LAWYERS WITHDRAWING FROM LITIGATION

Matter of Cassini, 2020 NY Slip Op 01057, Decided on February 13, 2020, Appellate Division, Second Department:

"Legal Analysis

VIII. The Pathways for Replacing an Attorney of Record

CPLR 321 provides three pathways by which the attorney of record for a party may seek to be replaced. The client always has the option of discharging the attorney, in which event the discharge is immediate (see Farage v Ehrenberg, 124 AD3d 159, 165). Of course, some further action must be taken in order for the discharge to be made known to the other parties to the action and to the court.
First, pursuant to CPLR 321(b)(1), the attorney of record may withdraw or be changed by a stipulation signed by the outgoing attorney and signed and acknowledged by the client, with notice to be provided to the other parties to the action (see CPLR 321[a]). The use of a stipulation of substitution, which avoids expense and delay, is common where the client, the outgoing attorney, and the incoming attorney (who could be the client pro se) are entirely in agreement on the substitution (see Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C321:2 at 181 [2010 ed]). Since the client is, by executing the stipulation of substitution, in effect, consenting to the discharge of the attorney of record and simultaneous replacement with another, there is no entitlement to an automatic stay of proceedings by reason of the change in counsel (see Shurka v Shurka, 100 AD3d 566), although incoming counsel could always seek a stay from the court (see CPLR 2201).

Second, CPLR 321(b)(2) permits the attorney of record for a party to be changed by order of the court. This pathway requires the attorney of record to move, by order to show cause, [*13]on such notice as the court may direct, to be relieved ^[FN8]. Withdrawal is not, however, available for the mere asking, particularly when some significant court action is pending, such as the commencement of a trial. The attorney must demonstrate that good cause exists to end the relationship with the client, such as by showing an irretrievable breakdown in the relationship or a failure of cooperation by the client (see Farage v Ehrenberg, 124 AD3d at 165). Whether a stay of proceedings should be granted upon an order relieving counsel of record is a matter to be considered further.

Third, pursuant to CPLR 321(c), if an attorney dies, "becomes physically or mentally incapacitated," or is removed, suspended, or otherwise becomes disabled at any time before judgment, no further proceedings may be taken against the party for whom the attorney appeared, without leave of court, until 30 days after notice to appoint another attorney has been served upon the party either personally or in such manner as the court directs. Under this provision, where an attorney becomes functionally disabled from representing the client, a stay of all proceedings automatically attaches, with that stay remaining in effect until a notice to appoint a replacement attorney is served. However, the court has the authority to grant leave for proceedings to be conducted despite the stay.

Unlike CPLR 321(b)(1), where a substitution is with the outgoing attorney's consent, and CPLR 321(b)(2), where an attorney may seek to be relieved, CPLR 321(c) becomes applicable upon the occurrence of an event that is typically outside the outgoing attorney's control. By the terms of the statute, the termination of the stay is dependent upon service of a notice to appoint by the adverse party or parties, with the notice to be served personally or as the court directs. Nothing precludes the court from serving the notice to appoint.

IX. The Interplay Between CPLR 321(b) and (c)

In approaching our analysis of the interplay between CPLR 321(b) and (c), there are two anomalous circumstances in this matter which require notation. Both CPLR provisions address the replacement of an attorney of record, approaching the topic as if there is but one singular attorney who represents the party in question.

In this case, Marianne had two distinct attorneys of record. However, absent special circumstances, there may be only one attorney of record for a party in a single action (see Stinnett v Sears Roebuck & Co., 201 AD2d 362, 364; Matter of Kitsch Riker Oil Co., 23 AD2d 502; but see Itar-Tass Russian News Agency v Russian Kurier, Inc., 140 F3d 442, 452 [2d Cir] [recognizing second attorney of record for the purpose of charging lien]). Here, both RK and Sills Cummis described themselves and were simultaneously recognized without objection as being attorneys of record for Marianne, although Sills Cummis's role, as described by Kaplan, was to assist Reppert and RK. The controversy at issue herein might have been less confusing had Sills Cummis served strictly in an of counsel capacity to RK, with the latter firm being the sole attorney of record. It might further be said that, while Reppert's illness gave rise to appropriate cause for Reppert to withdraw under CPLR 321(b), it did not necessitate granting Sills Cummis's motion for leave to withdraw. Likewise, it could be argued, if Reppert was disabled for the purpose of CPLR 321(c), an automatic stay of proceedings was not triggered because of Sills Cummis's status as a second attorney of record. However, since none of the parties have addressed, much less given any significance to, the duality of counsel, we note the circumstance but do not comment further on it.

