Horowitz et al v. Stewart Title Guaranty Company et al
Filing
122
ORDER DENYING PLAINTIFFS' RULE 60(B) MOTION FOR RELIEF FROM FINAL JUDGMENT [FRCP 60(B) (1)(2) AND (5)] re 115 . Signed by JUDGE LESLIE E. KOBAYASHI on 4/15/2020. (emt, )COURT'S CERTIFICATE of Service - Leonard G. Horowitz and Sherri Kane shall be served by First Class Mail to the address of record listed on the Notice of Electronic Filing (NEF) on April 16, 2020. Registered Participants of CM/ECF received the document electronically to the email addresses listed on the Notice of Electronic Filing (NEF).
UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII
LEONARD G. HOROWITZ, AN
INDIVIDUAL; SHERRI KANE, AN
INDIVIDUAL; AND ROYAL BLOODLINE
OF DAVID, A DISSOLVED
CORPORATION SOLE;
CIV. NO. 16-00666 LEK-KJM
Plaintiffs,
vs.
STEWART TITLE GUARANTY COMPANY,
FIRST AMERICAN TITLE CO., DOES
1 THROUGH 50, INCLUSIVE;
Defendants.
ORDER DENYING PLAINTIFFS’ RULE 60(B) MOTION FOR
RELIEF FROM FINAL JUDGMENT [FRCP 60(B)(1)(2) AND (5)]
On December 16, 2019, pro se Plaintiff Leonard G.
Horowitz (“Horowitz”), pro se Plaintiff Sherri Kane (“Kane”),
and Plaintiff Royal Bloodline of David (“Royal” and collectively
“Plaintiffs”) filed their Rule 60(b) Motion for Relief from
Final Judgment [FRCP 60(B)(1)(2) and (5)] (“Rule 60 Motion”).
[Dkt. no. 115.1]
1
On January 2, 2020, Defendant Stewart Title
Docket number 115-2 consists of Plaintiffs’ Exhibits 1
through 5 in support of the Rule 60 Motion. On December 18,
2019, Plaintiffs filed a “Corrective Filing,” which contains the
same five exhibits, but with each exhibit as a separate entry.
[Dkt. nos. 116-1 to 116-5.] Also on December 18, 2019,
Plaintiffs filed another version of the Rule 60 Motion, with the
original signatures of Horowitz, Kane, and Royal’s counsel,
Margaret Dunham Wille, Esq. [Dkt. no. 118.]
Guaranty Company (“Stewart Title”) and Defendant First American
Title Co. (“First American”) filed their respective memoranda in
opposition to the Rule 60 Motion.
[Dkt. nos. 119, 120.]
Plaintiffs filed their reply on January 16, 2020.
nos. 121.]
[Dkt.
The Court has considered the Rule 60 Motion as a
non-hearing matter pursuant to Rule LR7.1(d) of the Local Rules
of Practice for the United States District Court for the
District of Hawaii (“Local Rules”).
Plaintiffs’ Rule 60 Motion
is hereby denied for the reasons set forth below.
BACKGROUND
Horowitz and Kane, on behalf of themselves and Royal,
filed their Verified Complaint for Damages (“Complaint”) on
December 21, 2016.
[Dkt. no. 1.]
On January 4, 2017, Horowitz
and Kane filed their “Motion to Amend as a Matter of Course
[FRCP Rule 15(a)(1)(A)].”
[Dkt. no. 10.]
The magistrate judge
construed the document as the Amended Complaint.
[EO, filed
1/10/17 (dkt. no. 11).]
The factual allegations and counts in the Amended
Complaint are summarized in the June 30, 2017 order regarding
First American’s and Stewart Title’s respective motions to
dismiss (“6/30/17 Order”).
[Dkt. no. 39 at 4-7.2]
2
The motions
The 6/30/17 Order is also available at 2017 WL 2836990.
