- Category: Judge Karlin
- Published on 06 February 2009
- Written by Judge Karlin
SIGNED this 08 day of January, 2009.
Page 1 of 12
JANICE MILLER KARLIN
UNITED STATES BANKRUPTCY JUDGE
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF KANSAS
In re: )
RAFTER SEVEN RANCHES, LP, ) Case No. 05-40483
) Chapter 12
MEMORANDUM OPINION AND ORDER
DENYING MOTION TO RECUSE
The Motion to Recuse1 filed by Debtor, Rafter Seven Ranches, is before this Court
for decision. Given the close proximity between the filing of this motion and the trial on the
Motion to Remove Debtor-in-Possession for Cause or in the alternative to Convert the Case
to a Case Under Chapter 7,2 filed by Creditor C.H. Brown, C.H. Brown has not had the
2This Motion was filed August 1, 2008 as Doc. 447.
Case: 05-40483 Doc #: 518 Filed: 01/08/2009 Page 2 of 12
opportunity to respond to this recusal motion. Because of the imminent trial date,3 however,
the Court finds it appropriate to issue this ruling without awaiting a response.4
The motion relies solely on 28 U.S.C. § 455, and provides no case law support, nor
the standards this Court must apply, in evaluating the motion. Instead, Debtor summarily
suggests that adverse rulings, including those concerning the credibility of witnesses that
have appeared before the Court in connection with this case, evidence bias by the assigned
judge. Debtor indicates that “[t] reason for such bias is unknown, but the actions of the Court
in trials, pretrials, and scheduling conferences have all indicated that such bias does exist.”
Debtor does not provide the Court with any concrete examples of such “actions” except for
one, noted below.
Debtor also claims that the judge has already “decided” an issue that is still to come
before her, implying that this judge has prejudged issues on which no evidence has been
received. Finally, Debtor suggests that the assigned judge may be biased because she may
have visited with the former judge assigned to this case, whose impartiality and fairness
Debtor’s principal also questioned. That suggestion implies that this judge is either incapable
of reaching decisions on her own, without consulting the prior trial judge, or that the prior
3The trial is on C.H. Brown’s motion, Doc. 447.
4Motions to recuse should be filed “at the earliest possible time after the facts are discovered.” First Interstate
Bank of Arizona v. Murphy, Weir & Butler, 210 F.3d 983, 989 n.8 (9th Cir. 2000). The main bases for this motion relate
to decisions made in July, 2008 (Doc. 429) and September 2008 (Doc. 472), and one purported comment made in a
Scheduling Conference. Although the Court is unsure to which date Debtor refers, there was a Scheduling Conference
on September 23, 2008. Debtor then waited almost three months to even raise this issue with the Court, orally through
counsel, on December 19, 2008.
Case: 05-40483 Doc #: 518 Filed: 01/08/2009 Page 3 of 12
trial judge would not only desire to influence this trial judge’s opinions but also would
actually attempt to influence the trial judge’s opinions and did so in this case.5
Under 28 U.S.C. § 455, motions to disqualify are core proceedings6 addressed to the
trial court, to the person whose impartiality is questioned, and that person rules on the issue.
Since the motion is a core proceeding, the matter need not be referred to the district court for
a final order. Accordingly, this Court has jurisdiction over this core proceeding.7
Federal Rule of Bankruptcy Procedure 5004(a), through incorporation of 28 U.S.C.
§ 455, provides for disqualification of a bankruptcy judge from either the entire case or a
proceeding within a case, under certain conditions. “Title 28, section 455(a) of the United
States Code provides that ‘[a]ny justice, judge, or magistrate judge of the United States shall
disqualify himself in any proceeding in which his impartiality might reasonably be
questioned.’ ... Under this standard, ‘[t]he trial judge must recuse himself when there is the
appearance of bias, regardless of whether there is actual bias.’”8 “The test is whether a
reasonable person, knowing all the relevant facts, would harbor doubts about the judge's
impartiality.” The Court is to consider the totality of the circumstances when reviewing such
5This judge has no reason to think the prior trial judge has any desire to influence her decision on the issues (or
witnesses) in this or any other case, and he has certainly made no attempt to do so here.
