# Renfrow v. Grogan, Successor Trustee of The Joe

> United States Bankruptcy Court, N.D. Oklahoma · November 26, 2018

URL: https://www.frixlaw.com/law-library/cases/10461510

## Case

- **Court:** United States Bankruptcy Court, N.D. Oklahoma
- **Decided:** November 26, 2018
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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IN RE )
)
RENFROW, MIRANDA KRISTIN, _ ) Case No. 17-10385-R
) Chapter 7
Debtor. )

MIRANDA KRISTIN RENFROW __ )
)
Plaintiff, )
)
VS. ) Adv. No. 17-1027-R
)
COURTNEY GROGAN, )
SUCCESSOR TRUSTEE OF THE _)
JOE C. COLE REVOCABLE )
TRUST, UNDER TRUST AGREEF- __)
MENT DATED MARCH 28, 2002, +)
and ATKINSON, HASKINS, )
NELLIS, BRITTINGHAM, GLASS _ )
& FIASCO, P.C., )
)
Defendants. )

ORDER DENYING DEFENDANTS’ MOTION TO DISQUALIFY
Before the Court is the Defendants’ Motion to Disqualify the Honorable Dana Rasure
(Doc. 69) (“Motion to Disqualify’’) filed on November 21, 2018, by Defendants Courtney
Grogan, Successor Trustee of the Joe C. Cole Revocable Trust (“Grogan”) and Atkinson,
Haskins, Nellis, Brittingham, Glass & Fiasco, P.C. (“AHN”) (collectively, “Defendants” or
“Movants”’), and Plaintiff's Response thereto (Doc. 72) filed on November 26, 2018.

I. Jurisdiction
The Court has jurisdiction of this proceeding pursuant to 28 U.S.C. §§ 1334, 157(a),
and 157(b)(1) and (2), and Local Civil Rule 84.1(a) of the United States District Court for
the Northern District of Oklahoma.
IL. Background
Trial on the merits in this adversary proceeding is set for November 29, 2018.
Plaintiff Miranda Renfrow filed her original complaint against Defendants in August 2017,
and her amended complaint in January 2018. In her amended complaint, Renfrow alleges
that after receiving a Chapter 7 discharge, Defendants, among other things, continued to
prosecute an action in Tulsa County District Court (the “Grogan Action”) to collect
prepetition debts. The Grogan Action was tried in December 2017, and Grogan obtained a
jury verdict and judgment that imposed personal liability on Renfrow under the Uniform
Fraudulent Transfer Act (““UFTA”) (the “Judgment”). In her closing argument, Grogan,
through her counsel, asked the jury to find Renfrow liable for transferring particular assets
from her wholly owned corporation to herself with the intent to defraud her creditors.
Renfrow contends that those transfers occurred, if at all, prior to her filing bankruptcy. In
this proceeding, Renfrow charges Defendants of acting in contempt of the discharge order
and in violation of 11 U.S.C. § 524(a)(2), and seeks sanctions under 11 U.S.C. § 105(a)! in

‘Section 105(a) of the Bankruptcy Code provides bankruptcy courts with the equitable
power to enforce and remedy violations of substantive provisions of the Bankruptcy Code,
to enforce and implement court orders, and to prevent an abuse of process.

the form of damages. Defendants strenuously deny that they took any action to collect
prepetition debts.
On September 11, 2018, Defendants filed a motion for summary judgment, seeking
dismissal of this proceeding for lack of jurisdiction under the Rooker-Feldman doctrine, or,
in the alternative, judgment in Defendants’ favor on the ground that the jury verdict and
Judgment barred Renfrow from relitigating whether the debt reduced to judgment was
discharged debt. Defendants also argued that Renfrow could not show that Defendants
intended to violate the discharge injunction. Finally, Grogan, individually, sought judgment
in her favor on the basis that she acted on the advice of her counsel, AHN, and therefore did
not intend to violate the discharge injunction.
On November 13, 2018, the Court heard oral argument on the summary judgment
motion and Renfrow’s response thereto. On November 20, 2018, the Court entered an order
denying summary judgment. The Court concluded that under the Exxon Mobil case decided
by the United States Supreme Court,’ the Rooker-Feldman doctrine was inapplicable because
Renfrow had commenced this adversary proceeding prior to the entry of the Judgment. The
Court also concluded that under Oklahoma issue preclusion law, Defendants had not
established all the elements required to preclude Renfrow from seeking a declaration from
this Court that Defendants’ conduct in the Grogan Action violated this Court’s discharge
injunction. Elements not established by undisputed facts and applicable law included the

*Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005).

requirements that the Judgment be valid and final, and that Renfrow had a full and fair
opportunity to litigate. In addition, Defendants had not included the judgment roll of the
Grogan Action in their record on summary judgment.
Later on November 20, 2018, at a scheduled final pretrial conference, the Court
instructed the parties to submit a revised proposed Joint Pretrial Order to take into account
the issues of fact and law eliminated, narrowed, or clarified in the order denying summary
judgment. Defendants orally requested a continuance of the trial because they had not yet
obtained the full transcript of the trial in the Grogan Action. The Court found the motion to
continue the trial untimely because Defendants had asserted issue preclusion as a defense as
early as January 2018, and knew or should have known that it was their evidentiary burden
to tender the entire judgment roll to establish preclusion.’
On November 21, 2018, Defendants filed their Motion to Disqualify.

*See Defendants’ Response and Objection to Plaintiffs Motion to Amend Complaint
(Doc. 27) filed on January 29, 2018, wherein Defendants argued:
The publicly available record in the underlying case demonstrates Defendants
neither sought nor recovered any amounts for Plaintiffs pre-petition conduct
at the trial of the underlying case, and Plaintiff cannot ever prove Defendants
sought such damages. As such, Plaintiff's proposed amendment fails on its
face, and Plaintiff should be denied leave to amend her Complaint to add
claims that Defendants attempted to collect against Plaintiff for pre-petition
conduct at trial.
Id. at 3-4 (emphasis added).

Ill. Movants’ Allegations
Movants assert that the undersigned judge must recuse under 28 U.S.C. § 455(a)
because her “impartiality might reasonably be questioned.” They contend that certain
findings of fact the Court made after a full evidentiary hearing in another adversary
proceeding, Miranda Kristen Renfrow vs. Carrie Pettigrew and Thomas Mortensen, Adv. No.
17-1038 (the “Pettigrew Proceeding”), demonstrate that the Court has predetermined the
veracity of a key witness in this case, namely Renfrow’s counsel, Ron Brown. Motion, 6,
17-23. In denying defendant Mortensen’s motion to vacate the entry of default against him,
the Court found Brown’s testimony that he mailed the summons and complaint to Mortensen
credible and Mortensen’s testimony that he did not receive the complaint not credible.*

“In the Pettigrew Proceeding, Mortensen testified that he did not receive a dismissal
of claims in the Pettigrew state court litigation, notwithstanding Brown’s certificate of
service thereof. Pettigrew Order at 10 n.28. Mortensen also denied receiving the summons
and complaint Renfrow filed to commence the Pettigrew Proceeding, notwithstanding
Brown’s return of service which Mortensen deemed a “‘sham” affidavit. Id. at 19 & n.65.
The Court was required to weigh the evidence, and the credibility of both Brown and
Mortensen, to determine whether Brown had filed “sham” affidavits. The Court found in
both instances that it had no reason to doubt the accuracy of Brown’s certificates, stating
“Brown practices before this Court on a regular basis and has never given the Court any
reason to doubt his integrity.” Id. at 10 n.28 and 19 n.65. Further, the Court found that
Mortensen’s denial of receipt of the dismissal and the complaint was not convincing in that
Mortensen stated that he often set aside his unopened mail for extended periods of time, and
claimed that he routinely failed to receive mail that lawyers certified had been sent to him.
Id. at 20 n.67. Moreover, Mortensen’s client, Pettigrew, testified that she had reviewed the
complaint with Mortensen in December 2017. Id. at 21.

