Park Nat. Bank of Houston v. Kaminetzky
| Decision Date | 12 September 1996 |
| Docket Number | Civil Action No. H-96-0495. |
| Citation | 976 F.Supp. 571 |
| Parties | PARK NATIONAL BANK OF HOUSTON, Plaintiff, v. Dov Avni KAMINETZKY, Howard Weiss, et al., Defendants. |
| Court | U.S. District Court — Southern District of Texas |
John Wesley Wauson, Wauson & Associates, Houston, TX, for Park Nat. Bank of Houston.
Dov Avni Kaminetzky, Houston, TX, pro se.
Michael C. Whalen, Houston, TX, for Howard Weiss.
Stephen Gregory Hunt, Houston, TX, and Michael C. Whalen, Houston, TX, for Choice Acquisitions No One, Inc. and Choice Acquisitions No Five, Inc.
MEMORANDUM AND ORDER GRANTING SANCTIONS, COSTS, AND FEES
This action was removed to this Court on February 13, 1996, ostensibly by Defendant Howard Weiss ("Weiss"), with the agreement of Co-Defendant Dov Avni Kaminetzky ("Kaminetzky"). Upon Motions to Remand filed by Plaintiff Park National Bank of Houston ("Park National Bank") [Doc. # 2A] and Co-Defendants, Choice Acquisition No. One, Inc. ("CA1") and Choice Acquisition No. Five, Inc. ("CA5") [Doc. # 5], the case was remanded to the 333rd District Court of Harris County, Texas on February 15, 1996. See Doc. # 6.
Because legal grounds for removal were patently lacking1 and removal of this action appeared to violate a prior Order precluding such filings, see Kaminetzky v. Frost National Bank, 881 F.Supp. 276 (S.D.Tex. 1995) (Hittner, J.) ("Preclusion Order"), the Court on February 21, 1996, ordered the parties to show cause why sanctions, costs, expenses, and attorney's fees should not be imposed against Weiss, Kaminetzky, and/or their attorney, Michael Whalen ("Whalen").2 See Doc. # 7. The parties responded to the Order to Show Cause. See Choice Acquisition No. One, Inc. and Choice Acquisition No. Five, Inc.'s Supplement to Motion to Remand [Doc. # 12];3 Response of Park National Bank [Doc. # 13];4 Response of Defendants Kaminetzky and Weiss [Doc. # 14].
This Court had concerns about Kaminetzky, Weiss and Whalen's good faith because this lawsuit previously was removed to this Court by these parties (Civil Action No. 94-2977), and was remanded to state court by the Honorable Ewing Werlein, Jr. on September 22, 1994. Furthermore, another similar suit, which was twice removed by Kaminetzky, Weiss and Whalen to this Court from state court (Civil Action Nos. 94-2314 and 94-4403), was remanded on the same grounds as those cited by this Court.
The sanctions hearing in the case at bar was held on March 14, 1996. Kaminetzky and Whalen, plus counsel for Park National Bank, John Wesley Wauson, and counsel for CA1 and CA5, Stephen Gregory Hunt, appeared.5 For the reasons set forth below, sanctions for improper removal are amply warranted. The Court further concludes that Kaminetzky, with the assistance of Weiss and their joint counsel, Whalen, has attempted to evade Judge Hittner's Preclusion Order by removing this case from state court and by listing Weiss as the lead removing party in their removal papers and on the civil cover sheet.
The Court's findings as to the motivations for and implications of Kaminetzky's, Weiss' and Whalen's conduct in this case can be understood only by a review of their prior litigation history in this District (Part II), their conduct in this case specifically (Parts III and IV), and their stated rationales for removal of this case in February 1996 (Parts V). The Court's legal analysis and specific findings on sanctions are set forth in Parts VI and VII of this Order.
Kaminetzky, Weiss and Whalen have an extensive history of litigation in this Court. It is a classic example of abuse of the Court and of the litigation process. The suits in which they were (or are) involved are:
• Cullen Center Bank v. Investment Choices Corp., Kaminetzky and Weiss (hereinafter "Cullen Center Bank").
• Cause No. 92-055449, 129th Judicial District Court of Harris County.
• Removed to federal court on July 6, 1994 (Civil Action No. 94-2314, Southern District of Texas (Rainey, J.)).
• Second removal to federal court on September 7, 1995 (Civil Action No. 95-4403, Southern District of Texas (Hittner, J.)).
• Charles Nissan, et al. v. Kaminetzky and Weiss (hereinafter "Nissan").
• Cause No. 91-16901-A, 333rd Judicial District Court of Harris County.
• Removed to federal court on August 25, 1994 (Civil Action No. 94-2950, Southern District of Texas (Hughes, J.)).
• Park National Bank of Houston v. Kaminetzky and Weiss (hereinafter "Park National I").
• Cause No. 91-16901, 333d Judicial District Court of Harris County.
