Stanwyck v. Bogen et al

OCR transcription for search; preserved printed pages are authoritative

Case

2:10-ap-02982-PC Doc60_ Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 1 of 35

° FILED

+.
1 en DS ; i
E Fy “eH UNITED STATES BANKRUPTCY COUR MAY 2.0 207;
2 |G ENTRAL DISTRICT OF CALIFORNI _ ig
Me’ 20 201 pit : i
3 pc | LOS ANGELES DIVISION a
| Sumit or rea
4 ji In re: Deputy Clerk ) Case No. 2:07-bk-19183-PC
)
5 | STEVEN J. STANWYCK, ) Chapter 7
)
6 Debtor. } Adversary No. 2:10-ap-02982-PC
)
7 | STEVEN J. STANWYCK, )
) MEMORANDUM DECISION
8 Plaintiff, )
)
9 lv. )
,) Date; February 1, 2011
10 ) Time: 9:30 a.m.
JUDY L. BOGEN, et al., ) Place: United States Bankruptcy Court
1] ) Courtroom # 1539
Defendants. ) 255 East Temple Street
12 _} Los Angeles, CA 90012
13 Before the court are various motions interposed by Defendants, Judy L. Bogen, et al.,
14 | (sometimes collectively, referred to as the “Defendants”) in response to the complaint filed by
15 | Plaintiff, Steven J. Stanwyck (“Stanwyck”)! in the above referenced adversary proceeding”.
16
17 | ¥ Stanwyck, an attorney, was admitted to the practice of law in California on January 7, 1971.
Since February 13, 2010, Stanwyck has been enrolled involuntarily as an inactive member of the
18 | Ctate Bar of California pending action on a recommendation to the Supreme Court of California
19 | that he be disbarred from the practice of law in the State of California.
20 | % Based upon the findings of fact and conclusions of law contained in this Memorandum
7 Decision, the court adjudicates the following pending motions:
2 1. Motion for Dismissal of Complaint Under F.R.B.P. 7012 and F.R.Civ.P. 12(B)
filed by Defendant, Edward M. Ross on November 18, 2010;
23
2. Motion to Dismiss Complaint as to the Following Claims: Violation of Automatic
24 Stay, Injunctions and Account filed by Defendants, Hersh, Mannis & Bogen, et
25 al., on November 30, 2010.
6 3. Motion to Dismiss Complaint for Failure to State a Claim Upon Which Relief
Can be Granted filed by Defendants, Joan Ciapciak Stanwyck, Joan Stanwyck
27 Family 2000 Trust; and Joan Stanwyck Family 2002 Trust on December 7, 2010;

AUTHENTICATED
U.S. GOVERNMENT
INFORMATION

GPO

Case, 2:10-ap-02982-PC Doc 60_ Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 2 of 35

1 } Appearances were stated on the record at the hearing. The court, having considered the
2 | Defendants’ motions, Stanwyck’s opposition thereto, the Defendants’ replies, and the argument

3 | of counsel grants the relief requested in the motions based upon the following findings of fact

4 | and conclusions of law’ pursuant to F.R.Civ.P. 52(a)(1),* as incorporated into FRBP 7052 and
5
6 4, Motion to Dismiss Complaint for Failure to State a Claim Upon Which Relief
Can be Granted filed by Kirsten Jane Stanwyck; Kirsten Jane Stanwyck Living
7 Trust; and Logan and Blue, Inc. on December 6, 2010;
8
5. Motion to Dismiss for Failure to State a Claim Upon Which Relief Can be
9 Granted filed by Defendants, Isabel R. Cohen, Steven E. Young, Freeman,
10 Freeman & Smiley, Jared A. Barry, and Jeffrey Zabner on December 7, 2010;
1 6. Motion to Require Security; To Prohibit Filing of New Litigation; For Security
and Control; and To Deem Steven Stanwyck a Vexatious Litigant filed by
12 Defendants, Isabel R. Cohen, Steven E. Young, Freeman, Freeman & Smiley,
Jared A. Barry, and Jeffrey Zabner on December 7, 2010;
13
14 7. Motion of Defendants, Dennis N. Brager, John O. Kent and Brager Tax Law
Group (1) To Require More Definite Statement in Complaint, and (2) For an
15 Order Declaring Plaintiffs to be Vexatious Litigants filed on December 10, 2010;
and
16
7 8. Motion of Defendants, Stephen M. Lachs and ADR Services, Inc.: (1) To Require
More Definite Statement in Complaint; and (2) For An Order Declaring Plaintiffs
18 to Be Vexatious Litigants filed on January 4, 2011.

19 | Stanwyck’s Evidentiary Objections Accompanying Opposition to Motion to Dismiss &
Vexatious Litigant Motions of Defendants: Stephen M. Lachs; ADR Services, Inc.; Isabel R.

20 Cohen; Dennis Brager; John O. Kent; Brager Tax Law Group; Steven E. Young; Freeman,

31 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
22 | untimely.

23 | ¥ To the extent that any finding of fact is construed to be a conclusion of law, it is hereby
adopted as such. To the extent that any conclusion of law is construed to be a finding of fact, it is

24 hereby adopted as such.

25 . oe gs :
¥ Unless otherwise indicated, all “Code,” “chapter” and “section” references are to the

46 | Bankruptcy Code, 11 U.S.C. §§ 101-1330 after its amendment by the Bankruptcy Abuse

5 Prevention and Consumer Protection Act of 2005, Pub. L. 109-8, 119 Stat. 23 (2005). “Rule”
7

-2-

Case, 2:10-ap-02982-PC Doc 60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 3 of 35

1 | applied to contested matters by FRBP 9014(c).
2 I. STATEMENT OF FACTS

3 | A. Stanwyck’s First Bankruptcy Case.

4 On March 20, 1992, Stanwyck filed a voluntary petition under chapter 11 in Case No.
5 | 2:92-bk-22475-SB, In re Steven J. Stanwyck, Debtor, in the United States Bankruptcy Court,

6 | Central District of California, Los Angeles Division. On August 5, 1992, the case was converted
7 | to acase under chapter 7 and David R. Haberbush (“Haberbush”) administered the estate as

8 | trustee. Stanwyck received a discharge on June 28, 2002. After a final distribution on account of
9 | allowed claims, Haberbush was discharged as trustee and the case was closed on July 17, 2002.

10 | B. Stanwyck’s Second Bankruptcy Case.

11 While his first case was pending, Stanwyck filed a second voluntary petition under

12 | chapter 11 in Case No. 2:02-bk-25398-SB, styled In re Steven Jay Stanwyck, Debtor, in the

13 | United States Bankruptcy Court, Central District of California, Los Angeles Division, on May

14 | 28, 2002. On May 31, 2002, Stanwyck filed a motion secking conversion of the case to a case

15 | under chapter 7. An order converting the case to chapter 7 was entered on June 10, 2002, and

16 | Alberta Stahl (“Stahl”) was appointed trustee. Stahl investigated Stanwyck’s financial affairs

17 | and liquidated the assets of the estate. On January 14, 2003, Stahl filed a complaint in Adversary
18 | No. 2:03-ap-01040-SB, Stahl v. Stanwyck, objecting to Stanwyck’s discharge. On September

19 | 22, 2003, a judgment was entered in such adversary proceeding denying Stanwyck’s discharge
20 | pursuant to §§ 727(a)(2)(A), (a)(4), and (a)(5). On October 19, 2006, Stahl filed her final

21 | account as trustee. On May 13, 2008, an order was entered discharging Stahl as trustee,

22 | exonerating her bond, and closing the case.

