In re X-Cel, Inc., 82 B 6430
| Decision Date | 19 March 1986 |
| Docket Number | 84 C 3274.,No. 82 B 6430,82 B 6430 |
| Citation | 61 BR 691 |
| Parties | In re X-CEL, INC., d/b/a Sizzler Family Steak House, Debtor. |
| Court | U.S. District Court — Northern District of Illinois |
David M. Missner, Schwartz, Cooper, Kolb & Gaynor, Chicago, Ill., for creditor.
Louis W. Levitt, Levitt and Mason, Glenn R. Heyman, Dannen, Crane, Heyman & Haas, Chicago, Ill., for debtor.
This case is before the Court on Chapter 11 debtor X-Cel, Inc.'s motion to disqualify Bankruptcy Judge Charles B. McCormick from further participation in the adversary proceedings between X-Cel and A. Eicoff & Company ("Eicoff") pursuant to 28 U.S.C. § 455 (1982). Based on the following reasons, we deny X-Cel's motion and remand the case to Judge McCormick for further proceedings.
A brief discussion of the history of this case is necessary before we address the merits of the present motion. Earlier in this case, the bankruptcy court, by Judge McCormick's order, allowed a claim by Eicoff against X-Cel in Chapter 11 proceedings. Judge McCormick's order was a short statement which adopted the findings of fact submitted by Eicoff in its memorandum in support of its claim, which was attached to the judge's order. This Court affirmed the bankruptcy court's order, In re X-Cel, Inc., 46 B.R. 202 (N.D.Ill.1984), but the Seventh Circuit reversed, holding that there were inadequate findings in the bankruptcy court upon which to base an adequate appellate review. In re X-Cel, Inc., 776 F.2d 130, 131 (7th Cir.1985). The Seventh Circuit remanded the case to this Court and directed us to return it to the bankruptcy court for the issuance of new findings. We have done so, but intervening events have necessitated our withdrawal of the reference for the purposes of this motion.
Shortly after the Seventh Circuit issued its opinion, David Missner, an attorney with the law firm representing Eicoff, was in Judge McCormick's courtroom on another matter.1 Missner mentioned to the judge that the X-Cel decision had been reversed. He then told Judge McCormick that he was sorry the case was reversed and said he would submit new findings of fact and conclusions of law when the case was returned to the bankruptcy court. The judge said nothing in response to the statement, shrugged his shoulders and left the bench.
The only other persons in the courtroom at this time were Judge McCormick's minute clerk, a court reporter and Ira Goldberg, an associate with the law firm representing X-Cel.2 Goldberg had walked in while Missner was making his statements to the judge. The court reporter was not recording Missner's statements, so the court session apparently had been adjourned. Goldberg did not raise any objection to Missner's statement at the time since he was not directly involved in the X-Cel matter and did not wish to make any premature accusations. Instead, he returned to his office and reported the incident to the lead attorney in the X-Cel case. Through counsel, the parties then engaged in correspondence regarding this matter. X-Cel's requests for a voluntary transfer of the bankruptcy proceeding to another judge were rejected by Eicoff, and this motion ensued.
X-Cel has set forth two grounds in support of its motion to disqualify Judge McCormick. First, it argues that Missner's statements constituted an improper ex parte communication which raised a reasonable question as to the judge's impartiality, thus requiring disqualification under the Judicial Code. 28 U.S.C. § 455(a) (1982). Second, X-Cel claims that Judge McCormick's reactions to the filing of this motion at an on-the-record conference between the parties and the judge demonstrate a personal bias or prejudice against X-Cel which require disqualification under 28 U.S.C. § 455(b)(1) (1982). We now turn to these arguments in the order presented.
Section 455(a) of Title 28, United States Code states:
Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.
28 U.S.C. § 455(a) (1982).3 Whenever, under the facts and circumstances of a case, there is a reasonable basis for a finding of an appearance of partiality, a judge should recuse himself or herself. Pepsico, Inc. v. McMillen, 764 F.2d 458, 460 (7th Cir.1985). There is an appearance of partiality when "an objective, disinterested observer fully informed of the facts underlying the grounds on which recusal is sought would entertain a significant doubt that justice would be done in the case." Id. (emphasis added). Furthermore, the party moving for recusal or disqualification has the burden of producing facts which would raise such doubts. Clay v. Doherty, 608 F.Supp. 295, 299 (N.D.Ill.1985).
Based on the record before us, we find that no reasonable doubt exists regarding Judge McCormick's ability to handle further proceedings between X-Cel and Eicoff in an impartial manner. Missner's ex parte updating of the judge on the results of the appeal and his offer to submit new findings of fact and conclusions of law did not show good judgment on his part, but in the context of the circumstances of the communication clearly was not an attempt to influence the judge's decision-making. The preferred course of conduct would have been for Missner to wait until formal proceedings in the matter were once again before the bankruptcy court.
Nonetheless, we need not definitively determine the propriety of Missner's conduct in order to find that no reasonable doubt of Judge McCormick's impartiality exists. Although X-Cel refers to this incident as a "conversation", the communication was in reality purely one-sided. As the record undisputedly reflects, Judge McCormick did not even bother to respond to Missner's statements. Instead, he remained silent and left the bench. Little, if anything, more could have been expected of a judge in these circumstances. A fully informed, neutral observer could not reasonably question the judge's impartiality following this incident and disqualification is not, accordingly, required.
X-Cel's alternative argument is based on 28 U.S.C. § 455(b)(1) (1982), which states in pertinent part that: X-Cel contends that statements made by Judge McCormick at a conference he held with counsel for X-Cel and Eicoff demonstrate that he has developed a bias or prejudice against X-Cel arising from the accusations against his impartiality.
X-Cel has pointed to a couple of statements in particular made by Judge McCormick at the conference which it submits indicate a newly-developed prejudice or bias against X-Cel.4 First, it notes that the judge remarked that he felt that he was being placed in a position that was unfair to him and in which he did not wish to be placed. Next, the judge declared:
I have to tell you, Mr. Doyle counsel for X-Cel, and we might just as well get this straight for the record, I regard this as, the most charitable way I can put this, as really forensic nitpicking. Over and above that — it\'s deeper than that, the implication exists here that counsel for the debtor have consciously or unconsciously...
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