Additionally, RK is a law firm which had at least two attorneys affiliated with it, Reppert and Kelly. In dealing with death, removal, or disability of an attorney of record for a party, CPLR 321(c) postulates the existence of a singular individual who has died, has been removed or suspended, or has become disabled. It may be questioned whether, as here, CPLR 321(c) has any application at all to a circumstance where the attorney of record is a law firm composed of multiple individual attorneys. Where a client is represented by a law firm with multiple attorneys, it may be argued that the death, suspension, or disability of one attorney in that law firm does not trigger application of CPLR 321(c). However, the parties here do not argue that Kelly's unhampered ability to continue to represent Marianne precludes the application of CPLR 321(c) as the result of [*14]Reppert's personal circumstances.

Consequently, despite these anomalous facts, we approach our analysis upon the predicate that Reppert was, in effect, a solo practitioner and the exclusive attorney of record for Marianne. We do so because "[f]or us now to decide this appeal on a distinct ground that we winkled out wholly on our own would pose an obvious problem of fair play. We are not in the business of blindsiding litigants, who expect us to decide their appeals on rationales advanced by the parties, not arguments their adversaries never made" (Misicki v Caradonna, 12 NY3d 511, 519; see Green Tree Servicing, LLC v Molini, 171 AD3d 880, 882).

We see no reason why, in a circumstance where an attorney of record has become incapacitated, CPLR 321(c) would apply to the exclusion of the other pathways provided in CPLR 321 for replacing the attorney of record. Stated differently, where an attorney of record becomes disabled from further participating in the case, the attorney may seek to be replaced by consent through a stipulation of substitution (CPLR 321[b][1]), or the attorney could seek to be relieved by court order (CPLR 321[b][2]), or the party represented by the attorney could be compelled to replace the attorney by service of a notice to appoint by the adverse party (CPLR 321[c]). The statute does not make any one of these three pathways exclusive, though, as a practical matter, where an attorney has died or has become so incapacitated to be unable to execute an instrument, that attorney would not be able to effectively execute a stipulation of substitution or an affirmation in support of a motion for leave to be relieved. On the other hand, an adverse party may not always be in a position to know that the attorney of record for the other side has become disabled or disabled to such an extent as to preclude the attorney from continuing to provide representation to the client.

Where an attorney is allowed to be relieved by court order under CPLR 321(b)(2), it is preferable for the court to direct that the order be served by the adverse party, just as service of a notice to appoint by the adverse party or the court itself is required by CPLR 321(c). By directing that the adverse party serve the order upon the client previously represented by the relieved attorney, the court can assure that the client is on notice that his or her attorney is relieved of further representation and that a new attorney should be retained.

As will be discussed further infra, where an attorney seeks leave to withdraw under CPLR 321(b)(2), the court may stay proceedings pending the determination of the motion and after the determination. In contrast, where CPLR 321(c) is triggered, an automatic stay takes hold upon the occurrence of the triggering event. In both instances, it is preferable for the adverse party to serve notice of any stay and notice to appoint a new attorney upon the client of the relieved attorney in order to prevent the situation, as happened here, where a court-imposed stay lapsed before the client was on notice that a stay had been granted.

X. The Applicability of CPLR 321(c)

The most extensive treatment of CPLR 321(c) by our Court of Appeals is found in Moray v Koven & Krause, Esqs. (15 NY3d 384). In Moray, this Court affirmed the Supreme Court's order granting the defendant's motion pursuant to CPLR 3012(b) to dismiss the action for failure to timely serve a complaint, holding, inter alia, that the plaintiff's contention that the action had been stayed pursuant to CPLR 321(c) was raised for the first time on appeal and, thus, was not properly before us (see Moray v Koven & Krause, Esqs., 62 AD3d 765, revd 15 NY3d 384). The Court of Appeals reversed, stating:

"The command of CPLR 321(c) is straightforward: if an attorney becomes disabled, no further proceeding shall be taken in the action against the party for whom he appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court directs' (emphasis added). As the Practice Commentaries explain, CPLR 321(c) brings about an automatic stay of the action,' which goes into effect with respect to the party for whom the [disabled] attorney appeared' (Alexander, Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B, CPLR C321:3, at 183). As a result, [d]uring the stay imposed by CPLR 321(c), no proceedings against the party will have any adverse effect. It lies within the power of the other side to bring the stay to an end by serving a notice on the affected party to appoint new counsel within 30 days . . . If, at the end of the period, the party has failed to obtain new counsel (or elected to proceed pro se), the proceedings may continue against the party' (id.).

