Court Opinion

ID: 9325693
Source: CourtListenerOpinion
Date Created: 2022-12-14 17:00:31.520664+00
Date Added: 2024-06-11T17:15:01.867672
License: Public Domain

Appellate Case: 22-2070     Document: 010110782884      Date Filed: 12/14/2022   Page: 1
                                                            FILED
                                                United States Court of Appeals
                    UNITED STATES COURT OF APPEALS      Tenth Circuit

                            FOR THE TENTH CIRCUIT                     December 14, 2022
                          _______________________________________
                                                                     Christopher M. Wolpert
                                                                         Clerk of Court
     MTGLQ INVESTORS, LP,

           Plaintiff - Appellee,
                                                           No. 22-2070
     v.                                         (D.C. No. 1:17-CV-00487-KG-LF)
                                                            (D. N.M.)
     MONICA L. WELLINGTON,

           Defendant - Appellant.
                        _______________________________________

                             ORDER AND JUDGMENT *
                          _______________________________________

 Before BACHARACH, BALDOCK, and McHUGH, Circuit Judges.
                _______________________________________

          This matter grows out of the foreclosure and sale of Ms. Monica

 Wellington’s house. After granting summary judgment against

 Ms. Wellington on the foreclosure claim, the district court appointed a

 Special Master (Ms. Margaret Lake) to conduct the sale. The Special

 Master completed the foreclosure sale, and the district court approved it.

 *
      Oral argument would not help us decide the appeal, so we have
 decided the appeal based on the record and the parties’ briefs. See Fed. R.
 App. P. 34(a)(2)(C); 10th Cir. R. 34.1(G).

       Our order and judgment does not constitute binding precedent except
 under the doctrines of law of the case, res judicata, and collateral estoppel.
 But the order and judgment may be cited for its persuasive value if
 otherwise appropriate. See Fed. R. App. P. 32.1(a); 10th Cir. R. 32.1(A).
Appellate Case: 22-2070   Document: 010110782884   Date Filed: 12/14/2022   Page: 2

 Ms. Wellington appealed, and this Court affirmed the district court’s order.

 See MTGLQ Invs. v. Wellington, 856 F. App’x 146 (10th Cir. 2021).

       Following the foreclosure sale, Ms. Wellington moved to vacate the

 order approving the sale and to disqualify the district judge. The district

 court denied both motions, and Ms. Wellington appeals on three grounds:

 (1) procedural errors in appointing the Special Master and approving the

 Special Master’s report, (2) invalidity of the sale based on the Special

 Master’s unauthorized practice of law, and (3) abuse of discretion in the

 denial of the motion to disqualify the district judge. We reject these

 arguments.

 I.    The district court didn’t abuse its discretion in approving the
       Special Master’s report.

       We review the district court’s application of non-jurisdictional

 procedural rules for an abuse of discretion. See United States v. Nicholson,

 983 F.2d 983, 988 (10th Cir. 1993).

       Ms. Wellington argues that she didn’t have enough time to respond to

 the Special Master’s report. Parties generally have 21 days to object to the

 report. Fed. R. Civ. P. 53(f)(2). Here the district court approved the sale

 after only 6 days. Though Ms. Wellington didn’t have the typical 21 days,

 she doesn’t identify any meritorious challenges that she would have

 presented with more time.

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       Even without a response, the district court considered possible

 challenges and determined that

             the notice of the foreclosure sale had been proper and the
              procedures adequate and

             the sale price did not shock the conscience.

 Ms. Wellington does not identify any flaws in the district court’s

 reasoning. And without such flaws, the timing of the decision wouldn’t

 have prejudiced Ms. Wellington.

       She also alleges defects in the Special Master’s appointment. But she

 needed to raise these defects when responding to the original appointment.

 In October 2019, the creditor had submitted a proposed judgment that

 included appointment of a special master. Ms. Wellington then had a

 chance to object, and she did so. But her objections didn’t address the

 qualifications of the Special Master or the sufficiency of the Special

 Master’s appointment.

