BSD, Inc et al v. Equilon Enterprises, LLC et al

Filing 139

ORDER by JudgeARMSTRONG 6/18/13 granting 127 Motion to Withdraw as Attorney. (lrc, COURT STAFF) (Filed on 6/18/2013)

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UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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OAKLAND DIVISION
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6 BSD, INC., a California corporation; 21st

Case No: C 10-5223 SBA

CENTURY GROUP, INC., a California
7 corporation; and YOUSTINE, INC., a
California corporation,

ORDER GRANTING SECOND
MOTION TO WITHDRAW

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Plaintiffs,

Docket 127

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vs.
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EQUILON ENTERPRISES, LLC, a Delaware
11 limited liability company; ANABI OIL

CORPORATION, a California corporation;
12 and DOES 1 through 100, inclusive,

Defendants.

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AND RELATED COUNTER CLAIMS

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The parties are presently before the Court on Bleau Fox, A Professional Law

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Corporation's ("Bleau Fox") second motion to withdraw as counsel of record for Plaintiff,

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Counter-Claimant, and Counter-Defendant Youstine, Inc. ("Youstine"). Dkt. 127. Equilon

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Enterprises, LLC ("Equilon") has filed a statement of non-opposition to the motion. Dkt.

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135. Having read and considered the papers filed in connection with this matter and being

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fully informed, the Court hereby GRANTS Bleau Fox's motion to withdraw, for the reasons

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stated below. The Court, in its discretion, finds this matter suitable for resolution without

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oral argument. See Fed.R.Civ.P. 78(b); N.D. Cal. Civ. L.R. 7-1(b).

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I.

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DISCUSSION
The Court's Civil Local Rules authorize an attorney to withdraw as counsel of record

if: (1) written notice has been given reasonably in advance to the client and all other parties
in the action; and (2) the attorney obtains leave of Court. Civ. L.R. 11-5(a); see Darby v.
City of Torrance, 810 F.Supp. 275, 276 (C.D. Cal. 1992) (an attorney representing a client

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may not withdraw except by leave of court). In addition, the Local Rules provide that when

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withdrawal by an attorney from an action is not accompanied by simultaneous appearance

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of substitute counsel or agreement of the party to appear pro se, leave to withdraw may be

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subject to the condition that papers may continue to be served on counsel for forwarding

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purposes, unless and until the client appears by other counsel or pro se. Civ. L.R. 11-5(b).

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In this district, the conduct of counsel, including the withdrawal of counsel, is

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governed by the standards of professional conduct required of members of the State Bar of

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California. Civ. L.R. 11-4(a)(1); see Nehad v. Mukasey, 535 F.3d 962, 970 (9th Cir. 2008)

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(applying California Rules of Professional Conduct to attorney withdrawal). Rule 3-700 of

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the California Rules of Professional Conduct provides that counsel may withdraw if the

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client renders it unreasonably difficult for counsel to carry out its employment effectively

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or if the client breaches an obligation as to expenses or fees. Cal. R. Prof. Conduct 3-

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700(C)(1)(d) & (f). However, before counsel can withdraw, counsel must comply with

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California Rule of Professional Conduct 3-700(A)(2), which provides that counsel shall not

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withdraw from employment until the member has taken reasonable steps to avoid

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reasonably foreseeable prejudice to the rights of the client, including giving due notice to

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the client, allowing time for employment of other counsel, complying with rule 3-700(D)

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(regarding papers), and complying with applicable laws and rules. See El Hage v. U.S.

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Sec. Assocs., Inc., 2007 WL 4328809, at *1 (N.D. Cal. 2007). The decision to permit

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counsel to withdraw is within the sound discretion of the trial court. See United States v.

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Carter, 560 F.3d 1107, 1113 (9th Cir. 2009).

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Courts consider several factors when considering a motion for withdrawal,

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including: (1) the reasons counsel seeks to withdraw; (2) the possible prejudice that

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withdrawal may cause to other litigants; (3) the harm that withdrawal might cause to the

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administration of justice; and (4) the extent to which withdrawal will delay resolution of the

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case. Deal v. Countrywide Home Loans, 2010 WL 3702459, at *2 (N.D. Cal. 2010)

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(Armstrong, J.)

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Here, Bleau Fox seeks to withdraw on the ground that "the relationship between
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Youstine and [Bleau Fox] has significantly deteriorated to the point wherein it is now

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impossible for [Bleau Fox] to continue to represent Youstine and to take the necessary

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litigation strategies and steps to continue to diligently pursue and protect its best interests."

