In re Hutter, Bankruptcy No. 94-52227.

• Decision Date: 03 June 1998
• Docket Number: Bankruptcy No. 94-52227.
• Citation: 221 BR 632
• Court: U.S. Bankruptcy Court — District of Connecticut
• Parties: In re Nance HUTTER, Debtor.

221 B.R. 632 (1998)

In re Nance HUTTER, Debtor.

Bankruptcy No. 94-52227.

United States Bankruptcy Court, D. Connecticut.

June 3, 1998.

Timothy D. Miltenberger, Coan, Lewendon, Royston, Deming & Gulliver, New Haven, CT, for Trustee.

Nance Hutter, Greenwich, CT, Pro se.

Gerhard P. Hutter, Greenwich, CT, Pro se.

MEMORANDUM AND ORDER ON TRUSTEE'S MOTION TO RESCHEDULE AUCTION SALE AND DEBTOR'S MOTION TO DISQUALIFY UNDER 28 U.S.C. § 455

ALAN H.W. SHIFF, Chief Judge.

The chapter 7 trustee filed this motion to reschedule the auction sale of a residence jointly occupied by the chapter 7 debtor and Gerhard P. Hutter, her husband. On the date of the hearing, the debtor filed a Motion to Disqualify Judge Pursuant to 28 U.S.C. § 455. The debtor's motion to recuse is denied, and the trustee's motion to reschedule the auction sale is granted.

BACKGROUND

The factual predicate for these motions is stated in Richard Coan v. Gerhard P. Hutter (In re Hutter), 207 B.R. 981 (Bankr.D.Conn. 1997), appeal pending, (the "1997 Sale Order"). This is the second phase of the Hutters' concerted and coordinated effort to block the sale of their residence, located at 993 Lake Avenue, Greenwich, Connecticut (the "Property"). On June 30, 1986 and May 8, 1989, the Hutters granted mortgages to Putnam Trust Company of Greenwich ("Putnam") and Household Realty Corporation ("Household") respectively. The first phase began on June 1, 1992 when Putnam commenced a foreclosure action in the Connecticut Superior Court and ended on November 3, 1994 after their fifth motion to reopen the sale date set by that court was denied, the Connecticut Appellate Court dismissed their appeal and amended appeal, and the Connecticut Supreme Court denied their petition for certification.

The second phase began on December 12, 1994 when the debtor filed a bankruptcy petition in this court. On that date, the Hutters owed Putnam $624,321.79 and Household $656,881.49. Further, they had not paid real estate taxes to Greenwich, Connecticut since 1990.

The 1997 Sale Order, inter alia, granted the trustee's motion for judgment under Rule 7037 F.R. Bankr.P., as a sanction against Gerhard Hutter and authorized the sale of the Property, including his co-ownership interest under 11 U.S.C. § 363(h). The trustee's motion followed numerous continuances which were granted over the trustee's objection. On May 9, 1997, the Hutters filed a motion for reconsideration which was denied on June 6. On July 25, 1997, the district court granted a stay of the auction sale pending appeal. On January 14, 1998, the district court vacated that stay. A copy of the January 14 order is attached for ease of reference as Appendix A On March 11, 1998, the Hutters filed a Notice of Motion for Reimplementation of Stay of Bankruptcy Sale Pending Disposition of Appeal in the Second Circuit Court of Appeals. On March 31, the following order entered:

By this motion Appellants seek reinstatement, pending full briefing and determination on the merits, of a District Court\'s recently vacated stay of a Bankruptcy Court\'s orders (i) imposing default judgment as a discovery sanction in an adversary proceeding seeking to authorize the sale of a non-debtor\'s one-half interest in his marital residence pursuant to 11 U.S.C. §§ 363(h), and thereafter (ii) authorizing an auction sale of that home . . .

IT IS HEREBY ORDERED THAT the motion is hereby denied . . .

(emphasis added). A copy of that order is attached as Appendix B. On April 2, 1998, the trustee filed the instant motion to reschedule the auction sale. At the April 14 hearing, the debtor moved with a supporting affidavit for my recusal from this case pursuant to 28 U.S.C. § 455.

DISCUSSION

I.

Motion for Recusal

Although he did not specifically say so at the April 14 proceeding, Gerhard Hutter obviously supports the debtor's April 14 Motion to Disqualify.¹ The Assistant United States Attorney took no position. The motion was opposed by Putnam, the United States Trustee, and the trustee. The trustee argued that the debtor's motion was merely an attempt to have another judge administer this case after she and her husband failed to block the auction sale in this court and the courts to which they filed appeals.

Title 28 U.S.C. § 455, made applicable by Rule 5004 F.R. Bankr.P., provides in pertinent part:

(a) Any . . . judge . . . of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.

