United States District Court, D. Hawaii
LEONARD G. HOROWITZ, Appellant,
PAUL J. SULLA, JR., et al ., Appellees. Bankr. No. 16-00239 Adv. No. 16-90015
ORDER DISMISSING APPEAL
Derrick K. Watson, Judge
Leonard G. Horowitz, proceeding pro se, filed an
interlocutory appeal from a bankruptcy court order denying
his motion for reconsideration of the earlier denial of his
motion seeking attorneys' fees and sanctions against
Appellee Paul J. Sulla, Jr. Horowitz and Sulla have for years
engaged in protracted litigation in multiple venues
concerning a real property dispute. In the present appeal,
Horowitz contends that the bankruptcy judge erred by finding
no misconduct on the part of Sulla, an attorney, for
violation of the automatic stay and denying his request for
Horowitz fails to make a threshold showing of any apparent
need for immediate review of the bankruptcy court's
interlocutory order, the Court denies leave to file an
interlocutory appeal pursuant to 28 U.S.C. § 158(a)(3)
and Federal Rule of Bankruptcy Procedure 8004. Appellees'
Motion to Dismiss is accordingly GRANTED. Horowitz's
Motion for Judicial Notice is DENIED.
is the debtor in the underlying Chapter 13 bankruptcy
proceeding initiated on March 9, 2016. See Bankr.
No. 16-00239, Dkt. No. 1. Sulla is a creditor. Horowitz and
Sherri Kane were also Plaintiffs in a bankruptcy adversary
proceeding involving Sulla, Adv. No. 16-90015, and Horowitz
was a party in numerous other federal and state cases
involving the same persons and/or property.In the Adversary
Proceeding, Horowitz sought monetary and injunctive relief
regarding real property located at 13-3775 Pahoa-Kalapana
Road, Pahoa, Hawaii 96778 (the “Property”).
Horowitz and Kane alleged an assortment of misconduct on the
part of Sulla, Sulla's client Jason Hester, and the
judges who presided over several state court lawsuits, among
others. See Complaint, Adv. No. 16-90015, Dkt. No.
acquired the Property in 2004, but lost it via nonjudicial
foreclosure to Hester in 2010. See Complaint, Adv.
No. 16-90015. In 2014, Hester filed a quiet title action
against Horowitz and others, which eventually resulted in the
state court issuing a writ of ejectment against Horowitz and
Kane on March 1, 2016. See Hester v. Horowitz, Civ.
No. 14-1-0304, on appeal as Case No. CAAP-16-000163. About a
week later, on March 9, 2016, Horowitz filed for bankruptcy
protection. On April 15, 2016, the bankruptcy court granted
relief from the automatic stay to permit enforcement of the
writ. See 4/15/16 Order Granting Relief, Bankr. No.
16-00239, Dkt. No. 32.
Defendants moved in bankruptcy court for dismissal of the
Adversary Proceeding and alternatively asked the bankruptcy
court to abstain pursuant to 28 U.S.C. § 1334(c). The
bankruptcy court granted the motion, and on July 26, 2016,
denied the motion for reconsideration, concluding that
discretionary abstention was justified because
Plaintiffs' Adversary Complaint improperly sought to
overturn final judgments of Hawaii state courts. See
Adv. No. 16-90015, Dkt. Nos. 104 and 111.
the bankruptcy court's denial of confirmation of his
initial and second Chapter 13 plans, Horowitz filed a third
plan on August 5, 2016. Bankr. No. 16-00239, Dkt. No. 115. In
a September 16, 2016 Order, the bankruptcy court denied the
third plan and dismissed the Chapter 13 case. See
Regarding Plan Confirmation, Bankr. No. 16-00239, Dkt. No.
138. The bankruptcy judge based his decision on the following
It is abundantly clear that Dr. Horowitz filed this case in
order to secure a forum in which he can litigate and attack
state court decisions against him and in favor of Mr. Sulla,
Mr. Sulla's client, and others. All of Dr. Horowitz's
papers and oral presentations are filled to the brim with
argument, accusations, and invective concerning the
foreclosure of property in which Dr. Horowitz had an
interest, the state court proceedings that validated it, and
cases brought by Dr. Horowitz in federal district court to
attack it. According to his schedules, Dr. Horowitz's
most valuable asset by far is his legal case against Sulla et
Simply put, Dr. Horowitz has no need for relief under chapter
13. He has filed this case for the sole purpose of mounting a
collateral attack on adverse state court decisions.
