Auld-Susott, et al. v. Galindo, et al.

UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII
EVAN AULD-SUSOTT, as Trustee for
(1) IRREVOCABLE LIEF INSURANCE
TRUST OF JOHN L. SUSOTT AND
KATHRYN C. SUSOTT UAD 8/17/1988
AS RESTATED, EXEMPT TRUST FBO
DANIEL C. SUSOTT, and
(2) IRREVOCABLE LIFE INSURANCE
TRUST OF JOHN L. SUSOTT AND
KATHRYN C. SUSOTT UAD 8/17/1988
AS RESTATED, NON-EXEMPT TRUST
FBO DANIEL C. SUSOTT; and
JOHN L. SUSOTT,
Plaintiffs,
vs.
LAURYN GALINDO and DANIEL C.
SUSOTT,
Defendants.
CIVIL 20-00270 LEK-RT
ORDER DENYING DEFENDANTS’ SECOND MOTION
TO DISQUALIFY THE HON. LESLIE E. KOBAYASHI
On August 17, 2021, Defendants Lauryn Galindo
(“Galindo”) and Daniel C. Susott (“D. Susott” and collectively
“Defendants”) filed a motion seeking the disqualification of
this Court (“Second Motion to Disqualify”). 1 	[Dkt. no. 85.]
1 The Court finds the Second Motion to Disqualify suitable
for disposition without a hearing pursuant to Rule LR7.1(c) of
the Local Rules of Practice for the United States District Court
for the District of Hawaii (“Local Rules”).
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Defendants’ Second Motion to Disqualify is hereby denied for the
reasons set forth below.
BACKGROUND
The parties and the Court are familiar with the
factual and procedural background of this case, and only the
portions relevant to the Second Motion to Disqualify will be
repeated here.
Defendants previously filed a motion seeking the
disqualification or recusal of this Court, pursuant to 28 U.S.C.
§§ 144 and 455. 	[Defendants’ Motion to Disqualify or Recuse the
Hon. Leslie E. Kobayashi (“First Motion to Disqualify”), filed
12/20/20 (dkt. no. 37).] 	The First Motion to Disqualify was
premised upon alleged incidents of bias or prejudice during
various proceedings in Auld-Susott, et al. v. Galindo, CV 16-
00450 LEK-WRP (“CV 16-450”). 	On December 22, 2020, this Court
issued an entering order referring the First Motion to
Disqualify for reassignment to another judge, pursuant to 28
U.S.C. § 144 (“12/22/20 EO”), and Chief United States District
Judge J. Michael Seabright issued an order assigning the motion
to United States District Judge Jill A. Otake. 	[Dkt. nos. 38,
39.] 	On December 23, 2020, Judge Otake issue an order denying
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the First Motion to Disqualify (“12/23/20 Order”). 	[Dkt.
no. 40. 2 ]
In the Second Motion to Disqualify, Defendants assert
that there are new facts which have arisen since the 12/23/20
Order and which warrant disqualification of this Court, pursuant
to § 455(a). 	[Mem. in Supp. of Second Motion to Disqualify at
2.] 	Plaintiffs Evan Auld-Susott, as Trustee for (1) Irrevocable
Life Insurance Trust of John L. Susott and Kathryn C. Susott UAD
8/17/1988 as Restated, Exempt Trust FBO Daniel C. Susott, and
(2) Irrevocable Life Insurance Trust of John L. Susott and
Kathryn C. Susott UAD 8/17/1988 as Restated, Non-Exempt Trust
FBO Daniel C. Susott; and John L. Susott (collectively
“Plaintiffs”) argue the Second Motion to Disqualify is
meritless, rising to the point that it is frivolous, and that
this Court should sanction Defendants. 	[Plaintiffs’ mem. in
opp. to Second Motion to Disqualify, filed 9/2/21 (dkt. no. 94),
at 2-3.]
DISCUSSION
I. 	Reassignment of the Second Motion to Disqualify
First, this Court must address Defendants’ request to
have another judge consider the Second Motion to Disqualify. 	A
motion filed pursuant to § 144 must be assigned to another
2 The 12/23/20 Order is also available at 2020 WL 7647477.
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judge, and the judge who is the subject of the motion cannot
proceed in the case until the motion is resolved. 	However, a
party is only allowed to bring one § 144 motion in a case. 	See
28 U.S.C. § 144 (requiring a “sufficient affidavit that the
judge before whom the matter is pending has a personal bias or
prejudice either against him or in favor of any adverse party”
and stating “[a] party may file only one such affidavit in any
case”). 	Because the declaration that was attached to the First
Motion to Disqualify was found to satisfy the § 144 requirement
of an affidavit, see 12/22/20 EO, the First Motion to Disqualify
was decided by Judge Otake, pursuant to § 144. 	Since § 144
limits Defendants to one affidavit, and therefore one § 144
motion, the Second Motion to Disqualify was not referred to
Chief Judge Seabright for reassignment.
