MARLOWE PATENT HOLDINGS LLC v. DICE ELECTRONICS, LLC et al

Filing 197

MEMORANDUM AND ORDER granting 186 Szaferman Firm's Motion to Withdraw as Attorney; Ordering that Plaintiff has 20 days from the date of this Order to secure new counsel; further Ordering that the Court will conduct an in-person status conference on 7/9/2013 at 4:00 PM; Attorney RICHARD A. CATALINA, JR terminated. Signed by Magistrate Judge Douglas E. Arpert on 6/17/2013. (eaj)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MARLOWE PATENT HOLDINGS LLC,

:
:
Plaintiff,
:
:
v.
:
:
DICE ELECTRONICS, LLC, et al.
:
:
Defendants.
:
___________________________________ :
MARLOWE PATENT HOLDINGS LLC, :
:
Plaintiff,
:
:
v.
:
:
:
FORD MOTOR COMPANY
:
:
Defendant.
:
___________________________________ :

Civil Action No. 3:10-cv-1199 (PGS)

Civil Action No. 3:11-cv-7044 (PGS)

MEMORANDUM AND ORDER

This matter comes before the Court on a Motion by Szaferman Lakind Blumstein &
Blader, PC (“Szaferman Firm”), counsel of record for Plaintiff Marlowe Patent Holdings LLC
(“Plaintiff”), to withdraw as counsel [dkt. no. 186]. Plaintiff opposed Szaferman Firm’s Motion
by letter dated March 19, 2013.

Neither Defendants Ford Motor Company (“Ford”) nor

Precision Interface Electronics (“PIE”) have opposed Szaferman Firm’s Motion to Withdraw.1

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Ford and Pie did, however, submit letters to the Court outlining their concerns regarding
continued litigation of an allegedly “unenforceable and invalid patent”. Ford Letter at 2:8. And,
on June 10, 2013, Defendants Ford and PIE filed a Rule 11 Motion against Plaintiff for
prosecution of “an invalid and unenforceable patent” based on Plaintiff’s alleged sale of its
patent prior to filing the patent application as well as spoliation of evidence. Ford Letter at 1:3, 6.

The Court has considered the Parties’ submissions pursuant to FED. R. CIV. P. 78 and, for the
reasons set forth herein, Szaferman Firm’s Motion to Withdraw is GRANTED.
I.

INTRODUCTION
Plaintiff retained Szaferman Firm to represent its interests in the patent litigation between

Plaintiff and Dice Electronics, LLC (“Dice Litigation”) on May 17, 2012. Catalina Decl. at 2:4.
Plaintiff also retained Szaferman Firm to represent its interest in the patent litigation between
Plaintiff and Ford Motor Company (“Ford Litigation”) on August 23, 2012. Catalina Supp. Decl.
at 10:27. Prior to Szaferman Firm’s involvement, the Court allowed Plaintiff’s prior counsel,
Jeffrey Kaplan, Esq., to withdraw from representation in both the Dice and Ford Litigations [dkt.
nos. 16, 167].
Szaferman Firm now seeks to withdraw because, it claims, Plaintiff has not paid for legal
services rendered and out-of-pocket expenses incurred since September 2012.2 From August
2012 to March 2013, Szaferman Firm sent a series of emails requesting payment of Plaintiff’s
outstanding balance as well as advising Plaintiff to seek new counsel if he could not afford to
litigate the matters on a noncontingency basis. Catalina Supp. Decl. at 5-6:16, 6:18, 7:19, 8:23,
12:31, 16:40, 17:42, 18:45, 19:48. As of April 2, 2013, Szaferman Firm claims Plaintiff owes it
$163,666.16. Catalina Reply Decl. at 5:12.
II.

LEGAL STANDARD
Unless new counsel is substituted, attorneys may not withdraw except by leave of the

Court. L. CIV. R. 102.1. Pursuant to New Jersey Rule of Professional Conduct (“NJRPC”) §
1.16(b), an attorney may withdraw from representing a client if:
(1) withdrawal can be accomplished without material adverse effect on the
interests of the client;
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Plaintiff’s last payment of $1,000.00 was received sometime in September 2012.
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(2) the client persists in a course of action involving the lawyer’s services
that the lawyer reasonably believes is criminal or fraudulent;
(3) the client has used the lawyer’s services to perpetrate a crime or fraud;
(4) the client insists upon taking action that the lawyer considers
repugnant or with which the lawyer has a fundamental disagreement;
(5) the client fails substantially to fulfill an obligation to the lawyer
regarding the lawyer’s services and has been given reasonable warning
that the lawyer will withdraw unless the obligation is fulfilled;
(6) the representation will result in an unreasonable financial burden on
the lawyer or has been rendered unreasonably difficult by the client; or
(7) other good cause for withdrawal exists.
NJRPC § 1.16 (b); see also Haines v. Liggett Group, Inc., 814 F. Supp. 414, 422-23 (D.N.J.
1993). Further, NJRPC § 1.16(d) states, “upon termination of representation, a lawyer shall take
steps to the extent reasonably practical to protect the client’s interest, such as giving reasonable
notice . . . .”
The Court looks to four factors in determining whether counsel may withdraw from a
case: “(1) the reasons why withdrawal is sought; (2) the prejudice withdrawal may cause to other
litigants; (3) the harm withdrawal might cause to the administration of justice; and (4) the degree
to which withdrawal will delay the resolution of the case.” Rusinow v. Kamara, 920 F. Supp. 69,
71 (D.N.J. 1996); see also United States ex rel. Cherry Hill Convalescent Ctr. V. Healthcare
Rehab Systems, Inc., 944 F. Supp. 244, 252-53 (D.N.J. 1990).
III.

