PETER H. CARROLL, Bankruptcy Judge.
Before the court are various motions interposed by Defendants, Judy L. Bogen, et al., (sometimes collectively, referred to as the "Defendants") in response to the complaint filed by Plaintiff, Steven J. Stanwyck ("Stanwyck")
On March 20, 1992, Stanwyck filed a voluntary petition under chapter 11 in Case No. 2:92-bk-22475-SB, In re Steven J. Stanwyck, Debtor, in the United States Bankruptcy Court, Central District of California, Los Angeles Division. On August 5, 1992, the case was converted to a case under chapter 7 and David R. Haberbush ("Haberbush") administered the estate as trustee. Stanwyck received a discharge on June 28, 2002. After a final distribution on account of allowed claims, Haberbush was discharged as trustee and the case was closed on July 17, 2002.
While his first case was pending, Stanwyck filed a second voluntary petition under chapter 11 in Case No. 2:02-bk-25398-SB, styled In re Steven Jay Stanwyck, Debtor, in the United States Bankruptcy Court, Central District of California, Los Angeles Division, on May 28, 2002. On May 31, 2002, Stanwyck filed a motion seeking conversion of the case to a case under chapter 7. An order converting the case to chapter 7 was entered on June 10, 2002, and Alberta Stahl ("Stahl") was appointed trustee. Stahl investigated Stanwyck's financial affairs and liquidated the assets of the estate. On January 14, 2003, Stahl filed a complaint in Adversary No. 2:03-ap-01040-SB, Stahl v. Stanwyck, objecting to Stanwyck's discharge. On September 22, 2003, a judgment was entered in such adversary proceeding denying Stanwyck's discharge pursuant to §§ 727(a)(2)(A), (a)(4), and (a)(5). On October 19, 2006, Stahl filed her final account as trustee. On May 13, 2008, an order was entered discharging Stahl as trustee, exonerating her bond, and closing the case.
While his second case was pending, Stanwyck filed a third voluntary chapter 11 petition in Case No. 2:07-bk-19183-SB,
During the two and one-half years this case has been pending,
In response to Stanwyck's Complaint, Defendants, Judy L. Bogen, Neil Hersh, Joseph Mannis, Hersh, Mannis & Bogen, Edward M. Ross, Isabel R. Cohen, Steven E. Young, Jared A. Barry, Jeffrey Zabner, Freeman, Freeman & Smiley, Joan Ciapciak Stanwyck, Joan Stanwyck Family 2000
Defendants' motions were filed between November 18, 2010 and January 4, 2011, and originally set for hearing on December 21, 2010, January 4, 2011, or January 18, 2011.
This court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 157(a) and 1334(b). This matter is a core proceeding in that (1) Stanwyck's Complaint seeks damages under § 362(k) for alleged violations of the automatic stay, which is a core proceeding under 28 U.S.C. § 157(b)(2)(A), (G) and (O); and (2) Stanwyck's Complaint requires the court to enter an appropriate order to prevent vexatious litigation and an abuse of process. 11 U.S.C. § 105(a); 28 U.S.C. § 1651. Venue is appropriate in this court. 28 U.S.C. § 1409(a).
Rule 12(b)(6) authorizes the court, upon motion of the defendant, to dismiss a complaint for failure to state a claim upon which relief can be granted. F.R.Civ.P. 12(b)(6).
Twombly raised the bar for notice pleadings under Rule 8(a) such that a complaint will not survive a motion to dismiss under Rule 12(b) unless "the non-conclusory `factual content,' and reasonable inferences from that content . . . plausibly [suggest] a claim entitling the plaintiff to relief." Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir.2009). A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. A pleading that offers "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Nor does a complaint suffice if it tenders "naked assertion[s]" devoid of "further factual enhancement." Id. at 557, 127 S.Ct. 1955; see Limestone Dev. Corp. v. Vill. of Lemont, III, 520 F.3d 797, 802-03 (7th Cir. 2008) (stating that Twombly "teaches that a defendant should not be forced to undergo costly discovery unless the complaint contains enough detail, factual or argumentative, to indicate that the plaintiff has a substantial case").
