Court Opinion

ID: 9373954
Source: CourtListenerOpinion
Date Created: 2023-02-22 16:10:44.784795+00
Date Added: 2024-06-11T17:16:49.863085
License: Public Domain

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                            NOT FOR PUBLICATION                                     JUN 7 2022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

          UNITED STATES BANKRUPTCY APPELLATE PANEL
                    OF THE NINTH CIRCUIT

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

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

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

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

                                    INTRODUCTION

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

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

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

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

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

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

adversary proceeding, the clerk administratively closed the removed and

undecided adversary proceeding, essentially leaving the state court action in

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

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

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

Seeing no reversible error, we AFFIRM.

                                       FACTS

A.    The state court action

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Isha's bankruptcy filing.

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

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

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

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

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

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

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

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

case was closed on June 8, 2020.

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

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

proceeding:

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

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

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

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

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

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

chain of events which led to this appeal.

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

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

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

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

motion under Rule 5010 to reopen it.

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

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

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

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

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

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

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

proceeding as instructed in the Notice to Parties.

      The Deen Family argued that the adversary proceeding needed to be

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

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

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

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

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

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

decisions, orders, and judgments.

      Isha and Khwaja opposed the Motion to Reopen and Remand and

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

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

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

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

bankruptcy court lacked jurisdiction to reopen the dismissed adversary and that

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

argued that reopening the adversary would cause them extreme prejudice

because they had moved on with their lives and would now have to retain a

new attorney to continue with the litigation. Despite their prejudice argument,

however, Isha and Khwaja contended that the Deen Family could simply file a

new complaint in the state court.

      In reply, the Deen Family maintained that the adversary proceeding was

administratively closed, not dismissed; no order of dismissal had been entered,

and the clerk's Notice to Parties did not serve as one. The Deen Family argued

that the bankruptcy court had jurisdiction to at least clarify that the State Court

Action had automatically been remanded upon dismissal of the bankruptcy

case, or to reopen the adversary and remand the State Court Action under Civil

Rule 60.

      At the hearing, the bankruptcy court noted that the adversary proceeding

had been administratively closed, not decided or dismissed. Disregarding that

statement, Isha continued to argue that it had been dismissed and that the
                                         5
bankruptcy court lacked jurisdiction to grant any relief. The court then entered

its oral ruling, and later its written order, granting the Motion to Reopen and

Remand. First, the court determined that it had the discretion to reopen the

adversary proceeding because no final order or judgment had been entered. It

then proceeded to make findings supporting remand under Citigroup, Inc. v.

Pacific Investment Management Co. (In re Enron Corp.), 296 B.R. 505, 508 n.2 (C.D.

Cal. 2003). The court determined that, under the circumstances, the Deen

Family's delay in filing the remand request was not unreasonable. This timely

appeal followed.

                                  JURISDICTION

      The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and

157(b)(1). We address our jurisdiction under 28 U.S.C. § 158 below.

                                      ISSUES

1.    Do we have jurisdiction over this appeal?

2.    Did the bankruptcy court abuse its discretion in reopening the closed

adversary proceeding?

3.    Did the bankruptcy court abuse its discretion in granting remand?

                           STANDARDS OF REVIEW

      We review jurisdictional issues de novo. Menk v. LaPaglia (In re Menk), 241

B.R. 896, 903 (9th Cir. BAP 1999). We review de novo questions of subject matter

jurisdiction. Wilshire Courtyard v. Cal. Franchise Tax Bd. (In re Wilshire Courtyard),

729 F.3d 1279, 1284 (9th Cir. 2013). "De novo review requires that we consider a

matter anew, as if no decision had been made previously." Francis v. Wallace (In

re Francis), 505 B.R. 914, 917 (9th Cir. BAP 2014).
                                          6
      A bankruptcy court's decision whether to reopen an adversary proceeding

is reviewed for abuse of discretion. See Elias v. U.S. Tr. (In re Elias), 188 F.3d

1160, 1161 (9th Cir. 1999) (reopening bankruptcy case). Decisions to remand

under 28 U.S.C. § 1452 are also reviewed for abuse of discretion. McCarthy v.

