Spokane County’s attempt to buy Spokane Raceway Park got a surprise red flag Thursday when Superior Court Judge Robert Austin stepped aside from deciding whether to approve highest-bidder sales from a public auction.
The judge recused himself from the decision to approve the sales, but not from other aspects of the contentious five-year-old lawsuit, after a Seattle attorney questioned the propriety of Austin’s attendance at the April 10 auction he ordered.
In ruling from the bench, Austin said he doesn’t believe he did anything improper by attending the auction and suggested it was his judicial duty to understand and witness the legal process that was an extension of a lawsuit he’s handling.
“I don’t think there was any appearance of fairness violation,” the judge said, explaining that he was merely an observer at the auction to liquidate assets of Washington Motorsports to satisfy 500 or more limited partners.
But the judge said he will appoint a “special master” to review legal issues surrounding the auction and ultimately decide whether the sales it generated – including the $4.3 million offer from Spokane County – should be approved.
It’s unclear now how long that process will take or if the boarded-up racetrack will open for this season. The county was hoping to resume limited racing at the track by mid-July.
Austin said he will ask for six names of other judges, retired judges or attorneys who would be willing to determine whether the sales should be approved, as court-appointed receiver Barry Davidson recommended last month.
The judge did not set a date for his appointment of the special master.
The judge’s ruling came after Seattle attorney Jerome Shulkin filed legal documents asking Austin to immediately remove himself from the suit and refrain from ruling on the question of whether to approve the land sales.
Austin’s attendance at the auction created appearance-of-fairness and bias issues “that are very serious,” Shulkin said.
“As innocent as attending the auction may be,” Shulkin told the judge, “nonetheless, in my opinion, that is sufficient alone … to demand recusal.”
Shulkin is the attorney for Robert Kovacevich, a Spokane attorney and longtime business partner of deposed raceway park operator Orville Moe. Shulkin also represents limited partners Steve West, of Seattle; Daryl Stokes, of Spokane; and Bill Eastlick, of Longview, who have sided with Moe in the legal fight.
His clients don’t believe the $8.2 million generated at the auction is fair compensation for their investments in the facility, Shulkin said.
Shulkin told the court that he was prepared to file an appeal if Austin didn’t immediately recuse himself.
Moe was unsuccessful in an attempt earlier this year to have the judge and the receiver he appointed removed from handling the auction.
Attorney John Giesa, representing the receiver, said Shulkin’s attempt to block finalization of the land sales is legally flawed.
“The whole game here is to run out the clock until you leave the bench and the bank account is empty so nobody gets any money,” Giesa said of what he called “abusive litigation practices” by Moe and his associates. Austin has said he will retire at the end of the year.
Protracting the final sale of Washington Motorsports assets will be “exceedingly expensive” to the investors, Giesa said.
He further argued that appearance-of-fairness doctrine and judicial canons give Superior Court judges broad discretion, and Austin didn’t violate those standards when he elected to observe the public auction he ordered.
“There is not one scintilla of evidence” that Austin’s attendance at the auction caused bias or prejudice against anyone, Giesa said.
The real question, he said, is “who is behind” the decision to further delay the case. Giesa called West a “straw man for Orville Moe.” Moe was previously found in contempt of court and faces fines and attorney fees approaching $500,000.
Despite court orders that he “cease and desist” from further legal action related to the case, Moe filed a claim Tuesday against Spokane County, seeking unspecified damages. It contends Commissioners Mark Richard and Todd Mielke “conspired with” the court receiver to prevent Moe from attending the auction or bidding on the property.
Moe also contends the county “knowingly made false representations” that water wells on the raceway park property were polluted “when they knew in fact that the wells passed water quality standards.”
Giesa, who sought the earlier successful contempt of court sanctions against Moe, didn’t immediately say whether he will seek another contempt sanction or renew his request for the court to find Moe in criminal contempt and send him to jail.
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