Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_04-cv-06040/USCOURTS-caed-1_04-cv-06040-2/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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1

IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

CHESTER GARBER, et al., )

)

)

)

Appellants, )

)

vs. )

)

)

NATIONAL UNION FIRE )

INSURANCE COMPANY OF )

PITTSBURGH, PA, )

)

)

 Appellees. )

)

)

No. CV-F-04-6040 REC

ORDER DENYING APPELLANTS'

MOTION TO RECUSE JUDGE COYLE

On August 1, 2005, the court heard appellants' motion to

recuse Judge Coyle.

Upon due consideration of the record and the arguments of

the parties, the court denies appellants' motion for the reasons

set forth herein.

Chester and Emilia Garber, debtors/appellants, have filed an

appeal from three orders of the Bankruptcy Court authorizing

payment by the Chapter 7 bankruptcy estate in Bk. No. 94-14422-A7 to National Union Fire Insurance Company of Pittsburgh, PA as

Case 1:04-cv-06040-REC Document 34 Filed 08/16/05 Page 1 of 13
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The issues set forth in the Garbers opening brief are that 1

the Bankruptcy Court erred in authorizing payment to National Union

from the estate because National Union’s claim was subject to a

standard of strict scrutiny to which the Bankruptcy Court did not

adhere, that National Union was adverse to the Chapter 7 estate at

all relevant times, and that the Bankruptcy Court erred in

authorizing payment under 11 U.S.C. § 503(b)(2)(B) because National

Union did not seek approval from the Bankruptcy Court prior to any

recovery which benefitted the estate and did not provide any reason

for failing to seek such prior approval

2

an administrative claim for attorneys’ fees and costs. The 1

appeal was filed in the district court on July 30, 2004 and was

assigned to me on that date. In the Garbers’ reply brief in

support of their appeal filed on May 20, 2005, the Garbers

submitted as an attachment to that reply brief a motion to recuse

me from hearing the appeal. After being advised by the courtroom

deputy that the motion to recuse must be filed as a separate

motion, the Garbers filed a motion to recuse you from hearing

this appeal on June 7, 2005.

In moving for my recusal, the Garbers contend that most of

the fees and costs were incurred in connection with National

Union v. Garber, et al., No. CV-F-94-5414 REC (hereinafter the

District Court case or the Fraudulent Conveyance Action). A

motion for attorneys fees in the Fraudulent Conveyance Action is

pending before me. The Garbers contend that all of the fees and

costs included in the District Court case are included in the

Bankruptcy Court’s orders which are the subject of the Garbers’

instant appeal. According to the Garbers, some of the fees and

costs were approved by the Bankruptcy Court while others were

not. The Garbers contend:

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National Union argues that the Garbers waived their right to 2

seek recusal by failing to raise the issue in their opening brief.

Although the failure to raise an issue in the opening brief on

appeal generally constitutes a waiver of that issue, see Kim v.

Kang, 154 F.3d 966, 1000 (9 Cir.1998), the recusal motion has th

nothing to do with the merits of the issues raised in the appeal

from the Bankruptcy Court’s orders and, therefore, would not have

been properly raised in the opening brief. Consequently, the

Garbers did not waive their right to seek recusal by failing to

raise the issue in their opening brief.

3

Judge Coyle still needs to decide the

District Court Fee Motion as to whether any

or all of these fees should be allowed. If

he also decides the appeal from the

Bankruptcy Court Fee Motion, he will be

deciding whether fees and costs which he

might or might not allow in connection with

the District Court Fee Motion should or

should not be allowed under the Bankruptcy

Court Fee Motion. As a result, he will be

hearing or determining an appeal of a case or

issue tried by him, which is a violation of

28 U.S.C. Section 547 [sic]. He should

therefore recuse himself under that provision

and/or 28 U.S.C. § 455(a).

A. Waiver.

National Union argues that the Garbers have waived their

right to seek recusal.2

As recently reiterated by the Ninth Circuit in Skokomish

Indian Tribe v. United States, 410 F.3d 506, 519 (9 Cir. 2005): th

A motion for recusal must be made with

‘reasonable promptness after the ground for

such a motion is ascertained.’ Preston v.

