# FIL ED
FEB 11 2020 SUSAN M . SPRAUL, CLERK U. S

. BKCY

. APP. PANEL O F T HE N I NT H CI RCUI T 

### ORD ERED PU BLISHED
U NIT E D ST A T E S BA NK RU PT CYA PPE L L A T E PA N E L

OF T HE NINT H CIRCU IT In re: MA GGIE LIU, Deb to r. VIN C EN T JU E, A p pellant,

v. MA GGIE LIU; R IC HA RD A

. MA R SHA C K

, C hapter 7 Trustee; RU TA N & TU C K ER

, LLP; YUHU O ; U .S. TRU STEE, A p pellees. BA P N o s . C C -19-1039-STaF C C -19-1040-STaF Bk. N o . 8:17-b k-12832-C B A dv. N o . 8:18-ap-01066-CB

OPINION

A rgued and Sub m itted o n Septemb er 26, 2019

at Pasadena, C alifo rnia Filed – Feb ruary 11, 2020 A ppeals fro mthe U nited States Bankruptcy C o urt fo r the C entral Distric t o f C alifo rnia Ho no rab le C atherine E. Bauer, Bankruptcy Judge, PresidingA ppearanc es: K athleen P. March o f The Bankruptcy Law Firm, P.C

. argued fo r appellant; David Edward Hays o f Marshac k Hays LLP argued fo r appellee R ichard A . Marshac k, C hapter 7 Trustee.

Befo r e: SPRA K ER

, TAY L O R

, and FA R IS, Bankruptcy Judges. O pinio n b y Judge Spraker C o nc u rrenc e b y Judge Taylo r SPRA K ER

, Bankruptcy Judge:

INT ROD U CT I ON Vinc ent Jue appeals fro mtwo o rders. First, he appeals fro man o rder entered in the m ain b ankruptc y c ase denying a m o tio n to dism iss deb to r Maggie Liu’s chapter 7 1 b ankruptc y pursuant to § 109(g)(2). And sec o nd, he appeals fro ma sum m ary judgm ent entered in an adversary pro c eeding
avo iding as preferential his attachm ent lien perfec ted sho rtly b efo re Liu’s
c o m m enc em ent o f her c hapter 7 c ase. Even tho u gh these two rulings
o c curred in distinc tb a nkruptc y pro c eedings, Jue c laim s the latter ruling - the sum m ary judgm ent – triggered the finality o f the fo rm er – the denial o f the m o tio n to dism iss. Jue cho s e to appeal the denial o f the dism issal m o t io n o nly after the

1 Unless speci fi ed other wi se, all chapterand secti on r efer ences ar e to the Bankr uptcy Code, 11 U.S

. C. §§ 101-1532, all “Rule” r efer ences ar e to the Feder a l Rules of Bankr uptcy Pr ocedur e, and all “Ci v i l Rule” r efer ences ar e to the Feder al Rules of Ci v i l Pr ocedur e. 2b ankruptc y c o urt entered sum m ary judgm ent in the preferenc e ac tio n. Jue

c o ntends that his appe al was tim ely b ec a use the o rder denying his m o tio n was interlo c uto ry when it was entered. W e disagree. While o rders denying
so m e types o f c ase dism issal m o tio ns are c o nsidered interlo c uto ry, a rec ent N inth C irc uit dec isio n, A spen S k iing Co . v. Cherrett (In re C herrett) , 873 F.3d 1060 (9th C ir. 2017), held that the denial o f a § 707(b ) m o tio n to dism iss is final and im m ediately appealab le. There is no b asis fo r us to depart fro m o r distinguish this N inth C irc uit autho rity. Based upo n In re Cherrett, we ho ld that the appeal o f the denial o f the § 109(g)(2) dism issal m o tio n was untim ely filed and m ust b e DISMISSED fo r lac k o f jurisdic tio n. W e pub lish b ec ause there are no o ther c a ses fro mwithin this c irc uit determ ining the finality o f an o rder denying a § 109(g)(2) dism issal m o tio n. A s fo r the appeal fro mthe sum m ary judgm ent, Jue fo cu ses o n the b ankruptc y c o urt’s rejec tio n o f his affirm ative defenses. But no ne o f these defenses justify reversal. The o nly sub stantive defenses availab le to a preferenc e defendant are tho se enum erated in the preferenc e statute. Jue’s defenses are no t am o ng the enum erated defenses. A d ditio nally, m any o f his defenses am o unt to an im perm issib le c o llateral attac k o n the o r der denying Jue’s § 109(g)(2) m o tio n to dism iss. Finally, Jue’s argum ents that the c reatio n o f his attachm ent lien relates b ac k to events o utside the 90-day preferenc e perio d are no t suppo rted b y applic ab le law. A c c o rdingly, we A FFIRM the b ankruptc y c o urt’s summ ary judgm ent in favo r o f the trustee

3in the preferenc e ac tio n. 2 FA CT S

A . L iu’s Firs t Bankruptc y Cas e A nd T he State Court L aws uits A g ains t Her. In March 2017, Liu c o m m enc ed her first b a nkruptc y c ase b y filing a
chapter 13 petitio n. W ithin days o f c o m m enc em ent o f that c ase, Jue and
ano ther c redito r, Yu Huo, separately m o ved fo r relief fro mthe auto m atic stay. Jue so ught to pro c eed with two lawsuits against Liu pending in the O range C o unty Superio r C o urt, which the state c o u rt had c o nso lidated fo r trial. Jue had c o m m enc ed his first lawsuit in June 2015, asserting c auses o f
ac tio n fo r b reach o f pro m isso ry no t e, fraud, c o nversio n, and fraudulent transfer o f perso nal pro perty. Jue alleged that Liu induc ed him to lo an her
m o ney under false pretenses. In furtheranc e o f this lawsuit, Jue had ob tained a right to attach o rder and a writ o f attachm ent. Jue pro vided the writ o f attachm ent to the O range C o unty Sheriff fo r rec o rding in the c o unty’s real pro perty rec o rds. Ho wever, b efo re the Sheriff c o uld rec o r d the do c um ent, Liu transferred legal title in her residenc e to her daughters. This led toJue’s sec o nd lawsuit, filed in N o vemb er 2015, seeking to avo id Liu’s transfer o f her residenc e as a fraudulent transfer. On N o vemb er 30, 2015, sho rtly after

2 On S eptember 2 6 , 2019, Jue fi led a supplemental br i ef. The Panel nei ther author i zed, nor r equested, supplemental br i efing. Jue’s S eptember 26, 2019, supplemental br i ef i s her eby ORDERED S TRICKEN. 4filing his sec o nd lawsuit, Jue rec o r ded a lis pendens against the transferred

residenc e. Liu’s chapter 13 b ankruptc y filing stayed the c o nso lidated trial in Jue’s state c o u r t lawsuits. A dditio nally, Liu’s chapter 13 schedules indic ated that Liu’s daughters rec o nveyed the real pro perty to her b efo re her c hapter 13 filing, as she listed a fee sim ple interest in the residenc e in her Schedule A /B. On A pril 5, 2017, the b ankruptc y c o u rt entered an o rder granting Jue relief fro mstay, perm itting him to pro c eed with his state c o urt lawsuit fo r b reach o f the pro m isso r y no t e and fraud. 3 Huo also m o ved fo r relief fro mstay. Her m o tio n to ld a sim ilar sto ry. Prio r to Liu’s chapter 13 b ankruptc y filing, Huo c o m m enc ed a lawsuit in the O range C o unty Superio rC o urt fo r fraud, c o nversio n, b reach o f fiduc iary duty, unjust enrichm ent, b reach o f c o ntrac t, and fraudulent transfer. Huo alleged that Liu m isappro priated $1,000,000.00 entrusted to her fo r investm ent purpo ses. Trial was set to b egin o n March 15, 2017, the day after Liu filed her chapter 13 petitio n. A c c o r ding to Huo, Liu’s b ankruptc y was o ne o f several plo ys to delay trial. A fter hearing Huo ’s
m o tio n o n an expedited b asis, the b ankruptc y c o urt entered an o rder o n A pril 6, 2017, granting her relief fro mstay to pro c eed with the state c o urt
ac tio n.

3 In li ght of the r econv eyance of the r esi dence to Li u, Jue v oluntar i ly di smi ssed hi s fr audulent tr ansferacti on, wi th pr ej udi ce, on July 12, 2017. 5O n May 3, 2017, Liu requested dismissal o f her c hapter 13 c ase. The

next day, the b a nkruptc y c o urt entered an o rder dism issing the c ase. B. L iu’s Sec ond Bankruptcy Cas e A nd T he § 109(g )(2) M otion T o D is m is s . O n July 17, 2017, Liu filed a c hapter 7 b ankruptc y petitio n. In the interim b etween the two b a nkruptc y c ases, Huoob tained a m o ney judgm ent against Liu and was in the pro c ess o f enfo rc ing that judgm ent b y arranging fo r a sheriff’s sale o f Liu’s residenc e. A s fo r Jue, during the interim b etween the two b a nkruptc y c ases, he rec o r ded his writ o f attachm ent against Liu’s residenc e o n June 5, 2017, thereb y c r eating an attachm ent lien against the r esidenc e. In additio n, Jue and Liu stipulated to entry o f a m o ney judgm ent fo r $480,000 in the o riginal ac tio n b ro ught b y Jue. Huo m o ved to dism iss the chapter 7 c a se. Huo c o ntended that Liu’s
chapter 7 petitio n was filed in c o ntraventio n o f § 109(g)(2). This statute pro vides that an individual is ineligib le fo r relief under the Bankruptc y C o de if he o r she has b een a deb to r in ano ther c ase within 180 days and
ob tained a vo luntary dism issal o f the prio r c ase after the filing o f a m o tio n fo r relief fro mthe auto m aticstay. Liu filed her chapter 7 petitio n 74 days after the vo luntary dism issal o f her c hapter 13 c ase. Jue jo ined in Huo ’ s m o tio n to dism iss. The underlying b a sis fo r the jo inder was essentially the sam e as stated in the m o tio n. Jue also relied o n § 109(g)(2).
6Bo th the U nited States Trustee and the chapter 7 trustee o p po sed the

m o tio n to dism iss. The United States Trustee po inted to irregularities in Liu’s schedules, which inc luded inc o nsistent statem ents o f inc o m e, allegedly valueless o verseas real pro p erty ho ldings, and large “lo ans” fro m relatives m ade sho rtly b efo re the b ankruptc y filing even tho ugh Liu
c laim ed to have little o r no c ash o n hand as o f the date o f her petitio n. These and o ther c o nc erns regarding Liu’s c o nduc t led the U nited States Trustee toc o nc lude that the b a nkruptc y c o urt sho uld exerc ise its disc retio n under § 109(g)(2) to notdism iss Liu’s chapter 7 c ase. A c c o rding to the U nited States Trustee, keeping Liu in chapter 7 b ankruptc y wo uld perm it himand the chapter 7 trustee to c o m p lete a full and tho r o ugh review o f the c ase and to investigate Liu’s alleged m isc o nduc t. Under these
c irc u m stanc es, the United States Trustee m a intained that it wo uld b e unjust and illo gic al to dism iss the c ase pursuant to § 109(g)(2). In c o ntrast, the chapter 7 trustee’s o ppo sitio n to the dism issal m o tio n fo c used o n fo u r liens that were plac ed o n Liu’s residenc e during the 90-day preferenc e perio d prec eding her c hapter 7 b ankruptc y filing. The liens inc luded Jue’s $140,371.16 attac hm ent lien and Huo ’s $704,043.90 judgment lien. 4 The chapter 7 trustee no ted that these liens, unless avo ided, wo uld fully c o nsum e the $1 m illio n in equity in the residenc e. Therefo re, the