Defendants also argue this Court should exercise its
discretion to have another judge rule on the § 455 motion.
[Second Motion to Disqualify at 2 (citing United States v.
Heldt, 668 F.2d 1238, 1271 (D.C. Cir. 1981)).] 	In Heldt, the
District of Columbia Circuit stated: “The trial court may, of
course, at its option transfer [a § 455 motion] to another judge
for decision.” 	668 F.2d at 1271. 	Heldt is not binding
authority on this Court, nor is this Court aware of any Ninth
Circuit case that adopts Heldt or adopts a principle similar to
the one for which Defendants cite Heldt. 	Further, even assuming
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that this Court has the discretion to have another judge decide
the Second Motion to Disqualify, this Court declines to exercise
such discretion under the facts of this case.
II. 	Whether Disqualification is Warranted
Although the First Motion to Disqualify was decided
pursuant to § 144, “[t]he ‘substantive standard’ for the
disqualification or recusal of a judge under 28 U.S.C. §§ 144,
455(a), and 455(b) ‘is the same: Whether a reasonable person
with knowledge of all the facts would conclude that the judge’s
impartiality might reasonably be questioned.’” 	12/23/20 Order,
2020 WL 7647477, at *2 (some brackets and internal quotation
marks omitted) (quoting United States v. Hernandez, 109 F.3d
1450, 1453 (9th Cir. 1997) (per curiam)). 	The substantive
recusal and disqualification standards set forth in the 12/23/20
Order will therefore be applied to the Second Motion to
Disqualify.
Defendants base the Second Motion to Disqualify, in
part, on the same instances of alleged bias and prejudice that
they relied upon in the First Motion to Disqualify. 	See Mem. in
Supp. of Second Motion to Disqualify at 2-4. 	To the extent that
the Second Motion to Disqualify is based upon those instances,
the motion is denied, for the reasons that Judge Otake set forth
in the 12/23/20 Order. 	Thus, this Court will only address the
instances which occurred after the 12/23/20 Order that
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Defendants argue displayed this Court’s bias or prejudice
against them.
First, Defendants point to the following statement:
“In fact, it is hard to imagine any reason for the March 2019
Transfer other than a bad faith attempt to undermine the CV 16-
00450 Judgment, prolong litigation, or extend the time that
Defendants remain in possession of the property.” 	[Order
Denying Defendants’ Motion for a Stay of Further Proceedings,
filed 1/27/21 (dkt. no. 44) (“1/27/21 Order”), at 6 n.3. 3 ]
Defendants argue this statement “made it clear that [this Court]
had predetermined and intended to influence the outcome of” the
instant case. 	[Mem. in Supp. of Second Motion to Disqualify at
5.] 	When it ruled upon Defendants’ Motion to Stay, this Court
did not predetermine the outcome of this case. 	A preliminary
assessment of the merits of this case was necessary to assess
Defendants’ argument that they would suffer hardship if this
Court did not stay this case pending the outcome of Galindo’s
appeal from the CV 16-450 judgment. 	See 1/27/20 Order, 2021 WL
276990, at *1-2 (describing the standards applicable to a motion
to stay and addressing Defendants’ hardship argument). 	Thus,
the statement in the 1/27/21 Order regarding bad faith was
3 The 1/27/21 Order is also available at 2021 WL 276990.
Defendants’ Motion for a Stay of Further Proceedings (“Motion to
Stay”) was filed on November 4, 2020. 	[Dkt. no. 25.]
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relevant and necessary to the issues before this Court in the
Motion to Stay, and it was not an expression of bias or
prejudice against Defendants.
Defendants also assert this Court showed bias or
prejudice in the 1/27/21 Order by accepting Plaintiffs’
inaccurate argument about the consideration for the 2019
Transfer; and by indicating that it was inclined to find that
privity existed between Galindo and D. Susott. 	See 1/27/21
Order, 2021 WL 276990, at *3 & n.4. 	As previously stated, a
preliminary assessment of the merits of this case was necessary
to evaluate whether a stay pending the outcome of the CV 16-450
appeal was warranted. 	The preliminary assessment was not an
expression of bias or prejudice against Defendants.
Defendants also point to the statement in the 1/27/21
Order that: “This Court will not allow Defendants to keep
Plaintiffs and this Court on this hamster wheel.” 	1/27/21
Order, 2021 WL 276990, at *3. 	This statement was relevant to
this Court’s analysis of the factors it considered in
determining whether a stay was warranted; it was not an
expression of bias or prejudice against Defendants.
Defendants state that, “[a]fter reviewing th[e 1/27/21
O]rder, defendants’ counsel was very much afraid that it would
be impossible for his clients to receive a fair trial, and his
fears came to pass when this Court wrongfully” granted
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Plaintiffs’ Motion for Summary Judgment without a hearing, 4 which
“deprived [Defendants] of the jury trial they had validly
requested.” 	[Mem. in Supp. of Second Motion to Disqualify at 8-
9 (citation omitted).] 	Defendants also point to the striking of
portions of their materials in opposition to the Motion for
Summary Judgment as evidence of this Court’s bias or prejudice
against them. 	See Minute Order - EO: Court Order Regarding
Defendants’ Mem. in Opp. and Concise Statement of Facts in Supp.
