Appeal from an order of the Southern District of New York, Duffy, J., remanding appellant's removal petition to the New York City Civil Court, ordering appellant to forfeit his undertaking on removal, and directing appellant's attorney to pay appellee's attorney's fees as a sanction under Rule 11 of the Federal Rules of Civil Procedure. Affirmed.
Lumbard, Oakes, and Kearse, Circuit Judges.
Theoclis Simithis appeals from a December 18, 1987 order of Judge Duffy of the Southern District which remanded his case to the New York City Civil Court and ordered him to forfeit his $500 undertaking on removal, and, pursuant to Rule I I of the Fed. R. Civ. Proc., directed Simithis's attorney to pay $2,500 in legal fees and assessed an additional $2,500 fine against the attorney to be paid to the court. Finding that there is no colorable legal argument supporting either Simithis's removal of the action from the state court to the district court or supporting his appeal to this court, we affirm the order of the district court and impose additional Rule 11 sanctions for bringing this appeal.
In 1985, Four Keys Leasing & Maintenance Corp., a New York partnership, commenced a holdover dispossess proceeding against Simithis and his undertenants in New York County Civil Court. The purpose of the action was to evict Simithis and his undertenants from the ground floor of 691 Eighth Avenue, a building owned by Four Keys, on the basis that the 1983 lease to Simithis by Four Keys's predecessor in interest in 691 Eighth Avenue had been voided by the sale of the building to Four Keys. Simithis and his undertenants run a business called Paradise Alley at 691 Eighth Avenue. Paradise Alley is an "adult entertainment center," featuring peep shows and adult video booths.
In 1986, following a trial, the Civil Court awarded Four Keys a final judgment of possession. In March 1987, the judgment was affirmed by the Appellate Term. The Appellate Division denied Simithis's motion for leave to appeal on June 4, 1987.
On November 6, 1987, Simithis filed a removal petition in the Southern District. The petition alleged three bases for federal jurisdiction: diversity, a federal question, and a claim under 28 U.S.C. § 1443. The removal petition's primary allegations were fraud in the 1985 sale of the land and building; fraud in the original Civil Court proceedings because of improper captioning of the case; collusion between the New York City Office of Midtown Enforcement (OME) and Four Keys's primary owner, Richard Basciano, to further Basciano's "monopoly" of the adult entertainment industry; and equal rights violations due to the disparate impact on minority youths of OME's enforcement actions against the Simithis adult entertainment center. The petition sought to have the district court declare his rights, dismiss the action and vacate the final judgment of the Civil Court, and accord Simithis such relief as would appear necessary to "assure him the due and equal process of the law." The petition was signed by one of Simithis's two attorneys, Jeff L. Greenup. Simithis's other attorney, both in the district court and in this court, is Fred L. Wallace.
On December 3, 1987, twenty-six days after filing the removal petition and one day before the eviction pursuant to the Civil Court judgment was to occur, Simithis notified Four Keys of the November 6 removal. As a consequence of the stay of state court proceedings imposed by the removal petition, the eviction was canceled. On December 8, Four Keys filed an order to show cause asking why the case should not be remanded to the Civil Court and why the removal petition was not a "baseless fraud." The order to show cause was supported by an affidavit by Four Keys's attorney, Ralph J. Schwarz, Jr.
Both parties appeared before the district court on December 14, 1987. Judge Duffy first confirmed with Simithis's attorney Greenup that the removal petition did not mention that there was, at that time, a pending case in the Southern District before Judge Daronco (Simithis v. Barsch, 87 Civ. 6480). Next Judge Duffy sought to determine whether Simithis had filed his removal petition within 30 days of receiving "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b). Simithis's attorney Greenup never satisfactorily answered this question and instead argued that Simithis was being deprived of his property unjustly as a result of an allegedly wrongful racial motive held by New York City to act against his predominantly black and hispanic clientele. Judge Duffy then sought to determine whether the civil rights claim had ever been raised in the state court proceedings; Simithis's attorney Greenup replied that it had never been raised in the state court landlord-tenant case which was the subject of the removal petition. Judge Duffy also confirmed with both of Simithis's attorneys that the state court was never notified of the removal petition, that no civil rights claim was ever raised in the state court proceedings, and that Simithis had unsuccessfully appealed the final judgment of the Civil Court to the Appellate Division.
Judge Duffy concluded that the judgment of the Civil Court and its affirmance by the Appellate Term constituted a final judgment in the state court which rendered the case not removable. The court dismissed the removal petition and remanded the case to the New York County Civil Court. The court also ordered that the $500 bond that Simithis had posted when he filed his petition was forfeited and imposed sanctions under Rule 11 on Greenup (Simithis's attorney who signed the petition) for filing "what is clearly a frivolous action." Greenup was ordered to pay $2,500 to Four Keys's counsel for attorney's fees and a $2,500 fine to the court.
We agree with the district court that the state court proceedings constituted a final judgment and that Simithis never raised his due process and equal protection claims in the state courts. As a consequence, we agree that it should have been patently obvious to any attorney who had familiarized himself with the law governing removal of actions to the federal courts that this was a frivolous action.
Simithis's removal petition alleged grounds for removal based on diversity. Simithis is a citizen of New York and he filed the removal petition in the Southern District. Title 28 U.S.C. § 1441 provides for removal in civil actions involving original jurisdiction founded on a diversity action "if none of the parties in interest properly joined and served as defendants is a citizen of the state in which such action is brought." As the district court found, under 28 U.S.C. § 1441(b), ...