4 The other two li ens wer e: (1) a $118,382.00 deed of tr ust in fav or of Mei -Ling S u; and (2) a $400,000.00 deed of tr ust in fav or of Qi ang Li . In addi ti on to these four r ecent li ens, Liu’s schedules r efer enced a $375,000.00 fi r st deed of tr ust. 7chapter 7 trustee reaso ned that the b a nkruptc y c o urt sho uld exerc ise its

disc retio n to d eny the dism issal m o tio n so that he c o uld seek to avo id the preferential liens and adm inister the residenc e fo r the b enefit o f all o f the estate’s unsecured c redito rs. A fter hearing the m a tter, the b ankruptc y c o u rt ado p ted the reaso ning
o f the U nited States Trustee and the chapter 7 trustee, and denied the dism issal m o tio n. A c c o rding to the c o u rt, allo wing the c hapter 7 c a se to pro c eed wo uld pro m o te the Bankruptc y C o de’s po lic y o f ratab le distrib utio n to c r edito rs while also fac ilitating c ivil and c rim inal investigatio n into any alleged m isc o nduc t in Liu’s b ankruptc y c ases. The b ankruptc y c o urt entered its o r der denying the m o t io n to dism iss
o n Septemb er 26, 2017. N either Jue no r Huo im m ediately appealed this
o rder. C. T he T rus tee’s Preferenc e A dv ers ary Proc e eding . In A pril 2018, the chapter 7 trustee c o m m enc ed an adversary pro c eeding against Jue. 5 The trustee alleged that Jue’s rec o rding o f his writ
o f attachm ent c reated an attachm ent lien against Liu’s residenc e within 90 days o f Liu’s chapter 7 b ankruptc y filing. The trustee also alleged that, unless avo ided, this lien wo uld enab le Jue to rec eive m o re than he wo uld in Liu’s chapter 7 c ase ab sent the lien. The trustee thus c o nc luded that the attachm ent lien was an avo idab le preferential transfer.

5 The r ecor d indi cates that Huo sti p ulated to av oi dance of her j udgment li en. 8In his answer to the c o m plaint, Jue alleged several affirm ative

defenses, inc luding unc lean hands, esto ppel, and waiver. Each o f these defenses was b ased o n the c hapter 7 trustee’s o ppo sitio n to the m o tio n to dism iss. Jue insisted that such o ppo sitio n was wro ngful and entitled him to relief fro mthe avo idanc e ac tio n. Jue further asserted that the attachm ent lien sho uld b e treated as having arisen b efo re the 90-day preferenc e perio d. He urged that the attachm ent lien related b ac k to the date the state c o urt issued its right to attach o rder. A lternatively, Jue argued that the attac hm ent lien related b a c k to the date he rec o rded his lis pendens in the fraudulent transfer ac tio n. Finally, Jue asserted that equity dem anded the c o urt pro tec t himas an inno c ent party fro mthe c o nsequenc es o f Liu’s m isc o nduc t, which direc tly led to the c o urt’s denial o f the § 109(g)(2) m o tio n to dism iss. The b ankruptc y c o urt heard the parties’ c ro ss-m o t io ns fo r sum m ary judgm ent. The b ankruptc y c o urt ruled in favo r o f the trustee and against Jue. In the pro c ess, the b ankruptc y c o urt effec tively rejec t ed all o f Jue’s affirm ative defenses. O n Feb ruary 21, 2019, Jue filed a no tic e o f appeal fro mthe b ankruptc y c o urt’s o r al rulings o n the c ro ss-m o tio ns fo r sum m ary judgm ent. O n that sam e date, Jue filed a separate appeal fro mthe Septemb er 26, 2017 o rder denying the m o tio n to dism iss Liu’s b a nkruptc y
c ase. On A pril 3, 2019, the b ankruptc y c o urt entered its judgm ent avo iding

9and preserving Jue’s attachm ent lien. O n A p ril 4, 2019, Jue filed an

am ended no tic e o f appeal c o vering the final judgm ent in the adversary pro c eeding. JU RISD ICT ION The b ankruptc y c o urt had jurisdic tio n under 28 U .S.C . §§ 1334 and 157(b )(2)(A ) and (F). Subj ec t to the jurisdic tio nal discussio n set fo rth b elo w, we have jurisdic tio n under 28 U .S.C . § 158. ISSU E S 1. Did Jue tim ely appeal the o rder denying the § 109(g)(2) dism issal
m o tio n? 2. Did the b ankruptc y c o urt err when it granted sum m ary judgm ent in favo r o f the trustee in the preferenc e adversary pro c eeding?

ST A ND A RD OF RE V I E W Tim eliness is a jurisdic tio nal issue that we c o nsider de no vo . W ilk ins v. Mencha ca (In re W

ilk i ns) , 587 B.R . 97, 100 (9th C ir. BA P 2018). W e also
c o nsider de no vo appeals fro mgrants o f sum m ary judgm ent. Plya m v. Precisio n D ev., LLC

(In re Plya m ) , 530 B.R . 456, 461 (9th C ir. BA P 2015). When we c o nduc t a de no vo review, we c o nsider the m atter anew, as if the b ankruptc y c o urt had no t previo usly reso lved it. K a shika r v. Turnstile Ca pita l M

gm t., LLC (In re K

a s hika r) , 567 B.R . 160, 164 (9th C ir. BA P 2017).

10D ISCU SSION

A . Juris dic tional Is s ue - Finality A nd T im elines s Of A p p eal FromT he Order D enying Cas e D is m is s al M otion

. 1. Finality In Bankruptcy Cas e s - Generally. Finality is a c ritic al c o m po nent o f b a nkruptc y appellate jurisdic tio n. S ee Phillips v. Gilm a n (In re Gilm a n) , 887 F.3d 956, 961 (9th Cir. 2018). O rdinarily, a federal c o urt o rder is final, and therefo re appealab le, when “the dec isio n presented fo r review ‘ends the litigatio n o n the m erits and leaves no thing fo r the distric t c o urt to do b ut exec ute the judgm ent.’” Gugliuzz a v. Fed. Tra de Co m m 'n (In re Gugliuzz a ), 852 F.3d 884, 890 (9th Cir. 2017) (quo ting Co ngrejo Invs., LLC v. Ma nn (In re Bender) , 586 F.3d 1159, 1163 (9th C ir. 2009)). Ho wever, the N inth C irc uit takes a pragm atico rflexib le appro ach to finality in b ankruptc y c ases. S ee D unk ley v. R egaProps., Ltd. (In re R e ga Pro ps., Ltd.) , 894 F.2d 1136, 1138 (9th Cir. 1990). This appro ach to finality is driven b y the realizatio n that “‘c ertain pro c eedings in a b ankruptc y c ase
are so distinc t and c o nc lusive either to the rights o f individual parties o r the ultim ate o utc o m e o f the c ase that final dec isio ns as tothemsho uld b e [im m ediately] appealab le as o f right.’” Id. (quo t ing United S ta tes v. Technica l Kno cko ut Graphics, Inc. (In re Technica l Kno cko ut Graphics, Inc.) , 833 F.2d 797, 800 (9th C ir. 1987)). The test fo r finality in b ankruptc y typic ally asks twoquestio ns: (1) whether the b ankruptc y c o urt’s o rder fully and finally determ ined the
11disc rete issue o r issues it addressed; and (2) whether it “reso lves and

serio usly affec ts sub stantive rights.” Eden Pla ce, LLC v. Perl (In re Perl), 811 F.3d 1120, 1126 (9th C ir. 2016) (quo ting S S Fa rm s, LLC v. S ha rp (In re S K Fo o ds, L.P.) , 676 F.3d 798, 802 (9th Cir. 2012)). This Panel applies the same finality test used b y the N inth C irc uit. S ee Aspen S k i ing Co . v. Cherrett (In re Cherrett) , 523 B.R . 660, 665 (9th C ir. BA P 2014), a s co r rected , (N o v. 18, 2014),
a ff'd, 873 F.3d 1060 (9th C ir. 2017). 6 U sing this finality standard, the N inth C irc uit has fo und m any different types o f b a nkruptc y c o urt o rders to b e final. S ee, e.g. , In re Cherrett , 873 F.3d at 1065 (o rder denying m o tio n to dism iss c ase under § 707(b )); R o sso n v. F itzgera ld (In re R o s so n) , 545 F.3d 764, 769 (9th Cir. 2008) (c ase
c o nversio n o rder); D ye v. Bro wn (In re AFI H o l ding, Inc.) , 530 F.3d 832, 837 (9th C ir. 2008) (o rder rem o ving c hapter 7 trustee fo r c ause); D ucko r S pra dling &

Metzger v. Ba um Tr. (In re P.R .T.C ., Inc.) , 177 F.3d 774, 777, 780

6 In some cases, the Ninth Ci r cui t has appli ed a di ffer ent, four par t fi nali ty test that looks at the followi ng concer ns: “(1) the need to av oi d pi ecemeal li ti gati on; (2) j udi ci al effi ci ency; (3) the systemi c inter est i npr eser v ing the bankr uptcy cour t's r ole as the finder of fact; and (4) whetherdelayi ng r ev i ew would cause either par ty i r r epar able har m.” In re Perl , 811 F.3d at 1126 (quoti ng Sahagun v. Landmark Fence Co. (In re Landmark Fence Co.) , 801 F.3d 1099, 1102 (9th Ci r . 2015)). The Ninth Ci r cui t has held that thi s four -par t test should be appli ed only i n appeals fr om di s tr i ct cour t or BAP deci si ons r emanding to the bankr uptcy cour t for fur ther findings. Id. at 1126; see also Ocwen Loan Servicing, LLC v. Marino (In re Marino), __ F.3d ___ , sli p op. at 6 (9th Ci r . Feb. 10, 2020) (stating that BAP deci si ons ar e not fi nal when they r emand for factual deter minati ons on key i s sues). In contr ast, when the di str i ct cour t or the BAP affi r ms or r ev er ses the bankr uptcy cour t wi thout r emanding, the Ni nth Ci r cui t appli es the standar d two-par t test set for th abov e. In re Perl , 811 F.3d at 1126

. 12(9th C ir. 1999) (o rder appro ving sale o f estate assets); La w O f fices o f Nicho la s A. F ra nke v. Tiffa ny (In re Lewis) , 113 F.3d 1040, 1044 (9th Cir. 1997) (o rder fo r disgo rgem ent o f b a nkruptc y c o unsel’s atto rney’s fees); Turgeo n v. V icto r ia S ta tio n Inc. (In re V icto riaS ta tio n Inc.) , 840 F.2d 682, 683–84 (9th Cir. 1988) (o rder denying m o t io n to assum e real pro perty lease). The Suprem e C o urt has rec o gnized that “the o rdinary understanding
o f ‘final dec isio n’ is no t attuned to the distinc tive c harac ter o f b ankruptc y litigatio n.” R i tz en Grp., Inc. v. Ja ck so n M a so nry,LLC

, 2020 WL 201023 *2, __ S.C t. __ (Jan. 14, 2020); see a lso Bulla rd v. Blue H ills Ba nk , 575 U .S. 496, 135 S. C t. 1686, 1692-93 (2015). In Bulla rd, the Suprem e C o urt c o nsidered the finality o f an o rder denying c o nfirm atio n o f a chapter 13 plan fo r appeal. The C o urt explained the differenc es inherent in b ankruptc y m a tters fro m
m o re traditio nal litigatio n c ases: The [finality] rules are different in b ankruptc y. Ab a nkruptc y c ase invo lves an aggregatio n o f individual c o ntro versies, m a ny o f whic h wo uld exist as stand-alone lawsuits b ut fo r the b ankrupt status o f the deb to r. A c c o rdingly, C o ngress has lo ng pro vided that o rders in b a nkruptc y c ases m ay b e im m ediately appealed if they finally dispo se o f disc rete disputes within the larger c ase. The current b ankruptc y appeals statute reflec ts this appro ach: It autho rizes appeals as o f right no t o nly fro mfinal judgm ents in c ases b ut fro m“final judgm ents, o rders, and dec rees . . . in c ases and pro c eedings.” § 158(a). Id. at 1692 (no n-statuto ry c itatio ns and so m e internal quo tatio n m arks
o m itted).

