The Eleanora J. Dietlein Trust et al v. WL Ross & Co LLC et al

Filing 63

ORDER denying 44 Motion for Recusal of Magistrate Judge. Signed by Magistrate Judge Valerie P. Cooke on 3/7/14. (Copies have been distributed pursuant to the NEF - DN)

1
2
3
4
5
6

UNITED STATES DISTRICT COURT

7

DISTRICT OF NEVADA

8

***

9
10

THE ELEANORA J. DIETLEIN
TRUST, DEREK NEUMANN AND
GINA NEUMANN,

11
12
13

Case No. 3:11-CV-0719-LRH (VPC)
ORDER

Plaintiff,
v.
AMERICAN HOME MORTGAGE
INVESTMENT CORP., et al.,

14

Defendants.

15
16

Before the court is the motion of plaintiffs, the Eleanora J. Dietlein Trust, Derek

17

Neumann and Gina Neumann (“plaintiffs”) for recusal under 28 U.S.C. § 455(a) (#44). Co-

18

trustees and interested parties William Dietlein and Nora Dietlein Christensen (“co-trustees”)

19

opposed (#s 58 & 59), and plaintiffs did not rely.

20

I.

21

Plaintiffs originally filed this action on September 12, 2011, and defendants, American

22

Home Mortgage Servicing, Inc. and WL Ross & Co. LLC, removed it to this court on October

23

5, 2011 (#1). The chronology of the case relevant to plaintiffs’ motion to recuse concerns a

24

January 10, 2013, settlement conference in which the parties purportedly settled the case (#29).

25

The court ordered the parties to submit a stipulation to dismiss the case with prejudice no later

26

than April 17, 2013. Id. The parties never did so, and for unexplained reasons, the matter did

27

not come to the court’s attention until January 3, 2014.

28

Procedural Background

1

On January 3, 2014, Mr. Wilson, counsel for one of the interested parties and a co-

2

trustee, telephoned the court’s chambers (#59; Decl. of Gregory Wilson). Mr. Wilson attests the

3

purpose of his call to chambers was to inquire of the court’s judicial assistant about the status of

4

the case. Id. As Mr. Wilson’s declaration reports, court staff had left for the day, and Judge

5

Cooke answered the telephone.

6

conversation, which was to inquire about the status of the settlement of the case. Id.

Id.

Mr. Wilson’s declaration correctly recounts the

7

The court reviewed the docket sheet, which confirmed that although the case had been

8

settled in January 2013, the parties had never submitted the stipulation and order dismissing the

9

case with prejudice. Therefore, on January 6, 2014, the court issued a minute order noting that

10

the stipulation had not been filed and directing the parties either to file the stipulation to dismiss

11

the case by January 24, 2014; otherwise, the court scheduled a status hearing on January 27,

12

2014 (#31). The status hearing proceeded because the parties failed to file the stipulation.

13
14
15

At the January 27, 2014 status hearing, the court recited the chronology of the case and
then reported to counsel what precipitated the minute order (#31) and the hearing:
The Court:

And, interestingly, the reason - and I’m just
disclosing this because this is unusual. Mr. Wilson
called chambers, I don’t know, right before New
Years, or something, sir? Do you recall when it
was?

Mr. Wilson:

It was the first week of January, a Friday afternoon.

The Court:

Right. And so no one was in - thank you, sir. No
one was in chambers except me. And so I answered
the phone. And it was Mr. Wilson.

16
17
18
19
20
21
22
23
24
25
26
27
28

And so I turned my computer back on. And he was
telling me about this. And, you know, he was not a
party to the case at the time. And so I went back on
my computer.
And he said, you know, there’s this settlement, and,
you know, I represent these other people who have
an interest in this and who weren’t privy to the
settlement.
2

And so I said oh, well, hmm. And so I thanked Mr.
Wilson. And then on Monday I, sure enough,
looked at everything. And then I sent out a minute
order setting today’s conference because I wanted
to know what the heck was going on in this case.

1
2
3
4

Transcript of January 24, 2014 hearing, pages 9, lines 13-25; 10:1-8 (#38).
It is the court’s ex parte telephone conversation on January 3, 2014 that is the basis of

5
6

plaintiffs’ motion to recuse.

