In re: Jim Slemons Hawaii, Inc.

FILED 1 MAR 13 2013 SUSAN M SPRAUL, CLERK 2 U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT 3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. HI-11-1464-JuMkTa ) BAP No. HI-11-1468-JuMkTa 6 JIM SLEMONS HAWAII, INC., ) BAP No. HI-11-1475-JuMkTa ) (cross-appeals) 7 Debtor. ) ______________________________) Bk. No. 09-01802 8 JIM SLEMONS HAWAII, INC., ) ) 9 Appellant/Cross-Appellee,) ) 10 v. ) M E M O R A N D U M* ) 11 CONTINENTAL INVESTMENT ) COMPANY, LTD., ) 12 ) Appellee/Cross-Appellant,) 13 ) v. ) 14 ) U.S. Trustee; SHM, INC., dba ) 15 Car Stereo Express; TONY ) HAWAII CORP., ) 16 ) Appellees. ) 17 ______________________________) 18 Argued and Submitted on February 21, 2013 at Pasadena, California [19] Filed - March 13, 2013 [20] Appeal from the United States Bankruptcy Court 21 for the District of Hawaii 22 Honorable Lloyd King, Bankruptcy Judge, Presiding. _______________________ [23] Appearances: Anthony P. Locricchio, Esq., argued for Appellant 24 Jim Slemons Hawaii, Inc.; Jerrold K. Guben, Esq., of O’Connor Playdon & Guben LLP, argued for 25 Appellee Continental Investment Company, Ltd. _________________________ [26] 27 * This disposition is not appropriate for publication. Although it may be cited for whatever persuasive value it may [28] have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1. -1- 1 Before: JURY, MARKELL and TAYLOR, Bankruptcy Judges. 2 These cross-appeals arise from debtor Jim Slemons Hawaii, 3 Inc.’s second motion to recuse bankruptcy Judge Robert J. Faris 4 (Second Recusal Motion) from presiding over its bankruptcy case. 5 On October 12, 2011, this Panel affirmed Judge King’s order 6 denying debtor’s first motion to recuse Judge Faris (First 7 Recusal Motion) in Jim Slemons Haw., Inc. v. Office of the U.S. 8 Tr., et al. (In re Jim Slemons Haw., Inc.), BAP No. HI-10-1284. 9 A few months prior to our ruling, on June 20, 2011, debtor filed 10 its Second Recusal Motion. Judge King again decided the matter 11 and denied debtor’s motion by order entered August 3, 2011 12 (Recusal Order #2). One day before the issuance of that order, 13 debtor filed an ex parte motion to reopen the Second Recusal 14 Motion asserting, among other things, that “new matters” had 15 arisen. Judge King denied debtor’s motion to reopen by order 16 entered August 3, 2011. Debtor now appeals these orders (BAP 17 No. 11-1464). 18 Continental Investment Co., Ltd. (CIC) cross-appeals the 19 bankruptcy court’s ruling with respect to Recusal Order #2 (BAP 20 No. 11-1475). CIC also appeals from the bankruptcy court’s 21 order denying CIC’s motion for reconsideration of portions of 22 Judge King’s Memorandum Decision related to Recusal Order #2 23 (BAP No. 11-1468). For the reasons stated below, we DISMISS 24 CIC’s cross appeal with respect to Recusal Order #2 for lack of 25 jurisdiction and AFFIRM the bankruptcy court’s decisions in all 26 respects. [28] -2- 1 I. FACTS1 AND PROCEDURAL BACKGROUND 2 Set forth below is a history of the relevant facts related 3 to debtor’s chapter 112 case and a summary of debtor’s two 4 motions for recusal and its allegations against Judge Faris. 5 Debtor filed its chapter 11 petition on August 10, 2009. 6 Debtor was the lessee of several leases and sub-leases (Lease) 7 with CIC, the lessor and fee owner of the underlying real 8 property. The Lease was debtor’s primary asset. The real 9 property was expected to be condemned, in part, by the City and 10 County of Honolulu in connection with the right of way for its 11 new light rail system. Debtor, hoping to reap a profit from the 12 condemnation action, listed a condemnation claim against the 13 City of Honolulu in the estimated amount of $750,000 in 14 Schedule B. 15 A. Employment of Debtor’s Attorney 16 On September 28, 2009, Anthony P. Locricchio, filed an 17 application to be employed as debtor’s attorney. After 18 objections by the United States Trustee’s (UST) office were 19 resolved,3 the court approved Locricchio’s employment as [1] Some of these facts are taken from our Memorandum Decision [21] in In re Jim Slemons Haw., Inc., BAP No. HI-10-1284. 22 2 Unless otherwise indicated, all chapter, section and rule 23 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532 . “Rule” references are to the Federal Rules of Bankruptcy 24 Procedure and “Civil Rule” references are to the Federal Rules of Civil Procedure. [3] 26 In response to the UST’s objections, Locricchio sent a letter to the UST threatening Rule 9011 sanctions. At the 27 October 19, 2009 hearing on Locricchio’s employment, UST Terri Didion told the bankruptcy court that she had searched 28 (continued...) -3- 1 debtor’s general counsel by order entered on January 1, 2010. 2 B. Postpetition Rent: The November 9, 2009 Order 3 Shortly after the bankruptcy filing, on August 25, 2009, 4 CIC moved for the timely payment of postpetition rent under 5 § 365(d)(3) (Postpetition Rent Motion). On October 8, 2009, 6 debtor opposed the motion on the ground that CIC lacked standing 7 to bring the motion because the motion and memorandum in support 8 occasionally referred to CIC as Consolidated Investment Company, 9 Ltd. Debtor made no other arguments in opposition. 10 On the morning of October 19, 2009 - the day of the hearing 11 on CIC’s motion - debtor filed a pleading labeled as a motion 12 (Rent Offset Motion) without notice of a hearing date. In the 13 motion, debtor sought to (1) obtain a $85,000 credit against 14 rent payments due CIC for the remainder of August and all of 15 September; (2) pay the October rent; and (3) set an evidentiary 16 hearing for the resolution of various disputes between debtor, 17 CIC and others. 18 At the October 19, 2009 hearing, the bankruptcy court 19 informed Locricchio that it had not read debtor’s papers which [20] 21 3 (...continued) Locricchio’s bankruptcy experience through databases in Michigan, [22] California and Hawaii. Didion reported that she found two cases 23 that he worked on, one of which was the instant case. According to Didion, her objection to the employment of Locricchio based on 24 his lack experience was founded on good faith and after a reasonable inquiry. She also noted that Curtis Ching, the 25 Assistant UST, responded to the employment application because 26 she was on vacation when the application came in. Didion told the judge that she was, however, the trial attorney assigned to 27 the case. Hr’g Tr. 10/19/09 at 14-15. Locricchio has identified himself as an expert in condemnation cases. Hr’g Tr. 7/28/11 at 28 45:1-3. -4- 1 were filed that morning because they were untimely. In granting 2 CIC’s Postpetition Rent Motion, the bankruptcy court stated: 3 With regard to the motion for payment of rent, I’m – I’m going to grant that motion and leave for another 4 day the question of – I understand the October rents going to be paid promptly, and I’ll leave for another 5 day the – the question of whether the August and September rents have to be paid, and if they’re not 6 what consequences the non-payment would have. Hr’g Tr. 10/19/09 16:24-25; 17:1-4. [7] 8 The court granted CIC’s motion by order entered on November 9, 9 2009 (November 9 Order). The order stated in relevant part: 10 IT IS FURTHER ORDERED ADJUDGED AND DECREED that Jim Slemons Hawaii, Inc. is directed to timely pay the 11 monthly rent or a pro rated amount of monthly rent for the post-petition period from the petition date, 12 August 10, 2009, to the present and continue to make payments pursuant to Section 365(d)(3), until further 13 Order of this Court. 