United States, 923 F.2d 731, 733 (9 Cir. th

1991); see also Wood v. McEwen, 644 F.2d 797,

802 (9 Cir. 1981)(per curiam)(waiting th

sixteen months after discovering the ground

for recusal was untimely and resulted in a

waiver). The Tribe knew it was litigating a

case against TPU in Tacoma federal court,

before a Tacoma-area judge. It should have

known when it filed its complaint that it

might want to seek recusal of the judge

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assigned to the matter. At the very least,

the Tribe admits that it believed it had

grounds for recusal at least seven months

before filing the motion. The district court

thus did not abuse its discretion in denying

the recusal motion. See Kulas v. Flores, 255

F.3d 780, 783 (9 Cir. 2001). th

The Garbers argue that this motion is timely and that they

have not waived their right to seek recusal:

It appeared to Appellants that Judge Coyle

has the choice between hearing the appeal and

not deciding the fee issue still pending

before him from 2003, or deciding the fee

issue and not hearing the appeal. If he were

to do the former, 28 U.S.C. § 47 might not

apply (although it should be noted that Judge

Coyle did decide similar fee issues involving

the same fees before the last appeal to the

Ninth Circuit). In any event, it appeared

prudent to have all matters briefed so that

he could make a considered decision on the

issue with all briefs before him.

 

The Garbers have known since July 30, 2004 that this appeal

was assigned to me. They did not move for recusal until

approximately 10 months after the assignment and after the

briefing on the appeal was closed and the matter was ready to be

set for oral argument. As National Union argues, the Garbers

cannot argue in good faith that they were not aware of the basis

upon which this motion is based at the time the appeal was

assigned given that the Garbers made a similar recusal motion in

connection with a previous appeal from the bankruptcy court to 

this court in No. CV-F-96-5858 REC. The issue of recusal should

have been raised immediately upon the assignment of this appeal. 

The Garbers’ assertion that the issue of recusal should be

considered after the briefing on the bankruptcy appeal was

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completed makes no sense given their position that I cannot hear

this appeal because of the attorneys fees motion pending in the

Fraudulent Conveyance Action. Even if the attorneys fees motion

in the Fraudulent Conveyance Action had been resolved immediately

after this appeal was filed, the grounds upon which the Garbers

seek recusal would still exist. 

Consequently, the Garbers have waived their right to seek my

recusal in this bankruptcy appeal.

However, even if the Garbers had not waived their right to

seek recusal, the grounds upon which the Garbers base this motion

are without merit. 

B. 28 U.S.C. § 47.

28 U.S.C. § 47 provides that “[n]o judge shall hear or

determine an appeal from the decision of a case or issue tried by

him.” 

In seeking recusal pursuant to Section 47, the Garbers

contend that the attorneys fees approved by the Bankruptcy Court

and the subject of the appeal arose primarily from the Fraudulent

Conveyance Action and appeals associated with the Fraudulent

Conveyance Action. The Garbers assert that National Union, in

seeking an award of attorneys’ fees in the Fraudulent Conveyance

Action

argued that it had ‘substantially benefitted’

the bankruptcy estate and therefore was

entitled to fees through the District Court. 

Appellants argued that NU was violating the

automatic stay and that any decision on this

point could interfere with the Bankruptcy

process.

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The Garbers refer the court to a declaration of National Union’s

counsel, Scott Reddie, filed in the Fraudulent Conveyance Action,

wherein Mr. Reddie averred:

Rather than submitting all of the bills [of

McCormick, Barstow, NU’s counsel] to this

Court again, I am just submitting the

declaration that I filed in the bankruptcy

court which explains the different categories

of fees as well as a chart of the fees. The

numbers on this chart are different than the

numbers on the chart marked as Exhibit ‘G’

and submitted on July 7, 2000 with the motion

for attorneys’ fees because of the increased

number of categories. To the extent the

Court would like to see the bills that were

broken down into 15 categories and submitted

to the bankruptcy court, I will submit them

to the Court.

The Garbers contend that this averment from Mr. Reddie’s

declaration establishes that

the analysis of NU’s fees which were

submitted to the bankruptcy judge in

connection with the Bankruptcy Court Fee

Motion is the same analysis which is still

sitting before this Court in connection with

the District Court Fee Motion. Judge Coyle

is therefore simultaneously being asked to

rule on the same fees in connection with the

District Court Fee Motion and in connection

with the appeal from the Bankruptcy Court Fee

Motion.

The Garbers argue that Section 47 applies here to disqualify you

from hearing this bankruptcy appeal:

Although the bankruptcy judge reduced NU’s

fee request substantially, the appellants

argue in their appeal that fees were

improperly awarded. The fact that a request

for payment concerning the same fees are

pending in the District Court Fee Motion may

well have an impact on the decision on

appeal. Furthermore, the fact that Judge

Coyle needs to consider what the bankruptcy

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judge did in connection with the Bankruptcy

Court Fee Motion may well influence his

decision in deciding the District Court Fee

Motion. The fees awarded by the bankruptcy

judge are among those pending in the District

Court Fee Motion. Part of the fees she

rejected are also included in the District

Court Fee Motion.

In opposing the motion to recuse on this ground, National

Union argues that Section 47 only applies to Circuit Court

judges, not district court judges. 

