SKAZZI3 Capital Limited v. Pathway Genomics Corporation

Filing 59

ORDER Granting 49 Motion To Be Relieved As Counsel For Pathway Genomic Corporation. Attorney Jonathan Lawrence Gerber is withdrawn and terminated. Defendant Counsel SHALL immediately serve the Defendant with a copy ofthis Order and thereafter file a proof of service to confirm the same; and Defendant has thirty (30) days from the date of this Order to obtain newcounsel and have new counsel file a notice of appearance. Signed by Judge Roger T. Benitez on 12/16/2019. (mme)

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CLERK. U t t)is·:.:i!C"r GOUftT
~OUHiEF:N DISYi"\IL ·1 OF CJ.\LIFUfl.NI,~
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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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SKAZZI3 CAPITAL LIMITED,

Case No.: 3:18-CV-00317-BEN-KSC
Plaintiff,

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ORDER GRANTING MOTION TO
BE RELIEVED AS COUNSEL FOR
PATHWAY GENOMICS
CORPORATION

V.

PATHWAY GENOMICS
CORPORATION,

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Defendant.

[Doc. No. 49]

Before the Court is a Motion to Withdraw as Counsel for Pathway Genomics

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Corporation ("Defendant") filed by Miller Miller Gerber LLP ("Defendant's counsel").

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The Court finds this matter appropriate for resolution without a hearing. See Fed. R. Civ.

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P. 78. After reviewing all related filings, the Court grants the Motion.

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I. BACKGROUND

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Plaintiff originally brought this action to enforce an arbitral award obtained against

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Defendant in Europe. (Doc. No. 15 at 1.) After the suit was filed, Defendant sought to

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resolve the case without judicial intervention. The party's negotiations resulted in a good

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faith Settlement Agreement requiring Defendant to pay $482,913.00 by way of twelve ( 12)

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equal monthly installments of $40,242.75.

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Stipulated Judgment was executed calling for entry of the judgment in the event the

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Defendant failed to cure any missed payment within seven days of its scheduled due date.

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Id. at 1-2. Defendant defaulted and failed to cure on its second settlement payment. Id.

Id.

To secure the Plaintiffs interest, a

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1 After numerous unsuccessful attempts to resolve Defendant's default, Plaintiff sought entry
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of Judgment in tlie amouriCof$48-2,g1 J:oo~-less$4{f,142:75(amounipazd), Tor atotal of
$442,670.25. Id.
On October 25, Plaintiff filed a Motion for Clerks Judgment re Assignment Order

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and Restraining Order against Defendant. (Doc. No. 51.) Thereafter, Plaintiff filed a

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Notice of Non-Opposition when Defendant did not respond. (Doc. No. 54.)

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Defendant's Counsel now seeks to withdraw as counsel of record. (Doc. No. 49.)
Plaintiff Opposed the Motion to which Defendant Replied. (Doc. Nos. 50-51.)

II. LEGAL STANDARD

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An attorney may not withdraw as counsel except by leave of court. Kassab v. San

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Diego Police Dep 't, 2008 WL 251935, at* 1 (S.D. Cal. Jan 29, 2008); see also Beard v.

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ShuttermartofCal., Inc., 2008 WL 410694, at *2 (S.D. Cal. Fed. 13, 2008).

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Additionally, under local rules, an attorney must serve notice of its motion to withdraw

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on the adverse party as well as on the moving party's client with a declaration of service.

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Local Civ. R. 83.3(g)(3).

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"In ruling on a motion to withdraw as counsel, courts consider: (1) the reasons why

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withdrawal is sought; (2) the prejudice withdrawal may cause to other litigants; (3) the

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harm withdrawal might cause to the administration of justice; (4) the degree to which

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withdrawal will delay the resolution of the case." Garrett v. Ruiz, 2013 WL 163420

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(S.D. Cal. Jan. 14, 2013).

