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Horowitz v. Stewart Title Guaranty Co.

United States District Court, D. Hawaii

June 30, 2017

LEONARD G. HOROWITZ, an individual; SHERRI KANE, an individual; ROYAL BLOODLINE OF DAVID, a dissolved corporation sole, Plaintiffs,
v.
STEWART TITLE GUARANTY COMPANY; FIRST AMERICAN TITLE CO., and DOES 1 through 50, Inclusive, Defendants.

         ORDER GRANTING IN PART AND DENYING IN PART: (1) DEFENDANT FIRST AMERICAN TITLE CO.'S MOTION TO DISMISS “MOTION TO AMEND AS A MATTER OF COURSE [FRCP RULE 15(A)(1)(A)]; AMENDED COMPLAINT FOR DAMAGES AGAINST ALL DEFENDANTS” [ECF NO 10] FILED ON JANUARY 4, 2017; AND (2) DEFENDANT STEWART TITLE GUARANTY CO.'S MOTION TO DISMISS MOTION TO AMEND AS A MATTER OF COURSE [FRCP RULE 15(A)(1)(A)]; AMENDED COMPLAINT FOR DAMAGES, FILED JANUARY 4, 2017 [DKT. 10]

          Leslie E. Kobayashi United States District Judge.

         On January 17, 2017, Defendant First American Title Co. (“First American”) filed a Motion to Dismiss “Motion to Amend as a Matter of Course [FRCP Rule 15(a)(1)(A)]; Amended Complaint for Damages Against all Defendants” [ECF No 10] Filed on January 4, 2017 (“First American Motion”). [Dkt. no. 19.] On January 20, 2017, Defendant Stewart Title Guaranty Co. (“Stewart Title”) filed a Motion to Dismiss Motion to Amend as a Matter of Course [FRCP Rule 15(a)(1)(A)]; Amended Complaint for Damages, Filed January 4, 2017 [Dkt. 10] (“Stewart Title Motion”). [Dkt. no. 23.] On February 27, 2017, pro se Plaintiffs Leonard G. Horowitz (“Horowitz”), Sherri Kane (“Kane” and collectively “Plaintiffs”), and the Royal Bloodline of David (“Royal”) filed a memorandum in opposition to both motions. [Dkt. no. 29.] On March 6, 2017, Stewart Title and First American each filed a reply. [Dkt. nos. 30, 31.] The Court finds these matters suitable for disposition without a hearing pursuant to Rule LR7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawai`i (“Local Rules”). In an Entering Order filed on April 26, 2017 (“4/26/17 EO”), the Court granted the First American Motion and the Stewart Title Motion, [dkt. no. 36, ] and the instant Order supersedes the 4/26/17 EO. The First American Motion and the Stewart Title Motion are granted in part and denied in part for the reasons set forth below.

         BACKGROUND

         On December 21, 2016, Plaintiffs and Royal filed their Verified Complaint for Damages (“Complaint”). [Dkt. no. 1.] On January 4, 2017, Plaintiffs and Royal filed their Motion to Amend as a Matter of Course [FRCP Rule 15(a)(1)(A)] (“Motion to Amend”), and attached their Amended Complaint for Damages (“Amended Complaint”). [Dkt. no. 10.] Because Plaintiffs and Royal filed the Motion to Amend and Amended Complaint within the time period provided by Fed.R.Civ.P. 15(a)(1)(A), the magistrate judge concluded that the Motion to Amend was not necessary and construed the filing as only an Amended Complaint. [Dkt. no. 11.]

         The Amended Complaint is over seventy pages long, not including exhibits, and includes a long series of purported facts and other allegations, many of which are not relevant to the instant motions. However, because Plaintiffs and Royal are proceeding pro se, the Court must construe the Amended Complaint, and any other pleadings, liberally. See Bernhardt v. Los Angeles Cty., 339 F.3d 920, 925 (9th Cir. 2003) (“Courts have a duty to construe pro se pleadings liberally, including pro se motions as well as complaints.” (some citations omitted) (citing Zichko v. Idaho, 247 F.3d 1015, 1020 (9th Cir. 2001))). The Amended Complaint and the briefs all make repeated reference to a number of documents. This Court has explained:

As a general rule, this Court's scope of review in considering a motion to dismiss is limited to the allegations in the complaint. See Daniels-Hall v. Nat'l Educ. Ass'n., 629 F.3d 992, 998 (9th Cir. 2010). “[A] court may consider evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to the plaintiff's claim; and (3) no party questions the authenticity of the copy attached to the [Fed. R. Civ. P.] 12(b)(6) motion.” Id. (citations and internal quotation marks omitted). In addition, the court may consider documents attached to the complaint and matters that are subject to judicial notice. Consideration of any other types of material requires the court to convert the motion to a motion for summary judgment. Hawaii Reg'l Council of Carpenters v. Yoshimura, Civ. No. 16-00198 ACK-KSC, 2016 WL 4745169, at *2 (D. Hawai`i Sept. 12, 2016) (quoting United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003)).

Hays v. VDF Futureceuticals, Inc., CIVIL 15-00535 LEK-RLP, 2016 WL 5660395, at *4 (D. Hawai`i Sept. 28, 2016).

