FREDERICK P. CORBIT, Bankruptcy Judge.
THIS MATTER came before the court
At the continued hearing, the court heard argument of the parties referenced above and took the matters under advisement.
After reviewing the record, the arguments presented, and the applicable law, these matters are ready for decision. This court has original and exclusive jurisdiction of this bankruptcy case pursuant to 28 U.S.C. § 1334(a). This memorandum decision includes the court's findings of fact and conclusions of law. For the reasons set forth below, the court finds Mr. Tangwall is a vexatious litigant and contemporaneously with this memorandum decision will enter an order granting the Trustee's Motion and denying the Tangwall Motion.
Mr. Tangwall has a history of filing frivolous documents, cases, and appeals. Mr. Tangwall's history with the courts began more than twenty years ago and spans essentially the entire United States. The procedural and factual history of this case is long and often convoluted due, in the most part, to Mr. Tangwall filing multiple motions, cases, and appeals on the same issue to different courts. Because the parties are familiar with the facts and procedural history, the court does not need to restate them in detail here except as necessary to explain its decision.
Debtor, Margaret Bertran and her daughter, Barbara Tangwall, owned a parcel of property in Roundup, Montana ("the Ranch"). Donald Tangwall, Barbara Tangwall's husband, sued William and Barbara Wacker ("the Wackers") in Montana state court over a dispute concerning a trucking enterprise and a cattle trailer. The Wackers filed a third party complaint in that action against Ms. Bertran, the Tangwalls, and others to recover on a debt. While that suit was pending, Ms. Bertran and Ms. Tangwall transferred the Ranch, and Ms. Tangwall transferred a commercial property ("Montana Properties") by warranty deed to a purported trust called the Toni 1 Trust. On May 17, 2011, the Wackers obtained a judgment against Ms. Tangwall and Ms. Bertran in the Montana case (the "2011 Judgment"), in the amount of $137,551.47.
Both Ms. Bertran and the Tangwalls filed individual Chapter 7 bankruptcies in the District of Alaska in an attempt to regain/retain possession of the Montana Properties. Larry Compton was appointed as the Trustee in both cases. Relying on the Montana fraudulent transfer judgment, Trustee Compton asserted ownership of the two parcels in Montana in the Bertran case. Mr. Tangwall opposed the motion. Mr. Tangwall, as trustee of the Toni 1 Trust, initiated an adversary proceeding against the Trustee and the Wackers in the Alaska Bankruptcy Court (the "Adversary Action"). Among other claims, Mr. Tangwall argued that service of process on the Toni 1 Trust in the 2012 Montana fraudulent transfer case was so defective as to make the 2012 Judgment against the Toni 1 Trust void. The bankruptcy court agreed there might be concerns as to proper service on the trust. Therefore, on June 12, 2013, Trustee Compton filed his own fraudulent transfer counterclaim against Toni 1 Trust based on federal fraudulent transfer law instead of attempting to convince the bankruptcy court that the Toni 1 Trust had been validly served in the Montana lawsuit. During the pendency of the fraudulent conveyance litigation in the bankruptcy court, Mr. Tangwall was ordered to produce the alleged trust documents. The court also held that the Toni 1 Trust was required to appear through an attorney and Mr. Tangwall could not file pro per papers or pleadings on behalf of the Toni 1 Trust. Mr. Tangwall did not produce the trust documents, additionally, he continued to file and appear on behalf of the trust.
