Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_19-cv-02341/USCOURTS-caed-2_19-cv-02341-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:1334 Bankruptcy Appeal

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

In re RAJPAL SINGH CHATHA, and 

TARANJIT KAUR CHATHA,,

Debtors.

No. 2:19-cv-02341 WBS

Bankruptcy Case No.: 

17-25335-B-7

ORDER RE: MOTION FOR 

LEAVE TO APPEAL, OR, IN 

THE ALTERNATIVE, MOTION 

FOR CERTIFICATION OF THE 

FINALITY OF THE JUDGMENT

DOUGLAS WHATLEY, Chapter 7 

Trustee,

Plaintiff, 

v.

SIMRANJIT CHATHA; THRIVE 

MANAGEMENT, LCC; SUMMERFEST 

HOSPITALITY, LLC,

Defendants.

----oo0oo----

Plaintiff-appellee Douglas Whatley filed this action in 

bankruptcy court against defendants-appellants Simranjit Chatha 

Case 2:19-cv-02341-WBS Document 15 Filed 03/06/20 Page 1 of 6
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and Thrive Management LLC alleging claims related to two 

properties: a La Quinta Inn & Suites in Mansfield, Texas (the 

“Hotel”) and a parcel of real property located in Marysville, 

California (“Marysville Property.”). The bankruptcy court denied 

summary judgment as to the Hotel-related claims, but granted 

summary judgment as to most, but not all, claims related to the 

Marysville Property. (See Bankruptcy Court Order at 3 (Docket 

No. 8-1).) The judgment effectively ordered the transfer of the 

Marysville Property to appellee. (Id. at 40.) Before the court 

is appellants’ motion for leave to appeal the bankruptcy court’s 

order or, in the alternative, motion for certification of the 

finality of the judgment. (Docket No. 7.)

I. Motion for Certification of the Finality of the Judgment

To determine whether a judgment is final, and therefore 

whether appellate jurisdiction exists, courts in bankruptcy 

disputes typically apply a “flexible finality” approach which 

“focuses on whether the order affects substantive rights and 

finally determines a discrete issue.” In re Belli, 268 B.R. 851, 

854 (B.A.P. 9th Cir. 2001). Such an approach, however, does not 

apply in bankruptcy adversary proceedings because adversary 

proceedings “are merely federal civil actions under another name, 

and do not ordinarily present the types of uncertainties that 

necessitate ‘flexible finality’ analysis.” Id. Instead, 

“finality for purposes of jurisdiction over ‘as of right’ appeals 

under 28 U.S.C. § 158(a)(1) in adversary proceedings does not 

differ from finality in ordinary federal civil actions under 28 

U.S.C. § 1291.” Id. at 855. Accordingly, Federal Rule of Civil 

Procedure 54(b) controls such actions. Id.

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The present action is an adversary proceeding. (See

Appellants’ Mot. at 2 (Docket No. 7).) “The parties are named in 

the pleadings; the claims are those presented in the respective 

counts of the complaint. The litigation is conducted under the 

Federal Rules of Civil Procedure (as incorporated by Bankruptcy 

Rules) and follows the ordinary pattern of summons and complaint, 

answer, discovery, pretrial, trial, and judgment.” See id. at 

854-55. This court will therefore evaluate the finality of the 

judgment under Federal Rule of Civil Procedure 54(b) (“Rule 

54(b)”). 

Under Rule 54(b), “any order or other decision, however 

designated, that adjudicates fewer than all the claims or the 

rights and liabilities of fewer than all the parties does not end 

the action as to any of the claims or parties” unless the court 

“direct[s] entry of a final judgment as to one or more, but fewer 

than all, claims or parties” and “expressly determines that there 

is no just reason for delay.” Fed. R. Civ. P. 54(b). “Either 

the so-called ‘Rule 54(b) certification’ or ‘Rule 54(b) order’ 

appears on the face of the record using mandated express language 

or it is absent.” In re Belli, 268 B.R. at 855. If the socalled “Rule 54(b) certification” is not present, the “order is 

interlocutory and not appealable as a final order.” Id. at 855-

856. 