Prince (In re McCarthy), 230 B.R. 414, 416 (9th Cir. BAP 1999). A bankruptcy

court's application of its local rules is reviewed for abuse of discretion. See

United States v. Heller, 551 F.3d 1108, 1111 (9th Cir. 2009). A bankruptcy court

abuses its discretion if it applies the wrong legal standard, or misapplies the

correct legal standard, or if its factual findings are clearly erroneous. United

States v. Hinkson, 585 F.3d 1247, 1261-62 (9th Cir. 2009) (en banc).

                                    DISCUSSION

A.    Threshold issues

      The Deen Family raises several jurisdictional issues, including mootness,

standing, and our purported statutory lack of authority to review the remand

order.3 First, they argue that the appeal is constitutionally and equitably moot.

Other than saying this is so and citing a string of cases, the Deen Family fails to

articulate a cogent argument for why the appeal is moot. They begin by arguing

that remand of the State Court Action was automatic when Isha dismissed her

bankruptcy case, and therefore this Panel is unable provide Isha and Khwaja

with any effective relief. To begin, there is no "automatic" remand of removed

state court actions. Further, if the Deen Family's argument were correct, there

was no need for them to seek remand, and the bankruptcy court's efforts to

      3
        A motions panel denied the Deen Family's previous motion to dismiss on these
issues but permitted the parties to address them in their response and reply briefs.
                                               7
grant remand were futile. To the extent they rely on amended Local Rule 7041-

2(b)4 to argue that the adversary proceeding was automatically remanded upon

dismissal of the bankruptcy case, their reliance is misplaced. That rule was not

in effect when Isha dismissed her bankruptcy case in April 2020, and the Deen

Family has not articulated why the new rule should, or could, apply

retroactively. The Deen Family has not met their burden to show that the appeal

is moot. Ederel Sport, Inc. v. Gotcha Int’l L.P. (In re Gotcha Int’l L.P.), 311 B.R. 250,

254 (9th Cir. BAP 2004) (party asserting mootness has a "heavy burden" to

establish that the court is unable to grant any effective relief).

      Next, the Deen Family argues that Isha and Khwaja lack standing to

appeal. Standing to appeal a bankruptcy court order is limited to "persons

aggrieved" by the order. Harkey v. Grobstein (In re Point Ctr. Fin., Inc.), 890 F.3d

1188, 1191 (9th Cir. 2018). A "person aggrieved" is one who is "directly and

adversely affected pecuniarily" by the order. Id.; see also Fondiller v. Robertson (In

re Fondiller), 707 F.2d 441, 443 (9th Cir. 1983). The Deen Family argues that Isha

and Khwaja were not adversely affected by the bankruptcy court's order,

because reopening the adversary proceeding had no legal effect and was only

an administrative step to clarify the remand that was already effectuated once

      4 Local Rule 7041-2(a) & (b), effective December 1, 2021, provides:
      (a) Except as provided in the following subsection, whenever a bankruptcy case is
      dismissed, any pending related adversary proceeding which a final judgment has
      not been entered will be closed unless a party files a motion seeking continuation of
      the adversary proceeding within 21 days of case dismissal.
      (b) If the pending related adversary proceeding was removed from another court,
      it will be remanded to that court upon dismissal of the underlying bankruptcy case
      unless a party files a motion seeking continuation of the adversary proceeding in this
      Court within 21 days of case dismissal.
                                               8
Isha dismissed her bankruptcy case. Again, the Deen Family is wrong about the

purported automatic remand. Had the reopening not been granted, there would

have been no remand order. And as parties to the State Court Action, Isha and

Khwaja were clearly affected by the remand order. Thus, because Isha and

Khwaja were affected by the reopening and the remand order, they have

standing to appeal.

      The Deen Family also challenges our authority to review the remand

order. They argue that the statutory standard for remand under 28 U.S.C.

§ 1452(b) is "any equitable ground" and that a bankruptcy court's decision to

remand under that provision is not reviewable by the court of appeals. But we

are not the court of appeals. As a bankruptcy appellate panel, we may review a

bankruptcy court's remand order under 28 U.S.C. §§ 1447(d) and 1452(b). It is

further appellate review that is precluded. See Things Remembered, Inc. v.

Petrarca, 516 U.S. 124, 129 (1995); In re McCarthy, 230 B.R. at 417.

