Kabakow v. State Street Bank & Trust Co.

Filed 1/19/07  Kabakow v. State Street Bank & Trust Co. CA2/4

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b).  This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

            APPEAL from orders of the Superior Court of Los Angeles County, Richard C.  Neal, Judge.  Affirmed.

            Howard Arthur Kabakow, in pro. per., for Cross-Complainant and Appellant.

            Alvarado, Smith, Villa & Sanchez, Raymond G. Alvarado, Steven M.  Lawrence; Severson & Werson and Jan T. Chilton for Cross-Defendant and Respondent.

______________________

            Howard Arthur Kabakow appeals from an order declaring him to be a vexatious litigant and requiring that he post a $150,000 bond or suffer dismissal of his cross-complaint, and from the subsequent order dismissing his cross-complaint.  We find the orders supported by the evidence and a proper exercise of the trial court's discretion, and affirm.

FACTUAL AND PROCEDURAL SUMMARY

            There is no dispute as to the underlying facts in this case.  Appellant's corporation, XYZ Bell Corporation, purchased 4 fourplex apartment properties in Bell in 1976.  XYZ transferred the Bell properties to appellant.  In 1983, Home Savings of America loaned appellant $125,000, secured by a deed of trust and assignment of rents on the Bell properties.  Over the course of the next six years, appellant requested and received additional advances from Home Savings in the total amount of $150,900.  Through a series of assignments, the right, title, and interest under the deed of trust and loan adjustment agreement was ultimately transferred to respondent State Street Bank and Trust Company, Trustee for Holders of Bear Stearns Mortgage Securities, Inc. (State Street Bank) in October 1993.

            Appellant failed to make installment payments of interest and principal due during much of 1994, and on December 29, 1994, State Street Bank brought an action in Los Angeles Superior Court for judicial foreclosure, appointment of a receiver, and injunctive relief.

            Appellant immediately filed a notice of removal to United States District Court, thereby obtaining a stay of state court proceedings pending resolution of the removal notice.  The district court remanded the action to state court on January 3, 1995. 

            On January 10, 1995, State Street Bank gave appellant notice of an ex parte hearing in state court for appointment of a receiver.  The hearing was noticed for the following morning.  Also on January 10, appellant sought to remove the case to United States Bankruptcy Court in connection with the XYZ Bell Corporation bankruptcy proceedings, on the ground that XYZ had an interest in one of the properties identified in the state court action.  On January 12, 1995, State Street Bank filed an emergency motion in the XYZ bankruptcy action, requesting an immediate remand of the action to state court, and for sanctions.  On January 18, 1995, the bankruptcy judge entered an order expunging the notice of removal; it denied the request for attorney's fees without prejudice. 

            Upon learning that the bankruptcy court had signed the expungement order, State Street Bank, on January 19, re-noticed the ex parte hearing for appointment of a receiver for January 20 in state court.  (The order of expungement was not actually entered until February 7, 1995.)  Appellant then filed a Chapter 11 personal bankruptcy proceeding.  State Street Bank filed a motion in bankruptcy court for an order dismissing the case pursuant to 11 United States Code section 1112(b).  The Office of the United States Trustee joined in the motion, citing appellant's failure to comply with bankruptcy rules.  After a hearing, the bankruptcy judge granted the motion to dismiss, and imposed a 180-day bar to refiling any other bankruptcy case.

            Appellant appealed the order dismissing his bankruptcy case, and filed an emergency motion with the bankruptcy court for stay pending appeal.  The emergency motion was denied.  Appellant then filed an emergency motion for stay with the bankruptcy appellate panel.  That motion also was denied.

            After the bankruptcy court's order of dismissal became final, State Street Bank proceeded in state court to seek and obtain appointment of a receiver over the Bell properties.  On April 21, 1995, appellant filed a cross-complaint against State Street Bank and others (collectively referred to as respondents).  The cross-complaint included causes of action for discrimination in loan foreclosure, to quiet title, for cancellation of notices of default, for injunction, for violation of civil rights, for slander of title, and for illegal discrimination or boycott. 

            Respondents demurred and filed a motion to have appellant declared a vexatious litigant.  On November 9, 1995, the trial court declared appellant a vexatious litigant.  The ruling was based in part on appellant having been declared a vexatious litigant by the United States District Court in August 1995.  It also was based on appellants' repeated filing of unmeritorious motions, pleadings and other papers in the state court action.  Appellant was ordered not to file any new litigation in state court in propria persona without first obtaining leave of the presiding judge of the court where the litigation is proposed to be filed.  The court further determined there was no reasonable probability that appellant would prevail on his cross-complaint, and therefore ordered him to provide security in the form of an undertaking in the amount of $150,000.  Appellant filed a timely notice of appeal from this order.

            Appellant did not post the security as required by the November 9 order.  Respondents moved for dismissal of his cross-complaint.  That motion was granted on January 10, 1996, and appellant also filed a notice of appeal from that order.  The appeals were consolidated for decision. 

            On July 26, 1997, while the appeal in this court was pending, appellant filed a chapter 11 bankruptcy petition.  On September 9, 1997, one day before the original date set for oral argument in this court, appellant removed the appeal to the bankruptcy court.  After hearing argument in the case, on November 4, 1997, we vacated the submission and placed the matter off calendar pending further action by the bankruptcy court.  Appellant filed a motion to retain the removed case in bankruptcy court, but the court denied the motion and remanded the appeal to this court.  Appellant appealed the bankruptcy court's remand order.  On September 27, 1999, the United States Bankruptcy Appellate Panel affirmed the remand order.  Appellant's petition for rehearing of the bankruptcy appellate panel decision was denied on November 9, 1999. 

            Appellant's reorganization plan was confirmed by the bankruptcy court in March 1999, a final decree was issued on July 26, 2001, and the bankruptcy case was closed in September 2001.  Despite the finality of the bankruptcy court's order remanding the appeal to this court and the order closing the entire bankruptcy case, appellant has repeatedly taken the position that this court cannot proceed until a certified copy of the order of remand is mailed by the clerk of the federal court to the clerk of the state court, pursuant to 28 United States Code section 1447(c).  According to appellant, â€