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FILED

OCT 06 2016

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-15-1423-KuKiTa 

)

RICHARD STEPHEN KVASSAY, ) Bk. No. 2:11-bk-11698-DS

)

Debtor. )

______________________________)

)

RICHARD STEPHEN KVASSAY, )

)

Appellant, )

)

v. ) MEMORANDUM*

)

ROBERT V. KVASSAY, Trustee of )

the Kvassay Family Trust dated)

February 26, 1993; RUSSAKOW & )

TAN LLP; RUSSAKOW, GREENE & )

TAN LLP; MATTHEW C. BROWN, )

)

Appellees. )

______________________________)

Argued and Submitted on September 22, 2016

at Pasadena, California

Filed – October 6, 2016

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Deborah J. Saltzman, Bankruptcy Judge, Presiding

 

Appearances: Troy A. Stewart argued for appellant Richard

Stephen Kvassay; appellee Matthew C. Brown argued

for himself and for appellee Robert V. Kvassay,

trustee.

 

Before: KURTZ, KIRSCHER and TAYLOR, Bankruptcy Judges.

*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.
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INTRODUCTION

Former chapter 71 debtor Richard Stephen Kvassay appeals

from an order denying his motion to reopen his bankruptcy case so

that he could commence contempt proceedings against his brother

Robert Kvassay and his attorneys for alleged violation of the

discharge injunction. The bankruptcy court denied the motion to

reopen without specifying why, other than to merely state that

there was no reason to reopen.

Neither the Bankruptcy Code nor the Federal Rules of

Bankruptcy Procedure nor the bankruptcy court’s Local Rules

require that a bankruptcy case be reopened before commencing

contempt proceedings for violation of the discharge injunction. 

On that basis, we AFFIRM.

FACTS

The dispute underlying this appeal involves three brothers, 

(Richard, Robert and Peter), and a three and a half acre estate

and residence in Eagle Rock, California. Title to the real

property was placed into the Kvassay Family Trust dated

02/26/1993 by the brothers’ parents, who are now both deceased.

At the time of the parents’ death, both Richard and Peter lived

on the property. In fact, Richard had lived there more or less

continually since the 1960's, and Peter had lived there since the

1Unless specified otherwise, all chapter and section

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

all "Rule" references are to the Federal Rules of Bankruptcy

Procedure, Rules 1001-9037. All "Local Rule" references are to

the Local Bankruptcy Rules of the United States Bankruptcy Court

for the Central District of California.

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1980's.2 

At first, the three brothers attempted to cooperate

regarding refurbishing and disposing of the property. 

Eventually, however, that cooperation completely broke down, and

Robert as trustee of the trust sued Richard and Peter in the

Probate Division of the Los Angeles County Superior Court. 

Robert’s verified petition sought, among other things, to

evict Richard and Peter from the property and to offset against

their distributive share of the proceeds damages incurred as a

result of their alleged misconduct. According to Robert, both

brothers permitted the property to become extremely dilapidated

and interfered with efforts to refurbish the property. In

addition, Robert claimed, Peter falsely represented himself to be

trustee of the trust and thereby obtained a $1.5 million loan

secured by the trust property.

In 2011, while the probate court litigation was pending,

Richard filed a chapter 11 petition. His bankruptcy case later

was converted to chapter 7, and Robert obtained a bankruptcy

court order for relief from the automatic stay, which order

permitted him to proceed with the probate court litigation

without any restrictions on any aspect of those proceedings,

including eventual enforcement of the judgment.

After extensive probate court litigation, including an

unsuccessful state court appeal by Richard and Peter, Robert

2We have derived many of the facts set forth in this

decision from In re Kvassay, 2014 WL 2446181 (Mem. Dec.) (9th

Cir. BAP May 30, 2014), aff'd, 2016 WL 3318634 (Mem. Dec.) (9th

Cir. June 15, 2016).

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succeeded in evicting both Richard and Peter from the property in

2012. Other aspects of the probate court litigation continued

into 2015 and beyond.3

In September 2013, the bankruptcy court entered its standard

form discharge order, which is substantially the same as Official

Form B 18. The bankruptcy case was administratively closed in

October 2015 pursuant to § 350(a), and the debtor (Richard) filed

a motion to reopen the case in November 2015. In compliance with

the bankruptcy court’s Local Rule 5010-1, the motion to reopen

was accompanied by a declaration explaining why the case needed

to be reopened. According to the declaration, Richard wanted the

case reopened so he could commence contempt proceedings against

Robert and his attorneys for violation of the discharge

injunction. As Richard put it, Robert’s and his attorneys’

continued litigation in the probate court constituted an action

to collect, recover or offset roughly $1.5 million in discharged

prepetition debt, in violation of the discharge injunction. 

