Kovalchick v. R/S Financial Corporation et al

1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
IN RE: PETER KOVALCHICK, 	: 	Chapter 11
Debtor 	:
: 	Main Case No. 5:01-bk-03870
:
PETER KOVALCHICK, 	:
Plaintiff 	: 	Adversary No. 5:06-ap-50006
:
Indispensable and Necessary Parties 	:
:
CYRUS P. DOLBIN, JUDGE OF 	:
SCHUYLKILL COUNTY COURT 	:
OF COMMON PLEAS 	:
:
JOHN J. THOMAS, CHIEF JUDGE OF 	:
BANKRUPTCY COURT, MIDDLE 	:
DISTRICT OF PENNSYLVANIA 	:
:
v. 	:
:
R/S FINANCIAL CORP., ROBERT J. 	:
ROSENSTEIN, MIRIAM SMALLS, 	:
RICHARD A. SPRAGUE, SPRAGUE & 	:
SPRAGUE, CHARLES J. HARDY, AND 	:
THOMAS GROSHENS, 	:
Defendants 	:
________________________________________
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
IN RE: PETER KOVALCHICK, 	: 	Chapter 11
Debtor 	:
: 	Main Case No. (NONE)
:
PETER KOVALCHICK, 	:
Plaintiff 	: 	Adversary No. 06-2008 REF
:
Indispensable and Necessary Parties 	:
:
CYRUS P. DOLBIN, JUDGE OF 	:
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SCHUYLKILL COUNTY COURT 	:
OF COMMON PLEAS 	:
:
JOHN J. THOMAS, CHIEF JUDGE OF 	:
BANKRUPTCY COURT, MIDDLE 	:
DISTRICT OF PENNSYLVANIA 	:
:
v. 	:
:
R/S FINANCIAL CORP., ROBERT J. 	:
ROSENSTEIN, MIRIAM SMALLS, 	:
RICHARD A. SPRAGUE, SPRAGUE & 	:
SPRAGUE, CHARLES J. HARDY, AND 	:
THOMAS GROSHENS, 	:
Defendants 	:
________________________________________
MEMORANDUM OPINION
Background
This matter arose for this Court through the Designation of Bankruptcy Judge for Service
in Another District within the Circuit (the “Designation”), dated March 6, 2006, by Third Circuit
Court of Appeals Chief Judge Anthony J. Scirica. In the Designation, Chief Judge Scirica
designated and assigned me to this proceeding for such time as is necessary for the disposition of
the above-captioned matter. This case was then pending in the United States Bankruptcy Court
for the Middle District of Pennsylvania under the main Bankruptcy Docket Number 01-03870,
Adversary Proceeding Number 5:06-ap-50006 (the “MD PA Docket”), and Judge Scirica’s
Designation was captioned as a Middle District case. On March 8, 2006, the Clerk’s Office in
Middle District closed the case and the docket. The Clerk’s Office in Eastern District then
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1 Although captioned and styled in the beginning as a Complaint for Injunction, the
Complaint includes seven counts, only one of which seeks injunctive relief. The other six counts
assert various and sundry causes of action against R/S and Sprague, each count seeking
compensatory and punitive damages.
2 As Pennsylvania State Supreme Court Justice Ronald D. Castille remarked in one of
the numerous court decisions arising out of this dispute: “This matter has a long and tortured
history in the courts of this Commonwealth and in the federal bankruptcy courts over the past
sixteen years.” R/S Financial Corporation v. Kovalchick, et al, page 1, No. J-18-1998, No. 64
M.D. Appeal Docket 1997 (Pa. August 19, 1998). Nearly eight more years have passed, adding
to the long and tortured history.
3
opened a new adversary proceeding docket within this District under Adversary Proceeding
Docket Number 06-02008-ref (the “ED PA Docket”).
On March 9, 2006, Plaintiff, Peter Kovalchick (“Plaintiff”), who is appearing pro se in
this matter, filed his Motion for the Recusal/Disqualification of Richard E. Fehling, Bankruptcy
Judge (the “Recusal Motion”), which is based on three principal issues. The Recusal Motion
was filed in the Eastern District of Pennsylvania in the ED PA Docket. Plaintiff makes only a
limited reference to any matter that might remotely cause some conflict for me personally. Most
of Plaintiff’s allegations of conflicting circumstances refer to another attorney at my former law
firm, Stevens & Lee, and matters in which I was not involved. I note that Plaintiff has filed other
documents with the Eastern District Clerk, although he has used a mixed caption, including part
of the MD PA Docket number and part of the ED PA Docket number. I will address the issue of
venue, designation, use of the MD PA Docket, and use of the ED PA Docket below.
