Conway v. Vergos

297 B.R. 116, 2003 U.S. Dist. LEXIS 14574
CourtUnited States Bankruptcy Court, W.D. Tennessee
DecidedAugust 18, 2003
DocketNo. 02-2602 D
StatusPublished
Cited by1 cases

This text of 297 B.R. 116 (Conway v. Vergos) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Conway v. Vergos, 297 B.R. 116, 2003 U.S. Dist. LEXIS 14574 (Tenn. 2003).

Opinion

ORDER AFFIRMING BANKRUPTCY COURT’S ORDER DENYING LARRY PAUL CONWAY’S MOTION FOR RECUSAL

DONALD, District Judge.

Before the Court is Larry Paul Conway (“Appellant”)’s appeal of the Order Denying Motion for Recusal issued by the United States Bankruptcy Court for the Western District of Tennessee. Appellant asserts that the bankruptcy court judge should have disqualified herself based on past acts which indicate her partiality to the creditors. Specifically, Appellant maintains that substantial evidence of partiality exists based on the judge’s 1) extreme acts of bias; 2) prejudice based upon race; 3) improper favoritism and specific referral to certain European-Ameriean members of the bar who the judge asserted were competent to handle Chapter 11 proceedings; 4) denial or right to counsel; 5) evidence of failure to prevent fraud upon the bankruptcy estate; 6) utilization of official authority which exceeded the court’s jurisdiction; 7) disregard of competent evidence in the valuation of real property; 8) evidence of favoritism; 9) disparaging remarks and conduct regarding the debtor and his counsel; and 10) failure to uphold congressionally mandated federal court orders. This Court has jurisdiction pursuant to 28 U.S.C. § 158(a). For the following reasons, the Court AFFIRMS the Order Denying Motion for Recusal.

I. FACTUAL AND PROCEDURAL BACKGROUND1

Appellant, an African-American, filed an appeal from the United States Bankruptcy Court for the Western District of Tennessee’s order denying recusal in bankruptcy case number 02-23559. Appellant filed the motion for recusal after the bankruptcy judge issued several unfavorable rulings in two prior bankruptcy cases as well as in case number 02-23559. Thus, the bankruptcy judge presided over three Chapter [120]*12011 cases in which Appellant was either the debtor or an interested party.

The first of these cases was filed on June 21, 2000, by JACMAR, a corporate entity of which Appellant held 50-60% of the shares. JACMAR retained Richard Crawford to represent it in the bankruptcy proceedings. It was later determined that Mr. Crawford had been disbarred prior to 2000.

The court granted Appellant additional time in which to retain counsel competent to handle Chapter 11 bankruptcy proceedings. Thereafter, JACMAR retained Damita Dandridge, an African-American attorney. The court denied JACMAR’s application to employ Ms. Dandridge, however, until she employed co-counsel with Chapter 11 experience. On February 6, 2001, the bankruptcy court granted the United States Trustee’s Motion to Dismiss for failure to employ counsel.

On November 7, 2001, Appellant individually filed a Chapter 11 petition. Appellant retained Gerald Green as counsel. A hearing was held on January 29, 2002, on the Trustee’s Motion to Dismiss for failure to file the monthly report. During the hearing, Appellant asserts that the judge made disparaging remarks about Mr. Green and Appellant. The bankruptcy court dismissed the case on January 30, 2002. On February 11, 2002, Appellant filed a Notice of Appeal of the Order Granting the Motion to Dismiss Case by U.S. Trustee.

On February 26, 2002, Appellant filed another Chapter 11 petition, case number 02-23559. After the bankruptcy judge allowed the automatic stay to be lifted by some creditors, Appellant filed a motion seeking the recusal of the judge. Appellant alleged that the bankruptcy judge was partial and prejudice. The bankruptcy court denied Appellant’s motion for recu-sal. On July 15, 2002, Appellant filed an appeal of the bankruptcy court’s order.

II. STANDARD OF REVIEW

“On an appeal[,] the district court ... may affirm, modify, or reverse a bankruptcy judge’s judgment, order, or decree or remand with instructions for further proceedings.” Hardin v. Caldwell, 851 F.2d 852, 857 (6th Cir.1988) (internal citations omitted). When assessing what should be done to the judgment, decree or order, the district court reviews factual findings of the bankruptcy court for clear error, and legal conclusions de novo. 255 Park Plaza Assoc. Ltd. P’ship v. Conn. Gen. Life Ins. Co., 100 F.3d 1214, 1216 (6th Cir.1996). De novo review requires a court to review the legal conclusions without regard to the bankruptcy court’s determinations. First Union Mortgage Corp. v. Eubanks, 219 B.R. 468, 469 (6th Cir. BAP 1998). However, factual “findings of a bankruptcy court should not be disturbed by the district court judge unless there is ‘most cogent evidence of mistake or miscarriage of justice.’ ” Hardin, 851 F.2d at 857 (internal citations omitted). Furthermore, “the district court ‘may not make its own independent factual findings. If the bankruptcy court’s factual findings are silent or ambiguous as to an outcome determinative factual question, the district court ... must remand the case ... for necessary factual determinations.’ ” Id. (internal citations omitted).

III. ANALYSIS

Appellant asserts that the bankruptcy judge should have recused herself from case number 02-23559 because she was partial and prejudiced. In support of his assertion, Appellant relies on the orders and rulings issued by the bankruptcy court judge in three Chapter 11 proceedings to which Appellant was a party. Appellant [121]*121maintains that the bankruptcy court judge was racially prejudiced based on certain comments which she made. These comments include an observation by the judge that she did not know of any African-American attorneys who were qualified to practice Chapter 11. Appellant also asserts that the judge’s observation that Appellant and Mr. Green were not sophisticated enough to handle a Chapter 11 proceeding evidences her racial prejudice.

Section 455(a), Title 28 of the United States Code provides that “[a]ny justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” 28 U.S.C. § 455(a). Section 455(b)(1) further provides that a judge shall disqualify himself “where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding .... ” Section 455(a) requires the court to determine whether another person with knowledge of all the circumstances might reasonably question the judge’s impartiality. McBeth v. Nissan Motor Corp. U.S.A., 921 F.Supp. 1473, 1477 (D.S.C.1996) (citations omitted). The standard, therefore, “is an objective standard and is not to be construed to require recusal on spurious or loosely based charges of partiality.” Id. “The disqualifying bias must stem from an extrajudicial source and result in an opinion on the merits in the instant action based on something other than what was learned during participation in the case!” Id.

Judicial rulings alone almost never constitute a valid basis for a bias or partiality motion. Liteky v. United States, 510 U.S. 540, 553, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994). Instead, judicial rulings should be grounds for appeal, not for recusal. Id. Furthermore,

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Related

Conway v. Vergos
297 B.R. 116 (W.D. Tennessee, 2003)

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Bluebook (online)
297 B.R. 116, 2003 U.S. Dist. LEXIS 14574, Counsel Stack Legal Research, https://law.counselstack.com/opinion/conway-v-vergos-tnwb-2003.