Kerwin v. Rosenblum (In re Rosenblum)
| Decision Date | 03 May 2022 |
| Docket Number | 14-19756-AMC,Adv. 19-00241-AMC |
| Parties | IN RE: STEVEN ROSENBLUM, DEBTOR v. STEVEN ROSENBLUM, DEFENDANT RYAN KERWIN D/B/A XTREME CAGED COMBAT, PLAINTIFF |
| Court | U.S. Bankruptcy Court — Eastern District of Pennsylvania |
On December 11, 2014, Steven Rosenblum ("Debtor") filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code ("Petition Date"). Thereafter pro se creditor, Ryan Kerwin ("Kerwin"), filed countless motions and an adversary complaint seeking various forms of relief. This matter arises from Kerwin's latest motion in the above captioned adversary proceeding, titled "Creditor's Motion for Judge Ashley Chan to be Recused/Disqualified Pursuant to 28 U.S. Code 144" ("Recusal Motion"). Ryan Kerwin & Xtreme Caged Combat v. Rosenblum (In re Rosenblum), Case No. 14-19756 ("Bankr. Case"), Adv. No. 19-241 ("Second Adversary"), ECF No. ("ECF") 111.[1] For the reasons described below, the Recusal Motion is denied.
The relevant background of Kerwin's extensive litigation against the Debtor is discussed at great length in the following orders and opinions entered in the main bankruptcy case, an earlier adversary proceeding initiated by the Debtor, captioned Steven Rosenblum v. Ryan Kerwin, Xtreme Caged Combat, and A. Jordan Rushie, Esq., Bankr. Case, Adv. No. 16-124 ("First Adversary") (Bankr. E.D. Pa. dismissed Sept. 14, 2021), and the Second Adversary, seeking a determination of nondischargeability of Kerwin's claim pursuant to 11 U.S.C. §523(a)(6), each of which is hereby incorporated by reference:
For the sake of conciseness, the Court will only describe the facts that are relevant to the disposition of the Recusal Motion, and all shorthand terms not otherwise defined have the same meaning as set forth in the orders and opinions listed above.
On December 3, 2019, the Court conducted a hearing ("December 2019 Hearing") on the Debtor's Motion to Reinstate the Main Bankruptcy Case ("Debtor's Motion to Reinstate") and on confirmation of the Debtor's chapter 13 plan of reorganization ("Plan"). Tr. Dec. 2019 Hrg., Bankr. Case, ECF 302 at 4:1-4. Notably absent from the December 2019 Hearing was Kerwin who, at the time, had regularly appeared at most, if not all, other hearings in this case. See generally id. at 1-8. The following day, on December 4, 2019, the Court entered an order removing the bankruptcy case from abeyance ("December Reinstatement") and confirming the Debtor's Plan ("Confirmation Order"). Bankr. Case, ECF 257, 262. The Confirmation Order included standard language that read, "the plan has been proposed in good faith." Bankr. Case, ECF 262.
On December 10, 2019, Kerwin filed a notice of appeal of the Confirmation Order to the District Court for the Eastern District of Pennsylvania ("District Court"). Bankr. Case, ECF 272. Also on December 10, 2019, Kerwin initiated the Second Adversary, alleging, inter alia, that the pre-petition judgment he obtained against the Debtor for trademark infringement ("Trademark Infringement Judgment") is nondischargeable under 11 U.S.C. § 523(a)(6) ("Dischargeability Claim"). Second Adv., ECF 1 at 19-20.
The removal of the bankruptcy case from abeyance was short lived because, at a hearing on January 28, 2020 ("January 2020 Hearing"), the Court vacated the December Reinstatement after learning (1) that Kerwin for whatever reason had not received notice of the December 2019 Hearing and (2) of Kerwin's appeal to the Pennsylvania Superior Court ("Superior Court") of the State Litigation judgment entered in favor of Michelle Zarro, the Debtor's sister-in-law, and Allan Rosenblum, the Debtor's father, thereby placing the bankruptcy case into abeyance once more pending conclusion of the State Litigation. Bankr. Case, ECF 318. At the same hearing, the Court also granted in part the Debtor's motion to dismiss the Second Adversary, leaving Kerwin's Dischargeability Claim as the only count in the adversary complaint remaining for disposition. Second Adv., ECF 14.
