In re Maurice
| Decision Date | 31 March 1994 |
| Docket Number | Bankruptcy No. 93 B 23478. |
| Parties | In re John A. MAURICE, Debtor. |
| Court | United States Bankruptcy Courts. Seventh Circuit. U.S. Bankruptcy Court — Northern District of Illinois |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
Kenneth A. Kozel, LaSalle, IL, for debtor John A. Maurice.
Gerald M. Hunter, Oglesby, IL, for plaintiff John F. Dornik.
Debbie D. Stassen, Office of Craig Phelps, Chicago, IL, for Craig Phelps, Chapter 13 Trustee.
The following matters come before the Court: the motion of John F. Dornik ("Dornik") to lift the automatic stay and for other relief including sanctions against John A. Maurice, (the "Debtor"), and his attorney Kenneth Kozel ("Kozel"); the motion of Craig Phelps, the Chapter 13 standing trustee (the "Trustee") to dismiss the Debtor's Chapter 13 case; the Debtor's motion to dismiss Dornik's motion and to alter or amend an Order entered by the Court on November 24, 1993 (the "November 24th Order"); and the Debtor's motion for disqualification of the Court.
For the reasons set forth herein, the Court grants Dornik's motion and finally and fully lifts the automatic stay so that an appeal currently pending before the Circuit Court for the Seventh Judicial Circuit can be completed. The Court awards sanctions against the Debtor by way of dismissal of this case without prejudice to the pending appeal. The Court hereby imposes the sanction of mandatory continuing legal education against Kozel for violation of Federal Rule of Bankruptcy Procedure 9011. The Trustee's motion to dismiss is granted for the Debtor's failure to file a Chapter 13 plan as required by 11 U.S.C. § 1321 within the time required under Federal Rule of Bankruptcy Procedure 3015(b). The Debtor's motion to alter or amend the November 24th Order is granted to fully lift the automatic stay incidental to the dismissal of this case. The Debtor's motion to disqualify and to dismiss Dornik's motion are denied.
The Court has jurisdiction to entertain these motions pursuant to 28 U.S.C. § 1334 and local General Rule 2.33(A) of the United States District Court for the Northern District of Illinois. These matters constitute core proceedings under 28 U.S.C. § 157(b)(2)(A), (G) and (O).
The facts and background of the relationship between Dornik and the Debtor are set forth in an Opinion and Order entered in the Debtor's first bankruptcy case. See Dornik v. Maurice, 138 B.R. 890 (Bankr.N.D.Ill. 1992). Dornik's claim against the Debtor was reduced to judgment in an Illinois state court in 1987. The Debtor previously filed a Chapter 13 case in 1989, which was subsequently converted to Chapter 7. Dornik filed a dischargeability complaint against the Debtor under 11 U.S.C. §§ 523(a)(2)(A) and 523(a)(6). The Court found the underlying debt non-dischargeable, and a motion for sanctions was allowed in favor of Dornik. Id. The Debtor's post-trial motion to alter or amend the judgment was subsequently denied. See Dornik v. Maurice, 1992 WL 111104, 1992 Bankr. LEXIS 740 (Bankr. N.D.Ill. Apr. 30, 1992). An appeal was taken therefrom and the Court was affirmed. Maurice v. Dornik, 1992 WL 308535, 1992 U.S.Dist. LEXIS 16032 (N.D.Ill. Oct. 19, 1992). The Debtor further appealed to the Circuit Court for the Seventh Judicial Circuit, which appeal remains pending. The Debtor failed to obtain a stay pending appeal. Dornik, meanwhile, went back to the Illinois state court to enforce the 1987 judgment. His collection efforts were effectively stayed, however, when the Debtor filed a second Chapter 13 case on November 8, 1993. At that time the Debtor filed a petition and listed Dornik as his only creditor. The Debtor then filed an application to pay the filing fees in installments, as contemplated by Federal Rule of Bankruptcy Procedure 1006(b). The Debtor initially paid $30.00 when his application to pay the filing fee in installments was granted by the Honorable Jack B. Schmetterer on November 10, 1993. Pursuant to that Order, the Debtor was required to pay an additional $40.00 on or before December 13, 1993, another $40.00 on or before January 13, 1994, and the final installment of $40.00 on February 14, 1994. To date, the first $40.00 installment has not been received.
