Penelope Ann Johnson

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
In re:
PENELOPE ANN JOHNSON, 	Case No. 25-13004-SMG
Debtor. 	Chapter 7
____________________________________/
ORDER DENYING (I) MOTION TO
ALTER OR AMEND JUDGMENT, (II) MOTION FOR
ADMINISTRATIVE REVIEW, AND (III) MOTION TO RECUSE
On February 2, 2026, the Court issued an Order1 granting summary judgment
to 	creditor 	Sharon 	Muscella 	and 	interested 	party 	Peter 	Sobota, 	ruling 	that
Ms. Muscella and Mr. Sobota did not willfully violate the automatic stay when
Mr. Sobota served – post-petition – a continuing writ of garnishment on March 25,
2025. As a result, the Court held that debtor Penelope Ann Johnson was not entitled
to any damages under 11 U.S.C. § 362(k).2 On February 17, 2026, Ms. Johnson filed
1 Dkt. No. 145.
2 Id. at 16.
Scott M. Grossman, Chief Judge
United States Bankruptcy Court	_____________________________________________________________________________
ORDERED in the Southern District of Florida on March 11, 2026.
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three motions, all of which relate to her disagreement with the Court’s summary
judgment ruling:
• 	Motion to Alter or Amend Judgment;3
• 	Motion for Administrative Review;4 and
• 	Motion to Recuse Judge Scott M. Grossman.5
After 	carefully 	considering 	Ms. 	Johnson’s 	motions, 	the 	response6 	filed 	by
Ms. Muscella and Mr. Sobota, and Ms. Johnson’s reply,7 the Court concludes that
each of the motions is without merit.
I. 	Motion to Alter or Amend Judgment.
In her Motion to Alter or Amend Judgment, Ms. Johnson cites Federal Rule of
Civil Procedure 59(e), made applicable in bankruptcy cases by Federal Rule of
Bankruptcy Procedure 9023. Although Rule 59(e) grants courts authority to alter or
amend a judgment, it does not list the grounds on which a court may do so. The
Eleventh Circuit has stated that the “only grounds for granting [a Rule 59] motion
are newly-discovered evidence or manifest errors of law or fact.”8 “A manifest error is
one that amounts to a ‘wholesale disregard, misapplication, or failure to recognize
controlling precedent.’”9 Although Ms. Johnson disagrees with the Court’s ruling,
3 Dkt. No. 150.
4 Dkt. No. 152.
5 Dkt. No. 154.
6 Dkt. No. 157.
7 Dkt. No. 158.
8 MacPhee v. MiMedx Group, Inc., 73 F.4th 1220, 1250 (11th Cir. 2023) (quoting Arthur v. King, 500
F.3d 1335, 1343 (11th Cir. 2007)); see Trump v. Cable News Network, Inc., 2023 WL 8433599, at *1
(S.D. Fla. 2023) (quoting U.S. v. Dean, 838 Fed. App’x 470, 471-72 (11th Cir. 2020)).
9 Shuler v. Garrison, 718 Fed. App’x 825, 828 (11th Cir. 2017) (quoting Oto v. Metro. Life Ins. Co., 224
F.3d 601, 606 (7th Cir. 2000)); see also Trump, 2023 WL 8433599, at *1 (“[C]lear error or manifest
injustice occurs where the Court has patently misunderstood a party, or has made a decision outside
the adversarial issues presented to the Court by the parties, or has made an error not of reasoning but
of apprehension.” (internal quotation marks omitted) (quoting Great Lakes Ins. SE v. Boat Rental
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nothing in her motion establishes any grounds to alter or amend the ruling under
Rule 59(e).
Ms. 	Johnson 	asserts 	that 	the 	Court’s 	summary 	judgment 	ruling 	was
“substantively incorrect” and that it “was reached through a procedurally improper
‘ambush’ summary judgment,” depriving her of a “meaningful opportunity to be
heard.” Ms. Johnson essentially makes two arguments. First, she argues that the
Court should not have granted summary judgment without giving her an opportunity
to present evidence at an evidentiary hearing that had been set, but which the Court
canceled as a result of granting summary judgment. Second, she argues that the
Court improperly faulted her for not filing the transcripts of the deposition testimony
of Ms. Muscella and Mr. Sobota, when the Court presided over their depositions.10
The Court conducted hearings in this matter on October 1, 2025,11 October 27,
2025,12 and November 12, 2025.13 The Court then entered a scheduling order on
November 14, 2025.14 While that scheduling order did set an evidentiary hearing for
February 5, 2026, that scheduling order also set a December 12, 2025 deadline for
parties to move for summary judgment and set a briefing schedule in the event a
party did timely move for summary judgment.
Miami, Inc., 2020 WL 264674, at *6 (S.D. Fla. 2020))); Venegas-Hernandez v. Sonolux Records, 370
F.3d 183, 195 (1st Cir. 2004) (defining manifest error as an error “that is plain and indisputable, and
that amounts to a complete disregard of the controlling law.”).