23

24 | references are to the Federal Rules of Bankruptcy Procedure (“FRBP”), which make applicable
5 certain Federal Rules of Civil Procedure (“F.R.Civ.P.”). “L.R.” references are to the Local Rules
of the United States District Court for the Central District of California. “LBR” references are to
26 | the Local Bankruptcy Rules of the United States Bankruptcy Court for the Central District of

California.
27

-3-

Case

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60_ Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 4 of 35

C. Stanwyck’s Third Bankruptcy Case.
While his second case was pending, Stanwyck filed a third voluntary chapter 11 petition

in Case No. 2:07-bk-19183-SB, styled In re Steven Jay Stanwyck, Debtor, in the United States

Bankruptcy Court, Central District of California, Los Angeles Division, on October 12, 2007.
On April 2, 2008, Lucent Technologies, Inc., AT&T Corporation, and NCR Corporation filed a
motion seeking dismissal or, alternatively, conversion of the case to a case under chapter 7 for
cause pursuant to § 1112(b). The motion was joined by other creditors and parties in interest.
On July 29, 2008, an order was entered converting the case to a case under chapter 7. After a
series of interim trustee appointments and resignations, Jerry Namba (“Namba”) ultimately was
appointed trustee on August 19, 2008.

During the two and one-half years this case has been pending,’ Stanwyck has commenced
five adversary proceedings — four of which have alleged willful violations of the automatic stay
and sought damages under § 362(k). Stanwyck commenced this adversary proceeding on
November 2, 2010, by the filing of a 74-page document captioned: “Complaint For: Claim One:
Complaint For Damages For Violation of the Automatic Stay 11 USC 362, Injunctions &
Accounting[;] Demand for Jury Trial 28 USC 157(e)” (‘Complaint’). In his Complaint,
Stanwyck seeks “injunctive relief, damages, fees and costs under 11 USC §§ 362(k)(1)."* By
virtue of his overlapping bankruptcy cases, Stanwyck has had the benefit of the automatic stay
since 1992. In his Complaint, Stanwyck alleges that each of the named Defendants violated the
automatic stay that was in effect at one time or another in one or more of his three bankruptcy
cases during the past 19 years. Stanwyck further alleges that the 37 named Defendants engaged
in a conspiracy and acted in concert with one another to violate the automatic stay in one or more

of his bankruptcy cases. Stanwyck reasons that the Defendants should be jointly and severally

3 On August 23, 2010, this case was reassigned from Judge Samuel L. Bufford to Judge Peter H.
Carroll pursuant to Administrative Order 10-09 dated August 11, 2010.

* Complaint, 2:2.

Case

Oo Cfo DH

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc 60_ Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 5 of 35

liable for the damages he seeks under § 362(k) “[b]ecause of their concerted conduct . . . [and]
knowledge of the purposes of the conspiracy to deprive Plaintiff Steven Stanwyck of his
property.”’ Stanwyck seeks a judgment against the Defendants, jointly and severally, in the
following amounts: $8 million actual damages; $10 million for emotional distress; and $36
million punitive damages, together with injunctive and other relief.* Stanwyck also seeks a
separate award of special damages as to each of the 37 Defendants. Stanwyck’s claims for
special damages total an additional $16,397,770,000.”

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 Trust, Joan Stanwyck Family 2002 Trust, Kirsten Jane Stanwyck, Kirsten Stanwyck
Living Trust, and Logan & Blue, Inc. filed motions seeking dismissal of the Complaint under
Rule 12(b)(6) for Stanwyck’s failure to state a claim upon which relief can be granted.
Defendants, Stephen M. Lachs, ADR Services, Inc., Dennis N. Brager, John O, Kent, and Brager
Tax Law Group filed motions seeking a more definite statement pursuant to Rule 12(e).
Defendants, Stephen M. Lachs, ADR Services, Inc., Isabel R. Cohen, Steven E. Young, Jared A.

Barry, Jeffrey Zabner, and Freeman, Freeman & Smiley also seek an order declaring Stanwyck a

¥ Jd, 22:9-11. However, Stanwyck admits that Defendant, Joan Stanwyck obtained relief from
the stay in this case effective November 27, 2007 to permit her to proceed in Case No.
BD317414, In re Marriage of Stanwyck, Joan and Steven, in the Superior Court of California,
County of Los Angeles. Id., 5:12-16. The court takes judicial notice of the Order Granting
Motion for Relief from the Automatic Stay Under 11 U.S.C. § 362 (Action in Non-bankruptcy
Forum) entered on November 29, 2007. Stanwyck also admits that Defendant, Hersh, Mannis &
Bogen was the law firm that represented Defendant, Joan Stanwyck in the state court action and
that Defendants, Judy L. Bogen, Neal Hersh, and Joseph Mannis are partners in the firm. Id.,
11:1-3,

# 1d., 23:19-25:11.

4 Id., 23:24 - 24:23,

Case, 2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

eo Ss ON OM ive)

\O

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Main Document Page 6 of 35

vexatious litigant.

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.'° To
permit Stanwyck to recover from hand surgery and respond to the motions, the court continued
and consolidated the Defendants’ motions for hearing to February 1, 2011. Stanwyck filed a
written response in opposition to each of the motions. After a hearing on February 1, 2011, the
court took the Defendants’ motions under submission.

Il. JURISDICTION & VENUE

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).

Ill. MOTIONS TO DISMISS FOR FAILURE TO STATE A CLAIM,
AND/OR FOR A MORE DEFINITE STATEMENT

A. Standard for Dismissal Under Rule 12(b)(6).

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).'" Under Rule
8(a), a complaint must contain “a short and plain statement of the claim showing that the pleader
is entitled to relief.” F.R.Civ.P. 8(a)(2).” “[T]he pleading standard Rule 8 announces does not
require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-

unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, U.S. __, 129 S.Ct. 1937, 1949, 173

’ See supra, footnote # 2.
1” Rule 12(b)(6) is applicable to adversary proceedings by virtue of FRBP 7012(6).
17 Rule 8(a) is applicable to adversary proceedings by virtue of FRBP 7008(a).

-6-

Case,2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

co “ST

SO

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Main Document Page 7 of 35

L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 555 (2007)). “[A]

complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Iqbal, 129 S.Ct. at 1949 (quoting Twombly, 550 U.S. at 570). “[A]
complaint [that] pleads facts that are ‘merely consistent with’ a defendant’s liability . . . “stops
short of the line between possibility and plausibility of entitlement to relief.” Iqbal, 129 S.Ct.
1949 (quoting Twombly, 550 U.S. at 557). Further, although a court must accept as true all
factual allegations contained in a complaint, a court need not accept plaintiff's legal conclusions
as true. Iqbal, 129 S.Ct. at 1949. “Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.” Id. (quoting Twombly, 550 U.S. at
555).

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. Nor does a complaint suffice if it tenders “naked assertion[s]”

devoid of “further factual enhancement.” Id. at 557; see Limestone Dev. Corp. v. Vill. of

Lemont, Ill, 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

7.