14 The order included signature lines for Locricchio and Didion, 15 the UST, to indicate their approval as to the form of the order. 16 The signature lines were blank when the bankruptcy court signed 17 and entered the order. The BNC Certificate of Service showed 18 that after entry of the order it was served on debtor and 19 Locricchio. Debtor did not appeal the November 9 Order and it 20 became a final order in the case. As further discussed below, 21 this order forms the crux of the dispute with respect to 22 debtor’s Second Recusal Motion. 23 C. CIC’s Motion to Terminate The Lease 24 Under § 365(d)(4)(A) and (B), the deadline for debtor to 25 assume the Lease or move for an extension of time to assume was 26 early December 2009. Debtor neither filed a motion to assume 27 the Lease nor did it move to extend the time to assume the Lease 28 within the statutory time period. -5- 1 On December 23, 2009, CIC filed a motion (Lease Termination 2 Motion) seeking a declaration from the bankruptcy court that the 3 Lease was terminated and an order directing debtor to surrender 4 the premises. 5 On January 8, 2010, debtor filed an opposition, contending, 6 among other things, that its Rent Offset Motion barred CIC from 7 seeking to terminate the Lease until the court ruled on the 8 various disputes. Debtor further asserted that its Rent Offset 9 Motion made clear that it had assumed the unexpired lease under 10 § 365(d)(4). Finally, debtor maintained that once CIC filed its 11 Postpetition Rent Motion, it was barred from claiming that 12 debtor had not assumed the Lease. 13 At the January 19, 2010 hearing, the court took the matter 14 under advisement due to debtor’s complaint that CIC gave debtor 15 twenty-seven days notice instead of twenty-eight days. The 16 court gave debtor until February 11, 2010, to file a 17 supplemental memorandum and CIC’s counsel was given to 18 February 18, 2010, to file a reply.4 Debtor requested a further 19 extension to February 18, 2010, which the bankruptcy court 20 granted, and the time for CIC’s reply was extended to 21 February 25, 2010. 22 In debtor’s supplemental pleading filed on February 18, 23 2010, debtor accused the bankruptcy judge of being biased and 24 stated that it would be filing a motion to disqualify him. [4] 26 CIC filed its motion on December 23, 2009, and the hearing was set for January 19, 2010. Because the motion was filed 27 during the holiday season and Locricchio did not participate in the court’s non-mandatory electronic filing system which provides 28 immediate notice, the court gave debtor additional time. -6- 1 On February 22, 2010, before the filing of CIC’s reply, the 2 bankruptcy court issued a Memorandum Decision, finding that the 3 Lease was rejected on December 9, 2009, by operation of law 4 under § 365(d)(4). The bankruptcy court rejected debtor’s 5 argument that its Rent Offset Motion constituted a properly 6 noticed and timely motion to assume the Lease. The court also 7 observed that a debtor must pay postpetition rent under 8 § 365(d)(3) even if it later decided to reject the lease. 9 Finally, because debtor had mentioned in its papers that it 10 intended to file a motion for recusal, the bankruptcy judge 11 addressed the issue in the Memorandum Decision, concluding there 12 was no basis for his disqualification. 13 The court entered judgment for CIC on March 3, 2010 14 (Termination Judgment). 15 D. Debtor’s First Recusal Motion 16 On February 23, 2010 — one day after the court issued its 17 Memorandum Decision terminating debtor’s Lease — debtor filed 18 its First Recusal Motion to disqualify Judge Faris. Debtor 19 alleged that the judge overlooked CIC’s procedural 20 irregularities and considered pleadings it should have stricken. 21 Specifically, debtor asserted that the court should have 22 stricken CIC’s Lease Termination Motion because of the 23 insufficient notice (twenty-seven days instead of twenty-eight). 24 Debtor also alleged that CIC’s counsel was part of a “bankruptcy 25 club,” which was a social luncheon gathering of bankruptcy 26 attorneys that the bankruptcy judge regularly attended and which 27 excluded some attorneys from attending. Finally, debtor alleged 28 that the court rushed out its February 22 Memorandum on CIC’s -7- 1 Lease Termination Motion due to the possible delay caused by 2 debtor’s notice of its yet-to-be-filed recusal motion. 3 Debtor’s First Recusal Motion was set for hearing on 4 April 26, 2010, before Judge King.5 On April 7, 2010, debtor 5 filed an ex parte motion to stay the hearing so that it could 6 conduct an investigation into the court’s internal procedures. 7 The investigation would supposedly uncover whether Judge Faris 8 had improperly back-dated his Memorandum Decision from 9 February 24 to February 22 due to debtor’s pending recusal 10 motion. Judge King denied debtor’s ex parte motion by 11 Memorandum Decision and an order entered April 9, 2010. 12 At the April 26, 2010 hearing, Judge King denied debtor’s 13 First Recusal Motion. 14 On May 5, 2010, Judge King issued a Memorandum Decision, 15 finding that (1) Locricchio had not offered any evidence that if 16 luncheon meetings were held and Judge Faris participated, the 17 attendees precluded him, or any other attorney, from attending; 18 (2) although debtor had insufficient notice of CIC’s motion to 19 terminate the Lease, the notice deficiency resulted in no 20 prejudice to debtor because Judge Faris gave debtor the 21 opportunity to file a supplemental pleading; (3) debtor failed 22 to cite any case law that would require a court to deny a motion 23 (versus continuing it) due to insufficient notice; and (4) Judge [24] 25 5 A federal judge who is the subject of a recusal motion may 26 hear that motion himself. United States v. Sibla, 624 F.2d 864, 867-68 (9th Cir. 1980). To avoid any appearance of conflict or 27 bias, some districts or divisions use a procedure that has a different judge rule on a recusal motion. The District of Hawaii 28 used this optional procedure. -8- 1 Faris did not err by issuing his Memorandum Decision granting 2 CIC’s motion to terminate the Lease prior to the hearing on 3 debtor’s motion to disqualify him. Judge King concluded by 4 stating that debtor’s allegations of bias against Judge Faris 5 lacked factual and legal support.6 6 The bankruptcy court entered the order denying debtor’s 7 First Recusal Motion on May 5, 2010.7 8 Debtor appealed the ruling to this Panel. The Panel 9 summarily affirmed Judge King’s decision denying debtor’s First 10 Recusal Motion in In re Jim Slemons Haw., Inc., BAP No. 10-1284, 11 filed on October 12, 2011.8 12 E. The May 24, 2010 “Ambush” Hearing 13 Meanwhile, Locricchio, debtor, CIC and the UST filed 14 various motions. 