Considering the totality of the circumstances, Dr. Horowitz
has not carried his burden of proving that he filed this case
and his plan in good faith.
It is hard to imagine how Dr. Horowitz could propose a
confirmable plan that would also serve his overriding goal of
relitigating his dispute with Sulla et al. in this court.
Therefore, this case should not be prolonged any further and
9/16/16 Mem. Decision Regarding Plan Confirmation, Bankr. No.
16-00239 at 5.
same day, the bankruptcy court issued an Order to Show Cause
why the Adversary Proceeding should not be dismissed, based
on the dismissal of the underlying bankruptcy case.
See 9/16/16 OSC, Adv. No. 16-90015, Dkt. No. 122.
The bankruptcy court thereafter dismissed the Adversary
Proceeding on October 14, 2016. See Adv. No.
16-90015, Dkt. Nos. 128 (Order of Dismissal) and 129 (Final
September 19, 2016, the bankruptcy court entered an Order
Denying Confirmation and Dismissing Case. See Bankr.
No. 16-00239, Dkt. No. 143.
Issues On Appeal To District Court
Memorandum Of Decision On Alleged Misconduct By
September 16, 2016, the same day it issued its Memorandum of
Decision Regarding Plan Confirmation, the bankruptcy court
also issued a Memorandum of Decision on Debtor's Alleged
Misconduct by Paul Sulla, Jr. See 9/16/16 Order,
Bankr. No. 16-00239, Dkt. No. 139. That order denied
Horowitz's Motion to Show Cause for Violations of
Automatic Stay, Defying Disqualification Order and Bad Faith
Pleadings in Judgment Creditor Paul Sulla, Jr.'s
Objection to Confirmation of Amended Plan of Debtor
(“Motion To Show Cause”), filed on June 27, 2016,
in the Chapter 13 case. See Bankr. No. 16-00239,
Dkt. No. 97. The bankruptcy court found that Sulla (1) did
not violate the automatic stay; (2) should not be
disqualified from representing Hester in the bankruptcy
matter; and (3) is not liable to Horowitz for sanctions under
Federal Rule of Civil Procedure 11 or its bankruptcy
No Violation Of The Automatic Stay
bankruptcy court observed that Horowitz commenced his Chapter
13 case on March 9, 2016-shortly after the state court issued
the writ of ejectment on March 1, 2016. On March 11, 2016,
the Bankruptcy Noticing Center mailed notice of the
bankruptcy filing to Hester and Sulla. At some point prior to
7:24 p.m. on March 12, 2016, a copy of the writ of ejectment
was taped to the front gate of the Property. See
9/16/16 Order at 2. On March 18, 2016, Sulla filed a motion
for relief from the automatic stay to permit enforcement of
the writ of ejectment, which the bankruptcy court granted on
April 15, 2016. On June 10, 2016, the writ of ejectment was
enforced and Horowitz was evicted from the property.
See 9/16/16 Order at 2-3.
purposes of Horowitz's Motion To Show Cause, the relevant
time period was between March 9, 2016 and April 15, 2016. The
bankruptcy court explained that “the only conduct
during the relevant period that might amount to a stay
violation was the affixing of the writ of ejectment to the
front gate of the Property, presumably by a process server
acting for Sulla.” 9/16/16 Order at 2-3. The bankruptcy
judge concluded that this conduct did not amount to a
violation of the automatic stay. Citing a controlling Ninth
Circuit decision, In re Perl, 811 F.3d 1120 (9th
Cir. 2016), involving similar facts, the bankruptcy judge
found no stay violation. See 9/16/16 Order at 3-4.
