Lee v. Choudhri

CourtUnited States Bankruptcy Court, S.D. Texas
DecidedFebruary 17, 2023
Docket20-03395
StatusUnknown

This text of Lee v. Choudhri (Lee v. Choudhri) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lee v. Choudhri, (Tex. 2023).

Opinion

IN THE UNITED STATES BANKRUPTCY COURT February 17, 2023 FOR THE SOUTHERN DISTRICT OF TEXAS Nathan Ochsner, Clerk HOUSTON DIVISION

IN RE: § § CASE NO: 18-32218 BRIAR BUILDING HOUSTON LLC, § § CHAPTER 11 Debtor. § § GEORGE M LEE, § § Plaintiff, § § VS. § ADVERSARY NO. 20-3395 § MOHAMMAD ALI CHOUDHRI, § § Defendant. §

MEMORANDUM OPINION In an odd turn of events, Mohammad Ali Choudhri, the party who initially removed the instant proceeding to this Court, consented to the entry of final orders on all non-core maters by this Court, opposed George M. Lee’s motion to remand and won, now seeks to remand it back to state court after litigating in this Court for over two years and George M. Lee, the party who initially sought remand and lost is now opposing remand. On the day trial was to commence in this adversary proceeding, Mohammad Ali Choudhri filed the instant motion to remand for lack of subject matter jurisdiction. On February 8, 2023, the Court conducted a hearing and for the reasons stated herein the Court finds that it does in fact lack subject matter jurisdiction over this proceeding and remands it back to the 152nd Judicial District Court of Harris County, Texas. I. BACKGROUND This Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52, which is made applicable to adversary proceedings pursuant to Federal Rule of Bankruptcy Procedure 7052. To the extent that any finding of fact constitutes a conclusion of law, it is adopted as such. To the extent that any conclusion of law constitutes a finding of fact, it is adopted as such. This Court made certain oral findings and conclusions on the record. This Memorandum Opinion supplements those findings and conclusions. If there is an inconsistency, this Memorandum Opinion controls.1 For the purposes of this Memorandum Opinion and, to the extent not inconsistent herewith, this Court adopts and incorporates by reference each of the

Background Facts in this Court’s January 14, 2021, and November 14, 2022, Memorandum Opinions.2 1. On April 30, 2018, Briar Building Houston, LLC (“Debtor”) filed a Chapter 11 petition (“Petition”).3

2. On May 15, 2018, Debtor filed a motion to compromise that incorporated a fully executed copy of an agreement dated May 11, 2018, (“May 11, 2018, Forbearance Agreement”).4 After conducting an evidentiary hearing on May 22, 2018, the Court approved the Motion to Compromise (“May 22, 2018, Order”) and the motion to dismiss.5 The bankruptcy case was dismissed on the same date.6

3. On August 19, 2020, Mohammad Ali Choudhri (“Defendant”) removed the present proceeding from the 152nd Judicial District Court of Harris County, Texas, to this Court, thus initiating the instant adversary proceeding (“Adversary Proceeding”).7

4. On September 20, 2020, George M. Lee (“Plaintiff”) filed a motion to remand the Adversary Proceeding back to the 152nd Judicial District Court of Harris County, Texas.8

5. On January 14, 2021, this Court issued a Memorandum Opinion and Order denying Plaintiff’s motion for remand.9

1 Citations to the docket in this adversary proceeding styled Lee v. Choudhri, 20-3395, shall take the form “ECF No. –––,” while citations to the bankruptcy case, 18-32218, shall take the form “Bankr. ECF No. –––.” Any reference to “Code” or “Bankruptcy Code” is a reference to the United States Bankruptcy Code, 11 U.S.C., or any section (i.e.§) thereof refers to the corresponding section in 11 U.S.C. or 28 U.S.C. 2 ECF No. 23, 114. 3 Bankr. ECF No. 1. 4 Bankr. ECF No. 30. 5 Bankr. ECF No. 39. 6 Id. 7 ECF No. 1. 8 ECF No. 12. 9 ECF Nos. 23, 24. 6. On November 28, 2022, Defendant filed his “Defendant’s Motion For Remand For Lack Of Subject Matter Jurisdiction” (“Motion to Remand”).10

