Regions Bank v. Advanced Carwash Technologies, LLC

Filing 54

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that counsel Spencer Desai and Ryan Masons motion for leave to withdraw as counsel for defendant will be held in abeyance and the Court will impose a withdrawal notice period until May 8, 2013. IT IS FURTHER ORDERED that defendant Advanced Carwash Technologies, LLC shall obtain substitute counsel no later than May 8, 2013. IT IS FURTHER ORDERED that defendants substitute counsel, if any, shall file an entry of appearance no later than May 8, 2013. IT IS FURTHER ORDERED that counsel Spencer Desai and Ryan Mason shall provide a certified copy of this order to the defendant and file a notice with the Court that this has been done, within ten days of the date of this Orde r. IT IS FURTHER ORDERED that on May 8, 2013, or upon the entry of substitute counsel, whichever comes earlier, the Court will issue an order granting the request of attorneys Spencer Desai and Ryan Mason and the law firm of Desai and Eggmann, LLC to withdraw from their representation of defendant. IT IS FURTHER ORDERED that this matter is STAYED pending further order of theCourt. Response to Court due by 5/8/2013. Signed by District Judge Charles A. Shaw on 4/17/2013. (KSH)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
REGIONS BANK,

)
)
Plaintiff,
)
)
v.
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ADVANCED CARWASH TECHNOLOGIES, )
LLC,
)
)
Defendant.
)

No. 4:12-CV-888 CAS

MEMORANDUM AND ORDER
This matter is before the Court on counsel for defendant’s motion for leave to withdraw. For
the following reasons, the motion will be held in abeyance, and the Court will impose a notice of
withdrawal period until May 8, 2013. The Court will permit defense counsel to withdraw from
representation of the defendant on May 8, 2013, regardless of whether defendant has retained
substitute counsel.
Background.
Plaintiff filed this action against defendant for fraudulent transfer of assets, alter ego, and for
an accounting. Defendant appeared in this action and filed its answer through attorneys Ryan Mason
and Spencer Desai of the law firm Desai and Eggmann, LLC. The parties submitted a joint
scheduling plan on July 3, 2012, and the Court issued a Case Management Order on July 11, 2012.
On February 1, 2013, defendant filed a motion for summary judgment.
On April 11, 2013, defendant’s counsel filed a motion to withdraw. Counsel stated that
defendant “has neither the will nor the resources to continue defending this case, and has discharged
Counsel.” Because they have been discharged, counsel states that withdrawal is proper.
Discussion

This Court has adopted the Rules of Professional Conduct adopted by the Supreme Court of
Missouri, as amended by that Court. E. D. Mo. Local Rule 12.02. According to the Missouri Rules
of Professional Conduct, a lawyer shall withdraw from representation of a client if he has been
discharged. See Missouri Rules of Professional Conduct 4-1.16(a)(3). The comments for this rule
state, “A client has a right to discharge a lawyer at any time, with or without cause, subject to
liability for payment for the lawyer’s services,” Id., Comment 4. In this action, the Court finds that
defendant has discharged its counsel.
Generally, this Court will not allow counsel to withdraw from representation unless
substitute counsel enters an appearance for the client. This rule is especially significant in cases
where the client is a corporation. A corporation is an artificial entity that can only act through
agents, cannot appear pro se, and must be represented by counsel. Rowland v. California Men’s
Colony, 506 U.S. 194, 201-02 (1993).
“Entry of a default judgment is appropriate where a defendant corporation fails to comply
with a court order to obtain counsel.” R. Maganlal & Co. v. M.G. Chem. Co., Inc., No. 88 CIV. 4896
MJL THK, 1996 WL 715526 at *2 (S.D.N.Y. Dec. 12, 1996); see Top Sales, Inc. v. Designer Vans,
Inc., No. CIV.A. 3:96-CV-0721, 1997 WL 786254 at *2 (N.D. Tex. Dec. 11, 1997) (court grants
counsel’s motion to withdraw and orders defendant corporation to retain substitute counsel or risk
having its pleadings stricken and default judgment entered against it).
In light of the foregoing, the Court will hold in abeyance defense counsel’s motion for leave
to withdraw as counsel and order defendant to obtain substitute counsel no later than May 8, 2013.
If defendant fails to obtain substitute counsel within that time, Advanced Carwash Technologies,
LLC may be subject to a default judgment in favor of plaintiff. See Forsythe v. Hales, 255 F.3d 487,

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490-91 (8th Cir. 2001) (failure to engage in discovery and hire counsel admitted to practice before
the district court for a period of twenty-five months provided ample basis for a grant of default
judgment); Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852, 856-57 (8th Cir. 1996)
(corporate defendant was technically in default on date court allowed counsel to withdraw because
a corporation cannot proceed pro se). Defense counsel’s request to withdraw from representation
of defendant will be granted when substitute counsel enters an appearance or on May 8, 2013,
whichever occurs first.
Accordingly,
IT IS HEREBY ORDERED that counsel Spencer Desai and Ryan Mason’s motion for
leave to withdraw as counsel for defendant will be held in abeyance and the Court will impose a
withdrawal notice period until May 8, 2013.
IT IS FURTHER ORDERED that defendant Advanced Carwash Technologies, LLC shall
obtain substitute counsel no later than May 8, 2013.
IT IS FURTHER ORDERED that defendant’s substitute counsel, if any, shall file an entry
of appearance no later than May 8, 2013.
IT IS FURTHER ORDERED that counsel Spencer Desai and Ryan Mason shall provide
a certified copy of this order to the defendant and file a notice with the Court that this has been done,
within ten days of the date of this Order.
IT IS FURTHER ORDERED that on May 8, 2013, or upon the entry of substitute counsel,
whichever comes earlier, the Court will issue an order granting the request of attorneys Spencer
Desai and Ryan Mason and the law firm of Desai and Eggmann, LLC to withdraw from their
representation of defendant.

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IT IS FURTHER ORDERED that this matter is STAYED pending further order of the
Court.

CHARLES A. SHAW
UNITED STATES DISTRICT JUDGE

Dated this 17th day of April, 2013.

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