15 On February 4, 2010, Locricchio filed an application for 16 interim fees, requesting $39,647.40 for his services (Fee 17 Application). On February 25, 2010, the UST objected on the 18 grounds that Locricchio failed to follow the UST’s guidelines 19 for fee applications or discuss any of the factors in § 330(a) [6] Judge King commented that debtor’s original and [21] supplemental memoranda in support of its First Recusal Motion did 22 not contain a single citation to a statute, rule, or reported case. [7] On October 18, 2010, debtor filed a motion for 24 reconsideration of the order denying debtor’s First Recusal Motion. The bankruptcy court denied the motion by order entered [25] on October 29, 2010. Debtor appealed that decision on 26 November 30, 2010 (BAP No. 10-1469). The Panel entered an order dismissing the appeal as untimely on February 1, 2011. [8] Debtor has since appealed our decision to the Ninth 28 Circuit. -9- 1 to assist the court in determining the reasonableness of the 2 fees. CIC also objected, arguing that its postpetition rent had 3 administrative priority over debtor’s counsel’s fees. 4 On April 5, 2010, debtor moved to set aside the Termination 5 Judgment under Rule 9023 (Set Aside Motion). Debtor’s motion 6 essentially rehashed the same arguments it made in its First 7 Recusal Motion. In other words, the bankruptcy judge’s alleged 8 bias was debtor’s sole argument for setting aside the 9 Termination Judgment. 10 On April 7, 2010, CIC moved for payment of administrative 11 rent for the period August 10, 2009 (the petition date), to 12 December 9, 2009 (the rejection date)(Administrative Rent 13 Motion). Debtor did not oppose the motion. 14 On April 26, 2010, the UST moved to dismiss debtor’s case 15 under § 1112(b) for “cause” (Dismissal Motion). The UST 16 asserted that debtor had no possibility of a successful 17 reorganization without the Lease. Debtor responded by stating 18 that it would not oppose the motion. 19 These motions, along with debtor’s Rent Offset Motion 20 filed on October 19, 2009,9 were noticed for a hearing on May 21 24, 2010. On appeal, debtor refers to this hearing as the 22 “ambush” hearing. 23 On May 20, 2010, the bankruptcy court issued a tentative 24 decision regarding the various motions. The tentative stated [9] 26 On January 12, 2010, debtor filed a notice that the Rent Offset Motion would be heard on February 16, 2010. Therefore, by 27 the time debtor noticed the hearing, the date for assuming the Lease — December 8, 2009 — had passed. The hearing for the Rent 28 Offset Motion was continued from February 16 to May 24, 2010. -10- 1 the court would grant the UST’s Dismissal Motion on the ground 2 that debtor could not reorganize without the Lease, its primary 3 asset. It further stated that the court was inclined to deny 4 all other pending motions as moot due to its decision to dismiss 5 the bankruptcy case. 6 At the May 24, 2010 hearing, the bankruptcy court granted 7 the UST’s Dismissal Motion. But then the court also decided 8 that it needed to rule on debtor’s Set Aside Motion and found it 9 untimely. The court requested that the parties focus their 10 arguments on whether the remaining motions (the Fee Application, 11 Rent Offset Motion, and Administrative Rent Motion) should be 12 addressed by the bankruptcy court or litigated in state court. 13 Debtor argued that the remaining motions should be 14 litigated in state court. CIC argued that the matter of 15 Locricchio’s Fee Application and its request for administrative 16 rent under § 365(d)(3) were within the bankruptcy court’s 17 exclusive jurisdiction. The UST argued for dismissal with the 18 rent issue decided by the state court. The court took the 19 matters under advisement. 20 In a May 27, 2010 Memorandum Decision, the bankruptcy court 21 denied debtor’s Set Aside Motion on the grounds that it was 22 untimely and did not meet the standards for altering or amending 23 a judgment; i.e., the debtor did not demonstrate a manifest 24 error of law or fact or produce any newly discovered evidence. 25 Citing Pavelich v. McCormick, Barstow (In re Pavelich), 229 B.R. 26 777, 780-81 (9th Cir. BAP 1999), the bankruptcy court also found 27 that it had jurisdiction post-dismissal over its own orders and 28 to dispose of ancillary matters that were otherwise not moot. -11- 1 However, the court stated that it did not view its jurisdiction 2 over the amount of the rent due under the Lease or compensation 3 due debtor’s attorney as exclusive. Nonetheless, the court 4 found it would be unfair to avoid deciding the pending motions 5 because debtor was holding $95,000 cash that, without a ruling, 6 it could freely use after the dismissal of its case to the 7 detriment of CIC. Accordingly, the court exercised its 8 discretion to decide the remaining motions. 9 First, the court denied Locricchio’s Fee Application in its 10 entirety. The bankruptcy court found that Locricchio’s services 11 were not beneficial to the estate because he missed the deadline 12 for assumption of the Lease under § 365(d)(4) and, as a result, 13 debtor lost its most valuable asset. The bankruptcy court also 14 denied the application on the alternative ground that it lacked 15 information required by Rule 2016 and, although the UST had 16 pointed out the deficiencies, Locricchio made no effort to 17 correct them. 18 Next, the court denied debtor’s Rent Offset Motion which 19 alleged CIC’s misconduct and interference with its business 20 relationships was grounds for relieving debtor from the 21 statutory requirement under § 365(d)(3) of paying postpetition 22 rent for the months of August and September. The court observed 23 that in response to debtor’s allegation that CIC had wrongfully 24 collected rent from Tony Honda, CIC had produced a 1998 letter 25 agreement that authorized those payments. The court found that 26 debtor had never offered any reason why the agreement might be 27 invalid. Thus, the court concluded that there was no legitimate 28 dispute that debtor owed the full amount of the rent due under -12- 1 the Lease, minus any amounts which the subtenants paid to CIC. 2 Third, the court granted CIC’s Administrative Rent Motion. 3 The court noted that debtor filed no opposition to this motion. 