Thereof, filed 7/16/21 (dkt. no. 78) (“7/16/21 EO”).
First, it was within this Court’s discretion to decide
Plaintiffs’ Motion for Summary Judgment without a hearing. 	See
Local Rule LR7.1(c) (“Unless specifically required, the court
may decide all matters, including motions, . . . without a
hearing.”). 	Defendants argue Local Rule 56.1(a) requires that a
hearing be held on a motion for summary judgment. 	Local
Rule 56.1(a) states that a motion for summary judgment “shall be
heard on the schedule set forth in LR7.2, as permitted by Fed.
R. Civ. P. 56.” 	This Court does not interpret that provision as
requiring that a hearing be held on every motion for summary
judgment filed in this district. 	Rather, that provision merely
4 Plaintiffs’ Motion for Summary Judgment was filed on
June 9, 2021. 	[Dkt. no. 60.] 	The motion was granted in an
August 18, 2021 order, [dkt. no. 88,] which was clarified in a
September 23, 2021 order denying Defendants’ September 1, 2021
motion for reconsideration, [dkt. nos. 92 (motion for
reconsideration), 93 (order denying reconsideration)].
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indicates that, if a hearing on a motion for summary judgment is
set, the briefing schedule in Local Rule 7.2 applies, unless the
presiding judge establishes a different briefing schedule.
Defendants have not shown that this Court’s decision to vacate
the hearing on Plaintiffs’ Motion for Summary Judgment, which
had been scheduled for July 23, 2021, is evidence of this
Court’s bias or prejudice against them.
Second, the reasons why portions of Defendants’
opposition materials were stricken were set forth in the 7/16/21
EO, and Defendants have not shown that those reasons were
effectively a pretext for bias or prejudice against them.
Third, although Defendants filed a jury demand on August 10,
2020, [dkt. no. 15,] this Court was required to resolve Counts I
and III on summary judgement because Plaintiffs established that
there were no genuine issues of material fact, and that they
were entitled to judgment as a matter of law. 	See Fed. R. Civ.
P. 56(a) (“The court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.”
(emphasis added)). 	To the extent that Defendants disagree with
this Court’s substantive rulings on summary judgment, they can
raise those arguments in a timely appeal.
Ultimately, the Second Motion to Disqualify cites a
few specific statements by this Court in its orders and
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otherwise attempts to second-guess the procedural and
substantive rulings in this case. 	As Judge Otake noted when she
denied Defendants’ First Motion to Disqualify, Liteky v. United
States, 510 U.S. 540, 555 (1994), “provide[s] . . . guidance as
to when a judge’s rulings or statements can form the basis for
disqualification[.]” 	12/23/20 Order, 2020 WL 7647477, at *2.
[J]udicial rulings alone almost never constitute
a valid basis for a bias or partiality motion.
In and of themselves (i.e., apart from
surrounding comments or accompanying opinion),
they cannot possibly show reliance upon an
extrajudicial source; and can only in the rarest
circumstances evidence the degree of favoritism
or antagonism required (as discussed below) when
no extrajudicial source is involved. 	Almost
invariably, they are proper grounds for appeal,
not for recusal. 	Second, 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, do not
constitute a basis for a bias or partiality
motion 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, 510 U.S. at 555 (emphases in original) (citation
omitted). 	None of the instances cited in the Second Motion to
Disqualify reveal that this Court has opinions about this case
which derive from an extrajudicial source. 	Further, none of the
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instances reveal that this Court has any favoritism for
Plaintiffs or antagonism against Defendants, let alone
favoritism or antagonism that is so severe it made a fair
judgment impossible. 	Defendants have failed to establish any
reason that warrants this Court’s disqualification.
III. Plaintiffs’ Request for Sanctions
This Court declines to address the request for
sanctions that Plaintiffs made in their memorandum in opposition
to the Second Motion to Disqualify. 	To the extent that
Plaintiffs seek an award of sanctions, they should file the
appropriate motion because the issue of sanctions is separate
from the merits of the claims in this case, and such a motion
may be addressed after the entry of judgment.
CONCLUSION
For the foregoing reasons, Defendants’ Second Motion
to Disqualify the Hon. Leslie E. Kobayashi, filed August 17,
2021, is HEREBY DENIED.
IT IS SO ORDERED.
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DATED AT HONOLULU, HAWAII, September 27, 2021.
EVAN AULD-SUSOTT, ETC., ET AL. VS. LAURYN GALINDO, ET AL; CV 20-
00270 LEK-RT; ORDER DENYING DEFENDANTS’ SECOND MOTION TO
DISQUALIFY THE HON. LESLIE E. KOBAYASHI
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