The Estate of Larry Shaw et al v. Marcus et al

Filing 392

OPINION AND ORDER re: (155 in 7:14-cv-05653-NSR-JCM, 313 in 7:14-cv-03849-NSR-JCM) MOTION for Joseph H. Adams, Esq. to Withdraw as Attorney with papers filed limited to the notice of motion dated April 21, 2016 together with the captioned co ver sheets of the submissions being made on the motion, all of which are designated to be filed by The Estate of Larry Shaw. For the foregoing reasons, the Court GRANTS Mr. Adams' motion to withdraw as counsel for the Estate and Susan Shaw on the condition that Mr. Adams and Susan Shaw come to a satisfactory, equitable fee arrangement by September 23, 2016 that permits Mr. Adams' clients the opportunity to retain new counsel. Susan Shaw and Mr. Adams are directed to inform the Court in writing-in the form of one jointly signed letter not to exceed two pages--on or before September 23, 2016 whether such an agreement has been reached. If Mr. Adams and Susan Shaw are unable to reach such an agreement, they are directed to contact the court to schedule a hearing. The Clerk of the Court is respectfully requested to terminate the motion at ECF No. 313. (Signed by Judge Nelson Stephen Roman on 9/6/2016) (mml)

NELSON S. ROMÁN, United States District Judge
Counsel for the Estate of Larry Shaw and Susan Shaw, Joseph Adams, brings the instant
motion to withdraw as counsel. The Shaw Family Defendants filed opposition to the motion to
withdraw on a limited basis. For the reasons below, the Court conditionally grants Mr. Adams’
motion to withdraw.
DISCUSSION
Local Civil Rule 1.4 of the United States District Courts for the Southern and Eastern
Districts of New York (the “Local Rules”) governs withdrawal of counsel and provides:
An attorney who has appeared as attorney of record for a party may
be relieved or displaced only by order of the court and may not
withdraw from a case without leave of the court granted by order.
Such an order may be granted only upon a showing by affidavit or
otherwise of satisfactory reasons for withdraw or displacement and
the posture of the case, including its position, if any, on the
calendar[.]
Local Rule 1.4. “In making its determination, it is well-settled that a court has considerable
discretion in deciding a motion for withdrawal of counsel.” Bruce Lee Enterprises, LLC v.
A.V.E.L.A., Inc., No. 1:10 C 2333 MEA, 2014 WL 1087934, at *1 (S.D.N.Y. Mar. 19, 2014)
(citing SEC v. Pentagon Capital Mgt. PLC, No. 08 C 3324, 2013 WL 5815374, at *4 (S.D.N.Y.
Oct. 29, 2013); Whiting v. Lacara, 187 F.3d 317, 320 (2d Cir. 1999); Spadola v. N.Y.C. Transit
Auth., No. 00 C 3262, 2002 WL 59423, at * 1 (S.D.N.Y. Jan. 16, 2002)) (internal quotation
marks omitted). When considering whether to grant a motion to be relieved as counsel, “district
courts analyze two factors: the reasons for withdrawal and the impact of the withdrawal on the
timing of the proceeding.” Blue Angel Films, Ltd. v. First Look Studios, Inc., No. 08 Civ. 6469,
2011 WL 672245, at *1 (S.D.N.Y. Feb. 17, 2011); see also Whiting, 187 F.3d at 320-21 (“In
addressing motions to withdraw as counsel, district courts have typically considered whether ‘the

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prosecution of the suit is likely to be disrupted by the withdrawal of counsel.” (internal citations
and alterations omitted). Although there does not appear to be a “clear standard for what may be
considered a ‘satisfactory reason’ for allowing a withdrawal,” Blue Angel Films, Ltd., 2011 WL
672245, at *1 (citation omitted), a court may relieve counsel on the bases of health reasons or
non-payment of legal fees. Id. (collecting cases); Melodrama Pub., LLC v. Santiago, No. 12 CIV.
7830 JSR, 2013 WL 1700929, at *3 (S.D.N.Y. Apr. 11, 2013) (noting the court granted
counsel’s motion to withdraw as defense counsel for health reasons). “The Court may also
examine likely prejudice to the client, whether the motion is opposed, and whether the unpaid
representation has become a severe financial hardship to the firm.” Winkfield v. Kirschenbaum &
Phillips, P.C., No. 12 CIV. 7424 JMF, 2013 WL 371673, at *1 (S.D.N.Y. Jan. 29, 2013)
(internal citation omitted).
In the instant case, the Court finds that Mr. Adams has presented satisfactory reasons for
his withdrawal. Specifically, Mr. Adams submits two letters from his physician, dated December
2015 and March 2016, detailing that Mr. Adams has a history of atrial fibrillation caused by
“extraordinarily high mental stress levels related to his work.” (See Exhibit A to Declaration of
Joseph H. Adams relating to Confidential Health Matters Submitted on the Motion for
Permission to Withdraw.) The physician further advises that Mr. Adams’ work is predisposing
him to recurrence of atrial fibrillation and urges him to reduce stress in his professional life. (Id.)
Though the Shaw Family attempts to downplay the risks to Mr. Adams’ health as simply
litigation stress, the Court cannot ignore the insight and advice of Mr. Adams’ physician and
notes that this particular litigation—containing over 350 docket entries—is not an average
litigation and may produce abnormal levels of stress, even if largely caused by Mr. Adams
himself.

