Hawaii-Pacific Venture Capital Corp. v. Rothbard, Civ. No. 70-3104 and 73-3997.

Citation437 F. Supp. 230
Decision Date18 February 1977
Docket NumberCiv. No. 70-3104 and 73-3997.
PartiesHAWAII-PACIFIC VENTURE CAPITAL CORP. et al., Plaintiffs, v. H. B. ROTHBARD et al., Defendants, and American Security Bank et al., Garnishees. David M. SAPP et al., Plaintiffs, v. Willard M. P. WONG et al., Defendants.
CourtUnited States District Courts. 9th Circuit. United States District Court (Hawaii)

William W. Saunders, Jack C. Morse, Honolulu, Hawaii, for class action plaintiffs.

Thomas L. Mui, Honolulu, Hawaii, for plaintiff Rothbard and third-party defendant.

Lawrence I. Weisman, Honolulu, Hawaii, for defendant Wong and defendants and third-party plaintiff.

Jay M. Fidel, Wesley H. Sakai, Jr., Honolulu, Hawaii, for applicants for intervention.

DECISION ON MOTIONS TO DISQUALIFY AND FOR A NEW TRIAL

PENCE, District Judge.

I have before me Willard M. P. Wong's "Motion to Disqualify and For A New Trial" in Civil No. 70-3104, and "Motion to Disqualify" in Civil No. 73-3997, of January 12, 1977.

As pointed out by plaintiffs' counsel, these motions were filed at 4:30 p. m. — as the Clerk's office was closing — on the afternoon before this court was to have a final hearing concerning matters raised in Wong's various motions which had been set for 9:30 a. m. on the following day. Inasmuch as the document in 70-3104 contained a total of 142 pages, including exhibits, this court perforce continued all matters until a resolution of Wong's motions.

The complaint in Civil 70-3104 was filed January 6, 1970. Thereby Wong and others were charged with certain fraudulent actions in connection with the sale and transfer of securities in 1968 and 1969. Wong and others were alleged to have made an inside deal which upon trial resulted in a judgment against Wong of over $400,000. All the proceedings in the case were before me. The trial itself consumed nine days during February and March of 1973.

At the conclusion of all of the evidence and oral argument by counsel, in open court I made a very full and complete oral analysis of the evidence and made oral findings of fact and conclusions of law. That oral decision contained a detailed analysis of the evidence and the testimony of the witnesses. Wong had taken the stand several times and I made the following findings — explaining each time the basis for my conclusions:

That was his testimony. Now that is unbelievable. Just flatly, its unbelievable. (Tr. 1010, Vol. 4)
Here he was, the director of Liberty Bank, a big financier interested in many things, traveled widely, big operations going elsewhere, needed the best credit, and he wanted to disavow anything which he felt to his interest to disavow — and that's the way the Court analyzes his statement here. He was disavowing it because at that moment he thought it was to his best interest to disavow. (Tr. 1011, Vol. 4)
I simply couldn't believe that his testimony was true and subsequently he confirmed a lot of the belief because of the statements he made . . . and later on when he was called by Mr. Padgett, completely in contradiction to the opening statements. (Tr. 1012, Vol. 4)
Well, it is my conclusion and I find that Mr. Wong told the truth when he thought it would be to his advantage and seldom at any other time. His contradictions — I won't go into them all — his contradictions run throughout his entire testimony. (Ibid.)
I noted when Wong testified, that time after time whenever there was a sensitive area and there was a real difficulty on his part to answer the questions, he was very evasive. I could not help but consider his ethics in his operations with the bank in determining how much weight I could give to his testimony and how much I could believe him. Everyone here recognized that he completely paid no attention to his obligations as an officer of the bank. He was only concerned with: What can I get out of it? (Tr. 1016, Vol. 4)
If he hadn't lied so often and been such a shark in here. . . . As indicated, he worships the god of gold more than he worships any other factor of honor, integrity and so forth. He fought this all the way through. As I said, he didn't even tell his counsel all the truth in the matter. (Tr. 1025, Vol. 4)
I find that Wong's defense here was fabricated to the point that it is — I wouldn't say frivolous, but it's almost to the point that so far as attorney's fees, it was frivolous. The Court had no confidence in any of his representations, when this case was all over, except those that were confirmed by other evidence. (Tr. 1027, Vol. 4)

The above excerpts from my oral decision were condensed in the court's written Findings of Fact, Conclusions of Law and Judgment:

54. The testimony given by Willard M. P. Wong in this trial was to a great extent fabricated and intentionally false. The Court finds that the lengthy trial in Civil No. 70-3104 was necessitated primarily because of Wong's fabrications. . . . (Record, Vol. I, at 290)

As stated above, the evidentiary basis for each and every oral finding of fabrication on the part of Wong was set forth in detail in the oral decision.

