Kentucky

Judicial disqualification learned after the case: KESSLER HOMES, IC. V. PETZOLD (COA 1/18/2008)

By Michael Stevens

KESSLER HOMES, IC. V. PETZOLD
JUDGES:  Disqualification
2006-CA-001127
PUBLISHED: VACATING AND REMANDING
PANEL: LAMBERT PRESIDING; DIXON, ROSENBLUM CONCUR
COUNTY: FAYETTE
DATE RENDERED: 01/18/2008

This action began when Kessler Homes sued the Petzolds for the outstanding balance on a house construction contract. The Petzolds denied liability and counter claimed, seeking compensatory damages for substandard workmanship. The circuit court conducted a bench trial on the parties' claims, ruling nearly uniformly in favor of the Petzolds in which the judge awarded the Petzolds, the customers, over $30,000.00 in compensatory damages and over $100,000.00 in litigation costs.

Following the entry of judgment, Kessler Homes learned that the Petzolds's daughter was the trial judge's personal tax accountant, and during the pendency of the litigation, also served as treasurer of the judge's reelection campaign. Kessler then petitioned to vacate the judgment on the ground that the trial judge had a conflict of interest in this case.

A judge is disqualified from presiding over a case ?whenever the judge's impartiality might reasonably be questioned."  Recusal is mandatory when a judge's impartiality might reasonably be questioned.  Neither the court nor counsel dispute that had the trial judge's relationship to the Petzolds come to light prior to the entry of judgment, the trial judge should have, and would have, recused herself to avoid any appearance of impartiality.

The trial judge's ignorance of his conflict of interest during the pendency of the litigation was irrelevant because the legal standard is whether ?a reasonable person, knowing all the circumstances, would expect that the judge would have actual knowledge.?

Where a judge lacks actual knowledge of facts indicating an appearance of partiality during litigation, but gains it postjudgment in circumstances in which a reasonable observer would have expected the judge to have been aware of the relationship, he must ?take the steps necessary to maintain public confidence in the impartiality of the judiciary? by disqualifying himself and vacating his judgment. Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847, 860-61, 108 S.Ct. 2194, 2203, 100 L.Ed.2d 855 (1988).

The overriding policy concern here is not judicial veracity but rather public confidence in the impartiality of the judicial system. The typical, objective observer might well find it somewhat implausible that a judge running for reelection would be unaware that her campaign treasurer's parents were litigants in her court. Moreover, because this case was not tried by jury, but was rather conducted as a bench trial in which virtually all claims were resolved in the Petzolds's favor, including the award of litigation costs trebling the compensatory damages award, the same observer might well question the judge's impartiality.

While the COA did NOT find actual partiality, it did find there can be no question that the rule against appearance of impartiality has been violated and held that the extraordinary remedy of vacating the judgment is also appropriate here.  The verdict was vacated and remanded with directions to the trial court that the trial judge recuse and a new trial be granted.

Michael Stevens

Full post as published by Kentucky Cases on February 03, 2008 (boomark / email).