In Re Clifton Kerr

Key Facts

Issues

• Whether the bankruptcy judge must disqualify himself from presiding over adversary proceedings where he is a named defendant under 28 U.S.C. § 455(b)(5)(i). The court concludes disqualification is required but anticipates claims against the judge will be dismissed, potentially allowing reassignment.
• Whether removal of the federal action to the bankruptcy court was effective under 28 U.S.C. § 1452(a). The court questions its validity due to constitutional concerns but acknowledges the need to address recusal issues regardless of removal effectiveness.
• Whether the Barton doctrine bars suits against a bankruptcy trustee absent leave from the bankruptcy court. The trustee asserts this doctrine in both the federal and state actions to justify removal and dismissal.

Holdings

• The court recommended the District Court withdraw the reference under 28 U.S.C. § 157(d) to consolidate all matters and avoid jurisdictional conflicts. This would streamline proceedings and prevent duplicative litigation between the Federal and State Actions.
• The court determined that Mr. Kerr's claims against the Bankruptcy Judge are frivolous and barred by judicial immunity under 28 U.S.C. § 455(b)(5)(i). The claims, which allege judicial misconduct, were dismissed as they lack merit and are legally untenable.
• The court held that the undersigned Bankruptcy Judge is disqualified from presiding over the Adversary Proceedings (Adv. No. -1356 and -1341) under 28 U.S.C. § 455(b)(5)(i) because he is a named party to those proceedings. Disqualification applies until Mr. Kerr's claims against the judge are dismissed, which the court anticipates will occur due to judicial immunity and the frivolous nature of the claims.
• The court ruled that disqualification applies only to the Adversary Proceedings and not to Mr. Kerr's bankruptcy cases. The judge may continue to preside over the bankruptcy cases after disqualification, as they are separate proceedings.
• Mr. Kerr's claims against the Chapter 13 Trustee were held to be barred by the Barton doctrine, quasi-judicial immunity, and failure to state a claim. The Trustee's removal of the State Action was valid, and the court outlined procedural alternatives to expedite resolution.
• The notice of removal of the Federal Action (Case No. 2:25-cv-03959-SPG-SSC) to the Bankruptcy Court was deemed a legal nullity. The court concluded that removal of a federal action pending in the District Court to a Bankruptcy Court raises constitutional issues and is not permitted under the plain meaning of 28 U.S.C. § 1452(a).
• The notice of removal of the State Action (Case No. 25PSCV01961) to the Bankruptcy Court was effective. The court has jurisdiction over the State Action under 28 U.S.C. § 1334(b) (related to jurisdiction) and the Barton doctrine, as the claims are inextricably tied to Mr. Kerr's bankruptcy cases.

Remedies

• The court granted the motion for relief from the automatic stay (11 U.S.C. § 362(d)(1)) and in rem relief (11 U.S.C. § 362(d)(4)) to permit foreclosure on the Skyview Property, citing Mr. Kerr's history of non-payment and unauthorized transfers as sufficient 'cause.'
• The Bankruptcy Judge disqualified himself from presiding over the Adversary Proceedings (Adv. No. -1356 and -1341) under 28 U.S.C. § 455(b)(5)(i) because he was a named defendant in the litigation. This disqualification will remain until Mr. Kerr's claims against the judge are dismissed.
• The judge recommended that the District Court withdraw the reference under 28 U.S.C. § 157(d) to streamline the Adversary Proceedings, avoid duplicative litigation, and resolve jurisdictional 'ping-pong' between courts. If the District Court declines, the case will be reassigned to another Bankruptcy Judge.

Legal Principles

• Under 11 U.S.C. § 362(d)(4), 'in rem' relief allows creditors to bypass the automatic stay for property interests. The court found this applied to the Skyview Property due to unauthorized transfers and prior bankruptcy filings.
• Judges are granted absolute judicial immunity for actions within their judicial role. The court ruled that Mr. Kerr's claims against the Bankruptcy Judge and State Court Judge were barred by this immunity.
• The Barton doctrine bars suits against a bankruptcy trustee absent leave from the bankruptcy court. This principle was central to the Trustee's defense in both the Federal and State Actions.

Precedent Name

• In re Halvorson
• Crown Vantage, Inc.
• Gabor v. Seligmann
• Gordon v. Olguin
• In re Curtis
• Raiser v. City of Murrieta
• U.S. v. Feldman
• Studley
• Pesnell v. Arsenault
• Ronwin v. State Bar of Arizona
• In Re Cement Antitrust Litigation
• Thomas Steel Corp. v. Bethlehem Rebar Indus.
• United States v. Wilkerson
• DeFazio v. Hollister, Inc.

Cited Statute

• Federal Statutes
• Bankruptcy Code
• California Code Of Civil Procedure

Judge Name

• Neil W. Bason, United States Bankruptcy Judge
• Stephanie S. Christensen, United States Magistrate Judge
• Sherilyn Peace Garnett, United States District Judge

Passage Text

• The undersigned Bankruptcy Judge believes that the notice of removal of the Federal Action was a legal nullity because any action pending in a federal District Court cannot be removed to a Bankruptcy Court. ... [C]onstitutional issues arise from such removal.
• The undersigned Bankruptcy Judge is confident that Mr. Kerr's claims against the undersigned will be dismissed, both because they are entirely frivolous and because they are absolutely barred by judicial immunity. Once those claims are dismissed, the Adversary Proceedings could be transferred back to the undersigned.
• The undersigned will issue a separate order in each Adversary Proceeding (A) disqualifying himself from presiding over such Adversary Proceeding (pursuant to 28 U.S.C. § 455(b)(5)(i)), and (B) recommending to the District Court that it withdraw the reference (pursuant to 11 U.S.C. § 105(a) and 28 U.S.C. § 157(d)).