Szulik et al v. TAG Virgin Islands, Inc. et al

Filing 240

MEMORANDUM AND ORDER: Considering all of the foregoing, the Court Orders as follows: The motion to withdraw is granted effective December 31, 2013 or the close of fact discovery, whichever is later; Ms. Cornell shall take immediate steps to either: ( a) secure a lawyer admitted to practice in this Court to represent her; or (b) prepare to represent herself; The Court does not anticipate extending the date for completion of fact discovery but will extend the date for completion of expert discovery from January 31, 2014 to February 28, 2014 but does not anticipate further extension of this date; and All parties to the action, including Ms. Cornell, shall appear in person or by counsel at the status conference scheduled for January 17, 2014 at 11 a.m. (Signed by Judge P. Kevin Castel on 11/13/2013) (ja)

USDSSDNY
DOCUMENT
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

-----------------------------------------------------------x

ELECTRONICALLY FILED
DOC#: _____________
DATE FILED:

1/-13-/3

MATTHEW J. SZULIK, et aI.,
Plaintiffs,

12 Civ. 1827 (PKC)

-againstMEMORANDUM AND ORDER
TAG VIRGIN ISLANDS, INC., et aI.,
Defendants.

-----------------------------------------------------------x
CASTEL, Disbict Judge:
On April 4, 2012, shortly after the transfer of this action to this district, the law
firm of White1man Osterman & Hanna LLP ("WOH") entered a notice of appearance for Pamcia
J. Comell, a defendant in this action. With the discovery period soon set to expire, WOH now
moves to withdraw as her counsel for non-payment of fees. The motion to withdraw is
accompanied by a request that the Court stay the action for 60 days. Ms Comell opposes the
motion but urges that, if it is granted, the Court stay the action for 120 days.
An attomey entering a notice of appearance for a client does so mindful of the
provisions of Local Civil Rule 1.4 requiring the filing of a motion to withdraw and the
demonstration of a "satisfactory reason" for withdrawal, "the posture of the case, including its
position, if any, on the calendar. ... " and whether a charging or retaining lien is asselted. The
impact of withdrawal on the progress of the action is a relevant consideration in the exercise of
discretion to grant or deny the motion. See Whiting v. Lacara, 187 F.2d 317 (2d Cir. 1999).
WOH, who has been paid $291,987 in fees, has come forward with a declaration setting forth
the fact of non-payment of fees which it is asserts is "well more than twice the total amount that
Comell has paid to WOH." (Gillis Decl. '1[25; emphasis in the original.) The declaration fulther
recites the procedural posture in the case and states that WOH is not asserting a charging or

-2-

retaining lien and pledges its cooperation in any transition to new counsel. (Id.1I112- 11,27-29 &
36.)
Not al! "satisfactory reasons" for withdrawal are of equivalent import or require
the same immediacy of judicial action. COUlts look to New York Rules of Professional Conduct
for guidance on motions to withdraw. See Joseph Brenner Assocs. v. Starmaker EntertaiUlllent,
Inc .. 82 F.3d 55, 57 (2d Cir.1996). The Rules distinguish between permissive grounds for
withdrawal and mandatory grounds, such as where the continuation of the representation would
place the attomey in violation ofthe Rules. N.Y. Rules of Prof' I Conduct Rule 1.16(b). New
Yark sets fOlth 13 permissive grounds on which withdrawal may be sought, covering a range of
circumstances of varying import, including that "the client has used the lawyer's services to
perpetrate a crime or fraud .... " NY Rules of Prof' I Conduct 1.16(c)(3). As a pelmissive listed
ground for seeking withdrawal, WOH relies upon the following: "the client deliberately
disregards an agreement or obligation to the lawyer as to expenses or fees." Rule 1.16(c)( 5),
N.Y. Rules of Professional Conduct. On the record on this motion, there is no dispute, that
despite efforts by WOH and Ms. Comel! at resolution, Ms. Comel! without justification has not
satisfied her obligations to the law firm.
In exercising supervisory power over lawyers appearing before the COUlt and the
discretion afforded by Local Civil Rule lA, the Court may take account of the immediacy and
degree of potential halm-whether to the client, the lawyer or the judicial system-- from the
continuation ofthe representation. The immediacy and degree of harm may be weighed together
with the impact that the grant of the motion to withdraw would have on the progress ofthe case.
Here, the law firm maintains that it has represented Ms. Comel! for some months without
satisfaction of an·ears. No claim of a threat of immediate dissipation of assets is presented and

-3-

the COUIt concludes that the prejudice to the finn from continuing the representation for another
45 days or so is slight. The obligation of Ms. Cornell to pays fees in accordance with the terms of
her agreement with the law finn would remain and further time charges and disbursements
would continue to accme. Ms. Cornell opposes the motion so there is no claim of prejudice to
her from the film's continuation.
Withdrawal at this critical juncture would have a severe impact on the progress of
this securities fraud action. Fact discovery commenced over 16 months ago. The Third
Amended Case Management Plan and Scheduling Order provides that fact discovery will now
conclude on December 31, 2013. (Dkt. 186.) As is common, there is an accelerated level of
effort by all parties to complete as the discovery period draws to a close. Schedules for
depositions are already in place.
Considering all of the foregoing, the Court Orders as follows:
1. The motion to withdraw is granted effective December 31, 2013 or the close
of fact discovery, whichever is later;
2. Ms. Cornell shall take immediate steps to either: (a) secure a lawyer admitted
to practice in this COUIt to represent her; or (b) prepare to represent herself; I
3. The Court does not anticipate extending the date for completion offact
discovery but will extend the date for completion of expert discovery from
January 31,2014 to February 28,2014 but does not anticipate further
extension of this date; and

I Ms. Comell, acting on her own behalf, has submitted a 19-page Memorandum of Law in opposition to the motion
to withdraw, accompanied by a 44-paragraph declaration. A co-defendant has been self-represented throughout the

proceedings in this Court.

-4-

4. All parties to the action, including Ms. Cornell, shall appear in person or by
counsel at the status conference scheduled for January 17, 2014 at 11 a.m.

SO ORDERED.

~~P. Kevin Cast
United States District Judge

Dated: New York, New York
November 13, 2013