Case,2:10-ap-02982-PC Doc 60_ Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 8 of 35

1 | allegations in the complaint that, on their face, disclose some absolute defense or bar to recovery.

2 | See, e.g., Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 613 (6th Cir. 2009) (“[T]here is no

3 | 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

Oo CO ss HB tn

limitations appears on its face.”). Accordingly, a complaint fails to state a claim when the facts
10 | and dates alleged in the complaint disclose that the causes of action are time-barred. See Jablon

11 | v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir. 1980). Likewise, where the lawsuit is brought

12 | against defendants who have statutory or common law immunities, the complaint may be
13 | dismissed under Rule 12(b)(6) if the defense is disclosed on the face of the complaint. See

14 | United States v. Gaubert, 499 U.S. 315, 324-25 (1991); McKenna v. Wright, 386 F.3d 432, 436

15 | (2nd Cir, 2004); Leveto v. Lapina, 258 F.3d 156, 161 (3rd Cir. 2001).
16 Although the focus under Rule 12(b}(6) is the substance of the complaint, the court may
17 | consider a matter that is properly the subject of judicial notice along with the complaint when

18 | deciding a motion to dismiss for failure to state a claim. MGIC Indem. Corp. v, Weisman, 803

19 | F.2d 500, 504 (9th Cir. 1986) (“On a motion to dismiss, we may take judicial notice of matters of

20 | public record outside the pleadings.”); accord Banco Santander De Puerto Rico v. Lopez-Stubbe

21 | Un re Colonial Mortg. Bankers Corp.), 324 F.3d 12, 19 (Ist Cir. 2003) (“[M]atters of public

22 | record are fair game in adjudicating Rule 12(b)(6) motions, and a court’s reference to such

23 | matters does not convert a motion to dismiss into a motion for summary judgment.”); Henson v.

24 | CSC Credit Servs., 29 F.3d 280, 284 (7th Cir. 1994) (“Despite the express language of

25 | Fed.R.Civ.P. 12(b), we recently held that ‘[t]he district court may also take judicial notice of
26 | matters of public record’ without converting a 12(b)(6) motion into a motion for summary

27
-8-

Case

&_ ww bh

Oo CF ~ HD

10
i
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc 60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 9 of 35

399

judgment.’” (citation omitted)).

B. Rule 12(e).
Rule 12(e) states:

A party may move for a more definite statement of a pleading to which a responsive
pleading is allowed but which is so vague and ambiguous that the party cannot reasonably
prepare aresponse. The motion must be made before filing a responsive pleading and
must point out the defects complained of and details desired. Ifthe court orders a more
definite statement and the order is not obeyed within 14 days after notice of the order or
within the time the court sets, the court may strike the pleading or issue any other
appropriate order.

F.R.Civ.P. 12(e).° Rule 12(e) is “designed to correct unintelligibility.”. 1 MOORES MANUAL:
FEDERAL PRACTICE & PROCEDURE § 11.27[I], at 11-35 (2010). “Experience teaches that,
unless cases are pled clearly and precisely, issues are not joined, discovery is not controlled, the
trial court’s docket becomes unmanageable, the litigants suffer, and society loses confidence in

the court’s ability to administer justice.” Anderson v. Dist. Bd. of Trustees of Cent. Fla. Cmty,

College, 77 F.3d 364, 367 (11th Cir. 1996). Notwithstanding the filing of a motion under Rule
12(e), a trial court may in appropriate circumstances dismiss a claim sua sponte under Rule

12(b)(6). See Omar v. Sea-Land Serv., Inc., 813 F.2d 986, 991 (9th Cir. 1987) (citing Wong v.

Bell, 642 F.2d 359, 361-62 (9th Cir. 1981)). “Such a dismissal may be made without notice

where the claimant cannot possibly win relief.” Id. (citing Wong, 642 F.2d at 362); see Levald
Inc. v. City of Palm Desert, 998 F.2d 680, 686-87 (9th Cir. 1993); Shawnee Int’l, N.V. v. Hondo

Drilling Co., 742 F.2d 234, 236 (Sth Cir. 1984).

C. The Automatic Stay.
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

Y Rule 12(e) is applicable to adversary proceedings by virtue of FRBP 7012(b).

-9-

Case

—s A we SF Ww Nw

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 10 of 35

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.” “ A stay violation is willful “ifa party knew of the automatic stay, and

its actions in violation of the stay were intentional.” Eskanos & Adler, P.C. v. Leetien, 309 F.3d

1210, 1215 (9th Cir. 2002); see Pinkstaff v. United States (In re Pinkstaff), 974 F.2d 113, 115

(9th Cir. 1992). No specific intent is necessary, and a creditor’s good faith belief that the stay

was not being violated is not relevant to the issue of willfulness. Morris v. Peralta (In re Peralta),
317 B.R. 381, 389 (9th Cir. BAP 2004). In appropriate circumstances, the actual damages that

may be recovered under § 362(k) may include damages for emotional distress that resulted

specifically from a willful violation of the stay. Dawson y. Washington Mutual Bank (In re

Dawson), 390 F.3d 1139, 1148 (9th Cir. 2004), cert. denied, 546 U.S. 927 (2005).

4 Section 362(k) states:

(1) Except as provided by paragraph (2), an individual injured by any willful violation of
a stay provided in this section shall recover actual damages, including costs and
attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.

(2) If such violation is based on an action taken by an entity in the good faith belief that
subsection (h) applies to the debtor, the recovery under paragraph (1) of this subsection
against such entity shall be limited to actual damages.

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.

-10-

Case

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 11 of 35

D. Bankruptey Court Has Subject Matter Jurisdiction of a Claim Under § 362(k)
Notwithstanding a Dismissal or Closure of the Case in Which the Claim Arose.

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. ¢.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 vy. 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

BR. at 906 (“[T]here is no jurisdictional requirement that a closed bankruptcy case be reopened

-ll-

Case

10
1]
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc 60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 12 of 35

before ‘arising under’ jurisdiction can be exercised to determine whether a particular debt is
excepted from discharge.”). Because this court has post-closing jurisdiction over any claim
arising under § 362(k), the court rejects the Defendants’ assertion that Stanwyck was required to
reopen his prior bankruptcy cases to assert § 362(k) claims that may have accrued in one or more
of those cases since 1992. This court has “the power to compensate victims of violations of the
automatic stay and punish the violators, even after the conclusion of the underlying bankruptcy
case.” Johnson, 575 F.3d at 1083.

E. There is No Limitations Period on A Claim Under § 362(k).

Congress did not establish any limitations period for damage claims under § 362(k). Inre

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 1999, states:
Except as otherwise provided by law, a civil action arising under an Act of Congress
enacted after the date of enactment of this section may not be commenced later than 4

years after the cause of action accrues.

28 U.S.C. § 1658(a). In Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369 (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. 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 (emphasis added); see Baker v. Birmingham
Board of Educ., 531 F.3d 1336, 1338 (1 1th 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.””).

-1]2-

Case 2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 13 of 35

1 Section 362(h) was enacted in 1984.'° It was then amended and re-designated as § 362(k)
2 | in 2005.'° Section 362(k)(2), which limits the damages that may be recovered if a creditor

3 | violates the stay in the good faith belief that the stay terminated under § 362(h), was added in

4 | 2005.'? Stanwyck’s claims are made possible by the 1984 enactment, not by any post-1990

5 | amendment. Accordingly, Stanwyck’s complaint cannot be dismissed for failure to state a claim
due to the limitations period contained in 28 U.S.C. § 1658(a).