      Finally, and not raised by the parties, we note that orders granting a

motion to reopen are interlocutory and not appealable as of right. Wilborn v.

Gallagher (In re Wilborn), 205 B.R. 202, 206 (9th Cir. BAP 1996) (ruling that order

granting reopening is interlocutory but treating notice of appeal as a motion for

leave to appeal); see also Vylene Enters., Inc. v. Naugles, Inc. (In re Vylene Enters.,

Inc.), 968 F.2d 887, 889 (9th Cir. 1992) (we have a duty to determine our

jurisdiction sua sponte). However, since the bankruptcy court also ordered

remand of the State Court Action in the same order, which is a final decision,

we have jurisdiction over this appeal.

                                            9
B.   The bankruptcy court did not abuse its discretion in reopening the
     adversary proceeding.

     Isha and Khwaja raise a variety of arguments on appeal which largely fall

away because of their misguided belief that the adversary proceeding was

"dismissed." To the contrary, the adversary proceeding was "administratively

closed" – as the bankruptcy court pointed out.

     Local Rule 7041-2(a) that was in effect at the time provided:

     Whenever a case is dismissed, any pending related adversary
     proceeding within which a final judgment has not been entered
     may be dismissed without prejudice and without further order of
     the Court, unless a party files a motion seeking continuation of the
     adversary proceeding within 7 days of case dismissal.

Contrary to Isha and Khwaja's argument, the prior Local Rule 7041-2(a) was not

self-executing. It states that an adversary proceeding may be dismissed, not

shall. Further, the Notice to Parties under Local Rule 7041-2 issued by the clerk

after Isha's bankruptcy case was dismissed cautioned that the adversary

proceeding would be closed, not dismissed, if no one sought a continuation

within seven days of entry of the notice. The adversary proceeding was

administratively closed on May 18, 2020.

     While one can understand the confusion since Rule 7041 and Local Rule

7041 govern "dismissals" of adversary proceedings, the simple fact is the

adversary proceeding here was administratively closed, not dismissed. There is

no dismissal order on the docket. Thus, Isha and Khwaja's primary argument

that the bankruptcy court lacked jurisdiction to reopen a dismissed adversary

proceeding misses the point.

                                        10
      Focusing entirely on dismissal, Isha and Khwaja do not address whether

the bankruptcy court had jurisdiction to reopen an adversary proceeding that

lacked a final judgment and was administratively closed. In any event, we

conclude that it did. The Ninth Circuit has held that an administrative closing

has no legal consequence other than to remove the case from the court's active

docket. It is an administrative convenience; it is not a dismissal or a final

decision and has no jurisdictional significance. Dees v. Billy, 394 F.3d 1290, 1294

(9th Cir. 2005) (discussing cases). Both the parties and the court have the power

to reopen an administratively closed case. Penn W. Assocs., Inc. v. Cohen, 371

F.3d 118, 127 (3d Cir. 2004); Lehman v. Revolution Portfolio LLC, 166 F.3d 389, 392

(1st Cir. 1999).

      Under 28 U.S.C. § 1334(b), the bankruptcy court has jurisdiction over any

state court action that is "related to" a bankruptcy case. A state court action is

related to a bankruptcy case if the outcome of that action could conceivably

have any effect on the estate being administered in bankruptcy. Great W. Sav. v.

Gordon (In re Fietz), 852 F.2d 455, 457 (9th Cir. 1988). The prepetition claims Isha

held against the Deen Family were property of the estate, and the outcome of

that litigation, had she been successful, could have affected the administration

of the estate. Thus, the State Court Action was "related to" the bankruptcy case.

      The bankruptcy court still had related-to jurisdiction over the adversary

proceeding after Isha's bankruptcy case was dismissed. The dismissal of an

underlying bankruptcy case does not automatically terminate a bankruptcy

court's jurisdiction over a removed state court action that was pending at the

time of dismissal. Carraher v. Morgan Elecs., Inc. (In re Carraher), 971 F.2d 327, 328
                                          11
(9th Cir. 1992). Isha and Khwaja's reliance on Sea Hawk Seafoods, Inc. v. Alaska (In

re Valdez Fisheries Development Ass'n, Inc.), 439 F.3d 545, 548-49 (9th Cir. 2006), is

misplaced. Sea Hawk held that a bankruptcy court may not assert jurisdiction

over a related-to proceeding initiated after dismissal of the bankruptcy case.

