JERROLD N. POSLUSNY, JR., Bankruptcy Judge.
Before the Court is a motion filed by Joseph Kayati, Jr. (the "Debtor"), pursuant to sections 144 and 455 of Title 28 of the United States Code requesting that I recuse myself from the instant case (the "Recusal Motion"). Because the Debtor has not raised any factual allegations indicating any bias or perceived bias, and for the reasons stated below, the Recusal Motion will be denied.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334 and 157(a) and (b)(1). Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. Consideration of this Motion constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A) & (O).
The Debtor filed a petition for relief under Chapter 13 of Title 11 of the United States Code (the "Code") on July 30, 2015 (the "Petition Date"). This case was dismissed on July 11, 2016, but was reinstated and converted to Chapter 11 on November 29, 2016. The Case was re-converted to Chapter 13 on January 24, 2017. Several creditors have received relief from the automatic stay.
On the Petition Date, the Debtor was, and still is, the plaintiff in litigation in the Superior Court of New Jersey, Atlantic County, (the "State Court Action") against Michael DiMeo, Jr. and Michael DiMeo, Sr. (collectively, the "DiMeos"). The DiMeos have filed at least one counterclaim against the Debtor, claiming the lawsuit is frivolous and demanding attorney fees. On this basis, the DiMeos filed a priority proof of claim ("Claim No. 1") in the amount of $148,872.58 for "attorney fees for frivolous lawsuit" stemming from the State Court Action. The Debtor filed an objection to Claim No. 1. Dkt. No. 30. On October 8, 2015, this Court entered an order reclassifying Claim No. 1 as an unsecured contingent claim, but denying the Debtor's motion to disallow, "without prejudice to renew the motion after the state court litigation concludes." Dkt. No. 64. The Court found that this was a state law claim, based on litigation that was ongoing before a state court judge, and as such, the state court should determine whether the DiMeos have a valid claim for attorney fees under state law. After the state court makes that determination, the Debtor is free to return to this Court and present whatever argument he has as to why Claim No. 1 should be disallowed in the bankruptcy case. Despite this ruling, the Debtor filed a motion to reconsider ("Motion to Reconsider"), and, one week later while the State Court Action was still pending, filed a motion for an evidentiary hearing ("Motion for Evidentiary Hearing"), to "challenge the bona fines of the August 5, 2016 proof of claim of creditors Michael DiMeo, Sr. and Michael DiMeo Jr. . . ." Dkt. No. 103.
On November 15, 2016 the Court denied the Motion to Reconsider and the Motion for Evidentiary hearing. Dkt. No. 107. The Decision explained that a "claim" in bankruptcy is defined extremely broadly, and that Claim No. 1 set forth sufficient factual details to establish the amount of the indebtedness.
The Debtor appealed the Order Denying Reconsideration and Evidentiary Hearing. Dkt. No. 109. However, on May 10, 2017, the Debtor wrote a letter to the district court, withdrawing the appeal and stating that "As a result of reviewing the transcript I now understand that the [bankruptcy] court greatly assisted me in my petition by modifying [Claim No. 1] to a contingent claim permitting my bankruptcy to move forward." Dkt. No. 244-1.
At some point after the Petition Date, the Debtor filed an amended complaint in the State Court Action to add Frank and William DiMeo ("Frank and William") as Defendants. Neither had been listed as creditor in the Bankruptcy Case. Frank and William filed an answer and counterclaim. At a hearing in the State Court Action on March 7, 2017, it was revealed that the automatic stay had not been lifted as to Frank and William, and the state court, in the interest of judicial economy, halted all proceedings in the State Court Action, not just those related to Frank and William, until the automatic stay was lifted. At that state court hearing it was also indicated that the attorney for Frank and William in the State Court Action, Frank Olivio, did not have a CM/ECF password that would permit him to file electronically in the bankruptcy court. As a result, in March 2017, the DiMeos' Attorney filed a motion for relief from the automatic stay as to Frank and William, so that the state court would permit the entire State Court Action to move forward. Dkt. No. 165. The DiMeos' Attorney, Mr. Hahn, submitted a certification in support of the motion for relief, wherein he incorrectly stated that Frank Olivio was not admitted to the District of New Jersey, rather than merely being unable to file electronically. The Debtor opposed this motion, and filed a motion requesting sanctions for violation of the automatic stay. Dkt. No. 170.