6
71 F. Stanwvck’s Complaint Fails to State a Claim for Relief under § 362(k) as to Defendants, Neal
Hersh, Joseph Mannis, Judy Bogen, and Hersh, Mannis & Bogen.

8
Stanwyck’s Complaint alleges the following with respect to Defendants, Neal Hersh,
9
Joseph Mannis, Judy Bogen, and the law firm of Hersh, Mannis & Bogen:
10
23A. Defendants Judy Bogen and her Beverly Hills family law firm Hersh, Mannis &
11 Bogen (collectively “HMB”), in furtherance of the conspiracy to deprive Plaintiff Steven
Stanwyck of his property rights, on June 26, 2007 and May 23, 2010 on behalf of
12 Defendants Defendant Joan Stanwyck filed a false Declarations in the Family Law Action

as to the status of Steven’s bankruptcy case and the bankruptcy court’s orders as to the
13 Family Law Action.

14 23B. Defendant Bogen, as part of her vindictive and personal terror campaign even
physically asssaulted Plaintiff Steven Stanwyck when he was on the HMB premises
15 causing damages to him of at least $1,000,000."*

16 | Stanwyck’s Complaint further alleges that:

17 41. Defendant Joan Stanwyck and her lawyers HMB have without relief from the
automatic stay secured orders in the family law court and facilitated the movement of

18 estate property to Defendants Joan and Defendant Kirsten Stanwyck of at least
$5,000,000 and at least $300,000 in legal fees to themselves, all without seeking any

19

20

21

‘¥ Bankruptcy Amendments and Federal Judgeship Act of 1984, Pub. L. No. 98-353, § 304
22 | (1984). See Bernheim Litigation, 290 B.R. at 258 n.5 (“Section 362(h) of Title 11 was enacted in

1984.”),
23
24 '§ Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, §
441(1) (2005).
25
4 Id.
26
4 Complaint, 6:14-22.
27

-13-

Case, 2:10-ap-02982-PC Doc 60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 14 of 35

1 orders from the Family Law court as to the ownership of such funds or right to fees.”
2 | Stanwyck admits that (1) Defendant, Joan C. Stanwyck, his former spouse, obtained relief from
3 | the stay to proceed to judgment in the divorce proceeding pending with Stanwyck; (2) that
4 | Defendant, Hersh, Mannis & Bogen represented Defendant, Joan C. Stanwyck in the divorce
5 | action; and (3) that Defendants, Neal Hirsh, Joseph Mannis, and Judy L. Bogen are partners in
6 | the firm’ Stanwyck does not identify specific facts from which the court can divine a plausible
7 | claim for damages under § 362(k) for willful violation of the automatic stay, particularly in light
8 | of the undisputed fact that Defendant, Joan C. Stanwyck obtained relief from the stay to continue
9 | prosecution of the divorce case effective November 27, 2007.7! Stanwyck’s naked assertion of
10 | an alleged assault by Defendant, Judy Bogen falls far short of stating a claim that is plausible on
11 | its face22 To the extent that Stanwyck’s Complaint states that Defendant, Joan C. Stanwyck may
12 | have filed a false declaration in the “Family Law Action” and that Defendants, Joan C. Stanwyck
13 | and Defendant, Hersh, Mannis & Bogen may have obtained the payment of attorneys’ fees
14 | “without seeking any orders from the Family Law court as to the ownership of such funds or
15 | right to fees,” these are issues for the state court to decide, not this court. Because Stanwyck’s
16 | Complaint does not contain sufficient factual matter, accepted as true, to state a claim under §
17 | 362(k) for willful violation of the automatic stay that is plausible on its face as to Defendants,
18 | Neal Hersh, Joseph Mannis, Judy Bogen, and the law firm of Hersh, Mannis & Bogen, the court

19

20 | » Ta, at 11:5-9.
2

22

2% Id. at 11:1-3.

2V See supra, footnote # 7. While the declaration allegedly filed by Defendants, Judy Bogen and
23 | Hersh, Mannis & Bogen in the divorce action on June 26, 2007 predates the effective date of the
order lifting the automatic stay, Stanwyck’s Complaint is otherwise devoid of “further factual

24 enhancement” regarding his claim. Twombly, 550 U.S. at 557.

25
% The court takes judicial notice of Stanwyck’s Schedule B(21) filed on October 29, 2007,

96 | which fails to disclose any contingent or unliquidated claim on the petition date against

5 Defendant, Judy Bogen, individually, for alleged assault.
7

-14-

Case

oOo sa AH

~2)

10
1
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc 60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 15 of 35

finds that Stanwyck’s Complaint fails to state a claim as to said Defendants under § 362(k) upon
which relief can be granted.

; ck’s Complaint Fails to State a Claim for Relief under § 362(k) as to Defendants
Stephen M. Lachs, Isabel R. Cohen and Edward M. Ross.

Stanwyck’s Complaint alleges the following with respect to Defendants, Stephen M.
Lachs, Isabel R. Cohen and Edward M. Ross:

42. Defendant Stephen Lachs, Esq. is a “retired judge” who without leave of court by
appropriate orders, and his firm Defendant ADR Services, Inc. were paid by Defendant
Joan Stanwyck and HMB over $10,000 of bankruptcy estate funds.”

43. Defendant Isabel R., Esq. is a “retired judge” who without leave of any court by
appropriate orders and who fabricated such an order was paid by Defendant Joan
Stanwyck and HMB over $12,500 of bankruptcy estate funds.”

88. Defendant Edward M. Ross, Esq. is a “retired judge” who without leave of any court
by appropriate orders and his firm Defendant ADR Services, Inc. were paid by Defendant

Joan Stanwyck, Defendant Kirsten Stanwyck and FFS over $10,000 of bankruptcy estate
funds.

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 (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 (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.

+¥ Complaint, 11:11-13.
4 Id., 11:15-17.
2 Td., 21:8-10.

-[5-

Case, 2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 16 of 35

1 Defendant, Isabel R. Cohen is absolutely immune from liability for the claims made the
2 | basis of Stanwyck’s Complaint. The court takes judicial notice that Defendant, Isabel R. Cohen

3 | was appointed as a discovery referee in Case No, BD327414, Stanwyck v. Stanwyck, in the

4 | Superior Court of California, County of Los Angeles, on February 26, 2007, and that Stanwyck
5 | 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.”* Stanwyck admits in
his response to Defendant, Isabel R. Cohen’s motion to dismiss that his claim against her is

predicated upon collection of a post-petition debt he was ordered to pay in connection with

Oo 6c sD

ongoing discovery disputes in his divorce case.”’ There is no allegation in Stanwyck’s Complaint
10 | that Defendant, Isabel R. Cohen acted without jurisdiction.