That is not the case here. The prepetition State Court Action was removed to the

bankruptcy court while Isha's bankruptcy case was still pending. Consequently,

the bankruptcy court had jurisdiction to consider and to grant the Deen

Family's request to reopen the adversary proceeding.

      Isha and Khwaja next argue that their due process rights were violated

because the Deen Family cited only Rule 5010 as their basis for reopening the

adversary proceeding, which the bankruptcy court agreed was not the correct

rule. Unfortunately, the clerk's error notice incorrectly instructed the Deen

Family to proceed with their reopening request under Rule 5010, but that rule

applies to reopening bankruptcy cases, not adversary proceedings. However,

that procedural irregularity has no consequence in this case.

      Isha and Khwaja argue that they were not given notice of any other

statute to which to tailor their reopening argument and this violated their due

process rights. They are wrong for two reasons. First, there is no statute or rule

for reopening an administratively closed adversary proceeding. Neither the

Code nor the Rules provide any guidance. To the extent they argue it would be

Civil Rule 60(b), which is incorporated by Rule 9024, they are incorrect. That

rule applies only to final, appealable orders. United States v. Martin, 226 F.3d

1042, 1048 n.8 (9th Cir. 2000). As noted above, an administrative closing is not a

final, appealable order. Second, Isha and Khwaja adequately challenged the
                                          12
reopening of the adversary proceeding in their 328-page opposition and at the

hearing, regardless of the cited rule error. As such, they were not denied due

process. See Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)

(fundamental question for due process is whether appellant received any type

of notice that was reasonably calculated under all the circumstances to apprise

it of the pendency of the action and afford it an opportunity to present an

objection).

      Accordingly, we conclude that the bankruptcy court did not abuse its

discretion in reopening the adversary proceeding.

C.    The bankruptcy court did not abuse its discretion in granting remand.

      A bankruptcy court may remand a claim or cause of action related to a

bankruptcy case on any equitable ground under 28 U.S.C. § 1452(b). The statute

gives the bankruptcy court a broad grant of authority to remand a previously

removed claim or cause of action "on any equitable ground."

      A bankruptcy court may consider any of the following 14 factors in

determining whether to remand to the state court the claim or cause of action

concerned:

      (1) the effect or lack thereof on the efficient administration of the
      estate if the Court recommends [remand or] abstention;

      (2) extent to which state law issues predominate over bankruptcy
      issues;

      (3) difficult or unsettled nature of applicable law;

      (4) presence of related proceeding commenced in state court or other
      nonbankruptcy proceeding;

                                         13
       (5) jurisdictional basis, if any, other than 28 U.S.C. § 1334;

       (6) degree of relatedness or remoteness of proceeding to main
       bankruptcy case;

       (7) the substance rather than the form of an asserted core proceeding;

       (8) the feasibility of severing state law claims from core bankruptcy
       matters to allow judgments to be entered in the state court with
       enforcement left to the bankruptcy court;

       (9) the burden on the bankruptcy court's docket;

       (10) the likelihood that the commencement of the proceeding in
       bankruptcy court involves forum shopping by one of the parties;

       (11) the existence of a right to a jury trial;

       (12) the presence in the proceeding of nondebtor parties;

       (13) comity; and

       (14) the possibility of prejudice to other parties in the action.

Nilsen v. Neilson (In re Cedar Funding, Inc.), 419 B.R. 807, 820-21 & n.18 (9th Cir.

