Windermere Holdings, LLC v. U.S. Wall Decor, LLC et al

Filing 83

ORDER GRANTING 69 DEFENDANTS MOTION TO WITHDRAW AS COUNSEL.(lblc2S, COURT STAFF) (Filed on 8/4/2011)

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UNITED STATES DISTRICT COURT

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Northern District of California

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Oakland Division
WINDERMERE HOLDINGS, LLC.,

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For the Northern District of California

UNITED STATES DISTRICT COURT

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Plaintiffs,
v.

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No. C 10-03955 LB
ORDER GRANTING DEFENDANTS’
MOTION TO WITHDRAW AS
COUNSEL

U.S. WALL DECOR, LLC., et al.,
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[ECF No. 69]
Defendants.
_____________________________________/

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Pending before the court is Defendants’ counsel of record Ronald R. Richman’s motion to

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withdraw as attorney. Motion, ECF No. 69.1 Windermere did not contest the motion. Notice of

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Non-Opposition, ECF No. 75. On August 4, 2011, the court held a hearing on the motion and

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discussed with the parties case management dates.

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Having thoroughly reviewed the motion and supporting materials, and based on representations

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made by Judith Whitehouse of Bullivant Houser during the hearing, the court finds that counsel has

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satisfied the requirements of Civil Local Rule 11-5 and that sufficient cause exists to support

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counsel’s request to withdraw. On May 23, 2011, Mr. Richman sent Defendants an email that they

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owed his firm outstanding fees and that because they had not communicated with the firm since

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Citations are to the Electronic Case File (“ECF”) with pin cites to the electronic page
number at the top of the document, not the pages at the bottom.
C 10-03955 LB
ORDER GRANTING DEFENDANTS’ MOTION TO WITHDRAW

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March 2011, Mr. Richman intended to file a motion to withdraw as counsel of record. Ronald

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Richman Declaration, ECF No. 70 at 2-3, ¶ 7. According to Mr. Richman, Defendants have not

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responded to previous messages he left on their cell phones and the company telephones have been

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disconnected. Id. Other than an email response indicating receipt of Mr. Richman’s May 23

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correspondence, Mr. Richman has not had any contact with Defendants. Id. at 3, ¶ 8.

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Again on June 1, 2011, Mr. Richman emailed Defendants regarding Windermere’s pending

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motion to dismiss and the motion to withdraw. Richman Declaration, ECF No. 79 at 2, ¶ 3. He also

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advised them to seek new counsel. Id. On July 6, 2011, Mr. Richman contacted Defendants and

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informed them of the conversations in which his firm had engaged with Mr. Bomleny’s bankruptcy

Mr. Richman with direction for opposing Windermere’s motion to dismiss, Mr. Richman filed a

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For the Northern District of California

trustee. Id. at ¶ 5. Defendants did not respond. Id. As a result of Defendants’ failure to provide

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UNITED STATES DISTRICT COURT

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notice of non-opposition to that motion on July 18, 2011. Notice of Non-Opposition, ECF No. 77.

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At the August 4, 2011 hearing, Ms. Whitehouse confirmed that Defendants had still not responded to

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her firm’s attempts to contact them.

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There is good cause to grant defense counsel's motion to withdraw because Defendants have

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failed to communicate with counsel about the direction of the case. Defendants have also refused to

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pay their counsel’s outstanding fees after repeated requests and a warning that failure to do so would

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result in the attorney’s filing a motion to withdraw. See j2 Global Commc'ns, Inc. v. Blue Jay, Inc.,

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No. C 08-4254 PJH, 2009 WL 464768, at *1 (N.D. Cal. Feb. 24, 2009). Moreover, Defendants have

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ignored counsel’s repeated requests to provide Mr. Richman with direction for opposing

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Windermere’s motion to dismiss. Furthermore, counsel provided Defendants formal written notice

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via e-mail of counsel’s motion to withdraw and Defendants did not respond. Finally, there is no

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showing that defense counsel’s withdrawal will cause an injustice because, at this juncture, the case

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is in its early stages and the court has not yet set a trial date. Also, Windermere does not oppose the

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motion.

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Accordingly, the court GRANTS defense counsel’s motion to withdraw. However, because

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Defendants have not consented to the withdrawal and neither U.S. Wall Decor nor Kinkade Events

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has filed substitutions of counsel, the motion is granted on the condition that Defendants’ current
C 10-03955 LB
ORDER GRANTING DEFENDANTS’ MOTION TO WITHDRAW

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counsel shall continue to serve on Defendants all papers from the court and from Windermere or

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Thomas Kinkade until Defendants file a substitution of counsel as provided by Civil Local Rule 11-

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5(b). Because corporations may not appear in federal court except by counsel, U.S. Wall Decor and

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Kinkade Events shall file substitutions of counsel by August 25, 2011. Messrs. Scarlata and

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Bomleny may appear pro se if they so choose, but must file either a notice of their intention to

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proceed pro se or a substitution of counsel by August 25, 2011.

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The court sets a status conference for August 25, 2011. Defendants are warned that if they fail to

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timely file substitutions of counsel or otherwise appear, they may face Windermere’s motion for

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default judgment. Also pending is the motion to dismiss Defendants’ counterclaims and
crossclaims. ECF No. 61. Finally, Defendants risk dismissal of their remaining counterclaims and

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crossclaims for failure to prosecute.

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For the Northern District of California

UNITED STATES DISTRICT COURT

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The court sets the motion to dismiss for a hearing on September 15, 2011 at 11:00 a.m.

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The court also notes that Windermere has filed three amended complaints in this case. Rule

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15(a) permits parties to amend their pleadings once as a matter of course within 21 days after

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serving it or, “if the pleading is one to which a responsive pleading is required, 21 days after service

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of a responsive pleading or 21 days after service of a motion under Rule 12(b), (e), or (f), whichever

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is earlier.” Fed. R. Civ. P. 15(a)(1). In all other instances, a party may amend its pleading only with

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the opposing party’s written consent or the court’s leave. Fed. R. Civ. P. 15(a)(2). Windermere did

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not seek leave of this court to file its second and third amended complaints, and the record does not

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contain a stipulation indicating Defendants’ written consent to the amended complaints. Defendants

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did answer the third amended complaint. To the extent that the record should be supplemented to

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reflect the parties’ stipulation, the court directs Windermere to augment the record by August 18,

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2011 because the operative pleading will determine the extent of relief the court must consider in the

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default judgment context. See Fed. R. Civ. P. 54(c); Cripps v. Life Ins. Co. of N. America, 980 F.2d

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1261, 1267 (9th Cir. 1992) (relief limited to that requested in complaint)
Given the procedural stance of the case, the court HEREBY CONTINUES the current ADR

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deadline from September 28, 2011 to November 18, 2011.

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C 10-03955 LB
ORDER GRANTING DEFENDANTS’ MOTION TO WITHDRAW

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This disposes of ECF No. 69.

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IT IS SO ORDERED.

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Dated: August 4, 2011
_______________________________
LAUREL BEELER
United States Magistrate Judge

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For the Northern District of California

UNITED STATES DISTRICT COURT

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C 10-03955 LB
ORDER GRANTING DEFENDANTS’ MOTION TO WITHDRAW

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