the court-ordered deadline in the Notice to Parties had passed and

no one had appealed the dismissal. Isha and Khwaja argued that the

bankruptcy court lacked jurisdiction to reopen the dismissed adversary and that

Rule 5010 was not a proper basis for reopening it. Isha and Khwaja additionally

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