DONATO v. RHODE ISLAND HOSP. TRUST NAT. BANK

52 F. Supp.2d 317 (1999) | Cited 0 times | D. Rhode Island | June 15, 1999

DECISION AND ORDER

Executor of decedent's estate sued bank and law firm for nonfeasance.On plaintiffs motion for judicial recusal, the District Court, Lagueux,Chief Judge, held that fact that judge and defendant both had sons insame school class more than twenty years ago did not give rise tojudicial bias warranting recusal.

Motion denied.

1. Judges 49(1)

Judge should remove himself or herself from case where reasonableperson, were he or she to know all circumstances, would harbor doubtsabout judge's impartiality. 28 U.S.C.A. § 455(a).

2. Judges 51(3)

Litigant must offer factual basis and cannot compel judicialdisqualification simply on unfounded innuendo concerning possiblepartiality of presiding judge. 28 U.S.C.A. § 455(a).

3. Judges 49(1)

Standard for proving judicial bias from information obtained incourtroom is higher than for that obtained extrajudicially. 28 U.S.C.A.§ 455(a).

4. Judges 45

Fact that judge and tort defendant both had sons in same school classmore than twenty years earlier did not give rise to judicial biaswarranting recusal; judge and defendant did not socialize, and had noteven seen each other in past sixteen years. 28 U.S.C.A. § 455(a).

5. Judges 53

Appearance-of-impropriety ground for judicial disqualification may bewaived. 28 U.S.C.A. § 455(e).

6. Judges 53

Delay of eleven, months, from date plaintiff heard judge disclose thathe had once had contact with opposing party, to date plaintiff filedmotion to recuse, constituted waiver of issue; plaintiff wanted to seehow court would rule on his motion to remand. 28 U.S.C.A. § 455(e).

7. Federal Civil Procedure 2783(1)

Attorneys must make reasonable inquiry to assure that all motions arefactually well-grounded and legally tenable. Fed.Rules Civ.Proc.Rule 11,28 U.S.C.A.

8. Federal Civil Procedure 2783(1)

In deciding whether lawyer's inquiry before filing motion wasreasonable, court weighs various factors including complexity of subjectmatter, party's familiarity with it, time available for inquiry, and easeor difficulty of access to requisite information. Fed.Rules Civ.Proc.Rule11, 28 U.S.C.A.

9. Federal Civil Procedure 2768

Attorney may not escape sanctions for filing ungrounded motions merelyby claiming that he or she was protecting client's rights. Fed.RulesCiv.Proc.Rule 11, 28 U.S.C.A.

10. Federal Civil Procedure 2774(4)

Frivolous filing sanctions would not be imposed, even though motion forjudicial recusal was unfounded, in interest of moving case along tohearing on merits. Fed. Rules Civ.Proc.Rule 11, 28 U.S.C.A.

Plaintiff Louis Donato ("Donato") is the executor of the estate ofGloria Zinni and the guardian of Gloria's daughter and heir Dana ZinniDonato. This case began in state court in 1992 with allegations ofnonfeasance against the Rhode Island Hospital Trust National Bank, JamesWinoker, the law firm of Hinkley Allen & Snyder, and Richard Pierce, apartner in that firm (collectively "defendants"). It was removed to thisCourt in 1997.

On September 29, 1998, this Court ruled that Donato's state law claimswere preempted by the Employee Retirement Income Security Act,29 U.S.C. § 1001 et. seq. ("ERISA"). That unpublished opinion, whichis attached as Appendix A to this Decision, denied Donato's motion toremand.

On April 12, 1999, Donato moved for this writer to recuse himself fromthe case. This writer had disclosed on April 22, 1998 that he had metWinoker several times through the Providence Country Day School. Donatobelieves that this creates either bias or the appearance of bias. Hismemorandum passes up the opportunity to make a clear, conciseallegation, but the difference is not material because either, ifproved, would require recusal.

Defendants oppose the motion, and they ask this Court to imposesanctions against Donato and/or his counsel under Fed. R.Civ.P. 11.

