Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In the Matter of Paul

March 10, 2011

IN THE MATTER OF PAUL S. HUDSON, APPELLANT.


The opinion of the court was delivered by: Scullin, Senior Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

On September 18, 2007, Mr. Hudson filed a motion, pro se,*fn1 pursuant to 28 U.S.C. § 455(a) and (b) and Rule 5004(a) of the Federal Rules of Bankruptcy Procedure, seeking recusal of Judge Littlefield in Washington 1993, Inc. v. Paul S. Hudson (the "Adversary Proceeding"). In his motion, Mr. Hudson claimed that there existed an apparent bias on Judge Littlefield's part towards him due to, among other things, the court's alleged alteration of the complaint filed in the Adversary Proceeding.*fn2 On September 25, 2008, Judge Littlefield denied Mr. Hudson's recusal motion and further ordered Mr. Hudson to show cause why he should not be sanctioned pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure and 11 U.S.C. § 105. On December 11, 2008, Judge Littlefield imposed sanctions on Mr. Hudson and ordered that he be referred to the New York State Committee on Professional Standards so that it might determine his fitness to practice law in New York State. On August 30, 2010, Judge Littlefield denied Mr. Hudson's motion for reconsideration of his order imposing sanctions.

Currently before the Court is Mr. Hudson's appeal from the bankruptcy court's decision to impose sanctions and to refer him to the disciplinary committee.

II. BACKGROUND

In his recusal motion, Mr. Hudson indicated that, in reviewing the bankruptcy court's file in connection with an appeal to this Court, he discovered post-it notes on the Adversary Proceeding cover sheet and the complaint. The post-it note on the cover sheet reads, "5/1/00 added relief 727 per chambers direction." See Appendix ("App.") at 1040. The post-it note on the complaint reads, "added 727 relief for the complaint per chambers 5-01-00 CEB." See id. at 1042. Moreover, Mr. Hudson claimed that it was apparent that the complaint in the bankruptcy court's file was altered because a portion of the typeface of the "wherefore clause," namely "and on its fifth claim for relief for an order denying discharge to debtor," differs from the rest of the complaint and appears to be typewritten as opposed to printed from a computer like the balance of the pleading. See id. Mr. Hudson claimed that the bankruptcy court either made this alteration or directed someone to make it.

Mr. Hudson also noted that the bankruptcy docket contained two different entries for the complaint. The first corresponded to the original filing of the complaint with the Maryland bankruptcy court and indicated that the relief sought was only pursuant to 11 U.S.C. § 523. The second entry indicated that the relief sought in the complaint was pursuant to 11 U.S.C. § 727 as well. The second entry was entered on the docket on May 1, 2000, but referenced the original filing date of February 10, 2000. As the second entry was made after the bar date for filing objections to discharge, i.e., February 12, 2000, Mr. Hudson argued that the bankruptcy court's alleged ex parte alteration of the complaint could not be considered trivial.

On October 5, 2007, Mr. Siegal, counsel for the opposition, filed a letter with the bankruptcy court and attached a transcript of a proceeding held before Judge Derby of the Maryland bankruptcy court on March 10, 2000, at which the section 727 cause of action was specifically addressed. At that hearing, Judge Derby acknowledged that Mr. Hudson's discharge was entered in error and would be stricken because a section 727 cause of action was pending before the court. See id. at 1089, 1102-06. Judge Derby indicated that he spoke with the case administrator and the confusion seemed to arise over the language contained in the "wherefore clause" of the complaint. See id. at 1105-06. Specifically, Judge Derby pointed out that the prayer for relief did not specifically mention section 727 of the Bankruptcy Code with respect to the fifth cause of action, which is what the clerk looked at in classifying the complaint. See id. Judge Derby stated, however, that the fifth cause of action was a section 727 cause of action and indicated that he would be reclassifying the Adversary Proceeding to include the fact that it contained an objection to discharge in the fifth cause of action in the complaint. Prior to the docket being corrected pursuant to Judge Derby's instructions, the Adversary Proceeding and Mr. Hudson's bankruptcy case were transferred to the Northern District of New York.