11 Defendants, Stephen M. Lachs and Edward M. Ross may also be absolutely immune from
12 | liability for the claims made the basis of Stanwyck’s Complaint. Defendant, Edward M. Ross

13 | asserts that he was also appointed by the state court in which Stanwyck’s divorce action was

14 | pending to decide a discovery dispute between the parties in 2004, and that he conducted a

15 | hearing on the discovery dispute in the offices of Defendant, ADR Services, Inc.® There are no

16

17 | 2 Defendants, Isabel R. Cohen, Steven E. Young, Jared A. Barry, Jeffrey Zabner, and Freeman,
1g | Freeman & Smiley’s Request for Judicial Notice, Exhibits A-D. Plaintiff Steven J. Stanwyck’s
LBR 9013-1(i)(2) Evidentiary Objections Accompanying Opposition to Motion to Dismiss and
19 | 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,

20 | Freeman & Smiley; Jared A. Barry; Edward M. Ross & Jeffrey Zabner are overruled, As

2] previously stated, a matter that is properly the subject of judicial notice may be considered along
with the complaint when deciding a motion to dismiss for failure to state a claim. MGIC Indem.
22 | Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986).

23 | 2 Stanwyck’s Opposition to Motions to Dismiss, 8:10-16.

24 | Stanwyck objections to the Declaration of Edward M. Ross in Support of Motion for

5 Dismissa! of Complaint Under F.R.B.P. 7012 and F.R.CIV.P. 12(B) are sustained. The court
also strikes Stanwyck’s declaration in opposition to Defendant, Edward M. Ross’ dismissal
26 | motion, together with the documentary evidence attached thereto as Exhibits A and B, which

4 Stanwyck asks the court to consider in adjudicating the motion.

-16-

Case

ha

~] ON OA

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 17 of 35

allegations in Stanwyck’s Complaint that either Defendant, Stephen M. Lachs or Defendant,
Edward M. Ross acted without jurisdiction. But facts forming the basis of an immunity defense
for either Defendant, Stephen M. Lachs or Defendant, Edward M. Ross are not disclosed on the
face of Stanwyck’s Complaint nor in matters of public record for which the court has been
requested to take judicial notice.

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. 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.

H. Stanwyck’s Complaint Fails to State a Claim for Relief under § 362(k) as to Defendants,

Kirsten J. Stanwyck. Kirsten Stanwyck Living Trust, Logan & Blue, Inc.. Steven E, Young, Jared
A. Barry, Freeman, Freeman & Smiley, and Jeffrey Zabner.

Stanwyck’s Complaint alleges with respect to his daughter, Defendant, Kirsten J.
Stanwyck, the following:

60. Defendant Kirsten Stanwyck on November 4, 2003 executed a fraudulent Trust
Transfer Deed to the KJSLT on Malcolm Ave. which Trust Transfer Deed as a part of the
scheme was not recorded until December 16, 2003, LACR 03-3788543. Defendant
Kirsten Stanwyck on or about March 26, 2004 filed a lawsuit without relief from the
bankruptcy automatic stay against Plaintiff Steven Stanwyck in Los Angeles Superior
Court, SC 081 203 claiming that the lien of the UCC Financing Statement Exhibit 5 was
void, which claim was not granted, in which she also made false representations
including that she was a full time resident of Malcolm Avenue and that her Trust was
“Irrevocable.” Defendant Kirsten Stanwyck by her conduct has caused damage to
Plaintiff Steven Stanwyck of at least $1,700,000 the estimated fair market value of

-17-

Case

“TD

10
1]
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 18 of 35

Malcolm Ave.”
Stanwyck reasserts the allegations against Defendant, Kirsten J. Stanwyck later in the complaint:

87. Defendant Kirsten Stanwyck and FFS on or about March 26, 2004 filed a lawsuit
without relief from the bankruptcy automatic stay against Plaintiff Steven Stanwyck in
Los Angeles Superior Court, SC 081 203 in which she also made false representations
including that she was a full time resident of Malcolm Avenue and that her Trust was
“Irrevocable.”

Stanwyck’s Complaint further alleges with respect to Defendants, Logan & Blue, Inc., Steven E,
Young, Jared A. Barry, and Freeman, Freeman & Smiley that:

85. Defendant Logan & Blue, Inc. is a California Corporation believed to be wholly
owned by Defendant Kirsten Stanwyck and used as a conduit to hide Steven’s assets.

86. Defendants Steven E. Young, Esq. Jared A. Barry, Esq. and Freeman, Freeman &
Smiley (“FFS”) is the law firm which knowingly filed and prosecuted an action in Los
Angeles Superior Court, SC 081 203, against Steven J. Stanwyck in April 2004 regarding
the June 2003 Defendant Kirsten Stanwyck purchase of Malcolm Ave. without relief
from the automatic stay and received legal fees, property of the BK 2 estate, from Joan
and Defendant Kirsten Stanwyck. . .

89. In case SC 081 203 FFS falsely represented to the court that Defendant Kirsten
Stanwyck did not reside at Malcolm Ave. and that KJSLT was an irrevocable trust.

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.

91. Defendants Kirsten Jane Stanwyck; Defendant Kirsten Stanwyck Living Trust; Logan

& Blue, Inc.; Steven E. Young; Freeman, Freeman & Smiley; Jared A. Barry, Edward M.

Ross, Jeffrey Zabner by their conduct have damaged Plaintiff Steven J. Stanwyck in the

amount of at least $1,700,000."

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

2 Complaint, 15:18-26.
4 Id, 21:4-7
Y Td., 20:22 to 21:21,

-18-

Case

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 19 of 35

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, Jeffrey Zabner is
alleged to have formed a trust for Defendant, Kirsten Stanwyck and was paid to do so by
Defendant, Joan C. Stanwyck. There are no facts that would permit the court to draw a
reasonable inference that Defendants, Jeffrey Zabner, Kirsten Stanwyck, or Joan C. Stanwyck did
so in willful violation of § 362(a).

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:

A review of the underlying complaint reveals that the real property that is the subject of

the litigation was acquired by Plaintiff Kirsten Stanwyck (“Ms. Stanwyck”) in June 2003,

and transferred to her living trust in November 2003 .... Although Mr. Stanwyck had no

interest in his property, Plaintiffs allege he nonetheless issued a quitclaim deed from
himself to an entity known as “Bedford Associates, LLC.” ...

The bankruptcy action cited by Mr. Stanwyck as conferring federal jurisdiction was

brought in May 2002, over a year before Ms. Stanwyck acquired the property in question

and almost two years before she filed suit.... Assuming arguendo Mr. Stanwyck has

standing to assert his rights under 11 U.S.C. § 362, the statute does not allow a stay of
tortious post-petition conduct as alleged by Plaintiffs in the underlying state court action .

Since Mr. Stanwyck filed for bankruptcy over a year and a half before the present
complaint was filed, he may not stay his case pursuant to 11 U.S.C. § 362 and therefore

-19-

Case

Oo 6&6 4 BD WF

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 20 of 35

may not assert any rights provided by the statute.”
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.”

I. Stanwyck’s Complaint Fails to State a Claim for Relief under § 362(k) as to 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.

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

2 Order entered in Case No. 2:04-cv-03238-DSF-FMO, styled Stanwyck, et al. v. Stanwyck, et
al., in the United States District Court, Central District of California, Los Angeles Division, on
June 14, 2004, at Dk #17.