Importantly, the Court explained at the January 2020 Hearing that (1) the Plan provided a pro rata distribution to Kerwin on his unsecured proof of claim and that his acceptance of distributions made pursuant to the Plan had no effect on any rights that he had with respect to pursuing his Dischargeability Claim, and (2) if Kerwin intended to receive any distributions while his Dischargeability Claim was pending, he would need to withdraw his appeal of the Confirmation Order to permit the Plan distributions directed toward him to commence. Audio R. of Jan. 28, 2020, Hrg., Bankr. Case, at 11:35:07 - 12:00:02. The Court further explained that the good faith language in the Confirmation Order had no effect on any rights that Kerwin had with respect to pursuing either his Dischargeability Claim or his motion to dismiss the Debtor's bankruptcy case ("Dismissal Motion"). Id. at 12:00:02 - 12:01:12. Thereafter, on February 18, 2020, the Court entered an amended order modifying the language of the Confirmation Order to that effect ("Amended Order"), which read, "the [Confirmation] Order has no bearing on this Court's future resolution of whether the Debtor filed this case in good faith, the issues raised in.. .Kerwin's Motion to Dismiss or any of the claims raised by Mr. Kerwin's adversary proceeding against the Debtor." Am. Order, Bankr. Case, at ECF 333. See also Tr. Feb. 18, 2020 Status Hrg., Bankr. Case, ECF 369 at 2-9; 11-5; 19:16-7 (again explaining to Kerwin the effect of the Confirmation Order and further describing the purpose and details of the Amended Order). On March 2, 2020, Kerwin filed a praecipe to withdraw his appeal of the Court's Confirmation Order. In re Steven Rosenbulm, Case No. 19-5832- NIQA (E.D. Pa. dismissed March 2, 2020), ECF9.
On May 11, 2021, the Court held a status conference where it learned that Kerwin's petition to the Pennsylvania Supreme Court for allowance of appeal of the Superior Court's order affirming the judgment against Allan Rosenblum in the State Litigation had been dismissed. Xtreme Caged Combat v. Zarro, 247 A.3d 42, 52 (Pa. Super. Ct. 2021) appeal deniedby 260 A.3d 924 (Pa. 2021). Nonetheless, the State Litigation remained pending with respect to Zarro because the Superior Court had ordered a new trial on Kerwin's PUFTA claim against her, after determining that the Bucks County Court of Common Pleas ("State Trial Court") had erred in granting a nonsuit with respect to Zarro. Id. at 49-50. Audio Rec. Status Hrg. held May 11, 2021, Bankr. Case, at 10:30:27 - 10:31:37.
Meanwhile in the Second Adversary, on September 15, 2021, the Court entered an order denying (1) a motion for summary judgment ("Summary Judgment Motion") which Kerwin had filed appearing to seek to have the Court rule that Debtor had fraudulently transferred the Levittown Gym to Allan Rosenblum and Quick Fit, and (2) a motion filed by Kerwin concurrently with the Summary Judgment Motion for "the Court to Rule on Creditor's Fraudulent Transfer Claim Against Allan Rosenblum/Quick Fit USA And on the Status of the Debtor's Automatic Stay" ("Fraudulent Transfer Motion"), similarly appearing to seek a determination that Debtor had made a fraudulent transfer to Allan Rosenblum and/or Quick Fit. Second Adv., ECF 68. In support of its decision denying the Summary Judgment Motion, the Court noted that (1) the only remaining claim in the Second Adversary was the Dischargeability Claim based upon the Trademark Infringement Judgment; (2) the Superior Court had already affirmed the State Trial Court's determination that Kerwin introduced no evidence at trial sufficient to show that the Debtor transferred any property to [non-debtor] defendant Allan Rosenblum; (3) the Pennsylvania Supreme Court denied Kerwin's petition for allowance of an appeal of that determination; and (4) collateral estoppel prevents this Court from granting such motion with respect to Allan Rosenblum. I...
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