628 U.S.C. § 157(b)(2)(A) and In re Betts, 143 B.R. 1016, 1022 (Bankr. N.D. Ill. 1992).
728 U.S.C. §§ 1334(b), 157(a), and 157(b)(1).
8United States v. Lang, 364 F.3d 1210, 1217 (10th Cir. 2004) vacated on other grds, 543 U.S. 1108 (2005)
(citing Bryce v. Episcopal Church of Colo., 289 F.3d 648, 659 (10th Cir.2002)).
Case: 05-40483 Doc #: 518 Filed: 01/08/2009 Page 4 of 12
claims, disregarding “the judge's actual state of mind, purity of heart, incorruptibility, [and]
lack of partiality.”9
The Supreme Court thoroughly considered the issue of bias in Liteky v. United
States,10 a criminal case which nevertheless has application here. That Court held as follows:
The judge who presides at a trial may, upon completion of the evidence, be
exceedingly ill disposed towards the defendant, who has been shown to be a
thoroughly reprehensible person. But the judge is not thereby recusable for
bias or prejudice, since his knowledge and the opinion it produced were
properly and necessarily acquired in the course of the proceedings, and are
indeed sometimes (as in a bench trial) necessary to completion of the judge's
task. As Judge Jerome Frank pithily put it: “Impartiality is not gullibility.
Disinterestedness does not mean child-like innocence. If the judge did not
form judgments of the actors in those court-house dramas called trials, he
could never render decisions.” Also not subject to deprecatory
characterization as “bias” or “prejudice” are opinions held by judges as a result
of what they learned in earlier proceedings. It has long been regarded as
normal and proper for a judge to sit in the same case upon its remand, and to
sit in successive trials involving the same defendant.11
Accordingly, a party, or the debtor in a bankruptcy proceeding, is not entitled to a new judge
every time he or she loses a contested matter or an adversary proceeding within the context
of that bankruptcy proceeding.12
10510 U.S. 540, 550-51 (1994).
11Id. at 551-52 (citations omitted).
12Frates v. Weinshienk, 882 F.2d 1502, 1506 (10th Cir. 1989) (holding that improper or incorrect rulings are
grounds for appeal, not recusal).
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“Under section 455(a), the judge is under a continuing duty to ask himself what a
reasonable person, knowing all the relevant facts, would think about his impartiality.”13
Clearly, if a judge believes his or her impartiality might reasonably be questioned, the judge
has an obligation to recuse. “On the other hand, a judge has as much obligation not to recuse
himself where there is no reason to do so as he does to recuse himself when the converse is
true.”14 In addition, because cases interpreting § 455(a) are extremely fact driven, they “must
be judged on [their] unique facts and circumstances more than by comparison to situations
considered in prior jurisprudence.”15
A non-exhaustive list of factors that will ordinarily not satisfy the requirements for
disqualification under § 455(a) include:
“(1) Rumor, speculation, beliefs, conclusions, innuendo, suspicion, opinion,
and similar non-factual matters; (2) the mere fact that a judge has previously
expressed an opinion on a point of law or has expressed a dedication to
upholding the law or a determination to impose severe punishment within the
limits of the law upon those found guilty of a particular offense; (3) prior
rulings in the proceeding, or another proceeding, solely because they were
adverse; (4) mere familiarity with the defendant(s), or the type of charge, or
kind of defense presented; (5) baseless personal attacks on or suits against the
judge by a party; (6) reporters' personal opinions or characterizations
appearing in the media, media notoriety, and reports in the media purporting
to be factual, such as quotes attributed to the judge or others, but which are in
13U.S. v. Greenspan, 26 F.3d 1001, 1005 (10th Cir. 1994) (citing United States v. Hines, 696 F.2d 722, 728 (10th
Cir.1982) and Nichols v. Alley, 71 F.3d 347, 352 (10th Cir. 1995) (holding that it is “settled principle that a judge has
as strong an obligation not to recuse when the situation does not require as he has to recuse when it is necessary.”)).