For reasons outlined below, this Court denies the motion for recusal.Attorneys Arlene Violet and Marty Marran have abdicated their most-basicresponsibilities as members of this Federal Bar. They filed a writtenmotion that they knew or should have known was frivolous, and they couldbe sanctioned for their delinquency. Such irresponsible lawyering darkensthe reputation of all lawyers even though it primarily tars Violet andMarran. However, this Court declines to impose monetary sanctions in theinterest of moving this case along to a hearing on the merits.

I. The Motion to Recuse

A. The Standard Under § 455(a)

Donato makes his motion under 28 U.S.C. § 455(a), which recitesthat "[a]ny justice, judge or magistrate of the United States shalldisqualify himself in any proceeding in which his impartiality mightreasonably be questioned." 28 U.S.C. § 455(a).

A judge should remove himself or herself from a case where areasonable person, were he or she to know all the circumstances, wouldharbor doubts about the judge's impartiality. See United States v.Voccola, 99 F.3d 37, 42 (1st Cir. 1996); El Fenix de Puerto Rico v. TheM/Y JOHANNY, 36 F.3d 136, 140 (1st Cir. 1994). This includes theappearance of partiality. See In re Martinez-Catala, 129 F.3d 213, 220(1st Cir. 1997); In re Cargill, 66 F.3d 1256, 1260 n. 4 (1st Cir. 1995).The test is not whether this writer believes he can decide the casefairly or whether Donato believes that. See Liteky v. United States,510 U.S. 540, 548, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994). See also In reMartinez-Catala, 129 F.3d at 220 (not judge's opinion); Town of Norfolkv. U.S. Army Corps of Engineers, 968 F.2d 1438, 1460 (1st Cir. 1992) (notlitigant's opinion).

However, a litigant must offer a factual basis and cannot compeldisqualification simply on unfounded innuendo concerning the possiblepartiality of the presiding judge. See In re Martimez-Catala, 129 F.3d at220; Voccola, 99 F.3d at 42; El Fenix de Puerto Rico, 36 F.3d at 140. Thetrial judge must hear cases unless some reasonable factual basis to doubtthe impartiality of the tribunal is shown by some kind of probativeevidence. See El Fenix de Puerto Rico, 36 F.3d at 141. A judge may notabdicate difficult cases at the mere sound of controversy. See id.

B. Applied to this Case

This Court makes a practice of disclosing any relationship or pastevents that it believes might create even rumblings about partiality. Inthis case, this writer disclosed two facts in open court at an April 22,1998 hearing:

1) that this writer had a joint bank account opened and controlled by his wife at Hospital Trust (now BankBoston).

2) that this writer had met Winoker several times when their sons attended the Providence Country Day School.

This writer said at the April 1998 hearing that the connections did notappear to raise any partiality issues, and attorneys for all four partiessaid that they saw no issue to raise recusal.1 The parties continuedthat day to argue the motion to remand, which this Court took underadvisement and decided in the unpublished September 1998 opinion.

Now, Donato argues that this judge should recuse himself. At theMay 21, 1999 hearing, Attorney Marran said that the Hospital Trust (nowBankBoston) account does not raise a problem. Marran said the motionrests entirely on this writer's contacts with Winoker, although the brieffiled with this motion also argues that this Court's refusal to grantDonato's motions also shows bias.2

At the May 21, 1999 hearing, this writer expanded upon thedisclosure to explain the nature of the relationship with Winoker.Winoker is not a friend. He is hardly an acquaintance. This writer knewhim by his first name during the 1970s, but the only connection was thatWinoker and this writer each had a son in the Providence Country DaySchool Class of 1977. The boys were not friends. The parents neversocialized. But over several years inthe late 1970s, this writer and his wife served on the school's Parents'Council, and this writer met Winoker at meetings. The only issuesdiscussed related to the school. Winoker's place of residence, hisoccupation and his personal life were a complete mystery at the time.

The only meeting in the past two decades was an evening probably in1983 when this writer and his wife accidentally met Winoker and his wifewaiting for tables to eat chowder and clam cakes at George's in Galifee,Rhode Island. The discussion lasted fewer than 10 minutes and never roseabove small talk about the boys. The conversation only sticks in memorybecause Winoker's son, David, was attending the University of BridgeportLaw School, and this writer had not known the school existed.