Movants also contend that in the Pettigrew Proceeding the undersigned
“predetermined Renfrow hired Brown because she needed to ‘enforce her discharge’ in the
Grogan Action.” Motion at 3, § 8-9.°
In addition, Movants contend that in tts order denying summary judgment in this case,
the undersigned “sua sponte raised the issues of (1) whether Renfrow was given a full and
fair opportunity to litigate the dischargeability of the alleged post-petition transfers in the
Grogan Action and (2) whether the judgment in the Grogan Action is valid.” Motion at 4,
q11.°
Further, Movants argue that at the pretrial conference, the undersigned informed the
parties that “she intends to re-try the UFTA claim from the Grogan Action in toto and will
allow Brown to present hearsay testimony on issues relating to the Grogan Action verdict’s

“In the Pettigrew Order, the Court found that “Renfrow retained Brown to defend
against [the Second Amended Complaint in the Grogan Action] and to enforce her
discharge.” Pettigrew Order at 10. Movants complain that the Court made this finding
despite the fact that Renfrow did not testify at the Pettigrew Proceeding. Renfrow’s
testimony was not necessary to find that Renfrow hired Brown for these purposes. After
Renfrow obtained her discharge and her bankruptcy case was closed, Brown entered an
appearance in the Grogan Action on behalf of Renfrow and filed Renfrow’s answer to the
Second Amended Complaint. Less than a week later, Brown filed, on behalf of Renfrow, a
Complaint for Violation of the Permanent Discharge Injunction to commence this
proceeding. These facts are matters of public record and were not disputed.
°Defendants urged summary judgment on the basis of issue preclusion. The Court
determined that Defendants, who have the burden of proving issue preclusion, did not make
a showing sufficient to establish all essential elements of their defense.

validity without awaiting the trial transcript to show what actually happened at trial.”” Motion
at 5,9 13.’
IV. Analysis
A judge 1s required to disqualify herself any proceeding in which [her] impartiality
might reasonably be questioned."* The test under § 455(a) in this Circuit is “whether a
reasonable person, knowing all the relevant facts, would harbor doubts about the judge's
impartiality.”” The Tenth Circuit has stressed that the statute must not be so broadly
construed to require recusal “upon the merest unsubstantiated suggestion of personal bias or
prejudice.”’° Even if the judge is “exceedingly ill disposed” towards a party, if her opinion
could be seen by a third party as reasonably formed from evidence presented at trial or based

the pretrial conference, the Court reviewed and revised the parties’ proposed
pretrial order (submitted on November 1, 2018), line by line, in order to eliminate non-issues
and to clarify the scope of remaining issues based upon the applicable law. Also, some
issues and contentions were superceded by denial of summary judgment. Because Renfrow
alleges that Grogan’s closing argument at trial constituted an act to collect prepetition debt,
an obvious threshold factual issue is whether the transfers outlined by Grogan’s counsel in
closing argument occurred prepetition or postpetition. The closing argument has been
transcribed and is already in the record. Evidence of the nature and timing of the transfers
referred to in closing argument may be in the record of the Grogan Action, or it may exist
independent of that record. Nothing said at the pretrial conference should be interpreted to
preclude either party from objecting to inadmissible hearsay.
U.S.C. § 455(a). Section 455 is made expressly applicable to bankruptcy judges
by Bankruptcy Rule 5004(a).
” United States v. Cooley, 1 F.3d 985, 993 (10" Cir. 1993) (internal quotation marks
and citations omitted).
'Id. (internal quotation marks and citations omitted).

on prior proceedings, no basis for recusal exists.'' A judge has as strong a duty to sit when
there is no reason to recuse as she does to recuse when the law and facts require recusal.'”
Movants suggest that the Court is partial toward Brown and impartial toward
Movants. Generally, recusal on the grounds of partiality may be required when the judge
forms opinions about the litigants based on information obtained outside the course of
judicial proceedings, i.e., from an “extrajudicial source.” Recusal is not required simply
because the judge has ruled against the movant in pretrial proceedings. “[J]udicial rulings
alone almost never constitute a valid basis for a bias or partiality motion. [Citation omitted. |

... Almost invariably, they are proper grounds for appeal, not for recusal.” '? A judge is not
required to recuse on account of —
opinions formed by the judge on the basis of facts introduced or events
occurring in the course of the current proceedings, or of prior proceedings, . . .
unless they display a deep-seated favoritism or antagonism that would make
fair judgment impossible. Thus, judicial remarks during the course of a trial
that are critical or disapproving of, or even hostile to, counsel, the parties, or
their cases, ordinarily do not support a bias or partiality challenge. They may
do so if they reveal an opinion that derives from an extrajudicial source; and
they will do so if they reveal such a high degree of favoritism or antagonism
as to make fair judgment impossible."*

"Liteky v. United States, 510 U.S. 540, 550-51 (1994).
"See Hinman v. Rogers, 831 F.2d 937, 939 (10" Cir. 1987). See also In re Allied-
Signal, Inc., 891 F.2d 967, 970 (1* Cir. 1989) (judges must be circumspect in recusing so as
to discourage and prevent judge shopping by litigants unhappy with adverse rulings by the
presiding judge).
SLiteky v. United States, 510 U.S. 540, 555 (1994) (citation omitted).
'4Id. (emphasis original).