14Id. (citing City of Cleveland v. Cleveland Elec. Illuminating Co., 503 F. Supp. 368, 370 (N.D. Ohio 1980)).
15United States v. Jordan, 49 F.3d 152, 157 (5th Cir. 1995).
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fact false or materially inaccurate or misleading; and (7) threats or other
attempts to intimidate the judge.”16
Furthermore, when reviewing a charge of bias lodged against a judge, the Supreme Court has
counseled, “opinions formed by the judge on the basis of facts introduced or events occurring
in the course of the current proceedings, or of prior proceedings, do not constitute a basis for
a bias or partiality motion unless they display a deep-seated favoritism or antagonism that
would make fair judgment impossible. Thus, judicial remarks during the course of a trial that
are critical or disapproving of, or even hostile to, counsel, the parties, or their cases,
ordinarily do not support a bias or partiality challenge.”17 Finally, the movant bears the
burden of demonstrating that the judge is partial.18
A review of the “grounds” for recusal asserted by Debtor reveals that the motion
contains nothing but “speculation, beliefs, conclusions, innuendo, suspicion, opinion, and
similar non-factual matters.” Debtor suggests this judge, in its decision issued July 15,
16Nichols v. Alley, 71 F.3d 347, 351 (10th Cir. 1995) ( citing United States v. Cooley, 1 F.3d 985, 993 (10th Cir.
1993)). See also Tonkovich v. Kansas Bd. of Regents, 924 F. Supp. 1084, 1087-88 (D. Kan. 1996).
17United States v. DeClerck, 252 Fed. Appx. 220, 223, 2007 WL 3104596 at * 2 (10th Cir. 2007) (quoting Liteky
v. United States, 510 U.S. 540, 555 (1994)). See also United States v. Nickl, 427 F.3d 1286, 1298 (10th Cir. 2005)
(holding that “when a judge's words or actions are motivated by events originating within the context of judicial
proceedings, they are insulated from charges of bias”) (citing Liteky v. United States, 510 U.S. at 554-56 and Green v.
Branson, 108 F.3d 1296, 1305 (10th Cir.1997) (holding that “adverse rulings cannot in themselves form the appropriate
grounds for disqualification.”)).
18McCann v. Commc’ns Design Corp., 775 F. Supp. 1506 (D. Conn. 1991), aff’d, 35 F.3d 553 (2d Cir. 1994)
and In re Betts, 143 B.R. at 1020 (holding that “[a] judge is presumed qualified to hear a proceeding and the movant has
the burden of proving otherwise. A judge is not disqualified under section 455 merely because a litigant has transformed
his fear of an adverse decision into a fear that the judge will not be impartial.”) (internal citations omitted).
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2008,19 must have been biased, or she would not have made the findings she did. Without
rewriting that decision here, the Court merely incorporates it by reference and concludes that
the findings made therein were solely based on the evidence received, coupled with
applicable law. Although the Court found that as between WNL, Koster and Mr. Friesen,
Debtor’s principal and agent, the Court tended to believe WNL and Koster’s version of the
events, neither the opinion, nor this Court’s view of Friesen/Rafter Seven, come close to
meeting the requirement that she display a “deep-seated favoritism or antagonism that would
make fair judgment impossible.” To the contrary, after evaluating the events occurring in
this case, the Court finds that not only has Debtor not satisfied his high burden in seeking
recusal, but probably as important, this Court has carefully looked at her decisions, and her
actions, in this case and believes she has been, and will continue to be, fair in any further
Although this Court does not need to justify its conclusion that it has been, and will
continue to be, fair and impartial, the Court notes that before this recusal motion was filed,
but after the court issued its July 15, 2008 and September 19, 2008 rulings upon which
Debtor relies to suggest bias, the Court was required to decide three related motions. The
first was one filed by C.H. Brown to “Determine that Debtor's Use of Cash Assets of the
Estate to Purchase Land at Public Auction is not in the Ordinary Course of Debtor's Business,
20The Court has used this motion, and her research, to assist her in performing her “continuing duty to ask
[herself] what a reasonable person, knowing all the relevant facts, would think about [her] impartiality.” United States
v. Greenspan, 26 F.3d 1001 at 1005.