10 See Dkt. No. 88; see also Dkt. No. 149 at 41:13-42:4; 43:13-44:11; 46:7-47:11.
11 Dkt. No. 50.
12 Dkt. No. 65.
13 Dkt. No. 81.
14 Dkt. No. 88.
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As the Court explained at the November 12 hearing:
And then after all of that, Mr. Langley [counsel for Ms. Muscella and
Mr. Sobota], if the facts are where [sic] you contend they are, Rule 7056
can apply, does apply in a contested matter through Rule 9014. So if you
think there’s no genuine dispute as to any material fact, and your clients
are entitled to judgment as a matter of law, you can file a motion for
summary judgment, and Ms. Johnson can oppose it, if she sees fit to
oppose it within the contours of Rule 56, and I’ll decide whether we need
to have a trial.15
Later in the hearing – after rejecting the request of counsel for Ms. Muscella
and Mr. Sobota to move for summary judgment before Ms. Johnson could take the
depositions of Ms. Muscella and Mr. Sobota16 – the Court discussed with the parties
a summary judgment briefing schedule.17 After settling on a briefing schedule, the
Court stated that “in case [Ms. Muscella and Mr. Sobota] for whatever reason, don’t
move 	for 	summary 	judgment, 	we’ll 	continue 	the 	evidentiary 	hearing 	[on 	Ms.
Johnson’s request for sanctions for allegedly willful violation of the automatic stay]
to February 5th at 9.30 a.m.”18 The Court then concluded with a warning that “if you
timely move for summary judgment, I may cancel that hearing so that I can rule on
the summary judgment motion, okay?”19
Ms. 	Muscella 	and 	Mr. 	Sobota 	timely 	moved 	for 	summary 	judgment.20
Ms. Johnson then made numerous filings in response to their motion.21 In accordance
15 Dkt. No. 149 at 42:5-13.
16 Id. at 46:12-48:24.
17 Id. at 49:16-50:8.
18 Id. at 50:10-13.
19 Id. at 50:14-16. The Court also noted alternatively “Or I may set an oral argument on the summary
judgment motion for that hearing, okay – for that day.” Id. at 50:18-20.
20 Dkt. No. 111.
21 Dkt. Nos. 131, 132, 133, 134, 135, 137
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with the briefing schedule, Ms. Muscella and Mr. Sobota then filed a reply.22
Although not permitted or invited by the scheduling order, Ms. Johnson then filed a
sur-reply.23 After considering the motion for summary judgment, responses, reply,
sur-reply, and other materials in the record, the Court determined there was no
genuine dispute as to any material fact and that Ms. Muscella and Mr. Sobota were
entitled to judgment as a matter of law.
This is precisely how Federal Rule of Civil Procedure 56,24 which governs
motions for summary judgment, works. The whole point of summary judgment is to
allow the Court to decide a case (or part of a case) without a trial or evidentiary
hearing if there is no real dispute about the material facts and one side is entitled to
prevail as a matter of law. And “it is ‘well settled’ in the Eleventh Circuit that a court
is not required to hold an oral hearing before deciding a summary judgment
motion.”25 Due process only “requires that notice and an opportunity for hearing be
provided before a person’s rights may be determined in an action.”26 By setting a
summary judgment deadline, setting a briefing schedule27 that gave Ms. Johnson four
weeks to respond, and setting a deadline for the movants to reply – and then by
considering Ms. Johnson’s multiple responsive filings28 including her uninvited sur-
22 Dkt. No. 139.
23 Dkt. No. 142.
24 Federal Rule of Civil Procedure 56 applies to contested matters – like Ms. Johnson’s motion for
sanctions – in bankruptcy cases through Federal Rules of Bankruptcy Procedure 9014(c)(1) and
Federal Rule of Bankruptcy Procedure 7056.
25 In re Darrell, 660 B.R. 401, 408 (M.D. Fla. 2024) (citing Smith v. School Bd. of Orange Cnty., 487
F.3d 1361, 1367 (11th Cir. 2007) (citations omitted)).
26 Id. (citing Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)).
27 See Dkt. No. 88 (providing that “[i]f a timely summary judgment motion is filed, any response must
be filed by January 9, 2026, and any reply may be filed by January 23, 2026.”).
28 Dkt. Nos. 131, 132, 133, 134, 135.
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reply29 – the Court afforded Ms. Johnson with all required due process before
granting Ms. Muscella’s and Mr. Sobota’s motion for summary judgment.