A joint hearing on both the motion for relief and the motion for sanctions was held on April 18, 2017 ("April 18 Hearing"). The Debtor argued that Mr. Hahn had submitted inaccurate certifications, that Frank and William filing a counterclaim without stay relief warranted sanctions, and finally that stay relief should be denied. Dkt. No. 187. However, the Debtor stated that he was in favor of the stay being lifted so the entire State Court Action could move forward. When asked by the Court to explain why he wanted stay relief granted, but opposed the DiMeos' motion for stay relief, the Debtor stated "I am opposing the stay relief itself from the mechanics that were used to try to achieve that goal. . . ." Dkt. No. 187. The Court entered an order denying the motion for sanctions and granted the motion for relief. Dkt. Nos. 183 and 184.
On October 27, 2017, the Debtor filed this Recusal Motion. Dkt. No. 243. Although there are many allegations, they can be placed into four broad groups: (1) factual allegations involving the Honorable Ann Marie Donio; (2) factual allegations involving the Chapter 13 Trustee; (3) factual allegations related to the State Court Action; and (4) factual allegations related to myself as Judge. Dkt. No. 243. As this Motion requests that I disqualify myself, the allegations related to me are the only ones relevant to this decision; although the allegations sometimes cover more than one of these categories.
The Debtor makes several allegations expressing his displeasure with my decision to allow and reclassify Claim No. 1, despite what he claims was a lack of supporting evidence, and that this decision allowed the State Court Action to move forward. The Recusal Motion also states that I denied his motion to reconsider and his motion for an evidentiary hearing regarding the validity of Claim No. 1. The Debtor also alleges the documentation supporting Claim No. 1 indicates a number of
Beyond these allegations regarding specific rulings I made, the Debtor alleges that I have shown favoritism to the DiMeos by, for example, continuing with a confirmation hearing despite the DiMeos' attorney, Mr. Hahn, not being present and ignoring the Debtor's complaints regarding the DiMeos' conduct in the State Court Action. Further, the Debtor alleges I ignored the problems with certifications submitted by Mr. Hahn, and that I request Court Security Officers be present in the Courtroom during his hearings to intimidate him. The Debtor further complains that I improperly closed his adversary proceeding against the DiMeos. Finally, the Debtor makes a broad statement that the DiMeos' connections are preventing him from moving forward in his State Court Action and in this bankruptcy.
The Debtor also makes multiple other allegations unrelated to me. First, the Debtor alleges that Judge Donio has a familial relationship with a supplier for the DiMeos, and further that she is "Judge Poslusny's magistrate" and must recuse herself from this case. He simultaneously alleges that the Chapter 13 Trustee has supported his claim in state court and is working to prevent his case from moving forward. Finally, he makes multiple allegations regarding the conduct of the DiMeos in the State Court Action.
The DiMeos oppose the Recusal Motion pointing out that the Debtor had appealed this Court's Order Denying Reconsideration and Evidentiary Hearing, but later withdrew that appeal with a letter stating that the Debtor now believed the Court was trying to help him with its decision. Dkt. No. 244. The DiMeos argue it is inconsistent that the Debtor is now using those same decisions as evidence of bias against him. The parties consented to the Court ruling on the papers without holding a hearing, which is permissible under § 102(1) of the Code.
In considering a motion for recusal, a district court judge is governed by 28 U.S.C. § 144 and 28 U.S.C. § 455.
Initially, it is well settled that 28 U.S.C. § 144 by its terms does not apply to bankruptcy judges.