"The stay is meant to afford a litigant, who has, through no act or fault of his own, been deprived of the services of his counsel, a reasonable opportunity to obtain new counsel before further proceedings are taken against him in the action' (Hendry v Hilton, 283 App Div 168, 171 [2d Dept 1953] [discussing Civil Practice Act § 240, the predecessor statute to CPLR 321(c)])" (Moray v Koven & Krause, Esqs., 15 NY3d at 388-389 [footnote omitted]).

The Court applied the law to the facts.

"This lawsuit was automatically stayed by operation of CPLR 321(c) on January 24, 2008, the date when plaintiff's attorney was suspended from the practice of law. Defendant never acted to lift the stay by serving a notice upon plaintiff to appoint new counsel within 30 days. Thus, Supreme Court's order dismissing the action must be vacated (see e.g. Galletta v Siu-Mei Yip, 271 AD2d 486, 486 [2d Dept 2000] [ Since the judgment entered upon the defendants' default in appearing at trial was obtained without the plaintiff's compliance with CPLR 321(c), it must be vacated']; McGregor v McGregor, 212 AD2d 955, 956 [3d Dept 1995] [ The record reveals no compliance with the leave or notice requirements of CPLR 321(c). The appropriate remedy for a violation of CPLR 321(c) is vacatur of the judgment'])" (Moray v Koven & Krause, Esqs., 15 NY3d at 389).

The Court explained why it rejected two arguments the defendant made. First, the defendant pointed out that CPLR 321(c) permits further proceedings by leave of the court, and contended that the Supreme Court exercised that express statutory authority to hear and grant the defendant's motion to dismiss after the plaintiff's attorney was suspended from the practice of law. The Court of Appeals found that argument to be wanting:

"The drafter's notes on CPLR 321(c), however, state that the words without leave of the court' were designed to allow the court to vary the [30-day] rule in cases where the stay of proceedings would produce undue hardship to the opposing party, as where the time to take an appeal or other action would run or where a provisional remedy is sought and speed is essential' (4th Preliminary Rep of Advisory Comm on Prac and Pro, 1960 NY Legis Doc No. 20 at 191). No remotely comparable situation existed at the time Supreme Court dismissed this action. Moreover, Supreme Court did not mention CPLR 321(c), much less articulate a basis for exercising its discretion to relax the 30-day notice requirement" (Moray v Koven & Krause, Esqs., 15 NY3d at 390).

Second, the defendant contended that the plaintiff was foreclosed from raising CPLR 321(c) for the first time on appeal. The Court of Appeals did not agree:

"While we do not as a general rule resolve cases on grounds not raised in the trial court, the context here is unusual. We are dealing with a statute intended to protect litigants faced with the unexpected loss of legal representation. And there is no indication in this record that plaintiff sought to raise CPLR 321(c) only after having conducted his lawsuit pro se for some period of time after his attorney became disabled (cf. Telmark, Inc. v Mills, 199 AD2d 579, 580-581). As a general rule, unrepresented litigants should not be penalized for failing to alert a trial court to the existence of an automatic stay created for the very purpose of safeguarding them against adverse consequences while they are unrepresented. And as the Practice Commentaries point out, all it takes to end the automatic stay is service of a 30-day notice on the affected party" (Moray v Koven & Krause, Esqs., 15 NY3d at 390).

CPLR 321(c) applies to circumstances in which an event occurs which is personal to the attorney of record which involuntarily prevents the attorney of record from continuing to represent the party, notwithstanding the attorney's willingness to do so (see Hendry v Hilton, 283 App Div at 171). The statute is designed for the protection of a litigant who, through no fault of his or her own, has been deprived of the services of one's attorney of record and who, therefore, should be given a reasonable opportunity to obtain new counsel before further proceedings are taken against [*15]such party. The protection of the statute is confined to causes which, as to the client, may be said to arise from a force majeure or one over which the client has no control (see id.).

Moray involved the circumstance where the attorney of record was suspended from the practice of law. In McGregor v McGregor (212 AD2d at 956), the attorney of record was disbarred. Where the attorney of record has died, been disbarred, or has been suspended from practice, the fact of the attorney's inability to proceed further is readily established by a documentary record, such as a death certificate or court order. The disability of the attorney of record is also within the purview of CPLR 321(c), whether that disability be mental or physical (see Winney v County of Saratoga, 252 AD2d 882, 883). The disability, whatever its nature, must be such that effectually prevents the attorney from continuing the representation of the client (see Hendry v Hilton, 283 App Div at 171; see also Winney v County of Saratoga, 252 AD2d at 883). Whether such a disability has occurred, and when it occurred, may not always be readily known and, in particular, known to the adverse party. There also may be no available record that documents the nature and extent of the disability or establishes when the disability arose.

