Nutt et al v. Kees et al

Filing 30

ORDER, re 29 MOTION to Withdraw as Attorney for Osceola Nursing Home LLP, Osceola Healthcare PLLC & Stafford Kees, the Court directs that w/i 7 days of the date of entry of this Order, the Law Firm notify the named separate defendants in writing th at its motion to withdraw will be granted no later than 9/1/11, & that Osceola Nursing Home LLP & Osceola Healthcare PLLC risk default judgments if they fail to obtain substitute counsel before 9/1/11. Signed by Judge Susan Webber Wright on 8/10/2011. (jct)

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
JONESBORO DIVISION
KEVIN NUTT and LISA NUTT,

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Plaintiffs,
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vs.
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STAFFORD KEES; CARROLL COUNTY
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NURSING AND REHAB CENTER, INC., an *
Arkansas Corporation; OSCEOLA NURSING *
HOME, LLP, an Arkansas Limited Liability *
Partnership; OSCEOLA THERAPY AND
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LIVING CENTER, INC., an Arkansas
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Corporation; OSCEOLA HEALTHCARE,
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PLLC, an Arkansas Professional
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Limited Liability Company; and HOPE
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HEALTHCARE, LLC, an Arkansas Limited *
Liability Company,
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Defendants.
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No. 3:10cv00307 SWW

ORDER
Plaintiffs Kevin Nutt and Lisa Nutt bring this action pursuant to the Employee
Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., alleging breach of
fiduciary duty under ERISA and for ERISA retaliation. Plaintiffs allege that defendants,
Stafford Kees, Carroll County Nursing & Rehab Center, Inc., Osceola Nursing Home, LLP,
Osceola Therapy & Living Center, Inc., Osceola Healthcare, PLLC, and Hope Healthcare, LLC,
failed to make health insurance premium payments to a group health plan despite making
deductions from pay to cover such premiums. Plaintiffs further allege that they were employed
by defendants in various capacities and that their employment was terminated in retaliation for
insisting that defendants provide the benefits they had been promised.
Now before the Court is a motion [doc.#29] of Mitchell, Williams, Selig, Gates &

Woodyard, PLLC (The “Law Firm”) seeking permission to withdraw as counsel of record for
separate defendants Stafford Kees, Osceola Nursing Home, LLP, and Osceola Healthcare,
PLLC. The Law Firm states that separate defendants are not fulfilling their financial obligations
to the Law Firm and that it has previously given separate defendants reasonable warning that it
will withdraw unless the financial obligations are fulfilled. The Law Firm states that despite
those warnings, separate defendants still have not fulfilled their obligations and that an
unavoidable conflict has thus arisen between the Law Firm and separate defendants.
Rule 1.16(b)(5) of the Arkansas Model Rules of Professional Conduct provides that an
attorney may withdraw from representation of a client if “the client fails substantially to fulfill an
obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning
that the lawyer will withdraw unless the obligation is fulfilled.” Permitting an attorney to
withdraw is “presumptively appropriate” when the rules of professional conduct are satisfied,
including a client’s failure to pay fees. Cedar Rapids Lodge & Suites, LLC v. JFS Development,
Inc., No. C09-0175, 2010 WL 5070484, at *2 (N.D.Iowa Dec. 06, 2010) (quoting Brandon v.
Blech, 560 F.3d 536, 538 (6th Cir. 2009)).1 “‘Litigants have no right to free legal aid in civil
suits.’” Carpenters’ Dist. Council of Greater St. Louis v. Evans Concrete, Inc., No. 4:08-cv-49
CAS, 2008 WL 5191338, at *2 (E.D.Mo. Dec. 10, 2008) (quoting Fidelity Nat. Title Ins. Co. of
New York v. Intercounty Nat. Title Ins. Co., 310 F.3d 537, 540 (7th Cir. 2002)).
The Court has considered the matter and will permit the Law Firm to withdraw as
counsel of record for separate defendants. There is no indication that any party will be

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In addition, Local Rule 83.5(f) provides that “[n]o attorney shall withdraw from an action or proceeding except by
leave of Court after reasonable notice has been given to the client and opposing counsel.” The Law Firm states that it has
provided reasonable notice to separate defendants and opposing counsel.

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prejudiced if the Law Firm is permitted to withdraw or that the progress of this action will be
disrupted, and it appears that if the Law Firm is not permitted to withdraw, then its continued
representation of separate defendants will be without compensation. Under these circumstances,
the Court concludes that the Law Firm’s motion to withdraw as counsel of record for separate
defendants is well taken. Cf. Lieberman v. Polytop Corp., 2 Fed.Appx. 37, 39 (1st Cir. 2001)
(district court abused its discretion in refusing to let attorney withdraw, where it would be
necessary for counsel to expend additional energy and front necessary expenses “without any
real assurance that he will be paid for any of it...”).
However, there remains a question concerning the effective date of the Law Firm’s
withdrawal given that two of the separate defendants–Osceola Nursing Home, LLP and Osceola
Healthcare, PLLC–are business entities. The law does not allow a corporation or other business
entity to proceed pro se, Tribuilt Const. Group, LLC v. International Fidelity Ins. Co., No. 2:10cv-02052, 2011 WL 2357659, at *1 (W.D.Ark. June 13, 2011) (citing Ackra Direct Mktg. Corp.
v. Fingerhut Corp., 86 F.3d 852, 856 (8th Cir. 1996)), and if the Law Firm’s motion to withdraw
as counsel of record for Osceola Nursing Home, LLP and Osceola Healthcare, PLLC is granted
immediately, these defendants would technically be in default at that time. See id. (noting that
business entities “were technically in default when they failed to obtain substitute counsel, as the
law does not allow a corporation or other business entity to proceed pro se”). That being the
case, the Court will not grant the Law Firm’s motion to withdraw at this time but will impose a
withdrawal notice period and allow Osceola Nursing Home, LLP and Osceola Healthcare, PLLC
to obtain substitute counsel no later than September 1, 2011. If Osceola Nursing Home, LLP and
Osceola Healthcare, PLLC fail to obtain substitute counsel within that time, these defendants

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may be subject to a default judgment in favor of plaintiffs. See id.; Fingerhut, 86 F.3d at 856-57.
The Law Firm’s motion to withdraw from representation of Stafford Kees, Osceola Nursing
Home, LLP, and Osceola Healthcare, PLLC will be granted either when substitute counsel enters
an appearance on their behalf or on September 1, 2011, whichever occurs first. See Evans
Concrete, 2008 WL 5191338, at *3.2
The Court directs that within seven (7) days of the date of entry of this Order, the Law
Firm notify separate defendants Stafford Kees, Osceola Nursing Home, LLP, and Osceola
Healthcare, PLLC in writing that its motion to withdraw will be granted no later than September
1, 2011, that a corporation or business entity cannot proceed pro se in federal court, and that
Osceola Nursing Home, LLP and Osceola Healthcare, PLLC risk default judgments if they fail
to obtain substitute counsel before September 1, 2011. See Miracle-Ear, Inc. v. South Georgia
Hearing, Inc., Civil No. 10-4815 (JNE/AJB), 2011 WL 1827418, at *2 (D.Minn. May 12, 2011).

IT IS SO ORDERED this 10th day of August 2011.
/s/Susan Webber Wright
UNITED STATES DISTRICT JUDGE

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Stafford Kees is a natural person and there is nothing that would prevent him from proceeding pro se at any time
should he so choose. Nevertheless, to avoid confusion, the Court will impose the same withdrawal notice period for Mr. Kees.

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