Roee Kiviti v. Naveen Bhatt, 80 F.4th 520

Background

Adiel and Roee Kiviti paid contractor Naveen Bhatt $58,770 to renovate their D.C. home; Bhatt was not properly licensed and work was defective.
The Kivitis sued in D.C. Superior Court, but Bhatt filed Chapter 7 bankruptcy and the automatic stay halted the state action.
In bankruptcy the Kivitis filed (a) an adversary complaint with Count I (liability under D.C. law for $58,770) and Count II (nondischargeability under 11 U.S.C. §523(a)(2)(A)), and (b) a proof of claim in the main case as a fallback.
The bankruptcy court dismissed Count II (deeming any debt dischargeable) but left Count I pending — a partial dismissal of the adversary proceeding.
To obtain appellate review, the parties voluntarily dismissed Count I without prejudice so the Kivitis could appeal the dismissal of Count II; the district court reviewed and affirmed, and the Kivitis appealed to the Fourth Circuit.
The Fourth Circuit held the bankruptcy-court order dismissing Count II was not a final appealable order and that the parties could not manufacture finality by their voluntary dismissal; it vacated the district-court judgment for lack of jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was the bankruptcy court's dismissal of Count II a "final" appealable order while Count I remained?	The dismissal of dischargeability is a discrete, final core ruling and thus appealable.	No—finality is measured by the procedural unit (the adversary); a partial dismissal leaving other claims pending is interlocutory.	Not final: the adversary proceeding is the proper procedural unit; partial dismissal of one claim is not immediately appealable.
Can parties manufacture finality by voluntarily dismissing remaining claims without prejudice after a partial dismissal?	Voluntary dismissal merely recognizes the case was effectively over; it made the prior order final.	Allowing this would permit piecemeal appeals and circumvent Congress's finality rule.	Parties cannot manufacture finality; voluntary dismissal without prejudice does not convert a prior interlocutory order into a final one.
Was Count I constitutionally moot (Article III mootness) after Count II was dismissed, such that the adversary was "legally over"?	Yes — without nondischargeability, any judgment on Count I would be unenforceable outside bankruptcy, so the adversary was moot.	Mootness is an Article III doctrine that does not constrain statutory bankruptcy courts unless Congress says so.	Bankruptcy courts are not bound by Article III mootness; Count I was not constitutionally moot for bankruptcy-court adjudication.
Did the district court have jurisdiction to hear the appeal from the dismissal of Count II after the parties dismissed Count I?	District court had jurisdiction because the adversary was dismissed in full after the voluntary dismissal, making the order final and appealable under 28 U.S.C. §158(a).	No jurisdiction: the original bankruptcy order was non-final when entered and parties may not cure that defect by later voluntary dismissal.	District court lacked appellate jurisdiction; the Fourth Circuit vacated and remanded for lack of jurisdiction.

Key Cases Cited

Ritzen Grp., Inc. v. Jackson Masonry, LLC, 140 S. Ct. 582 (2020) (finality in bankruptcy is assessed by the appropriate procedural unit)
Bullard v. Blue Hills Bank, 575 U.S. 496 (2015) (bankruptcy finality is distinct from §1291 district-court finality)
Microsoft Corp. v. Baker, 582 U.S. 23 (2017) (parties cannot use voluntary dismissal to manufacture appellate jurisdiction)
Affinity Living Grp., LLC v. StarStone Specialty Ins. Co., 959 F.3d 634 (4th Cir. 2020) (distinguishes between claims that are legally over and merely practically over)
Mission Product Holdings, Inc. v. Tempnology, LLC, 139 S. Ct. 1652 (2019) (standards for when relief is effective and limits on enforcement post-bankruptcy)
Stern v. Marshall, 564 U.S. 462 (2011) (bankruptcy courts are not Article III courts and have limited constitutional status)
In re Boca Arena, Inc., 184 F.3d 1285 (11th Cir. 1999) (adversary proceedings are stand‑alone lawsuits within bankruptcy)
Britt v. DeJoy, 45 F.4th 790 (4th Cir. 2022) (finality: an order is final when it ends the litigation on the merits and leaves nothing to do)
Waugh Chapel S. v. United Food & Com. Workers Union Local 47, 728 F.3d 354 (4th Cir. 2013) (cannot use voluntary dismissal to manufacture jurisdiction)