When a judge’s opinion on the merits of a case derives from the evidence presented, and no
extrajudicial source is involved, unfavorable judicial rulings can "only in the rarest
circumstances evidence the degree of favoritism or antagonism required" for recusal.’°
Movants’ contention that the undersigned's impartiality might reasonably be
questioned is based on the Court’s finding of Brown’s credibility in the Pettigrew
Proceeding, its ruling on summary judgment in this proceeding, its conduct of the pretrial
conference, and its denial of Movants’ continuance request. All complaints of partiality
and/or impartiality stem from findings, conclusions, and decisions made in the course and
context of judicial proceedings and routine trial administration efforts. Movants have not
established that any opinion the Court may have of the litigants or their counsel is derived
from an extrajudicial source.'®
Further, Movants have not established that a third-party observer, fully informed of
all the relevant facts, would find that the Court’s findings, conclusions, rulings, or conduct
of pretrial proceedings, display the degree of deep-seated favoritism or antagonism required
to question the impartiality of the undersigned judge. Adverse rulings “almost never

Td.
‘The Court’s opinion of Brown’s integrity was informed, as stated in the Pettigrew
Order, solely by his past conduct in proceedings before the Court. Movants do not allege any
extra-judicial knowledge or relationship, and there is none. Thus, the cases Movants cite in
support of their Motion to Disqualify are inapposite. See Roberts v. Bailar, 625 F.2d 125 (6"
Cir. 1980) judge had a duty to recuse because judge knew the defendant and opined that he
was an “honorable man” who “would never intentionally discriminate against anyone’);
Hadler v. Union Bank & Trust Co. of Greensburg, 765 F.Supp. 976 (S.D. Ind. 1991) Gudge
was required to recuse due to long standing friendship with the key witness who had a
financial stake in the outcome of the proceeding).

constitute a valid basis for recusal.”’” Further, a court’s comments on the merits of the case
based on its interpretation of applicable law, or comments concerning a party’s failure to
comply with the court’s rules or orders, or comments made to focus parties on the elements
of their claims and defenses, or efforts to narrow the issues for trial, are necessary for the
efficient administration of a proceeding, and are not grounds for recusal."*
V. Conclusion
Movants have not demonstrated that the undersigned has formed opinions of the
parties or counsel based upon an extrajudicial source, nor have they shown that the
undersigned has displayed “such a high degree of favoritism or antagonism as to make fair
judgment impossible.”’’ Accordingly, the Motion to Disqualify is denied.”

"Liteky, 510 U.S. at 555.
'SSee, e.g., Barna v. Haas (Inre Haas), 292 B.R. 167, 178-81 (Bankr. S.D. Ohio 2003),
and cases cited therein.
MLiteky, 510 U.S. at 555.
The Motion to Disqualify is also untimely. In the Tenth Circuit, a party must “act
promptly once it knows of the facts on which it relies in its motion. A promptly filed motion
conserves judicial resources and alleviates the concern that it is motivated by adverse rulings
or an attempt to manipulate the judicial process.” United States v. Pearson, 203 F.3d 1243,
1276 (10" Cir. 2000); Willner v. Univ. of Kansas, 848 F.2d 1023, 1028-29 (10" Cir. 1988).
Movants filed their Motion to Disqualify on the eve of trial after the Court denied
their motion for summary judgment. The Motion to Disqualify was filed long after Movants
should have known that under Oklahoma preclusion law, they needed to present the entire
judgment roll in the Grogan Action to establish their defense of issue preclusion. Further,
Movants were aware of the Court’s finding concerning Brown’s credibility in the Pettigrew
Proceeding at least three weeks before they filed the Motion to Disqualify because they
submitted the Pettigrew Order as one of their trial exhibits.
10

SO ORDERED this 26" day of November 2018.

DANA L. RASURE, CHIEF JUDGE
UNITED STATES BANKRUPTCY COURT

1]

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10461510. Public record. Not legal advice.