A Butler energy company has asked an Allegheny County judge to remove herself from presiding over a civil case in which it is the defendant, alleging that she failed to disclose a prior business relationship with the plaintiff.
Winfield Resources alleged in its motion filed March 26 to disqualify Common Pleas Judge Christine A. Ward that she served as a trustee for an irrevocable trust for her parents, as well as power of attorney for her mother, and that she executed a lease of her mother’s property to PennEnergy in 2017 for which the company paid $21,480.
PennEnergy, which has a joint development agreement with Winfield to develop and produce natural gas, is suing Winfield in an arbitration dispute that was filed in January and assigned to Judge Ward. Although the case is in its early stages, Judge Ward already granted a motion for a preliminary injunction sought by PennEnergy on Feb. 20.
“The court has never disclosed its business relationship with [PennEnergy Resources] in this action,” according to Winfield’s motion to disqualify.
It argues that Judge Ward’s disqualification is mandatory, given her business relationship with the plaintiff.
But in its response, PennEnergy argued that Winfield knew — or should have known — about the payments when they first occurred and that Judge Ward was “fully divested” of any interest in her mother’s property as of November, when the oil and gas rights for were sold separately to Three Rivers Royalty II for $121,370.63.
“At no time — either then or now — did PennEnergy have any oil and gas leases or any other business relationship with Judge Ward or her family. And, PennEnergy never paid any monies to Judge Ward individually in connection with the subject leases or any other alleged business relationship.
“Simply stated, Judge Ward has no business relationship with the parties or any other conflict, perceived or actual, that would require recusal,” PennEnergy wrote in its response. “Defendants know this, as Winfield has known of and held an interest in the oil and gas leases defendants now complain for over two years. Defendants’ deceitful maneuvers should not be rewarded.”
According to the motion to disqualify, Winfield found out about the business relationship between Judge Ward and PennEnergy on March 16 while doing what it called a routine review of the joint operating agreement it had with PennEnergy. Although it may have been in possession of the list of hundreds of properties in which the rights had been acquired, Winfield attorney Ray Middleman said, it is not typical for those to be analyzed for the names of the individuals selling the rights.
“The reference that we knew about these lease agreements in 2017 — we would no more have looked at them than the man on the moon,” Mr. Middleman said.
In the review, Winfield wrote in its motions, it showed that Judge Ward executed a lease agreement with PennEnergy through her power of attorney and as trustee in February 2017.
PennEnergy then issued a check to the trust characterized as “bonus consideration” on July 14, 2017, totaling $21,480. The Winfield motion noted, too, that the lease agreements were signed by a senior vice president and counsel for PennEnergy, S. Casey Bowers, who spent a day testifying before Judge Ward in a related case between PennEnergy and Winfield.
Neither he nor Judge Ward disclosed any relationship at that point, either, Winfield said in its motion.
Messages to PennEnergy attorney Thomas Jones were not returned.
“It is the appearance of impropriety which must be avoided,” Mr. Middleman wrote. “Here, the public record reveals significant and substantial cash payments to the court, and/or her family, from [PennEnergy] as well as direct business dealings between the court and attorney Bowers.”
Any objective person would question those circumstances, he continued.
The motion to disqualify cites Rule 2.11 of the Pennsylvania Judicial Code of Conduct, which requires a judge to disqualify herself “in any proceeding in which the judge’s impartiality might reasonably be questioned.”
It also requires disqualification if a judge “has an economic interest in the subject matter in controversy.”
Mr. Middleman said he’s not accusing the judge of any wrongdoing.
“At a minimum, it’s an appearance of impropriety,” he said. “It doesn’t look good, and that’s what we said.”
After Winfield’s motion to disqualify was filed, Judge Ward, who was working from home because of the COVID-19 court closure, sent an email back to the parties saying she could not open the attachment or access the documents it included.
In her message, though, she acknowledged a past interest.
“However it is my belief that there is no current relationship between PennEnergy and any Ward interests, such as they are. I also thought that I had disclosed a past interest, but it may have been in another case that I have in which Penn is a party,” she wrote. “You guys came in with your hair on fire, so I can’t say for sure that I made that disclosure in this case.”
Judge Ward, who was appointed to the bench in 2003 and won a 10-year seat later that year, is the administrative judge in the civil division and handles complex civil litigation. In her emailed response, she told the attorneys that her family is not wealthy, and that any moneys received were used to pay for her mother’s care.
“Frankly, I did not pay a keen interest in those matters,” she wrote. “As to the trust 3 acres, I would have had a 1/7th interest in those 3 acres.”
Judge Ward, who did not return messages, has not yet ruled on the motion to disqualify.
But Mr. Middleman said he believed her email made it clear that the issue needs to be addressed.
“Whether it was consciously on the court’s mind or not, that’s not the issue,” Mr. Middleman said. “It’s the appearance of impropriety.
“It was never a thought that went through my head — that it was purposeful.”
Two experts in judicial ethics said Judge Ward was required to disclose the relationship at the outset of the case. But that doesn’t necessarily mean she’s required to recuse herself now.
Because the relationship with PennEnergy ended in 2017, said Arthur Hellman, a law professor at the University of Pittsburgh, it is not necessary for Judge Ward to step down from the case now.
“Her dealings with PennEnergy are too remote to require recusal under the appearance of impartiality standard,” he said. “If she’s divested all of her interest, then no reasonable person would think her impartiality would be affected in deciding this case.”
But, he continued, an initial disclosure — out of caution — would avoid any questions.
“I can easily see this would be a matter of inadvertence,” Mr. Hellman said. “Judges are human and fallible like everyone else.”
That’s why, he said, if a judge makes a disclosure of a potential conflict of interest, it should be done either in writing or in a recorded proceeding.
“It’s important disclosures are made on the record and in a form they can be easily checked later,” Mr. Hellman said.
Sam Stretton, an attorney and expert in judicial ethics, said it was an error for Judge Ward not to disclose the previous relationship, but because the relationship with PennEnergy is not ongoing, there is no need for her to disqualify.
The rules, he continued, are designed to promote public confidence in the court system.
“That’s an important concept,” Mr. Stretton said. “That’s the whole purpose of the rule, so after the fact, you don’t have people second-guessing.”
Paula Reed Ward: pward@post-gazette.com, 412-263-2620 or on Twitter@PaulaReedWard.
First Published: April 27, 2020, 9:15 a.m.