Stewart Title’s and First American’s motions to dismiss the
(. . . continued)
2
to dismiss were granted, insofar as all of Plaintiffs’ claims
were dismissed, but the motions were denied, insofar as the
dismissal was without prejudice.
Plaintiffs were granted leave
to file a second amended complaint, but they were cautioned that
Royal had to be represented by counsel.
6/30/17 Order, 2017 WL
2836990, at *6.
On September 29, 2017, Horowitz and Kane, on behalf of
themselves and Royal, filed their “Motion for Leave to File
‘Second Amended Verified Complaint;’ [FRCP Rule 15(a)(2)].”
[Dkt. no. 53.]
In a December 14, 2017 order, the magistrate
judge denied the motion, but granted Horowitz and Kane leave to
file another motion for leave to amend (“12/14/17 Order”).
[Dkt. no. 68.3]
Royal was not granted leave to amend because
neither Horowitz nor Kane was authorized to allege claims on
Royal’s behalf.
12/14/17 Order, 2017 WL 10647373, at *6.
On December 11, 2017, Margaret Dunham Wille, Esq.,
entered her appearance as counsel for Royal.
[Dkt. no. 67.]
On
December 26, 2017, Plaintiffs filed a motion for reconsideration
of the 12/14/17 Order.
[Dkt. no. 69.]
The magistrate judge
Amended Complaint were filed on January 17 and 20, 2017,
respectively. [Dkt. nos. 19, 23.]
3
The 12/14/17 Order is also available at 2017 WL 10647373.
3
denied the motion for reconsideration.
[EO, filed 2/8/18 (dkt.
no. 80).]
On February 26, 2018, Horowitz and Kane, individually,
filed a Motion for Leave to File Proposed Second Amended
Complaint for Damages and Other Relief (“2/26/18 Motion to
Amend”).
[Dkt. no. 82.4]
On May 3, 2018, the magistrate judge
filed his (1) Order Denying Plaintiffs Leonard G. Horowitz and
Sherri Kane’s Motion for Leave to File Proposed Second Amended
Complaint for Damages and Other Relief [FRCP 15(a)(2)];
(2) Finding and Recommendation to Dismiss this Action with
Prejudice (“F&R”).
[Dkt. no. 95.5]
The additional factual
allegations that Horowitz and Kane added to the proposed Second
Amended Complaint are summarized in the F&R.
at *3-4.
2018 WL 6588506,
The magistrate judge concluded that: the proposed
Second Amended Complaint did not comply with Fed. R. Civ. P. 8;
F&R, 2018 WL 6588506, at *5-7; and all of the proposed claims
were futile because they would not survive a Fed. R. Civ. P. 11
motion to dismiss, id. at *7-16.
The magistrate judge denied
the 2/26/18 Motion to Amend, finding that allowing Horowitz and
Kane a further opportunity to amend their claims would be
4
Horowitz and Kane’s proposed Second Amended Complaint for
Damages (“Second Amended Complaint”) is docket number 82-8.
5
The F&R is also available at 2018 WL 6588506.
4
futile.
The magistrate judge also recommended that the case be
dismissed with prejudice.
Id. at *16-17.
Horowitz and Kane filed objections to the F&R on
May 14, 2018, and this Court denied the objections and adopted
the F&R in a December 21, 2018 order (“12/21/18 Order”).
nos. 96, 113.6]
[Dkt.
In the 12/21/18 Order, the following objections
and arguments were rejected: the proposed Second Amended
Complaint complied with Rule 8; the magistrate judge was biased;
Horowitz and Kane were covered by the title insurance policies
at issue in this case; the Second Amended Complaint adequately
pled duty and causation to support the negligence claim; and the
bad faith claim was supported by plausible factual allegations.
2018 WL 6729630, at *4-8.
This Court declined to consider
Horowitz and Kane’s general objections to the F&R’s summary of
the events described in the Second Amended Complaint and
rejected their submission of purportedly new evidence.
