Elkharwily v. First Interstate Bank

FILED IN THE U.S. DISTRICT COURT 2 EASTERN DISTRICT OF WASHINGTON May 27, 2025 SEAN F. MCAVOY, CLERK 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON ALAA ELKHARWILY, NO: 2:25-CV-0104-TOR 8 Plaintiff, ORDER ON PENDING MOTIONS 9 vs. FIRST INTERSTATE BANK, a Montana corporation and state- chartered bank, and LPSL CORPORATE SERVICES, INC., and MATHEW WADDELL, JENNIFER MATTSON, AND THEIR COMMUNITY PROPERTY, 14 Defendants.

15 BEFORE THE COURT are Motion to Dismiss Second Amended Complaint (ECF No. 137); Defendants Waddell and Mattson’s Joinder in Motion to Dismiss (ECF No. 138); and various other motions. The Court has reviewed the record and files herein and is fully informed.

19 I. Dismissal 20 Plaintiff has filed a Second Amended Complaint, ECF No. 43, which primarily attacks the state court receivership imposed on Wall Street Apartments.

2 Plaintiff’s complaint is 136 pages long and does not properly allege any causes of action.

4 The Full Faith and Credit Act mandates that the “judicial proceedings” of any State “shall have the same full faith and credit in every court within the United States ... as they have by law or usage in the courts of such State . . . from which they are taken.” 28 U.S.C. § 1738. Similarly, under the Rooker–Feldman doctrine,1 a federal district court does not have subject matter jurisdiction to hear a direct appeal from a final judgment of a state court. See Noel v. Hall, 341 F.3d 10 1148, 1155 (9th Cir. 2003). A losing party in state court is thus barred from seeking what in substance would be appellate review of a state judgment in federal district court, even if the party contends the state judgment violated his or her federal rights. Johnson v. DeGrandy, 512 U.S. 997, 1005–06 (1994); Allah v. Superior Court, 871 F.2d 887, 891 (9th Cir. 1989). Together, the Full Faith and Credit Act and the Rooker–Feldman doctrine prevent federal courts from undermining state court orders.

17 Plaintiff is filing this action to take over the Receivership in state court. This he cannot do. Accordingly, Plaintiff’s cause of action is dismissed with prejudice.

1 Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983).

1 The Court has reviewed Plaintiff’s proposed third amended complaint and it suffers the same problems, so his request to file a third amended complaint is denied.

4 II. Plaintiff’s Notice of Judicial Conflict (ECF No. 143) 5 Pursuant to 28 U.S.C. § 455, a district court judge “shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.” 28 7 U.S.C. § 455(a). For example, the judge must disqualify himself if “he has a personal bias or prejudice concerning a party . . . .” 28 U.S.C. § 455(b)(1); United States v. Sibla, 624 F.2d 864, 867 (9th Cir. 1980) (citation omitted) (section 445(b)(1) “simply provides a specific example of a situation in which a judge’s ‘impartiality might reasonably be questioned’ pursuant to section 455(a).”).

12 Judges are presumed impartial. First Interstate Bank of Arizona, N.A. v. Murphy, Weir & Butler, 210 F.3d 983, 987 (9th Cir. 2000). A party has a “substantial burden” in demonstrating otherwise. Fletcher v. Conoco Pipe Line Co., 323 F.3d 15 661, 664 (8th Cir. 2003); In re McCarthey, 368 F.3d 1266, 1269 (10th Cir. 2004).

16 A judge has “as strong a duty to sit when there is no legitimate reason to recuse as he does to recuse when the law and facts require.” Clemens v. U.S. Dist. Court for Cent. Dist. of California, 428 F.3d 1175, 1179 (9th Cir. 2005) (citing Nichols v. Alley, 71 F.3d 347, 351 (10th Cir. 1995)).

