Last night it was only me home with Owen and the cats. Two of the cats and Owen were in my small bedroom and a clothes basket fell. They all got scared and ran for the door. It was almost like a comedy as they realized they were all there together and still being scared started growling hissing etc. Owen had enough and went after one of the cats. I dragged him off. He would not even acknowledge me he was a different dog. I can say to him normally Owen bed and he goes to his bed and lays down... okay sometimes he will pout and sigh. It was like I was not even there.
I put him in his kennel in the porch the door was open to the kennel and to the porch. The cats wanted to keep an eye on him and I feel antagonize him by creeping up and looking at him. He stayed in there for a long while and came out to sit by me and was fine.
One cat he gets along with fine and grooms and sleeps with. The other cat involved well she just plain don't like Owen and they keep their distance. Owen likes his crate and will at times go in it on his own. Owen has been with these cats since he was a puppy and we got him back to Calgary. I put him in it as you guys say that is their safe zone and I thought he would calm down better there then out on his bed.
1. Was I right to put him in his kennel and leave the door open on it and the door open to the porch. He was able to decide when he was ready and did come out calm and relaxed.
2. How in the heck do you discipline cats to tell them bugger off let the dog calm down?

You did the right thing with Owen. As for the cats, if you ever find out the answer to your question, please let me know. Physically separating them from Owen (like, put them in a closed-off room for a half hour or so) would be the only way I can think of--or, if the cats are going crazy, throw a blanket over them to break through their hysteria.

It sounds as if everyone just got caught up in a chaotic moment and reacted to it. This has happened in the past with my dogs a couple of times. We just had to step in and separate them and allow them to calm themselves and they were fine.
The way you handled Owen seems very reasonable to me.
As for the cats, like WG said when you figure that out let us all know.

You did everything right. You didn't punish Owen by putting him in his crate, you put him in his safe place, and left the door open. Good job!

As for the cats. Well, I love both cats and dogs, even though I'm more of a dog and bunny person, I do adore cats. I had cats all my life. Cats have only been absent since I met my husband. He's very allergic.

Cats do what they want when they want. There's really no rhyme or reason. So, I'll echo what the others have said. If you figure out why they act the way they do, let us know, you'll be breaking a huge mystery, because even cat experts have no idea why cats act like cats. :)