34 Rule 15(a)(2) of the Federal Rules of Civil Procedure states that “[t]he court should freely give
leave [to amend] when justice so requires.” F.R.Civ.P. 15(a)(2). “Dismissal without leave to
amend is improper unless it is clear, upon de novo review, that the complaint could not be saved
by any amendment.” Polich v. Burlington N., Inc., 942 F.2d 1467, 1472 (9th Cir. 1991).
“TL]eave to amend should be granted unless the district court ‘determines that the pleading could
not possibly be cured by the allegation of other facts.’” U.S. v. SmithKline Beecham, Inc., 245
F.3d 1048, 1052 (9th Cir. 2001) (citation omitted); Bly-Magee v. California, 236 F.3d 1014,
1019 (9th Cir. 2001) (quoting Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000)). Given the
nature of the deficiencies in Stanwyck’s claim against Defendants, Kirsten Jane Stanwyck,
Kirsten Stanwyck Living Trust, Jared A. Barry, Steven E. Young, and Freeman, Freeman &
Smiley, the court finds that Stanwyck’s pleading could not possibly be cured by the allegation of
other facts.

-20 -

Case

oO © 1 SN

10
i
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 21 of 35

05-0-02890, respectively.”* Stanwyck generally alleges that Defendant, Joan C. Stanwyck, with
the assistance of Defendants, Dennis N. Brager, John O. Kent, and the Brager Tax Law Group,

violated the automatic stay by filing papers in Case No. 378435, Steven J. Stanwyck vy. Franchise

Tax Board, a case initiated by Stanwyck, in which Defendant, Joan C. Stanwyck asserted an
“innocent spouse” defense.*? Stanwyck also alleges that Defendant, Joan C, Stanwyck, with the
assistance of Defendants, Leslie S. Klinger and/or James H. Banks: (1) failed to file certain tax
returns from 2000 to 2006;7° (2) refinanced certain indebtedness secured by the real property at
9734 Wendover Drive, Beverly Hills, CA, in 1999;” and (3) stole Stanwyck’s identity by filing
tax returns for Stoneridge Partnership.* Finally, Stanwyck alleges that Defendant, Joan C.
Stanwyck (1) failed to turn over personal property valued at $2 million when she moved from the
Wendover Drive property to the Malcolm Avenue property in or about August 2003;° and (2)
fraudulently negotiated a $25,000 retainer check that Stanwyck allegedly received from a client
in 1994.°

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)

* Complaint, 11:20-22,
* Jd, 7:18-28.

4 Id, 8:7-11.

4 Td., 9:1-7.

& Id. 10:4-15.

Id., 13:11-25.

“ Id., 18:24-27.

-2]-

Case,2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 22 of 35

1 | the specific provision of § 362(a) allegedly violated by the Defendant; (2) the facts concerning

2 | the date, time, and nature of the conduct alleged to be in violation of § 362(a); (3) the case in

3 | which the automatic stay was allegedly violated; (4) the material facts showing that the alleged

4 | conduct was willful, and (5) an itemization of damages directly attributable to such violation.

5 | Absent such facts, the court is unable “to draw the reasonable inference that [a] defendant is

6 | liable for the misconduct alleged.” Twombly, 550 U.S. at 555. Stanwyck’s claims as to

7 | Defendants, Joan C. Stanwyck, Joan Stanwyck Family 2000 Trust, and Joan Stanwyck Family
8 | 2002 Trust amount to bare legal conclusions or contain insufficient factual information to survive
9 | challenge under Rule 12(b)(6). Nor can Defendants, Dennis N. Brager, John O. Kent, and the

10 | Brager Tax Law Group be expected to respond to the vague and disjointed allegations of

11 | Stanwyck’s Complaint absent a more definite statement under Rule 12(e).

12 IV. MOTIONS FOR AN ORDER DECLARING STANWYCK

A VEXATIOUS LITIGANT
e A. Standard for Determining Whether to Issue a Pre-filing Order Against a Vexatious Litigant.
" 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. Quai! 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
2 ‘{t]here is strong precedent establishing the inherent power of federal courts to regulate the
i activities of abusive litigants by imposing carefully tailored restrictions under appropriate
a 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
a 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

~22-

Case

Oo Co FTF DH

10
il
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 23 of 35

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.

1. Stanwyck was Given Notice and an Opportunity to be Heard.

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 original hearing on each motion.
Stanwyck requested a continuance of the hearings due to certain medical issues. Stanwyck’s
requested continuance was granted, and the hearings were continued to February 1, 2011, to
provide Stanwyck with additional time to file written responses in opposition to the motions,
Stanwyck appeared at the hearing in opposition to each of the Defendants’ motions on February

1, 2011. Stanwyck had sufficient notice of the relief sought by the Defendants and an adequate

-23-

Case

nO A

~~]

10
11
12
13
14
15
16
17
18
19
20
2]
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 24 of 35

opportunity to be heard on the matter. See Mullane v. Central Hanover Bank & Trust Co., 339
U.S, 306, 314 (1950) (Due process is satisfied when notice is “reasonably calculated, under all of
the circumstances, to apprise interested parties of the pendency of the action and to afford them
the opportunity to present their objections.”).

2. There is an Adequate Record for Review Detailing the Harassing Nature of
Stanwvck’s Litigations.

“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.

a. Adversary No. 2:08-ap-01240-SB.

On February 29, 2008, Stanwyck filed a 130-page complaint in Adversary No. 2:08-ap-

(1240-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
emotionat 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.*' The defendants named
in Stanwyck’s amended complaint included Joan C. Stanwyck, Individually and as Trustee;

Kirsten Stanwyck, Individually and as Trustee; Judy L. Bogen; Joseph Mannis; Neal Hersh; and

4 Stanwyck’s Claim Nos. 4 through 21 included alleged causes of action under $§ 542, 522(f),
544(a), 544(b), 545, 547, 548, 549 and 550; fraud; racketeering conspiracy; breach of fiduciary
duty; conversion; breach of contract; breach of the covenant of good faith and fair dealing;
professional malpractice; intentional and negligent infliction of emotional distress, constructive
trust; accounting, and injunctive relief.

~94-

Case

fs

~1 ON A

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 25 of 35

Hersh, Mannis, Bogen & Kipper. In response to Stanwyck’s amended complaint, the court
received 16 motions pursuant to Rule 12(b).

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.”

b. Adversary No. 2:08-ap-01435-SB.

While Adversary No. 2:08-ap-01240-SB was pending, Stanwyck filed a 399-page

complaint in Adversary No. 2:08-ap-01435-SB, North Am. Timeshare Shareholders Trust, et al.

v. Internal Revenue Service, et al,, on April 28, 2008, alleging 16 separate causes of action

against one or more of 26 named defendants and seeking damages in excess of $16.6 billion,
declaratory and injunctive relief, attorneys fees, interest and costs. In Claims 1-3 of the
complaint, Stanwyck sought a judgment against all of the named defendants, including Joan
Stanwick, Judy Bogen, Neal Hersh, Joseph Mannis, Hersh, Mannis & Bogen, Stephen M.
Laches, ADR Services, Inc., and Isabel R. Cohen, for $25 million actual damages, $225 million
punitive damages, attorneys fees, and costs for alleged violation of § 362(k).¥ In response

thereto, the court received 10 motions to dismiss Stanwyck’s complaint pursuant to Rule

“¥ According to the docket, the court reached the merits of only 2 of the pending Rule 12(b)
motions before the adversary proceeding was dismissed. On May 3, 2010, an order was entered
dismissing the adversary proceeding as to Defendants, Ira Benjamin Katz and Leslie S. Gold,
also erroneously sued as Beugelmans, Katz & Radis. On July 22, 2010, an Order Granting
Motion of the United States of America to Dismiss Plaintiff's Complaint was entered dismissing
the adversary proceeding as to the United States of America and its agency, the Internal Revenue
Service.