The Trustee then filed a motion seeking an order permitting him to sell the bankruptcy estate's half interest in one of the Montana Properties (Ranch property). The Wackers joined in the motion, so that the entire Ranch property was the subject of the motion. A hearing on the motion was held on June 6, 2016. The Tangwalls, the Trustee, and his attorney, and attorney Eric LeRoy for the Wackers all attended the hearing. On June 7, 2016, the bankruptcy court granted the Trustee's motion (the "Order Approving Sale") and made the following findings: (1) the bankruptcy court has subject matter jurisdiction over the trustee's motion as it constitutes a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (N); (2) the bankruptcy court has personal jurisdiction over Donald Tangwall, both in his individual capacity and as the "alleged trustee of the Toni 1 Trust"; (3) the bankruptcy court has personal jurisdiction over the Toni 1 Trust; (4) the bankruptcy court has personal jurisdiction over Barbara Tangwall and Margaret Bertran; (5) the trustee may sell the bankruptcy estate's 50% undivided interest in the Ranch by auction; (6) because the Wackers joined in the trustee's motion, the sale of the Ranch shall be for the Ranch as a whole; (7) proper notice of the motion had been given to all parties involved in the Bertran bankruptcy proceedings, and all persons claiming through them; and (8) the sale of the Ranch would be free and clear of the claims and liens of all persons who received notice of the motion.
On June 13, 2016, the Tangwalls filed a Notice of Appeal from the Bankruptcy Court's Order Approving Sale. [ECF No. 115]. On June 20, 2016, the Tangwalls filed a request for an evidentiary hearing, in which they asserted that the bankruptcy court lacked jurisdiction "over the Toni 1 Trust." They also maintained that all "orders, memorandum and judgments entered by [the Bankruptcy] Court should be deemed null and void." [ECF No. 118]. The bankruptcy court denied the motion because it lacked jurisdiction due to the notice of appeal filed on June 13, 2016. [ECF No. 119]
Ms. Bertran and the Tangwalls then moved to stay the execution of the Order Approving Sale. The bankruptcy court denied the motion. Ms. Bertran and the Tangwalls then appealed to the district court, which also denied the motion to stay.
It is clear just from the brief history summarized above that Ms. Bertran and the Tangwalls continue to litigate issues even after they have exhausted all of their lawful remedies. Indeed, Mr. Tangwall made it clear to the court that he plans to continue to litigate issues related to the fraudulent conveyance of the Ranch until "hell freezes over!"
Under the All Writs Act, 28 U.S.C. § 1651(a), the court has the authority to impose filing restrictions, such as a pre-filing order, on abusive litigants. Ringgold-Lockhart v. Cnty. of Los Angeles, 761 F.3d 1057, 1061 (9th Cir. 2014) (citing DeLong v. Hennessey, 912 F.2d 1144, 1147 (9th Cir. 1990)). However, because such orders constrain a litigant's fundamental right of access to the courts, they should rarely be used, and only if courts comply with certain procedural and substantive requirements. Id. at 1062 (quoting DeLong, 912 F.2d at 1147). The court must: (1) give litigants notice and "an opportunity to oppose the order before it [is] entered"; (2) compile an adequate record for appellate review, including "a listing of all the cases and motions that led the [court] to conclude that a vexatious litigant order was needed"; (3) make substantive findings of frivolousness or harassment; and (4) tailor the order narrowly so as to "closely fit the specific vice encountered." Id. (quoting DeLong, 912 F.2d at 1147-48).
The first two requirements are procedural, while the latter two are substantive, designed to help the court define "who is, in fact, a `vexatious litigant' and construct a remedy that will stop the litigant's abusive behavior while not unduly infringing the litigant's right to access the courts." Ringgold-Lockhart, 761 F.3d at 1062 (quoting Molski v. Evergreen Dynasty Corp., 500 F.3d 1047, 1058 (9th Cir. 2007)).
In this case, the first requirement — notice and an opportunity to oppose — has been satisfied. Mr. Tangwall was given notice of the hearing and when Mr. Tangwall expressed concern as to whether notice was proper, the court granted Mr. Tangwall the continuance he requested.
The second requirement is providing an adequate record for appellate review, including a listing of the cases and motions that led it to conclude that a vexatious litigant order is needed. At the very least the record "needs to show . . . that the litigant's activities were numerous or abusive." See Molski 500 F.3d at 1057, quoting De Long, 912 F.2d at 1147. The court notes that the Trustee's Motion provides a detailed recitation of the Mr. Tangwall's numerous filings in this bankruptcy case.