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and Requires Court Approval, After Notice, Which Has Neither been Sought nor Given.”21
The second was Debtor’s Contingent Motion to Allow Debtor to Purchase the Friesen
Homestead, Tract 3, at the Auction Sale to be Held November 19, 2008.”22 The third was
Debtor’s Motion for an Emergency Hearing, since the sale at issue was imminent. The Court
ruled in Debtor’s favor on all three motions,23 demonstrating that the Court remains impartial,
even after the trial resulting in the adverse ruling in July 2008.
The only other articulated basis for seeking recusal is the suggestion that this judge
has prejudged an issue that is the subject of an upcoming hearing. Debtor states that this
judge “pointed out that it had already decided the issue concerning Mr. Friesen’s taking of
the approximately $1,600 and depositing it into other accounts, and seemed to rely upon this
finding (which was not at issue before the Court on the motion decided on July 15, 2008) in
deciding the present matter.” This bare assertion requires some context.
In describing the background for the Settlement Agreement that was the subject of the
trial resulting in the July 2008 decision, the Court noted that certain trusts held by Mr.
Friesen’s children had abandoned their interest in the subject real estate. The Court then
inserted a footnote, as follows:
14. Although the Trusts expressly relinquished whatever interest they had in
the subject real estate, as noted in § 4(i) of the Court’s Order, which fact was
acknowledged when Mike Friesen approved the Settlement Agreement in his
Case: 05-40483 Doc #: 518 Filed: 01/08/2009 Page 9 of 12
capacity as the Trusts’ representative, Mike Friesen nevertheless gave the
money received from the 2006 wheat crop, pursuant to the terms of the
Settlement Agreement, to the Trusts, and failed to report that income to the
Chapter 12 Trustee. When WNL and Koster’s counsel caught him doing this,
he stated (during his deposition) that if “it’s going to become a big deal” he’d
return the money to the estate, where this Court finds it rightfully belongs. See
Exhibit 2 to Koster’s Memorandum in Support of Summary Judgment, at page
75 of deposition (page 19 of Exhibit 2). The Court assumes Mike Friesen will
now promptly return that money to the Chapter 12 estate because consciously
diverting property of the estate to someone not entitled to it is a “big deal.”
Debtor suggests that a) this finding was not required by the issues, and b) shows bias. Debtor
also claims that at a Scheduling Conference on the pending Motion to Dismiss or Convert
by C.H. Brown, this judge said that she had already found that Mr. Friesen had given the
money to his children’s trusts, instead of depositing it into the debtor-in-possession account.
Debtor argues that this finding of fact will predispose the Court in ruling on the pending
Motion to Dismiss or Convert. In reality, the Court’s finding that Mr. Friesen had deposited
these funds in his children’s trust accounts came after Mr. Friesen had admitted doing so,
under penalty of perjury, on Rafter Seven’s behalf. The Court also believed that estate funds
should be immediately returned to the debtor-in-possession account, and should be properly
reflected in required monthly accountings. The Court felt inclusion of this statement that the
money must be placed in the correct account was the most expedient way of ensuring
Debtor’s principal knew that he had a fiduciary duty to ensure that estate funds were properly
segregated and kept in an estate account.24
24The statement achieved its intended purpose, as Debtor thereafter filed a pleading stating “[a]pproximately
$1,600 which the Debtor deposited with the trust, and which the Debtor never attempted to hide has been returned and
is now in a separate certificate of deposit in the name of Rafter Seven Ranches.” See Doc. 483.