This kind of relationship does not compel recusal because it was bothsuperficial and antique. At its height in the 1970s, the relationship atissue was one between polite strangers whose sons happened to have beenin the same class. Cf. In re Cargill, 66 F.3d at 1260 n. 4 (recusalappropriate where case is argued by attorney whose firm was simultaneouslyrepresenting judge in a private issue). On top of that, this writer hasnot seen Winoker in 16 years and has not had a conversation of substancein more than two decades. See In re Martinez-Catala, 129 F.3d at 221(noting the importance of time's passage since a lawyer had been ajudge's law clerk). No reasonable person could believe that a judge wouldbe partial to a person who he knew through a Parents' Council 20 yearsago and never made any effort to see again.

At times, this Court recuses itself at even the suggestion of a problembecause impartiality rests so centrally to a court's mission. It hasreacted to. litigants' fears even when they were not reasonable.However, this case is complicated because neither of the other judges inthis district can hear this case. Judge Ernest Torres has already recusedhimself, and Judge Mary Lisi's husband represents Winoker in thisaction. Therefore, the parties would face the expense and inconvenienceof having this case transferred to New Hampshire, our sister jurisdictionin such matters. Where there is absolutely no appearance of bias, itwould be unreasonable to impose such costs and delays on the parties.

II. Waiver of The Motion

Even if grounds for recusal existed in April 1998, Donato cannot pressthis motion almost a year later. Donato's attorney Violet explicitlywaived the issue at the April 1998 hearing, and Donato waited more than11 months to file this motion.

A. The Law of Waiver

The statute plainly contemplates that a party may waive anappearance-of-impropriety ground for disqualification. See In re Cargill,66 F.3d at 1261. The statute itself does not define the form orprerequisites of such a waiver; it only imposes the condition that thewaiver be preceded by a full disclosure on the record of the basis forthe disqualification. See 28 U.S.C. § 455(e); In re Cargill 66 F.3dat 1261.

The First Circuit held in Cargill that there was a waiver under §455(e) where:

1) the judge made a complete disclosure.

2) the party's attorney unequivocally said that the party did not object to the judge's continued service in the case; and

3) the party heard about the disclosure from counsel and delayed the protest until a month had passed and the judge had issued an opinion on a motion to dismiss.

See In re Cargill, 66 F.3d at 1261-62.

B. Applied To This Case

Donato waived any grounds for recusal because he acted even lessreasonably than the party in Cargill. Donatowas at the April 1998 hearing. (See Transcript of April 22, 1998 hearingat 1.) He heard this Court's disclosure and heard his attorney, Violet,make a clear waiver. Yet he waited 11 months and waited to see how thisCourt would rule on the motion to remand and a later motion forclarification before pressing this motion in court.

The April 22, 1998 hearing began with this writer's disclosures.Attorneys for all four parties were present and said that they would notmove to recuse:

THE COURT: I forgot to mention James Winoker is a defendant. First of all, before I hear arguments I just want to make some disclosures for the record. I know James Winoker. His son and one of my sons were classmates at Providence Country Day School Class of 1977, and my wife and I had occasion from time to time to meet Mr. Winoker and his wife at Country Day functions. And I think we met him once waiting for a table in a restaurant and chatted with them, probably 10 years ago. That's the extent of my knowledge of Mr. Winoker. But I do know him and know him by his first name. We've never socialized in any way. I want that to be on the record.

Also, I want to put on the record that my wife has a small bank accountat Rhode Island Hospital Trust National Bank where she put some fundsthat she inherited through her mother in an account. And I think sheadded my name to the account a few years ago. So I make thesedisclosures.

I don't feel in my own mind that I have any problem in deciding thiscase, in deciding the merits of this case, or any part of this case. Butif anyone thinks they want to move to recuse me I'll hear that motion.

MS. VIOLET: We do not, your Honor.

THE COURT: All right. Anybody else?

MR. REID: No, your Honor.

MR. SNOW: No, your Honor.

