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Herman Dubnoff v. Honorable David J. Goldstein, Referee in Bankruptcy in The United States District Court For The Northern District of New York, 385 F.2d 717, 2d Cir. (1967)
Herman Dubnoff v. Honorable David J. Goldstein, Referee in Bankruptcy in The United States District Court For The Northern District of New York, 385 F.2d 717, 2d Cir. (1967)
2d 717
to any alleged interest under Section 67(b), ordinarily to assume its factual
truth and to rule on its legal sufficiency. This is, we believe, the duty of
the Referee in the first instance as a trial tribunal, a duty which, though
distasteful, may not be avoided.
We do not intend hereby to determine or to intimate the sufficiency or
insufficiency of the totality of any facts which were submitted or which
may be supplied with respect to alleged "interest." However, we believe
that the appellant is entitled, under primary rules of judicial
administration, to submit whatever appropriate proof he may have and to
secure a definitive ruling by the Referee on its sufficiency.
The jurisdiction of the Court of Appeals in bankruptcy matters is governed
by Title 11 U.S.C. 47(a). Unless the order sought to be reviewed
determines with finality any substantive issue in dispute, it is not
reviewable. Dutch American Mercantile Corporation v. Eighteenth Ave.
Land Co., 302 F.2d 636, 637 (2nd Cir. 1962).
Smith, C. J., in Lesser v. Migden, 328 F.2d 47, 48 (2nd Cir. 1964) wrote:
"It is clear that to be appealable an interlocutory order must have the character
of a formal exercise of judicial power affecting the asserted rights of a party;
that is, it must substantially determine some issue or decide some step in the
course of the proceeding." 2 Collier on Bankruptcy, 14th ed. p. 792. This is not
a final order nor is it such an interlocutory order as to be appealable.
(10th Cir. 1962); United States v. Ritter, 273 F.2d 30 (10th Cir. 1959). In any
event, the discharge of the rule for a writ of prohibition or writ of mandamus to
prohibit a judge from proceeding in a cause on the ground of his alleged bias
and prejudice would not relieve the judge from passing on the sufficiency of
grounds for disqualification alleged in an affidavit. In re Greene, 160 F.2d 517
(3rd Cir. 1947).
4
Hence, the appeal from the District Court on the matter of "interest" must be
dismissed. Since there was no right to appeal from the Referee's action,
whatever it may have been, for review by the District Court, that Court is
directed to remand the matter to the Referee for proceedings not inconsistent
with this opinion.
II.
Removal of the Referee
5
With respect to the removal of a Referee, Title 11 U.S.C. 62(b) provides in its
relevant portions as follows:
"(b) Removal of a referee during the term for which he is appointed shall be
only for incompetency, misconduct, or neglect of duty: * * * Any cause for
removal in respect of any referee coming to the knowledge of the Director shall
be reported by him to the judge or judges of the judicial district or districts in
which such referee serves, and a copy of such report shall at the same time be
transmitted to the council and to the referee. Such judge or judges may, upon
receipt of such report, or upon their own motion, remove the referee for any one
or more of the above mentioned causes; where there is more than one judge,
such removal shall be by a concurrence of a majority of the judges, and where
there is no such concurrence, then by the council. Before any order of removal
shall be entered, except in the case of a part-time referee where the cause for
removal is that his services are not needed, a full specification of the charges
shall be furnished to the referee, and he shall be accorded by the removing
judge or judges an opportunity to be heard on the charges."
The District Court properly decided that removal proceedings require either a
proceeding and report initiated by the Director of the Administrative Office of
the United States Courts or a motion of the court. Judge Port said: "* * * I don't
think that a litigant under that Section can initiate such a removal proceeding by
a motion before the court * * *" (Appellant's Appendix, 54a-55a, 56a, 58a),
indicating that an attorney who suggests that there is misconduct on the part of
the Referee should submit the information to the Director of the Administrative
Office (Appellant's Appendix, 57a). Judge Port thereupon vacated the show
cause order insofar as it related to the request for an order for removal of the
Referee (Appellant's Appendix, 57a-58a, 60a, 62a, 95 a). Levine appears to
have agreed with the court in this disposition (Appellant's Appendix, 60a).
Levine later said to the Court: "Your Honor will have no objection in the cause
of expediency, for me to send the papers to the director." The Court answered:
"I have no control over that" (Appellant's Appendix, 100a).
8
As appellant now concedes, he has, with Judge Port's permission, "sent all the
papers" to the Director of the Administrative Office (of the United States
Courts) and has received a reply, saying that the papers have been forwarded to
the Attorney-General with a request for an appropriate investigation
(Appellant's Brief, p. 7).
10
It is our belief that the removal proceedings specified in 62(b) may be instituted
on the basis of information coming to the knowledge of the Director and
reported by him to the judge or judges of the judicial district or districts in
which said referee serves or (2) upon the motion of the judge or judges of the
judicial district or districts in which said referee serves in each case,
however, only for incompetency, misconduct, or neglect of duty, and subject to
the requirements as to specifications of the charges and to the right to be heard,
as provided by statute. Such a proceeding is not an essential part of the matter
which was set to be heard before the Referee. Consequently, we believe that
the order of Judge Port on the removal question was not interlocutory and,
therefore, affirm.
III.
Disqualification for Bias
11
IV.
Appointment or Designation of Another Referee
12
13
"(b) The judge may, at any time, for the convenience of parties or for cause,
transfer a case from one referee to another."
14
Although the Referee himself told appellant, "You get yourself another
Referee. You asked for it" (Appellant's Appendix, 32a), the District Court
seems to have been reluctant to consider this feature.
15
We conclude that this relief was requested under "such other and further relief"
in the order to show cause. When Levine, before Judge Port, advocated the
transfer of the matter in bankruptcy to another Referee, Judge Port commented:
(1) That this was generally done on the basis of the residence of the parties
(Appellant's Appendix, 70a, 71a); (2) That he would be "reluctant to order a
new Referee in and to state to the lawyers in the district that all you need to do
is charge a Referee with some unseeming [sic] contact and you will get the
other Referee" and that he did not "propose to set such a precedent" (Appellant's
Appendix, 91a). Commenting further, Judge Port said: "I don't feel that the
Court as a matter of precedent should grant that kind of discretionary relief * *
*" (Appellant's Appendix, 93a).
16
17
This feature of the order of the District Court is in no event appealable at this
time. Hence, the appeal is dismissed.
V.
Expunging and Sealing
18
20
21
(1) The appeal with respect to prohibiting the Referee-appellee from acting in
the Potter bankruptcy case because of alleged interest under Section 67(b) is
dismissed, but the District Court is directed to remand this matter to the Referee
with instructions to proceed in a manner not inconsistent with this opinion;
22
(2) The decision of the District Court as to the application for removal of the
Referee-appellee under Section 62(b) is affirmed;
23
(3) The appeal from the order of the District Court denying the motion to
transfer the case to another Referee under Section 45(b) is dismissed;
24
(4) The appeal from the order of the District Court insofar as it denied any
action because of bias is dismissed.
25
Notes:
Later at the hearing before the District Court it appeared that the Referee's son
was about forty years of age, married, with children, and was a resident of
Syracuse (Appellant's Appendix, 72a, 75a)