Ordinarily, a Rule 12(b)(6) motion cannot be used to raise an affirmative defense. See Xechem, Inc. v. Bristol-Myers Squibb Co., 372 F.3d 899, 901 (7th Cir.2004) ("Complaints need not contain any information about defenses and may not be dismissed for that omission."). However, it is proper to dismiss pursuant to Rule 12(b)(6) when the plaintiff has included allegations in the complaint that, on their face, disclose some absolute defense or bar to recovery. See, e.g., Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 613 (6th Cir. 2009) ("[T]here is no reason not to grant a motion to dismiss where the undisputed facts conclusively establish an affirmative defense as a matter of law."); Weisbuch v. County of Los Angeles, 119 F.3d 778, 783 n. 1 (9th Cir.1997) ("If the pleadings establish facts compelling a decision one way, that is as good as if depositions and other expensively obtained evidence on summary judgment establishes identical facts."); ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3rd Cir.1994) ("[A] complaint may be subject to dismissal under Rule 12(b)(6) when an affirmative defense like the statute of limitations appears on its face."). Accordingly, a complaint fails to state a claim when the facts and dates alleged in the complaint disclose that the causes of action are time-barred. See Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980). Likewise, where the lawsuit is brought against defendants who have statutory or common law immunities, the complaint may be dismissed under Rule 12(b)(6) if the defense is disclosed on the face of the complaint. See United States v. Gaubert, 499 U.S. 315, 324-25, 111 S.Ct. 1267, 113 L.Ed.2d 335 (1991); McKenna v. Wright, 386 F.3d 432, 436 (2nd Cir.2004); Leveto v. Lapina, 258 F.3d 156, 161 (3rd Cir.2001).
Although the focus under Rule 12(b)(6) is the substance of the complaint, the court may consider a matter that is properly the subject of judicial notice along with the complaint when deciding a motion to dismiss for failure to state a claim. MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir.1986) ("On a motion to dismiss, we may take judicial notice of matters of public record outside the pleadings."); accord Banco Santander de Puerto Rico v. Lopez-Stubbe (In re Colonial Mortg. Bankers Corp.,) 324 F.3d 12, 19 (1st Cir.2003) ("[M]atters of public record are fair game in adjudicating Rule 12(b)(6) motions, and a court's reference to such matters does not convert a motion to dismiss
Rule 12(e) states:
F.R.Civ.P. 12(e).
Section 362(a) imposes a broad stay upon the filing of a bankruptcy petition against any act, judicial or otherwise, to collect a prepetition debt, enforce a lien, or exercise control over property of the debtor or the estate. See 11 U.S.C. § 362(a). Section 362(a) gives "the bankruptcy court an opportunity to harmonize the interests of both debtor and creditors while preserving the debtor's assets for repayment and reorganization of his or her obligations." McCarthy, Johnson & Miller, Inc. v. North Bay Plumbing, Inc. (In re Pettit,) 217 F.3d 1072, 1077 (9th Cir. 2000); see Dean v. Trans World Airlines, Inc., 72 F.3d 754, 755-56 (9th Cir.1995) ("Section 362(a) has two broad purpose. First, it provides debtors with protection from hungry creditors. . . . Second, the stay assures creditors that the debtor's other creditors are not racing to the various courthouses to pursue independent remedies to drain the debtor's assets. . . .").
Section 362(k) permits an individual injured by a willful violation of the automatic stay to "recover actual damages, including costs and attorneys' fees, and, in appropriate circumstances, . . . punitive damages."
Bankruptcy courts have subject matter jurisdiction over "all civil proceedings arising under title 11, or arising in or related to cases under title 11." 28 U.S.C. § 1334(b). Damage claims predicated upon § 362(k) arise under title 11 and fall squarely within the bankruptcy court's subject matter jurisdiction. Davis v. Courington (In re Davis), 177 B.R. 907, 912 (9th Cir. BAP 1995). Bankruptcy courts retain jurisdiction to adjudicate claims arising under § 362(k) notwithstanding a dismissal or closing of the bankruptcy case. See, e.g., Johnson v. Smith (In re Johnson), 575 F.3d 1079, 1084 (10th Cir.2009) ("The great weight of case authority supports our conclusion that a § 362(k)(1) proceeding remains viable after termination of the underlying bankruptcy case."); Aheong v. Mellon Mortgage Co. (In re Aheong), 276 B.R. 233, 244 (9th Cir. BAP 2002) ("[W]e have held that after dismissal of a bankruptcy case the bankruptcy court retains jurisdiction over an action for damages for willful violation of the automatic stay."); Fernandez v. GE Capital Mortgage Servs., Inc. (In re Fernandez), 227 B.R. 174, 179 (9th Cir. BAP 1998), aff'd, 208 F.3d 220 (9th Cir.2000).