As for the Court not considering the deposition testimony of Ms. Muscella and
Mr. Sobota, the Court did not do so because Ms. Johnson did not provide transcripts
of their testimony to the Court. While the Court took the unusual step in this case of
presiding over their depositions, the Court did so not as a fact finder but instead to
“keep the peace,”30 “rule on objections,”31 “rule on claims of privilege,”32 and to “make
sure it goes smoothly and doesn’t get out of hand.”33 This was done given certain
allegations about the conduct of state court proceedings that resulted in two different
judges prohibiting Ms. Johnson and her husband from proceeding there without an
attorney.34 As the party opposing summary judgment, if Ms. Johnson believed their
deposition testimony supported her position, it was incumbent upon her to file those
transcripts with the Court.35 She did not do so, and so the Court did not consider their
testimony in its ruling.36 Indeed, this is exactly what Rule 56(c)(3) contemplates by
providing that a court “need consider only the cited materials.”37 Accordingly, the
Court not relying on deposition testimony that Ms. Johnson failed to provide to the
29 Dkt. No. 142.
30 Dkt. No. 149 at 44:1.
31 Id. at 41:16.
32 Id. at 41:16-17.
33 Id. at 41:17-18.
34 Id. at 36:2-19.
35 See Polk v. S. Comfort Conversions, 2005 WL 8157953, at *1 n. 1 (N.D. Ala. 2005) (“Rule 56(c) of the
Federal Rules of Civil Procedure ‘saddles the non-movant with the duty to “designate” the specific facts
in the record’ supporting his claim.” (quoting Jones v. Sheehan, Young & Culp, P.C., 82 F.3d 1334,
1338 (5th Cir. 1996))).
36 See Dkt. No. 145 at 15 n. 59.
37 Fed. R. Civ. P. 56(c)(3) (emphasis added).
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Court does not violate her due process rights and is not grounds to alter or amend the
summary judgment ruling under Rule 59(e).
II. 	Motion for Administrative Review.
Ms. 	Johnson’s 	Motion 	for 	Administrative 	Review38 	asserts 	generalized
allegations 	of 	procedural 	irregularities, 	constitutional 	violations, 	and 	judicial
misconduct, but fails to identify any specific legal error, cite supporting authority, or
establish a basis for the requested “administrative review.” As the Court explained
above, 	Ms. 	Johnson 	has 	not 	established 	any 	grounds 	for 	reconsideration. 	If
Ms. Johnson wishes to seek review of this Court’s summary judgment order, she may
do so through the appropriate appellate process. Accordingly, Ms. Johnson’s Motion
for Administrative Review will be denied.
III. 	Motion to Recuse.
Ms. 	Johnson’s 	Motion 	to 	Recuse39 seeks 	the 	recusal 	of 	Judge 	Scott 	M.
Grossman 	based 	upon 	vague 	allegations 	of 	bias, 	failure 	to 	consider 	evidence,
“procedural abuse,” and ethical violations. However, Ms. Johnson’s true complaint is
with the Court’s adverse rulings against her. This is not a basis for recusal.
As Judge Peter D. Russin recently explained in In re Vital Pharmaceuticals:40
Federal judges are presumed to be impartial. That presumption may be
overcome, but only in circumstances where a reasonable, fully informed
observer would doubt the judge’s ability to remain fair and neutral, or
where 	a 	judge 	in 	fact 	harbors 	a 	personal 	bias 	or 	prejudice 	that
38 Dkt. No. 152.
39 Dkt. No. 154.
40 In re Vital Pharms., Inc., 2025 WL 1617545 (Bankr. S.D. Fla. 2025).
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disqualifies them from presiding. Section 455 of Title 28 sets out two
principal grounds for disqualification.
Under § 455(a), a judge must recuse “in any proceeding in which his
impartiality might reasonably be questioned.” This is an objective test.
The question is not whether the party before the court believes the judge
is biased, but whether a reasonable person, fully informed of the
relevant facts, would harbor doubts about the judge’s impartiality.
Under § 455(b)(1), recusal is required where a judge “has a personal bias
or prejudice concerning a party.” This provision refers to actual bias—
not perceived bias—and it must arise from an extrajudicial source,
meaning it cannot be based solely on the judge’s rulings, statements, or
conduct in the case. The Supreme Court has repeatedly emphasized that
judicial rulings, even if harsh or erroneous, are almost never grounds for
recusal.41
Ms. Johnson has not alleged any facts that would establish grounds for recusal under
28 U.S.C. § 455. Accordingly, her Motion to Recuse will be denied.
For the reasons discussed, it is ORDERED that:
1. 	Ms. Johnson’s Motion to Alter or Amend Judgment42 is DENIED.
2. 	Ms. Johnson’s Motion for Administrative Review43 is DENIED.
3. 	Ms. Johnson’s Motion to Recuse44 is DENIED.
# # #
Copies furnished to all interested parties by the Clerk of Court.
41 Id. at *3 (emphasis added) (internal citations omitted).
42 Dkt. No. 150.
43 Dkt. No. 152.
44 Dkt. No. 154.
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