7

II.

8

Recusal is governed by 28 U.S.C. §§ 144 and 455. Under section 144, a party seeking

9

recusal must set forth, in an affidavit, facts and reasons for the belief that bias or prejudice exists.

10

See 28 U.S.C. § 144. 1 The standard for recusal under sections 144 and 455 is “whether a

11

reasonable person with knowledge of all the facts would conclude that the judge’s impartiality

12

might reasonably be questioned.” United States v. Studley, 783 F.2d 934, 939 (9th Cir. 1986).

13

The alleged prejudice must result from an extrajudicial source; a judge’s prior adverse ruling is

14

not sufficient cause for recusal. Id. The challenged judge should rule on the legal sufficiency of

15

the recusal motion in the first instance Id. at 940.
Canon 3A(4)(b) of the Code of Conduct for United States Judges specifically addresses

16
17

Discussion and Analysis

plaintiffs’ concern:

18

24

(4)
A judge should accord to every person who has a legal
interest in a proceeding, and that person’s lawyer, the full right to
be heard according to law. Except as set out below, a judge should
not initiate, permit, or consider ex parte communications or
consider other communication concerning a pending or impending
matter that are made outside the presence of the parties or their
lawyers.
If a judge receives an unauthorized ex parte
communication bearing on the substance of a matter, the judge
should promptly notify the parties of the subject matter of the
communication and allow the parties an opportunity to respond, if
requested. A judge may:

25

*****

19
20
21
22
23

26
27

1

Plaintiffs’ motion is not supported by an affidavit.

28

3

(b)
when circumstances require it, permit ex parte
communication for scheduling, administrative, or emergency
purposes, but only if the ex parte communication does not address
substantive matters and the judge reasonably believes that no party
will gain a procedural, substantive, or tactical advantage as a result
of the ex parte communication.

1
2
3
4
5
6
7
8
9
10
11
12
13
14

As Canon 3A(4)(b) explains, an ex parte communication is permissible for administrative
purposes that do not concern substantive matters, and the judge reasonably believes no party will
gain a procedural, substantive, or tactical advantage. Such is the case here. Mr. Wilson clearly
intended to speak with court staff to inquire about the status of a pending case, but the judge
answered the call instead, as chambers staff had left for the afternoon. Mr. Wilson’s phone call
was purely for administrative purposes, and there was no substantive discussion about the case at
all. Mr. Wilson reported the status of the settlement and did disclose he represented an interested
party or parties, but nothing more. The court reviewed the docket sheet, which confirmed that
the stipulation to dismiss the case had never been submitted, so on the following business day,
the court issued a minute order directing the parties to file the stipulation to dismiss the case or to
appear at a status conference.

15
16
17
18
19

Had court staff answered Mr. Wilson’s call, the result would have been the same, and Mr.
Wilson’s inquiry was nothing more or less than a communication about an administrative matter
in a pending case. When the parties did not submit the stipulation to dismiss, the court held a
hearing shortly thereafter so the parties could report on the status of the settlement agreement.
The court then reported its conversation with Mr. Wilson on the record at the hearing.

20
21
22
23
24
25

Plaintiffs also cite the court’s comments at the January 24, 2014 hearing as a further basis
for recusal. See motion for recusal (#44) at page 2, lines 13-17. Plaintiffs take these comments
out of context. As the transcript of the hearing accurately reflects, the court’s comments had
nothing to do with the January 3, 2014 telephone conference with Mr. Wilson; rather, the
comments concerned papers filed subsequent to the notice of the hearing. See #s 32, 35, 36, &
37.

26
27
28

4

1

III.

Conclusion

2

The court has considered plaintiffs’ motion, and concludes that the ex parte conversation

3

with Mr. Wilson on January 3, 2014 is not a basis for recusal for the reasons stated in this order.

4

Plaintiffs’ motion for recusal (#44) is DENIED.

5

DATED: March 7, 2014.

6
7
8

VALERIE P. COOKE
UNITED STATES MAGISTRATE JUDGE

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

5