*8-9.
Id. at
Finally, this Court rejected Horowitz and Kane’s
objection to the recommendation of dismissal with prejudice.
Id. at *9.
Because the F&R was adopted in its entirety and the
2/26/18 Motion to Amend was denied, the claims that were
dismissed without prejudice in the 6/30/17 Order were dismissed
with prejudice.
6
Id.
The Judgment in a Civil Case (“Judgment”)
The 12/21/18 Order is also available at 2018 WL 6729630.
5
was entered immediately after the filing of the 12/21/18 Order.
[Dkt. no. 114.]
Plaintiffs took no action in this case until the
filing of the instant Rule 60 Motion.
Plaintiffs now seek
relief from the Judgment, in light of the Judgment on Appeal
that was issued on July 22, 2019 in three consolidated appeals
before the Hawai`i Intermediate Court of Appeals (“ICA” and
“State Court Appeals”).7
Plaintiffs contend the outcome of the
State Court Appeals: 1) shows that this Court made a mistake in
the 12/21/18 Order; and 2) constitutes newly discovered facts or
new law warranting relief from the Judgment in this case.
Plaintiffs also contend new facts relevant to this case came to
light during December 2019 because of an indictment filed in
state court against Paul Sulla, Jr. (“Sulla”) and Halai Heights
LLC.
See Corrective Filing, Exh. 4 (Indictment filed on
7
The three cases were: Hester v. Horowitz, et al., CAAP-160000162 (“CAAP-16-162”); Hester v. Horowitz, et al., CAAP-160000163 (“CAAP-16-163”); and Hester v. Horowitz, CAAP-18-0000584
(“CAAP-18-584”). See Hester v. Horowitz, NO. CAAP-16-0000162
(“State Court Appeals Opinion”), 2019 WL 1950822 (Hawai`i Ct.
App. May 2, 2019), as corrected on denial of reconsideration,
2019 WL 2178556 (May 17, 2019), cert. rejected, SCWC-16-0000162,
2019 WL 4785880 (Hawai`i Sept. 30, 2019); see also Corrective
Filing, Exh. 2 (Judgment on Appeal). Horowitz and Royal were
among the defendants/counterclaimants who filed the appeal in
CAAP-16-162; Horowitz, Kane, and Royal were among those who
filed the appeal in CAAP-16-163; and only Horowitz was a
respondent/appellant in CAAP-18-584. See Corrective Filing,
Exh. 2.
6
12/5/19, in the State of Hawai`i Third Circuit Court, in State
v. Sulla, et al., Cr. No. 19-0000968 (“2019 Sulla Indictment”)).
Plaintiffs argue the Judgment should be vacated, and they should
be allowed to file a new version of the complaint addressing the
recent developments.
STANDARD
Plaintiffs bring the Rule 60 Motion pursuant to
subsections (b)(1), (2), and (5).
[Motion at 1.]
Rule 60(b)
states, in pertinent part:
On motion and just terms, the court may relieve a
party or its legal representative from a final
judgment, order, or proceeding for the following
reasons:
(1) mistake, inadvertence, surprise,
or excusable neglect;
(2) newly discovered evidence that,
with reasonable diligence, could not have
been discovered in time to move for a new
trial under Rule 59(b); [or]
. . . .
(5) the judgment has been satisfied,
released, or discharged; it is based on an
earlier judgment that has been reversed or
vacated; or applying it prospectively is no
longer equitable[.]
Any motion brought pursuant to Rule 60(b) “must be made within a
reasonable time,” but motions brought pursuant to subsections
(1) or (2) must be brought “no more than a year after the entry
of the judgment.”
Fed. R. Civ. P. 60(c).
7
To the extent Plaintiffs rely on Rule 60(b)(1), they
essentially seek reconsideration of the 12/21/18 Order.
Relevant to the instant case, “[r]econsideration pursuant to
Rule 60 is generally appropriate . . . to correct clear error or
prevent manifest injustice.”