Below are several of Mr. Tangwall's many cases.
• Borock v. Dalby, et al., Case No. 91-cv-76364; 90-71433-DT; Michigan; Adversary action arising out of a 1988 bankruptcy case concerning title to real property. The federal court entered an order enjoining several parties, including Mr. Tangwall, from filing any additional suits relating to that bankruptcy case, or the real property in question.
• Tangwall (Donald), a/k/a Nilssin (Donald) v. Dougherty, 1991 WL 408005 (D.N. Mar. 1, 1991); Mariana Islands; Mr. Tangwall, as trustee of WED Family Preservation Trust, sued in Northern Mariana Islands federal district court to attack the Michigan decision concerning the Michigan real property. The Mariana Federal Court dismissed the case, finding that Mr. Tangwall failed to make any connection whatsoever between the defendants and the Northern Mariana Islands.
• In re Owners Family Preservation Trust, 1991 WL 408009 (D.N. Mar. 1, 1991); Mariana Islands; Court dismissed Mr. Tangwall's Chapter 11 case, filed by Mr. Tangwall as trustee of Owners Family Preservation Trust. The court noted that the filing was suggestive of bad faith and vexatious litigation.
• Tangwall v. Robb, 2003 WL 23142190 (E.D. Mich., 2003); Mr. Tangwall filed a malpractice action against his lawyers in Michigan federal district court. The court dismissed the case with prejudice.
• Tangwall v. Jablonski, 111 Fed. Appx. 365 (6th Cir. 2004) (unpublished); A Tangwall entity ("Tang-Tang Marketing") sued the same defendant as Mr. Tangwall, on the same cause of action. The court noted it had serious doubts as to whether Tang-Tang Marketing existed as a separate entity from Tangwall himself, or that the alleged assignment of rights ever took place.
• Tangwall v. First State Bank of Princeton, 1987 WL 16129 (N.D. Ill., 1987); Tangwall, as trustee of a trust, sued Princeton Bank and its officers and directors personally on a RICO action. The court dismissed the action for failure to state a claim, but gave Tangwall 30 days to refile case if trust appeared through an attorney. The court noted that "a trustee is not a proper pro se plaintiff. A trustee may not properly risk trust assets on his own untutored legal skills. Moreover, pro se plaintiffs place a particular burden on the court as the court must evaluate difficult complaints without any substantial benefits of an advocate. In this action the completely unhelpful response to the motion to dismiss is a case in point." (p. 2).
• Tangwall v. Looby, 109 Fed. Appx. 12 (6th Cir. 2004); Mr. Tangwall claimed to be a beneficiary of a trust ("BFPT"). Tangwall was removed as trustee for allegedly stealing from BFPT. Nine days later, Mr. Tangwall filed bankruptcy in Tennessee. Mr. Tangwall entered into a global settlement between himself, the bankruptcy trustee, and BFPT. Although Mr. Tangwall willingly entered into the settlement, he then sued the parties to the settlement. The case was dismissed on grounds of judicial estoppel, with the court noting that Mr. Tangwall was anything but `frank and fair' in his dealings with the judicial system, that the lawsuit contravened the settlement agreement he signed.
• Huebner v. Tangwall, 2006 WL 2238960 (M.D. Tenn. 2006) ("Huebner I"); affirming the finding that Mr. Tangwall fraudulently transferred assets to other entities including a trust.
• In Montana, there were more than ten civil lawsuits involving Mr. Tangwall. In the list below, Mr. Tangwall is a plaintiff in 9 out of the 10.
• Tangwall v. Spaulding, Cause No. 1:11-CV-00039-RFC-CSO; United States District Court for the District of Montana; Mr. Tangwall sought to enjoin various Montana state court judges from making any further orders and voiding all of their previous orders as to Mr. Tangwall.