13U ltim ately, the C o urt fo und that the relevant “pro c eeding” fo r

purpo ses o f finality within the b a nkruptc y was the c o nfirm atio n pro c ess as a who le. Denial o f the c hapter 13 plan was no t final b ec ause “o nly plan
c o nfirm atio n - o r c ase dism issal - alters the status quoand fixes the rights and ob ligatio ns o f the parties.” Id . at 1692. Despite denial o f the plan the deb to r s c o uld c o ntinue with the plan pro c ess, so that “[d]enial o f
c o nfirm atio n with leave to am end, b y c o ntrast, changes little.” Id . at 1693. 7 A pplying Bulla rd, the Suprem e C o urt rec ently held that denials o f relief fro mstay were final fo r purpo ses o f appeal. In R itz en Grp., Inc. , the C o urt again no ted the diffic ulties in applying traditio nal c o nc epts o f finality to b ankruptc y dec isio ns. Rec o gnizing the o ften interdependent nature o f b ankruptc y dec isio ns, the C o u rt rem arked that “[d]elaying appeal until the term inatio n o f the entire b ankruptc y c ase, therefo re, c o uld have this unto w ard c o nsequenc e: R eversal o f a dec isio n m a de early o n
c o u ld require the b ankruptc y c o urt to unravel later adjudic atio ns rendered

7After Bullard, the Ni nth Ci r cui t has held that i ts four -par t bankr uptcy finali ty test does not per mi t i t to tr eat as final di str i c t cour t or BAP r emands solely because they inv olv e pur ely legal questi ons the r esoluti on of whi ch would mater i a lly ai d the bankr uptcy cour t’s deci si onal pr ocess. In re Gugliuzza , 852 F.3d at 897-98. Accor ding to In re Gugliuzza , a deci si on that r emands a case forfur ther findings wi ll r ar ely “fi nally di spose of [a] di scr ete di spute [] wi thin the lar ger case.” Id. at 897 (ci tin g Bullard, 135 S

. Ct. at 1692). Mor eov er, In re Gugliuzza r ead Bullardto adopt a gener al r u le “that only deci si ons that alter the status quo or fi x the par ti es’ r i ghts and obli gati ons could be appealed.” Id. The Ninth Ci rcui t has held, howev er, that i ts two-par t fi n ali ty test gener ally i s consi stent wi th Bullard

. In re Gilman , 887 F.3d at 962-63. 14in relianc e o n an earlier dec isio n.” 2020 WL 201023, at *2. The C o urt then

c o nc luded that relief fro m stay m o tio ns presented a disc rete, independent “pro c eeding” that qualified as final fo r purpo ses o f appeal. In do ing so , the C o urt rejec ted the argum ent that m o t io ns fo r relief fro m stay m erely determ ined the appro priate fo rumfo r the larger pro c ess o f c laim s adjudic atio n rec o gnizing that stay relief dec isio ns “c an signific antly inc rease c redito rs’ c o sts.” Id . at *5. Sim ilarly, the C o urt rejec ted c o nc erns regarding piec em eal appeals po inting to the sub s tantial reso urc es expended o n sub sequent litigatio n o f the c redito r’s c laimin the b ankruptc y and c o nfirm atio n o f the deb to r’s plan o f reo rganizatio n that flo w ed fro m the denial o f relief fro mstay. Rejec ting the request to restart the litigatio n
o n the m o ving c redito r’s c laim, the C o u rt ob served that “[t]he sec o nd b ite Ritzen seeks sc arc ely advanc es the finality princ iple.” Id . at *7. Tho u gh the need fo r an expanded c o nc ept o f finality fo r b ankruptc y dec isio ns is well estab lished, the b a nkruptc y finality standard is no t witho ut its do wnside. Every tim e an appellate c o u rt dec lares that a c ertain type o f o rder is flexib ly final and henc e im m ediately appealab le, it has the po tential to ero de whatever c ertainty there is c o nc erning the tim ely
c o m m enc em ent o f an appeal. The stakes c o u ld no t b e higher. Failure to tim ely appeal a final o rder is a jurisdic tio nal defec t, which deprives the appellate c o urt o f the po wer to review the o rder. S ee O z e nne v. Cha se Ma nha tta n Ba nk

(In re O z enne) , 841 F.3d 810, 814 (9th Cir. 2016) (en b anc ); In

15re W

ilk ins , 587 B.R . at 107. Thus, fo r every type o f b ankruptc y o rder fo r whic h the prevailing finality standard perm its im m ediate review, there is a po tential trap fo r the unwary litigant: the failure to rec o gnize that a partic u lar type o f b ankruptc y o rder is final and im m ediately appealab le typic ally m eans that the litigant will m iss the appeal deadline and lo se his
o r her right and ab ility to appeal. R itz en Grp, Inc., 2020 W L 201023, at *3 (“an erro neo us identific atio n o f a final o rder as interlo c uto ry m ay c ause a party to m iss the appellate deadline”). This situatio n, ho wever, is no t new. The N inth C irc u it has lo ng advised litigants in b ankruptc y who are unsure ab o u t the finality o f an
o rder to file a no tic e o f appeal to preserve their rights whether the m atter was final o r interlo c uto r y. S ee Ryther v. Lum ber Pro ducts, Inc. (In re Ryther) , 799 F.2d 1412, 1414 (9th Cir. 1986); see a lso S ilver S a ge Pa rtners, Ltd. v. C ity o f D esert H o t S prings (In re C ity o

f D esert H

o t S prings) , 339 F.3d 782, 787 (9th C ir. 2003) (“In Ryther

, we no ted that if a litigant is unsure ab o ut the nature
o f an o rder, the litigant sho uld file b o th a no tic e to appeal and a m o tio n fo r leave to appeal b efo re the BA P o r distric t c o urt.”). 2. Finality Of OrdersD enyingM otions T o D is m is s Bankruptc y Cas es . a. T raditional A pplic a tion

. “O rdinarily, o rders denying a m o t io n to dism iss wo uld no t c o nstitute final, appealab le o rders b ec a use they do no t ‘end[ ] the litigatio n o n the

16m erits and leave[ ] no thing fo r the c o urt to do b ut exec ute the judgm ent.’”

In re Cherrett

, 873 F.3d at 1064-65 (quoting In re La ndm a rk Fence Co . , 801 F.3d at 1102). In the b ankruptc y appeal c o ntext, the N inth C ircuit traditio nally has held that denials o f a m o tio n to dism iss the b ankruptc y are interlo cuto ry b ec ause the appellants wo uld no t b e irreparab ly harm ed in the ab senc e o f an im m ediate appeal. S e e Fa rber v. 405 N. Bedfo rd D r. Co rp. (In re 405 N

. Bedfo rd D r . Co rp.) , 778 F.2d 1374, 1377-79 (9th Cir. 1985) (denial
o f dism issal o f chapter 11 c ase fo r b a d faith); In re C ity o f D esert H

o t S prings , 339 F.3d at 790 (denial o f dism issal o f chapter 9 fo r b ad faith); In re R ega Pro ps., Ltd. , 894 F.2d at 1138–39 (denial o f dism issal o f chapter 11 fo r b ad faith). In re 405 N. Bedfo rd D r. Co rp. is particularly instruc tive. There, the N inth C irc uit dism issed as interlo c uto ry an appeal fro mthe denial o f a
m o tio n to dism iss a b ankruptc y c ase under § 1112(b ) fo r b ad faith. In assessing the finality o f the denial o f the dism issal m o tio n, In re 405 N
. Bedfo r d D r. Co rp. fo c used upo n the ab senc e o f a need fo r im m ediate appellate review to prevent irreparab le harm :

A ltho ugh the b enefic iaries will have to c o ntinue their partic ipatio n in the reo rganizatio n pro c ess, their interests will b e pro tec ted while they partic ipate. . . . A s secured c redito rs, the b enefic iaries c an pro tec t their interests b y m o ving the b ankruptc y c o urt to pro vide them adequate pro tec tio n as defined b y 11 U .S.C . § 361, o r b y

17seeking relief fro mthe auto m aticstay under 11 U

. S.C . § 362(d) if such pro tec tio n is no tpro vided. In re 405 N. Bedfo rd D r. Co rp ., 778 F.2d at 1377. The N inth C irc uit distinguished the c o ntinuatio n o f the chapter 11
c ase b efo re it fro mo ther instanc es where it perm itted im m ediate appeal despite the c o ntinuatio n o f the b ankruptc y. C iting Ma so n v. Integrity Ins. Co . (In re Ma so n), 709 F.2d 1313 (9th C ir. 1983), the c o urt no ted that an appeal fro mthe denial o f a deb to r’s m o tio n to vac ate the o rder fo r relief in an invo luntary chapter 7 b ankruptc y c ase was suffic iently final to warrant an im m ediate appeal fo r two reaso ns. First, the pro c edures surro unding an invo luntary b ankruptc y were sim ilar to tho se em plo yed in o ther c ivil and
c rim inal litigatio n that result in a final judgm ent. Therefo re, the c o urt
reaso ned, the pro c edural fram ewo rk suggested that an o rder fo r relief sho uld b e treated as final. In re 405 N. Bedfo rd D r. Co rp ., 778 F.2d at 1378. Sec o nd and m o r e im po rtantly, the N inth C irc uit fo und that, o nc e the o rder fo r relief was entered, there were no statuto ry pro visio ns adequately pro tec ting invo luntary deb to rs against irreparab le injury fro mthe
c o ntinuatio n o f the b ankruptc y. 8 Id

.