Analysis of the Recusal Motion must start with a brief review of the underlying matter
that was the subject of the Designation. Very briefly, it appears from Plaintiff’s Complaint for
Injunction (the “Complaint”) 1 that Plaintiff’s difficulties began nearly 24 years ago 2 when R/S
Financial Corporation, through its agents, employees, and officers (collectively, “R/S”)
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3According to the allegations in the Plaintiff’s complaint herein, the amount of the
judgment, entered on May 22, 1982, after a jury trial, was $1,436,489.49. Through an appeal to
the Pennsylvania Superior Court, the Plaintiff alleges, the principal amount of the judgment was
reduced to $1,004,831.65 in 1985.
4
successfully obtained a judgment in the Court of Common Pleas for Schuylkill County,
Pennsylvania, against Plaintiff’s parents in excess of One Million Dollars (the “Judgment”).3
R/S was represented then and continues to be represented by the law firm Sprague & Sprague
through individual attorneys in that law firm (collectively, “Sprague”). 	R/S, through its counsel
Sprague, has proceeded since 1982 with various actions in Schuylkill County state court to
attempt to collect on their judgment, including an action against Plaintiff and his wife and
siblings, aiming to collect the debt from some property transferred to Plaintiff and his wife by
Plaintiff’s parents. Judge Cyrus P. Dolbin (“Judge Dolbin”) presided over most (if not all) of the
Schuylkill County litigation of R/S against Kovalchick. Judge Dolbin is identified in many of
Plaintiff’s allegations as the judge in Schuylkill County who heard the R/S – Kovalchick matters
and is included as an involuntary indispensable party plaintiff in this proceeding.
Because Plaintiff was continually unsuccessful in his efforts to resist the R/S collection
efforts, he (and other members of his family) periodically filed for protection pursuant to the
United States Bankruptcy Code (the “Code”) and, most recently, his pending Chapter 11 is open
before United States Bankruptcy Judge John J. Thomas (“Judge Thomas”). In the course of
Plaintiff’s bankruptcy proceeding, Judge Thomas granted R/S relief from the automatic stay of
Section 362 of the Code, permitting R/S, still represented by Sprague, to return to Schuylkill
County court for its collection efforts. Also over the past few months, Plaintiff has been the
subject of a certain criminal complaint alleged to have been initiated by R/S.
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4The other United States Bankruptcy Judge in the Middle District of Pennsylvania, Judge
Mary D. France, recused herself from this matter because she had been counsel for the United
States Trustee in the underlying main bankruptcy case prior to her taking the bench in 2002.
5
Plaintiff filed this adversary proceeding in the Middle District of Pennsylvania
Bankruptcy Court against R/S and Sprague and joined Judge Dolbin as an indispensable party.
Judge Thomas was also included as an involuntary indispensable party to the litigation, he
recused himself, and the Designation of this case was made to me.4
Recusal Allegations
At no time, in any of the numerous allegations in the Complaint or in the Recusal
Motion, does Plaintiff make any allegation in any way that Stevens & Lee or I had anything to
do with the collection efforts of R/S or of any other facet of Plaintiff’s litigation or bankruptcy
proceedings.
Plaintiff’s three stated bases for seeking my recusal follow: (1.) Stevens & Lee, my
former law firm, has an attorney in an Of Counsel position, Alvin Lewis, Esquire, who is a
former partner in the Sprague law firm; (2.) Stevens & Lee and the Sprague firm were both
involved in certain disputes in Lancaster County relating to its proposed convention center and
the firms’ names have appeared in news article together; and (3.) I have appeared in at least one
identified bankruptcy seminar and conference in the Middle District of Pennsylvania as a
lecturer.
Plaintiff’s specific allegations in the Recusal Motion relating to me follow, with my
comment when appropriate:
Paragraph 11. The Third Circuit Court appointed me to hear this matter. This is correct.