In Robert’s response to the motion to reopen, Robert argued

that the motion to reopen should be denied because Richard was

improperly attempting to relitigate the probate court’s

3Because the excerpts of record provided by the parties

included little information regarding the relief from stay and

probate court proceedings, we have reviewed the electronic case

dockets from the underlying bankruptcy case and the underlying

probate court litigation. See Bk. No. 11-11698; LASC Case No.

BP122477. We can and do take judicial notice of these documents. 

See O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.),

887 F.2d 955, 957–58 (9th Cir. 1989); Mullis v. Bankr. Ct.,

828 F.2d 1385, 1388 & n.9 (9th Cir. 1987). We also have reviewed

the bankruptcy and adversary proceeding dockets in the related

bankruptcy case of Richard’s brother Peter. We take judicial

notice of these dockets as well. See id.

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determination that Richard had “stolen assets of the trust.” 

Robert further argued that Richard had “unclean hands” and that

it would be inequitable to permit Richard to reopen his

bankruptcy case to commence contempt proceedings. Among other

things, Robert pointed out that he had not been listed or

scheduled as a creditor in Richard’s bankruptcy case, and he

additionally claimed that he did not actually know about

Richard’s bankruptcy case until it was too late to file either a

proof of claim or a nondischargeability action under § 523(c). 

Robert also asserted that denial of the motion to reopen was

justified for the same reasons the bankruptcy court indicated it

was prepared to deny the motion of Richard’s brother Peter for an

order to show cause re contempt for violation of the discharge in

Peter’s bankruptcy case. According to Robert, the bankruptcy

court stated its reasons for denying Peter’s motion for an order

to show cause during the course of a summary judgment hearing in

Robert’s nondischargeability adversary proceeding against Peter.

(Adv. No. 12-02577). 

During the summary judgment hearing, the bankruptcy court

stated that it was going to deny Peter’s motion for an order to

show cause re contempt because Robert’s actions in prosecuting

the probate court litigation did not violate the discharge

injunction. The bankruptcy court reasoned that, in light of the

fact that the liability at issue in the probate court litigation

also was the subject of a pending nondischargeability action, the

discharge injunction did not enjoin Robert from prosecuting the

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probate court litigation.4

After reviewing Richard’s motion to reopen and Robert’s

opposition, the bankruptcy court denied the motion to reopen

without holding a hearing. The three sentence order merely

stated that the motion to reopen was denied because “there are no

grounds to reopen the case.” The bankruptcy court entered its

order denying Richard’s motion to reopen on December 2, 2015, and

Richard timely appealed.

JURISDICTION

The bankruptcy court had jurisdiction pursuant to 28 U.S.C.

§§ 1334 and 157(b)(2)(O). We have jurisdiction under 28 U.S.C.

§ 158.

ISSUE

Did the bankruptcy court commit reversible error when it

held that there were no grounds to reopen Richard’s bankruptcy

case?

STANDARDS OF REVIEW

Orders denying motions to reopen are reviewed for an abuse

of discretion. Staffer v. Predovich (In re Staffer), 306 F.3d

967, 971 (9th Cir. 2002).

The bankruptcy court abuses its discretion if it applies an

incorrect legal rule or its factual findings are illogical,

implausible or without support in the record. See U.S. v.

Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc).

4Peter appealed the denial of his motion for an order to

show cause re contempt, and oral argument in Peter’s appeal was

held on the same date and before the same panel as held in this

appeal. (BAP No. CC-15-1420-KiTaKu.)

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In conducting our appellate review, we must ignore harmless

error, and we may affirm on any ground supported by the record. 

Lakhany v. Khan (In re Lakhany), 538 B.R. 555, 559-60 (9th Cir.

BAP 2015). 

DISCUSSION

Under § 350(b), the bankruptcy court may reopen a bankruptcy

case “to administer assets, to accord relief to the debtor, or

for other cause.” Rule 5010 describes the appropriate procedures

for requesting the reopening of a case pursuant to § 350(b). 