* Stanwyck’s Claim Nos. 4 through 16 included alleged causes of action under §§ 542, 502 and
506; fraud; breach of fiduciary duty; breach of contract; breach of the covenant of good faith and
fair dealing; intentional and negligent infliction of emotional distress; professional malpractice;
racketeering conspiracy; conversion; assault and battery; constructive trust, and declaratory relief.

-25-

Case

wn Fe w&! UN

Oo 6& “DH

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 26 of 35

12(b)(6). On July 14, 2008, Defendants, Leslie S. Klinger, Robert Kopple, Douglas Schwartz,
and Kopple & Klinger, LLP also filed a Motion to Declare Plaintiffs to Be Vexatious Litigants
and [To] Require Them to Post Security.

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.”

c. Adversary No. 2:10-ap-02982-PC.

Stanwyck’s Complaint was filed in this adversary proceeding on November 2, 2010.
Stanwyck alleges causes of action under § 362(k) against 37 named Defendants and seeks

injunctive relief, damages in excess of $16.4 billion, fees and costs.

“4 According to the docket, the court reached the merits of only 3 of the Rule 12(b) motions
before the adversary proceeding was dismissed. On March 18, 2010, an Order Granting Motion
to Dismiss Complaint and Dismissing Adversary Proceeding was entered dismissing the
adversary proceeding as to Defendant, Alberta P. Stahl. On July 22, 2010, an Order Granting
Motion of the United States of America to Dismiss Plaintiffs Complaint was entered dismissing
the adversary proceeding as to the Internal Revenue Service. On February 8, 2010, Defendant,
Isabel R. Cohen filed a document entitled “Notice of Ruling” which indicates that Judge Bufford
granted her Rule 12(b)(6) motion and dismissed Stanwyck’s complaint as to any claims asserted
against her, but no order was ever entered on the motion. Judge Bufford did not reach the merits
of the motion seeking to have Stanwyck declared a vexatious litigant.

- 26 -

Case

10
7
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 27 of 35

d. Adversary No. ?:10-ap-02641-PC.

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.”

e. Adversary No. 2:11-ap-01002-PC.

On January 3, 2011, Stanwyck filed a 58-page complaint in Adversary No. 2:1 l-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.

3. Substantive Findings About Frivolous or Harassing Nature of Plaintiff's Litigation.

The third De Long factor goes “to the heart of the vexatious litigant analysis.” Molski,

‘S The court takes judicial notice of the Order Granting Defendants’ Motion to Dismiss
Adversary Complaint for Failure to State a Claim Upon Which Relief Can be Granted entered in
such adversary proceeding on January 4, 2011, together with the findings of fact and conclusions
of law contained in the Memorandum Decision Re: Defendants’ Motion to Dismiss Adversary
Complaint for Failure to State a Claim Upon Which Relief Can be Granted of even date
therewith.

-27-

Case

So GO —~) G

10
1]
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc 60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

Main Document Page 28 of 35

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.

a, Stanwyck’s History of Litigation.

“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:

(1)

(2)

(3)

(4)

Order Dismissing Complaint, Imposing Sanctions, Granting Attorney’s Fees and
Declaring Plaintiffs Vexatious Litigants, entered in Case No. CV 01-7749-GAF,
Stanwyck, et al. v. Beilinson, et al., in the United States District Court, Central
District of California, Los Angeles Division, on July 21, 2002, and affirmed by
the Ninth Circuit on April 28, 2004. See Stanwyck v. Beilinson, 104 Fed.Appx.
616, 619 (9th Cir. 2004);

Order Granting Defendants’ Requests for Judicial Notice and Defendants’ Motion
to Declare United Computer Systems, Inc. and Steven J. Stanwyck Vexatious
Litigants, entered in Case No. CV 00-1640-RSWL, United Computer Svs., Inc. v.
AT&T Corp., et al., in the United States District Court, Central District of
California, Los Angeles Division, on December 26, 2002, and affirmed by the
Ninth Circuit. See United Computer Sys., Inc. v. AT&T Corp., 107 Fed.Appx.
818, 821 (9th Cir. 2004);

Order Granting Requests for Judicial Notice, and Motion for Declaration that
United Computer Systems, Inc., United Computer Systems, and Steven J.
Stanwyck are Vexatious Litigants, by AT&T, Lucent and NCR, in Case No.
BC254633, Stanwyck et al. v. Felder, et al., in the Superior Court of California,
County of Los Angeles, Civil Central West, dated January 29, 2002; and

Order Declaring Steven J. Stanwyck, United Computer Systems, United
Computer Systems, Inc., North American Timeshare, Inc. to be Vexatious
Litigants, Requiring Furnishing Security and Requiring Seeking Leave Before
Filing Future Lawsuits, in Case No, 400264, United Computer Systems, et al. v.
Vickery, et al,, in the Superior Court of California, County of San Francisco, on
January 9, 2003.

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

- 28 -

Case,2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 29 of 35

1 | States District Court, Central District of California, Los Angeles Division, for his failure to
2 | respond to a Notice of Filing by Vexatious Litigant Subject to Prefiling Order. The dismissal

3 | was affirmed by the Ninth Circuit. Pine Assocs., Inc., 234 Fed. Appx. at 697. On August 5,

pf

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.

Vo 0 GO NC

Finally, a Decision Including Disbarment Recommendation and Inactive Enrollment

10 | Order was filed in Case No. 02-O-10226, In the Matter of Steven Jay Stanwyck, in the State Bar

11 | Court of California on February 10, 2010, recommending that “Steven Jay Stanwyck be disbarred
12 | from the practice of law in the State of California.” In its 33-page decision, the State Bar Court
13 | chronicled Stanwyck’s vexatious filings and professional misconduct since 1996. In making its
14 | recommendation, the State Bar Court determined there was clear and convincing evidence

15 | establishing that Stanwyck “engaged in frivolous and abusive litigation tactics for nearly two

16 | decades” and that Stanwyck’s conduct “significantly harmed the administration of justice and

17 | those parties who were subjected as defendants to his inappropriate litigation practices.” In

18 | making its recommendation, the State Bar Court concluded:

19 [Stanwyck] has engaged for nearly two decades in a deliberate and repeated abuse of the
judicial system. He has filed repetitive lawsuits against numerous parties, and conducted

20 those suits in a manner that was abusive of both the parties and the courts. As soon as the
parties or the courts stop his antics in one forum, he moves to continue them in another,

21 but frequently adding as defendants the attorneys who had prevailed over him in the prior
action. This pattern continues to the present day. Such conduct by a member

22 demonstrates a lack of fitness to practice and continues an ongoing danger to the public,
the courts, and the profession.

23
Numerous courts in the past have endeavored to re-direct [Stanwyck] from his

24 inappropriate ways by issuing warnings and orders of sanctions. More recently, the
courts have repeatedly issued declarations that he is a vexatious litigant. Unfortunately,

25 all of these efforts by other courts have not caused [Stanwyck] to adopt a more ethical
approach.