Paragraph 12. Plaintiff investigated my background. This appears evident by Plaintiff’s
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exhibits.
Paragraph 16. Plaintiff received notice on March 8, 2006, that I had been assigned to
hear this matter. This cannot be contradicted.
Paragraph 18. I was an attorney with Stevens & Lee. This is correct.
Paragraph 19. Alvin Lewis, Esquire, is Of Counsel to Stevens & Lee. This is correct,
although I do not recall when attorney Lewis first joined Stevens & Lee. Attorney Lewis’ office
has been located in Stevens & Lee’s Lancaster office since joining the firm and my office has
been located in the firm’s Reading office during my entire tenure at Stevens & Lee. I mention
this not to indicate that attorneys in Stevens & Lee’s various offices do not communicate, but
merely to show that attorney Lewis and I had no daily discourse or interaction.
Paragraph 20. “Alvin Lewis, Esq., is also a partner to Richard A. Sprague, Esq., in
Lancaster, PA.” I quote this statement of Plaintiff because of the implication, through the use of
the present tense, that attorney Lewis, while an attorney at Stevens & Lee is or was, at the same
time, also a partner with another lawyer or law firm in Lancaster, in particular, with the Sprague
firm. This is not correct. I do understand, however, that attorney Lewis had been associated in
some way with Sprague prior to attorney Lewis joining Stevens & Lee.
Paragraph 21. Stevens & Lee and Sprague are “embroiled in controversies” in Lancaster
County relating to its proposed convention center and are mentioned together in a “news article.”
Plaintiff is correct that both law firms were involved in certain litigation relating to Lancaster
County’s disputes about its proposed convention center, although neither firm has represented or
currently represents the other. Personally, I had very little, if any, involvement in that litigation.
I also note that the “news article” to which Plaintiff refers appears to be a web-log of unknown
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distinction, origin, or agenda.
Paragraph 22 (part one). Some time in the past (apparently when attorney Lewis was
associated with Sprague), attorneys Lewis and Sprague worked together in some litigation in
which they are claimed to have used political power to bring in a judge from the Ninth Circuit to
hear by designation with the Third Circuit Court an appeal of the litigation. Although I am
aware of the referenced litigation, I had not been aware that attorney Lewis was involved in the
matter and I am not aware of any such issues relating to the constitution of the Third Circuit
panel of judges. Furthermore, at the time of his alleged involvement in that litigation, I believe
that attorney Lewis was not affiliated with Stevens & Lee. Once again, Plaintiff relies on a web-
log of unknown pedigree for this information.
Paragraph 22 (part two). Attorneys Lewis and Sprague were on the House Select
Committee on Assassinations and worked together there. Plaintiff quotes another web-log
“source” as reporting their “clouding the investigation of both John F. Kennedy’s assassination
and Martin Luther King, Jr.’s assassination.” I was aware that attorney Lewis served on such
Committee, but I have seen or heard nothing other than limited conspiracy theories to indicate
any “clouding,” which would be irrelevant to this matter in any event.
Paragraph 23. In a Stevens & Lee news article, I am mentioned as having lectured at a
bankruptcy seminar in the Middle District of Pennsylvania. This is correct.
Paragraph 24. I have a history of being involved, whether personally, through Stevens &
Lee, or through lecturing with most of the defendants in this matter. Plaintiff is correct that I
have participated in continuing legal education programs in the Middle District of Pennsylvania.
Plaintiff may also be correct about some prior relationship between attorney Lewis and the
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5Federal Rule of Bankruptcy Procedure, Rule 5004 states:
(a) Disqualification of judge
A bankruptcy judge shall be governed by 28 U.S.C. § 455, and disqualified from
presiding over the proceeding or contested matter in which the disqualifying
circumstances arises or, if appropriate, shall be disqualified from presiding over
the case.
(b) Disqualification of judge from allowing compensation
A bankruptcy judge shall be disqualified from allowing compensation to a person
who is a relative of the bankruptcy judge or with whom the judge is so connected
as to render it improper for the judge to authorize such compensation.
8
Sprague firm, but that does not affect or relate to me. Plaintiff is correct that Stevens & Lee and
Sprague were both involved in certain Lancaster County convention center matter, but that also
does not affect or relate to me
Paragraph 25. The Plaintiff’s allegations, he claims, show an improper appearance. I
disagree - no impropriety arises or appears from the matters to which Plaintiff refers as I will
discuss below.