"Arising under" jurisdiction does not hinge "on the present existence of an open case or a non-dismissed case," but "depends solely on the existence of `civil proceedings arising under title 11.'" Aheong, 276 B.R. at 244; see Menk v. Lapaglia (In re Menk), 241 B.R. 896, 904 (9th Cir. BAP 1999) ("[S]ubject-matter jurisdiction is conferred by the `arising under' clause of § 1334(b), as it is a cause of action created by the Bankruptcy Code, without existence outside the context of bankruptcy, and otherwise unknown to the law" and "the action [can] be commenced after the bankruptcy case has been closed"). Hence, an adversary proceeding may be commenced in bankruptcy court years after the related bankruptcy case has been administered and closed without reopening the case. See Staffer v. Predovich (In re Staffer), 306 F.3d 967, 972 (9th Cir.2002) ("[A] separate motion to reopen is not a jurisdictional requirement, or even a prerequisite for commencing an action for nondischargeability of a debt under § 523(a)(3)(B)."); Menk, 241 B.R. at 906
Congress did not establish any limitations period for damage claims under § 362(k). In re Bernheim Litigation, 290 B.R. 249, 258 (D.N.J.2003); Koffman, 182 B.R. at 124 ("Congress did not enact a statute of limitations on actions under section 362(h). . . ."); Nelson v. Post Falls Mazda (In re Nelson), 159 B.R. 924, 925 (Bankr.D.Idaho 1993). Defendants, Edward M. Ross, Jeffrey Zabner, Steven E. Young, Jared A. Barry, and Freeman, Freeman & Smiley argue that the four-year statute of limitations provided in 28 U.S.C. § 1658 should apply to claims under § 362(k). Section 1658 of title 28, which was enacted in 1990, states:
28 U.S.C. § 1658(a). In Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 124 S.Ct. 1836, 158 L.Ed.2d 645 (2004), the Supreme Court opined that "[a]n amendment to an existing statute is no less an `Act of Congress' than a new, stand-alone statute." Id. at 381, 124 S.Ct. 1836. It concluded, however, that "a cause of action `aris[es] under an Act of Congress enacted' after December 1, 1990—and therefore is governed by § 1658's 4-year statute of limitations—if the plaintiff's claim against the defendant was made possible by a post-1990 enactment." Id. at 382, 124 S.Ct. 1836 (emphasis added); see Baker v. Birmingham Board of Educ., 531 F.3d 1336, 1338 (11th Cir.2008) ("Baker's claims against the Board were `made possible by a post-1990 enactment' and `therefore [are] governed by § 1658's 4-year statute of limitations.'").
Section 362(h) was enacted in 1984.
Stanwyck's Complaint alleges the following with respect to Defendants, Neal
Stanwyck's Complaint further alleges that:
Stanwyck admits that (1) Defendant, Joan C. Stanwyck, his former spouse, obtained relief from the stay to proceed to judgment in the divorce proceeding pending with Stanwyck; (2) that Defendant, Hersh, Mannis & Bogen represented Defendant, Joan C. Stanwyck in the divorce action; and (3) that Defendants, Neal Hirsh, Joseph Mannis, and Judy L. Bogen are partners in the firm.
Stanwyck's Complaint alleges the following with respect to Defendants, Stephen M. Lachs, Isabel R. Cohen and Edward M. Ross:
Judges are absolutely immune from liability for actions taken in the exercise of their judicial functions. Curry v. Castillo (In re Castillo), 297 F.3d 940, 947 (9th Cir.2002). Absolute immunity is not reserved solely for judges, but extends to nonjudicial officers for "all claims relating to the exercise of judicial functions." Burns v. Reed, 500 U.S. 478, 499, 111 S.Ct. 1934, 114 L.Ed.2d 547 (1991). Whether a judge is immune from suit depends upon whether, at the time of the challenged action, he or she had jurisdiction over the subject matter of the issue presented for decision. Stump v. Sparkman, 435 U.S. 349, 356, 98 S.Ct. 1099, 55 L.Ed.2d 331 (1978). The scope of jurisdiction must be construed broadly, however, and a judge is entitled to immunity even if he or she acted, in error, maliciously, or outside the scope of his or her authority. Id. Moreover, a judge is subject to liability only for action in the clear absence of all jurisdiction. Id. at 356-57, 98 S.Ct. 1099.
Defendant, Isabel R. Cohen is absolutely immune from liability for the claims made the basis of Stanwyck's Complaint. The court takes judicial notice that Defendant, Isabel R. Cohen was appointed as a discovery referee in Case No. BD327414, Stanwyck v. Stanwyck, in the Superior Court of California, County of Los Angeles, on February 26, 2007, and that Stanwyck was jointly responsible with Defendant, Joan C. Stanwyck for payment of fees and expenses incurred by Defendant, Isabel R. Cohen as a discovery referee in the case.