MR. CORRENTE: No, your Honor. (Transcript of April 22, 1998 hearing at 2-3.)

Violet's waiver was unequivocal. Donato now claims to differentiatebetween legal issues and credibility issues at trial, but this writer wasexplicit that he planned to rule on "the merits of this case" and "anypart of this case."

In March and April 1999, Donato expressed concern to Violet about thiswriter's impartiality, (see letters attached to P.'s Mem.), but even thefirst letter was more than 10 months after the initial hearing. Donatowaited to see how this Court would rule on his motion to remand. TheCargill panel spoke exactly to this kind of situation when it found thata party had waived the right to move for recusal based on an appearanceof bias.

C. The Additional Issue of Timeliness

Defendants' counsel, who had not read the transcript of the April 1998hearing, did not raise the explicit waiver argument, but said that the11-month delay was a reason in itself to deny the motion.

This Court declines to reach this issue. Precedent cited in defendants'memorandum may well support defendants' position, but because Donato'smotion fails so obviously on two independent grounds, this issue issuperfluous.

III. Sanctions Against Violet and Marran

Donato is a plaintiff, and he feels aggrieved by defendants and by thefederal court. He was apparently about one month away from trial in statecourt when his lawyers amended the Complaint to raise an issue about apension plan. That led to the removal and ERISA preemption. This Courtrecognizes that preemption and the Supremacy Clause provide thin solaceto a plaintiff who feels wronged. Certainly, Donato was not justified inforcing defendants to defend this motion merely becausehe has a fallacious memory, but this Court wants Donato to appreciatethat he has received a fair hearing based on the law. This opinion iswritten to emphasize that Donato's concerns are taken seriously.

Attorneys Violet and Marran have greater responsibilities thantheir client, and they failed them. Attorneys must make a reasonableinquiry to assure that all motions are factually well-grounded andlegally-tenable. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393,110 S.Ct. 2447, 110 L.Ed.2d 359 (1990); Lichtenstein v. ConsolidatedServs. Group, Inc., 173 F.3d 17, 23 (1st Cir. 1999) (applying objectivestandard). In deciding whether a lawyer's inquiry was reasonable, thisCourt weighs various factors including "the complexity of the subjectmatter, the party's familiarity with it, the time available for theinquiry, and the ease (or difficulty) of access to the requisiteinformation." Lichtenstein, 173 F.3d at 23. An attorney may not escapesanctions merely by claiming that he or she was protecting a client'srights. See Silva v. Witschen, 19 F.3d 725, 730 (1st Cir. 1994).

Violet and Marran failed in a simple case with which they wereintimately familiar, had almost a year to research, and could have easilyobtained a transcript. They did not order a transcript of the April 22,1998 hearing. They did not make a legally credible argument in theirmotion to recuse. Even if a reading of the precedents would not haveconvinced Donato of the futility of a § 455(a) motion, thetranscript would have shown Donato that his worries are based on a faultymemory, not an appearance of bias. Donato wrote Violet that this writerhad socialized with Winoker and that our sons had a relationship, but thetranscript shows that this writer had said explicitly in April 1998 thatthe families "never socialized in any way."

At a minimum, Violet and Marran should have known the motion wasfutile. However, this Court finds that the lawyers knew the motion wasunwarranted, in part from Violet's explicit waiver in April 1998, in partfrom Marran's languid oral advocacy, and in part because they bothattached Donato's three letters to the motion to show the Court that theyhad been forced into filing.

Violet and Marran faced the problem of a client demanding action thatthey knew would be frivolous, and they let the attorney-clientrelationship deteriorate to the point that Donato was having his lettersto Violet notarized. Rule 11 demands that attorneys deal with this typeof dilemma in the privacy of their own offices. At times, a lawyer has aduty to say "No" to his or her client. See Keating v. Rhode Island,785 F. Supp. 1094, 1100 (D.R.I. 1992). Violet and Marran could haveexplained the law to Donato, or they could have just refused theirclient's dictate and let him seek other counsel. Instead, they pushed theproblem onto defendants and this Court.