Paragraph 29. Plaintiff finds it “inconceivable and too coincidental” that I should not fall
within certain descriptions under Title 28 U.S.C. Section 455 of what justifies or requires
recusal. Again, I disagree and will discuss below.
Discussion of 28 U.S.C. Section 455
Federal Rule of Bankruptcy Procedure, Rule 50045, states that a bankruptcy judge shall
be governed by 28 U.S.C. Section 455 in matters of disqualification. Section 455 sets forth the
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628 U.S.C. § 455 provides:
(a) Any justice, judge, or magistrate judge of the United States shall disqualify
himself in any proceeding in which his impartiality might reasonably be
questioned.
(b) He shall also disqualify himself in the following circumstances:
(1) Where he has a personal bias or prejudice concerning a party, or personal
knowledge of disputed evidentiary facts concerning the proceeding;
(2) Where in private practice he served as lawyer in the matter in controversy, or
a lawyer with whom he previously practiced law served during such association
as a lawyer concerning the matter, or the judge or such lawyer has been a material
witness concerning it;
(3) Where he has served in governmental employment and in such capacity
participated as counsel, adviser or material witness concerning the proceeding or
expressed an opinion concerning the merits of the particular case in controversy;
(4) He knows that he, individually or as a fiduciary, or his spouse or minor child
residing in his household, has a financial interest in the subject matter in
controversy or in a party to the proceeding, or any other interest that could be
substantially affected by the outcome of the proceeding;
(5) He or his spouse, or a person within the third degree of relationship to either
of them, or the spouse of such a person:
(i) Is a party to the proceeding, or an officer, director, or trustee of
a party;
(ii) Is acting as a lawyer in the proceeding;
(iii) Is known by the judge to have an interest that could be
substantially affected by the outcome of the proceeding;
(iv) Is to the judge’s knowledge likely to be a material witness in
the proceeding.
As a United States Judge, I am also guided by the Code of Conduct for United States
Judges, although the Code of Conduct neither expands upon nor extends the statutory
9
statutory requirements for the recusal of a United States Judge from hearing certain litigation.6
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prohibitions of Section 455.
10
Plaintiff relies upon two different provisions within Section 455. First, Section 455(a) provides:
“Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding
in which his impartiality might reasonably be questioned.” Second, Section 455(b)(1) provides:
“He shall also disqualify himself in the following circumstances: Where he has a personal bias or
prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the
proceeding . . . .”
“To invoke these provisions of Section 455, there must be a factual and reasonable basis
to question the court’s impartiality.” United States v. Martorano, Crim. No. 82-11, 1987 WL
13677, at *3 (E.D. Pa. July 13, 1987). Furthermore, application of § 455 involves a two-step
analysis:
First, a charge of partiality must be supported by a factual basis. Although public
confidence may be as much shaken by publicized inferences of bias that are false
as by those that are true, a judge considering whether to disqualify himself must
ignore rumors, innuendos, and erroneous information published as fact in the
newspapers. To find otherwise would allow an irresponsible, vindictive or
self-interested press informant and/or an irresponsible, misinformed or careless
reporter to control the choice of judge. Second, disqualification is appropriate
only if the facts provide what an objective, knowledgeable member of the public
would find to be a reasonable basis for doubting the judge's impartiality. Were
less required, a judge could abdicate in difficult cases at the mere sound of
controversy or a litigant could avoid adverse decisions by alleging the slightest of
factual bases for bias. See H. Rep. No. 1453, 1974 U.S. Code Cong. &
Admin.News, supra, at 6355. This restricted mandate to disqualify is calculated
to induce a judge to tread the narrow path between timidity and tenacity.
In re United States, 666 F.2d 690, 695 (1st Cir. 1981) (footnote and citations omitted).
Therefore, application of subsections 455(a) and (b)(1) involve a determination of bias
from the objective perspective of a reasonable person rather than from the perspective of the
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movant. E.g., Martorano, 1987 WL 13677, at *3; Barna v. Haas (In re Haas), 292 B.R. 167, 177
(Bankr. S.D. Ohio 2003). “[T]he judge need not recuse himself based on the ‘subjective view of
a party’ no matter how strongly that view is held.” United States v. Sammons, 918 F.2d 592,
599 (6th Cir. 1990). Moreover, a judge “has a duty not to recuse if disqualification is not
appropriate.” Martorano, 1987 WL 13677, at *3; accord, e.g., United States v. Brant, Crim. A.