On November 19, 1993, Dornik served out the instant motion to lift the automatic stay. He requested relief including allowing the oral arguments on the appeal set before the Seventh Circuit for December 2, 1993, to go forward. Dornik further contends that the instant case is frivolous and filed in bad faith. Dornik's motion was certified to have been personally served on the Debtor and Kozel on November 19, 1993, as well as mailed to the Trustee that day. The motion was accompanied with a notice that same would be presented for hearing on November 24, 1993, in Chicago. The motion and notice of the hearing was first lodged with the Court on the morning of November 24, 1993, a few minutes before same was to be heard, but after Kozel telephoned the Court's chambers to see if the motion was on the Court's call for that day. After review of the motion and an unsuccessful attempt by one of the Court's staff to return Kozel's call, the Court entered the November 24th Order lifting the automatic stay to allow the appeal to proceed. The November 24th Order also continued a hearing on the motion for December 17, 1993 at the Court's regularly scheduled Joliet, Illinois date. Additionally, the November 24th Order granted Kozel leave to file responsive pleadings thereto by December 8, 1993. Dornik's attorney was ordered to file any reply by December 15, 1993, as well as serve a copy of the interim order on Kozel, the Clerk of the United States Court of Appeals for the Seventh Judicial Circuit, and the Trustee. Neither the Debtor nor Kozel appeared at the November 24, 1993 hearing.
The Debtor responded with his motion to alter or amend the November 24th Order contending that Kozel had telephoned the Court's chambers the morning of November 24, 1993, and was advised by an unnamed clerk that the motion was not on the Court's regular call. Thus, he did not attend. The Debtor's motion contends that the Court lacked jurisdiction and authority to take any action in Chicago because the matter should have been heard in Joliet, Illinois. In addition, on December 8, 1993, the Debtor served out his motion to dismiss, contending that Dornik's actions constitute improper harassment, and that Dornik's motion should be denied, and that the Debtor be given leave to file a petition for attorney's fees and costs against Dornik and his attorney.
The scheduled hearing on Dornik's motion was held in Joliet on December 17, 1993. Attorneys for Dornik, the Debtor, and the Trustee were present. Kozel filed and served in open court the motion to disqualify. At that time the Trustee presented and filed his motion to dismiss the case. The Court offered all parties an opportunity for an evidentiary hearing on the various motions. The attorneys for the Debtor, Dornik and the Trustee all waived such opportunity to supplement the record with any additional evidence. Rather, they chose to rest on their pleadings. The Court granted leave to the various parties to file supplemental papers by December 30, 1993, after which all pending motions would be taken under advisement. The Court also advised that it intended to take judicial notice of the contents of the instant case file, to which no objection was raised. The only additional pleadings filed were by Dornik in opposition to the disqualification motion.
The bases of the motion to disqualify and the challenge to the Court's impartiality under 28 U.S.C. § 455, made applicable by Bankruptcy Rule 5004(a), are the adverse rulings rendered in the prior bankruptcy case and adversary proceeding. The motion summarily concludes without any supporting facts that the Court treats the Debtor and Kozel differently than he treats other debtors and attorneys who come before him. The Debtor also complains that the November 24th Order was the product of a hearing that Kozel was advised would not take place. The Debtor thus contends that he and Kozel were misled and not treated as others. The relevant provisions of section 455 state as follows:
28 U.S.C. § 455(a) and (b)(1).
The test for disqualification under section 455 is whether "an objective disinterested observer fully informed of the facts of the case . . . would entertain significant doubt that justice be done." Union Carbide Corp. v. U.S. Cutting Service, Inc., 782 F.2d 710, 715 (7th Cir.1986), citing Pepsico, Inc. v. McMillen, 764 F.2d 458, 460 (7th Cir.1985). "Judges have an obligation to litigants and their colleagues not to remove themselves needlessly, . . . because a change of umpire in mid-contest may require a great deal of work to be redone . . . and facilitate judge-shopping." In re National Union Fire Ins. Co., 839 F.2d 1226, 1229 (7th Cir.1988) (citation omitted).
A judge is presumed qualified to hear a proceeding and the movant has the burden of proving otherwise. Idaho v. Freeman, 478 F.Supp. 33 (D.Idaho 1979). A judge is not disqualified under section 455 merely because a litigant has transformed his fear of an adverse decision into a fear that the judge will not be impartial. Idaho v. Freeman, 507 F.Supp. 706, 762 (D.Idaho 1981), citing S.Rep. No. 93-419, 93rd Cong., 1st Sess.1973. Fur...
To continue reading
Request your trial