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Thelma McCoy v. USA

Summarizing by Craig Geno

Friendly Finance Service - Eastgate Inc. v. Dorsey (In re Dorsey)

5th Cir. La. W.D. No. 3:090-CV-573 UNPUBLISHED
Appeal of denial of Motion to Disqualify BankruptcyJudge Hunter was dismissed as it is not an appealable final order under 28 U.S.C. Section 1291, nor an appealable interlocutory order under 28 USC Section 1292(a). Judge Hunter refused to recuse himself and appellant needs to await final judgment by the District Court on the Bankruptcy Court's denial of the Section 727 objection and the propriety of the injunction imposed on appellant before the 5th Circuit can address the judge's refusal to recuse himself.
Procedural context:
Appellant, Friendly Finance Service, had initially brought an action under Section 523 to have the obligations of the Debtors deemed nondischargable and also sought to have their discharges denied under Section 727. When the Bankruptcy Court dismissed both claims and further enjoined Friendly from filing similar suits in other Chapter 7 cases, Friendly filed a Motion to Disqualify Judge Hunter, which was denied initially without a hearing. The case went up on appeal and the Section 523 ruling was affirmed, but the other judgment was vacated and remanded for further proceedings. On remand Judge Hunter denied the motion to disqualify without hearing any evidence and orally ruled in favor of the Debtors on the 727 objection and the injunction. Friendly appealed again. Friendly also moved for rehearing of the motion to disqualify and, after that was denied, he appealed that decision as well. On the second appeal, the District Court remanded again finding that Judge Hunter should have given Friendly Finance an opportunity to present evidence on the Motion to Disqualify. and administratively terminated the appeal of the other rulings. A hearing was held in the Bankruptcy Court, followed by another denial of the Motion to Disqualify. The DIstrict Court dismissed the appeal of this denial as moot, stating Judge Hunter was no longer the preciding judge in the bankruptcy proceedings. Friendly Finance appealed that ruling to the Fifth Circuit.
A creditor in a Chapter 7 case filed an adversary seeking to deem their claim nondischargable under Section 523 as well as seeking denial of the discharges of the Debtors under 727. The Bankruptcy Court judge dismissed both claims and made a finding that the Plaintiff had repeatedly filed "abusive complaints". So, the Bankruptcy Judge went further and also enjoined the Plaintiff from filing any similar complaints in other Chapter 7s without first getting leave of court. The Plaintiff filed a motion to disqualify the judge under 28 USC Section 455(a) and (b)(1). That motion was summarily denied. Due to the first appeal, Plaintiff was able to put on his evidence on the Motion to Disqualify the second time, but the Bankruptcy Judge did not recuse himself. The other appeal regarding the injunction and the 727 count was "administratively terminated," which the Fifth Circuit describes as effectively staying the appeal. In error, the District Court Judge deemed the second appeal on disqualification moot, mistakenly believing that Judge Hunter was no longer on the case. Now the appeal of the denial of recusal has been dismissed for lack of jurisdiction, as the appeal in the District Court has not yet resulted in a final judgment. In a footnote the 5th Circuit Judges noted that the District Court may find it appropriate to reevaluate the recusal issue on the merits. The District Court wil now need to proceed with review of the appeal on the denial of the 727 objection and the propriety of the injunction.
Jones, Garza and Prado

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