BAP 2009) (citing In re Enron Corp., 296 B.R. at 508 n.2). 5 The bankruptcy court

determined that several of these factors supported remand of the State Court

Action: (1) state law issues predominated; (2) there was no other basis for

       5 The first 12 of these factors are found in the Ninth Circuit case Christiansen v. Tucson
Estates, Inc. (In re Tucson Estates, Inc.), 912 F.2d 1162, 1167 (9th Cir. 1990), applying them to
permissive abstention. The bankruptcy court stated that it was also applying permissive
abstention in its decision to remand. However, neither mandatory nor permissive abstention
was applicable here, as those provisions do not apply when a state court action has been
removed to federal court. This is because abstention requires the existence of a parallel state
court proceeding. Sec. Farms v. Int’l Bhd. of Teamsters, Chauffers, Warehousemen & Helpers, 124
F.3d 999, 1009 (9th Cir. 1997). Upon removal, the state court proceeding has been
extinguished. Id. at 1010. The parties do not raise this issue. However, we conclude that the
                                                    14
jurisdiction other than the bankruptcy filing; (3) there were several nondebtor

parties; (4) the State Court Action lacked relatedness to the main bankruptcy

case; and (5) the Deen Family could be prejudiced if their claims were not

remanded and they had to file a new complaint, because the statute of

limitations could have run on some or all of their claims. The bankruptcy court

also observed that the State Court Action would have gone to final judgment

had it not been removed.

      Other than erroneously arguing that the bankruptcy court lacked

jurisdiction to remand the State Court Action because the adversary proceeding

was dismissed, Isha and Khwaja offer little argument for how the bankruptcy

court abused its discretion in granting remand. They do not challenge the

court's overall factual findings supporting remand under Cedar Funding/Enron

or argue that that the court applied an incorrect legal standard. At best, they

claim that the bankruptcy court failed to consider the prejudice that would

result to them by remanding the State Court Action and considered only the

resulting prejudice to the Deen Family if the State Court Action was not

remanded. We disagree. The court did consider prejudice to both parties but

decided the prejudice to the Deen Family outweighed any potential prejudice to

Isha and Khwaja.6

court's error here was harmless because it also considered the appropriate factors for remand.
       6 Isha and Khwaja argue that remanding the State Court Action without also

remanding the removed and "intertwined" legal malpractice claim that was the subject of
another adversary proceeding was prejudicial. To the contrary, since no final judgment was
entered in that matter either, they are free to request a reopening and remand of it too.
                                                 15
      Further, their argument that they would suffer "extreme prejudice" if the

State Court Action was remanded is undermined by Isha's statement at the

hearing that, rather than remand, she wants the Deen Family to refile their

cross-claims. We, as did the bankruptcy court, fail to see how remanding the

State Court Action as opposed to the Deen Family refiling the same claims in

the state court would result in prejudice to Isha and Khwaja. Either way, they

are defending themselves against a lawsuit. If the statute of limitations has run

on the Deen Family's cross-claims, the prejudice would be to the Deen Family,

not Isha and Khwaja.

      Lastly, Isha and Khwaja argue that their due process rights were violated

because they did not receive adequate notice that a request for remand would

be at issue at the hearing and were denied any further briefing regarding

remand. We disagree. The Deen Family's notice and brief in support clearly

stated that remand was at issue, and the motion itself was titled "Defendants'

Request for Remand to State Court and Order for Remand." Isha and Khwaja's

opposition expressly argued against remand and asked the court to deny the

request. Their hearing notice also acknowledged that a request to remand

would be the subject of the hearing. And Isha argued against remand at the

hearing. Consequently, Isha and Khwaja received sufficient due process.

Mullane, 339 U.S. at 314.

      While the bankruptcy court must generally refrain from considering the

merits of the underlying dispute on a motion to reopen, In re Menk, 241 B.R. at

916, it is not prohibited from doing so when a motion to reopen is combined

with another substantive motion that is briefed and argued by the parties, see
                                        16
ITT Fin. Servs. v. Ricks (In re Ricks), 89 B.R. 73, 75 (9th Cir. BAP 1988) (panel

reviewing bankruptcy court order granting both a motion to reopen the

bankruptcy case and a motion to avoid liens). Further, the bankruptcy court did

not finally determine the parties' claims or rights; it simply remanded all

matters to the state court for decision. Even if it was improper for the

bankruptcy court to consider remand at this point, it is not clear what

arguments Isha and Khwaja could have raised in further briefing that would

have changed the outcome.

      In summary, we see no abuse of discretion by the bankruptcy court in

reopening the adversary proceeding. It also applied the correct law regarding

remand, and its findings for remand are not clearly erroneous.

                                  CONCLUSION

      For the reasons stated above, we AFFIRM.

                                          17