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In re Yormak

United States District Court, M.D. Florida, Fort Myers Division

June 18, 2019




         This matter comes before the Court on appellant Steven R. Yormak's September 19, 2018 interlocutory Notice of Appeal/Mandamus (Doc. #1) from the Bankruptcy Court's Order Denying Creditor Steven R. Yormak's Motion for Recusal or Disqualification of Presiding Judge Caryl E. Delano (Doc. #1-3). Attached to the Notice of Appeal is a corresponding Motion for Leave and Appeal and Petition for Writ of Mandamus (Doc. #1-2). The appeal was transferred to the Fort Myers Division on December 3, 2018. (Doc. #8.)

         Also before the Court is appellant's Motion to District Court to Stay Bankruptcy Proceedings Until Final Disposition of Motion for Disqualification Appeal(s) or Order for Mandamus (Doc. #3) filed on September 27, 2018. Appellee filed a Response (Doc. #6) on October 8, 2018, and appellant filed a Reply (Doc. #7) on October 11, 2018. For the reasons set forth below, the motions are denied and the appeal is dismissed.

         I. Background

         In 2014, Steven Yormak filed suit against his son Benjamin Yormak in federal court for breach of an oral and written consulting agreement and for unjust enrichment. The Second Amended Complaint alleges that Steven Yormak provided consulting services to his son based on his own practice of law for 33 years with a focus on disability and employment law. Steven Yormak alleged that his son had a successful law practice as a result of the consulting services, but that his son failed to make payments to him and refused to allow him to continue providing consulting services. (No. 2:14-cv-33-FTM-29CM, Doc. #190.)

         During the pendency of this case, Benjamin Yormak filed for bankruptcy protection, and Steven Yormak became a creditor in the bankruptcy proceeding. (No. 9:15-bk-04214.) As a result, the underlying breach of contract claim was automatically stayed, and remains stayed. (No. 2:14-cv-33-FTM-29CM, Docs. ## 181, 198.)

         There have been several other interlocutory appeals filed from the Bankruptcy Court proceeding by creditor Steven Yormak. The first such appeal sought review of the Bankruptcy Court's decision to allow the case to try the issue of whether the contracts were void as a matter public policy because they constituted the unlicensed practice of law. Leave to appeal was denied on June 19, 2017 by the district court. (No. 2:17-cv-73-FTM-38, Doc. #29.) Creditor Yormak appealed the decision, and the Eleventh Circuit dismissed the appeal for lack of jurisdiction on September 13, 2017. (Id., Doc. #34.)

         The second such appeal was from an Order granting debtor leave to amend an objection to a claim. Leave to appeal was denied on June 8, 2018 by the district court. (No. 2:18-cv-309-FTM-29, Doc. #14.) An appeal was dismissed by the Eleventh Circuit for lack of jurisdiction. (Id., Doc. #21.)

         The third such matter was a request to withdraw the reference to the bankruptcy court, which was denied without prejudice to seeking withdrawal if the case proceeded to trial and the creditor wished to assert his right to a jury trial. (No. 2:18-cv-508-FTM-29, Doc. #7.)

         In the current matter, Steven Yormak seeks an interlocutory appeal of the denial of his motion to recused the assigned bankruptcy court judge who is handling the case.

         II. Standards of Review

          As previously stated:

The United States District Court functions as an appellate court in reviewing decisions of the United States Bankruptcy Court. 28 U.S.C. § 158(a); In re JLJ, Inc., 988 F.2d 1112, 1116 (11th Cir. 1993). The threshold issue is the district court's jurisdiction to entertain the appeal. In re Donovan, 532 F.3d 1134, 1136 (11th Cir. 2008). The first inquiry is whether the appealed Order was final and appealable, or whether it was an interlocutory order. If the Court determines that the Order was interlocutory in nature, the second inquiry is whether leave to file an interlocutory appeal should be granted. In re Charter Co., 778 F.2d 617, 620-621 (11th Cir. 1985).
An interlocutory order is one that “does not finally determine a cause of action but only decides some intervening matter pertaining to the cause, and which requires further steps to be taken in order to enable the court to adjudicate the cause on the merits.” In re Kutner, 656 F.2d 1107, 1111 (5th Cir. Unit A Sept. 1981)[1] (citation omitted).

In re Yormak, No. 2:18-CV-309-FTM-29, 2018 WL 2763343, at *2 (M.D. Fla. June 8, 2018), appeal dismissed, No. 18-12623-FF, 2018 WL 4587767 (11th Cir. Aug. 14, 2018). If the order from which appeal is sought is an interlocutory order, the district court considers leave to appeal should be granted.

A federal district court has jurisdiction to consider interlocutory appeals from the orders of a bankruptcy court if the district court grants leave. 28 U.S.C. § 158(a)(3). If a district court, on its own motion or on the request of a party, determines:
(i) the judgment, order, or decree involves a question of law as to which there is no controlling decision of the court of appeals for the circuit or of the Supreme Court of the United States, or involves a matter of public importance;
(ii) the judgment, order, or decree involves a question of law requiring resolution of conflicting decisions; or
(iii) an immediate appeal from the judgment, order, or decree may materially advance the progress of the case or proceeding in which the appeal is taken, the district court shall certify the appeal. 28 U.S.C. § 158(d)(2)(A). See also 28 U.S.C. § 1292(b).

In re Yormak, at *2. If an order denying recusal is reviewed, the denial reviewed for abuse of discretion. Christo v. Padgett, 223 F.3d 1324, 1333 (11th Cir. 2000).

         III. Bankruptcy Court Order

         On September 7, 2018, Bankruptcy Judge Delano denied a motion to recuse herself. (Doc. #1-3.) Judge Delano started with a comprehensive history of the litigation between the parties, including the appeals described above. (Id., pp. 3-13.) As relevant here, while Creditor was still represented by counsel, the Bankruptcy Court entered an Attorney Eyes Only Order (AEO Order) regarding debtor's clients' information that would not otherwise be publicly available because creditor wanted to join the Trustee's discovery requests. (Id., pp. 14-15.) After creditor became pro se, he filed a motion to rescind the AEO Order. After an intervening first appeal, the matter was continued and creditor was directed to file a separate and supported motion to compel. (Id., p. 15.) The AEO Order was rescinded and discovery was stayed pending a ruling on debtor's motion for leave to amend the objection. (Id., p. 16.) The Bankruptcy Court allowed debtor an opportunity to react if creditor started contacting ...

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