Defendants, Stephen M. Lachs and Edward M. Ross may also be absolutely immune from liability for the claims made the basis of Stanwyck's Complaint. Defendant, Edward M. Ross asserts that he was also appointed by the state court in which Stanwyck's divorce action was pending to decide a discovery dispute between the parties in 2004, and that he conducted a hearing on the discovery dispute in the offices of Defendant, ADR Services, Inc.
Notwithstanding the foregoing, Stanwyck's Complaint as to Defendants, Stephen M. Lachs, Edward M. Ross and ADR Services, Inc. lacks essential factual foundation. Twombly, 550 U.S. at 557, 127 S.Ct. 1955. Stanwyck's Complaint is devoid of factual content that would permit the court to draw a reasonable inference that Defendants, Stephen M. Lachs, Edward M. Ross, or ADR Services, Inc. obtained payment of a debt owing by Stanwyck in willful violation of § 362(a). Because Stanwyck's Complaint does not contain sufficient factual matter, accepted as true, to state a claim for relief under § 362(k) that is plausible on its face as to Defendant, Edward M. Ross, the court finds that Stanwyck's Complaint fails to state a claim as to said Defendant under § 362(k) for willful violation of the automatic stay upon which relief can be granted. Stanwyck's Complaint is so vague and ambiguous as to the claims asserted against Defendants, Stephen M. Lachs and ADR Services, Inc. that said Defendants cannot reasonably prepare a response absent a more definite statement.
Stanwyck's Complaint alleges with respect to his daughter, Defendant, Kirsten J. Stanwyck, the following:
Stanwyck reasserts the allegations against Defendant, Kirsten J. Stanwyck later in the complaint:
Stanwyck's Complaint further alleges with respect to Defendants, Logan & Blue, Inc., Steven E. Young, Jared A. Barry, and Freeman, Freeman & Smiley that:
90. Defendant Jeffrey Zabner, Esq. is a lawyer paid by Defendant Joan Stanwyck to prepare the shell KJSLT used to hide Steven's property including by holding title to Malcolm Drive. Defendant Zabner on or about November 4, 2003, paid by Defendant Joan Stanwyck, formed the sham Defendant Kirsten Stanwyck Living Trust with Defendant Joan Stanwyck as its successor Trustee and sole beneficiary.
None of the facts alleged in Stanwyck's Complaint against Defendants, Kirsten Jane Stanwyck, Kirsten Stanwyck Living Trust, Steven E. Young, Freeman, Freeman & Smiley, Jared A. Barry, Jeffrey Zabner, and Logan & Blue, Inc. form the basis for a plausible claim for damages for a willful violation of the automatic stay. Stanwyck's conclusory allegation that Defendant, Logan & Blue, Inc. is a "conduit to hide Steven's assets" falls far short of stating a plausible claim for relief against said Defendant under § 362(k). Defendant,
Defendants, Jared A. Barry, Steven E. Young, and Freeman, Freeman & Smiley represented Defendant, Kirsten Stanwyck in an action filed under Case No. SC 081203, styled Stanwyck, et al. v. Stanwyck, et al., in the Superior Court of California, County of Los Angeles, on or about March 26, 2004, to quiet title to the Malcolm Avenue property identified in Stanwyck's Complaint. Stanwyck removed the state court action to Case No. 2:04-cv-03238-DSF-FMO, in the United States District Court, Central District of California, Los Angeles Division, arguing in pertinent part, that the state court action was commenced in violation of the automatic stay. On June 11, 2004, the district court remanded the proceeding to the state court stating:
The district court, having previously determined that Defendant, Kirsten Stanwyck's commencement of the state court action did not violate the automatic stay and that Stanwyck "may not assert any rights provided by the statute," Stanwyck's Complaint against Defendants, Kirsten Jane Stanwyck, Kirsten Stanwyck Living Trust, Steven E. Young, Jared A. Barry, and Freeman, Freeman & Smiley fails to state a claim under § 362(k) that is plausible on its face and will be dismissed as to said Defendants without leave to amend.