4 The court further found that debtor failed to comply with its 5 November 9 Order, which required debtor to timely pay all 6 postpetition rents until further order. Therefore, the court 7 directed debtor and its counsel to remit all of the estate’s 8 cash to CIC in partial satisfaction of CIC’s administrative 9 claim and reserved jurisdiction to enforce this requirement.10 10 The bankruptcy court entered the order denying Locricchio’s 11 Fee Application on June 29, 2010. The court entered the orders 12 denying debtor’s Set Aside Motion and Rent Offset Motion on 13 July 13, 2010, and the corresponding judgments on July 26, 2010. 14 The court entered the order granting CIC’s Administrative Rent 15 Motion on July 13, 2010, and corresponding judgment on July 26, 16 2010. Finally, the bankruptcy court entered the order granting 17 the UST’s Dismissal Motion on July 13, 2010. 18 Debtor timely appealed each of the orders, which we 19 affirmed in In re Jim Slemons Haw., Inc., BAP Nos. 10-1403, 20 10-1404, 10-1405, filed October 12, 2011.11 21 F. Debtor’s Second Recusal Motion 22 On June 20, 2011, debtor filed its Second Recusal Motion, 23 the subject of these cross-appeals. The overall tone of 24 debtor’s motion showed that it was unhappy about losing the [10] 26 In response, debtor filed an interpleader action in the Hawaii District Court. [11] Debtor also appealed our decision on those matters to the 28 Ninth Circuit. -13- 1 Lease, which, in turn, caused it to allegedly lose over one 2 million dollars due to the pending condemnation action. This 3 loss, debtor suggested, occurred due to the misconduct of 4 Mr. Guben, CIC’s attorney, and Curtis Ching, the Assistant UST. 5 That misconduct, debtor argued, was overlooked by Judge Faris 6 because Guben, Ching and Judge Faris are all part of an “Old 7 Boys Network.” Thus, according to debtor, Judge Faris showed 8 favoritism towards Guben and Ching and this caused the Judge to 9 take the steps that he did. 10 In its motion, debtor placed the propriety of the 11 November 9 Order at issue. Debtor alleged that Guben 12 intentionally altered the November 9 Order to include August and 13 September rents even though the bankruptcy court had not ordered 14 those rents to be paid. Debtor argued that CIC did not send 15 copies of the “proposed secret order” to debtor or the UST’s 16 office in violation of LBR 9072(d)(2). Debtor then alleged that 17 the court “in cooperation with or in dereliction of duty 18 approved the false secured order absent signatures as to form of 19 the order. . . .” In the end, debtor argued that the fraudulent 20 order caused debtor to default under the lease which virtually 21 ended the bankruptcy.12 22 After debtor filed the motion, Judge King directed CIC and 23 its counsel to file a responsive pleading to debtor’s motion by 24 an order dated June 23, 2011. CIC filed its response on July 7, 25 2011. On July 13, 2011, Judge King issued an Order for [12] Of course debtor overlooks the fact that it never assumed 28 the Lease within the time limits under § 365(d)(4). -14- 1 Supplemental Memorandum directing CIC to file a supplemental 2 response “specifically addressing the contents and propriety of 3 the [November 9 Order] and the circumstances surrounding the 4 submission to the court of the proposed order. . . .” 5 On July 20, 2011, Ching filed his declaration with the 6 bankruptcy court. Ching declared that he attended the 7 October 19, 2009 hearing on CIC’s motion for the payment of 8 postpetition rent, that the UST did not take a position on the 9 motion, and that on October 21, 2009, he received an email from 10 CIC with the proposed form of the November 9 Order, which was 11 also sent to debtor’s counsel. Ching declared that he did not 12 oppose the proposed November 9 Order. 13 On July 21, 2011, CIC filed its supplemental memorandum. 14 In that pleading, CIC addressed, among other things, the 15 procedures surrounding the entry of the November 9 Order. CIC 16 did not explain why it submitted an order to the bankruptcy 17 court which was apparently inconsistent with Judge Faris’ oral 18 ruling at the October 19, 2009 hearing. On the same day, CIC 19 filed Guben’s declarations. Attached to one declaration were 20 emails from Guben’s office to the UST and Locricchio with the 21 proposed order and the letter to Judge Faris regarding the 22 circulation of the proposed order to Locricchio and UST Didion. 23 Guben’s second declaration set forth the chronological events in 24 the bankruptcy case, which also referenced Guben’s handling and 25 circulation of the proposed November 9 Order. 26 On July 26, 2011, debtor responded. Debtor again alleged 27 that Ching, along with Guben and Judge Faris, participated in 28 the entry of the fraudulent November 9 Order. Debtor raised -15- 1 numerous examples of alleged impropriety and bias, including: 2 (1) Guben sent the proposed November 9 Order to Ching, instead 3 of Didion, who was the UST assigned to the case; (2) Judge Faris 4 approved the fraudulent order that was submitted without any 5 signature of approval of the form of the order; and (3) there 6 was no evidence that Guben served the proposed order on 7 Locricchio. In addition, debtor provided a list of thirty 8 “facts” that were allegedly “admitted” by Guben and Ching that 9 demonstrated their misconduct. These facts were reiterations of 10 the three points outlined above. 11 The Hearing 12 On July 28, 2011, the bankruptcy court heard the matter. 13 The transcript shows that the Judge King patiently listened to 14 Locricchio’s arguments regarding Guben and Ching’s alleged 15 misconduct surrounding the entry of the November 9 Order. 16 Near the beginning of the hearing, Locricchio stated on the 17 record that he “did not get the order” (referring to the 18 November 9 Order). Hr’g Tr. 7/28/11 5:21-22, 6:1-14, 20-21. 19 Locricchio also argued at length about Guben submitting the 20 proposed November 9 Order to Ching, rather than Didion who was 21 not, in his opinion, a member of the “Old Boys Network.” Id. at 22 9:14-15. Locricchio argued that Ching had “no authority to 23 oppose the order. He had been specifically excluded.” Id. at 24 21:21-24. At another point, Locricchio stated that he had filed 25 a motion to remove Mr. Ching.13 “That problem was solved on the [13] 27 Indeed, Judge King later states in his Memorandum Decision that Locricchio never filed such a motion nor were we 28 (continued...) -16- 1 record by Ms. Didion stating that she was the attorney.” Id. at 2 39:4-8. 3 Judge King, in turn, questioned Locricchio about when he 4 learned about the discrepancy in the order regarding the August 5 and September rents and whether he ever moved for an order for 6 reconsideration or appealed the November 9 Order. The 7 transcript shows that Locricchio never directly answered the 8 Judge’s question about when he learned about the discrepancy. 9 Further, Locricchio stated that he did not file a motion for 10 reconsideration because of Judge Faris’ bias stating: “Wise 11 attorney practice says never file a motion to reconsider when 12 you know the judge is going to rule against you.” Id. at 13 15:12-13. 