Horowitz v. Sulla

Filing 4

ORDER DENYING APPLICATION TO PROCEED IN FORMA PAUPERIS re 1 - Signed by JUDGE DERRICK K. WATSON on 5/4/2017. "If Horowitz wishes to proceed with this appeal, he must remit the appropriate filing fee by June 14, 2017. Fa ilure to do so will result in the automatic dismissal of this action." (emt, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Leonard G. Horowitz served by first class mail at the address of record on May 4, 2017.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAI‘I

LEONARD G. HOROWITZ,
Appellant,

CV. NO. 17-00197 DKW-RLP
Bankr. No. 16-00239

vs.
PAUL J. SULLA, Jr., et al.,

ORDER DENYING APPLICATION
TO PROCEED IN FORMA
PAUPERIS

Appellees.

On April 21, 2017, Appellant Leonard G. Horowitz, proceeding pro se, filed
in United States Bankruptcy Court, District of Hawaii: (1) a Notice of Appeal And
Statement Of Election, and (2) an Application To Proceed In District Court Without
Prepaying Fees Or Costs, seeking to proceed in forma pauperis on appeal (“IFP
Application”).1 Federal courts can authorize the commencement of any suit
without prepayment of fees or security by a person who submits an affidavit that
demonstrates he or she is unable to pay. See 28 U.S.C. § 1915(a)(1). “An affidavit
in support of an IFP application is sufficient where it alleges that the affiant cannot
pay the court costs and still afford the necessities of life.” Escobedo v. Applebees,

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The Notice of Appeal and IFP Application were transmitted to this district court on May 2, 2017,
and the instant civil action was opened on May 3, 2017. Dkt. No. 1. The IFP Application is
properly before the district court, rather than the bankruptcy court. See In re Perronton, 958 F.2d
889, 896 (9th Cir. 1992) (bankruptcy court lacks authority to waive fees under Section 1915(a)).

787 F.3d 1226, 1234 (9th Cir. 2015) (citing Adkins v. E.I. Du Pont de Nemours &
Co., 335 U.S. 331, 339 (1948)); see also United States v. McQuade, 647 F.2d 938,
940 (9th Cir. 1981) (The affidavit must “state the facts as to affiant’s poverty with
some particularity, definiteness and certainty.”) (internal quotation omitted).
When reviewing an application filed pursuant to Section 1915(a), “[t]he only
determination to be made by the court . . . is whether the statements in the affidavit
satisfy the requirement of poverty.” Martinez v. Kristi Kleaners, Inc., 364 F.3d
1305, 1307 (11th Cir. 2004). While Section 1915(a) does not require a litigant to
demonstrate absolute destitution, Adkins, 335 U.S. at 339, the applicant must
nonetheless show that he or she is “unable to pay such fees or give security therefor.”
28 U.S.C. § 1915(a).
Here, the IFP Application indicates that although Horowitz is not employed
and/or has earned no income in wages during the past twelve months, he has
received $1500 per month in “royalties from books,” and owns a vehicle worth
$500. Horowitz lists debts in the amount of $150,000 in legal fees and $245,000
from a “past business contract.” He pays $700 per month for rent and has no
dependents. Based upon the IFP Application, Horowitz’s income is above the
poverty threshold identified by the Department of Health and Human Services
(“HHS”) 2017 Poverty Guidelines. See 2017 HHS Poverty Guidelines, available at

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https://www.federalregister.gov/documents/2017/01/31/2017-02076/annual-update
-of-the-hhs-poverty-guidelines (indicating that the poverty threshold for a
one-person household in Hawaii is $13,860).
Although Horowitz has debts and other expenses, as demonstrated by the IFP
Application and bankruptcy filing, the Court’s independent review of all the
financial information in the record demonstrates that he fails to qualify for IFP status
under Section 1915(a).2 The Court acknowledges that Horowitz’s stated debts and
expenses consume much of his monthly income from book royalties. Nevertheless,
his IFP Application does not establish that he cannot both pay the costs of litigating
this case “and still be able to provide himself . . . with the necessities of life.” See
Adkins, 335 U.S. at 339 (internal quotation marks omitted). Accordingly, the Court
finds that Horowitz has not made the required showing under Section 1915 to
proceed without prepayment of fees, and DENIES his IFP Application.

2

The Court takes judicial notice of filings in the underlying Chapter 13 Bankruptcy. See
Fed.R.Evid. 201(b); In re Keahey, 414 F. App’x 919, 923 (9th Cir. 2011). Horowitz, in both
March and August of 2016, filed bankruptcy schedules and statements listing substantial assets in
bankruptcy court that were not identified on the IFP Application, such as two limited liability
companies (with his 50% interests valued at $60,000 and $17,000 respectively), domains and
trademarks, accounts receivable, artwork, jewelry, and musical instruments worth thousands of
dollars. See Bankr. No. 16-00239, Dkt. Nos. 4, 7, 114, and 115. Several of these same assets
were likewise absent from a previous IFP Application filed by Horowitz that was denied by the
district court on June 14, 2016. See Horowitz v. Sulla, 2016 WL 3264249, at *2 (D. Haw. June
14, 2016) (“Appellants previously disclosed substantial assets in bankruptcy court that were not
identified on the IFP Application.”).

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If Horowitz wishes to proceed with this appeal, he must remit the appropriate
filing fee by June 14, 2017. Failure to do so will result in the automatic dismissal
of this action.
IT IS SO ORDERED.
DATED: May 4, 2017 at Honolulu, Hawai‘i.

Horowitz v. Sulla; CV 17-00197 DKW-RLP; ORDER DENYING
APPLICATION TO PROCEED IN FORMA PAUPERIS

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