With respect to the claims alleged against Defendants, Joan C. Stanwyck, Joan Stanwyck Family 2000 Trust, Joan Stanwyck Family 2002 Trust, Dennis N. Brager, John O. Kent, and the Brager Tax Law Group, Stanwyck's Complaint is rambling, disorganized, and largely unintelligible. Stanwyck alleges that Defendant, Joan C. Stanwyck, with Defendant, Kirsten Stanwyck, "filed false First Amended Complaints to the State Bar of California, 05-0-04530 and 05-0-02890, respectively."
Defendants, Joan C. Stanwyck, Joan Stanwyck Family 2000 Trust, Joan Stanwyck Family 2002 Trust, Dennis N. Brager, John O. Kent, and the Brager Tax Law Group are entitled to a short, concise statement of the pertinent facts which form the basis for Stanwyck's claim for relief against each of them under § 362(k). F.R.Civ.P. 8(a)(2). To state a plausible claim for relief under § 362(k), Stanwyck's Complaint must identify with respect to each Defendant: (1) the specific provision of § 362(a) allegedly violated by the Defendant; (2) the facts concerning the date, time, and nature of the conduct alleged to be in violation of § 362(a); (3) the case in which the automatic stay was allegedly violated; (4) the material facts showing that the alleged conduct was willful, and (5) an itemization of damages directly attributable to such violation. Absent such facts, the court is unable "to draw the reasonable inference that [a] defendant is liable for the misconduct alleged." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Stanwyck's claims as to Defendants, Joan C. Stanwyck, Joan Stanwyck Family 2000 Trust, and Joan Stanwyck Family 2002 Trust amount to bare legal conclusions or
Federal courts have discretion to enjoin parties from frivolous litigation under the All-Writs Act, 28 U.S.C. § 1651. See, e.g., Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1051 (9th Cir.2007) ("The All Writs Act, 28 U.S.C. § 1651(a), provides district courts with the inherent power to enter pre-filing orders against vexatious litigants."); Weissman v. Quail Lodge, Inc., 179 F.3d 1194, 1197 (9th Cir. 1999) ("District courts have the inherent power to file restrictive pre-filing orders against vexatious litigants with abusive and lengthy histories of litigation."); De Long v. Hennessey, 912 F.2d 1144, 1146 (9th Cir.1990) ("We recognize that `[t]here is strong precedent establishing the inherent power of federal courts to regulate the activities of abusive litigants by imposing carefully tailored restrictions under appropriate circumstances.'") (citing Tripati v. Beaman, 878 F.2d 351, 352 (10th Cir. 1989)). "Bankruptcy courts, being courts established by Act of Congress, `have the power to regulate vexatious litigation pursuant to 11 U.S.C. § 105 and 28 U.S.C. § 1651.'" Goodman v. Cal. Portland Cement Co. (In re GTI Capital Holdings, LLC), 420 B.R. 1, 11 (Bankr.D.Ariz.2009) (quoting Lakusta v. Evans (In re Lakusta), 2007 WL 2255230, * 3 (N.D.Cal.2007)).
Before imposing a pre-filing order against a vexatious litigant in the Ninth Circuit, the court must: (1) give the litigant notice and an opportunity to be heard before the order is entered; (2) compile an adequate record for review; (3) make substantive findings as to the frivolous or harassing nature of the litigant's actions; and (4) draft an order that is "narrowly tailored to closely fit the specific vice encountered." De Long, 912 F.2d at 1147-48. In Molski, the Ninth Circuit observed that the five factors set forth in Safir v. United States Lines, Inc., 792 F.2d 19 (2d Cir.1986) provide "a helpful framework for applying the two substantive factors (factors three and four)" of the De Long test. Molski, 500 F.3d at 1058. The Safir factors are: "(1) the litigant's history of litigation and in particular whether it entailed vexatious, harassing or duplicative lawsuits; (2) the litigant's motive in pursuing the litigation, e.g., does the litigant have an objective good faith expectation of prevailing?; (3) whether the litigant is represented by counsel; (4) whether the litigant has caused needless expense to other parties or has posed an unnecessary burden on the courts and their personnel; and (5) whether other sanctions would be adequate to protect the courts and other parties." Safir, 792 F.2d at 24.
Notice and an opportunity to be heard before a pre-filing order is entered "is a core requirement of due process." Molski, 500 F.3d at 1058 (citing De Long, 912 F.2d at 1147). In this case, Stanwyck was properly served with each of the Defendants' motions seeking that he be declared a vexatious litigant and requesting that a pre-filing order be entered against him. Stanwyck had adequate notice of the date, time and place of the
"An adequate record for review should include a listing of all the cases and motions that [leads] the court to conclude that a vexatious litigant order [is] needed." De Long, 912 F.2d at 1147. "At the least, the record needs to show, in some manner, that the litigant's activities were numerous or abusive." Id. (citations omitted) (emphasis added). As previously noted, Stanwyck has filed five adversary proceedings in this bankruptcy case alone.