14 Finally, although Locricchio never filed an appeal of the 15 November 9 Order, he alludes at the hearing that he had in fact 16 done so. Id. at 11-14, 30-32, 43. After a lengthy discussion 17 about these things, Locricchio again stated that the order “did 18 not come to me period.” Id. at 28:16-17. However, he later 19 admitted that he did get the order after it was entered. Id. at 20 29:13. At that point, the court advised Locricchio that he 21 should have done something to get the order corrected. Id. at 22 29:21-25. 23 The hearing on the Second Recusal Motion also covered 24 numerous other subjects related to Locricchio’s conduct during 25 the case. Locricchio admitted on the record that he was [13] (...continued) 28 able to locate one on the docket. -17- 1 representing both Jim Slemons and Jim Slemons Hawaii, Inc. 2 during the bankruptcy case, but that fact was never disclosed to 3 the court. Id. at 17:3-14. It also came out that Mr. Slemons 4 was making unauthorized loans to the debtor. Id. at 18. 5 Locricchio sent a check from his client trust account to pay 6 CIC’s rent, but CIC ultimately returned that money to 7 Locricchio. Locricchio argued that the money was Mr. Slemons’, 8 not the debtor’s. Although Judge Faris ordered Locricchio to 9 return the funds, Locricchio filed instead an interpleader 10 action in the Hawaii District Court. Id. at 18, 53-54. 11 Locricchio also accused Judge Faris of being biased when he 12 denied Locricchio’s application for fees in its entirety. 13 Locricchio claimed that he did not act to “adopt the lease I 14 knew my client couldn’t pay” so it was “ridiculous” that Judge 15 Faris denied Locricchio’s fees on the ground that his services 16 were not beneficial to the estate because he missed the deadline 17 for assuming the lease. Id. at 48. Locricchio also pointed to 18 Judge Faris’ failure to hold a hearing on the Rent Offset Motion 19 as a further example of his bias. Id. 20 Guben then argued about the procedures surrounding the 21 entry of the November 9 Order. He maintained that it was sent 22 by email to Locricchio and Ching for their comments. He stated 23 that it went to Ching because Ching appeared at the October 19, 24 2009 hearing. Guben pointed out that the transcript from the 25 October 19, 2009 hearing, which his firm ordered, was lodged 26 with the court on October 22, 2009. Id. at 66. Guben 27 maintained that he sent a letter on October 26, 2009, to Judge 28 Faris that attached the proposed form of order he was going to -18- 1 lodge pursuant to LBR 9021-1(a) and (b). The letter and order 2 went to Didion by email and to Locricchio, not only by email but 3 also facsimile.14 4 Judge King then questioned Guben on why the November 9 5 Order was inconsistent with the Judge Faris’ verbal ruling. Id. 6 at 66. Guben stated that he thought the order was consistent 7 with the judge’s ruling. Id. at 67:6-8. Guben reiterated that 8 Ching, Locricchio, Didion and the judge all had an opportunity 9 to review the transcript and the order. Id. at 67:16-22. 10 Finally, Didion argued that Ching’s declaration was 11 submitted to the court so that the court would know that the 12 order was emailed to the office of the UST. Id. at 71:6-8. The 13 court then took the matter under submission. 14 The August 3, 2011 Memorandum Decision 15 In his August 3, 2011 Memorandum Decision, Judge King found 16 that debtor’s Second Recusal Motion did not meet the standard 17 for disqualification under 28 U.S.C. § 455 and applicable Ninth 18 Circuit case law because debtor did not come forward with any 19 extrajudicial sources evidencing bias. Judge King also 20 concluded that debtor’s arguments in its papers and at oral 21 argument had no merit. Judge King found that (1) there was no 22 evidence that the November 9 Order was entered fraudulently, in 23 secrecy, or with any bias against debtor; (2) there was no 24 requirement under the applicable local rule that the order [25] 26 14 Locricchio argued at the hearing that the reputed service 27 on him by ECF was false because he was not an ECF filer. However, Guben never asserted that Locricchio was served by ECF; 28 he said by email and/or facsimile. -19- 1 contain signatures of counsel for the debtor or the UST; (3) the 2 October 26, 2009 letter transmitting the proposed order to Judge 3 Faris indicated that copies had been provided to counsel for the 4 debtor and counsel for the UST; (4) Judge Faris waited an 5 additional period of time to see if there were any objections to 6 the proposed order; and (5) there were no objections and the 7 order was eventually entered on November 9, 2009. 8 Judge King also noted that CIC stated in a sworn 9 declaration that it complied with the local bankruptcy rules in 10 preparing and circulating a proposed order. The UST also 11 submitted a sworn declaration by Ching stating that it received 12 the proposed order sent by counsel for CIC and made no 13 objections. The exhibit, a copy of the email correspondence 14 sent by counsel for CIC attached to the UST’s declaration, 15 identified Locricchio to be a recipient of the email 16 correspondence and proposed order. In the end, Judge King did 17 not believe Locricchio had not received the filed November 9 18 Order when the BNC Certificate of Service and the Clerk of the 19 Court both indicated that the debtor and Locricchio received 20 notice of the entry of the November 9 Order. 21 Tellingly, Judge King concluded that Locricchio provided no 22 reasonable excuse as to why he waited to advise the court of the 23 problems with the text of the November 9 Order until 18 months 24 after its entry. “The best explanation Locricchio gave was that 25 it would have been a waste of time to seek to have the order 26 corrected, given the bias of the presiding judge against 27 debtor’s counsel.” The court found this explanation “wholly 28 unsatisfactory.” In short, Judge King found Locricchio had it -20- 1 in his power to have this matter promptly addressed and 2 corrected, but he failed to do so. 3 Judge King concluded by finding debtor’s Second Motion to 4 recuse Judge Faris was without factual or legal support. The 5 court entered the order denying debtor’s Second Recusal Motion 6 on August 3, 2011. 7 Debtor’s Motion to Reopen 8 On August 2, 2011, the day before the court issued its 9 Memorandum Decision, debtor filed an ex parte motion to reopen 10 the matter. Debtor sought this relief on the grounds that CIC 11 had ordered a transcript of the July 28, 2011 hearing, debtor’s 12 counsel received a call from a clerk of the court concerning the 13 date of a notice of appeal filed by debtor, and unspecified “new 14 matters” were alleged to have arisen. The court denied the ex 15 parte motion on the grounds that there was nothing extraordinary 16 about counsel ordering a transcript, the call from the clerk was 17 to remind debtor to supply the date of the filing of his notice 18 of appeal and the “new matters” were not stated in any detail 19 and thus could not be the basis for reopening. On August 3, 20 2011, the court entered the order denying debtor’s motion to 21 reopen. 