Milliner et al v. Bock Evans Financial Counsel, Ltd.
Filing
57
ORDER Granting 51 Motion to Withdraw as Attorney. Signed by Hon. Thelton E. Henderson on 2/3/2016. (tehlc2, COURT STAFF) (Filed on 2/3/2016)
1
UNITED STATES DISTRICT COURT
2
NORTHERN DISTRICT OF CALIFORNIA
3
4
CHARLOTTE B. MILLINER, et al.,
5
Plaintiffs,
6
7
8
v.
BOCK EVANS FINANCIAL
COUNSEL, LTD.,
Case No. 15-cv-01763-TEH
ORDER GRANTING MOTION TO
WITHDRAW
Defendant.
9
10
This matter is before the Court on Shustak Reynolds & Partners, P.C. (the “Shustak
United States District Court
Northern District of California
11
Firm”)’s Motion to Withdraw as Counsel for Defendant Bock Evans Financial Counsel,
12
Ltd. (“Bock Evans”). Docket No. 51. The Court found this matter suitable for resolution
13
without oral argument, pursuant to Civil Local Rule 7-1(b), and vacated the hearing set for
14
January 25, 2016. Having carefully reviewed the parties’ written arguments, and good
15
cause appearing, the motion is hereby GRANTED for the reasons set forth below.
16
17
18
LEGAL STANDARD
In this district, the California Rules of Professional Conduct govern motions to
19
withdraw as counsel. See Nehad v. Mukasey, 535 F.3d 962, 970 (9th Cir. 2008) (applying
20
California Rules of Professional Conduct to attorney withdrawal). California Rule of
21
Professional Conduct (“Rule”) 3-700(C)(1)(f) allows withdrawal when a client “breaches
22
an agreement or obligation to the [attorney] as to expenses or fees,” and Rule 3-
23
700(C)(1)(d) allows withdrawal where the client “renders it unreasonably difficult for
24
[counsel] to carry out the employment effectively.” Finally, Rule 3-700(A)(2) provides
25
that counsel “shall not withdraw from employment until the member has taken reasonable
26
steps to avoid reasonably foreseeable prejudice to the rights of the client, including giving
27
due notice to the client, allowing time for employment of other counsel, complying with
28
rule 3-700(D) [regarding return of papers], and complying with applicable laws and rules.”
1
The decision to permit counsel to withdraw is within the sound discretion of the
2
trial court. United States v. Carter, 560 F.3d 1107, 1113 (9th Cir. 2009). Courts consider
3
several factors when deciding a motion for withdrawal, including: “(1) the reasons counsel
4
seeks to withdraw; (2) the possible prejudice that withdrawal may cause to other litigants;
5
(3) the harm that withdrawal might cause to the administration of justice; and (4) the extent
6
to which withdrawal will delay resolution of the case.” Deal v. Countrywide Home Loans,
7
No. C 09-01643 SBA, 2010 WL 3702459, at *2 (N.D. Cal. Sept. 15, 2010).
8
9
10
DISCUSSION
The Shustak Firm has satisfied Rule 3-700(A)(2)’s notice requirement, providing
United States District Court
Northern District of California
11
Bock Evans with both verbal and written notice of its intent to withdraw on December 8,
12
2015. Docket No. 51-2 ¶ 13. As to the basis for withdrawal, the Shustak Firm explained
13
that: “[I]t is not, and has not, been paid for its representation of Bock Evans. Moreover,
14
Bock Evans has failed to take critical advice from the Shustak Firm concerning this
15
litigation and the fee agreement between Bock Evans and the Shustak Firm specifically
16
permits the Shustak Firm to withdraw from its representation should Bock Evans breach
17
the agreement, which it has done.” Docket No. 51-1 at 1.