On February 29, 2008, Stanwyck filed a 130-page complaint in Adversary No. 2:08-ap-01240-SB, styled North Am. Timeshare Shareholders Trust, et al. v. Edward D. Jones & Co., et al. In his amended complaint filed on May 30, 2008, Stanwyck alleged 21 separate causes of action against one or more of 63 named defendants and sought damages in excess of $16.6 billion, an accounting, imposition of a constructive trust, injunctive relief, attorneys fees, interest, and costs. In Claims 1-3, Stanwyck sought $50 million actual damages, $50 million for emotional distress, $450 million punitive damages, costs of court and attorneys fees from all of the defendants pursuant to § 362(k) for alleged willful violation of the automatic stay in Case Nos. 2:92-bk-22475-SB, 2:02-bk-25398-SB, and/or 2:07-bk-19183-SB.
On May 14, 2009, Stanwyck filed a Notice of Voluntary Dismissal of Defendant, Logan & Blue, Inc. pursuant to F.R.Civ.P. 41(a). On June 29, 2010, an Order for Dismissal and Abandonment of Claims was signed by Judge Samuel L. Bufford dismissing the adversary proceeding and abandoning all remaining claims to Stanwyck.
While Adversary No. 2:08-ap-01240-SB was pending, Stanwyck filed a 399-page
On June 2, 2009, Stanwyck filed a document entitled "Non Estate Plaintiffs' Dismissals Without Prejudice of Non Estate Claims" seeking immediate dismissal of certain claims made the basis of the complaint, including his claims under § 362(k). The adversary was not dismissed, but remained on the court's docket for another 12 months without an adjudication of the pending Rule 12(b) motions. During that time, Namba, without formally substituting as a plaintiff in the litigation, negotiated settlements on behalf of the estate with a number of the defendants regarding claims asserted by Stanwyck in Adversary Nos. 2:08-ap-01240-SB and 2:08-ap-01435-SB. Namba's efforts resolved a number of the Rule 12(b) motions pending in the adversary proceedings. Once his settlement efforts were exhausted, the adversary proceedings were dismissed. On June 29, 2010, an Order for Dismissal and Abandonment of Claims was signed by Judge Samuel L. Bufford dismissing Adversary No. 2:08-ap-01435-SB and abandoning all remaining claims to Stanwyck.
Stanwyck's Complaint was filed in this adversary proceeding on November 2,
On September 7, 2010, Stanwyck filed a 120-page complaint in Adversary No. 2:10-ap-02641-PC, Steven J. Stanwyck v. Scott Drexel, et al., alleging, in pertinent part, violations of §§ 362(a) and 525(a) against one or more of 8 named defendants, including the State Bar of California, and seeking damages in excess of $5 million, injunctive relief, attorneys fees, interest and costs. Stanwyck also sought a jury trial on his claims. On October 12, 2010, Defendants, Scott Drexel, Michael J. Glass, Miho Murai, Charles Murray, Brian Rowsey, James Towrey, Russell Weiner, and the State Bar of California moved to dismiss Stanwyck's complaint under Rule 12(b)(6). Stanwyck opposed the motion. After a hearing on November 30, 2010, an order was entered dismissing the adversary proceeding.
On January 3, 2011, Stanwyck filed a 58-page complaint in Adversary No. 2:11-ap-01003-PC, Steven J. Stanwyck v. Uniquities Consignments House, et al., seeking actual and punitive damages in excess of $3 million for alleged fraud, extortion, racketeering, conspiracy, breach of contract, and elder abuse against one or more of 23 named defendants, including the Jamaican Government. Again, Stanwyck sought a jury trial on his claims. After Stanwyck failed to appear at a court-ordered status conference, an order was entered on March 18, 2011, dismissing the adversary proceeding.
There is an adequate record for review of the order.
The third De Long factor goes "to the heart of the vexatious litigant analysis." Molski, 500 F.3d at 1059. The court must make "substantive findings as to the frivolous or harassing nature of the litigant's actions." De Long, 912 F.2d at 1148 (quoting In re Powell, 851 F.2d 427, 431 (D.C.Cir.1988)). In so doing, the court must evaluate "`both the number and content of the filings as indicia' of the frivolousness of the litigant's claims." Id. Alternatively, the third De Long factor is satisfied if the evidence supports a finding of harassment. De Long, 912 F.2d at 1148. With respect to this element, the Safir factors apply. See Molski, 500 F.3d at 1058.