This was a frivolous motion based on warrantless allegations,including at least one factual contention-that this judge "has alsocandidly admitted that he and members of his family have had socialrelationships with at least one of the defendants and his family"— that would have been deemed false by the most-rudimentaryinvestigation. (P.'s Mot. To Recuse Pursuant to 28 U.S.C. § 455(a) at¶ 3.) Violet and Marran are not guilty of mere mischaracterizations.Cf. Navarro-Ayala v. Hernandez-Colon, 3 F.3d 464, 468-69 (1st Cir. 1993)(reversing district court). With only a reasonable inquiry, they wouldhave uncovered facts and precedent that would have proved the motionfutile. See id. (collecting reasonable inquiry cases).

However, this Court declines to impose monetary sanctions in deferenceto the overriding mission of providing parties with a just forum tosettle their dispute. In this case, this Court errs on the side ofcaution in order to emphasize its impartiality. Although Violet andMarran have failed both as attorneys and officers of the court, sanctionsmight indirectly affect Donato.The point of this civil action is the dispute between Donato anddefendants. This Court wants to reach the merits and get this caseresolved. The costs incurred by defendants cannot be substantial in theoverall scheme of eight years of litigation, and absorbing those costswill keep defendants from becoming embroiled in collateral appeals underRule 11. See In re Williams, 156 F.3d 86, 89-93 (1st Cir. 1998) (lawyerswho avoided sanctions could not seek appellate review of court's writtenfindings), cert. denied, ___ U.S. ___, 119 S.Ct. 905, 142 L.Ed.2d 904(1999). See also Lichtenstein, 173 F.3d at 22 (party who requestedsanctions must overcome "extraordinary deference" where court deniedmotion). Finally, the publication of this Decision will be sanctionenough.

CONCLUSION

To date, Donato has received the impartial hearings to which he isentitled under the law. He will continue to receive that sameimpartiality through to the conclusion of this action.

For the preceding reasons, this Court denies the motion to recuse anddeclines to impose monetary sanctions against Donato, Violet or Marran.It is so Ordered.

APPENDIX

MEMORANDUM AND ORDER

Plaintiff Louis Donato ("plaintiff') is the executor of the estate ofGloria Zinni and the guardian of Gloria's daughter and heir Dana ZinniDonato. This case began in state court in 1992 with allegations ofnonfeasance against the Rhode Island Hospital Trust Bank, James Winoker,the law firm of Hinkley Allen & Snyder, and Richard Pierce, a partner inthat firm (together "defendants"). After the third amended complaint wasfiled in 1997, defendants removed the case to this Court asserting thatone of the new claims implicated the Employee Retirement Income SecurityAct, 29 U.S.C. § 1001 et. seq. ("ERISA").

Plaintiff filed an objection to removal, and Magistrate Judge RobertW. Lovegreen, treating it as a motion to remand, ruled that the suit hadbeen properly removed to this Court and should not be remanded to statecourt. Relying on Supreme Court and First Circuit precedents, he reasonedthat ERISA preempted at least part of the claims made in plaintiffscomplaint.

This case is before this Court on plaintiffs objection to MagistrateJudge Lovegreen's decision.

II. Standard of Review

Magistrate Judge Lovegreen styled his decision a "Report andRecommendation," but a motion to remand is non-dispositive and isbetter-characterized as a final order. See Delta Dental of Rhode Islandv. Blue Cross & Blue Shield of Rhode Island, 942 F. Supp. 740, 746(D.R.I. 1996). Thus, this case is really an appeal of a final order,rather than an objection to a report and recommendation. The appropriatestandard of review is whether this Court finds the magistrate judge'sconclusions to be "clearly erroneous or contrary to law."28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a); D.R.I.R. 32(b).

II Discussion

In this case, Magistrate Judge Lovegreen's decision is not clearlyerroneous or contrary to law. In fact, it is the correct decision basedon the precedents in Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111S.Ct. 478, 112 L.Ed.2d 474 (1990), Carlo v. Reed Rolled Thread Die Co.,49 F.3d 790 (1st Cir. 1995), and Vartanian v. Monsanto Co., 14 F.3d 697(1st Cir. 1994). As such, there is no utility in completely rehashing thearguments.