Here, the parties agree that the bankruptcy court did 

not adjudicate all claims. (Opp’n to Mot. at 3; Def.-Appellants’ 

Mot. at 3.) The parties also agree that the bankruptcy court did 

not certify the order under Rule 54(b) or expressly state that 

there was no just reason for delay. (Opp’n to Mot. at 7-8; Def.-

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Appellants’ Reply at 3 (Docket No. 14).) Because the “‘Rule 

54(b) certification’ is not present, . . . [the] order is 

interlocutory and not appealable as a final order.” In re Belli, 

268 B.R. at 855-56; see also id. at 856-57 (“It is long-settled 

that a grant of partial summary judgment without a Rule 54(b) 

certification is interlocutory and not within an appellate 

court’s jurisdiction over final orders.”) (citing Chacon v. 

Babcock, 640 F.2d 221, 222 (9th Cir. 1981).) 1

II. Leave to Appeal

Because the bankruptcy court’s order is interlocutory, 

“appellate jurisdiction depends upon whether the appellate court 

grants leave to appeal under 28 U.S.C. § 158(a)(3).” Id. at 856. 

“To determine whether to grant leave to file an interlocutory 

appeal from a bankruptcy court, the Court considers the 

following: (1) whether the order on appeal involves a 

‘controlling question of law as to which there is a substantial 

ground for difference of opinion’; (2) whether an ‘immediate 

right to appeal will materially advance the ultimate termination 

of the litigation’; and (3) whether denying leave to appeal ‘will 

result in wasted litigation and expense.’” Thissen v. Johnson, 

1 In their reply, Defendants-appellants argue that the 

bankruptcy court treated the order as a final judgment because 

the judgment was placed on a separate document. (Reply at 3-4.) 

Defendant-Appellants therefore ask this court to vacate the 

bankruptcy court’s judgment. (Id. at 4.) Appellants cite no 

authority to suggest that this court can do so. Further, until 

the bankruptcy court either dismisses or adjudicates the 

remaining claims in this action, the bankruptcy court “remains 

free under Rule 54(b) to change its mind about the . . . count as 

to which it granted partial summary judgment.” In re Belli, 268 

B.R. at 857. This court declines “to intermeddle with the trial 

court’s handling of the adversary proceeding until it has 

completed its task.” Id. at 858.

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406 B.R. 888, 892 (E.D. Cal. 2009) (quoting In re Roderick Timber 

Co., 185 B.R. 601, 604 (B.A.P. 9th Cir. 1995)). In its decision 

denying defendants-appellants’ motion for stay pending appeal, 

the bankruptcy court considered each of these points and 

concluded that defendants-appellants did not satisfy any of the 

factors above. (Opp’n to Mot. Ex. 2 at 6-7 (Order Denying Motion 

to Stay).) For the following reasons, this court agrees.

First, appellants have not identified any controlling 

question of law as to which there could be substantial ground for

difference of opinion. In evaluating this factor, the court 

looks to whether “there may be some conflict in the case law.” 

In re Roderick, 185 B.R. at 604. Appellants ask the court to 

evaluate two questions: first, whether a delay in reporting 

constitutes “concealment” under California Civil Code § 3439.04, 

and second, whether there was consideration in the creation of a 

life estate. 

For both questions, appellants fail to identify any

conflicting authority on either of these issues. Instead, 

appellants appear to argue that the bankruptcy court’s factual 

findings may have been incorrect. Appellants’ contentions 

represent questions of fact, not questions of law, and certainly 

do not establish “a substantial ground for difference of 

opinion.” See In re Roderick, 185 B.R. at 604; cf. Thissen, 406 

B.R. at 892 (finding difference of opinion where two judges at 

the Eastern District of California, within two days, “reached 

opposite conclusions . . . under nearly identical facts”). 

Appellants therefore fail to satisfy the first factor. 

Second, an immediate right to appeal will not advance 

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the ultimate termination of the litigation. A trial is necessary 

to adjudicate the claims related to the Hotel. (Appellants’ Mot. 

at 3; see also Order Denying Motion to Stay at 7.) Further, the 

bankruptcy court will still have to hear a claim for recovery of 

profits as to the Marysville Property. (Appellants’ Mot. at 3.) 

Granting leave to appeal here would not resolve these issues any 

earlier. Accordingly, appellants have not satisfied the second 

factor. 

Finally, denying leave will not result in wasted litigation 

and expense.2 As discussed above, the litigation will continue 

even if the court grants leave. To the contrary, granting leave 

would run the greater risk of wasting time and resources through 

the potential for piecemeal appeals. Accordingly, appellants 

also fail to satisfy the third factor. 

IT IS THEREFORE ORDERED that appellants’ motion (Docket 

No. 7) is, and the same hereby is, DENIED.

Dated: March 5, 2020

2 Notably, appellants do not address this factor.

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