         The relevant facts in the instant matter are: Royal is a ministry that “was formed in 2001 to advance its global humanitarian mission.”[1] [Amended Complaint at pg. 1.] On January 15, 2004, Royal acquired a property in Pahoa, Hawai`i (“the Property”) via Warranty Deed from C. Loran Lee (“Lee”) and recorded the Warranty Deed with the State of Hawai`i Bureau of Conveyances (“BOC”). [Amended Complaint, Aff. of Leonard G. Horowitz (“Horowitz Aff.”), Exh. 4 at 22-26 (Warranty Deed).[2]. Royal financed part of the purchase of the Property with a loan from Lee, and Royal signed a Promissory Note for $350, 000 on January 15, 2004 (“Note”), and recorded a Mortgage in the BOC the same day. [Id. at 27-28 (Promissory Note), 29-44 (Mortgage).] First American was the escrow agent for Royal's purchase of the Property. [Amended Complaint at pg. 2.] Stewart Title provided title insurance on the Property, and issued the title insurance policy to Royal for $550, 000 on January 23, 2004 (“the Policy”). [Horowitz Aff., Exh. 1.]

         Because of a judgment entered in a separate case, Royal was instructed to make payments under the Note and Mortgage to someone aside from Lee starting in 2004. [Stewart Title Motion, Decl. of Jenny J.N.A. Nakamoto (“Nakamoto Decl.”), Exh. 5 (Garnishment Order, dated 12/27/2004).] On May 15, 2009, Lee assigned the Mortgage to himself as the “Overseer of the Office of the Overseer, a Corporate Sole and His Successor Over/For the Popular Assembly of Revitalize, a Gospel of Believers” (“Gospel of Believers” and “Assignment”). [Horowitz Aff., Exh. 30.] Lee died on June 29, 2009, and Jason Hester (“Hester”), as his successor, became the Overseer of the Gospel of Believers (“Overseer”). See First American Motion, Decl. of Summer H. Kaiawe (“Kaiawe Decl.”), Exh. C (Quitclaim Deed, dated May 3, 2010 (“5/3/10 Quitclaim Deed”)) at 2; see also Amended Complaint at pg. 16. On April 2, 2010, Hester, as Overseer, initiated non-judicial foreclosure proceedings by filing the Mortagee's Affidavit of Foreclosure under Power of Sale with the BOC. [Kaiawe Decl., Exh. B.] On April 20, 2010, the Overseer held a sale by public auction, and the Overseer purchased the Property for $175, 000 and conveyed the Property via a Quitclaim Deed. See 5/3/10 Quitclaim Deed; see also Amended Complaint at pg. 17. On June 9, 2011, the Overseer conveyed the Property to Hester via Quitclaim Deed (“6/9/11 Quitclaim Deed”). [Kaiawe Decl., Exh. D (6/9/11 Quitclaim Deed); Amended Complaint at pg. 17.] Finally, on June 28, 2012, Royal conveyed the Property to Plaintiffs via Quitclaim Deed (“6/28/12 Quitclaim Deed”). [Horowitz Aff., Exh. 6.]

         Plaintiffs and Royal allege that First American and Stewart Title “have withdrawn unreasonably, and neglected their duties, ” and “seek compensation for damages of more than $6 million stemming from protracted litigation and the Property's wrongful conversion by Lee's virtual representative, attorney Sulla, aided-and-abetted by the Defendants alleged negligence and willful blindness.” [Amended Complaint at pg. 4.] To that end, Plaintiffs and Royal bring claims for: negligence (“Count I”); [id. at pg. 20-26;] gross negligence (“Count II”); [id. at pg. 27-28;] bad faith (“Count III”); [id. at pg. 29-36;] fraud (“Count IV”); [id. at pg. 37-49;] unfair and deceptive trade practices, in violation of Haw. Rev. Stat. § 480-2 and Haw. Rev. Stat. § 481-3(a)(7) (“Count V”); [id. at pg. 50-52;] negligent infliction of emotional distress (“Count VI”); [id. at pg. 52-53;] violation of the Bank Holding Company Act, 12 U.S.C. § 1972(1) (“Count VII”); [id. at pg. 53-55;] tortious interference with prospective business advantage (“Count VIII”); [id. at pg. 55-59;] breach of fiduciary duty (“Count IX”); [id. at pg. 59-60;] civil conspiracy (“Count X”); [id. at 61-62;] and violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962 (“Count XI”) [id. at pg. 63-72].

         DISCUSSION

         I. Horowitz and Kane's Representation of Royal

         Horowitz and Kane bring the instant action pro se, and purport to also represent Royal. [Id. at pg. 1.] Local Rule 83.11 states: “Business entities, including but not limited to corporations, partnerships, limited liability partnerships, limited liability corporations, and community associations, cannot appear before this court pro se and must be represented by an attorney.” This district court has noted that “[t]his Rule implements established law.” Quality Prof'l Indus., Inc. v. Sun Power, CIV. NO. 15-00080 JMS-BMK, 2015 WL 12838142, at *1 (D. Hawai`i Mar. 19, 2015) (citing Rowland v. Cal. Men's Colony, 506 U.S. 194, 201-02 (1993) (“It has been the law for the better part of two centuries . . . that a corporation may appear in the federal courts only through ...


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