Here, in moving for leave to withdraw from representing Marianne, Reppert asserted that, for medical reasons, he had been unable to fully return to the practice of law full-time since July 2015. He offered to "provide an in camera affirmation for the Court to review or make [himself] available to discuss the medical issues privately that prevent [him] from continuing at this time with the Court." He asserted that he was "physically unable to provide the representation that is necessary to properly represent [his client]," Marianne. In an affirmation executed two week later, in support of Sills Cummis's motion for leave to withdraw, Kaplan asserted that his firm's role in the matter was ending "[n]ow that Mr. Reppert's health prevents him from continuing to represent Marianne before this Court." The objectants did not oppose the withdrawal motions. While it does not appear that the Surrogate's Court took Reppert up on his offer to share medical information with the court privately, the court, in granting Reppert's motions for leave to withdraw, made the specific finding and determination that Reppert was "unable to continue to represent [Marianne] due to health reasons." In making this finding and determination, the court provided the basis for a discretionary withdrawal of counsel under CPLR 321(b)(2) and simultaneously activated the automatic stay provisions of CPLR 321(c), as Reppert's judicially determined inability to continue to represent Marianne for health reasons constituted a finding of disability for the purpose of CPLR 321(c). Further, in making this finding in its orders, the court put the objectants on notice that Reppert was unable to continue his representation of Marianne and was thus disabled, leading to the applicability of CPLR 321(c).

The objectants argue that CPLR 321(c) does not apply because there was no force majeure and there is no evidence that Reppert was effectively prevented from practicing law. This contention is unpersuasive. The statements by Reppert and Kaplan made in affirmations submitted in support of the withdrawal motions are evidence that Reppert was unable to effectively continue with the representation of Marianne. While no medical testimony or documentation was provided, and the Surrogate's Court might well have denied the withdrawal motion for that reason (see Matter of Plaro Estates, Inc. v Assessor, 101 AD3d 886, 888; Winney v County of Saratoga, 252 AD2d at 883), or requested the submission of supporting medical documentation, the court evidently was satisfied that Reppert's condition was serious and substantial, as evidenced by its unchallenged finding that Reppert was unable to continue with the representation. In this regard, we note that the previous Surrogate had granted a lengthy delay in the trial partly due to Reppert's representation that he was required to undergo surgery. The finding by the court on the motions for leave to withdraw that Reppert's condition precluded his continued participation in the matter, coupled with the facts that Reppert's health condition was a cause over which Marianne had no control and was not due to any fault on her part, established the existence of a disability for the purpose of CPLR 321(c) (see Hendry v Hilton, 283 App Div at 171). Reppert's condition, contrary to the objectants' argument, constituted a force majeure, that is, an unexpected event that prevented him from doing or completing something he had agreed or planned to do (see Black's Law Dictionary [11th ed 2019]). The objectants contend that, even if Reppert was disabled, the statutory stay was not implicated because Marianne failed to oppose or object to RK's withdrawal motion. Again, we disagree.

Where counsel is permitted to withdraw, pursuant to CPLR 321(b)(2), over the client's objection, the 30-day stay of proceedings generally attaches since the court has effectively [*16]"removed" counsel for the purpose of CPLR 321(c) (Albert v Albert, 309 AD2d 884, 886; see Matter of Wiley v Musabyemariya, 118 AD3d 898, 899-900; Sarlo-Pinzur v Pinzur, 59 AD3d 607). However, none of our cases stand for the proposition that the CPLR 321(c) stay applies only where the client objected to counsel's motion for leave to withdraw. Indeed, CPLR 321(c) provides that the "removal" of the attorney of record brings about a stay, without regard to whether the removal was with or without the client's consent. It would make little sense to construe the statute as conferring a stay to protect a client who opposed counsel's application to withdraw due to disability, despite knowing of the attorney's incapacity, while denying a stay to a client who, recognizing that the attorney was disabled, did not object to the attorney's request to withdraw. Either way, the stay attaches, but subject to the court's authority to vary it in appropriate cases.

CPLR 321(c) expressly permits the court to grant leave to continue the proceedings, and deny a stay, in particular cases where the attorney of record has been removed or suspended. Certainly, where the attorney's withdrawal is caused by a voluntary act of the client, the court has the discretion to permit the matter to proceed without a stay (see Matter of Wiley v Musabyemariya, 118 AD3d at 899-900 [no stay where client voluntarily discharged attorney]; Sarlo-Pinzur v Pinzur, 59 AD3d at 608 [no stay where client refused to cooperate with counsel in preparing for trial]; Graco Constr. Corp. v Eves, 232 AD2d 370, 370-371 [no stay where client voluntarily discharged attorney on the first day of trial]). Likewise, a stay may be refused where the removal of counsel was the product of the client's own wrongful act (see RDLF Fin. Servs., LLC v Bernstein, 93 AD3d 421 [attorney, representing both himself and his law firm, was disbarred after pleading guilty to stealing client funds; no stay because his removal from the bar was the product of his own wrongdoing]). Here, however, there is nothing in the record indicating that Marianne's voluntary act or wrongdoing caused Reppert's withdrawal.

