Demoulas v. Demoulas Super Markets, Inc.

• Decision Date: 22 December 1998
• Citation: 428 Mass. 543,703 N.E.2d 1141
• Parties: Arthur S. DEMOULAS v. DEMOULAS SUPER MARKETS, INC., & others. 1
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 1141

703 N.E.2d 1141

428 Mass. 543

Arthur S. DEMOULAS v. DEMOULAS SUPER MARKETS, INC., & others. ¹

Supreme Judicial Court of Massachusetts Middlesex.

Argued Sept. 3, 1998.

Decided Dec. 22, 1998.

Edward J. Barshak, Boston (Christine M. Netski & Susan A. Hartnett with him), for Demoulas Super Markets, Inc., & others.

Robert C. Gerrard, Boston (Carol R. Cohen and Thomas S. Fitzpatrick, with him), for plaintiff.

Before WILKINS, C.J., and ABRAMS, LYNCH, GREANEY, FRIED, MARSHALL and IRELAND, JJ.

LYNCH, Justice.

The defendants appeal from a Superior Court judgment denying their motions for judicial recusal, to vacate all prior orders, and for relief from judgment. The defendants also appeal from the entry of a supplemental judgment after remand. We granted the defendants' application for direct appellate review. For the reasons set forth below, we affirm the denial of the recusal motion. However, we remand the supplemental judgment to the Superior Court for further proceedings in accordance with this and our earlier opinion. Demoulas v. Demoulas Super Mkts., Inc., 424 Mass. 501, 677 N.E.2d 159 (1997) (Demoulas I ).

Facts. The facts surrounding the dispute between the parties are more thoroughly set out in Demoulas I.

The present case arises from a shareholder derivative action, brought in 1990 by Arthur S. Demoulas, on behalf of Demoulas Super Markets, Inc. (DSM), and Valley Properties, Inc. (Valley), against Telemachus A. Demoulas and others, alleging that the defendants fraudulently and in breach of their fiduciary duties, conspired to divert corporate opportunities from DSM and Valley to Market Basket, Inc.; Doric Development Corporation, Inc.; Lee Drug, Inc.; and 231 Realty Associates.

The defendants' pretrial motions included a motion for judicial recusal which was denied. ² After a jury-waived trial, judgment was entered for the plaintiff, and the defendants appealed.

At about the time that the appeal in Demoulas I was entered in the Appeals Court the defendants began their fifteen-month investigation regarding allegations of ex parte contact and improper conduct involving the trial judge and the plaintiff's attorney. On March 13, 1997, we affirmed the judgment in all material respects. Demoulas I, supra at 503-504, 677 N.E.2d 159. In accordance with the judgment, a transfer of assets from Market Basket and 231 Realty Associates was scheduled to occur on June 28, 1997, and June 30, 1997. The defendants filed the recusal and other motions now before us on June 25, 1997, almost two years after the entry of judgment in favor of the plaintiff, mere days before the transfer was to take place.

The defendants alleged in their most recent recusal motion and accompanying affidavits that the judge had social contact with the lead counsel for the plaintiff in a restaurant owned by the judge's husband during the pendency of the Superior Court trial. The defendants argued that recusal was required and that they were entitled to relief from judgment based on Canon 3 of the Code of Judicial Conduct, which provides that "[a] judge should disqualify himself in a proceeding in which his impartiality might reasonably be questioned...." S.J.C. Rule 3:09, Canon 3(C)(1), as appearing in 382 Mass. 811 (1981).

The judge referred the defendants' motions to the Chief Justice of the Superior Court, who referred the pending motions back to her. ³ In his order, the Chief Justice concluded that it was within the discretion of the judge to decide whether recusal was required. He ruled that the judge was in the best position to hear and to decide the motions, and noted his confidence in her ability to be impartial.

The judge conducted a hearing on July 21, 1997. She, as well as the lead counsel for the plaintiff, denied the veracity of the allegations in the affidavits supporting the defendants' recusal motion. During the hearing, the defendants again requested that the motion be referred to another judge. On July 22, 1997, the judge issued her order stating:

"(1) [H]aving examined my conscience, I know there is no truth to the allegations and thus no reason to recuse myself or to vacate the judgments; (2) the motion is untimely; (3) having examined my conscience, I can impartially discharge the two remaining issues in these cases; (4) no objective, knowledgeable member of the public would find a reasonable basis for doubting this Judge's impartiality with regards to these two issues; and (5) the attorneys involved in this motion have not complied with their duty ... to conduct a reasonable inquiry in order to acquire knowledge, information and form a belief that the allegations made in this motion have a basis in fact."