Nos. 89-111, 89-112, 1995 WL 118214, at *1 (E.D. Pa. March 10, 1995); In re Womack, 253
B.R. 245, 246 (Bankr. E.D. Ark. 2000). Although the language of Section 455 is clear, the
legislative history relating to its enactment provides further interpretative assistance:
No judge, of course, has a duty to sit where his impartiality might be reasonably
questioned. However, the new test should not be used by judges to avoid sitting
on difficult or controversial cases.
At the same time, in assessing the reasonableness of a challenge to his
impartiality, each judge must be alert to avoid the possibility that those who
would question his impartiality are in fact seeking to avoid the consequences of
his expected adverse decision. Disqualification for a lack of impartiality must
have a reasonable basis. Nothing in this proposed legislation should be read to
warrant the transformation of a litigant’s fear that a judge may decide a question
against him into a “reasonable fear” that the judge will not be impartial. Litigants
ought not to have to face a judge where there is a reasonable question of
impartiality, but they are not entitled to judges of their own choice.
H.R. Rep. No. 93-1453 (1974), reprinted in 1974 U.S.C.C.A.N. 6351, 6355. “Courts must
exercise great care in considering motions for recusal so as to discourage their use for purposes
of judge shopping or delay.” Haas, 292 B.R. at 175.
Section 455 (b)(1) sets forth an explicit statement of circumstances that mandate recusal
of a judge. A Seventh Circuit decision describes a working test for determining
recusal/disqualification as “whether a reasonable person would be convinced the judge was
biased.” Brokaw v Mercer County, 235 F.3d 1000, 1025 (7th Cir. 2000). The court further
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explained that recusal “is required only if actual bias or prejudice is proved by compelling
evidence.” Id. In Easley v University of Michigan Board of Regents, 906 F.2d 1143 (6th Cir.
1990), a judge serving on a law school committee was not required to recuse himself from a
discrimination suit against the law school because his position did not give him any knowledge
of the events at issue in some discrimination litigation against the school.
Section 455(a), on the other hand, does not set forth specific instances in which I should
recuse myself, as Section 455(b) prescribes. Sub-section (a) is more generalized and requires an
objective view when considering recusal. The question for the judge is not whether the judge
believes that he or she is biased, prejudiced, or impartial, but whether the judge’s “impartiality
might be reasonably questioned.” In the Third Circuit, this reasonable person standard has been
interpreted to mean: “[A] reasonable man knowing all the circumstances would harbor doubts
concerning the judge’s impartiality.” Blanche Road Corp. v. Bensalem Township, 57 F.3d 253,
266 (3d Cir. 1995) (quoting and relying upon prior Third Circuit decisions).
Other courts’ decisions have gone on to refine the standard. The hypothetical reasonable
person is not generally considered to be a judge because judges may have become inured to
certain perceived conflicts that might genuinely offend lay persons. See United States v.
DeTemple, 162 F.3d 279, 287 (4th Cir. 1998). The hypothetical observer, however, “is not a
person unduly suspicious or concerned about a trivial risk that a judge may be biased.” Id. 	A
judge is obliged to consider “how things appear to the well-informed, thoughtful observer rather
than to a hypersensitive or unduly suspicious person.” In re Mason, 916 F.2d 384, 386 (7th Cir.
1990).
Section 455(a) can be broken into thirteen bases for recusal, seven that are frequently
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alleged but rarely require recusal and six in which recusal may be more likely to be granted.
Many of these thirteen bases do not apply at all to the Recusal Motion, but they will be
mentioned. The seven types of allegations that do not generally warrant recusal have been
summarized as follows: (1.) Rumor, speculation, beliefs, conclusions, innuendo, suspicions,
opinions, and similar non-factual matters; (2.) the judge’s prior statements on a point of law or
policy; (3.) prior rulings in the same or a related proceeding; (4.) familiarity with the parties or
the legal theories presented; (5.) baseless personal attacks on the judge; (6.) reports in the media
about what the judge believes, says, or does; and (7.) threats or attempts to intimidate the judge.