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Courts have previously held that "[f]ailure to pay attorney's fees can be valid

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ground for withdrawal." Leatt Corp. v. Innovative Safety Tech., LLC, 2010 WL 444708,

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at *2 (S.D. Cal. Feb. 2, 2019); see also Canadaigua Wine Company, Inc. v. Edwin

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Moldauer, 2009 WL 89141 (E.D. Cal. Jan 14, 2009) (granting motion to withdraw legal

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counsel where defendant refused to accept legal advice or pay his fees.) Furthermore,

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there is no danger of prejudice where a hearing date is not immediately set or where

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litigation is at a relatively nascent stage. Gurvey v. Legend Films, Inc., 2010 WL

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2756944 (S.D. Cal. July 12, 2010). There is also no undue delay where the counsel takes
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1 "reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client,

~ -~-2 . iriclucling givingoue notice to theclierif [ana]allowing time for-employment ofother- -~
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counsel ... " Cal. Rule of Prof. Conduct 3-700(A)(2).

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However, according to local rules,

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Only natural persons representing their individual interests in propria
persona may appear in court without representation . . . All other parties,
including corporations, partnerships and other legal entities, may appear in
court only through an attorney permitted to practice ...

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Local Civ. R. 83.3(k); see also Laskowitz v. Shellenberger, 107 F. Supp. 397,398 (S.D.

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Cal. 1952) ("Since a corporation cannot practice law, and can only act through the agency

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of natural persons, it follows that it can appear in court on its own behalf only through a

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licensed attorney.")

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III. DISCUSSION
In the present case, Defendant's counsel shows valid cause for withdrawal because

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all of the relevant considerations tip in its favor. First, the Defendant can no longer pay

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for its legal services. (Doc. No. 49 at 2-3.) Next, the Plaintiff's assertion of prejudice is

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questionable being that Defendant's counsel has already provided Plaintiff's counsel with

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the last known contact information he has for the Defendant. (See Doc. No. 51, Deel. of

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Jonathan Gerber.) Furthermore, Defendant's refusal to communicate has rendered it

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impossible for counsel to represent the Defendant in this collection action. Finally, the

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slight delay required for the Defendant to obtain new counsel will ultimately result in this

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case once again moving towards resolution.

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At the same time, the Court recognizes that granting the withdrawal motion would

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leave Defendant, a corporate Defendant, without counsel, in contravention of Local Rule

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83.3(k). However, Rule 83.3(k) is not offended where the court orders an umepresented

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corporate defendant to find substitute counsel and gives them some time to do so. See

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e.g., Indymac Fed. Bank, F.S.B. v. McComic, No. 08-CV-1871-IEG WVG, 2010 WL

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2000013 (S.D. May 18, 2010) (granting counsel's motion to withdraw as defendants
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could no longer pay and were not prejudiced, but also directing defendants to secure
suosfitutecounsel, where-counsel citeaplaintifflimitea parlriersliip's refusal to____ _

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participate in litigation and inability to pay fees as reasons for withdrawal); McNally v,

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Commonwealth Financial Systems, Inc,, 2013 WL 685364 (S.D. Cal. Feb. 25, 2013)

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(granting motion where litigation was at an early stage and where corporate defendant

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was unable to pay legal fees, consented to the motion, and had "ample opportunity to

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retain substitute counsel as needed").

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As in Indymac, the corporate Defendant, in this case, failed to pay its counsel's
fees, refusedto engage in further communications, and has failed to respond in

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opposition to counsel's Motion to Withdraw. Given the circumstances of the instant

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action, the Court grants Defendant counsel's Motion for withdrawal and directs the

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Defendant to find substitute representation within thirty (30) days from the entry of this

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Order.

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IV. CONCLUSION

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For the foregoing reasons, the Court hereby ORDERS that:

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1. Defendant Counsel's Motion to Withdraw is GRANTED;

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2. The Clerk of Court SHALL update the docket to reflect the withdrawal of

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Jonathan L. Gerber, of Miller Miller Gerber LLP, as counsel of record for

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Pathway Genomics Corporation;

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3. Defendant Counsel SHALL immediately serve the Defendant with a copy of
this Order and thereafter file a proof of service to confirm the same;
4. Defendant has thirty (30) days from the date of this Order to obtain new
counsel and have new counsel file a notice of appearance.
IT IS SO

RDERED.

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3:18-CV-00317-BEN-KSC