"Stanwyck, and his related corporations, have been designated as vexatious litigants by four state and federal courts." Pine Assocs., Inc. v. Chase Mortg. Holdings, Inc., 234 Fed.Appx. 697 (9th Cir.2007). Stanwyck is currently subject to the following pre-filing orders:
On June 21, 2005, the district court dismissed Stanwyck's complaint in Case No. CV 05-845-JFW (MANx), Pine Assocs., Inc., et al. v. Chase Mortg. Holdings, Inc., et al., in the United States District Court, Central District of California, Los Angeles Division, for his failure to respond to a Notice of Filing by Vexatious Litigant Subject to Prefiling Order. The dismissal was affirmed by the Ninth Circuit. Pine Assocs., Inc., 234 Fed.Appx. at 697. On August 5, 2010, the district court dismissed Stanwyck's complaint in Case No. CV 10-3553-AHM (FMOx), Stanwyck v. American Home Assurance & National Union Fire Ins. Co., et al., in the United States District Court, Central District of California, with prejudice for having been previously designated a vexatious litigant and failing to comply with a pre-filing requirement in that court.
Finally, a Decision Including Disbarment Recommendation and Inactive Enrollment Order was filed in Case No. 02-O-10226, In the Matter of Steven Jay Stanwyck, in the State Bar Court of California on February 10, 2010, recommending that "Steven Jay Stanwyck be disbarred from the practice of law in the State of California." In its 33-page decision, the State Bar Court chronicled Stanwyck's vexatious filings and professional misconduct since 1996. In making its recommendation, the State Bar Court determined there was clear and convincing evidence establishing that Stanwyck "engaged in frivolous and abusive litigation tactics for nearly two decades" and that Stanwyck's conduct "significantly harmed the administration of justice and those parties who were subjected as defendants to his inappropriate litigation practices." In making its recommendation, the State Bar Court concluded:
Id. at 31.
Stanwyck's current Complaint, like the prior complaints, is nearly devoid of comprehensible facts upon which Stanwyck's allegations are based. Given the large number of defendants to each action, the inappropriateness of many of the defendants to the actions, and the duplicative nature of the claims asserted, the court finds that the lawsuits filed by Stanwyck in this bankruptcy case are both vexatious and harassing.
Stanwyck may have a legitimate claim for relief under § 362(k); but like the prior complaints, Stanwyck has yet to disclose any pertinent facts that would form the basis of a cognizable claim under § 362(k) as to any of the Defendants named in his current Complaint. Damages may be recovered under § 362(k) only for a "willful" violation of the stay. 11 U.S.C. § 362(k). A defendant's stay violation is "willful" only if (1) the defendant knew of the automatic stay and (2) the defendant's acts were intentional. In re Abrams, 127 B.R. 239, 244 (9th Cir. BAP1991). The number of complaints, coupled with the false and exaggerated allegations of injury contained in each complaint, support a finding that Stanwyck's lawsuits are vexatious and pursued for the overriding purpose of harassment.
Stanwyck's suits are always brought in pro se. Generally, courts must give some deference to pro se litigants. Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (per curiam) ("A document filed pro se `is to be liberally construed,' and `a pro se complaint, however inartfully pleaded, must be held to less stringent standards than formal pleadings drafted by lawyers.'" (citation omitted)). Stanwyck, however, is a lawyer. Furthermore, a court must not tolerate an abuse of the judicial process so flagrant that it permits one individual to preempt the use of judicial resources that might otherwise be devoted to adjudicating the meritorious claims of other litigants. See De Long, 912 F.2d at 1148.
Stanwyck has filed other largely duplicative complaints against the same or similar Defendants. Stanwyck's actions have forced the Defendants to undertake unnecessary expense to defend themselves from baseless claims. This court has expended considerable time and effort reviewing and
Stanwyck has been sanctioned for his actions in previous suits that have been filed. Stanwyck has been designated a vexatious litigant and is subject to pre-filing orders in both the state court and the federal district court. Stanwyck has now filed several complaints in the bankruptcy court seeking damages in excess of $16.6 billion against multiple defendants, each time making baseless allegations. The court does not believe that a sanction other than the furnishing of security and a pre-filing order would be appropriate to protect the courts and other parties from further frivolous lawsuits being brought by Stanwyck.