Nichols v. Alley, 71 F.3d 347, 351 (10 th Cir. 1995). Nothing in Plaintiff’s Recusal Motion
appears to rely in any way on numbers (2.), (3.), (5.), (6.), or (7.) above; but numbers (1.)and (4.)
are at issue.
When considering disqualifying reason (1.), a court shall not use the standard of
“Caesar’s wife,” which is the standard of mere suspicion. The disqualification decision must
reflect not only the need to secure public confidence through apparently impartial proceedings,
but also the need to prevent parties from too easily obtaining the disqualification of a judge,
thereby potentially manipulating the system for strategic reasons, perhaps to obtain a judge more
to their liking. In re Allied-Signal, Inc., 891 F.2d 967, 970 (1st Cir. 1989) (Breyer, J.). 	Judges
often cannot possibly avoid having some acquaintance with the parties or law firms that might
appear before them, which is the basis of disqualifying reason (4.). Direct and personal social,
business, or other relationships and previous contacts with parties or counsel are generally
rejected as the basis for recusal. See MacDraw, Inc., v. CIT Group Equip. Fin., Inc., 157 F.3d
956, 963 (2d Cir. 1998); United States v. Morrison, 153 F.3d 34, 47-49 (2d Cir. 1998). These
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disqualifying reasons will be examined below against the allegations in the Recusal Motion.
The six types of recusal allegations that get more traction with the courts are: (8.) Close
personal or professional relationships with attorneys or others; (9.) public comments or outside
activities; (10.) ex parte contacts; (11.) involvement pertaining to a guilty plea in criminal cases;
(12.) the judge taking personal offense at something done or said by the parties or counsel; and
(13.) miscellaneous allegations of some conflict that faces the judge personally and directly.
Again, Plaintiff’s Recusal Motion does not rely on numbers (9.), (10.), (11.), (12.), or (13.), but
number (8.) is at issue.
As mentioned above, a judge’s friendship with one or more of the attorneys, witnesses, or
parties in a matter, which is disqualifying reason (8.), does not ordinarily require recusal. When
a judge’s close personal friend, however, was a key witness in a proceeding, when the judge
remarked that he would “bend over backwards to prove he lacked favoritism” toward the
witness, and when an adverse decision might jeopardize the judge’s wife’s friendship with a
party’s wife, the judge should have recused himself. United States v. Kelly, 888 F.2d 732, 744-
47 (11 th Cir. 1989). The Eleventh Circuit Court also examined a matter in which a judge’s law
clerk’s father (who had himself been a law clerk for the judge) was a partner in a law firm
representing one of the parties before the judge and the law clerk had actually conducted a
hearing with counsel in the judge’s absence. Parker v. Connors Steel Co., 855 F.2d 1510 (11 th
Cir. 1988). Recusal might have appeared even more appropriate because the judge openly
credited his law clerk in his written opinions. But even with these close and overlapping
personal and direct relationships, the Eleventh Circuit found the judge’s failure to recuse himself
to be harmless error in Parker.
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In another such decision, the Seventh Circuit Court declared that friendships among
judges and lawyers are common and a judge need not disqualify himself just because a friend,
even a close friend, appears as a lawyer before the judge. United States v. Murphy, 768 F.2d
1518, 1537 (7th Cir. 1985). The court went on, however, to note that the judge should have
recused himself in Murphy because the friendship between the judge and the attorney was
particularly close and personal and their families were about to take a joint vacation. Id. at 1538.
The court nevertheless did not reverse the judge’s decision not to recuse himself because the
issue was raised too late.
Application of Section 455 to the Recusal Motion Allegations
The three categories of grounds for recusal discussed above under Section 455(a)
obviously break down to two separate categories because disqualifying reasons (4.) and (8.) are
effectively the same thing, varying only in the degree of the judge’s familiarity and friendship
with counsel or the parties. For that matter, the other potentially relevant ground for recusal,
disqualifying reason (1.) (rumor, speculation, belief, conclusions, innuendo, suspicions,
opinions, and similar non-factual matters), to the extent it is extant here, is derived from the
alleged relationships that I have or had, primarily through imputation, with the parties in this
case. I will therefore regard Plaintiff’s entire objection as being based entirely upon prior
relationships, whether mine personally or mine through imputation from my prior law firm.