22 CIC’s Motion for Reconsideration 23 On August 3, 2011, CIC filed a motion for clarification or 24 reconsideration of the August 3, 2011 order and memorandum. CIC 25 requested that the court modify certain language in the decision 26 pertaining to “inconsistencies” between Judge Faris’ oral ruling 27 at the October 19, 2009 hearing and the language in the 28 November 9 Order. That “inconsistency” had to do with whether -21- 1 or not the August and September rents were to be included in the 2 order. 3 According to CIC, as a matter of law,15 there could be no 4 offset of a prepetition claim against a postpetition debt. CIC 5 also argued that the court could not delay the payment of the 6 postpetition rent beyond October 11, 2009 under § 365(d)(3) 7 “excuse period”. CIC maintained that debtor never requested to 8 be excused from timely paying the postpetition rent. Therefore, 9 CIC argued that Judge Faris knew, as a matter of law, that 10 debtor was not eligible for a 60-day “excuse” or delay to pay 11 the postpetition rent for the months of August and September 12 2009. 13 CIC also argued that Judge King’s interpretation of Judge 14 Faris’ comments at the October 19, 2009 hearing was contrary to 15 the specific language of § 365(d)(3). CIC contended that the 16 court’s interpretation made it seem like Judge Faris was giving 17 debtor an open-ended extension or delay until it had to pay 18 postpetition rent under § 365(d)(3). 19 The August 18, 2011 Memorandum Decision 20 In its August 18, 2011 Memorandum Decision, the bankruptcy 21 court denied CIC’s motion for reconsideration for several 22 reasons. First, because debtor’s Second Recusal Motion alleged 23 a discrepancy between Judge Faris’ statements at the October 19, 24 2010 hearing and the November 9 Order, Judge King made clear 25 that he assumed, but did not decide, that certain discrepancies [15] This “law” was submitted to Judge King for the first time 28 in the reconsideration motion. -22- 1 did in fact exist. Second, Judge King noted that CIC was given 2 three opportunities to present its side of the discrepancy 3 issue. Judge King concluded that CIC had ample opportunity to 4 present the arguments set forth in its motion to reconsider, but 5 did not. Finally, Judge King found that hearing CIC’s motion to 6 reconsider would serve no purpose because the issue before the 7 court was whether or not to disqualify the presiding bankruptcy 8 judge, not debtor’s claim of a discrepancy between the judge’s 9 verbal ruling and the written order prepared by CIC’s counsel. 10 Judge King stated that his ruling on the motion to disqualify 11 would not change even if he assumed no discrepancy. 12 Accordingly, Judge King denied the motion by order entered on 13 August 18, 2011. 14 G. The Appeals 15 Debtor timely appealed the orders denying its Second 16 Recusal Motion and motion to reopen (BAP No. 11-1464). CIC 17 timely filed its appeal of the order denying CIC’s motion for 18 reconsideration (BAP No. 11-1468) and timely filed its cross 19 appeal of the order denying Debtor’s Second Recusal Motion (BAP 20 No. 11-1475).16 21 II. JURISDICTION 22 The bankruptcy court had jurisdiction over this proceeding 23 under 28 U.S.C. §§ 1334 and 157(b). We have jurisdiction under [25] 26 16 After the briefs were submitted, CIC submitted additional 27 authorities to the Panel on February 6 and 14, 2013. Although we have reviewed the additional authorities, we do not find them 28 pertinent to the issues on appeal. -23- [1] 28 U.S.C. § 158.17 2 III. ISSUES 3 A. Whether the bankruptcy court erred in denying debtor’s 4 Second Recusal Motion; 5 B. Whether the bankruptcy court erred in denying debtor’s 6 motion to reopen; 7 C. Whether the bankruptcy court erred in denying CIC’s 8 motion for reconsideration of the Second Recusal Motion. 9 IV. STANDARDS OF REVIEW 10 We review under an abuse of discretion standard a 11 bankruptcy court’s decision to (1) deny a motion for recusal of 12 a bankruptcy judge; (2) deny a motion to reopen; and (3) deny a 13 motion for reconsideration under Rule 9023. See Berry v. U.S. 14 Tr. (In re Sustaita), 438 B.R. 198, 208 (9th Cir. BAP 2010) 15 (motion for recusal); Zenith Radio Corp. v. Hazeltine Research 16 Inc., 401 U.S. 321, 331 (1971) (motion to reopen); 17 Diker v. Dye (In re Edelman), 237 B.R. 146, 150 (9th Cir. BAP 18 1999) (reconsideration under Rule 9023). 19 A bankruptcy court abuses its discretion if it applied the 20 wrong legal standard or its findings were illogical, 21 implausible, or without support in the record. 22 TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832 (9th 23 Cir. 2011). [17] 26 On October 13, 2011, the BAP issued a Clerk’s Order Re Finality, indicating that the appeals might be interlocutory and 27 requiring a response from the parties. The Panel received and considered the responses and issued an order on January 6, 2012, 28 finding the orders on appeal were final. -24- 1 V. DISCUSSION 2 A. The Bankruptcy Court Did Not Abuse Its Discretion In Denying Debtor’s Second Recusal Motion (BAP No. 11-1464) [3] 4 “A bankruptcy judge shall be governed by 28 U.S.C. § 455 , 5 and disqualified from presiding over the proceeding or contested 6 matter in which the disqualifying circumstance arises, or, if 7 appropriate, shall be disqualified from presiding over the 8 case.” Rule 5004(a). Section 455 of Title 28 provides: 9 (a) Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in 10 which his impartiality might reasonably be questioned. 11 (b) He shall also disqualify himself in the following circumstances: [12] (1) Where he has a personal bias or prejudice 13 concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding. [14] 15 In evaluating recusal motions, we start from the premise 16 that “[j]udicial impartiality is presumed.” First Interstate 17 Bank of Ariz., N.A. v. Murphy, Weir & Butler, 210 F.3d 983 , 987 18 (9th Cir. 2000); see also Liteky v. U.S., 510 U.S. 540 , 554-55 19 (1994). 20 Evaluations of bias or prejudice are judged from an 21 objective perspective; “whether a reasonable person with 22 knowledge of all the facts would conclude that the judge’s 23 impartiality might reasonably be questioned.” Seidel v. Durkin 24 (In re Goodwin), 194 B.R. 214, 222 (9th Cir. BAP 1996); Liteky, [25] 510 U.S. at 548 . The reasonableness test is “limited to outward 26 manifestations and reasonable inferences drawn therefrom. In 27 applying the test, the initial inquiry is whether a reasonable 28 factual basis exists for calling the judge’s impartiality into -25- 1 question.” United States v. Cooley, 1 F.3d 985, 993 (10th Cir. 2 1993). However, “factual allegations do not have to be taken as 3 true,” and “[t]here is as much obligation for a judge not to 4 recuse when there is no occasion . . . to do so as there is 5 . . . to [recuse] when there is. A judge should not recuse 6 . . . on unsupported, irrational, or highly tenuous 7 speculation.” Lopez v. Behles (In re Am. Ready Mix, Inc.), [8] 14 F.3d 1497 , 1501 (10th Cir. 1994). 