El Fenix de Puerto Rico v. M/Y JOHANNY

• Decision Date: 03 March 1994
• Docket Number: No. 93-1493,93-1493
• Citation: 36 F.3d 136
• Parties: EL FENIX de PUERTO RICO, Plaintiff, Appellant, v. THE M/Y JOHANNY, etc., et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 136

36 F.3d 136

EL FENIX de PUERTO RICO, Plaintiff, Appellant, v. THE M/Y JOHANNY, etc., et al., Defendants, Appellees.

No. 93-1493.

United States Court of Appeals First Circuit.

Heard March 3, 1994.

Decided Sept. 26, 1994.

Fernando D. Castro, with whom Calvesbert & Brown, San Juan, PR, was on brief, for appellant.

Jorge Calero Blanco, with whom Ada Pilar Martin and Ledesma, Palou & Miranda, Hato Rey, PR, were on brief, for appellees.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and CYR, Circuit Judge.

CYR, Circuit Judge.

In this case we must decide whether a recusal order under 28 U.S.C. Sec. 455(a) may be set aside on reconsideration by the judge who entered it. As we conclude that it was improper for the recused judge to revisit the recusal order in these circumstances, we leave appellant's substantive challenges to the district court judgment for consideration on remand.

I BACKGROUND ¹

A. The Underlying Action

Appellee Aurelio Varona Perez ("Varona") purchased the M/Y JOHANNY, a 43-foot Wellcraft "San Remo" twin-diesel motor yacht, in October 1987. Appellant El Fenix de Puerto Rico ("El Fenix") later issued an "all-risk" marine insurance policy on the JOHANNY in the total amount of $340,000. No claims were made on the policy until after the JOHANNY's final voyage two years later.

In the wake of Hurricane Hugo, which struck Puerto Rico in September 1989, Varona noticed a slight "vibration" in the JOHANNY. On November 14, 1989, Varona and his brother, a professional marine mechanic, set off from the Cangrejos Yacht Club in San Juan for the port of Fajardo, Puerto Rico, to have the boat drydocked for repair. Prior to departing San Juan Harbor, Varona's brother inspected the JOHANNY's underwater running gear, and, finding nothing amiss, concluded that it was safe to proceed.

Approximately one hour into the voyage, however, Varona noticed that the JOHANNY was riding abnormally low in the water. Upon investigation, Varona's brother discovered two to three feet of water in the engine compartment. Varona issued Mayday calls, but was unable to contact either the United States Coast Guard or his yacht club in San Juan. The source of the leak was not located and, within thirty minutes after discovery of the flooding, the two engines stopped simultaneously, apparently as a result of the rising water.

With the JOHANNY rapidly taking on water, Varona and his brother disembarked into a small dinghy, intending to return to San Juan, summon assistance and attempt to salvage the JOHANNY. The outboard motor on the dinghy malfunctioned, however, and since it would operate only intermittently it took almost three hours to reach the nearest point of land, where Varona reported the incident to the Puerto Rico Maritime Police. The following day he informed his insurance broker. Neither Varona nor his brother saw the JOHANNY sink, and marine salvage surveyors have never been able to locate her.

In due course, El Fenix initiated this admiralty action, alleging that Varona had scuttled the vessel, and demanding damages and a judicial declaration disallowing coverage under the marine insurance policy. Varona counterclaimed for a declaration of coverage. During the four-day bench trial, Varona and his brother testified to the events of November 14, 1989, as related above, and proffered opinions to the effect that the incursion of sea water into the engine compartment could have resulted from the failure of a stuffing-box, a perforation in the hull, or any number of other possible breaches. El Fenix countered with the deposition of Dr. Carlos V. Wheeler, a marine engineer, for the purpose of undermining the technical plausibility of the Varonas' accounts of the flooding of the vessel. El Fenix also presented the expert testimony of Arturo A. Vaello, Jr., a marine surveyor, who opined that the JOHANNY had been scuttled. Vaello's opinion was based largely on perceived irregularities in the manner in which Varona had pursued the insurance claim.

At the conclusion of the trial, the presiding judge explicitly credited the Varonas' testimony and rejected the expert testimony presented by El Fenix. The court held that the loss of the JOHANNY had been accidental, and found El Fenix liable under its marine insurance policy.