Briefly, this complaint "relates to" an ERISA plan under the firstprong of the Ingersoll-Rand test because "the court's inquiry must bedirected to the plan." Ingersoll-Rand, 498 U.S. at 140, 111 S.Ct.478.

Plaintiff correctly notes that the cause of action is based on theactions and inactions of defendants and not on the machinations of aretirement plan. (See Memo. of Law in Supp. of Pl.'s Objection to Reportand Recommendation, at 4.) But plaintiff does not recognize the breadthof ERISA preemption. As plaintiff notes, there would be no federaljurisdiction for a state law claim merely because the alleged misdeedsinvolved an FDIC-insured bank account. (See id.) However, ERISA isdifferent.4 Its preemption provision cuts a wide swath, reaching statelaws that "relate to" employee benefit plans in a broad sense. See Shawv. Delta Air Lines, Inc., 463 U.S. 85, 99, 103 S.Ct. 2890, 77 L.Ed.2d 490(1983) (noting "breadth" of intended preemption in legislative history).

In Carlo, the First Circuit rejected an argument that is nearlyidentical to the one made here by plaintiff. Carlo sued his formeremployer for misrepresentation and argued that although themisrepresentation concerned a retirement plan, the claim did not relateto the plan itself. See Carlo, 49 F.3d at 793. Carlo emphasized that hedid not seek greater benefits or damages from the plan. See id. The FirstCircuit recognized that some courts have found against preemption insimilar cases, in part because ERISA preemption often leaves a plaintiffwithout a remedy. See id. at 793-94. But it held that Carlo's claims werepreempted because the court would have to analyze the ERISA-covered planto calculate damages. See id. at 794.

As Magistrate Judge Lovegreen noted, the court in this case would haveto analyze ERISA to calculate damages and to decide whether defendantsfailed to protect Domenic A. Zinni's intentions regarding thedistribution of his estate. (See Report and Recommendation, at 10-11.)Defendants' alleged duties are inexorably intertwined with ERISA, andCongress has explicitly placed those issues in the hands of federal lawdeciders.

For the preceding reasons, this Court affirms Magistrate Lovegreen'sdecision. Because plaintiffs claims are preempted, removal was proper andplaintiffs motion to remand was appropriately denied.

1. A transcript of the relevant section of the April 22, 1998 hearingis included in Section II(B) below.

2. This second argument .is as specious in law as it is skeletal inDonato's memorandum. (See P.'s Mem. in Supp. of Mot. To Recuse Pursuantto 28 U.S.C. § 455(a) at 2-3.) This Court ruled against Donato on amotion to remand. However, the Supreme Court has noted that the standardfor proving bias from information obtained in the courtroom is higherthan for that obtained "extrajudicially." See Liteky v. United States,510 U.S. 540, 554-55, 114 S.Ct. 1147, 127 L.Ed.2d 474 (1994) (judicialrulings alone almost never constitute a valid basis for a bias orpartiality motion) (citing United States v. Grinnell Corp., 384 U.S. 563,583, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966)).

In the September 1998 opinion, this Court followed First Circuitprecedent to hold that Donato's claims were preempted by ERISA. Later, itdeclined attorney Marran's invitation to suggest how Donato shouldstructure his case.

Donato is in a hard place. The First Circuit has said that ERISAeliminates some state causes of actions without providing a federalequivalent. In the memorandum in support of this motion, Donato'sattorneys sputter against proceeding to trial. However, this Court is notforcing anyone to endure a trial, and it has done nothing that the LitekyCourt found objectionable. It set a trial schedule because that is thenext procedural step when the parties have completed discovery.

Donato's attorneys proposed no alternative to trial until filing themotion to certify an appeal on the issue of remand that has been delayedby this motion. It is not this Court's role to announce sua sponte howDonato should proceed with his case. Donato and his attorneys need todecide where they want to go from here. Perhaps with a trial. Perhapswith a motion to amend the Complaint. Perhaps with the already-filedmotion to certify an interlocutory appeal to the Circuit.

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