9 Generally, allegations of bias or prejudice must stem from 10 some extrajudicial source. Liteky, 510 U.S. at 550-55 . If 11 there is no evidence of extrajudicial sources of bias or 12 prejudice, then a charge of impartiality has to be supported on 13 evidence that the judge exhibited “such a high degree of 14 favoritism or antagonism to make fair judgment impossible.” Id. 15 at 554-55. 16 Debtor alleged that Judge Faris had a relationship with 17 Guben and Ching because they were all part of what debtor refers 18 to as an “Old Boys Network”. What that exactly means is not 19 readily apparent from the record. Instead, what is apparent is 20 that debtor’s vague accusations about the relationship and 21 resulting bias have no factual support in this record. Further, 22 even if such a relationship existed, evidence of which is not in 23 the record, it does not follow that the relationship was 24 sufficient to demonstrate personal bias or an inability to be 25 impartial. Social acquaintances, friendships or associational 26 relationships are rarely grounds for recusal. See Sexson v. 27 Servaas, 830 F.Supp.475, 482 (S.D. Ind. 1993) (judge’s social or 28 associational relationship was not grounds for recusal); Clay v. -26- 1 Doherty, 608 F.Supp. 295 (N.D. Ill.1985) (judge’s acquaintance 2 with key witness in civil rights case did not justify recusal); 3 M.K. Metals, Inc. v. Nat’l Steel Corp., 593 F.Supp. 991 , 994–95 4 (N.D. Ill. 1984) (judge’s friendship with the principal of a 5 “think-tank” that was providing an expert witness to the 6 defendant did not justify recusal); United States v. Conforte, [7] 457 F.Supp. 641 (D. Nev. 1978), aff’d, 624 F.2d 869 , cert. 8 denied, 449 U.S. 1012 (1980) (recusal not required in criminal 9 case in which defendant had dozens of social encounters with 10 judge at bridge tournaments, despite the fact that the judge had 11 publicly expressed a negative impression of the defendant). 12 Debtor would like us to infer from the alleged “Old Boys 13 Network” relationship that Judge Faris showed favoritism towards 14 Guben and Ching and bias against debtor when he entered the 15 November 9 Order. The factual record does not reasonably 16 support such an inference. Indeed, the record shows that there 17 was nothing sinister going on when Judge Faris entered the 18 order. Rather, the facts show that the November 9 Order was 19 properly served on debtor and Locricchio prior to and after its 20 entry. Although Locricchio maintained that he never received 21 the proposed order, Judge King did not believe him when the 22 emails in evidence and Guben’s declaration showed otherwise. 23 Furthermore, the BNC Certificate of Service clearly showed that 24 Locricchio received the order after it was entered. The 25 transcript of the October 19, 2009 hearing was readily available 26 for all parties to review prior to the entry of the order, but 27 at no time did Locricchio review the transcript. Locricchio [28] -27- 1 also did not appeal the November 9 Order18 nor could he tell 2 Judge King exactly when he learned about the so-called 3 discrepancy in the order. We do not think a reasonable person, 4 possessing knowledge of these facts, could plausibly question 5 Judge Faris’ impartiality in entering the November 9 Order. In 6 reality, debtor’s Second Recusal Motion appears to have been 7 fueled by its attempt to collaterally attack the November 9 8 Order which was not appealed. In any event, dissatisfaction 9 with a ruling may present ample grounds for appeal, but it 10 rarely - if ever - presents a basis for recusal. Liteky, [11] 510 U.S. at 555 . 12 On this record, we also cannot conclude that Judge Faris’ 13 handling of the May 24, 2010 hearing — the so-called “ambush” 14 hearing — shows any “outward manifestation” of affirmative bias 15 against debtor. Debtor complains about Judge Faris’ failure to 16 rule on its Rent Offset Motion, but Judge Faris denied the 17 motion in his May 27, 2010 Memorandum Decision. Judge Faris did 18 not rule on the motion any sooner because debtor failed to 19 notice a hearing on the matter. 20 Debtor next complains that Judge Faris departed from his 21 tentative ruling because of his bias against debtor. But Judge 22 Faris’ tentative decision was just that — tentative. Of course, 23 Judge Faris could depart from that ruling after hearing oral 24 argument from the parties. Debtor conveniently ignores the 25 basis for Judge Faris’ rulings on matters that the judge [18] 27 Locricchio continues to assert on appeal that he indeed filed an appeal to set aside the November 9 Order. His assertion 28 is incorrect. This false assertion is troubling. -28- 1 previously thought may be mooted by the dismissal of debtor’s 2 case. A huge issue was the fact that $95,000 remained in the 3 DIP bank account. How did it get there? The record reflects 4 that money came out of Locricchio’s client trust account to pay 5 CIC’s postpetition rent and CIC returned that money to debtor. 6 Locricchio then claimed the money was Jim Slemons. The record 7 shows that Locricchio never obtained court authorization for Jim 8 Slemons to loan debtor money to pay the rents. Based on these 9 facts, Judge Faris perhaps was concerned, rightly so, that once 10 debtor’s bankruptcy case was dismissed, debtor could use the 11 money for purposes other than the payment of CIC’s 12 administrative rent, which was ordered to be paid in the 13 November 9 Order. 14 In short, Judge Faris’ handling of the hearing does not 15 indicate that he had any bias or prejudice against debtor. A 16 reasonable person with knowledge of these facts could not 17 conclude that Judge Faris exhibited “such a high degree of . . . 18 antagonism [towards debtor] as to make fair judgment 19 impossible.” Liteky, 510 U.S. at 555 . Finally, to the extent 20 Judge Faris’ rulings on the various orders are adverse rulings 21 against debtor, such rulings are not grounds for 22 disqualification, but grounds for appeal. Id. Debtor in fact 23 appealed each of the orders that stemmed from the May 24, 2010 24 hearing and we affirmed Judge Faris’ rulings on appeal.19 [19] 26 As previously mentioned, debtor has appealed these decisions to the Ninth Circuit. Further, besides requesting 27 recusal of Judge Faris, it is unclear what remedy debtor seeks for the alleged bias when its case has been dismissed. From what 28 (continued...) -29- 1 As debtor has argued, it is best to look at the 2 proceedings in this case in their entirety. Looking at the 3 record as a whole, debtor’s grounds for recusal of Judge Faris 4 here are no more persuasive than in its first motion. Debtor 5 implies that just about everyone involved in this case, with the 6 exception of Didion, is part of the “Old Boys Network”. At one 7 point, debtor questions whether Judge King could be impartial. 