DISCUSSION
In support of its Motion, Szaferman Firm claims: (1) Mr. Catalina cannot personally

afford to represent Plaintiff in this litigation under the circumstances; (2) Plaintiff did not fulfill
its obligations to make payments as set forth in the Retainer Provision; and (3) since August
2012, Szaferman Firm has repeatedly counseled Plaintiff that payment must be made in a timely
manner in order for Szaferman Firm to continue representation. Catalina Br. at 6-7.
First, Szaferman Firm (and particularly, Mr. Catalina) claim that continued representation
of Plaintiff will result in “an unreasonable financial burden on the lawyer.” See NJRPC
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§1.16(b)(6). The Court agrees. See Erie Molded Plastic v. Nogah, 2013 WL 1200303, at *3 (3d
Cir. Mar. 26, 2013) (granting counsel’s motion to withdraw, even in the absence of substitute
counsel, when client refused to pay $5,000.00 in unpaid fees). It appears that, as of April 2013,
Plaintiff owes Szaferman Firm $163,666.16 and has provided no assurances of future payment.
Mr. Catalina, moreover, has a unique employment arrangement at Szaferman Firm. As an ‘Of
Counsel’ attorney, Mr. Catalina’s compensation is derived solely from what Szaferman Firm
actually receives in payment from the client. Catalina Decl. at 3:12. Plaintiff’s delinquency on
its payments, therefore, has caused Mr. Catalina “personal, significant and unreasonable
financial burden.” Id. at 3.
Next, Plaintiff has had both adequate notice of its obligations as well as ample
opportunity to cure its default. See NJRPC § 1.16(b)(5). As set forth in the Retainer Provision,
which is signed by Plaintiff, the “client must pay the Firm’s fees and expenses when due and
payable.” See Catalina Reply Decl. at 4:8-9. Although Plaintiff asserts that an alternative fee
arrangement was reached as to both matters, the record suggests otherwise. First, with regard to
the Dice Litigation, Plaintiff claims that Szaferman Firm agreed to seek out funding from an
investor on its behalf. Szaferman Firm, however, maintains that they only counseled Plaintiff as
to that option. Catalina Reply Decl. at 3-4:8. Plaintiff provides no evidence to contradict
Szaferman Firm’s contention. Second, with regard to the Ford Litigation, Plaintiff claims that
Szaferman Firm agreed to take the matter on a 100% contingency basis. But Szaferman Firm
provides transcripts of email correspondence dated August 10, 13 and 21, 2012 explicitly
rejecting a 100% contingency arrangement for the Ford Litigation. See Catalina Supp. Decl. at
5:18, 5:19, 8:23. Plaintiff has provided no evidence to contradict these messages.

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Moreover, Plaintiff had over seven months’ notice to cure its default. In emails beginning
as early as August 2012 and continuing up to March 19, 2013, Mr. Catalina clearly told Plaintiff
that he would be forced to file a motion to withdraw if Plaintiff did not bring its payments up to
date. Catalina Supp. Decl. at 5:16, 8:23, 10:28, 12:31, 16:40.
Finally, granting the Motion will neither unduly delay resolution of the litigation nor
prejudice Defendants.

Both cases appear to be progressing according to their respective

Scheduling Orders. And, in the absence of opposition by any Defendants, the Court cannot find
undue prejudice. See Magargal v. New Jersey, 2011 WL 5526077, at *2 (D.N.J. Nov. 14, 2011)
(granting motion to withdraw where counsel and plaintiff differed as to course of litigation and
defendants did not object).
IV.

CONCLUSION & ORDER
In light of the amount of money claimed to be due to Szaferman Firm as well as

Plaintiff’s alleged misrepresentations about the validity of the patent and alleged spoliation of
evidence, it would be unjust to require Szaferman Firm to continue serving as counsel without
compensation. Plaintiff, moreover, has sufficient time and opportunity to seek new counsel
without causing undue delay in the proceedings. Accordingly,
IT IS on this 17th day of June, 2013,
ORDERED that Szaferman Firm’s Motion to withdraw is GRANTED; and it is further
ORDERED that Plaintiff shall have twenty (20) days from the date of this Order to
secure new counsel; and it is further
ORDERED that the Court will conduct an in-person status conference on July 9, 2013 at
4:00 PM.
s/ Douglas E. Arpert
DOUGLAS E. ARPERT
UNITED STATES MAGISTRATE JUDGE
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