Also unavailing is the objectants' contention that the legislative purpose underlying the enactment of CPLR 321(c) is to protect an unknowing client whose counsel failed to inform the client of counsel's suspension or disability. Here, there is no evidence that Marianne knew that Reppert had a health impairment at the time she initially retained him some 10 years earlier. Nor is there any evidence as to whether and when Reppert advised Marianne of his health condition, apart from his disclosures to the court. In any event, the Court of Appeals has said that "[t]he stay is meant to afford a litigant, who has, through no act or fault of his own, been deprived of the services of his counsel, a reasonable opportunity to obtain new counsel before further proceedings are taken against him in the action'" (Moray v Koven & Krause, Esqs., 15 NY3d at 389, quoting Hendry v Hilton, 283 App Div at 171). Reppert's medical condition, which deteriorated well after he began representing Marianne in lengthy, protracted proceedings, was a cause over which Marianne had no control and was not due to fault on her part.

XI. The Duration of the Stay

CPLR 321(c) provides that, where an attorney becomes disabled, "no further proceeding shall be taken in the action against the party for whom he [or she] appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court directs." Where the stay has been violated, the remedy is to vacate the judicial determinations rendered in contravention of the statute (see Livore v Malik, 305 AD2d 641, 642; Galletta v Siu-Mei Yip, 271 AD2d at 486; McGregor v McGregor, 212 AD2d at 956; see also Moray v Koven & Krause, Esqs., 15 NY3d at 389; Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C321:3 ["A party against whom an order or judgment is entered in violation of CPLR 321(c) may have the order or judgment vacated"]). The stay provided for in CPLR 321(c) went into effect upon the Surrogate's Court's finding that Reppert was disabled, which was first made in its orders dated February 16, 2016, relieving RK in the Turnover and SNT Proceedings. Even if it is assumed that this finding was not imported into the Accounting Proceeding until the March 14, 2016, order relieving RK made in that proceeding, and that the stay did not take effect in that proceeding until March 14, 2016, there is no significant consequence as it does not appear that any judicial determinations were rendered in the interval between February 16 and March 14, 2016.

It is undisputed that no party sought leave of the Surrogate's Court to take further proceeding against Marianne and that no formal notice to appoint another attorney was served on her. The March 14, 2016, order, granting RK's withdrawal from representing Marianne in the Accounting Proceeding, did not explicitly state that Marianne had to find new counsel. In any event, [*17]no one served her with it. However, even though Marianne was never formally served with a notice to appoint, it does not necessarily follow that the statutory stay of proceedings continued on ad infinitum, as Marianne contends.

In Telmark, Inc. v Mills (199 AD2d 579), the Appellate Division, Third Department, found, on the facts presented, that there was no violation of CPLR 321(c)^[FN9]. There, the defendant's attorney notified the parties that he had been suspended from practice and had advised the defendant to obtain the services of another attorney. The defendant then sent a letter to the plaintiff's attorneys in which she acknowledged that her counsel had been suspended and directed that the plaintiff "send any papers directly to [her] until notified to the contrary" (Telmark, Inc. v Mills, 199 AD2d at 580 [internal quotation marks omitted]). The defendant then proceeded pro se, which she had the right to do (see id. at 580-581).

In Moray, the Court of Appeals referenced Telmark by stating:

"We are dealing with a statute intended to protect litigants faced with the unexpected loss of legal representation. And there is no indication in this record that plaintiff sought to raise CPLR 321(c) only after having conducted his lawsuit pro se for some period of time after his attorney became disabled (cf. Telmark, Inc. v Mills, 199 AD2d 579, 580-581 [3d Dept 1993])" (Moray v Koven & Krause, Esqs., 15 NY3d at 390).

Thus, in Moray, the Court of Appeals distinguished Telmark but did not overrule Telmark or call into doubt its conclusion on the facts there presented that there was no violation of CPLR 321(c).
Telmark is instructive in several respects. First, in Telmark, the defendant's attorney did give his client notice that she needed to appoint a new attorney. Second, the defendant responded to that notice by voluntarily electing to proceed pro se."