Securities and Exchange Commission v. Brennan et al

Filing 136

ORDER granting 123 129 Motions to Withdraw as Attorney. Attorney Gerald H Summers; Frank A Lightmas, Jr and Marya L Schalk terminated. Signed by Magistrate Judge Susan K Lee on 2/6/2017. (SAC, )Order mailed to James Brennan, III, Douglas Dyer, Carole Brennan,Alison Dyer and Broad Street Ventures, LLC.

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
AT CHATTANOOGA
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
JAMES HUGH BRENNAN, III, et al.,
Defendants.

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No. 1:16-cv-307-TRM-SKL

ORDER
Before the Court are the following motions: (1) a motion filed by Attorneys Jerry H.
Summers and Marya L. Schalk and the law firm of Summers, Rufolo & Rodgers, P.C.,
(collectively “Summers”) to withdraw as co-counsel for Defendants James Hugh Brennan, III,
Douglas Albert Dyer (“Dyer”) and Broad Street Ventures, LLC (“Broad Street”) and Relief
Defendants Carole Johnston Brennan and Alison F. Dyer (collectively “Defendants”) with
attached consents to the withdrawal signed by each of the individual Defendants and a consent by
Broad Street signed by Dyer [Docs. 123 and 123-1]; and (2) a motion filed by Attorney Frank A.
Lightmas, Jr. and the Law Offices of Frank A. Lightmas Jr., LLC (collectively “Lightmas”) to
withdraw as co-counsel for Defendants with similar attached consents to withdraw [Docs. 129 and
129-1].

Plaintiff U.S. Securities and Exchange Commission (“Plaintiff”) opposes only the

motion to withdraw filed by Lightmas, but only as it relates to withdrawing from representation of
Broad Street [Doc. 134]1. Plaintiff opposes the motion to withdraw by Lightmas as to Broad
Street because a corporation must be represented by licensed counsel to present a defense in this
1

The Court finds it is unnecessary to address the assertions of both Plaintiff and Lightmas that the
other has made untimely filings. As Plaintiff did not file any objection to the Summers’ motion,
the Court deems the failure to respond as a waiver of any objection to the relief requested by
Summers. E.D. Tenn. L.R. 7.2.

action. Lightmas filed a reply [Doc. 135],2 and the motions are now ripe.
Summers and Lightmas request withdrawal because, among other things, they have been
paid only limited amounts for representing Defendants and have been advised that Defendants
have no available financial resources to pay for legal representation. As a result, Summers and
Lightmas and are no longer being compensated for their representation of Defendants. In their
respective motions, Summers and Lightmas represent that they have complied with the
requirements of E.D. Tenn. L.R. 83.4(g) for withdrawal and have satisfied all requirements to
withdraw under E.D. Tenn. L.R. 83.4(g) and and Rule 1.16 of the Tennessee Rules of Professional
Conduct.

Summers and Lightmas also state that under these circumstances, withdrawal is

required pursuant to Rule 1.16(b) of the Tennessee Rules of Professional Conduct due to
extraordinary circumstances.
Pursuant to Local Rule 83.4(g) an attorney must send notice of his or her withdrawal to a
client within certain time parameters, or the client may certify in writing that he or she agrees to the
withdrawal of counsel. However, “[i]f the client is a corporation or other artificial person or legal
entity created by statute that may only appear in court through counsel, the Court, absent
extraordinary circumstances, shall not allow the attorney to withdraw until the client has obtained
substitute counsel.” E.D. Tenn. L.R. 83.4(g). I FIND extraordinary circumstances are set forth

2

Attorney Lightmas contends in his reply that because he is only admitted pro hac vice, if local
counsel is allowed to withdraw, then he could not continue to represent Broad Street as he is not
admitted to practice in the Eastern District of Tennessee. Attorney Lightmas’ argument is
mistaken because admission pro hac vice in this Court is not predicated upon representation and
involvement of local counsel.
2

in the motions of Summers and Lightmas, in part, due to the composition of Broad Street.3
Accordingly, the motions to withdraw by Summers and Lightmas on behalf of all
Defendants [Docs. 123 and 129] are GRANTED. The Clerk is DIRECTED to terminate them as
as counsel of record for all Defendants and to mail a copy of this Order to Defendants at the
addresses listed in the motions of Summers and Lightmas [Doc. 123, Page ID # 1141-42 and Doc.
129, Page ID #1171-72].
Within fifteen (15) days from the date of this Order, each individual Defendant shall either
(1) have new counsel file a notice of appearance on his or her behalf; or (2) file a written notice
informing the Court that he or she will proceed pro se in this matter. Also within fifteen (15)
days from the date of this Order, Broad Street shall have new counsel file a notice of appearance
on its behalf if it intends to present a defense to this action. All deadlines in the Court’s
Scheduling Order [Doc. 120] remain in effect.
Defendants are forewarned that they each must comply with all requirements of the
Court’s orders and local rules or risk default judgment being entered against them in this
action upon appropriate motion.
SO ORDERED.
ENTER:
s/fâátÇ ^A _xx
SUSAN K. LEE
UNITED STATES MAGISTRATE JUDGE
3

Both Summers and Lightmas filed a consent to withdraw on behalf of Broad Street signed only
by Dyer as its representative member [Doc. 123, Page ID # 1146 and Doc. 129, Page ID # 1176].
The motions of Summers and Lightmas state that Dyer and Brennan are the only two members of
Broad Street and each has a fifty percent interest in the company and that “Broad Street has no
employees, no shareholders, and no one else that is associated with it or has an interest in the
company” and “100% of the ownership interest in Broad Street is held by Dyer and Brennan.”
[Doc. 123, Page ID # 1140]. Dyer and Brennan have each consented to the withdrawal
individually. While Plaintiff appears to question whether the consent by Broad Street is effective
as to Lightmas, it provides no authority that the consent is insufficient nor does it object to the
withdrawal by Summers.
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