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Second, even though Debtor’s principal admitted in his sworn deposition that he had
deposited those funds in his children’s account, the issue that is imminently before the Court
is not whether he did so (since he admitted he did), but whether that act, coupled with
numerous other issues raised by C.H. Brown,25 justifies removal of Mr. Friesen pursuant to
11 U.S.C. §1204 (or whether the case should be converted to a Chapter 7 pursuant to 11
U.S.C. § 1208(d)).
The Court has not decided whether Mr. Friesen had good cause to originally deposit
the money in his children’s accounts,26 and/or whether it was an innocent mistake that has
since been corrected, both of which positions Mr. Friesen has variously asserted. In addition,
the standard for removing Mr. Friesen under § 1204 is a stringent one. It requires that the
court find cause, including fraud, dishonesty, incompetence, or gross mismanagement of the
affairs of the debtor, either before or after the commencement of the case. The Court has not
made any findings, or reached any conclusions, about that issue. The Court has found, based
upon Mr. Friesen’s sworn testimony, that the money was deposited in the wrong account, but
nothing more. That finding in no way prejudges the issues remaining before the Court. And
the Court has made no findings and reached no conclusions as to the reasons for Mr.
Finally, it is important to remember that
25See Doc. 515, Pretrial Order at pages 3-6.
26On August 26, 2008, Debtor indicated “[t]he Debtor believes that giving money to the trusts was proper and
if deemed to be improper, such funds will be returned.” By November 10, 2008, in Doc. 483 referenced in note 23,
above, however, Debtor was no longer arguing the deposit to the children’s trust was “proper,” but that Debtor had,
instead, complied with its obligation to place estate funds in an estate account.
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[a] court is not required to ignore facts heard in prior hearings in the
bankruptcy case or proceedings. This may also extend to opinions expressed
regarding prior or related cases, as in an individual debtor’s actions with
regard to a related, corporate bankruptcy. Thus, familiarity with a party or
with the fact which arose from participation in an earlier judicial proceeding
does not disqualify a judge from presiding at a later trial.27
Accordingly, the only other basis for seeking disqualification—that this Court has prejudged
an issue, is simply incorrect, and does not properly support the Motion to Recuse.
A judge is obligated to “perform the duties of the office impartially and diligently.”28
In addition, this Court wholeheartedly agrees with the statement by the Tenth Circuit Court
of Appeals, in United States v. Greenspan,29 that “[t]here are few characteristics of a
judiciary more cherished and indispensable to justice than the characteristic of
impartiality.”30 Furthermore, Congress has mandated, through enactment of 28 U.S.C. § 455,
that justice must not only be impartial, but also that it must reasonably be perceived to be
impartial. But a litigant does not have the right to seek recusal of a judge simply because the
judge has ruled against him, or has found his prior testimony in the case to be less credible
than the testimony of other witnesses.
This judge is the second judge to preside over this case. The first judge asked the case
to be reassigned after Debtor’s principal similarly questioned the impartiality of the first
27Collier on Bankruptcy, § 5004.01[a], at 5004-6 (15th ed. rev. 2002). (citations omitted).
28Code of Conduct for United States Judges, Canon 3 (1992).
2926 F.3d 1001, 1007 (10th Cir. 1994).
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judge,31 who had rendered some decisions adverse to Debtor. Although this Court would
carefully apply the standards for disqualification in any case, because this is the second
request for a new judge in this case, the duty to do so is perhaps even heightened here.
Finally, as noted above, a judge has as much obligation not to recuse herself where there is
no reason to do so as she does to recuse herself when the converse is true. Because there is
no reason to recuse, this judge declines to do so.
IT IS, THEREFORE, ORDERED that Debtor’s Motion to Recuse is denied. The
trial scheduled for January 12, 2008 will proceed as scheduled.
# # #
31Doc. 339, Order Returning Cases to Clerk for Reassignment, where the prior judge found that denial of
informal request to recuse would likely result in delays not beneficial to either the Rafter Seven or the Michael Friesen
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