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In addition, though Mr. Adams concedes to representing the Estate and Susan Shaw on a
“quasi-pro bono” basis, the nonpayment of fees from his client has led to significant financial
difficulties, a factor the court may consider in deciding whether to relieve an attorney of
representation. Winkfield, 2013 WL 371673, at *1. See also Stair v. Calhoun, 722 F. Supp. 2d
258, 265 (E.D.N.Y. 2010) (“The Court may also examine … whether the unpaid representation
has become a severe financial hardship to the firm.”) (internal citation omitted). Moreover, as
detailed more below, both Susan Shaw and Mr. Adams have represented to the Court that they
have irreconcilable differences. See Hallmark Capital Corp. v. Red Rose Collection, Inc., No.
96CIV.2839(RPP)(AJP), 1997 WL 661146, at *3 (S.D.N.Y. Oct. 21, 1997) (“if the client and
counsel have irreconcilable differences, that is a satisfactory reason to allow counsel to
withdraw”).
In addition to considering the reasons for withdrawal, courts typically also assess whether
“the prosecution of the suit is [likely to be] disrupted by the withdrawal of counsel.” Blue Angel
Films, Ltd., 2011 WL 672245, at *2 (citations and quotation marks omitted). Though it is true
that the Court may consider “the protracted history of the litigation” when deciding a motion to
withdraw, Bruce Lee Enterprises, LLC., 2014 WL 1087934, at *2 (internal citation omitted),
“[w]here discovery has not yet closed and the case is not on the verge of trial readiness, prejudice
is unlikely to be found.” Winkfield, 2013 WL 371673, at *1 (internal citations and quotation
marks omitted). See also Thekkek v. LaserSculpt, Inc., No. 11 CIV. 4426 HB JLC, 2012 WL
225924, at *2 (S.D.N.Y. Jan. 23, 2012) (collecting cases where courts deny motions to withdraw
on the eve of trial). Although Mr. Adam’s withdrawal will impact the timing of the pending
motion practice and the discovery schedule, as another attorney will need some time to become
familiar with the litigation, this is not a case that is on the verge of being tried. Moreover, the

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Shaw Family contends that Mr. Adams’ failure to comply with discovery orders and extended
letter-writing has delayed much of the litigation. Presumably, then, the Shaw Family will not
object to the removal of these issues, which are acting as barriers to the progression of this
litigation. Therefore, the timing of the motion will not disrupt the proceedings to the point where
denial would be warranted.
The Shaw Family does not oppose the motion to withdraw, with the exception that they
request that if Mr. Adams is to be relieved, the Court order him to remain counsel as record until
all discovery issues and summary judgment briefing are completed. Though the Court is
cognizant of the need to reduce prejudice to a withdrawing attorney’s opponent, the requested
relief would essentially require Mr. Adams to remain counsel for every litigation responsibility
with the exception of trial, if the case were to go to trial. This would gut the Court’s decision to
grant Mr. Adams’ motion to withdraw. 1
Finally, it has come to the Court’s attention that a significant and irreconcilable
difference has arisen between Mr. Adams and one of his clients—Susan Shaw. In in camera
affidavits submitted to the Court, Susan Shaw and Mr. Adams detail their continually
deteriorating relationship and breakdown in communications, as well as Mr. Adams’ frustration
of his clients’ attempts to retain new counsel. The Court notes that it “possesses certain inherent

