United States District Court, D. Hawaii
LEONARD G. HOROWITZ, and SHERRI KANE, Plaintiffs,
PAUL J. SULLA, JR. et al., Defendants. U.S. Bankruptcy No. 16-00239 Adversary Proceeding No. 16-90015
ORDER DENYING MOTION TO WITHDRAW THE
Derrick K. Watson Judge.
Leonard G. Horowitz and Sherri Kane, proceeding pro se, seek
withdrawal of the reference of Adversary Proceeding No.
16-90015. It is difficult, if not impossible, to discern any
cognizable claims within Plaintiffs' Motion to Withdraw
the Reference and underlying bankruptcy filings, and any
mention of possible causes of action lack plausible,
supporting factual allegations. Because the Motion to
Withdraw the Reference is untimely and fails to establish
that Plaintiffs are entitled to mandatory or permissive
withdrawal under 28 U.S.C. § 157(d), the Motion is
is the debtor in the underlying Chapter 13 bankruptcy
proceeding. Horowitz and Kane are Plaintiffs in the
bankruptcy adversary proceeding that is the target of the
instant Motion, Adv. Pro. No. 16-90015, as well as in
numerous other federal and state cases involving several of
the same parties. In the adversary proceeding, Plaintiffs
seek monetary and injunctive relief regarding real property
located in the State of Hawaii. Several
Defendants moved in bankruptcy court for dismissal of
the adversary proceeding pursuant to Federal Rule of Civil
Procedure 12(b)(1) and 12(b)(6), and alternatively asked the
bankruptcy court to abstain pursuant to 28 U.S.C.§
1334(c). The bankruptcy court granted the motion to dismiss
in a July 8, 2016 order, concluding that discretionary
abstention was proper because Plaintiffs sought to overturn
final judgments of Hawaii state courts. See Motion
Ex. 8 at 6, 18-19 (7/8/16 Order; Bankr. Dkt. No. 104).
those state court proceedings, identified by Plaintiffs as
Civ. No. 05-1-0196 (foreclosure) and Civ. No. 14-1-0304
(ejectment), the state courts approved Defendant Jason
Hester's nonjudicial mortgage foreclosure of the property
at issue in this adversary proceeding and issued a writ of
ejectment against Plaintiffs. As noted in the bankruptcy
court's Memorandum of Decision on Plaintiffs' Motion
for Reconsideration of the bankruptcy court's dismissal
of the adversary proceeding:
although the plaintiffs think there was a gross miscarriage
of justice in the state court, I am not convinced. I see no
reason for a federal court to intervene in a case where the
state trial court has entered judgments after many years of
extensive and hard-fought litigation. I remain convinced that
this case belongs in the state appellate courts, rather than
in this court.
Ex. 1 at 4 (7/26/16 Order; Bankr. Dkt. No. 115).
the bankruptcy judge denied their motion for reconsideration,
Plaintiffs filed the instant Motion seeking withdrawal of the
general, district courts have original and exclusive
jurisdiction over all bankruptcy matters, 28 U.S.C. §
1334, and may refer all bankruptcy matters to a bankruptcy
court. 28 U.S.C. § 157(a). Pursuant to Local Rule
1070.1(a), “all cases under Title 11 and all civil
proceedings arising under Title 11 or arising in or related
to a case under Title 11 are referred to the bankruptcy
judges of this district.” A party who believes that a
proceeding pending in the Bankruptcy Court should instead be
litigated before the district court may move for mandatory or
permissive withdrawal of that reference pursuant to 28 U.S.C.
§ 157(d). Section 157(d) provides:
The district court may withdraw, in whole or in part, any
case or proceeding referred under this section, on its own
motion or on timely motion of any party, for cause shown. The
district court shall, on timely motion of a party, so
withdraw a proceeding if the court determines that resolution
of the proceeding requires consideration of both title 11 and
other laws of the United States regulating organizations or
activities affecting interstate commerce.
28 U.S.C. § 157(d). Motions to withdraw a reference are
heard by the district court. Fed. R. Bankr. 5011(a).
“The party moving for withdrawal of the reference has
the burden of persuasion.” Hawaiian Airlines, Inc.
v. Mesa Air Group, Inc., 355 B.R. 214, 218 (D. Haw.
2006); Field v. Levin, 2011 WL 3477101, at *2 (D.
Haw. Aug. 8, 2011).
seek withdrawal of the reference “pursuant to 28 U.S.C.
§ 157(d); 42 U.S.C. §§ 1981 and 1983,
following service of the bankruptcy  Court's filing of
MEMORANDUM OF DECISION ON MOTION FOR
RECONSIDERATION[.]” Motion at 2. Plaintiffs contend
that withdrawal of the reference is required due to -
(a) conflicting final judgments in State cases 0196 and
 arguably violating res judicata doctrine and the
Plaintiffs' civil rights; and (b) wrongful conversion of
said commercial property (hereafter, “Property”)
but for acts of Defendants detailed below and
“presumptively correct” albeit prejudicial and
erroneous “discretionary ...