(b) He shall also disqualify himself in the following circumstances:

(1) Where he has a personal bias or prejudice concerning a party. . . .

28 U.S.C. §§ 455(a), (b)(1) (West 1997).

Timeliness

This circuit has construed § 455 to include a timeliness provision. United States v. Brinkworth, 68 F.3d 633, 639 (2d Cir.1995). Applications for recusal

. . . are normally to be made at the earliest possible moment after obtaining knowledge of facts demonstrating the basis for such a claim. . . . It is important to present recusal applications promptly for at least two reasons. First, a prompt application affords the . . . judge an opportunity to address the merits of the application before taking any further steps that may be inappropriate for the judge to make. Second, a prompt application avoids the risk that a party is holding back a recusal application as a fall-back position in the event of adverse rulings on pending matters.

In re International Business Machines Corp., 45 F.3d 641, 643 (2d Cir.1995) (citations and internal quotation marks omitted) (emphasis added). See also Gil Enterprises, Inc. v. Delvy, 79 F.3d 241, 247 (2d Cir.1996). The Second Circuit has applied a four part test in determining whether a § 455 motion is timely:

(1) the movant has participated in a substantial manner in trial or pretrial proceedings;

(2) granting the motion would represent a waste of judicial resources;

(3) the motion was made after the entry of judgment; and

(4) the movant can demonstrate good cause for delay.

United States v. Brinkworth, supra, 68 F.3d at 639. As applied to the facts here, it is determined that the recusal motion was not timely filed.

The debtor identifies June 6, 1995 as the date when she first "began to fear that she could not receive a fair and impartial treatment." Affidavit in Support of Motion for Disqualification at 3. She also states that on February 4, 1997, she "came to understand the true hopelessness of her situation, and my absolute unwillingness to give her even the slightest attention or consideration, depriving her of her due process, and equal protection under the law." Id. at 8.

Whether the Movant Participated in a Substantial Manner in Trial or Pre-trial Proceedings

The docket in this bankruptcy case contains 50 pages of entries through April 14, 1998, the hearing date. Forty-two of those pages are after June 6, 1995. The debtor filed 52 pleadings and other papers after February 4, 1997, i.e., 25 motions, 25 objections, and two supplemental objections. Her motions sought, inter alia, the appointment of pro bono counsel; continuances²; a stay pending appeal; sanctions; and various other motions to expedite hearing, quash, abstain, compel, clarify, reconsider, decide matters without oral argument, correct the docket, remove the trustee and strike his pleadings, and dismiss the adversary proceeding. In addition, the trustee initiated six motions after February 4, 1997. As a consequence of the matters filed by the debtor and the trustee, the court conducted 29 hearings.

The 20 page docket of the adversary proceeding Coan v. Hutter, supra, 207 B.R. 981, which resulted in the 1997 Sale Order, contains 12 pages following February 4, 1997. Notwithstanding her lack of standing,³ the debtor joined Gerhard Hutter in filing two pleadings after February 4, 1997. The trustee filed five motions after that date, and the court conducted seven hearings on the matters filed by the debtor and the trustee. The debtor did not move for my recusal in the adversary proceeding or in this case until April 14, 1998. It is therefore apparent that the debtor "participated in a substantial manner" in this case before she moved for my recusal.

Whether Granting the Motion Would Represent a Waste of Judicial Resources

Granting the debtor's motion would represent a significant waste of judicial resources, as her failure to move for my recusal at the earliest possible moment after "she came to understand the true hopelessness of her situation" resulted in a substantial increase in the docket of this case. As a consequence, I have invested innumerable hours and resources in connection with those matters, taking "steps that would have been inappropriate," assuming her recusal motion had any merit. In re International Business Machines Corp., supra, 45 F.3d 641, 643. Those observations do not consider the time it would take another judge to become familiar with this case, which would result in even more waste of judicial resources and delay. As noted infra at 636-642, the debtor's motion has no merit.

Whether the Motion Was Made After the Entry of Judgment

The 1997 Sale Order, inter alia, authorized the trustee to sell Gerhard Hutter's co-ownership in the Property under § 363(h). On January 14, 1998, the district court vacated its July 25, 1997 stay pending appeal of the 1997 Sale Order. On March 31, 1998, the Second Circuit Court of Appeals denied the motion filed by the debtor and Gerhard Hutter to reinstate the stay pending appeal. The debtor's recusal motion was filed on April 14, 1998.

Whether the Movant Can Demonstrate Good Cause for Delay

The debtor appears to acquiesce in the conclusion that her recusal motion was not timely made, because on April 29, 1998, she filed an unsolicited Supplement to Motion to Disqualify, in which she claims that "had she known about my favoritism toward the trustee, which goes back at least as far as 1993, she would have immediately moved Judge Shiff to...