8 In re 405 N. Bedford Dr. Corp . also di s ti ngui shed or d er s denying r eli ef fr om stay fr om or der s denying di smi s sal. It explai ned that or der s denying r eli ef fr om stay wer e final and appealable because they “will fr equently cause [the cr edi tor ] i r r epar able har m i f he has to wai t to the end of the bankr uptcy case to appeal.” 778 F.2d at 1379 (ci ti ng Crocker Nat’l Bank v. Am. Mariner Indus., Inc. (In re Am. Mariner Indus., Inc.) , 734 F.2d 426 (9th Ci r. 1984)). Accord Ritzen Grp., Inc. , 2020 WL 201023, at *6 (obser ving that excludi ng deni a l s of r eli ef fr om stay fr om i m medi ate appeal “would for ce cr edi tor s who lose (continued...) 18Indeed, the N inth C irc uit in In re Ma so n spec ific ally fo und “the o ther

pro tec tio ns under the Bankruptcy C o de insuffic ient to o utweigh the potential fo r irreparab le injury o nc e an o r der fo r relief is entered.” In re Ma so n, 7 09 F.3d at 1317-18 (emphasis added). Pertinent tothe instant
m atter o n appeal, In re Ma so n held that im m ediate review was appro priate b ec ause: A n o rder fo r relief, b eing a c o nc lusive determ inatio n o f the deb to r’s status as b ankrupt, c arries with it a g reat potential fo r irreparab le injury if im m ediate appeal is no t allo wed. A n o rder fo r relief effec tively divests the deb to r o f his assets, c reating an estate c o ntro lled b y the b ankruptc y c o urt. In a Chapter 7 c ase the trustee is ob ligated to gather the assets o f the estate, liquidate them, and to the extent po ssib le satisfy c redito rs’ c laim s. The deb to r is then discharged, 11 U .S.C . § 727, and the c ase c lo sed, 11 U .S.C . § 350. During the adm inistratio n o f the estate the deb to r ’s rights are lim ited. O n entry o f the o rder fo r relief he lo ses c o ntro l o f his assets, which m ay inc lude a b usiness. Adeb t o rm ay po ssib ly attac k the pro priety o f every sale b y appeal, b ut to effec tively do so he m ust seek to stay the sale. Id. at 1317 (em phasis added and internal c itatio ns and quo tatio ns o m itted).

b. In reChe rre tt. In In re Ch errett

, a c redito r m o ved to dism iss the deb to r s’ chapter 7

8 (...continued) stay-r eli ef moti ons to fully li ti gate thei r clai ms in bankr uptcy cour t and then, after the bankr uptcy case i s ov er, appeal and seek to r edo the li ti gati on all ov er agai n in the or i gi nal cour t.”)( quoting Ritzen Grp. Inc. v. Jackson Masonry, LLC (In re Jackson Masonry, LLC) , 906 F.3d 494, 503 (6th Ci r. 2018)). 19b ankruptc y under § 707(b ) fo r ab use. 9 523 B.R . at 664-65. The c redito r

argued that § 707(b ) applied b ec ause the C herretts’ deb ts were prim arily
c o nsum er. The b ankruptc y c o urt disagreed and denied the m o tio n to dism iss. Id. at 665. On appeal, the BA P held that the o rder was final fo r review. Id. at 666. The BA P no ted that altho ugh the N inth C irc uit had no t yet addressed the finality o f o rders denying m o tio ns to dism iss under § 707(b ), the First, Third, Fo urth, Fifth, Seventh and Eighth C irc u its “c o nsider such o rders to b e final b ased o n prac t ic a lity, judic ial effic ienc y and o ther pragm aticc o nsideratio ns.” Id . C iting vario us c o m m ents fro m these dec isio ns, the BA P held that the denial o f the dism issal m o t io n was final, reaso ning: If such an o rder is no t c o nsidered final, the m o ving party and the deb to r will have to wait until the c ase is c o m pleted, whic h wastes deb to r reso u r c es that sho uld b e used to pay c redito rs, and fo rc es trustees and b a nkruptc y c o urts to expend their sc arc e institutio nal reso urc es o n ab u sive C hapter 7 petitio ners. Mo reo ver, po stpo ning the appeal until the end o f the b ankruptc y c ase c o uld result in the need to unwind vario us adm inistrative ac tio ns, likely with so m e diffic ulty (e.g., having to revo ke the deb to r’s discharge, po t entially c o m pelling c redito r s to disgo rge distrib utio ns m a d e b y the trustee). Id . at 667 (c itatio ns and internal quo t a tio n m arks o m itted).

9 As amended by the Bankr uptcy Abuse Pr ev enti on and ConsumerPr otecti on Act of 2005, Pub. L. No. 109–8, 119 S tat. 23, § 707(b) pr esumes that a chapter7 case i s abusiv e, and should be di smi ssed, unless the debtori s able to sati sfy the “means test” also set for th i n the amended statute. See McDow v. Dudley, 662 F.3d 284, 288 (4th Ci r. 2011) (descr ibing 2005 amendments to § 707(b)). 20The N inth C irc uit affirm ed, also relying o n the dec isio ns o f its sister

c irc u its and no ting: “[t]hese c irc uits rec o gnize that the c u rrent versio n o f § 707(b ) . . . ‘m anifest[s] a c o ngressio nal po licy to po lic e all C hapter 7 c ases fo r ab use at the o u t s et o f a C hapter 7 pro c eeding.’” In re Cherrett , 873 F.3d at 1065 (quo ting M cD o w, 662 F.3d at 288). It further po inted to the o ther
c irc u its’ fo c us o n “‘pragm aticc o nsideratio ns that indic ate that the denial o f a § 707(b ) m o tio n to dism iss is different fro mthe denial o f o ther m o tio ns to dism iss.’” Id. (quo ting M c D o w, 662 F.3d at 288). The N inth C irc uit did no t expressly c o nsider whether any harmo r injury wo uld arise if the appellant c redito r were fo r c ed to wait until the end o f the b ankruptc y c ase to appeal the denial o f its § 707(b ) dism issal
m o tio n. 1 0 Instead, it fo c used o n “po lic ies o f judic ial effic ienc y and finality”

1 0 In re Cherrett ’s finali ty analysi s in lar ge par t r eli ed on McDow, 662 F.3d at 287- 90, whi ch also consi der ed the finali ty of an or der denyi ng di s mi ssal of a bankr uptcy under§ 707(b) and emphasized the pr a gmati c har m that would r esult i f appellate r ev i ew was delayed unti l completi on of the bankr uptcy case: Delaying appellate consi der ati on of abuse could frustr ate both pr inci p les of j udi ci al economy and Congr ess’s goal of ensur ing that debtor s allocate as much of thei r r esour ces as possi ble towar d r epayi ng thei r debts. The r esour ces of the debtor could be wasted in completing the bankr uptcy pr oceedi ng befor e finally r esolv ing the abuse i ssue. Requi r ing tr ustees to complete Chapter 7 pr oceedings befor e appealing deni al of thei r § 707(b) moti ons wastes debtor r esour ces that should be used to pay cr edi tor s, and for ces tr ustees and bankr uptcy cour ts to expend thei r scar ce in sti tuti onal r esour ces on abusiv e Chapter 7 peti ti oner s. Id. at 290 (ci tati ons and inter nal quotati on mar ks omi tted). 21to c o nc lude that the denial o f dism issal was a final o rder. Id. (quo ting Z o lg

v. K elly (In re K

elly) , 841 F.2d 908, 911 (9th Cir. 1988)). The c o urt fo und that these po lic ies justified treating the denial o f appellant’s § 707(b ) dism issal
m o tio n as final, explaining: “Sec tio n 707(b ) c reates a statuto ry gateway b ased o n whether the c ase is ab usive, and an o rder denying that m o tio n to dism iss as ab usive, in effec t, finally and c o nc lusively reso lves the issue. If the denial o f a § 707(b ) m o tio n to dism iss c anno t b e appealed im m ediately. . . , the C hapter 7 pro c eedings wo u ld have to b e c o m pleted b efo re it c o uld b e determ ined whether the pro c eedings were ab usive in the first plac e.” In re Cherrett

, 873 F.3d at 1065 (quo ting M cD o w, 662 F.3d at 289–90). 3. Finality In T his A ppeal: T he Order D enyingD is m is s a l Of T he Chapter 7 Bankruptcy U nder § 109(g ). Having set fo rth the relevant legal fram ewo rk, we c o nsider the o rder
o n appeal: the denial o f Jue’s § 109(g)(2) m o tio n to dism iss Liu’s chapter 7 b ankruptc y c ase.

a. L ang uag e A nd E ffec t Of § 109(g )(2). In assessing whether the denial o f the § 109(g)(2) dism issal m o tio n is final, we m ust c o nsider the language and effec t o f the statute. C f. M cD o w, 662 F.3d at 287-90. Sectio n 109(g) pro vides: (g) N o twithstanding any o ther pro visio n o f this sec tio n, no individual o r fam ily farm er m ay b e a deb to r under this title who has b een a deb to r in a c ase pending under this title at any tim e in the prec eding 180 days if--

22(1) the c ase was dismissed b y the c o u rt fo r willful failure o f the deb to r to ab ide b y o r ders o f the c o urt, o r to appear b efo re the c o urt in pro per pro sec utio n o f the c ase; o r (2) the deb to r requested and ob tained the vo luntary dism issal o f the c ase fo llo wing the filing o f a request fo r relief fro mthe auto m aticstay pro vided b y sec t io n 362 o f this title. C o ngress enac ted § 109(g)(2) to prevent a spec ifictype o f ab usive b ankruptc y filing: serial b ankruptc ies filed m erely as a m eans o f ob taining repeated b ankruptc y stays in o rder to frustrate c redito rs’ effo rts to enfo rc e their rights and interests under state law. Greenwell v. C a rty (In re Ca rty) , 149 B.R . 601, 603 (9th C ir. BA P 1993) (identifying the “ob vio us thrust” o f the statute as preventing deb to rs fro mdenying c redito rs the b enefit o f a stay term inatio n b y filing ano ther b ankruptc y c ase); see a lso In re Hieter , 414 B.R . 665, 669 (Bankr. D. Idaho2009) (no ting that C o ngress enac ted § 109(g)(2) to prevent ab usive repeat filings). Eligib ility under § 109(g), ho wever, is no t jurisdic tio nal and c an b e waived if no t raised. Lea fty v. Aussie S o no ra n Ca pita l, LLC (In re Lea fty) , 479 B.R . 545, 550 (9th C ir. BA P 2012) (§ 109(g)(2) is no t jurisdic tio nal); see a lso S o a m es La ne Tr. v. Go nz a lez(In re S o a m es La ne Tr.) , BA P N o . C C –16–1042–FDK

u, 2016 WL 4198426 * 4 (9th Cir. BA PA ug. 8, 2016) (“This Panel has repeatedly held that the b ankruptc y c o urt has sub jec t m atter jurisdic tio n even if the deb to r is ineligib le under § 109.”). A dditio nally, we have previo usly rec o gnized that b ankruptc y c o urts m ay suspend this
23eligib ility requirem ent in tho se lim ited situatio ns where “m ec hanic al

applic atio n o f § 109(g) wo uld pro duc e an illo gic al, unjust, o r c a pric io us result, o rwhen the b enefit o f a dism issal wo uld inure to a b ad faith
c redito r.” In re Lea

fty, 479 B.R . at 551 (c iting H o m e S a v. o

f Am

. , F .A. v. Luna (In re Luna ) , 122 B.R . 575, 576 (9th C ir. BA P 1991)).

b. Jue’sA r g um ents On Finality. Jue argues that In re Cherrettis lim ited to denials o f dism issal m o tio ns under § 707(b ). He c o ntends that In re 405 N
. Bedfo rd D r. Co rp. states the general rule that dec isio ns that enab le a b a nkruptc y c ase to c o ntinue are
no t final, even under the b ankruptc y finality standard. In suppo rt o f his argum ent, Jue c ites o ur dec isio n in Mo e n v. Hull (In re Hull) , 251 B.R

. 726 (9th C ir. BA P 2000), in which we reviewed a denial o f a c redito r’s m o tio n to dism iss under § 109(e) and the b ankruptc y c o urt’s determ inatio n that the deb to r d id no t exc eed the deb t lim its fo r chapter 13 eligib ility. A fter denial
o f the m o tio n to dism iss, the b ankruptc y c o urt c o nfirm ed the deb to r’s
chapter 13 plan. U po n c o nfirm atio n, the c redito r appealed, challenging b o th the deb to r’s eligib ility fo r chapter 13 as well as c o nfirm atio n o f the plan. Id. at 730. A s a prelim inary m atter, we no ted that c o nfirm atio n o f the c hapter 13 plan im p lic itly determ ined eligib ility as it was a prerequisite fo r
c o nfirm atio n. Id. at 730-31. Therefo re, the b ankruptc y c o urt’s eligib ility ruling was, at least im p lic itly, treated as interlo c uto ry and b ec am e final

24o nly upo n entry o f an o rder c o nfirm ing the c hapter 13 plan. Id.

