Opinion
Nos. 2006-CA-001127-MR, 2006-CA-001179-MR, 2006-CA-001928-MR.
January 18, 2008.
Appeals and Cross-Appeal from Fayette Circuit Court Honorable Pamela R. Goodwine, Judge, Action No. 02-CI-04138.
Albert F. Grasch, Jr., Elizabeth K. Mitchell, Grasch Cowen, PSC, Lexington, Kentucky, Brief for Appellant/Cross-Appellee.
Lori B. Shelburne, Gess Mattingly Atchison, PSC, Lexington, Kentucky, Brief for Appellees/Cross-Appellants.
OPINION
Kessler Homes, a homebuilder, appeals a bench trial judgment granting the Petzolds, the customers, over $30,000.00 in compensatory damages and over $100,000.00 in litigation costs. Kessler Homes also appeals the trial court's denial of its motion for post-judgment relief pursuant to CR 60.02. The Petzolds cross-appeal the dismissal of their Consumer Protection Act claim. For the reasons herein, we vacate the judgment below.
Background
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.
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. In her order denying post judgment relief, the trial judge averred that, during the litigation, she had been completely unaware that her campaign treasurer and tax accountant was the Petzolds's daughter. She concluded that, due to her lack of knowledge of her relationship to the Petzolds during the litigation, post judgment relief should be denied.
Legal Standards
Regarding the threshold issue of judicial impartiality, we note that post judgment relief should only be granted in the most extraordinary circumstances and is reviewed for abuse of discretion. See CR 60.02; see also Dull v. George, 982 S.W.2d 227, 229 (Ky.App. 1998). Under well settled Kentucky law, a judge is disqualified from presiding over a case "whenever the judge's impartiality might reasonably be questioned. . . ." SCR 4.300. We have held that recusal is mandatory when a judge's impartiality might reasonably be questioned. Jacobs v. Commonwealth, 947 S.W.2d 416, 417 (Ky.App. 1997). The Supreme Court of Kentucky has held that any doubt about a judge's qualifications to preside should be resolved in favor of the party with good faith doubts based on substantial grounds. See Dotson v. Burchett, 190 S.W.2d 697, 700 (1945).
Analysis
In the instant case, neither 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. Thus, the issue here is whether the post judgment discovery of a relationship between the trial judge and the Petzolds calls into question the judge's impartiality so as to require that the judgment be set aside when the trial judge avers complete ignorance of any relationship to the Petzolds during the actual pendency of the litigation.
Although no Kentucky precedent appears directly on point, the case of Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847, 860-61, 108 S.Ct. 2194, 2203, 100 L.Ed.2d 855 (1988) (applying federal analog of Kentucky judicial disqualification rule), is persuasive. In Liljeberg, the trial judge presided over a case in which Loyola University had a direct financial interest and in which the trial judge happened to serve on Loyola University's Board of Trustees. When this conflict of interest was raised after entry of the judgment, the judge refused to set aside his judgment on the ground that, due to his own forgetfulness, he had not been aware of his relationship to the interested University during the pendency of the litigation and, therefore, could not have been partial. The Supreme Court of the United States held that 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." Liljeberg, 486 U.S. at 862. Thus, the Court held that, 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, 486 U.S. at 861.
Here, by virtue of our office, we ourselves have atypical knowledge regarding the workings of a judicial reelection campaign conducted in the relative impersonality of a large metropolitan venire. Thus, we know of no reason to doubt the trial judge's claim that she was unaware that her campaign treasurer was also the daughter of litigants in her court. But, the overriding policy concern here is not judicial veracity but rather public confidence in the impartiality of the judicial system. And, we likewise do not find it at all unreasonable that the typical, objective observer in the trial judge's venire 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.
Consequently, while we do not find actual partiality, we hold that, on the facts of this case, there can be no question that the rule against appearance of impartiality has been violated. Furthermore, we also hold that the extraordinary remedy of vacating the judgment is also appropriate here to preserve public confidence in the impartiality of the judiciary. See Liljeberg, 486 U.S. at 862-63 (applying federal analog of CR 60.02) (violation of recusal rule only warrants vacation of the judgment in certain cases). We are cognizant that our ruling erases four years of litigation without finding any culpable behavior by the court, counsel or parties. Nevertheless, the controlling and persuasive authorities demand that concerns for judicial economy give way when we act to maintain an impartial judiciary that cannot reasonably be impugned. Accordingly, our decision to grant the extraordinary remedy of setting aside a final and appealable judgment is compelled.
For the foregoing reasons, we vacate the opinion, order and judgment entered on February 3, 2006, and the order entered on May 2, 2006. We further remand this case to the trial court with directions that the trial judge recuse and a new trial be granted.
ALL CONCUR.