B. The Recusal Order

On February 9, 1993, the first day of trial, El Fenix witness Arturo Vaello spotted one Bob Fisher in the gallery of the courtroom. Vaello knew Fisher to be a local yachtsman well versed in maritime matters. In casual conversation following Vaello's testimony on the second day of trial, Fisher told Vaello that the presiding judge had "asked him to sit through the trial and listen to the evidence On March 1, 1993, nearly three weeks after the Vaello-Fisher conversation allegedly occurred, and after judgment had entered in favor of Varona on February 19, El Fenix moved, inter alia, for a new trial or to alter and amend the judgment. See Fed.R.Civ.P. 59(a), (e). Although El Fenix conceded that it had "no specific knowledge" that the presiding judge was not impartial, it hypothesized that the judge might have consulted with Fisher in arriving at a judgment in the case. It contended that the Vaello affidavit gave rise "to the possibility of an 'appearance' of partiality" that might require disqualification under 28 U.S.C. Sec. 455(a) ("Any justice, judge or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned."). The motion was accompanied by a request that El Fenix be allowed to depose Fisher.

                presented by the parties."   Vaello reported this conversation to El Fenix's counsel the same day
                

On March 11, 1993, notwithstanding a finding that the judgment had been based exclusively on the evidence, the presiding judge disqualified himself from further participation in the case and vacated the judgment previously entered, based simply on the fact that his impartiality had been challenged. The recusal order stated in pertinent part:

[T]he Court invited both Mr. and Mrs. Bob Fisher, long time personal friends, to attend a public trial. [The invitation] was prompted by the fact that the Fishers are both boat aficionados and Mr. Fisher, who is currently retired, would enjoy the trial. To conclude from the presence of Mr. and Mrs. Fisher that the Court somehow surreptitiously connived to seek the opinion of a non-witness to make its decision is a strained conclusion to say the least. Plaintiff's argument on this issue has the tenor of a dubious strategy influenced by an unfavorable result.

The Court's decision in this action, stated for the record at the conclusion of the evidence, was based exclusively on the evidence presented by both parties and in great part based on specific credibility determinations.

Nevertheless, given the fact that the impartiality of this judge has been put at issue by plaintiff, I hereby DISQUALIFY myself from further participating in this case. It is further ORDERED that the Judgment issued [previously in this matter] is hereby VACATED AND SET ASIDE.

(Emphasis added).

Varona promptly moved for reconsideration of the recusal order on grounds that (1) the El Fenix motion had been untimely, in that possible grounds for disqualification must be presented at the earliest possible juncture; and (2) the presiding judge had erred in recusing himself under 28 U.S.C. Sec. 455(a) because the request to depose Fisher, paired with El Fenix's highly tenuous and speculative allegations, did not place the court's impartiality in objectively reasonable question. On April 20, 1993, the recused judge entered a one-page reconsideration order--vacating the recusal order and reinstating the judgment--"based on the arguments presented" in the motion for reconsideration.

II DISCUSSION

El Fenix first attacks the reconsideration order as an abuse of discretion. ² Cf.

Norfolk v. United States Army Corps of Eng'rs, 968 F.2d 1438, 1460 (1st Cir.1992) (denial of Sec. 455(a) motion reviewed for "abuse of discretion").

As a threshold matter, we note that El Fenix has never asserted, either before the district court or on appeal, that a sufficient factual basis existed for finding that the impartiality of the presiding judge was placed in objectively reasonable question simply by extending Fisher an invitation to witness the trial, nor by Fisher's attendance as a spectator. ³ Furthermore, El Fenix challenges none of the findings underlying the recusal order, most notably that the "Court's decision ... was based exclusively on the evidence presented by both parties...." Consequently, nothing in the district court record provided sufficient grounds for recusal. See, e.g., In re United States, 666 F.2d 690, 695 (1st Cir.1981) ("[A] charge of partiality [under 28 U.S.C. Sec. 455(a) ] must be supported by a factual basis [and] a judge considering whether to disqualify himself must ignore rumors, innuendos, and erroneous information....") (emphasis added).

We think it clear, therefore, that the motion for disqualification under 28 U.S.C. Sec. 455(a) should have been denied. First, the district court did not adhere to the impartiality test required under section 455(a). See Home Placement Serv., Inc. v. Providence Journal Co., 739 F.2d 671, 675 (1st Cir.1984) (describing Sec. 455(a) test as whether a reasonable person, "were he to know all the circumstances, would harbor doubts about the judge's impartiality") (emphasis added), cert. denied, 469 U.S. 1191, 105 S.Ct. 964, 83 L.Ed.2d 969 (1985); see also Ricci v. Key Bancshares of Maine, Inc., 111 F.R.D. 369, 373-75 (D.Me.1986) (Aldrich, J.) (discussing appropriate level of knowledge to impute to "reasonable person"). Second, the utter absence of a sufficient factual basis for recusal under subsection 455(a) completely undermined the recusal order. Further, as the district court was in a position to debunk the innuendo underlying El Fenix's motion,...