In re Hull do es no t assist Jue. In In re Hull, the c r edito r appealed the § 109(e) eligib ility determ inatio n after c o nfirm atio n. C o nfirm a tio n o f the
chapter 13 plan effec tively “c lo sed” the c ase fo rfinality purpo ses. S ee Giesbrecht v. Fitzgera ld (In re Giesbrecht), 429 B.R

. 682, 688 (9th C ir. BA P 2010) (“the interlo c u to ry O rder Denying C o nfirm atio n m erged into the
c o u rt’s final [chapter 13] c o nfirm atio n o rder, and is suffic ient to suppo rt appellate jurisdic tio n o f the earlier interlo c uto ry o rder”); see a lso Burns v. Ma cGibbo n (In re Ma c Gibbo n) , BA P N o . W W -05-1422-PaN K , 2006 WL 6810935, at *10 (9th Cir. BA P A ug. 14, 2006) (“onc e the b ankruptc y c o urt entered its o rder c o nfirm ing the [c hapter 11] plan o f reo rganizatio n, the b ankruptc y c o urt’s ruling o n the m o tio ns to dism iss, c o nvert o r appo int trustee [b ec am e] final and appealab le”). Thus, In re Hull stands fo r the pro po sitio n that the denial o f a dism issal m o tio n b ec o m es final fo r appeal
no later than c o nfirm atio n. In any event, unlike §§ 109(g) and 707(b ), § 109(e) is no t a
c o ngressio nal respo nse to perc eived ab use in the b ankruptc y systemthat C o ngress enac ted as a thresho ld b arrier to ab usive filings. 1 1 Mo re im po rtantly, if we were to ac c ept Jue’s argum ent that In re Hull is appo s ite and In re Cherrettis lim ited to denials o f dism issal m o tio ns

1 1 We need not deci de whether the di stincti ons between § 109(e) on the one hand and §§ 109(g) and 707(b) on the otherhand ar e suffi ci ent to j usti f y the di v er gent tr eatment of di smi ssal moti ons under § 109(e) for finali ty pur poses. 25under § 707(b ), then we wo u ld need to reso lve an even m o re prob lem atic

issue: in a chapter 7 c ase, when wo uld the denial o f a § 109(g)(2) m o tio n to dism iss b ec o m e final? Traditio nal no tio ns o f b ankruptc y finality suggest that the denial o f Jue’s m o tio n wo uld no t b ec o m e final and appealab le until the c lo s ing, c o nversio n, o r dism issal o f the c hapter 7 c ase. Unlike In re Hull, there is no plan to c o nfirm in a chapter 7 c ase, so the denial o f the § 109(g)(2) dism issal m o tio n wo uld c o ntinue to b e interlo c uto r y until the
c ase was later c o nverted o r d ism issed o r Liu’s chapter 7 c ase was c lo sed. Here, the trustee c o ntinues to adm inister Liu’s chapter 7 c ase. R ec o gnizing that Liu’s b ankruptc y has no t b een “c lo sed” fo r purpo ses o f appellate finality, Jue c o ntends that the denial o f the § 109(g)(2)
m o tio n to dism iss b ec am e final when the b ankruptc y c o urt entered judgm ent in the preferenc e ac tio n. Jue reaso ns that this is when his rights were serio usly affec ted. W e disagree with this ad ho capplic a t io n o f finality as it c o ntravenes the very rule Jue advo c ates. A s articu lated in In re Ma so n and In re 405 N. Bedfo rd D r. Co rp ., finality fo r denial o f dism issals hinged o n the potential fo r irreparab le harmand the pro tec tio ns inc luded in the Bankruptcy C o de to m itigate the risk o f such harm s. In re 405 N
. Bedfo rd D r. Co rp. , 778 F.2d at 1378; In re Ma so n , 709 F.3d 1317-18. Do c trinally, the date o f judgm ent in the adversary pro c eeding m akes little sense fo r use in determ ining the finality o f eligib ility rulings in the
m ain b ankruptc y c ase b ec ause each adversary pro c eeding is a disc rete

26“judic ial unit” fo rfinality purpo ses. S ee Belli v. Tem k in (In re Belli) , 268 B.R

.

851, 855 (9th C ir. BA P 2001). Each adversary pro c eeding is fully reso lved
o nly upo n entry o f a final judgm ent. Id. Thus, there is no spec ial b ankruptc y finality rule applic ab le in adversary pro c eedings. Id. A nd what o f tho se b a nkruptc ies in which there are no adversary pro c eedings? In chapter 7 c ases, finality wo u ld presum ab ly o c cur upo n the
c lo s ing, c o nversio n, o rdism issal o f the c a se. But the unc ertainty o f when these m ilesto ne events m ight o c c ur m akes themunsuitab le as triggers fo r finality. A s a prac t ic al m atter, ac c epting Jue’s c o ntentio n wo uld lead to an
unwo r kab le piec em eal systemo f finality, where an o rder denying c ase dism issal wo u ld b ec o m e final fo r different parties in interest at different tim es. Finality wo uld depend o n when, o r whether, a party’s rights were adversely adjudic ated so m etim e in an adversary pro c eeding. In sho rt, Jue argues that finality arises o nly when the po tential harm s c o nsidered in In re Ma so n and In re 405 N
. Bedfo rd D r. Co rp. are ac tually realized b y a party in interest. A side fro mb eing exc eedingly haphazard, this wo uld fo rc e the parties and the b ankruptc y c o urt to litigate disputes that m ight b e rendered
m o o t if an appellate c o urt later determ ines that the b ankruptc y c ase sho uld have b een dism issed at the o utset. Put b luntly, Jue’s po s itio n o n finality in this c o ntext, if ac c epted, wo u ld render b ankruptc y finality highly im prac tic a l.

27c . A p plic ation Of Finality A fter In reChe rre tt A n d M cD ow . W e find no m eaningful distinc tio n b etween the denial o f dism issal under § 109(g) and the denial o f dism issal under § 707(b ) held to b e final in In re Cherrett . C o ngress enac ted b o th statutes toaddress ab u sive b ankruptc y filings and to serve as statuto ry gateways to pro c eeding in b ankruptc y. Bo th adjudic ate a deb to r’s initial eligib ility fo r b ankruptc y, thereb y c o nc luding a disc rete pro c eeding that dram atic ally “alters the status quoand fixes the rights and ob ligatio ns o f the parties.” Bulla rd, 135 S. C t. at 1692. These situatio ns differ fro mthe m o tio ns to dism iss fo r b ad faith at issue in In re 405 N. Bedfo r d, In re C i ty o f D esert H

o t S prings , and In re R ega Pro perties. A s rec o gnized in In re C ity o f D esert H

o t S prings, a deb to r ’s b ad faith is subjec t to c o ntinuing exam inatio n in a reo rganizatio n, and denial o f dism issal fo r b ad faith do es no t prec lude the b a nkruptc y c o urt fro m dism issing the b ankruptc y o n the sam e b asis later if it sub sequently appears that the deb to r is no t ac ting in go o d faith. 1 2 339 F.3d at 790. In

1 2 These ci ted cases ar ose i n chapter 11 and chapter 9. S i mi lar ly, a chapter 7 case may be di smi ssed for bad fai th as cause under§ 707(a). See Sherman v. SEC (In re Sherman) , 491 F.3d 948, 967 n.24 (9th Ci r. 2007) (holdin g that deni al of di smi ssal of chapter 7 case under§ 707(a) i s inter locutor y). Hickman v. Hana (In re Hickman) , 384 B.R. 832, 836 (9th Ci r . BAP 2008), pr esents an inter esti ng case wher e the BAP gr anted inter locutor y r ev i ew of the bankr uptcy cour t’s deni al of the debtor ’s v oluntar y moti on to di smi ss under§ 707(a). Because the BAP gr anted the debtor leav e to pur sue an inter locutor y appeal, ther e was no need to closely exami ne the finali ty of the or der (continued...) 28c o ntrast, the b ankruptc y c o urt’s o rder denying the § 109(g)(2) dism issal

m o tio n “finally and c o nc lusively reso lve[d] the issue” o f Liu’s eligib ility to file this c hapter 7 b ankruptc y. In re Cherrett , 873 F.3d at 1065 (quo ting M cD o w ). In this regard, the denial o f the § 109(g) dism issal m o tio n had the
sam e func tio nal effec t as the denial o f dism issal under § 707(b ) in In re Cherrett . In b o th situatio ns, the denial o f dism issal determ ined that the b ankruptc y was no t ab u sive and wo u ld pro c eed. 1 3 Sec o nd, if denial o f the § 109(g)(2) dism issal m o tio n c anno t b e im m ediately appealed, “the C hapter 7 pro c eedings wo uld have to b e
c o m p leted b efo re it c o uld b e determ ined whether the pro c eedings were ab usive in the first plac e.” Id. (quo ting M cD o w, 662 F.3d at 289–90). Both In re Cherrettand M cD o w explained ho w the ab senc e o f an im m ediate appeal in this situatio n o ffends the dual po lic ies o f judic ial ec o no m y and the
c o nservatio n o f estate reso u r c es. In this sense, as in In re Ma so n , the c o ntinuatio n o f the b ankruptc y
c ase “c arries with it a great po tential fo r irreparab le injury if im m ediate appeal is no t allo wed.” In re Ma so n , 709 F.2d at 1317. In re Ma so n fo c used o n the po tential injury to an invo luntary deb to r. But b ankruptc y alters the

1 2 (...continued) appealed under In re Mason , In re 405 N. Bedford Dr. Corp., and now as supplemented by In re Cherrett.

1 3 We acknowledge that the Fi fth Ci rcui t has held that the deni al of a § 109(g) di smi ssal moti on i s inter locutor y r ather than fin al. See Promenade Nat’l Bank v. Phillips (In re Phillips) , 844 F.2d 230, 235-36 (5th Ci r. 1988). Howev er, In re Phillips cannot per s uade us that we should depar t fr om In re Cherrett, whi ch we ar e bound to follow. 29entirety o f deb to r-c redito r relatio nships. Signific ant po tential harm arises

fro mthe wro ngful c o ntinuatio n o f any b a nkruptc y, whether initiated
vo luntarily o r invo luntarily. The dispo sitio n o f the estate’s assets and fixing
o f o ther rights during the c o m pletio n o f the c hapter 7 c a se do ub t lessly has the po tential to deprive partic ular c redito r s o f so m e o r all o f the rec o very they wo uld b e ab le to ob tain o utside o f b ankruptc y. Thus, the c o ntinuatio n
o f the c hapter 7 c ase o ften results in dram aticand irreversib le c hanges no t
o nly in the deb to rs’ affairs, b ut also, as this c ase dem o nstrates, fo r c redito rs
no w subjec t to the statuto rily augm ented rights o f the b a nkruptc y estate. 1 4 In additio n to the deb t o r and c r edito rs, we alsoare c o nc erned ab o ut the im pac t o f the c o ntinuing c hapter 7 c ase o n the trustee and the pro fessio nals the trustee em plo ys to help pro m p tly liquidate the estate. S ee genera lly§ 704(a)(1) (setting fo rth trustee’s duty toliquidate the b ankruptc y estate’s assets). In o rder to c o m plete a chapter 7 b ankruptc y, the trustee frequently m ust sell estate pro perty, objec t to c laim s and exem ptio ns,
challenge the deb t o r’s discharge, and avo id c ertain transfers o f estate pro perty. C o u r ts and interested parties must ac t in relianc e o n entered