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In addition, the Shaw Family requests a number of miscellaneous orders from the court, such as an order
preventing Mr. Adams from representing the Estate or any member of Susan Shaw’s family in any future action and
an order prohibiting Mr. Adams from communicating with any third party regarding any member of the Shaw
Family. (See Shaw Family Memorandum in Opposition to Joseph Adams’ Motion to Withdraw as Counsel
(“Opposition Memo”), ECF NO. 314, at 13.) The Shaw Family additionally asks that the court request that Mr.
Adams declare that he is going to retire from the practice of law. (Opposition Memo at 10.) These requests are
frivolous. Though the Court may impose conditions on permission to withdraw, conditions are generally based on
further advocacy in the case at issue. See Emile v. Browner, No. 95 Civ. 3836, 1996 WL 724715, at *2 (S.D.N.Y.
Dec. 17, 1996) (citing several cases where counsel's withdrawal was conditioned on further advocacy). It is not for
the Court to police Mr. Adams future actions, advocacy, or practice of law. Moreover, the Court cannot preclude
Mr. Adams from seeking payment for past services in any lawful manner. Mr. Adams has not represented that he
will seek a retaining or charging lien against his client and as a result, there is no issue for the Court to rule on with
respect to a lien.

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powers to discipline attorneys who appear before it. These include the powers to police the
conduct of attorneys as officers of the court and to impose sanctions for attorney misconduct. In
exercising these inherent powers, courts have the right to inquire into fee arrangements ... to
protect the client from excessive fees [,] and may order attorneys to return fees the client has paid
pursuant to a contract.” In re Goldstein, 430 F.3d 106, 110 (2d Cir. 2005) (internal citations and
quotation marks omitted). In Goldstein, the Second Circuit upheld the reduction of an attorney’s
fees where his failure to respond to the court’s orders and treatment of his client forced the client
to personally seek the court’s aid. Id. “Other courts have imposed forfeiture of all or part of an
attorney’s legal fees” based on the attorney’s conduct. In re Chase, 372 B.R. 142, 157–58
(Bankr. S.D.N.Y. 2007) (collecting cases) (holding that the attorney must forfeit all of his fees
where he committed numerous violations of the court’s rules). See also In re Michaelson, 511
F.2d 882, 888 (9th Cir.), cert. denied, 421 U.S. 978, 95 S.Ct. 1979, 44 L.Ed.2d 469 (1975) (to
protect clients from excessive fees and conflicts of interest, the court has authority to inquire into
fee contracts).
Susan Shaw explains that her limited financial resources combined with Mr. Adams’
refusal to negotiate his fees in good faith has undermined her attempts at securing new counsel.
Mr. Adams denies these allegations and asserts that the requested discount in his fees is
unreasonable. In light of these representations, Mr. Adams will be permitted to withdraw on the
condition that he and his clients come to a mutually agreeable fee arrangement that will allow
Susan Shaw and the Estate the opportunity to retain new counsel. Mr. Adams is reminded that,
according to the New York Rules of Professional Conduct, “[e]ven when withdrawal is
otherwise permitted … upon termination of representation, a lawyer shall take steps, to the extent
reasonably practicable, to avoid foreseeable prejudice to the rights of the client, including giving

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reasonable notice to the client, allowing time for employment of other counsel, [and] ...
promptly refunding any part of a fee paid in advance that has not been earned and complying
with applicable laws and rules." NY ST RPC Rule 1.16(e). "Professional rules of conduct,
enforceable by the Court, are intended to protect the public of which clients are members and
preserve the integrity of the system in which lawyers operate." In re Fisher, 908 F. Supp. 2d 468,
472-73 (S.D.N.Y. 2012). See In re Emmerling, 223 B.R. 860, 869 (B.A.P. 2d Cir. 1997) ("It is
evident that the failure to comply with the Federal Rules, particularly on the part of counsel [],
has resulted in a great deal of unnecessary litigation and cost and has thoroughly undermined the
procedural foundations of the adversary proceeding. In such a situation, a comt of equity must
fashion a remedy which will protect the interests of the clients[].")
CONCLUSION
For the foregoing reasons, the Court GRANTS Mr. Adams' motion to withdraw as
counsel for the Estate and Susan Shaw on the condition that Mr. Adams and Susan Shaw come to
a satisfactory, equitable fee arrangement by September 23,2016 that permits Mr. Adams' clients
the opportunity to retain new counsel. Susan Shaw and Mr. Adams are directed to inform the
Court in writing-in the form of one jointly signed letter not to exceed two pages--on or
before September 23,2016 whether such an agreement has been reached. If Mr. Adams and
Susan Shaw are nnable to reach such an agreement, they are directed to contact the comt to
schedule a hearing. The Clerk of the Court is respectfully requested to terminate the motion at
ECFNo.313.
Dated:

I"
September
2016
White Plains, New York

£

SO ORDERED:

NEL~

United States District Judge
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