On October 7, 1997, the judge entered a supplemental judgment in this case. The supplemental judgment did not contain any provision regarding investment credits due to the defendants, but did however, contain a provision regarding tax credits for taxes paid by the individual defendants. The defendants' motion to alter or to amend the supplemental judgment was denied on November 3, 1997.

1. The recusal motion. The defendants' main contention is that the judge erred in denying the defendants' motion for recusal under Canon 3(C), ⁴ and relief from judgment pursuant to Mass. R. Civ. P. 60(b)(6), 365 Mass. 828 (1974).

In reviewing a judge's denial of a recusal motion, the standard of review on appeal is, ordinarily, whether there was an abuse of discretion. ⁵ However, we have never before considered the procedure to be followed when a recusal motion is based on allegations of extrajudicial conduct which are disputed by the judge. ⁶ We conclude for the reasons explained below that, on the facts before us, no evidentiary hearing was required and that the denial of the defendants' motions was not error.

(a) Timeliness of the recusal motion. The judge ruled that the motion was not timely. The defendants contend the timeliness of the motion is not relevant to the determination whether the defendants are entitled to an evidentiary hearing before another judge. Our analysis takes into consideration both the timeliness of the motions and the substance of the allegations.

Substantial authority exists that recusal motions filed after trial are presumptively untimely at least absent a showing of good cause for tardiness. "Discharge of a judge from a case after hearings have begun is unusual and ought not to be done in the absence of compelling reasons." MacCormack v. Boston Edison Co., 423 Mass. 652, 665, 672 N.E.2d 1 (1996), quoting Edinburg v. Cavers, 22 Mass.App.Ct. 212, 217, 492 N.E.2d 1171 (1986). See Commonwealth v. Davis, 13 Mass.App.Ct. 179, 187-188, 431 N.E.2d 251 (1982). "[A] motion for recusal filed weeks after the conclusion of a trial is presumptively untimely absent a showing of good cause for its tardiness." United States v. Studley, 783 F.2d 934, 939 (9th Cir.1985), ⁷ citing United States v. Hurd, 549 F.2d 118, 119 (9th Cir.1977). See Waggoner v. Dallaire, 649 F.2d 1362, 1370 (9th Cir.1981) ("A disqualification motion filed after trial and judgment is generally considered untimely"); Crawford v. Crawford, 429 Pa.Super. 540, 550-551, 633 A.2d 155 (1994) (failure to request recusal before judge has ruled on substantive matter precludes right to have judge disqualified; court affirmed denial of recusal motion on grounds it was waived and stated judicial bias may not be raised for first time during posttrial proceedings).

Having in mind that this is the second recusal motion of the defendants; that the proceedings before the judge were extensive, time consuming, and complicated; and that the case had reached its final stage, we conclude that the burden is on the defendants to make a strong showing that nothing could have been done at an earlier time. "The law is well settled that one seeking the disqualification of the judge must do so at the earliest moment after knowledge of the facts demonstrating the basis for such disqualification." United States v. Kelly, 519 F.Supp. 1029, 1050 (D.Mass.1981). "[A] party, knowing of a ground for requesting disqualification, can not be permitted to wait and decide whether he likes the subsequent treatment that he receives." Matter of United Shoe Mach. Corp., 276 F.2d 77, 79 (1st Cir.1960).

The defendants' affidavits demonstrate that much of the relevant information on which they rely was available to them long before they filed their motion. The defendants state that their investigation was triggered by rumors of which they were aware as early as December, 1995, shortly after the trial concluded, of social contact between the judge and the plaintiff's lead counsel allegedly occurring between late 1993 and the middle of 1995. See United States v. Brinkworth, 68 F.3d 633, 639-640 (2d Cir.1995) (defendant's recusal motion based on appearance of partiality made days before trial was untimely where it was based on rumors defendant admitted to knowing for years, where recent statement to support motion was based on past rumor, and where litigation had been going on before judge for three years, especially where motion was filed soon after judge refused to make "preplea commitment to sentencing"). See also In re Petit, 204 B.R. 271, 274 (Bankr.D.Me.1997) (judge stated information on which motions to disqualify were premised were known to movants for nine months prior to filing their motions and clearly were not filed at earliest opportunity), ⁸ quoting Matter of United Shoe Mach. Corp., supra; Ricci v. Key Bancshares of Me., Inc., 111 F.R.D. 369, 377 (D.Me.1986). Furthermore, the judge noted in her decision:

"The employees referenced in the motion were all readily available to the investigators and defendants' counsel during this entire nineteen month period. At no time prior to this motion was any allegation made by defendants' counsel or any third party impugning my conduct and defendants did not raise this issue when they argued for my recusal in their...