Under Rule 5010, the motion to reopen does not need to be served

on any parties; instead, the court may consider the motion ex

parte, because it presents an extremely limited range of issues:

“whether further administration appears to be warranted; whether

a trustee should be appointed; and whether the circumstances of

reopening necessitate payment of another filing fee.” Menk v.

Lapaglia (In re Menk), 241 B.R. 896, 916-17 (9th Cir. BAP 1999). 

Put another way, the reopening of the bankruptcy case is a

ministerial act of little or no legal significance. It merely

enables the bankruptcy court clerk to manage the bankruptcy

docket and case file and treat the case as an active, pending

matter. In re Staffer, 306 F.3d at 972; In re Menk, 241 B.R. at

913. As further explained in Menk, reopening of the bankruptcy

case does not affect either the debtor’s property or abandoned

estate property. Id. at 914. In fact, “[t]o the extent that

effects of closing are to be undone, specific orders in separate

civil proceedings are necessary.” Id. at 913.

Given the limited legal significance and limited practical

impact of reopening a bankruptcy case, when ruling on a motion to

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reopen, bankruptcy courts ordinarily should avoid addressing the

merits of any legal or factual disputes underlying the motion to

reopen. In re Staffer, 306 F.3d at 972; In re Menk, 241 B.R. at

916. As Menk explained: 

It may be objected that considerations of economy make

it sensible to combine consideration of the motion to

reopen with consideration of arguably dispositive

issues in the underlying litigation. The logical

appeal in this position turns out, in the long run, to

be a false economy. Well-intentioned shortcuts that

give short shrift to orderly procedure create

unfortunate misimpressions about the quality of justice

dispensed in bankruptcy courts, look sloppy, and lead

one into disorienting thickets that present more

trouble than they avoid.

The better practice is the procedurally correct one of

requiring merits issues to be left to the underlying

litigation and relying on Rule 9011 and the court's

inherent sanctioning authority to constrain

inappropriate litigation.

Id. at 916 (citations omitted).

On the other hand, when the undisputed facts in the record

unequivocally establish that reopening the case would be a

“pointless exercise,” the bankruptcy court may deny the motion to

reopen on that basis. See, e.g., Beezley v. Cal. Land Title Co.

(In re Beezley), 994 F.2d 1433, 1437 (9th Cir. 1993). 

In this case, the motion to reopen was unnecessary – or

pointless – for the following reason: neither the Bankruptcy Code

nor the Federal Rules of Bankruptcy Procedure required the

reopening of the bankruptcy case in order for Richard to commence

the contempt proceedings for alleged violation of the discharge

injunction. Staffer and Menk held that reopening of the case is

not required either jurisdictionally or otherwise before bringing

a post-closing nondischargeability action against the debtor. 

In Re Staffer, 306 F.3d at 972; In re Menk, 241 B.R. at 912; see

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also In re Lakhany, 538 B.R. at 560 (same). For the same reasons

that Staffer, Menk and Lakhany concluded that reopening was not

necessary in order to commence a post-closing action under § 523,

case reopening similarly is not necessary for the commencement of

post-closing contempt proceedings for violation of the discharge

injunction. At most, reopening the case in this context would be

a matter of convenience for the clerk of court in order to

facilitate case management and file management activities. 

In re Staffer, 306 F.3d at 972; In re Menk, 241 B.R. at 913.

In addition, the bankruptcy court’s “Court Manual”5

specifies that case reopening is not procedurally required in the

Central District of California before commencing a post-closing

action under § 523 or a post-closing action to remedy a violation

of the discharge injunction. See Court Manual at § 2.8(c) (Last

Revised August 2016).

In sum, it was unnecessary to reopen Richard’s bankruptcy

case in order for Richard to commence contempt proceedings

against Robert and his attorneys for alleged violation of the

discharge injunction, so the bankruptcy court did not commit

reversible error when it denied Richard’s motion to reopen.

CONCLUSION

For the reasons set forth above, we AFFIRM the bankruptcy

court’s order denying Richard’s motion to reopen his bankruptcy

case.

5The Court Manual describes itself as an “adjunct” to the

bankruptcy court’s Local Rules and can be found on the bankruptcy

court’s website at http://www.cacb.uscourts.gov/court-manual

(last visited Sept. 22, 2016).

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