1 4 The i mpact of the deni al of a moti on to di smi ss a bankr u ptcy case i s multi

faceted. Asi de fr om the v ar i ety of par ti es potenti ally i mpacted, di scussed abov e, the conti nuati on of the case also affects par ti es in inter est tempor ally because the date of the bankr uptcy peti ti on fi xes the r i ghts of par ti es wi th r espect to many di ffer ent types of i ssues, including clai ms, di schar ge, exempti ons, and av oi dance r i ghts. See generally, Ritzen Grp., Inc. , 2020 WL 201023, at *6 (obser ving that conti nu ati on of bankr uptcy case wi thout affor ding i mmedi ate appeal fr om a deni al of r eli ef fr om stay can hav e si gni fi cant adv er s e consequences on all par ti es to the bankr uptcy case). 30o rders. Todelay appellate review o f a deb to r’s alleged ab use plac es all

chapter 7 ac tivity, and the resulting c o nsequenc es, at risk o f a later appellate determ inatio n that the c ase was, in fac t, ab u sive fro mthe o utset. This has particular c o nsequenc es fo r the c hapter 7 trustee and his o r her pro fessio nals, who are c o m pensated (if at all) fro mpro perty o f the estate. Estate pro fessio nals wo rk o n c o ntingenc y; they are paid o nly fro m assets rec o vered fo r the b ankruptc y estate. Unlike deb t o rs’ pro fessio nals in
a reo rganizatio n that m ay still pursue paym ent fro mtheir deb to r s if the
reo rganizatio n is dism issed, chapter 7 pro fessio nals have no m eans o f
c o m p ensatio n if it were later determ ined, po ssib ly years afterwards, that the deb to r’s b ankruptc y vio lated either § 109(g)(2) o r § 707(b ). This c ase am ply dem o nstrates the risks to the trustee and the estate pro fessio nals. Onc e in b ankruptc y, the trustee quic kly identified and pursued the sale o f real pro perty and avo idanc e o f preferenc es related to that pro perty to rec o ver m o nies fo r all o f the unsec ured c redito rs. W ithho lding a right o f im m ediate appeal here wo u ld o nly exac erb ate the adverse ec o no m ic s chapter 7 pro fessio nals frequently enc o unter and run
c o u nter to the c o nc erns fo r judic ial effic ienc y and finality at the heart o f In re Cherrett, and m o re rec ently raised b y the Suprem e C o urt in R itz en Grp., Inc. W e c o nc lude that the o rder denying dism issal was final when entered. Bec ause we lac k jurisdic tio n o ver Jue’s appeal fro mthe o rder denying the c ase dism issal m o tio n, o ur m erits review is lim ited to Jue’s
31appeal fro mthe b ankruptc y c o urt’s summ ary judgm ent in the preferenc e

adversary pro c eeding. B. M erits Is s ue – Sum m ary Judgm ent In Preferenc e A dv ers a ry Proc eeding . In b o th the b ankruptc y c o urt and o n appeal, Jue did no t direc t ly
challenge the b asicelem ents fo r estab lishing an avo idab le preferenc e. Instead, he has fo cused alm o st exc lusively o n a handful o f his affirm ative defenses. The defenses Jue identifies and relies upo n inc lude unc lean hands, equitab le esto ppel, b reach o f fiduc iary duty, and “relatio n b ac k.” 1 5 1. Bas icL aw Gov erning Preferential T rans fers A nd T he U n av ailability Of E quitable D efens es . Generally speaking, the transfer o f pro perty o f the deb t o r is an
avo idab le preferenc e if it has the fo llo wing five c harac teristic s: (1) it b enefits a c r edito r; (2) it was m ade o n ac c o u nt o f an antec edent deb t; (3) it
was m ade while the deb to r was inso lvent; (4) it was m ade during 90 days im m ediately prec eding the b ankruptc y filing; and (5) it enab les the c redito r to rec eive a larger am o unt than it wo uld have rec eived fro m the estate ab sent the transfer. Unio n Ba nk v. W o la s , 502 U .S. 151, 154–55 (1991) (citing

1 5 In r eali ty, some of these so-called defenses ar e not pr oper ly classi fi ed as defenses at all. For example, the br each of fi duci ar y duty ”defense” actually i s a cause of acti on under Cali for ni a l a w. See generally Oasis W. Realty, LLC v. Goldman , 51 Cal. 4th 811, 821 (2011) (i d enti fyi ng cause of acti on and i ts elements). Nor i s “r elati on back” an affi r mati v e defense underCali f or ni a law. Mor e pr eci s ely, r elati on back i s a legal doctr ine Jue has asser ted i n an attempt to negate the ti m ing element necessar y for establi shin g an av oi dable pr efer ence. Ev en so, the pr oper char acter i zati on of these pr inci ples does not change our analysi s or r esoluti on of thi s appeal. 3211 U .S.C . § 547(b )). C o ngress “b ro adly autho rized b ankruptc y trustees” to

avo id preferential transfers “ unles s o ne o f seven exc eptio ns defined in sub sec t io n (c ) [o f § 547] is applic ab le.” Id. at 154 (em phasis in o riginal). This Panel has held that there are no exc eptio ns o rdefenses to
avo idanc e o f preferenc es o ther than tho se spec ified in the statute. S ee Enserv Co ., Inc. v. Ma npo wer, Inc./ Ca l . Peninsula(In re Enserv Co ., Inc.) , 64 B.R . 519, 521 (9th C ir. BA P 1986), a ff’d813 F.2d 1230 (9th C ir. Mar. 19, 1987)(tab le). In re Enservreaso ned that the plain language o f § 547(c ) lim ited preferenc e defenses to tho se therein and that “C o ngress did no t intend that ac tio ns pursued under Sec tio n 547 wo uld b e subjec t to questio n b ased o n equitab le c o nsideratio ns.” Id. Furtherm o re, In re Enserv is
c o nsistent with the Sup r em e C o urt’s ob servatio n: “[w]e have lo ng held that ‘whatever equitab le po wers rem ain in the b ankruptc y c o u rts must and c an
o nly b e exerc ised within the c o nfines o f’ the Bankruptcy C o de.” La w v. S iegel, 571 U .S. 415, 421 (2014) (quo ting N o rwest Ba nk

W o rthingto n v. Ahlers , 485 U .S. 197, 206 (1988)). O utside o f the N inth C irc u it, the vast m ajo rity o f c ases that have expressly c o nsidered the issue have held that sub stantive defenses to § 547
ac tio ns are lim ited to tho s e set fo rth in the statute. S ee, e.g. , Ogle v. Advent, Inc. (In re HD D R o ta ry S a l es, LLC) , C a se N o . 11-38053, 2012 WL 6694072, at *4 (Bankr. S.D. Tex. Dec . 20, 2012) (“This c o urt jo ins the ho st o f o thers that have held that § 547(c ) . . . pro vides the exc lusive list o f sub stantive affirm ative defenses to a § 547(b ) preferenc e ac tio n”); Guinn v. Irwin Mo rtg.
33Co rp. (In re Pa tterso n) , 330 B.R . 631, 642 (Bankr. E.D. Tenn. 2005); co ntra,

Philip S ervs. Co rp. v. Luntz(In re Philip S e rvs. (D ela wa re), Inc.) , 267 B.R . 62, 70–71 (Bankr. D. Del. 2001) (rejecting plaintiffs’ assertio n that defendants
c o u ld no t raise any affirm ative defenses o ther than tho se c o ntained in § 547(c )). 1 6 In sum, as indic a ted b y In re Enservand the o ther c ited autho rity, the Bankruptcy C o de’s statuto ry schem e go verning preferenc es do es no t perm it Jue to raise the equitab le defenses he attem pts to raise b ased o n allegatio ns o f unc lean hands, b reach o f fiduc iary duty, and esto ppel. 2. Jue’sE quitable D efens es A ls o A re Im perm is s ible Bec aus e T hey Collaterally A ttac k T he Bankruptcy Court’s Order D enyingT he § 109(g )(2) M otion T o D is m is s . Even if the C o de did perm it equitab le defenses, we still wo u ld
c o nc lude that Jue’s defenses are m eritless. They all are b a sed o n the sam e fatally-flawed prem ise: that the chapter 7 trustee’s o ppo sitio n to the § 109(g)(2) m o t io n to dism iss and the b ankruptc y c o u rt’s denial o f that
m o tio n c o ntravened the plain term s o f § 109(g)(2). A s a m atter o f equity, Jue m aintains that his attachm ent lien sho uld no t have b een avo ided when it wo uld no t have b een avo idab le as a preferential transfer b ut fo r the

1 6 The maj or i ty cases typi cally di stin gui s h, and per mi t, “thr eshold” or pr ocedur al defenses like “lack of per sonal j ur i sdi cti on, standing, or ser v i ce of pr ocess.” In re Patterson , 330 B.R. at 642 (ci ti ng Kmart Corp. v. Uniden Am. Corp. (In re Kmart Corp.) , 318 B.R. 409, 415 (Bankr . N.D. Ill. 2004)). In re Enserv Co., Inc. di d not addr ess the i s sue of thr eshold or pr ocedur al defenses. 64 B.R. at 521. In any ev ent, all of the defenses Jue has attempted to asser t ar e substanti v e i n natur e. 34wro ngful failure to dism iss Liu’s chapter 7 c ase.

The ob vio u s prob lemwith this argum ent is that it am o unts to an im perm issib le c o llateral attac k o n the denial o f the § 109(g)(2) m o tio n to dism iss. A s we have explained ab o ve, the b ankruptc y c o u rt’s o r der denying this m o tio n was a final o rder, and Jue failed to tim ely appeal that
o rder. He c anno t no w attac k the b asis o f that o rder, o rthe c o nsequenc es flo wing fro mthat o rder, in his appeal fro mthe preferenc e adversary pro c eeding. This is exac tly what Jue attem pts to do b y way o f his unc lean hands, b reach o f fiduc iary duty, and esto p pel argum ents. O ur prio r dec isio ns m ake c lear that appellants c anno t suc c essfully
challenge an o rder o n appeal b y attac king a prio r final o rder that they did
no t tim ely appeal. S ee, e.g., Alako z a i v. C itiz ens Equity F irst Credit U nio n (In re Ala ko z a i) , 499 B.R . 698, 704 (9th C ir. BA P 2013) (“A lako zai's challenge to

. . . the In R emO rder in the Fo urth C ase am o unts to a c o llateral attac k o n a final o rder”); H

erita ge Pa c. F in., LLC

v. Ma chuca (In re Ma chuca ) , 483 B.R . 726, 735–36 (9th C ir. BA P2012) (“the b ankruptc y c o urt’s o rder granting
sum m ary judgm ent was final. HPF c anno t c o llaterally attac k that judgm ent thro ugh the § 523(d) pro c eeding”); W o o ds &Erick

so n, LLP v. Leo na rd (In re AV I, Inc.) , 389 B.R . 721, 731 (9th C ir. BA P 2008) (“to the extent that W& E seeks to c o llaterally attac k the validity o f that o r der vac ating and annulling the dism issal, it c anno t do so in this appeal b ec ause the o rder is final and the tim e to appeal has passed”); s ee a lso V a lley N a t'l Ba nk o

f Ariz . v. N

eedler (In re Gra ntha m Bro s.) , 922 F.2d 1438, 1442 (9th Cir. 1991) (rejec ting as
35frivo lo u s appellant’s attem pted c o llateral attac k o n b ankruptc y c o u rt’s

prio r sale o r der). In sho rt, Jue’s unc lean hands, b reach o f fiduc iary duty, and esto ppel defenses am o unt to an im perm issib le c o llateral attac k o n the o rder denying the § 109(g)(2) dism issal m o tio n. A c c o rdingly, these defenses do no t suppo rt reversal o f the b ankruptc y c o urt’s summ ary judgm ent in favo r o f the trustee in the preferenc e ac tio n. 1 7 3. Jue’sRelation Bac k A rg um ent A ls o L ac ks M erit. The o nly o ther argum ent o f Jue’s we need to discu ss is Jue’s relation b ac k argum ent as it im pac t s the date o f the preferential transfer. Jue’s argum ent is two fo ld. First, Jue argues that his attachm ent lien related b ac k

