In re Parson

• Decision Date: 15 September 2021
• Docket Number: 21-30982
• Parties: In re: BRIDGET BROWN PARSON, Debtor.
• Court: United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Northern District of Texas

In re: BRIDGET BROWN PARSON, Debtor.

No. 21-30982

United States Bankruptcy Court, N.D. Texas, Dallas Division

September 15, 2021

Chapter 13

MEMORANDUM OPINION AND ORDER DENYING DEBTOR'S MOTION FOR RECUSAL OF JUDGE LARSON

Before this Court is the Motion for Recusal of Judge Larson^[1] (the "Motion" or "Motion for Recusal") filed by the pro se Debtor, Bridget Brown Parson (the "Debtor" or "Ms. Parson"). The Debtor timely filed a Notice of Appeal^[2] on August 25 2021 to this Court's Order Denying Confirmation of Chapter 13 Plan (the "Confirmation Order").^[3] Within the Notice of Appeal were at least three separate motions.^[4] This Memorandum Opinion and Order shall only address the Motion for Recusal.

For the reasons stated below, the Court will deny the Motion.

I. Jurisdiction and Venue

Bankruptcy subject matter jurisdiction exists in this proceeding pursuant to 28 U.S.C. § 1334. This is a proceeding to disqualify a sitting judge under 28 U.S.C. § 455, which is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). The bankruptcy court has authority to adjudicate this matter pursuant to the United States District Court for the Northern District of Texas Miscellaneous Order No. 33. The following shall constitute this Court's reasoning pursuant to Rule 59 of the Federal Rules of Civil Procedure (the "Rules"), as incorporated by Rule 9023 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules").

II. Background and Procedural Posture

The Debtor initiated this proceeding by filing a voluntary petition under Chapter 13 of the Bankruptcy Code on May 27, 2021.^[5] The Debtor filed a proposed Chapter 13 plan (the "Plan") on June 10, 2021.^[6] The Court held a hearing on August 5, 2011, regarding confirmation of the proposed Plan in which Mr. Thomas D. Powers, the Chapter 13 Trustee (the "Trustee"), and the Debtor appeared, as did counsel for Becky Cole and Select Portfolio Servicing, Inc. The Trustee, Becky Cole and Select Portfolio Servicing each objected to confirmation of the Plan.

The Court heard the testimony of the Debtor, took evidence^[7] and heard arguments regarding the Plan. Based on the testimony, evidence and arguments, the Court found the Debtor failed to carry her burden of proof as to confirmation because the plan was not confirmable on its face. The Court found that the Debtor failed to comply with various provisions of the Bankruptcy Code, including sections 1322; 1325(a)(3) (good faith);^[8] 1325(a)(4) (best interests of creditors);^[9]1325(a)(7) (good faith); and 1325(a)(9) (failure to supply tax returns). Accordingly, the Court denied confirmation of the Plan and strongly recommended that Ms. Parson retain counsel to assist her in her Chapter 13 bankruptcy.

On August 11, 2021, this Court entered its Confirmation Order.^[10] The Debtor did not seek to amend the Plan or retain counsel. Rather, the Debtor filed a Notice of Appeal containing at least three separate motions: a Motion to Transfer Venue, ^[11] a Motion to Reconsider^[12] and this Motion for Recusal, ^[13] each of which were properly docketed separately by the Clerk of Court.^[14] The Motion for Recusal lodged a myriad of complaints against the Court, all of which will be addressed in turn below.^[15] On September 2, 2021, the Court held a hearing on the Motion for Recusal, the Motion to Transfer Venue, and the Trustee's Motion to Dismiss Chapter 13 Case with Prejudice for Five Years (the "Motion to Dismiss").

During the hearing on the Motion for Recusal, the Debtor requested that the Court recuse itself from her bankruptcy case. However, the Debtor presented no substantive evidence at the hearing, instead choosing to make broad, baseless assertions against the Court, including but not limited to: the Court's "ignorance" of state court orders and prior bankruptcies, failure to "swear in" opposing counsel, prejudice constricting the Debtor's ability "to freely speak," the use of "adverse documents" for which the Debtor was unaware and not properly noticed, violations of her "natural rights," and fostering an environment of "hostility."^[16] The Court gave the Debtor significant leeway and time to make her case before the Court. The Court took extra care to do so due to not only the seriousness of the allegations made, but also the Debtor's status as a pro se litigant.

