Daniel Imperato v. Navigators Insurance Company ( 2017 )


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  •             Case: 14-15282   Date Filed: 02/28/2017   Page: 1 of 7
    [DO NOT PUBLISH]
    IN THE UNITED STATES COURT OF APPEALS
    FOR THE ELEVENTH CIRCUIT
    ________________________
    No. 14-15282
    Non-Argument Calendar
    ________________________
    D.C. Docket No. 9:14-cv-80586-KLR
    DANIEL IMPERATO,
    Plaintiff-Appellant,
    versus
    NAVIGATORS INSURANCE COMPANY,
    Defendant-Appellee.
    ________________________
    Appeal from the United States District Court
    for the Southern District of Florida
    ________________________
    (February 28, 2017)
    Before HULL, WILSON, and MARTIN, Circuit Judges.
    PER CURIAM:
    Case: 14-15282     Date Filed: 02/28/2017   Page: 2 of 7
    Daniel Imperato, proceeding pro se, appeals: (1) the district court’s sua
    sponte dismissal of his complaint, which alleged a breach of contract claim against
    his former insurer, Navigators Insurance Company (“Navigators”); (2) the denial
    of his request to proceed in forma pauperis; and (3) the denial of his motion to
    recuse the magistrate judge and district court judge. After careful review, we
    affirm the district court’s denial of Imperato’s motion to proceed in forma pauperis
    and his motion for recusal, but reverse the dismissal of Imperato’s complaint and
    remand for further proceedings consistent with this opinion.
    I.
    In 2012, the Securities and Exchange Commission (“SEC”) brought a civil
    action against Imperato and other defendants, including his company, Imperiali.
    The SEC alleged that several securities laws had been violated. The district court
    granted summary judgment in favor of the SEC, and this Court affirmed that ruling
    on appeal. SEC v. Imperiali, Inc., 594 F. App’x 957 (11th Cir. 2014) (per curiam).
    The district court’s summary judgment order adopted the magistrate judge’s
    Report and Recommendation, which found Imperato
    inten[ded] to deceive by knowingly making blatantly false and
    deceptive material statements . . . which were subsequently
    disseminated to potential investors via the internet [and that] [t]hese
    deceptions . . . were all part of Imperato’s scheme to lure investors to
    the company, and establish his liability as a primary violator of the
    anti-fraud provisions . . . .
    2
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    SEC v. Imperiali, Inc., No. 12-80021-CIV, 
    2013 WL 12080193
    , at *14 (S.D. Fla.
    Sept. 25, 2013).
    In May 2014, Imperato filed this action against Navigators seeking
    indemnification. He alleged his policy with Navigators “cover[ed] the directors
    and officers pertaining to mismanagement and[/]or [SEC] claims.” Imperato
    claimed Navigators improperly refused and denied his claims, and as a result,
    caused him “irreparable harm and insurmountable damages” and caused Imperiali
    to fail.
    This action was transferred to the district court judge and magistrate judge
    who had presided over Imperato’s SEC action. Imperato moved to recuse them
    both under 28 U.S.C. §§ 144 and 455 because of their involvement with the SEC
    action and “personal bias and prejudice” against him. The district court denied the
    motion.
    Imperato then sought leave to proceed in forma pauperis and asked for
    volunteer counsel. The motion was denied because Imperato had not filed the
    required form along with his motion detailing his financial situation. Imperato
    filed another motion to appoint counsel, as well as a “Motion Correction and
    Clarification,” but both those motions were not filed on the proper forms and also
    lacked any financial information. The magistrate judge found Imperato’s
    complaint was “clearly baseless,” pointing to Navigators’s policy that excluded
    3
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    losses resulting from Imperato’s “deliberately fraudulent or criminal acts . . . if it is
    finally adjudicated that such conduct in fact occurred.” Because the district court
    found Imperato was deliberately fraudulent in the SEC action, the magistrate judge
    concluded “there [was] no set of facts under which [Imperato] could prevail on a
    breach of contract claim.” The magistrate judge recommended Imperato’s
    complaint be dismissed with prejudice under 28 U.S.C. § 1915(e)(2), and the
    district court adopted that recommendation. This appeal followed.
    II.
    We review de novo a district court’s sua sponte dismissal for failure to state
    a claim under § 1915(e)(2)(B)(ii), viewing the allegations in the complaint as true.
    Hughes v. Lott, 
    350 F.3d 1157
    , 1159–60 (11th Cir. 2003). A district court’s sua
    sponte dismissal for frivolity under § 1915(e)(2)(B)(i) is reviewed for an abuse of
    discretion. 
    Id. at 1160.