Moreover, the bankruptcy judge concluded that, even if there
had been a violation, Horowitz did not establish that the
violation was willful by proving that Sulla had actual
knowledge of the bankruptcy filing when the writ was affixed
to the gate. See 9/16/16 Order at 4 (“A
violation is ‘willful' if the creditor knew of the
automatic stay and its actions that violate the stay were
intentional.”) (quoting Eskanos & Adler, P .C.
v. Roman (In re Roman), 283 B.R. 1, 7-8 (B.A.P. 9th
Cir.), aff'd, 309 F.3d 1210, 1215 (9th Cir.
even if there had been a willful violation, the bankruptcy
judge concluded that (1) Horowitz failed to establish that
the posting of the writ on the front gate caused him to
suffer any quantifiable injury; and (2) it would not (except
perhaps in extreme circumstances not present here) support an
order prohibiting Sulla from objecting to confirmation of a
plan. See 9/16/16 Order at 4.
Disqualification Not Warranted
sought Sulla's disqualification based upon a prior ruling
by a federal magistrate judge in a different matter, in which
Sulla was a necessary witness on several of the claims before
the district court. Horowitz argued unsuccessfully before the
bankruptcy judge that Sulla violated the district court's
unrelated order by appearing in this bankruptcy case.
See 9/16/16 Order at 5. The bankruptcy judge instead
concluded that “[t]he fact that one court disqualified
Mr. Sulla does not require all courts to do so. Further,
there is no reason to think, [that] Sulla's testimony
will be necessary in this bankruptcy case, [because, in] a
separate order entered concurrently with this order, I have
dismissed this bankruptcy case for reasons unrelated to any
testimony Mr. Sulla might be able to give.” 9/16/16
Order at 5.
Horowitz Did Not Comply With Fed.R.Bankr.P.
the bankruptcy judge rejected the request for sanctions
because Horowitz did not comply with the safe harbor
provision of Federal Rule of Bankruptcy Procedure 9011(c)(1).
See 9/16/16 Order at 5. Although Horowitz invoked
Federal Rule of Civil Procedure 11 at the beginning of his
motion, he did not discuss the rule elsewhere in his request
for sanctions. Because Horowitz did not serve an unfiled copy
of the motion or give the target of the motion 21 days to
correct the alleged misconduct, the bankruptcy judge found
that he failed to comply with the requirements of Federal
Rule of Bankruptcy Procedure 9011. “There is no
indication that . . . Horowitz complied with the safe harbor,
so sanctions are not available under rule 9011.”
9/16/16 Order at 5.
Order Denying Motion For Reconsideration
filed a Motion for Reconsideration on September 26, 2016.
See Bankr. No. 16-00239, Dkt. No. 148 (“Mot.
for Recon.”). The Motion for Recon alternatively sought
removal of pending claims “of alleged automatic stay
violations requiring due process, intertwined with remaining
claims in the Adversary Proceeding, to bring long-overdue
[sic] trial on the merits.” Mot. for Recon. at 2.
Horowitz argued that the bankruptcy court's denial of his
Motion To Show Cause violated his due process rights and
“unreasonably, inequitably, unjustly and
un-Constitutionally helped Sulla convert the estate Property
to Sulla/Hester in violation of, inter alia, 42 U.S.C. §
1981.” Mem. in Supp. of Mot. for Recon. at 17.
According to Horowitz, “[i]n this spirit of judicial
corruption, the [bankruptcy] [c]ourt's Orders reflect
abstinence from ‘good behavior' in the face of
prima facie evidence of Sulla's forgery(ies) of . . .
signatures, perjury, false filings with the State, and wire
fraud contributing to real Property conversion.” Mem.
in Supp. of Mot. for Recon. at 17.
bankruptcy judge denied the Motion for Recon on September 29,
2016. See 9/29/16 Order, Bankr. No. 16-00239, Dkt.
No. 150. The Order Denying Debtor's Motion to Reconsider
noted that Horowitz sought relief under Federal Rule of Civil
Procedure 60, made applicable by Federal Rule of Bankruptcy
Procedure 9024. See 9/29/16 Order at 1. Because
Horowitz did not specify which subsection of Rule 60(b)
formed the basis for his reconsideration request, the
bankruptcy court considered each of them, concluding that
“there is no support for relief from the [9/16/16]
order under any provision of Rule 60(b)(1)-(5).”
9/29/16 Order at 2. The bankruptcy court also specifically
There is no newly discovered evidence that could not have
been or was not raised in the underlying motion. The facts
stated in the reconsideration motion were also raised
numerous times in various motions before this court as well
as in the state court actions where debtor lost title to the
property. Furthermore, there are no ...