1 7It also i s wor th noti ng that Jue’s br each of fi duci ar y duty defense lacks mer i t on i ts own ter ms. It i s pr emi sed on Jue’s beli ef that the tr ustee had a duty to Jue as an indi v i dual cr edi tor to pr otect and pr eser v e hi s indi v i dual li en inter est ov er and abov e what the tr ustee mi ght hav e thought best for Li u’s enti r e body of cr edi tor s, or her bankr uptcy estate, as a whole. Thi s beli ef i s mi staken. The chapter 7 tr ustee r epr esents the estate as a whole and i s char ged wi th gather ing and li qui d a ti ng all of the estate’s assets. §§ 323(a); 704(a)(1); see also In re Wisdom , 478 B.R. 394, 399 (Bankr . D. Idaho 2012), aff'd, 490 B.R. 412 (D. Idaho 2013), aff’d sub nom. Wisdom v. Gugino , 649 F. App’x 583 (9th Ci r . 2016) (“‘[t]he tr ustee i s a fi duci ar y char ged wi th pr otecti ng the i nter est of all estate benefi c i ar i es – namely, all classes of cr edi tor s . . . .’”) (quoting Uni ted S tates Tr ustee, Handbook for Chapter 7 Tr ustees, p. 4-2 (Effective October 1, 2012)). The task of gather ing and li qui dati ng all of the estate’s assets typi cally i s the most i mpor tant duty the tr ustee fulfi l ls. See Dye v. Brown (In re AFI Holding, Inc.) , 530 F.3d 832, 845 (9th Ci r . 2008) (stating that tr ustee’s “pr i mar y j ob i s to mar shal and sell assets, so that those assets can be di s tr ib uted to the estate’s cr edi tor s and then close the estate.”)(quoting U.S. Trustee v. Joseph, (In re Joseph) , 208 B.R. 55, 60 (9th Ci r . BAP 1999)). In car r yin g out thi s duty, “the tr ustee ‘may not be the r epr esentati v e of any par ti cularcr edi tor , but must r epr esent all cr edi tor s wi thout par ti ali ty.’” Id. at 844 (quoti ng Gross v. Russo (In re Russo) , 18 B.R. 257, 270–71 (Bankr . E.D.N.Y. 1982)). 36to the lis pendens he filed in his state c o urt fraudulent transfer ac t io n. A nd

sec o nd, Jue argues that the attachm ent lien related b ac k to the date o f the state c o urt’s issuanc e o f a right to attach o rder. Bo th o f these dates fall
o utside the 90-day preferenc e perio d under § 547(b )(4)(A ) and thereb y
wo uld negate the tim ing requirem ent fo r the c hapter 7 trustee’s preferenc e
c laim . But neither o f these relatio n b ac k argum ents have any m erit. C alifo rnia law sim ply do es no t suppo rt them

.

a. T he L is PendensHas No Relation Bac k E f fec t On Jue’s A ttac h m e n t L ien. Jue insists that the prio rity o f his attachm ent lien sho uld relate b ac k to the date he rec o rded a lis pendens in relatio n to his real pro perty fraudulent transfer ac tio n. Bec ause his lis pendens was rec o rded o utside o f the 90-day preferenc e perio d, Jue m aintains that his sub s equently ac quired attachm ent lien is no t avo idab le as a preferenc e. “‘Alis pendens is a rec o rded do c um ent giving c o nstruc t ive no tic e that an ac tio n has b een filed affec ting title o r right to po ssessio n o f the real pro perty desc rib ed in the no tic e.’” M iraO versea s Co nsulting Ltd. v. M use Fa m ily Enters., Ltd. , 237 C al. A pp. 4th 378, 383 (2015) (quo ting Kirkeby v. S up. C t. , 33 C al. 4th 642, 647 (2004)). “Bec ause a lis pendens pro vides
c o nstruc tive no t ic e o f the litigatio n, ‘ any judg m ent later obtained in the
ac tion relates b ac k to the filing o f the lis pendens.’” Id. at 383-84 (quo ting S linta k v. Buckeye R etirem ent Co ., L.L.C ., Ltd., 139 C a l. A pp. 4th 575, 586 (2006)) (em phasis added); see a lso C al. C iv. Pro c . C o de (“C

. C .P.”) § 405.24

37(“The rights and interest o f the c laim a nt in the pro perty, as ultim ately

determ ined in the pending no tic ed ac tio n, shall relate b ac k to the date o f the rec o r ding o f the no tic e.”). But Jue never ob tained a judgm ent in his real pro perty fraudulent transfer ac tio n. To the c o ntrary, he vo luntarily dism issed it with prejudic e. C o nsequently, the rule that enab les a judgm ent in an ac tio n affec ting real pro perty to relate b ac k to the date o f a rec o r ded lis pendens has no applic atio n here. 1 8 Jue no netheless m a intains that, fo r purpo ses o f relatio n b a c k, the attachm ent lien he o b tained in his ac tio n fo r b reach o f the pro m isso ry no te sho uld b e treated as if it were the sam e as a fraudulent transfer judgm ent. He o nly o ffers o ne b asis fo r this treatm ent: ac c o rding to Jue, Liu linked the two state c o urt lawsuits b y filing a no tic e o f related c ases in b o th the b reach
o f pro m isso ry no te ac tio n and in the fraudulent transfer ac tio n. In light o f

1 8 In suppor t of hi s ar gument, Jue r eli es on Hurst Concrete Products., Inc. v. Lane (In re Lane) , 980 F.2d 601 (9th Ci r . 1992). But Jue’s r eli ance on In re Lane i s mi splaced. In re Lane inv olv ed a cr edi tor who had obtained, in the same acti on, a j u dgment i n i ts fav or for both monetar y damages and for the debtor ’s fr audulent tr a n s fer of r eal pr oper ty. Id. at 604. Her e, i n contr ast, Jue nev er obtai n ed any j udgment agai nst Liu for fr audulent tr a nsferof r eal pr oper ty. The absence of thi s type of j udgment, her e, i s cr i ti c al. As In re Lane explai ned, “The ulti mate oper a ti on of the li s pendens on the Lanes’ pr oper ty i s measur ed by the ter ms and effectiv e scope of the deci si on r ender ed in the S uper i or Cour t.” Id. (ci ti ng Rose v. Knapp , 153 Cal. App. 2d 379, 386 (1957)). Her e, gi ven the absence of a j udgment inJue’s fav or for the fr audulent tr a n s fer of r eal pr oper ty, Jue’s r ecor ded li s pendens could not possi b ly hav e any r elati on back effect. See M ira Overseas Consulting Ltd. , 237 Cal. App. 4th at 383-84.

38the no tic e o f related c ases, Jue argues that his attac hm ent lien sho u ld b e given the sam e effec tin the fraudulent transfer ac tio n as a fraudulent transfer judgm ent wo uld have. He c ites no autho rity to suppo rt this argum ent. Jue’s relatio n b a c k argum ent relying o n the prio r lis pendens to purpo rtedly take his attachm ent lien o utside the 90-day preferenc e perio d
m akes no sense. The law pertaining to lis pendens prac tic e m akes c lear that the o nly relevant ac tio n fo r lis pendens and relatio n b ac k purpo ses was Jue’s fraudulent transfer ac tio n. S eeC

. C .P. § 405.24; M iraO v ersea s Co nsulting Ltd. , 237 C al. A p p . 4th at 383-84. But nojudgm ent was entered in that c ase, and he later dism issed that ac t io n. A m ere no tic e o f related c ases is no t sub stantive. It c anno t, and sho uld no t, b e viewed as po tentially
changing settled, sub stantive C alifo rnia law. S ee genera lly C al. R . C t. Rule 3.300 (desc rib ing prac t ic e and pro c edure go verning no t ic es o f related
c ases); see a lso Ho n. Lee Sm alley Edm o n & Ho n. C urtis E. A . K arno w, C al. Prac tic e Guide: C iv. Pro c . Befo r e Trial ¶ 12:38 (The R utter Gro up 2019) (“The purpo s e [underlying related c ase no t ic es] is to pro m o t e judic ial effic ienc y and to prevent plaintiffs fro m‘judge sho pping’ . . . .”). In sho rt, we find Jue’s relatio n b ac k argum ent b ased o n the lis pendens who lly unpersuasive. W e therefo re rejec t it.

39b. T he Rig ht T o A ttac h Order HasNo Relation Bac k E ffec t On Jue’sA ttac hm ent L ien. Jue alternately c laim s that his attachm ent lien related b ac k to the date the state c o urt issued its right toattach o rder. To suppo rt this c laim, Jue relies o n W

ind Po wer S ystem s, Inc. v. Ca nno n F ina ncia l Gro up, Inc. (In re W ind Po wer S ystem s, Inc.) , 841 F.2d 288 (9th C ir. 1988). In re W ind Po w er S ystem s, Inc. dealt with a b ankruptc y trustee’s preferenc e c laimand the effec t o f a
c redito r’s o verlapping liens arising, respec tively, fro ma tem po r ary pro tec tive o rder and a sub sequent levy o n a writ o f attachm ent. 841 F.2d at 290. Relying o n C al. C iv. Pro c . C o d e § 488.500(a) &(e), In re W ind Po wer S ystem s, Inc. held that when a c redito r attaches pro perty that already is subjec t to the c redito r’s lien arising fro ma tem po rary pro tec tive o rder, the prio rity o f the sub sequent attachm ent lien “relates b ac k” to the date o f the earlier lien. Id. at 291. A s a result, In re W i nd Po wer S ystem s, Inc. c o nc luded that the c redito r’s attachm ent lien, whic h was c reated within the 90-day preferenc e perio d, was no t avo idab le as a preferenc e, b ec a use the c redito r’s prio r lien arising fro mthe tem po rary pro tec tive o rder was c r eated o utside
o f the 90-day preferenc e perio d. Id. at 292. By relying o n In re W

ind Po wer S ystem s, Inc. , Jue effec tively c laim s that, fo r relatio n b ac k purpo ses, the right to attach o rder he ob t a ined is the
sam e thing as a tem p o rary pro tec tive o rder. W e disagree. Jue never
ob tained a tem po rary pro tec tive o rder. Mo reo ver, tem po rary pro tec t ive
o rders are no t b y any m eans the sam e as right to attach o rders. Tem po rary

40pro tec tive o rders c reate liens, per C .C .P. § 486.110, and require a showing

that they are nec essary to prevent great o r irreparab le harm

. S eeC .C .P. § 486.020(d). In c o ntrast, right to attach o rders do no t c reate liens and do
no t require a sho wing o f great o r irreparab le harm