    We review the denial of a petition to proceed in forma pauperis for an abuse
    of discretion. Daker v. Comm’r, Ga. Dep’t of Corr., 
    820 F.3d 1278
    , 1283 (11th
    Cir. 2016). We also review the denial of a motion to recuse for an abuse of
    discretion. United States v. Perkins, 
    787 F.3d 1329
    , 1342 (11th Cir. 2015).
    A.
    Imperato first argues the district court erred in dismissing his complaint with
    prejudice. The district court relied on § 1915(e) in dismissing Imperato’s
    4
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    complaint. Section 1915 governs in forma pauperis proceedings. See 28 U.S.C.
    § 1915. However, while Imperato moved for in forma pauperis status, he was not
    actually proceeding in forma pauperis because he paid his filing fee. This Court
    has held “[l]ogically, § 1915(e) only applies to cases in which the plaintiff is
    proceeding IFP.” Farese v. Scherer, 
    342 F.3d 1223
    , 1228 (11th Cir. 2003) (per
    curiam). Therefore, the district court could not properly dismiss Imperato’s claim
    based on this statute. We reverse the district court’s dismissal of Imperato’s
    complaint and remand for further proceedings consistent with this opinion.1
    B.
    Imperato next argues the district court erred in denying his motion to
    proceed in forma pauperis. Federal courts may allow someone who is unable to
    afford the costs of litigation to go forward with an action without paying fees when
    that person submits a financial affidavit. See 28 U.S.C. § 1915(a)(1). That
    affidavit must say “the nature of the action . . . and affiant’s belief that the person
    is entitled to redress.” 
    Id. The same
    statute gives the court discretion to appoint
    counsel for that person, even though civil litigants do not have a constitutional
    right to counsel. See 
    id. § 1915(e);
    Bass v. Perrin, 
    170 F.3d 1312
    , 1320 (11th Cir.
    1999).
    1
    Nothing in this opinion should be read to mean the district court’s factual analysis was
    incorrect. Upon remand, the district court is free to reconsider Navigators’s motion to dismiss
    that was denied as moot or consider if sua sponte dismissal under Federal Rule of Civil
    Procedure 12(b)(6) would be appropriate. See Am. United Life Ins. Co. v. Martinez, 
    480 F.3d 1043
    , 1057, 1069 (11th Cir. 2007).
    5
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    The district court properly denied Imperato’s motion to proceed in forma
    pauperis because he did not file the required affidavit specified in § 1915(a).
    Therefore, the district court did not abuse its discretion.
    C.
    Finally, Imperato argues the district court erred in denying his motion to
    recuse the district court judge and the magistrate judge. A federal judge must
    recuse if a party to a proceeding “files a timely and sufficient affidavit that the
    judge . . . has a personal bias or prejudice [] against him.” 28 U.S.C. § 144. The
    affidavit “must allege facts that would convince a reasonable person that bias
    actually exists.” Christo v. Padgett, 
    223 F.3d 1324
    , 1333 (11th Cir. 2000). A
    federal judge must disqualify from “any proceeding in which his impartiality might
    reasonably be questioned” or if the judge “has a personal bias or prejudice
    concerning a party.” 28 U.S.C. § 455. To require recusal under this statute, the
    movant must show “an objective, fully informed lay observer would entertain
    significant doubt about the judge’s impartiality.” 
    Christo, 223 F.3d at 1333
    .
    Imperato has not met his burden. His motion for recusal did not attach an
    affidavit and provides no support for his claim of prejudice or bias beyond
    conclusory allegations. Imperato’s only factual assertion in the motion is that the
    two judges presided over his earlier matters. This Court’s “general rule is that bias
    sufficient to disqualify a judge must stem from extrajudicial sources,” unless “a
    6
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    judge’s remarks in a judicial context demonstrate such pervasive bias and prejudice
    that it constitutes bias against a party.” In re Walker, 
    532 F.3d 1304
    , 1310–11
    (11th Cir. 2008) (per curiam) (quotation omitted). Imperato did not allege any
    extrajudicial bias in his motion, and has not pointed to any improper remark by
    either judge showing bias or prejudice. And “[r]ecusal cannot be based on
    unsupported, irrational or highly tenuous speculation.” United States v. Cerceda,
    
    188 F.3d 1291
    , 1293 (11th Cir. 1999) (per curiam) (quotation omitted). Therefore,
    the district court did not abuse its discretion.
    AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
    7
    

Document Info

Docket Number: 14-15282

Judges: Hull, Martin, Per Curiam, Wilson

Filed Date: 2/28/2017

Precedential Status: Non-Precedential

Modified Date: 9/26/2023