• Don Tangwall and Margaret Bertran v. William J. Edwards, Larry J. Djernes, Joel Marking, Lance Lundvall, Lon E. Sibley, and John Lapierre; Case No. DV-11-08; Musselshell County Montana: The court found Mr. Tangwall to be a vexatious litigant.
The court finds the second factor in the vexatious litigant analysis is met based on the record in this court and the above summary of other cases involving Mr. Tangwall.
The third factor requires that the court to examine both the number and content of the filings as indicia of the frivolous nature of the litigant's claims. The record summarized above, as well as the record in this court, demonstrates Mr. Tangwall's voluminous filings. The court finds that Montana State Court Judge David Cybulski succinctly and accurately described Mr. Tangwall's vexatious judicial history. According to Judge Cybulski,
Even if the court looks solely to this bankruptcy case, there is ample evidence to support a vexatious litigant order. Mr. Tangwall has made numerous, repetitive and redundant filings that lack a basis in fact or law. Yet, each of Mr. Tangwall's motions were duly heard by this court, and they have required numerous responsive pleadings from the trustee. The court does not dispute that Mr. Tangwall had the right and the ability to seek redress with the courts as to ownership of the Montana Property. However, as noted below, Mr. Tangwall has had his day in court and now, he steadfastly refuses to accept the courts' decisions.
The following is a glimpse of trial cases and appeals that are related to the same issues:
• Case No. F11-00939-HAR
• Adv. No. F14-90016-HAR
• Adv. No. F14-90020-HAR
• Case No. 4:16-cv-00022
• Case No. 4:16-cv-00024
• Case No. 4:16-cv-00029-SLG
• Case No. 12-00501-HAR (multiple appeals)
• Case No. 14-60010
• Case No. 4:17-cv-00004 TMB
• Case No. 4FA-17-01675 Cl
• Case No. 14-90016
• Case No.14-90019
The above summary leads the court to conclude that Mr. Tangwall has caused needless expense to other parties and has posed an unnecessary burden on the court and its personnel. The court shares the trustee's concerns that Mr. Tangwall will continue to burden the bankruptcy estate's resources and the court. The vast majority of Mr. Tangwall's filings have been meritless. The trustee and his counsel have been burdened because they have had to respond not only to Mr. Tangwall's motions and oppositions, but to the complaints Mr. Tangwall has made outside of this bankruptcy case that attack the trustee's personal reputation and professional capacity. Additionally, Mr. Tangwall's filings, which primarily sought to reargue matters previously decided, have resulted in an overabundance of hearings before this court on issues which are not germane to this bankruptcy. Thus, the court makes a substantive finding of frivolousness and harassment as to Mr. Tangwall.
The fourth and final factor is that the pre-filing order must be narrowly tailored to the vexatious litigant's wrongful behavior. See Wood, 705 F.2d at 1523-26 (plaintiff restricted from filing new actions paralleling the issues being litigated in a case and preventing him from re-litigating issues decided in two cases). Narrowly tailored orders are needed "to prevent infringement on the litigator's right of access to the courts." Sires, 748 F.2d at 51; see also, Wood, 705 F.2d at 1525 (if restrictive orders are "used too freely or couched in overly broad terms, injunctions against future litigation may block free access to the courts"). In this case, the court finds that Mr. Tangwall is a vexatious litigant and that the proper order requires Mr. Tangwall to obtain leave of the court before filing any further documents in this court other than a notice of appeal of this memorandum decision and the related vexatious litigant order. The court assures Mr. Tangwall that it will approve for filing, any complaint, pleading or other document if such document adequately demonstrates a basis in law, and conforms to the federal and local rules.
Based on the reasons and law set forth above, the court will enter a contemporaneous order granting the Trustee's Motion.
Additionally, the court will enter an order denying the Tangwall Motion. The court finds that the jurisdictional issues have already been litigated and decided and that there are no facts presented to support Mr. Tangwall's claims of an alleged bias of the court. Indeed, even if there were facts to support this allegation, the time to present those arguments has long passed.