In so arguing, National Union refers the court to United

States v. Zarowitz, 326 F.Supp. 90, 92 n.4 (C.D. 1971):

It is to be noted that [Section 47] is found

in the Judicial Code in Chapter 3 which is

solely concerned with organization of the

Courts of Appeal and has absolutely nothing

to do with the District Courts.

National Union further refers the court to In re Linder, 215 B.R. 

826, 831 (6 Cir. BAP 1998): th

The Panel further notes that Congress has

previously addressed the issue of a federal

trial judge’s participation in appellate

review when it enacted 28 U.S.C. § 292(a),

which provides for a district judge’s service

as part of a circuit panel. In such

circumstances, a district judge is prohibited

from hearing an appeal from the district

judge’s own docket but not from hearing an

appeal from other judges in that same

district. 28 U.S.C. § 47. Such precision by

Congress in enacting legislation governing

federal trial judges’ participation in

appellate service forecloses the argument

advanced by the Appellant that a conflict

exists when this Panel is acting in

accordance with specific statutory

authorization.

Relying on these cases, National Union argues:

Section 47 only applies to an appeal from the

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decision of a case or issue tried by Judge

Coyle. The matter under appeal was tried by

Judge Rimel in the Bankruptcy Court under

bankruptcy case number 94-14422. She

determined that National Union was entitled

to an administrative expense claim in the

Garber bankruptcy because some of the fees

incurred in the fraudulent transfer action

benefitted the bankruptcy estate. The matter

that is pending in the District Court, on the

other hand, was tried by Judge Coyle in a

different case, case number CV-F-94-5414 REC. 

Furthermore, the issues are not the same in

the two cases. In the District Court case,

National Union is seeking recovery of its

fees incurred on several different theories

against both the Garbers and Betty Ting (who

is not even part of the Garber bankruptcy or

the appeal). 

National Union further notes that the Garbers do not cite a case

holding that Section 47 requires recusal of a district court

judge from hearing an appeal from a bankruptcy case because a

different case pending before him includes an issue that is

similar. 

The Garbers respond that Section 47 can apply to a district

judge sitting in a bankruptcy appeal. Although the Garbers

concede that the Central District stated in a footnote that

Section 47 is inapplicable to district court judges, the decision

itself did not involve a district judge sitting in appeal from a

bankruptcy ruling. In addition, the Garbers contend, that the

statute was codified in Chapter 3 of the Judicial Code “is not

well-taken” because the “statute must be taken in context.” The

Garbers, referring to the wording of Section 47, i.e., “[n]o

judge shall hear or determine an appeal from the decision of a[n]

... issue tried by him”, contends that I have before me the

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“issue” of the allowance of attorneys’ fees to National Union in

connection with all of the litigation between National Union, the

Garbers and Betty Ting. The Garbers argue:

In effect, Judge Coyle is now being asked to

decide whether the bankruptcy judge was

correct in awarding a portion of the fees

which he may (or may not) award in the fee

motion still pending before him. He has

tried (but still must decide) the issue of

awarding these same fees, and the appeal

involves the awarding and payment of the same

fees.

The purpose of Section 47 is to have an

appeal come before a judge who is not

influenced by having formed an opinion at the

trial level. True, because of the

intricacies of the present case, Judge

Coyle’s forming of an opinion has taken place

as a trial judge in the district court. The

appeal to him comes from the bankruptcy

court, and he did not decide the issue in the

bankruptcy court. However, the purpose of

the statute is to prevent situations in which

the judge on appeal must pass on matters

involving his own decisions ....

In the present case, Judge Coyle has pending

before him precisely the same fees, and the

issue of whether they should be allowed, and

precisely the same parties affected by the

decision involving concerning fees. At this

stage, it is difficult to say whether he will

first render a decision in the case which has

been pending before him ... or rather if he

will decide the appeal first. Either way,

however, he must inevitably take into account

in his first decision the fact that he will

be rendering a decision in the other case,

which means that the decision in the appeal

will be substantially influenced by his

decision in the ... fee case. In a sense,

this is like the old adage, which asserts

that one can turn lead into gold by speaking

a magic word, so long as one doesn’t think of

the word ‘hippopotamus.’ Naturally, having

been told that one must not think of the word

‘hippopotamus,’ one cannot effect the

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metallic transmutation. Similarly, in

deciding the appeal, Judge Coyle cannot avoid

considering his own pending decision on the

same fees involved, and the impact of his

decision in the appeal on his decision in the

same matter before him as the trial judge. 

As a result, he cannot really make an

independent appellate decision, which is the

purpose for Section 47 in the first place.