By oral bench ruling, the Court denied the Motion to Transfer Venue and Motion for Recusal on the record. The Motion to Dismiss was taken under advisement. This Memorandum Opinion and Order shall relate solely to the Motion for Recusal.^[17]

III. Standard Pursuant to 28 U.S.C. § 455

"One of the fundamental rights of a litigant under our judicial system is that [s]he is entitled to a fair trial in a fair tribunal, and that fairness requires an absence of actual bias or prejudice in the trial of the case."^[18] "The right to a fair and impartial trial is fundamental to the litigant; fundamental to the judiciary is the public's confidence in the impartiality of our judges and the proceedings over which they preside."^[19] To achieve those objectives, Congress enacted 28 U.S.C. § 455. Bankruptcy Rule 5004(a) states that the provisions of 28 U.S.C. § 455 shall govern the disqualification of a bankruptcy judge from a proceeding, contested matter, or case.^[20] Section 455 reads in pertinent part:

(a) Any justice, judge, or magistrate 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, or personal knowledge of disputed evidentiary facts concerning the proceeding;

(2) Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it; [and]

(3) Where he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of the particular case in controversy[.]^[21]

Only Section 455(a) and (b)(1) have arguably been implicated by virtue of the Motion for Recusal. The Fifth Circuit has interpreted this statute to give the judge who is the subject of a motion to recuse authority to decide the motion.^[22] Therefore, this Court will address the Debtor's Motion.

A judge is presumed qualified to preside over a case.^[23] A movant seeking disqualification bears the burden of proving that a judge is unqualified by clear and convincing evidence.^[24] Recusal under 28 U.S.C. § 455(a) is considered based upon objective criteria, and the standard to be applied is "whether a reasonable person with knowledge and understanding of all the relevant facts would conclude that the judge's impartiality might reasonably be questioned."^[25] A party's statement that she believes a court is not impartial, without more, does not constitute grounds for recusal.^[26] In Levitt v. University of Texas, 847 F.2d 221 (5th Cir. 1988), the Fifth Circuit addressed the proper procedure for determining a motion for recusal, holding that "[t]he judge can himself decide whether the claim asserted is within § 455. If he decides that it is, then a disinterested judge must decide what the facts are."^27[] Thus, in order to rule on the Motion for Recusal, the Court must first decide whether the "claim asserted" by the Debtor "rises to the threshold standard of raising a doubt in the mind of a reasonable observer" as to the Court's impartiality. If not, then I should recuse myself. If so, another judge should "decide what the facts are" by holding an evidentiary hearing, and presumably this other judge would then decide whether disqualification is appropriate.^28[] Thus, under Levitt, the Court must first determine whether the Debtor's allegations rise to the threshold standard. For the reasons explained below, this Court finds that they do not and that recusal is not warranted.

IV. Analysis

In the Debtor's first argument, she complains that the Court has committed an "ongoing violation of the ignorance" of the abatement of pending cases.^29[] The Court can assure the Debtor that it is not "ignorant" of the prior rulings in the state courts and the Debtor's prior bankruptcies. Where the issue lies is with the import the Debtor seeks to give the prior orders.

The "abatement" of bankruptcy court orders in favor of state court appellate proceedings and prior orders in dismissed bankruptcy cases was discussed in this Court's Order Denying the Debtor's Motion to Reconsider.^30[] The "abatement" of state court appellate orders does not bear on this Court's jurisdiction. Rather, the stay of such orders is in deference to this Court and the imposition of the automatic stay imposed by 11 U.S.C. § 362.^31[] As such, the abatement of a state court appeal does not limit this Court's power in any way and is not a basis for recusal.

Second the Debtor complains of the applicability of orders entered in one or more of her prior dismissed bankruptcy proceedings. Under 11 U.S.C. § 349(b), the "pre-discharge dismissal of a bankruptcy case returns the parties to the positions they were in before the case was initiated."^32[] Dismissal of a bankruptcy case restores the status quo ante.^33[] This is consistent with Congress's stated intent that the purpose of dismissal is to "undo the bankruptcy case, as far as practicable, and to restore all property rights to the position in which they were found at the commencement of the case."^34[] The rights and claims of Becky Cole and Select Portfolio Servicing are not limited to the proofs of...