. S ee C .C .P.§ 484.090; see
a lso Ho n. A lan M. Ahart, C al. Prac t ic e Guide: Enfo rc ing Judgm ents & Deb ts ¶ 4:129 (The R

utter Gro up 2019) (stating that a right toattach o r der “is like a ‘dec larato ry relief’ o rder, determ ining fo r purpo ses o f the ac tio n that the plaintiff’s c laimis o ne fo r which a [writ o f attachm ent] m a y issue, then o r later.”). A t b o t to m, Jue wo uld have us c o nflate his right to attach o rder with a tem po rary pro tec tive o rder m erely b ec ause he b elieves it wo uld lead to an equitab le result in this c ase. A ssum ing witho u t dec iding that equity suppo rts the result Jue seeks to reach, we dec line to re-fashio n C alifo rnia law m erely to fit his general no tio n o f what equity requires. C alifo rnia’s attachm ent pro c edures are stric t ly c o nstrued, and we are no t free to expand
o r alter themin this m anner. S ee K em p Bro s. Co nstr. v. Tita n Elec. Co rp. , 146 C al. A pp. 4th 1474, 1476 (2007) (no ting stric t c o nstruc tio n o f C alifo rnia’s attachm ent pro c edures); see a lso V F S F in., Inc. v. C

H F Express, LLC

, 620 F. Supp. 2d 1092, 1095–96 (C .D. C a l. 2009) (explaining purpo se and b asic requirem ents o f C alifo rnia’s attachm ent laws). A c c o rdingly, we rejec t as
m eritless Jue’s relatio n b ac k argum ent. A t the end o f the day, given that Jue’s relatio n b ac k argum ent has no
m erit and that Jue ob tained his attachm ent lien within 90 days o f Liu’s
41chapter 7 b ankruptc y filing, it was no t even nec essary fo r the trustee to

prevail o n his preferenc e c laimin o rder to prevent Jue fro menfo rc ing the lien. By o peratio n o f C alifo rnia law, the attachm ent lien auto m atic a lly term inated upo n the filing o f Liu’s chapter 7 petitio n. C .C .P. § 493.030(b );
see a lso In re W

ind Po w er S ystem s, Inc. , 841 F.2d at 293 (“The purpo se o f [C .C .P. § 493.030(b )] is to have a lien o f attachm ent dec lared vo id witho ut
c o u rt ac tio n“); In re Asla nya n , C ase N o . 17-24195-A -7, 2017 WL 6520450, at *1 n.1 (Bankr. E.D. C a l. Dec . 20, 2017) (c iting sam e statue and stating: “[h]ad the attachm ent lien b een rec o rded less than 90 days prio r to the b ankruptc y, it wo uld have term inated when the deb to r filed this c ase.”); 12 Miller & Starr, C al. Real Est. § 42:40 (4th ed. 2019) (“W hen . . . a vo luntary
o r invo luntary petitio n in b a nkruptc y has b een filed, any attac hm ent o r tem po rary pro tec tive o rder issued within the prec eding 90 days is term inated”). 1 9

1 9 Cali for ni a law also pr ov i des for the automati c pr eser v ati on of the li en for the estate’s benefi t. C.C.P. § 493.060 (“Upon the fi l ing of a peti ti on commencing a case underTi tle 11 of the Uni ted S tates Code (Bankr uptcy), a li en ter min ated pur suant to thi s chapteri s pr eser v ed for the benefi t of the estate.”). Ev en so, the chapter 7 tr ustee’s pr efer ence acti on was not a meaningless endeav or . Befor e the bankr uptcy cour t could hav e appli ed ei ther §§ 547 and 550, or C.C.P. §§ 493.030 and 493.060, the bankr uptcy cour t needed to ascer tai n whether Jue’s r elati on back ar guments had any mer i t. If Jue had pr ev ai led on ei ther of those ar guments, then the attachment li en would hav e been tr eated as cr eated befor e the 90-day pr efer ence per i od. Thi s would hav e been suffi ci ent to defeat both the tr ustee’s pr efer ence clai mand appli cati on of C.C.P. §§ 493.030 and 493.060. See In re Wind Power Systems, Inc. , 841 F.2d at 292-93.

42CONCL U SION

Fo r the reaso ns set fo rth ab o ve, we DISMISS fo rlac k o f jurisdic tio n Jue’s appeal fro mthe o rder denying the § 109(g)(2) dism issal m o tio n, and we A FFIRM the b ankruptc y c o urt’s preferenc e sum m ary judgm ent in favo r
o f the c hapter 7 trustee.

C o nc u r renc e b egins o n next page.

43TAY LO R

, Bankruptcy Judge, c o nc urring:
I jo in in the well-reaso ned dec isio n to dism iss the appeal fro mthe
o rder denying the § 109(g)(2) dism issal m o tio n fo r lac k o f jurisdic tio n. I also agree with m y c o lleagues’ analysis regarding the preferenc e
ac tio n. I write separately, ho wever, to m a ke plain m y view that, while litigatio n invo lving the attac hm ent lien was inevitab le, a preferenc e ac tio n to set it aside was unnec essary. Mr. Jue ob tained his attachm ent lien under C alifo rnia law and during the 90 day preferenc e perio d prec eding Ms. Liu’s b ankruptc y filing. I, thus, c o nc lude that under C alifo rnia law it term inated o n the petitio n date. In early 1979, the C alifo rnia Legislature antic ipated C o ngressio nal
enac tm ent o f the new b ankruptc y c o de. The Legislative C o unsel’s Digest, as relevant here, discussed this pending legislatio n as fo llo ws:

A B 617, as intro d uc ed, Mc A lister (Jud.). A ttachm ent. Under existing state law, . . . the filing o f a petitio n in b ankruptc y term inates a lien . . . o f attachm ent if the lien was c reated within 4 m o nths prio r to the . . . the filing o f the petitio n. This b ill wo uld reduc e such tim e perio d to 90 days, c o nsistent with the 90- day preferenc e perio d o f the rec ently enac ted federal Bankruptc y R efo rm A c t o f 1978 (hereinafter A c t). Existing law pro vides that, where a lien o f attachm ent term inates as a result o f the . . . filing o f a petitio n in b ankruptc y . . . the trustee, rec eiver, o r deb to r in po ssessio n if
1there is no trustee o r rec eiver, m a y sec ure the release o f the

attachm ent b y filing a request therefo r. The rec ently enac t ed federal A c t pro hib its a b a nkruptc y judge fro mappo inting a rec eiver in a b ankruptc y c ase b ut autho rizes appo intm ent o f an interim trustee. This b ill wo uld delete rec eivers as a c atego ry o f perso ns who m a y sec ure the release o f attachm ent and sub stitute interim trustees, thus m aking state law c o nsistent with federal law. Under current federal law, a c o urt m ust determ ine whether o rno t a transfer sho uld b e preserved fo r the b enefit o f a b ankrupt estate where such transfer has b een avo ided. Ho wever, the rec ently enac ted federal A c t , to take effec t O c tob er 1, 1979, pro vides that any avo ided transfer is auto m atic ally preserved fo rthe b enefit o f the estate. Existing state law ac kno wledges that, under federal law, the b a nkruptc y c o u r t c o uld o r der a lien preserved fo rthe b enefit o f a b ankrupt estate. This b ill wo uld delete such ac kno wledgm ent in state law and, instead, pro vide, c o nsistent with the rec ently enac ted federal A c t, that a lien o f . . . attachm ent term inated b y the filing o f a petitio n c o m m enc ing a c a se under spec ified federal law is preserved fo r the b enefit o f the b a nkrupt estate. The b ill wo uld b ec o m e effec tive im m ediately as an urgenc y m easure, b ut wo u ld no t b ec o m e o perative until O c tob er 1, 1979, thus c o inc iding with the o perative date o f the federal A c t. The b ill wo uld no t apply to any b ankruptc y c ase c o m m enc ed prio r to O c tob er 1, 1979. A .B. 617, A ssemb . R eg. Sess., at 1-2 (C al. 1979-80). C o nsistent with this statem ent o f legislative intent, the C alifo rnia

2Legislature enac ted C .C .P. § 493.030(b ) whic h, sinc e its o perative date o f

O c t ob er 1, 1979, has stated as follo w s : The filing o f a petitio n c o m m enc ing a vo luntary o r invo luntary c ase under Title 11 o f the United States C o de (Bankruptc y) term inates a lien o f . . . attachm ent if the lien was c r eated within 90 days prio r to the filing o f the petitio n. C .C .P. § 493.040 rec o gnizes that, as a prac tic al m atter, the auto m atic term inatio n o f the lien m ay no t ac c o m plish a return o f assets o r a
c larific atio n o f the pub licrec o rd. So, it pro vides a pro c edure fo r ac quiring
such c o o peratio n. In particular, the levying o ffic er m ust release the attachm ent 10 days fro m the date o f m ailing o f papers to the plaintiff unless o therwise o rdered. C

. C .P. § 493.040(f). Finally, as relevant here, C .C .P. § 493.060(b ) pro vides as fo llo ws: U po n the filing o f petitio n c o m m enc ing a c ase under Title 11 o f the U nited States C o d e (Bankruptc y), a lien term inated pursuant tothis chapter is preserved fo r the b enefit o f the estate. These pro visio ns o f C alifo rnia law were c learly intended to m irro r the Bankruptc y C o de and to pro vide fo r release o f attachm ent liens witho ut the nec essity o f an invo lved judic ial pro c ess. S ee In re W ind Po wer S ys., Inc. v. Ca nno n F ina ncia l Gro up, Inc. (In re W ind Po wer S ys., Inc.) , 841 F.2d 288, 293 (9th C ir. 1988) (“The purpo se o f [C .C .P. § 493.030(b )] is to have a lien o f attachm ent dec lared vo id witho ut c o urt ac tio n.”). During o r al argum ent, we asked c o unsel fo r the c hapter 7 trustee

3why he filed a preferenc e ac tio n; he respo nded o nly with a no nspec ific

c o nc ern regarding preservatio n o f the lien fo r the b enefit o f the estate. But, C .C .P. § 493.060(b ) already pro vides fo r lien preservatio n. A nd in m y review I fo und no c ase even questio ning that C alifo rnia law auto m atic ally invalidated attachm ent liens and preserved themfo r the b enefit o f the estate. A s a result, I b elieve that the preferenc e ac tio n was unnec essary. Under C alifo rnia law, the lien had already c eased to exist. A nd under C alifo rnia law, the lien had already b een preserved fo rthe b enefit o f the estate. A ll that was left here was fo r the trustee to ob tain an o rder requiring expungem ent o f the attachm ent fro m the pub licrec o r d. Having said the ab o ve, I again ac kno wledge that this is an unusual
c ase. First, Mr. Jue alsoob tained a stipulated judgm ent during the preferenc e perio d. But the rec o rd do es no t evidenc e that he also ob tained a judgm ent lien. I fo und no c ase ho lding that a judgm ent during the preferenc e perio d negated auto m aticterm inatio n o f a preferenc e perio d attachm ent lien. A nd, as my c o lleagues m ake c lear, Mr. Jue did no t raise defenses arising under preferenc e law; he attac ked the b o nafides o f the b ankruptc y filing and argued that the attachm ent itself aro se o u tside the 90 days prio r to filing the petitio n. Thus, I ackno w ledge again that this litigatio n was inevitab le; Mr. Jue wo uld have raised these po ints even if the trustee to o k the path I suggest and m erely so ught expungem ent o f the

4attachm ent fro mthe pub licrec o rd.

In sum, I feel c o m pelled to m ake these po ints b ec ause silenc e m ay b e viewed as a green light at b est, and at wo rst a m andate, that trustees igno re the C alifo rnia law that term inates attachm ent liens o b tained during the 90- day preferenc e perio d . In m y o pinio n, they sho uldn’t.

5