26

Id, at 31.
27

-29-

Case

oo ee)

Oo oo ~~ BW Wr £

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 30 of 35

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.

b. Stanwyck’s Motive in Pursuing the Litigation.

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.
BAP 1991). 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.

c. Whether Stanwyck is Represented by Counsel.

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 (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.

d. Whether Stanwyck has Caused Unnecessary Expense to the Parties or Placed a
Needless Burden on the Courts.

Stanwyck has filed other largely duplicative complaints against the same or similar

-30-

Case

>

Oo CO SF BD A

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 31 of 35

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 ruling on motions seeking dismissal of these claims under Rule 12(b)(6) and relief
from Stanwyck’s continuing lawsuits. Stanwyck has caused unnecessary expense to the parties
and has placed a needless burden on the courts.

e. Whether Other Sanctions Would be Adequate to Protect the Courts and Other Parties.

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.

4. The Order is Narrowly Tailored to the Specific Vice Encountered.

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

-31-

Case, 2:10-ap-02982-PC Doc 60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc

wv we

oO co SD

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Main Document Page 32 of 35

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.

B. Stanwyck Must Post Security To Continue This Litigation.

L.R. 83-8.1 states:

“7 “Abandoned Claim” includes (1) any claim or cause of action asserted by Stanwyck in his first
amended complaint filed in Adversary No. 2:08-ap-01240-SB, styled North Am. Timeshare
Shareholders Trust. et al. y. Edward D. Jones & Co., et al., and abandoned to Stanwyck by Order
for Dismissal and Abandonment of Claims entered in such adversary proceeding on July 7, 2010;
and (2) any claim or cause of action asserted by Stanwyck in his complaint filed in Adversary
No. 2:08-ap-01435-SB, North Am. Timeshare Shareholders Trust, et al. v. Internal Revenue
Service, et al,, and abandoned to Stanwyck by Order for Dismissal and Abandonment of Claims
entered in such adversary proceeding on July 7, 2010.

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 fina! 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.

-32-

Case

oOo CO “SR

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 33 of 35

It is the policy of the Court to discourage vexatious litigation and to provide persons who
are subjected to vexatious litigation with security against the costs of defending against
such litigation and appropriate orders to control such litigation. It is the intent of this rule
to augment the inherent power of the Court to control vexatious litigation and nothing in
this rule shall be construed to limit the Court’s inherent power in that regard.

L..R. 83-8.1*7 L.R. 83-8.2 further states, in pertinent part:

On its own motion or on motion of a party, after opportunity to be heard, the Court may,
at any time, order a party to give security in such amount as the Court determines to be
appropriate to secure the payment of any costs, sanctions or other amounts which may be
awarded against a vexatious litigant, and may make such other orders as are appropriate
to control the conduct of a vexatious litigant. Such orders may include, without
limitation, a directive to the Clerk not to accept further filings from the litigant without
payment of normal filing fees and/or without written authorization from a judge of the
Court ..., issued upon such showing of the evidence supporting the claim as the judge
may require.

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.

Vv. CONCLUSION

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,
Neal Hersh, Joseph Mannis, Judy Bogen, Hersh, Mannis & Bogen, Edward M. Ross, Logan &
Blue, Inc., Jeffrey Zabner, Joan C. Stanwyck, Joan Stanwyck Family 2000 Trust, and Joan
Stanwyck Family 2002 Trust under Rule 12(b)(6) with leave to amend, subject to the terms of a

pre-filing order that will be imposed by the court on Stanwyck as a vexatious litigant; (3) grant

“ Tp this court, “[a] matter not specifically covered by [the LBRs] may be determined, if
possible, by parallel or analogy to the F.R.Civ.P., the FRBP, or the District Court Rules. LBR
1001-1(e)(1). Since vexatious litigation in the bankruptcy court is not specifically covered by a
local bankruptcy rule, the court will apply L-R. 83-8.1 through L.R. 83-8.4.

-33-

Case, 2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 34 of 35

1 | the motions of Defendants, Steven M. Lachs, ADR Services, Inc., Dennis N. Brager, John O.
2 | Kent, and the Brager Tax Law Group for a more definite statement pursuant to Rule 12(e),

3 | subject to the terms of a pre-filing order that will be imposed by the court on Stanwyck as a

a

vexatious litigant; and (4) grant the motions of Defendants, Isabel R. Cohen, Steven E. Young,
Freeman, Freeman & Smiley, Jared A. Barry, Jeffrey Zabner, Stephen M. Lachs, ADR Services,

Inc., Dennis N. Brager, John O. Kent, and the Brager Tax Law Group seeking security and the

~~ A

imposition of a pre-filing order against Stanwyck as a vexatious litigant. Stanwyck will be
8 | ordered to furnish security in the amount of $925,000 to secure for each of the named Defendants
9 | the costs of defending this action, including attorneys fees. The clerk of this court will be
10 | ordered not to accept for filing by or on behalf of Stanwyck any paper that seeks relief (1) under
11 | § 362(k) for an alleged violation of the automatic stay or conspiracy to violate the automatic stay;

12 | or (2) based upon an Abandoned Claim, absent leave o

13 Separate orders will be entered cong
14 | DATED: May 20, 2011

15 PETER H. CARROLL
United States Bankruptcy Judge

16
17
18
19
20
21
22
23
24
25
26

27
-34-

Case 2:10-ap-02982-PC Doc60 Filed 05/20/11 Entered 05/20/11 11:44:40 Desc
Main Document Page 35 of 35

NOTICE OF ENTERED ORDER AND SERVICE LIST

Notice is given by the court that a judgment or order entitled (specify) MEMORANDUM DECISION was entered on the
date indicated as “Entered” on the first page of this judgment or order and will be served in the manner indicated below:

I. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (“NEF”) - Pursuant to controlling General Order(s)
and Local Bankruptcy Rule(s), the foregoing document was served on the following person(s) by the court via NEF and
hyperlink to the judgment or order. As of 5/20/11, the following person(s) are currently on the Electronic Mail Notice List
for this bankruptcy case or adversary proceeding to receive NEF transmission at the email address(es) indicated below.

Susan S Baker sbaker@nemecek-cole.com

Jonathan B Cole jcole@nemecek-cole.com

Leslie S Gold LeslieGold@katzlaw.net

Andrew A Goodman agoodman@goodmanfaith.com

David Seror (TR) kpscion@ecjlaw.com, dseror@ecf.epiqsystems.com
United States Trustee (LA) ustpregion16.la. ecf@usdoj.gov

[] Service information continued on attached page

ll. SERVED BY THE COURT VIA U.S. MAIL: A copy of this notice and a true copy of this judgment or order was sent by
United States Mail, first class, postage prepaid, to the following person(s) and/or entity(ies) at the address(es) indicated
below:

Steven J. Stanwyck
225 Montana Ave. #103
Santa Monica, CA 90403

Martin K. Deniston

Wilson, Elser, Moskowitz
555 So. Flower St., Ste 2900
Los Angeles, CA 90071

Edith R Matthai

500 S Grand Ave

Ste 1500

Los Angeles, CA 90071-2609

Lori S Ross

707 North trena Avenue
Unit A

Redondo Beach, CA 90277

John M Rygh

915 Wilshire Blvd Ste 2100
Los Angeles, CA 90017

(] Service information continued on attached page

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

August 2010 F 9021-1.4.NOTICE.ENTERED.ORDER