Moreover, Federal Rule of Bankruptcy Procedure ("Rule") 5004 states that "`a bankruptcy judge shall be governed by 28 U.S.C. § 455' in matters of disqualification, which by implication appears to exclude § 144."
However, as noted above, § 144 and § 455 are overlapping provisions.
Under both §§ 144 and 455, the legal standard for recusal is the same — bias.
Although the legal standard of recusal is the same under both §§ 144 and 455, the provisions differ slightly.
Section 144 of Title 28 of the U.S. Code reads:
Section 144 requires district court judges to recuse themselves if a party timely files a sufficient affidavit, setting forth factual statements showing the judge has personal bias or prejudice against a party.
However, "The mere filing of an affidavit under this section does not automatically disqualify a judge."
However, an affidavit is only legally sufficient, if the facts alleged therein: (1) are material and stated with particularity; (2) would convince a reasonable person that a bias exists; and, (3) evince bias that is personal, as opposed to judicial in nature.
Additionally, "[t]o ensure that motions for recusal are not being used purely to avoid adverse outcomes, Section 144 requires recusal motions to be timely."
In this case, as noted, because I am a bankruptcy judge, § 144 is inapplicable. Further, I find the affidavit both legally insufficient and untimely and that as such, recusal under § 144 would not be appropriate, even if § 144 were applicable. This case was filed on July 30, 2015, and the Debtor does not reference any newly discovered facts about me in his affidavit, that were not available to him when the case began almost 30 months earlier. Thus, I do not find that the affidavit would have been timely. All of the facts alleged about me that were not known to the Debtor on the Petition Date are directly related to judicial rulings I made, and these do not form a sufficient basis to require recusal. There is not a single extrajudicial fact alleged about myself, or my relations or biases. Thus, none of the allegations are material, because none evince a personal bias. As such, and for the more detailed reasons below, I find recusal would not be appropriate under § 144.
As noted, § 455, unlike § 144, is applicable to bankruptcy judges. Section 455 provides that a judge "shall disqualify himself" if one or more of several enumerated circumstances are met. 28 U.S.C. § 455.
Section 455(b) contains
By contrast, § 455(a) is an objective test, requiring recusal from any proceeding in which his impartiality might be questioned.
Section 455 as a whole is distinct from § 144 in several other key aspects. Beyond the fact that § 144 does not apply to bankruptcy judges, § 455 applies regardless of whether a formal motion is filed and requires recusal when a judge's impartiality "might reasonably be questioned," 28 U.S.C. § 455(a), or "[w]here [the judge] has a personal bias or prejudice concerning a party." 28 U.S.C. § 455(b)(1).
Despite these distinctions, because § 455 does not establish any form of procedure for consideration of recusal motions, courts have often looked to 28 U.S.C. § 144, which sets forth a procedure by which a party may seek a judge's recusal.
Similarly, although § 455 does not contain a specific requirement regarding the timing of a motion for recusal, it achieves the same purpose, ensuring that "motions for recusal are not being used purely to avoid adverse outcomes", by requiring "the source of bias to be extrajudicial, that is stemming from a source outside of the proceeding, or of such an intensity as to make a fair trial impossible."
Beginning with § 455(b), neither §§ 455(b)(2) nor (b)(5) are applicable. The Debtor makes no factual allegations related to these subsections about me, and none of these subsections apply to me. I have no relationship to the parties of which I am aware or that has been brought to my attention, and I was not involved in the matter before this Court, as a practicing attorney, nor is any attorney with whom I practiced law. As such, the only remaining portion of § 455(b) that potentially could be relevant, is subsection (1), "Where he has a personal bias . . . concerning a party." 11 U.S.C. § 455(b)(1). Under (b)(1), a party must show actual bias, whereas under (a), merely the appearance of bias is all that is necessary.