First, I can find no cases that deal with the imputation of a conflict arising because a
lawyer in my former law firm had previously been associated with the Sprague law firm, which
is in this case both as a party and as counsel for themselves and the client they have represented
throughout this litigation. Similarly, I could find nothing requiring recusal because the
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defendant Sprague law firm and my former law firm were both counsel involved in some
litigation in Lancaster County.
As discussed above, the decisions in MacDraw, 157 F.3d at 963, and Morrison, 153 F.3d
at 47-49, reject even direct and personal social or business relationships with parties or counsel
as the basis for recusal (whether positive or negative). Furthermore, MacDraw and Morrison
speak to the judge’s personal and direct prior and existing relationships, not the attenuated and
imputed nature of Plaintiff’s allegations. In Kelly, 888 F.2d at 744-47, and Parker, 855 F.2d
at1523-28, the court determined that the direct and personal nature of the judge’s relationships
should have led to recusal (but even the Parker court found that the very close, personal
relationship, although possibly justifying recusal, was ultimately harmless error).
In considering my relationship with the Sprague defendants, the decision in Murphy, 768
F.2d at 1537, supports the principle that a judge should recuse himself only if the friendship
between the judge and the attorney was particularly close and personal (their families were about
to take a joint vacation). Id. at 1538. Wholly lacking among Plaintiff’s allegations, however, is
any suggestion about any close personal relationship whatsoever between me and the defendants.
I have not met any of the Sprague defendants and I have not had any relationship with them,
whether personal or professional.
That leaves the allegation, true as it is, that I appeared as a speaker on ethical issues in a
continuing legal education program sponsored by and for the Middle District of Pennsylvania
Bankruptcy Association. Frankly, I have served as a speaker on bankruptcy, ethics, and
litigation in a number of programs conducted within the Middle District of Pennsylvania.
Plaintiff’s suggestion that this activity somehow constitutes a basis for recusal is entirely
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7As mentioned above, then Circuit Judge Breyer warned courts in Allied-Signal, 891 F.2d
at 970, to be wary about recusal requests based upon mere suspicions.
17
unsupported by any decision by any court and must be rejected.
As far as the particular elements of Section 455(b)(1) are concerned, nothing whatsoever
has been advanced, whether by compelling evidence or otherwise, that might show actual bias or
prejudice. Brokaw, 235 F.3d at 1025. I have no personal bias or prejudice concerning a party
and I have no personal knowledge of any disputed evidentiary facts concerning the proceeding.
No reasonable person could believe that I was prejudiced or biased one way or another.
In conclusion, I find that none of the ground’s advanced by Plaintiff require me to
disqualify or recuse myself from involvement in this proceeding. Beyond being required to
recuse or disqualify myself, of course, is my ability and power to do so voluntarily. I emphasize
here that it is not merely the absence of controlling cases or authority that convinces me not to
recuse myself. On the face of the Recusal Motion, the request that I recuse myself without the
slightest offering that I have personal or direct bias, prejudice, pre-disposition, inclinations,
knowledge of the facts, or familiarity with the parties cannot be countenanced. I believe that any
such decision to recuse myself, even voluntarily, based upon Plaintiff’s allegations would be
wholly inappropriate and improper.7 The Recusal Motion shall be denied.
Venue & Docket
Judge Scirica’s Designation, I believe, intended that I was designated by his special
assignment to hear the above matter as a judge in the Middle District of Pennsylvania. This
adversary proceeding, however, was closed in the MD PA Docket on March 8, 2006, and a new
case was opened (without a corresponding “main” bankruptcy case) in the ED PA Docket, on
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that same date, upon the receipt of the files and records from the Middle District. Whether
intentional or otherwise, these actions effected a change of venue from one District to another.
Again, I believe that this result was not intended and I find that venue of this adversary
proceeding remains in the Middle District for docketing and record-keeping purposes.
The parties have filed some matters with the Clerk’s office in the Eastern District with
mixed MD PA Docket and ED PA Docket numbers, possibly causing additional confusion. In
addition, a hearing has been scheduled on April 6, 2006, in this court on a motion to dismiss that
was filed in this District by the defendants. No party will be jeopardized by the administrative
error regarding venue and my Order below will include transferring all documents filed in the
Eastern District to the Middle District, and recording them and re-docketing them in the MD PA
Docket as if they had been originally filed there.