Ferretti v. Beach Club Maui, Inc.,
Civ. No. 18-00012 JMS-RLP, 2018 WL 3672741, at *1 (D. Hawai`i
Aug. 2, 2018) (citing Sch. Dist. No. 1J, Multnomah Cty. v.
ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993)).
To the extent they rely on Rule 60(b)(2), Plaintiffs
“must show that the evidence relied upon ‘(1) existed at the
time of the trial, (2) could not have been discovered through
due diligence, and (3) was of such magnitude that production of
it earlier would have been likely to change the disposition of
the case.’”
Fergerstrom v. PNC Bank, N.A., Case No. 13-cv-
00526-DKW-RLP, 2019 WL 1510328, at *2 (D. Hawai`i Apr. 5, 2019)
(quoting Jones v. Aero/Chem Corp., 921 F.2d 875, 878 (9th Cir.
1990)).
As to Rule 60(b)(5), this district court has stated:
Rufo v. Inmates of Suffolk County Jail, 502 U.S.
367 (1992) provides for “a general, flexible
standard for all petitions brought under the
equity provision of Rule 60(b)(5).” Bellevue
Manor Assoc. v. United States, 165 F.3d 1249,
1255 (9th Cir. 1999). A Rule 60(b) motion to
modify a court order should be granted when there
has been “a significant change either in factual
conditions or in law.” Rufo, 502 U.S. at 384;
see Horne v. Flores, [557 U.S. 433,] 129 S. Ct.
2579, 2597 (2009).
8
Sakuma v. Ass’n of Condo. Owners of Tropics at Waikele, Civil
No. 08-00502 HG-KSC, 2012 WL 299899, at *3 (D. Hawai`i Jan. 31,
2012), aff’d (9th Cir. May 15, 2012).
DISCUSSION
I.
Rule 60(b)(1) - Mistake
First, to the extent Plaintiffs seek Rule 60(b) relief
because the 12/21/18 Order “mistakenly misapprehended
Plaintiffs’ interests as deriving from a (never-existing) ‘joint
venture’ between Royal, Horowitz and Kane,” [mem. in supp. of
Rule 60 Motion at 2,] the argument is rejected as untimely.
Plaintiffs filed the Rule 60 Motion within a year after the
filing of the 12/21/18 Order.
However, the one-year date is an
outer limit, and filing a Rule 60 motion within one year does
not automatically render the motion brought “within a reasonable
time.”
See Rule 60(c)(1); see also Henao v. Hilton Grand
Vacations Co., Case No. 16-cv-00646-DKW-RLP, 2018 WL 5931110, at
*3 n.2 (D. Hawai`i Nov. 13, 2018) (citing Kagan v. Caterpillar
Tractor Co., 795 F.2d 601, 610 (7th Cir. 1986) (explaining that
the “no more than a year” language is “an extreme limit, and the
motion will be rejected as untimely if not made within a
reasonable time, even though the one-year period has not
expired.”)).
9
Plaintiffs argue the 12/21/18 Order mischaracterized
the relationship between Royal, Horowitz, and Kane.
That is not
an argument which Plaintiffs needed more than eleven months to
develop, and the argument is not based upon either the State
Court Appeals Opinion or the 2019 Sulla Indictment.
Plaintiffs
therefore failed to raise this issue within a reasonable time
after the filing of the 12/21/18 Order, and their Rule 60 Motion
is untimely as to this issue.
Even if the mischaracterization
issue were considered, Plaintiffs have not presented “facts or
law of a strongly convincing nature to induce the court to
reverse” its description in the 12/21/18 Order of the
relationship between Plaintiffs.
See Yoshimura v. Kaneshiro,
CIVIL 18-00038 LEK-KJM, 2019 WL 4017231, at *3 (D. Hawai`i
Aug. 26, 2019) (describing the two goals that a motion for
reconsideration must accomplish) (citations and quotation marks
omitted).