1 The test for section 455(a)—and thus also 455(b)(1)—is “whether a reasonable person with knowledge of all the facts would conclude that the judge’s impartiality might reasonably be questioned.” United States v. Wilkerson, 208 4 F.3d 794, 797 (9th Cir. 2000) (quoting United States v. Hernandez, 109 F.3d 1450, 1453 (9th Cir. 1997) (quoting United States v. Studley, 783 F.2d 934, 939 (9th Cir. 1986))). “An affidavit filed pursuant to [section 455] is not legally sufficient unless it specifically alleges facts that fairly support the contention that the judge exhibits bias or prejudice directed toward a party that stems from an extrajudicial source.” United States v. Sibla, 624 F.2d at 868 (citation omitted) (bare conclusions devoid of specific facts tending to show personal bias not enough); In re Complaint of Judicial Misconduct, 584 F.3d 1230, 1231 (9th Cir. 2009) (vague accusations insufficient). Importantly, “[r]umor, speculation, beliefs, conclusions, innuendo, suspicion, opinion, and similar non-factual matters” and “mere familiarity with the defendant(s)” are “matters not ordinarily sufficient to require a § 455(a) recusal.” Clemens v. U.S. Dist. Court for Cent. Dist. of California, 428 F.3d at 1178–79 (quoting Nichols v. Alley, 71 F.3d at 351). This analysis centers on “[t]he facts proven” and not the “unverified suspicions harbored by the [parties].” In re United States, 158 F.3d 26, 31 (1st Cir. 1998).

19 The standard of review for the denial of a motion for recusal is abuse of discretion. United States v. Martin, 278 F.3d 988, 1005 (9th Cir. 2002) (citations omitted). As the First Circuit explains: 2 At one end are situations in which the hypothesis of partiality is so compelling that the judge has no real choice but to recuse herself. See, e.g., 3 Fredonia Broad. Corp. v. RCA Corp., 569 F.2d 251 (5th Cir. 1978) (involving a recusal motion based upon one party’s representation by the 4 judge’s former law clerk, who had served in that capacity during a prior trial of the same action). At the other end are situations in which the hypothesis 5 of partiality is so tenuous that the judge has no real choice but to sit. See Blizard v. Frechette, 601 F.2d 1217 (1st Cir. 1979) (involving a recusal 6 motion based upon nothing more than a judge’s criticism of a party and her case in an opinion). Between these two polar extremes lies a zone in which 7 the district judge’s discretion holds sway. See In re U.S., 666 F.2d 690, 695 (1st Cir. 1981). If a case falls within this gray area, a court of appeals ought 8 not to interfere.

9 In re United States, 158 F.3d at 31 (citations altered).

10 Plaintiff’s proposed grounds for disqualification are not supported by any facts.

12 ACCORDINGLY, IT IS HEREBY ORDERED: 13 1. The Motion to Dismiss Second Amended Complaint (ECF No. 137) and 14 Defendants Waddell and Mattson’s Joinder in Motion to Dismiss (ECF No. 15 138), are GRANTED. This case is DISMISSED with prejudice.

16 2. Plaintiff’s Pro Se Motion for Electronic Case Filing Authorization, ECF No. 17 135, is DENIED as moot.

18 3. Plaintiff’s Motion for Entry of Default, ECF No. 136, is DENIED as moot.

19 4. Plaintiff’s Motion for Leave to File Amended Complaint, ECF No. 140, is 20 DENIED.

1 5. Plaintiff's Motion to Stay all Proceedings and Extend and Suspend All 2 Deadlines, etc., ECF No. 143, is DENIED.

3 6. Plaintiff's Motion to Expedite Hearing on Motion to Stay, ECF No. 144, is 4 DENIED.

5 The District Court Executive is directed to enter this Order and Judgment of 6|| Dismissal with Prejudice, furnish copies to counsel and Plaintiff, and CLOSE the file.

8 DATED May 27, 2025. (Py on OR; A iy) al JP ae 0 f 10 THOMAS O. RICE ~ United States District Judge