7. On December 21, 2022, Plaintiff filed his “Objection To Defendant’s Motion To Remand For Lack Of Subject Matter Jurisdiction”11 and “Plaintiff’s Memorandum Of Law In Support Of Objection To Defendant’s Motion To Remand For Lack Of Subject Matter Jurisdiction” (“Response”).12

8. On January 4, 2023, Defendant filed his “Defendant’s Reply in Support of Motion to Remand”13 (“Reply”).

9. On February 8, 2023, the Court held a hearing and now issues its instant Memorandum Opinion.

II. JURISDICTION AND VENUE 28 U.S.C. § 1334(b) grants this Court jurisdiction over “all civil proceedings arising under title 11, or arising in or related to cases under title 11.” The jurisdictional issue presented is whether this Court has subject matter jurisdiction under § 1334(b) over the Adversary Proceeding. This Court may only hear a case in which venue is proper.14 28 U.S.C. § 1409(a) provides that “a proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending.” The Court presided over the underlying bankruptcy proceeding therefore venue of this proceeding is proper. III. ANALYSIS A. Standard of review for considering bankruptcy jurisdiction over removed state court proceedings

28 U.S.C. § 1452(a) provides that “A party may remove any claim or cause of action in a civil action… to the district court for the district where such civil action is pending, if such district

10 ECF No. 124. 11 ECF No. 128. 12 ECF No. 129. 13 ECF No. 130. 14 28 U.S.C. § 1408. court has jurisdiction of such claim or cause of action under section 1334 of this title.”15 Section 1334(b) grants this Court jurisdiction over “all civil proceedings arising under title 11, or arising in or related to cases under title 11.”16 “Arising under” jurisdiction requires that the proceeding “invoke a substantive right provided by [the Bankruptcy Code].”17 “Arising in” jurisdiction refers to proceedings that are not based on any provision of the Bankruptcy Code, but nonetheless “would

have no existence outside of the bankruptcy.”18 Taken together, proceedings that are “arising under” or “arising in” bankruptcy comprise this Court’s core jurisdiction.19 This Court may also exercise jurisdiction over proceedings that “relate to” a case under the Bankruptcy Code.20 A proceeding is “related to” a case under the Bankruptcy Code “when the outcome of that proceeding could conceivably have any effect on the estate being administered in bankruptcy.”21 In other words, “if the outcome could alter the debtor's rights, liabilities, options, or freedom of action (either positively or negatively) and which in any way impacts upon the handling and administration of the bankrupt estate.”22 “The existence of subject matter jurisdiction is determined at the time of removal.”23 “If ‘related to’ jurisdiction exists at the time of removal

subsequent events ‘cannot divest the district court of that subject matter jurisdiction.’”24

15 28 U.S.C. § 1452(a). See also 28 U.S.C. § 157

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Bank of Louisiana v. Craig's Stores of Texas, Inc.
266 F.3d 388 (Fifth Circuit, 2001)
In Re Enron Corp. Securities
535 F.3d 325 (Fifth Circuit, 2008)
Caterpillar Inc. v. Williams
482 U.S. 386 (Supreme Court, 1987)
American National Red Cross v. S. G.
505 U.S. 247 (Supreme Court, 1992)
Celotex Corp. v. Edwards
514 U.S. 300 (Supreme Court, 1995)
Rivet v. Regions Bank of Louisiana
522 U.S. 470 (Supreme Court, 1998)
Travelers Indemnity Co. v. Bailey
557 U.S. 137 (Supreme Court, 2009)
Corley v. United States
556 U.S. 303 (Supreme Court, 2009)
In Re Enron Corp. Securities, Derivative
511 F. Supp. 2d 742 (S.D. Texas, 2005)
Collins v. Sidharthan (In Re KSRP)
809 F.3d 263 (Fifth Circuit, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
Lee v. Choudhri, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lee-v-choudhri-txsb-2023.