Moreover, even if that portion of the 12/21/18
Order’s background section was vacated, Plaintiffs have not
shown how that would alter the ultimate rulings in the order.
Plaintiffs’ Rule 60 Motion is denied as to their argument that
the 12/21/18 Order mischaracterizes the relationship between
Royal, Horowitz, and Kane.
Plaintiffs also argue that, based on the State Court
Appeals Opinion, this Court’s “approval of the” nonjudicial
foreclosure that the ICA vacated in CAAP-16-163 constitutes a
10
mistake warranting relief pursuant to Rule 60(b)(1).
supp. of Rule 60 Motion at 2.]
[Mem. in
In CAAP-16-163, the ICA vacated
the final judgment in a quiet title action.
Opinion, 2019 WL 1950822, at *7.
State Court Appeals
Horowitz, Kane, and Royal
argued judgment should not have been granted in favor of Hester
in the quiet title action because of the prior judicial
foreclosure action.
Id. at *4.
However, neither the judicial
foreclosure action nor the quiet title action was the basis for
any of the rulings in the 12/21/18 Order.
See generally
12/21/18 Order, 2018 WL 6729630, at *4-9.
Plaintiffs’
Rule 60(b)(1) argument based on the State Court Appeals Opinion
is therefore rejected.
II.
Rule 60(b)(2) – Newly Discovered Evidence
Plaintiffs next argue Rule 60(b)(2) relief is
warranted because the State Court Appeals Opinion and the 2019
Sulla Indictment constitute newly discovered evidence.
Horowitz
and Kane raised the pending appeal before the ICA and the
pending criminal complaint against Sulla in a supplemental
memorandum in support of their objections to the F&R, but those
arguments were rejected.
at *8-9.
See 12/21/18 Order, 2018 WL 6729630,
The possibility that the ICA would rule in favor of
Horowitz, Kane, and Royal in the State Court Appeals, and the
possibility that a criminal case against Sulla would progress
were both considered by this Court when it considered Horowitz
11
and Kane’s objections to the F&R.
Because those possible events
were already contemplated by this Court, the ultimate outcome in
CAAP-16-163 and the 2019 Sulla Indictment are not facts that
“would have been likely to change the” rulings in the 12/21/18
Order.
See Jones, 921 F.2d at 878 (citation and quotation marks
omitted).
Plaintiffs’ request for Rule 60(b)(2) relief is
denied because they have not presented anything that constitutes
newly discovered evidence.
III. Rule 60(b)(5) – Application of Judgment No Longer Equitable
Finally, Plaintiffs argue that, in light of the State
Court Appeals Opinion and the 2019 Sulla Indictment, enforcing
the Judgment in the instant case is no longer equitable.
For
reasons similar to those set forth in the Rule 60(b)(2)
analysis, neither the State Court Appeals Opinion nor the 2019
Sulla Indictment is “a significant change either in factual
conditions or in the law.”
See Rufo, 502 U.S. at 384.
Plaintiffs’ Rule 60(b)(5) argument must therefore be rejected.
Having concluded that Plaintiffs are not entitled to
relief under either Rule 60(b)(1), (2), or (5), this Court
denies the Rule 60 Motion.
CONCLUSION
On the basis of the foregoing, Plaintiffs’ Rule 60(b)
Motion for Relief from Final Judgment [FRCP 60(b)(1)(2) and
(5)], filed December 16, 2019, is HEREBY DENIED.
12
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, April 15, 2020.
LEONARD G. HOROWITZ, ET AL. VS. STEWART TITLE GUARANTY COMPANY,
ET AL.; CIVIL 16-00666 LEK-KJM; ORDER DENYING PLAINTIFFS’ RULE
60(B) MOTION FOR RELIEF FROM FINAL JUDGMENT [FRCP 60(G)(1)(2)
AND (5)]
13
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