To avoid further confusion and to make certain that all parties and I know where things
stand procedurally, I will cancel the April 6, 2006, hearing on the defendants’ motion to dismiss
(and any other hearings that might have been set) and schedule a status conference for all parties
to meet with me to discuss all aspects of this matter. An appropriate Order shall follow.
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1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
IN RE: PETER KOVALCHICK, 	: 	Chapter 11
Debtor 	:
: 	Main Case No. 5:01-bk-03870
:
PETER KOVALCHICK, 	:
Plaintiff 	: 	Adversary No. 5:06-ap-50006
:
Indispensable and Necessary Parties 	:
:
CYRUS P. DOLBIN, JUDGE OF 	:
SCHUYLKILL COUNTY COURT 	:
OF COMMON PLEAS 	:
:
JOHN J. THOMAS, CHIEF JUDGE OF 	:
BANKRUPTCY COURT, MIDDLE 	:
DISTRICT OF PENNSYLVANIA 	:
:
v. 	:
:
R/S FINANCIAL CORP., ROBERT J. 	:
ROSENSTEIN, MIRIAM SMALLS, 	:
RICHARD A. SPRAGUE, SPRAGUE & 	:
SPRAGUE, CHARLES J. HARDY, AND 	:
THOMAS GROSHENS, 	:
Defendants 	:
________________________________________
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
IN RE: PETER KOVALCHICK, 	: 	Chapter 11
Debtor 	:
: 	Main Case No. (NONE)
:
PETER KOVALCHICK, 	:
Plaintiff 	: 	Adversary No. 06-2008 REF
:
Indispensable and Necessary Parties 	:
:
CYRUS P. DOLBIN, JUDGE OF 	:
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2
SCHUYLKILL COUNTY COURT 	:
OF COMMON PLEAS 	:
:
JOHN J. THOMAS, CHIEF JUDGE OF 	:
BANKRUPTCY COURT, MIDDLE 	:
DISTRICT OF PENNSYLVANIA 	:
:
v. 	:
:
R/S FINANCIAL CORP., ROBERT J. 	:
ROSENSTEIN, MIRIAM SMALLS, 	:
RICHARD A. SPRAGUE, SPRAGUE & 	:
SPRAGUE, CHARLES J. HARDY, AND 	:
THOMAS GROSHENS, 	:
Defendants 	:
________________________________________
ORDER
AND NOW, this 29th day of March, 2006, upon our consideration of the Plaintiff’s
Motion for the Recusal/Disqualification of Richard E. Fehling, Bankruptcy Judge, as well as the
entire file in the above-captioned matter, IT IS HEREBY ORDERED, based upon the discussion
in the foregoing MEMORANDUM OPINION, that Plaintiff’s Motion is denied.
IT IS FURTHER ORDERED that the venue in this matter properly remains in the United
States Bankruptcy Court for the Middle District of Pennsylvania.
IT IS FURTHER ORDERED that all documents filed in the Clerk’s Office for the United
States Bankruptcy Court for the Eastern District of Pennsylvania shall be immediately
transferred to the Clerk’s Office for the Bankruptcy Court in the Middle District of
Pennsylvania, specifically in the Wilkes-Barre Division; that the docket in the Middle District of
Pennsylvania be reopened; that all matters entered on the docket in the Eastern District of
Pennsylvania shall be re-entered in the docket of the Middle District of Pennsylvania, preserving
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3
all dates of filing as entered in the Eastern District of Pennsylvania; and that the docket in the
Eastern District of Pennsylvania be closed.
IT IS FURTHER ORDERED that the hearing presently scheduled in the ED PA Docket
on defendants’ motion to dismiss and any and all other hearings scheduled in either District are
hereby postponed indefinitely and the parties shall appear before me
On: 	Wednesday, April 26, 2006
At: 	11:00 a.m.
In: 	Courtroom No. 1
Third Floor, The Madison
400 Washington St.
Reading, PA 19601
for a status conference in this proceeding.
BY THE COURT
________________________
Richard E. Fehling
United States Bankruptcy Judge
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