United States District Court, M.D. Florida, Tampa Division
IN RE FUNDAMENTAL LONG TERM CARE, INC. Debtor.
SHUMAKER, LOOP & KENDRICK, LLP, Appellee. ESTATE OF ARLENE TOWNSEND, ESTATE OF ELVIRA NUNZIATA, ESTATE OF JAMES HENRY JONES, ESTATE OF JOSEPH WEBB, ESTATE OF OPAL LEE SASSER, and ESTATE OF JUANITA JACKSON, Appellants,
VIRGNTA M. HERNANDEZTOVINGTON UNITED STATES DISTRICT JUDGE
matter comes before the Court pursuant to Appellee Shumaker,
Loop & Kendrick, LLP's September 20, 2019, Motion to
Strike, in part, the Notice of Appeal, Designation of Record
and Statement of Issues filed by Appellants. (Doc. # 3).
Appellants - the Estates of Arlene Townsend, Elvira Nunziata,
James Henry Jones, Joseph Webb, Opal Lee Sasser, and Juanita
Jackson (the “Estates”) - responded in opposition
on October 4, 2019. (Doc. # 8). For the reasons given below,
the Motion is granted in part and denied in part.
Court has previously noted, the underlying Chapter 7
bankruptcy proceeding has been ongoing for several years. A
recitation of its history is not necessary here.
Steven Berman, Esq., of Shumaker, Loop & Kendrick, served
as the Chapter 7 Trustee's special litigation counsel
from 2012 to 2015. (Doc. ## 3, 9-52, 10-141). On June 4,
2018, the Estates filed a Motion to Disqualify Berman and
Shumaker as counsel to the Chapter 7 Trustee Nunc Pro
Tunc and for Disgorgement of Compensation (the
“Disqualification Motion”). (Doc. # 10-577). In
the Disqualification Motion, the Estates accused Shumaker and
Berman of (1) holding interests adverse to the bankruptcy
estate, in violation of Section 327 of the Bankruptcy Code;
and (2) failing to disclose certain connections they had to
entities involved in the bankruptcy litigation, in violation
of Federal Rule of Bankruptcy Procedure 2014. (Id.
at 26-33). On that basis, the Estates sought Berman's and
Shumaker's disqualification nunc pro tunc to the
date of its original employment in 2012 and disgorgement of
all past and future compensation. (Id. at 33-35).
same date that they filed the Disqualification Motion, the
Estates also filed a Motion to Withdraw the Reference on the
Contested Matter Initiated by the Disqualification Motion.
(Doc. # 10-612). That motion asserted that Edward Comey, law
clerk for the presiding judge in the bankruptcy matter, the
Honorable Michael G. Williamson, was a former associate at
Shumaker and that his prior association with the firm might
lend him unfair extrajudicial knowledge. (Id. at
4-9). Accordingly, the Estates requested that the District
Court rule on the Disqualification Motion. (Id. at
11). The District Court denied the Motion to Withdraw the
Reference, finding that the bankruptcy judge's
determination of the Disqualification Motion “promotes
the efficient use of judicial resources and advances
uniformity in bankruptcy procedure.” In re
Fundamental Long Term Care, Inc., No. 8:18-cv-1602-T-23,
2018 WL 5717425, at *1 (M.D. Fla. Nov. 1, 2018).
January 17, 2019, the Estates filed a Motion for Recusal (the
“Recusal Motion”), seeking the recusal of Judge
Williamson and Mr. Comey from the case in its entirety. (Doc.
# 11-10). Specifically, the Estates argued that Mr. Comey had
a conflict of interest because he previously worked for
Shumaker and his wife was currently a partner at that firm.
(Id. at 1-2, 5-6). They insisted that Mr.
Comey's bias should be imputed to Judge Williamson.
(Id. at 8).
7, 2019, Judge Williamson granted Appellants' motion to
recuse in part and denied it in part (the “Recusal
Order”). (Doc. # 11-38). The Bankruptcy Court noted
that the Estates based their Recusal Motion solely on Mr.
Comey's links to Shumaker, rather than any direct
conflicts on the part of the judge, and it explained that Mr.
Comey had been screened from the case as of the date the
Estates filed the Disqualification Motion. (Id. at
11-12, 17). Further, the Bankruptcy Court found that Mr.
Comey's conflicts should not be imputed to Judge
Williamson because there had been no substantive
participation by Mr. Comey on the Disqualification Motion and
the Estates had shown no actual bias by the judge.
(Id. at 12-13, 17). Thus, Judge Williamson declined
to recuse himself but isolated Mr. Comey from the case.
(Id. at 19).
with this result, the Estates sought an interlocutory appeal
of the Recusal Order. In re Fundamental Long Term
Care, No. 8:19-cv-1564-T-33, 2019 WL 3429546, at *1
(M.D. Fla. July 30, 2019). On July 30, 2019, this Court
denied the Estates leave to appeal the Recusal Order, finding
that the Estates had failed to demonstrate any of the three
elements required for an interlocutory order. Id. at
addition, on June 21, 2019, the Estates filed a petition for
a writ of mandamus with the District Court, seeking to have
the District Court compel Judge Williamson to recuse himself
from the entire underlying Chapter 7 bankruptcy proceeding.
In re: Estate of Juanita Jackson, et al., Case no.
8:19-cv-1517-MSS-TGW, Doc. # 1. On September 27, 2019, Judge
Scriven denied the petition. Id., Doc. # 16.
August 21, 2019, the Bankruptcy Court entered its order on
the Disqualification Motion, denying disqualification and
finding that Shumaker did not violate Section 327 of the
Bankruptcy Code or Bankruptcy Rule 2014 (the
“Disqualification Order”). (Doc. # 11-52).
to the September 4, 2019, Notice of Appeal, the Estates seek
to appeal two orders entered by the Bankruptcy Court: (1) the
August 21, 2019, Disqualification Order and (2) the June 7,
2019, Recusal Order. (Doc. # 1). Shumaker now moves to strike
the Notice of Appeal to the extent it attempts to appeal the
Recusal Order. (Doc. # 3). Shumaker also moves to strike the
corresponding Appellants' Designation of Record and
Statement of Issues to the extent those documents reflect an
attempt to appeal the Recusal Order. (Id. at 1-2,
12). The Estates have responded, and the Motion is ripe for
argues that the Estates should not be allowed to
“bootstrap” an appeal of the interlocutory
Recusal Order to the appeal of the Disqualification Order
because (1) this Court already denied the Estates leave to
file an interlocutory appeal of the Recusal Order, and (2)
the Recusal Order is not so inextricably intertwined with the
Disqualification Order that the Court may exercise pendent
appellate jurisdiction over the Recusal Order. (Doc. # 3 at
their part, the Estates argue that the Motion to Strike
should be denied for three reasons. (Doc. # 8 at 3). First,
the Recusal Order was an interlocutory order that
“merged” with the final, appealable
Disqualification Order. (Id. at 3, 4-6). Second, the
Estates argue that this Court has pendent appellate
jurisdiction over the Recusal Order because that Order is
“inextricably intertwined” with the
Disqualification Order and review of the Recusal Order is
“necessary to ensure meaningful review” of the
Disqualification Order. (Id. at 3, 6-8). Finally,
the Estates contend that this Court's denial of their
earlier motion for leave to file an interlocutory appeal is
not dispositive of the issue. (Id. at 4, 8-10).
“Merger” of Recusal Order into ...