On October 9, 2007, Mr. Hudson filed a reply affirmation. See id. at 1091-1100. Instead of withdrawing his allegations in light of Mr. Siegal's letter and the attached hearing transcript, Mr. Hudson focused on the form of Mr. Siegal's letter and stated that[n]either Mr. Corvetti*fn3 [n]or Attorney Varley have filed any affidavits regarding their knowledge of the circumstances of the alteration of the complaint and there have been no submissions by any interested party refuting or denying the prima facie evidence that the original complaint was altered by the clerk on or about May 1st, 2000 at the direction of the chambers of Judge Littlefield, to add language to the prayer for relief clause requesting a denial of discharge based on 727. Nor has anyone refuted, denied or questioned that this was done without notice to the parties.

See id. at 1093. Moreover, Mr. Hudson acknowledged that he recalled that Judge Derby stated that the discharge had been issued in error but that he was unaware of Judge Derby's remarks discussing "reclassifying" the complaint to include an objection to discharge under section 727 as well as section 523. See id. at 1094. He further argued that Judge Derby's comments, however, "[did] not amount to an order or direction to amend the complaint to add language to the prayer for relief clause." See id.

At the October 10, 2007 hearing, Judge Littlefield addressed his concerns regarding Mr. Hudson's recusal motion. See id. at 1136-46. Specifically, Judge Littlefield discussed the fact that Mr. Hudson was in the Maryland bankruptcy court on the day that Judge Derby declared that Mr. Hudson was improperly given a discharge and further ordered that the docket should be corrected to reflect the fact that a section 727 opposition to discharge was timely filed. See id. at 1140-41. Mr. Hudson, however, made clear that he still believed that Judge Littlefield or his chambers altered the original complaint to add language regarding section 727. See id. Judge Littlefield reserved decision.

On October 19, 2007, in light of the bankruptcy court's comments at oral argument, Mr. Hudson filed a supplemental reply affirmation. See id. at 1148-53. Specifically, Mr. Hudson stated that [p]aragraph 11 of my affirmation is accordingly hereby clarified by adding the underlined language and deleting the matter in brackets: "[While action by the clerk and Judge Littlefield's chambers was in my view highly improper in altering or amending the complaint,] the now revealed remarks of Judge Derby at a hearing in March 2000 explain and arguably avoid the appearance of bias by Judge Littlefield as to adding 727 to the cover sheet to the complaint and as to adding a new entry on the docket for docket entry No. 1 on May 1st, 2000, noting 727 as grounds in addition to 523, but not as to the alteration of the complaint at the direction of chambers by adding a demand for denial of discharge to the complaint prayer for relief clause without notice to the parties or motion practice. The other grounds for recusal stated in prior motions which were previously denied by this court have been resubmitted in this motion [however] remain, as do possible ex parte activity by Mr. Corvetti or his attorneys in secretly seeking such alteration of the complaint after the bar date had passed."

See id. at 1149-50. Mr. Hudson repeated that Judge Derby's remarks did not contemplate or justify the alteration of the original complaint and that "[t]his appears likely to have been an initiative of Judge Littlefield or his assistants and possibly as the result of ex parte contacts by Mr. Corvetti with court personnel." See id. at 1151.

On September 25, 2008, Judge Littlefield denied Mr. Hudson's recusal motion and further ordered Mr. Hudson to show cause why he should not be sanctioned pursuant to Rule 9011 of the Federal Rules of Bankruptcy Procedure and 11 U.S.C. ยง 105. See id. at 1176. Regarding the alleged alterations to the complaint, Judge Littlefield held that the Complaint in the court's file, the copy of the complaint that Hudson introduced at the hearing before Judge Derby on March 10, 2000 as Exhibit 13, and the copy of the Complaint Hudson included in the record on appeal filed with the district court as part of Appendix 4 (N.D.N.Y. Case No. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.