8 But none of what debtor complains about would have caused a 9 reasonable person to question the impartiality of any judge who 10 handled any part of this case. As stated before, the fact that 11 a court rules against a party cannot, in and of itself, be 12 grounds for recusal. This point needs no further elaboration. 13 In sum, Judge King properly identified the correct legal 14 rules to apply to the recusal motion. On this record, we cannot 15 say that his factual findings were illogical, implausible or 16 without support in inferences that may be drawn from the facts 17 in the record. Accordingly, Judge King did not abuse his 18 discretion in denying debtor’s Second Recusal Motion. 19 B. The Bankruptcy Court Did Not Abuse Its Discretion in Denying Debtor’s Motion to Reopen (BAP No. 11-1464) [20] 21 We have looked at the entire record in this matter and the 22 defects in debtor’s motion to reopen are similar to the defects 23 in its Second Recusal Motion. There was simply no basis for 24 debtor’s motion. [25] 26 19 (...continued) 27 we can tell, the only remaining aspect of the case is the distribution of the $95,000 which was left in the DIP bank 28 account. -30- 1 Factors for a trial court to consider when deciding to 2 reopen a case are: 3 (1) the importance and probative value of the evidence or arguments sought to be introduced, i.e., whether it 4 is cumulative or might ‘affect the outcome of the case by, for example, offering a new theory of liability or 5 present a significant alteration of the evidence presented at trial[,]’ (2) the moving party’s 6 diligence and explanation for failing to previously introduce the evidence or arguments, (3) the undue 7 prejudice that the delay might cause the non-moving party, and (4) whether the court has already announced 8 its decision. 9 In re W. Shore Assocs., Inc., 435 B.R. 723, 725 (Bankr. M.D. 10 Fla. 2010 ). The Ninth Circuit has stated that “reopening a case 11 for the purpose of introducing overlooked evidence must be done 12 with extreme reluctance because of the undue emphasis given to 13 the introduced evidence with consequent distortion of the 14 evidence as a whole and the possibility that such prejudice will 15 result to the other party as to require a mistrial.” Eason v. 16 United States, 281 F.2d 818, 822 (9th Cir. 1960). 17 Debtor’s motion did not meet any of the standards for a 18 motion to reopen. Its motion simply asserted vague and 19 ambiguous arguments regarding “new matters” and offered no 20 discussion as to what these matters were or how they would 21 affect the outcome of the case. Further, as found by the 22 bankruptcy court, the ordering of a transcript or the phone call 23 by the court’s clerk had nothing to do with the underlying 24 merits of the Second Recusal Motion. Finally, debtor made no 25 showing to excuse the untimeliness of the proposed introduction 26 of new evidence. For these reasons, we conclude that Judge 27 King’s denial of the motion to reopen was not an abuse of 28 discretion. -31- 1 C. The Bankruptcy Court Did Not Abuse Its Discretion in Denying CIC’s Motion for Reconsideration (BAP No. 11-1468) [2] 3 CIC contends that Judge King’s findings regarding the 4 discrepancy between Judge Faris’ ruling at the October 19, 2010 5 hearing and the November 9 Order are incorrect as a matter of 6 law. We do not decide in this appeal whether or not the 7 “findings” regarding the order were right or wrong. In his 8 Memorandum Decision, Judge King made clear that he did not 9 decide there was in fact a discrepancy, but he simply assumed 10 the discrepancy existed because debtor’s Second Recusal Motion 11 directly raised the issue. Moreover, as pointed out by Judge 12 King, the issue before him was whether the facts surrounding the 13 entry of the November 9 Order demonstrated that Judge Faris was 14 biased against debtor. Judge King found those facts did not 15 demonstrate bias. Therefore, according to Judge King, 16 regardless of the alleged discrepancy, Judge King’s decision 17 regarding the alleged bias would not change. On this basis, 18 there was really no reason for Judge King to reconsider his 19 findings. 20 In addition, CIC had ample opportunity to make a record of 21 its legal arguments to its liking on the issue, but did not do 22 so until after the fact. There were also no grounds for 23 reconsideration — CIC did not present newly discovered evidence, 24 demonstrate clear error, or show an intervening change in 25 controlling law. See Fontenot v. Mesa Petroleum Co., 791 F.2d 26 1207, 1219 (5th Cir. 1986) (a motion to amend under Rule 52(b) 27 is intended “to correct manifest errors of law or fact or, in 28 some limited situations, to present newly discovered -32- 1 evidence.”); 389 Orange St. Partners v. Arnold, 179 F.3d 656 , 2 665 (9th Cir. 1999) (setting forth grounds for reconsideration 3 under Civil Rule 59(e)); see also Rules 7052 and 9023 (applying 4 Civil Rule 52 and 59 to bankruptcy proceedings). Under these 5 circumstances, we conclude that the bankruptcy court did not 6 abuse its discretion by denying CIC’s motion for 7 reconsideration. 8 D. CIC’s Cross Appeal of Recusal Order #2 (BAP No. 11-1475) 9 Similar to its motion for reconsideration, CIC filed its 10 cross appeal of Recusal Order #2 seeking to amend Judge King’s 11 findings. As stated, Judge King made clear in his Memorandum 12 Decision that he did not decide the issue regarding the alleged 13 discrepancy in the November 9 Order. Therefore, because the 14 alleged discrepancy was not one of the issues adjudicated, CIC 15 did not suffer an adverse impact from entry of Recusal Order #2. 16 See Cobb v. Aytch, 539 F.2d 297, 300 (3d Cir. 1976) (appellants 17 suffered no adverse impact from the decree and lacked standing). 18 Moreover, Judge King stated that if a discrepancy occurred, 19 that fact was immaterial to his decision regarding recusal. The 20 Supreme Court has held: “A party may not appeal from a judgment 21 or decree in his favor, for the purpose of obtaining a review of 22 findings he deems erroneous which are not necessary to support 23 the decree.” Elec. Fittings Corp. v. Thomas & Betts Co., [24] 307 U.S. 241, 242 (1939); see also N.Y. Telephone Co. v. 25 Maltbie, et al., 291 U.S. 645 (1934) (appellant not entitled to 26 an appeal from a decree for the purpose of reviewing portions of 27 the decree that are not res judicata). For these reasons, 28 because we lack jurisdiction over CIC’s cross appeal of Recusal -33- 1 Order #2, the cross appeal is dismissed. 2 VI. CONCLUSION 3 Having determined that there is no basis for reversal of 4 any of Judge King’s decisions, we AFFIRM each of the orders on 5 appeal. [28] -34-