The court concludes that Section 47 could be applied to

preclude a district judge from hearing an appeal from a

bankruptcy ruling made by that judge while on the bankruptcy

court. However, Section 47 means exactly what it says - a judge

cannot sit in appeal on an issue decided by him or her. Here, in

the bankruptcy appeal, I will be sitting in appeal of a decision

made by Judge Rimel. Even if the attorneys’ fees motion pending

before me in the Fraudulent Conveyance Action had been decided

before this appeal was filed or shortly thereafter, there would

be no basis for recusal under Section 47 because I did not make

Judge Rimel’s decision, Judge Rimel did. Furthermore, the

attorneys’ fees motion pending before me is much broader than the

fee request in the bankruptcy court and asserts other grounds for

the award other than the benefit to the bankruptcy estate and

also involves a request for attorneys’ fees from Betty Ting.

While the issues are similar to an extent, the issues arise in

different cases before different courts. Therefore, even if the

court had ruled that the Garbers did not waive their right to

seek recusal, the motion to recuse is denied to the extent that

it relies on Section 47.

C. 28 U.S.C. § 455(a).

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The Garbers also base this motion on 28 U.S.C. § 455(a). 

Section 455(a) provides:

Any justice, judge, or magistrate of the

United States shall disqualify himself in any

proceeding in which his impartiality might

reasonably be questioned.

In seeking recusal pursuant to Section 455(a), the Garbers

contend that the appearances in this case demonstrate the

impropriety of my hearing the instant appeal:

Judge Coyle was the district judge who

originally ruled against the Garbers on

summary judgment and in favor of National

Union, resulting in NU’s claims against them. 

Subsequently, National Union filed the

District Court Case, and Judge Coyle was

assigned that case. Judge Coyle sua sponte

withdrew the reference of the adversary

proceeding which NU had initially filed in

the bankruptcy court, a highly unusual

occurrence in itself.

Judge Coyle decided the District Court Case

against the Garbers, and they partially

prevailed on appeal. The issue concerning

attorneys fees and costs were returned to

Judge Coyle by the Ninth Circuit .. NU filed

its claim with the bankruptcy court and

followed up with the District Fee Motion. 

That latter motion was argued and submitted

in July 2003. In the meantime, the Chapter 7

trustee objected to NU’s claim for many of

the same fees. The Bankruptcy Court Fee

Motion was argued, decided, and is now on

appeal before Judge Coyle.

It would appear exceptionally unfair for

Judge Coyle to hear an appeal which covers

the same facts, fees, and costs which are

still pending before him ... NU filed three

lawsuits against the Garbers. All of the

significant decisions in these three cases

have been made by Judge Coyle. He has never

allowed any case to go to a jury, ruling in

NU’s favor on summary judgment and dismissing

all of the Garbers’ counterclaims. He

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withdrew the reference from the bankruptcy

court of NU’s denial of discharge action

against the Garbers - a case which still

remains pending and undecided ... Under all

the facts, no reasonable person would believe

Judge Coyle would be making a dispassionate

decision as an appellate judge concerning

fees and costs involving the District Court

Case while the same issues are pending before

him in the District Court Fee Motion.

To the extent that the Garbers base this aspect of their

motion to recuse on the facts that I have ruled against them in

other litigation and withdrew the reference to the bankruptcy

court, these grounds for recusal have been rejected by the Ninth

Circuit on the Garbers’ appeal in No. CV-F-96-5858 REC. 

Furthermore, judicial rulings do not constitute grounds for

disqualification. See Liteky v. United States, 510 U.S. 540,

555-556 (1994); United States v. Conforte, 624 F.2d 869 (9th

Cir.), cert. denied, 449 U.S. 1012 (1980). 

The Garbers have not demonstrated that recusal under Section

455(a) is required. As National Union notes, I am not sitting as

a trial judge and an appellate judge in the same case. The

instant appeal arises out of the Garber bankruptcy heard by the

Bankruptcy Court whereas the Fraudulent Conveyance Action is

pending in the District Court under a different case number. As

noted, there is an additional party in the Fraudulent Conveyance

Action and the issues in the Fraudulent Conveyance Action

pertaining to the pending motion for attorneys fees are not

identical to those involved in the appeal from the Bankruptcy

Court’s ruling on attorneys’ fees. Furthermore, the Garbers cite

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no cases which state or even infer that a district court judge

must recuse himself from hearing a bankruptcy appeal because

there is pending before the same judge a district court action

involving some of the same parties or even some of the same

issues. Consequently, even if the court had ruled that the

Garbers did not waive their right to seek recusal, the motion to

recuse is denied to the extent that it relies on Section 455(a).

ACCORDINGLY:

1. Appellants’ Motion to Recuse Judge Coyle is denied.

IT IS SO ORDERED.

Dated: August 12, 2005 /s/ Robert E. Coyle 

668554 UNITED STATES DISTRICT JUDGE

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