Thereafter, a very substantial judgment was rendered against Wong because of "Wong's illicit profit."1 Wong appealed to the Ninth Circuit. There resulted a remand to this court on January 6, 1975, for further consideration of the damages. The appellate court ordered a determination of the market value of a certain stock in 1968. Thereafter, a judgment on remand was entered on March 28, 1975. Also, Civil No. 73-3997 involving allegation of fraudulent conveyance by Wong to others has been on my calendar and subject to several hearings.

In March of 1976 I was holding a hearing in Orchid Island Hotel, Inc., BK 76-0061. As appears from Exhibit A attached to counsel's Affidavit and Certificate of Good Faith in Civil No. 73-3997, Au, an attorney for one of the parties, advised the court that he wished to call "the Trustee, Mr. Willard Wong" to testify concerning the hotel's prior operations. Some time before, Wong had been appointed Receiver under a mortgage foreclosure action by state court Judge Arthur Fong who was Wong's prior attorney. As indicated in the exhibit, the court was prepared to proceed but Au reported that Mr. Weisman, Wong's attorney, had said that Wong was "unable to be present."

Mr. Weisman: Mr. Wong returned from Canada yesterday . . . ill with the flu and could not be here this morning.

Thereafter appears:

The Court: All right. How soon will you be able to get a doctor's certificate as to his illness?
You know why I say that, because I'm on record as to what I think of his veracity.
Mr. Weisman: I understand that.

The "record" to which I referred and which was understood by Mr. Weisman to be, is the record in Civil 70-3104, which I have set forth in detail above.

Other than the above two judicial statements concerning Wong and his credibility, nowhere has Wong produced even one scrap of paper or one bit of even hearsay evidence that I have ever expressed any extrajudicial statement or comment concerning Wong's veracity.

It was with the above judicial background that Wong filed his motion to disqualify and his attorney filed the required affidavit of good faith.

The law is only too well settled that §§ 144 and 455, Title 28, U.S.C., have always been and are construed to be in pari materia. Davis v. Board of School Com'rs of Mobile County, 517 F.2d 1044, 1052 (5th Cir. 1975). With but few exceptions not here relevant, it is still the law under the new § 455 that any bias or prejudice arising in a judicial context cannot be a basis for disqualification. Davis, supra, and cases cited therein.

A judge may not be disqualified for any bias developed during the very trial in which disqualification is sought. To hold otherwise would obviously disqualify the judge in almost every case where he is forced to make a decision. Tynan v. U. S., 126 U.S.App.D.C. 206, 376 F.2d 761, 764 (1976), cert. denied, 389 U.S. 845, 88 S.Ct. 95, 19 L.Ed.2d 111. Cf. Mitchell v. Sirica, 163 U.S.App.D.C. 373, 502 F.2d 375 (1974).

While in Civil 73-3997 Wong asks only that I recuse myself from the proceedings in that action, in Civil 70-3104 he asks not only that I recuse myself but also that the judgment and findings previously made in that case be set aside and Wong be granted a new trial on all issues. If I am to recuse myself therefore, the basis for my alleged bias and prejudice must appear from extrajudicial conduct on my part. The facts contained in Wong's affidavit and exhibits must show that my findings of fact and conclusions of law concerning Wong's credibility in Civil 70-3104, set forth above, reasonably were founded upon a preceding bias and prejudice against Wong himself.

The theme running throughout Wong's labored and prolix affidavit is that "the Court in this case and in totally unrelated cases displayed uncommon antagonism toward him. I could not understand the basis for the Court's antagonism until I recently learned the facts set forth below from . . . files which were previously unavailable to me." (¶ 4) "My awareness of the source of Judge Pence's animosity toward me did not arise until July 15, 1976", etc. (¶ 5) Even the most minute search through the 26 exhibits, two affidavits, and Wong's own 22 page affidavit reveals but one declared expression or manifestation of possible antagonism or bias or prejudice on my part toward Wong between 1967 and 1973. That one is contained in ¶ 6 when Wong states that in late 1967 or early 1968 I requested that he agree to a sale of a parcel of property known as the Kona Riviera (K-R) in which Wong and I — among others — were members of a partnership formed in 1959 to purchase the parcel for resale, for $3.25 a square foot and Wong recites, "I responded to the Judge's request by telling him that I considered the offer totally inadequate and that I refused to go along. The Judge responded in a heated fashion that `we have the votes and we will sell it without your concurrence,' or words to that effect." (¶ 6.) Apart from that...

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