• Removed to federal court on August 26, 1994 (Civil Action No. 94-2977, Southern District of Texas (Werlein, J.)).
• Second removal to federal court on February 13, 1996 (Civil Action 96-495, Southern District of Texas (Atlas, J.)).
• Kaminetzky v. Park National Bank et al. (hereinafter "Park National II").
• Original complaint filed pro se in federal court on September 2, 1994 (Civil Action No. 94-3055, Southern District of Texas (Hittner, J.)).
• Kaminetzky et al. v. Frost National Bank of Houston, et al. (hereinafter "Frost National Bank").
• Original complaint filed pro se in federal court on December 13, 1994 (Civil Action No. 94-4207, Southern District of Texas (Hittner, J.)).
Copies of the docket sheets, each dispositive written Court Order, and the available pertinent hearing transcripts on those motions are included in an Appendix being filed with this Order. The following is a summary of these actions and their resolution in federal court.
On July 6, 1994, Kaminetzky, Weiss and their corporation, Investment Choices Corporation ("ICC"), with Whalen as their counsel, removed Cullen Center Bank v. Investment Choices Corporation, Kaminetzky and Weiss, Cause No. 92-055449, from the 129th Judicial District Court of Harris County to this Court, where it was assigned to the Honorable John D. Rainey as Civil Action No. 94-2314. Cullen Center Bank originally filed the action to recover damages from ICC and the individual guarantors, Kaminetzky and Weiss, for past due rents stemming from a lease. On June 8, 1994, approximately one month prior to removal, the Honorable Gregg Abbott, then Judge of the 129th Judicial District Court, had granted partial summary judgment against these three Defendants, addressing all issues except attorney's fees.
ICC filed bankruptcy the same day the state court's summary judgment was announced.6 According to the Court's docket sheet, this bankruptcy allegedly served as the basis for removal on July 6, 1994. Cullen Center Bank obtained an order lifting the automatic stay on August 31, 1994, and then moved to remand the case to state court. ICC, Kaminetzky and Weiss (all represented by Whalen) contended that removal was proper because it intended to file a counterclaim against Plaintiff that would raise a federal question under 18 U.S.C. §§ 1961 et seq. and 18 U.S.C. § 1005. Judge Rainey issued an Order on January 18, 1995, remanding this action to state court, holding that equity mandated remand of this dispute despite the pendency of ICC's bankruptcy. Civil Action No. 94-2314, Order [Doc. #9], at 1-2; 28 U.S.C. § 1452(b). As to Defendants' argument that ICC intended to assert a counterclaim under the Racketeering Influenced Corrupt Organizations Act ("RICO"), Judge Rainey stated:
Under Section 1331, the claim of the plaintiff must "arise under" federal law. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct. 2841, 2847, 77 L.Ed.2d 420 (1983) (emphasis added). In other words, if a question of federal law does not appear on the face of the plaintiff's complaint, federal question jurisdiction does not exist and removal is improper. Anderson v. American Airlines, Inc., 2 F.3d 590, 593 (5th Cir.1993). Such a claim of federal question jurisdiction must be resolved solely on the basis of the allegations within the complaint itself. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. at 9-10, 103 S.Ct. at 2847.... It is clear that the Supreme Court views the removal statute as providing limited access to federal court. Id., 463 U.S. at 9-10, 103 S.Ct. at 2846.
A case may not be removed on the basis of a counterclaim by the defendant, even if it raises a federal question and both parties admit it is the only question truly at issue. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. at 9-12, 103 S.Ct. at 2846-48. "Although such allegations show that ... in the course of the litigation, a question under the constitution would arise, they do not show that the suit, that is, the plaintiff's original cause of action, arises under the constitution." Id., 463 U.S. at 10, 103 S.Ct. at 2847 (citations omitted).
Order, at 2-3 (emphasis in original).
Thus, Judge Rainey informed Whalen and his clients, Kaminetzky and Weiss, of the relevant black letter law: No removal is permitted on the basis of a counterclaim or defense allegedly raising questions of federal law.
The next action involving Kaminetzky and Weiss in this Court was Charles Nissan, et al. v. Kaminetzky and Weiss, Civil Action No. 94-2950, an action removed from the 333rd Judicial District Court of Harris County, Texas (Cause No. 91-16901-A).7 This case was removed on August 25, 1994, by Kaminetzky and Weiss purportedly on the grounds it was related to a pending bankruptcy case. Defendants referred to Kaminetzky's own bankruptcy, which was filed by Whalen that same day, on August 25, 1994, as Bankruptcy Case No. 94-45761. The Bankruptcy Court's docket sheet reflects that Kaminetzky failed to file virtually any of the necessary documents: the disclosure of attorney compensation, statement of financial affairs, schedules A-J, and statement regarding secured property. The Bankruptcy Court ordered the missing materials to be filed on or before September 9, 1994.
Shortly thereafter, on September 30, 1994...
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