Applying this standard to the case before me, the Debtor has not alleged any extrajudicial facts regarding me that would indicate any basis for recusal. Indeed, there are no facts alleged about me apart from those directly related my judicial rulings. As the Supreme Court has stated, "In and of themselves [judicial rulings] cannot possibly show reliance upon an extrajudicial source; and can only in the rarest circumstances evidence the degree of favoritism or antagonism required . . . when no extrajudicial source is involved. Almost invariably, they are proper grounds for appeal, not for recusal."
As discussed above, the Debtor makes numerous allegations regarding decisions I made related to the allowance and reclassification of Claim No. 1. Beyond the fact that these complaints appear to be inconsistent, as the Debtor penned a letter stating he believed these decisions were helpful to his case, these do not form a basis for recusal. Even if these decisions were not helpful to the Debtor, they do not constitute a showing of bias. A similar analysis is applicable to the Debtor's argument that I granted relief from the automatic stay at the April 18 Hearing despite problems with the certifications submitted by Mr. Hahn. The Debtor's complaint is made after the Debtor acknowledged that, ultimately, he wanted that relief too, but was merely objecting to the "mechanics" used in requesting the relief. Indeed, during the hearing I stated that it sounded like the Debtor wanted the State Court Action to move forward and the Debtor replied that that was correct. Dkt. No. 187. Refusing to place form over function, I found that all parties were in favor of stay relief and agreed it was in the best interest of the estate, and I granted the relief. I find that these decisions would not lead a reasonable person, knowing all the circumstances, to harbor doubts concerning my impartiality, particularly given that the Debtor, at some point in time, found each of these decisions to be favorable to him.
Additionally, although there are no specific dates listed in the Recusal Motion, the Debtor spoke at length during April 18 Hearing about technical violations in papers submitted by DiMeos' counsel. The Debtor pointed to this Court's denial of his motion for sanctions as evidence of bias. As noted, Mr. Hahn explained at the April 18 Hearing that he mistakenly stated that Frank Olivio was not admitted to the Federal Bar, when in fact the problem was that Frank Olivio did not have a CM/ECF password and was unable to file motions and responses electronically in this District. As I found the misstatements neither intentional nor material, I granted the motion for relief and denied the Debtor's motion for sanctions.
Similarly, my decisions regarding whether to allow a creditor to object to confirmation, or allowing time for a Debtor to respond to the Chapter 13 Trustee's motion to dismiss are not only routine, and legally required, but do not and cannot form a basis for a finding of bias.
As noted above, judicial determinations alone will not establish a basis for recusal. Turning to the Debtor's allegations related to the presence of Court Security Officers, the Court routinely has a Court Security Officer in the courtroom during hearings, and whether a party finds them intimidating is irrelevant, their purpose is to provide security for Court personnel. This does not establish any bias, let alone the deep-seated antagonism necessary to require recusal.
Ultimately, as noted above, none of the factual allegations relate to any extrajudicial source of bias, indicating that there is no basis for recusal. Further, even if I consider the allegations based purely on the Court's judicial rulings, these could not give rise to a showing of bias such that a reasonable man knowing all the circumstances would harbor doubts concerning the judge's impartiality.
As to the remaining allegations, these do not relate to me and hence cannot establish my bias towards or against any party. The Court will merely point out that Judge Donio is not "Judge Poslusny's magistrate", as the Debtor alleges, but is in fact a magistrate judge for the District of New Jersey. Judge Donio was appointed and hears cases pursuant to 28 U.S.C. §§ 631,
Additionally, any allegations regarding the Chapter 13 Trustee do not form a basis for me to recuse excuse myself. Finally, any allegations regarding the conduct of the DiMeos in the State Court Action are properly addressed to and decided by the state court. This Court does not act as an appellate court to state courts.
As there are no extrajudicial factual allegations regarding my impartiality in this matter, and further given that the allegations regarding my judicial decisions fail to create any doubt as to my impartiality or indicate any bias at all, the Motion for Recusal is Denied.