The fourth and final factor in the De Long standard is that the pre-filing order must be narrowly tailored to the vexatious litigant's wrongful behavior. In De Long, the Ninth Circuit held overbroad an order preventing the plaintiff from filing any suit in a particular district court. De Long, 912 F.2d at 1148. In O'Loughlin v. Doe, the Ninth Circuit held that an order requiring a plaintiff to show good cause before making any request to proceed in forma pauperis was not narrowly tailored. O'Loughlin v. Doe, 920 F.2d 614, 618 (9th Cir.1990). Likewise, in Moy v. U.S. the Ninth Circuit held that an order requiring a plaintiff to obtain leave of court to file any suit was overly broad when the plaintiff had only been highly litigious with one group of defendants. Moy v. U.S., 906 F.2d 467, 470 (9th Cir.1990).
In contrast, the Ninth Circuit in Molski affirmed a pre-filing order which declared the plaintiff a vexatious litigant and prevented the plaintiff from filing further actions under Title III of the Americans with Disabilities Act ("ADA") in the United States District Court for the Central District of California. Molski, 500 F.3d at 1061. "The order ... appropriately cover[ed] only the type of claims [plaintiff] had been filing vexatiously—ADA claims." Id. The order did not prevent plaintiff from filing any ADA complaints. Id. "[I]t merely subject[ed] [plaintiff's] complaints to an initial screening review by a district judge." Id. The Ninth Circuit found that the district court's pre-filing order was "narrowly tailored because it [did] not deny [plaintiff] access to courts on any ADA claim that [was] not frivolous, yet it add[ed] a valuable layer of protection, which [the Ninth Circuit thought] was warranted, for the courts and those targeted by [plaintiff's] claims." Id. (citation omitted).
In this case, the court finds that Stanwyck is a vexatious litigant and that the proper order must require Stanwyck to obtain leave of court before filing any further complaint seeking relief (1) under § 362(k) for an alleged violation of the automatic stay or conspiracy to violate the automatic stay; or (2) based upon an Abandoned Claim.
L.R. 83-8.1 states:
L.R. 83-8.1
L.R. 83-8.2. In light of the complexity of the purported claims made the basis of Stanwyck's Complaint, the number of defendants named by Stanwyck in the Complaint, the amount of the alleged damages, and the reasonable amount of attorneys fees and costs that may be incurred by each of the 37 named Defendants in defense of the litigation, the court finds that security in the amount of $925,000 is appropriate.
For the reasons stated, the court will (1) grant the motions of Defendants, Isabel R. Cohen, Kirsten Jane Stanwyck, Kirsten Stanwyck Living Trust, Jared A. Barry, Steven E. Young, and Freeman, Freeman & Smiley under Rule 12(b)(6) and dismiss Stanwyck's Complaint as to said Defendants with prejudice and without leave to amend; (2) grant the motions of Defendants,
Separate orders will be entered consistent with this memorandum.
Stanwyck's Evidentiary Objections Accompanying Opposition to Motion to Dismiss & Vexatious Litigant Motions of Defendants: Stephen M. Lachs; ADR Services, Inc.; Isabel R. Cohen; Dennis Brager; John O. Kent; Brager Tax Law Group; Steven E. Young; Freeman, Freeman & Smiley; Jared A. Barry; Edward M. Ross & Jeffrey Zabner are overruled. Stanwyck's LBR 9013-1(i)(2) Evidentiary Objections filed on January 31, 2011 are overruled as untimely.
11 U.S.C. § 362(k). Section 362(k), which was enacted as § 362(h) in 1984, was re-designated § 362(k) by amendment in 2005. See infra, footnotes # 15 & 16.
On March 22, 2011, Namba reported that all assets of Stanwyck's bankruptcy estate had been liquidated, there are funds on hand of $61,250, and that his final report as trustee will be submitted shortly. Declaration of Jerry Namba in Response to Court's Order Directing Jerry Namba, Trustee, to Show Cause Why He Should Not be Removed as Trustee or, Alternatively, Ordered to File a Report of No Distribution and Discharged as Trustee, and Why Case Should Not be Closed filed in Case No. 2:07-bk-19183-PC, In re Steven J. Stanwyck, Debtor, in the United States Bankruptcy Court, Central District of California, Los Angeles Division, on March 22, 2011, at Dk # 248. The court takes judicial notice that 28 proofs of claim were timely filed in Stanwyck's bankruptcy case totaling $55,150,526.88. Given the administrative expenses that have accrued since the petition date, it appears that the case will be administratively insolvent.