       Once the district court appointed the Special Master, Ms. Wellington

 waited more than two years to object. Like the district court, we consider

 these objections late; and Ms. Wellington has not shown good cause for the

 delay. That delay constituted a waiver of any objections to the

 appointment. See Regents of Univ. of New. Mexico v. Knight, 321 F.3d

 1111, 1127 (Fed. Cir. 2003) (“It is well-settled that objections to the

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 appointment and use of a special master may be waived if not made in a

 timely fashion.”).

 II.    Ms. Wellington has not shown that the Special Master engaged in
        the unauthorized practice of law.

        Ms. Wellington argues that the Special Master engaged in the

 unauthorized practice of law. For this argument, Ms. Wellington relies on

 State Bar v. Guardian Abstract & Title Co., 575 P.2d 943 (N.M. 1975).

 There the New Mexico Supreme Court held that lay employees would have

 been engaged in the practice of law if they had exercised legal judgment

 about a form or had given advice about the effect of a document. 575 P.2d

 at 949. Based on this holding, Ms. Wellington contends that the Special

 Master engaged in the unauthorized practice of law by preparing a deed for

 conveyance of the property to the highest bidder.

        We disagree. The Special Master obtained supervision by the district

 court, which reviewed and approved the foreclosure sale and the Special

 Master’s Deed. See Appellant’s App’x vol. VI, at 97–98. Given the district

 court’s supervisory role, the Special Master’s preparation of the deed

 didn’t involve the unauthorized practice of law under State Bar v.

 Guardian Abstract & Title Co., 575 P.2d 943 (N.M. 1975).

 III.   The district judge did not abuse his discretion by declining to
        recuse.

        Ms. Wellington sought the district judge’s recusal under 28 U.S.C.

 § 455. Under § 455, recusal would have been required if the “judge’s

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 ‘impartiality might be reasonably questioned’” by a reasonable person who

 knows all of the relevant facts. United States v. Hines, 696 F.2d 722, 728

 (10th Cir. 1982) (quoting United States v. Ritter, 540 F.2d 459, 462 (10th

 Cir. 1976)). The district judge denied the motion, and we review this

 decision for an abuse of discretion. Hinman v. Rogers, 831 F.2d 937, 938

 (10th Cir. 1987).

       A district court’s ruling on a motion to recuse is considered an abuse

 of discretion if it was an “arbitrary, capricious, whimsical, or manifestly

 unreasonable judgment.” Higganbotham v. Okla. ex rel. Okla. Transp.

 Comm’n, 328 F.3d 638, 645 (10th Cir. 2003) (internal quotation marks

 omitted).

       Ms. Wellington argues that the district judge showed partiality by

 condoning the unauthorized practice of law. As discussed above, the

 Special Master did not engage in the unauthorized practice of law. So the

 judge’s approval of the Special Master’s report did not reflect partiality.

       Even if the judge had erred, though, an error in the ruling wouldn’t

 have shown partiality. In fact, the district judge elsewhere denied the

 creditor’s request to appoint a receiver to manage rental income from the

 property, reasoning that (1) Ms. Wellington probably hadn’t committed

 fraud and (2) the property was not in imminent danger of a loss,

 concealment, or diminution in value. Appellant’s App’x vol. II, at 227. The

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 district judge’s actions thus don’t reflect an arbitrary, whimsical, or

 manifestly unreasonable resolution of Ms. Wellington’s claims.

       Even if the district judge had erred, though, the error would have

 been harmless. To decide whether a § 455 violation is harmless, we

 evaluate “the risk of injustice to the parties in the particular case, the risk

 that the denial of relief will produce injustice in other cases, and the risk

 of undermining the public’s confidence in the judicial process.”

 Higganbotham, 328 F.3d at 645–46 (internal quotation marks omitted).

       None of those risks are present here. This Court has already affirmed

 the district court’s order of foreclosure and sale. MTGLQ Invs., LP v.

 Wellington, No. 20-2000, 856 F. App’x 146 (10th Cir. 2021). And

 Ms. Wellington retained her ability to redeem the property. We thus see no

 reason for the public to question the district judge’s impartiality.

 IV.   Conclusion

       The district court acted within its discretion when approving the sale

 and denying Ms. Wellington’s motion to recuse. So we affirm.

                                      Entered for the Court

                                      Robert E. Bacharach
                                      Circuit Judge

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