18
As discussed above, failure to pay attorneys’ fees constitutes good cause for
19
withdrawal under Rule 3-700(C)(1)(f). Indeed, there is no objection from any party to the
20
basis for the Shustak Firm’s motion. The only objection to the motion came from
21
Plaintiffs, who agreed that withdrawal is appropriate in this case but requested that the
22
motion be granted with the following conditions: “(a) that all papers from the court and
23
from Plaintiffs continue to be served on Defendant’s current counsel for forwarding
24
purposes until a substitution of counsel is filed as provided by Civil Local Rule 11-5(b);
25
(b) this court retains jurisdiction over Defendant’s current counsel for the purpose of
26
determining sanctions for conduct of that counsel up to the conditional order allowing
27
withdrawal; (c) because corporations may not appear in federal court except by counsel,
28
Defendant has 30 days . . . to find substitute counsel and for that counsel to make an
2
1
appearance and file a request for substitution of counsel; and (d) if Defendant has not filed
2
substitution of counsel by that date, Defendant’s answer shall be stricken and a default
3
entered against Defendant and in favor of Plaintiffs.” Docket No. 54 at 5-6.
4
The Shustak Firm agreed to condition (a), and in an event, such condition is proper
under the Northern District of California’s Civil Local Rules. See Civ. L.R. 11-5(b)
6
(“When withdrawal by an attorney from an action is not accompanied by simultaneous
7
appearance of substitute counsel or agreement of the party to appear pro se, leave to
8
withdraw may be subject to the condition that papers may continue to be served on counsel
9
for forwarding purposes . . . unless and until the client appears by other counsel or pro
10
se.”). Accordingly, the Shustak Firm shall continue to receive all papers served in this
11
United States District Court
Northern District of California
5
action and forward them to the appropriate representative of Bock Evans until substitute
12
counsel is appointed.
13
As to condition (b), this Court need not “retain jurisdiction” over counsel when
14
granting a motion to withdraw. If the members of the Shustak Firm have been responsible
15
for sanctionable conduct, the Court is not stripped of authority to impose sanctions upon
16
them merely by virtue of the Shustak Firm’s withdrawal as counsel of record. See In re
17
Itel Sec. Litig., 791 F.2d 672, 675 (9th Cir. 1986) (holding that a court retains jurisdiction
18
to sanction counsel even after he withdraws from an action). Accordingly, this condition is
19
unnecessary.
20
Finally, as to conditions (c) and (d), the Shustak Firm does not challenge the case
21
law cited by Plaintiffs in support of these requests. And Plaintiffs are correct in arguing
22
both that corporations may not appear in federal court except by counsel (see Civ. L.R. 3-
23
9(b); Rowland v. Cal. Men’s Colony, 506 U.S. 194, 202 (1993)), and that federal courts
24
routinely include, in orders granting motions to withdraw, a directive that corporate parties
25
file a substitution of counsel by a date certain or face default (see United States v. High
26
Country Broad. Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993) (holding that default judgment
27
against a corporation was appropriate where the corporation failed to retain counsel, as
28
directed)). Moreover, the Shustak Firm “has informed Bock Evans that if the withdrawal
3
1
is granted, and Bock Evans does not retain new counsel, a judgment may be entered
2
against them.” Docket No. 51-1 at 6. Accordingly, Bock Evans has 30 days, or until
3
March 4, 2016, to find substitute counsel. If Bock Evans has not filed a substitution of
4
counsel by that date, then its answer will be deemed stricken and default will be entered
5
against it.
6
7
8
9
CONCLUSION
The Shustak Firm, and all of its members, are hereby permitted to withdraw, as
counsel of record in the above-captioned action for Defendant Bock Evans, effective
immediately upon issuance of this Order. The Shustak Firm shall continue to receive all
11
United States District Court
Northern District of California
10
papers served in this action and forward them to the appropriate representative of Bock
12
Evans until substitute counsel is appointed. Bock Evans has 30 days, or until March 4,
13
2016, to find substitute counsel. If Bock Evans has not filed a substitution of counsel by
14
that date, then its answer will be deemed stricken and default will be entered against it.
15
16
IT IS SO ORDERED.
17
18
19
Dated: 02/03/16
_____________________________________
THELTON E. HENDERSON
United States District Judge
20
21
22
23
24
25
26
27
28
4
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?