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In re Khurana

United States District Court, D. Idaho

January 16, 2020

IN RE PRAVEEN K. KHURANA, Debtor.
v.
STATE OF IDAHO, CHILD SUPPORT SERVICES, Appellee. PRAVEEN K. KHURANA, Appellant, Adv. No. 19-07002-TLM

          MEMORANDUM DECISION AND ORDER

          ROBERT H. WHALEY SENIOR UNITED STATES DISTRICT COURT JUDGE.

         Pending before the Court is pro se Appellant Praveen K. Khurana's appeal from two orders issued by the United States Bankruptcy Court for the District of Idaho, which dismissed Mr. Khurana's adversary proceeding against the State of Idaho, Child Support Services. The Court has reviewed Mr. Khurana's opening brief, ECF No. 16, his supplemental opening brief, ECF No. 17, Child Support Services' responsive brief, ECF No. 18, as well as the documents filed in both this appeal and the underlying adversary proceeding. Being fully informed, the Court affirms the orders of the Bankruptcy Court.[1]

         I. Jurisdiction

         The Court has jurisdiction over “final judgments, orders, and decrees” of bankruptcy judges pursuant to 28 U.S.C. § 158(a)(1). These include orders of dismissal in adversary proceedings, like those at issue here. In re Reynolds, 455 B.R. 312, 318 (D. Mass. 2011).

         II. Background[2]

         Mr. Khurana filed a bankruptcy petition in January 2013, commencing Case No. 13-20058-TLM. In September 2013, he received a chapter 7 discharge, see 11 U.S.C. § 727, and the matter was closed as a “no-asset” case. In June 2015, Mr. Khurana moved to reopen the case and those proceedings remain ongoing.

         In January 2019, Mr. Khurana filed a pro se “Complaint for Adversary Proceeding - Violation of Lift of Automatic Stay by State of Idaho (Department) of Subject Child Support Enforcement Order, ” which commenced this adversary proceeding, No. 19-07002-TLM. The complaint alleged that Child Support Services was enforcing and collecting upon a Canadian child support order that provided for the support of Mr. Khurana's two children, both of whom live in Canada. Mr. Khurana alleged that Child Support Services' actions: (1) violated the automatic stay provisions of 11 U.S.C. § 362(a)[3]; (2) violated the Hague Convention; (3) caused him to overpay based on its failure to properly apply the current exchange rate; and (4) violated his rights under the U.S. Constitution because of his inability to access the Canadian courts. He also asserted that Canada was an “impossible forum” for him to appear in, given his lack of a Canadian visa and limited financial means. Finally, he made various contentions about the sufficiency of the Canadian court's notice, its personal jurisdiction, and its impartiality. Mr. Khurana also issued deposition subpoenas to Deputy Attorney General Douglas Fleenor and Bureau Chief of Child Support Services Robert Rinard.

         Child Support Services moved to dismiss Mr. Khurana's complaint and also moved to quash the two deposition subpoenas. In March 2019, the Bankruptcy Court held a hearing, heard argument from both parties, and took the matter under advisement.

         On March 29, 2019, the Bankruptcy Court issued an order granting Child Support Services' motion to dismiss and also issued an accompanying Memorandum of Decision. In its Memorandum, the Bankruptcy Court first noted that it lacked jurisdiction to adjudicate many of the counts in Mr. Khurana's complaint-such as the count alleging a “violation of the Hague Convention”-as its jurisdiction was limited to bankruptcy matters. See 28 U.S.C. § 1334. The court also noted that it would abstain from addressing the various issues regarding the collections processes, the Canadian judicial procedures, and whether the children's ages or occupations should operate to reduce the underlying child support obligation, as these matters were best litigated in other forums. Consequently, the court determined that it would focus on Mr. Khurana's allegations that Child Support Services violated the automatic stay and/or the discharge injunction by attempting to collect the owed child support.

         With respect to these allegations, the court noted that the Bankruptcy Code exempts “domestic support obligations” from both the automatic stay and from discharge. See 11 U.S.C. §§ 362(b)(2)(B), 523(a)(5). The court also noted that Mr. Khurana appeared to concede that Child Support Services was in fact pursuing “child support, ” even if he took issue with the claimed amounts, or the “collection fees” assessed, or the exchange rates. Accordingly, the court found that the obligations at issue were “domestic support obligations” within the meaning of the Bankruptcy Code and therefore that Child Support Services' collection efforts did not violate the automatic stay or the discharge injunction. Finally, the court granted Child Support Services' motion to quash Mr. Khurana's deposition subpoenas.

         On April 3, 2019, Mr. Khurana timely appealed from the Bankruptcy Court's order dismissing the complaint and its accompanying memorandum of decision. ECF No. 1 at 1-2; see Fed. R. Bankr. P. 8002(a)(1).

         III. Standard of Review

         When reviewing a bankruptcy court's decision, a district court functions as an appellate court and applies the standards of review generally applied in federal court appeals. In re Crystal Properties, Ltd., 268 F.3d 743, 755 (9th Cir. 2001). Thus, this Court reviews the Bankruptcy Court's legal conclusions and interpretation of the Bankruptcy Code de novo and its factual findings for clear error. In re Green, 583 F.3d 614, 618 (9th Cir. 2009); In re Andrews, 155 B.R. 769, 770 (B.A.P. 9th Cir. 1993).

         While it did not expressly state as such, the Bankruptcy Court dismissed Mr. Khurana's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), made applicable to this adversary proceeding under Federal Rule of Bankruptcy Procedure 7012(b), for failure to state claims upon which relief can be granted. Accordingly, the Court must accept as true all facts alleged in the complaint and draw all reasonable inferences in favor of Mr. Khurana. In re Tracht Gut, LLC, 836 F.3d 1146, 1150 (9th Cir. 2016). However, the Court does not have to accept conclusory allegations in the complaint as true. Id. To survive a motion to dismiss, a plaintiff must aver in the complaint “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Id. at 1151 (quoting Ashcroft v. Iqbal, 556 U.S. 662, ...


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