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Bleau Decl. ¶ 3, Dkt. 127-1. Specifically, counsel for Youstine, Thomas Bleau ("Bleau"),

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states that it has become increasingly difficult to communicate with Youstine's sole

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shareholder, director, and contact person, Mike Abdou ("Abdou"). Id. ¶¶ 4-5. Bleau states

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that while his firm had been "authorized to make certain representations to opposing

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counsel, indicating that Youstine would accept the terms of a proposed settlement, . . .

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Abdou subsequently ignored communications from [Bleau Fox] and failed and refused to

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execute the Settlement Agreement on Youstine's behalf." Id. ¶ 6. Bleau further states that

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Abdou hindered Bleau Fox's ability to oppose Equilon's first motion for partial summary

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judgment by his delayed responses to communications from the firm and his failure to

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provide "necessary" documentation that he had promised to deliver. Id. ¶ 8.

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In addition to Youstine's failure to cooperate with counsel, Bleau Fox seeks to

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withdraw on the ground that Youstine has incurred substantial attorneys' fees (in excess of

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$40,000) and costs that Youstine has failed to pay after being requested to do so as early as

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May 2012. Bleau Decl. ¶¶ 5-9. Bleau Fox asserts that Youstine has "done nothing to pay

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any portion of its outstanding balance with the firm." Id. ¶ 9.

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The Court finds that Bleau Fox has demonstrated that withdrawal as counsel of

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record for Youstine is warranted. Youstine's lack of cooperation and refusal to pay counsel

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constitute good cause for withdrawal. Further, Bleau Fox has provided written notice to

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Youstine and to all the parties in this action of its intention to withdraw in compliance with

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Civil Local Rule 11-5(a). See Bleau Decl. ¶ 11.1 Bleau Fox has also shown that it has

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taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of its client.

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Specifically, Bleau Fox has filed an opposition to Equilon's second motion for partial

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The Court notes that all the parties that have appeared in this matter were notified
of Bleau Fox's intent to withdraw as counsel of record for Youstine when Bleau Fox e-filed
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summary judgment and motion for summary judgment (Dkt. 134), and has informed

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Youstine in writing that it must retain new counsel in order to continue to prosecute this

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action2 and that the failure to do so may result in its complaint being dismissed and its

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answer to Equilon's counterclaims being stricken. Bleau Decl. ¶¶ 9-10. Finally, given that

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the trial date has been vacated pending resolution of Equilon's second motion for partial

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summary judgment and motion for summary judgment (Dkt. 130), the Court finds that

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withdrawal will not harm the administration of justice, unduly delay resolution of this case,

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or cause Youstine undue hardship or prejudice. Accordingly, Bleau Fox's motion to

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withdraw as counsel of record for Youstine is GRANTED.

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II.

CONCLUSION

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For the reasons stated above, IT IS HEREBY ORDERED THAT:

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1.

Bleau Fox's motion to withdraw as counsel of record for Youstine is

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GRANTED. However, because no substitution of counsel has been filed, the motion is

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granted on the condition that all papers continue to be served on Bleau Fox for forwarding

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purposes, unless and until Youstine appears by other counsel.

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2.

Youstine shall have sixty (60) days from the date this Order is filed to secure

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legal counsel and have counsel file a notice of appearance. Failure to do so may result in

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the dismissal of Youstine's complaint. In addition, failure to timely secure new counsel

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may result in the striking of Youstine's answer to Equilon's counterclaims and a default

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judgment entered against Youstine. See United States v. High Country Broadcasting, Co.,

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Inc., 3 F.3d 1244, 1245 (9th Cir. 1993) (default judgment against corporation appropriate

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where corporation failed to retain counsel); Rojas v. Hawgs Seafood Bar, Inc., 2009 WL

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1255538, at * (N.D. Cal. 2009) ("When a corporation fails to retain counsel to represent it

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in an action, its answer may be stricken and a default judgment entered against it").

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2.

This Order terminates Docket 127.

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A corporation may appear only through licensed counsel. See Civ. L.R. 3-9(b);
Rowland v. California Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 202,
(1993); D-Beam Ltd. P'ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973-974 (9th Cir.
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IT IS SO ORDERED.
Dated: 6/18/13

_______________________________
SAUNDRA BROWN ARMSTRONG
United States District Judge

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