BEING RELIEVED AS COUNSEL IS NOT A UNILATERAL AFFAIR

KALAMATA CAPITAL GROUP, LLC v. AJP REMODELING, LLC, 2023 NY Slip Op 51301 - Kings Co.  Supreme Court 2023:

"The instant action alleges causes of action premised upon a breach of a merchant cash advance contract.

Plaintiff Kalamata Capital Group, LLC is a corporation operating in New York (see NYSCEF Doc No. 30 ¶ 1). Defendants are companies organized or situated in Georgia as well as an individual (see id. ¶¶ 2-3). Allegedly, according to Plaintiff, Plaintiff and Company Defendants entered into an agreement whereby Plaintiff agreed to purchase all rights to Company Defendants' future receivables having an agreed upon value of $78,100.00 (see id. ¶ 6). Individual Defendant Julio Andres Penaranda Jr. personally guaranteed the contract, per Plaintiff (see id. ¶ 8).

Defendants' attorneys, Usher Law Group P.C., answered the complaint and responded to Plaintiff's discovery demands (see NYSCEF Doc No. 4-6, 12-18). They now move to be relieved as counsel (see NYSCEF Doc No. 76).

Defendants' attorneys claim that "undersigned counsel was advised that the Defendants no longer with to be represented by counsel" (NYSCEF Doc No. 76 ¶ 10). On June 20, 2023, a letter was sent by Usher Law Group P.C. to Defendants, purporting to confirm that in accordance with the latter's request, the firm would no longer be representing them, and "In order for this firm to be relieved as counsel for you[r] matter, please sign the attached affidavit and return it to us as soon as possible in the postage paid envelope enclosed" (NYSCEF Doc No. 78 at 2).

During oral argument the Court asked appearing counsel if he wished to provide an in-camera disclosure as to why counsel of record sought to be relieved. Appearing counsel declined the offer and provided no additional information.

II. Movant's Arguments

Movant law firm Usher Law Group cites case law for the proposition that "New York Courts have long held that an attorney mad [sic] end the relationship with a client at any time for good cause and on reasonable notice to the client. (See In re Dunn, 205 N.Y 398, 403 (1912)" (NYSCEF Doc No. 76 ¶ 12). Movant cites a provision of the New York Rules of Professional Conduct, "1.16 (b)(6)," that does not exist (see id. ¶ 13). This asserted provision purportedly "states that a lawyer may withdraw from representing a client if 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 so long as it can be accomplished without material adverse effects on the interest of the client" (id.).

III. Discussion

Here, the Defendants' counsel seeks to be relieved. No opposition to Defendants' attorneys' motion has been filed. No appearance has been made in opposition.

In 1912, the Court of Appeals established that an attorney may terminate his relationship with a client in litigation "at any time for a good and sufficient cause and upon reasonable notice" (Matter of Dunn [Brackett], 205 NY 398, 403 [1912]).

"As a general rule, an attorney may obtain leave of court to terminate the attorney-client relationship at any time upon reasonable notice, for a good and sufficient cause, including the client's failure to pay legal fees and the failure to cooperate in his or her representation so as to cause a breakdown in that relationship (see 22 NYCRR 1200.0, Rule 1.16 [c]; Misek-Falkoff v Metro. Tr. Auth., 65 AD3d 576, 577 [2d Dept 2009]; Rivarderneria v New York City Health and Hosps. Corp., 306 AD2d 394, 395 [2d Dept 2003]; Tartaglione v Tiffany, 280 AD2d 543, 543 [2d Dept 2001]; Adler v Mitchell, 2022 NY Slip Op 50665[U], *2, 2022 NY Misc LEXIS 3194, *3 [Sup Ct, NY County, Jul. 25, 2022])" (Ventura v Choi, 2023 WL 4290358, *1 [Sup Ct, NY County, June 29, 2023, No. 805374/2016].) However, an attorney's right to withdraw as counsel is not absolute, and a sound reason must be provided why counsel should be allowed to withdraw (see Matter of Jamieko A., 193 AD2d 409 [1st Dept 1993]).

Conduct on the part of the clients rendering it unreasonably difficult to carry out the employment effectively is a valid ground for terminating the attorney-client relationship (see Rann v Lerner, 160 AD2d 922 [2d Dept 1990]). However, not every dispute between a client and an attorney warrants withdrawal (see Willis v Holder, 43 AD3d 1441 [4th Dept 2007]; LeMin v Central Suffolk Hosp., 169 AD2d 821 [2d Dept 1991].

The courts have an "inherent and statutory power to regulate the practice of law" (Matter of First Natl. Bank of E. Islip v Brower, 42 NY2d 471, 474 [1977]), and that power includes the authority to deny a motion to withdraw "because of the attorney's failure to show good and sufficient cause warranting withdrawal under the Code of Professional Responsibility"^[1] (J.M. Heinike Assoc. v Liberty Natl. Bank, 142 AD2d 929, 930 [4th Dept 1988]; accord Willis v Holder, 43 AD3d 1441 [4th Dept 2007]).

After an attorney has withdrawn it would be foolhardy to believe that the Defendant will easily be able to obtain a new attorney as "whatever the basis of permitted withdrawal, and certainly where it is based on insufficient merit of the claim or defense, prospective new counsel will, understandably, be reluctant to accept the representation" (Diaz v New York Comprehensive Cardiology, PLLC, 43 Misc 3d 759, 764 [Sup Ct, Kings County 2014]).

"The decision to grant or deny permission for counsel to withdraw lies within the discretion of the trial court" (McDonald v Shore, 100 AD3d 602, 603 [2d Dept 2012] [internal quotation marks and citations omitted]).

Moving counsel cites a nonexistent provision of the Rules of Professional Conduct. There is no paragraph (6) of subdivision (b) of Rule 1.16, as cited to by counsel. Rule 1.16 enumerates circumstances under which an attorney may ethically withdraw from representing a client. Subdivision (b) of Rule 1.16 provides:

(b) Except as stated in paragraph (d), a lawyer shall withdraw from the representation of a client when:

(1) the lawyer knows or reasonably should know that the representation will result in a violation of these Rules or of law;

(2) the lawyer's physical or mental condition materially impairs the lawyer's ability to represent the client;

(3) the lawyer is discharged; or

(4) the lawyer knows or reasonably should know that the client is bringing the legal action, conducting the defense, or asserting a position in the matter, or is otherwise having steps taken, merely for the purpose of harassing or maliciously injuring any person.

(22 NYCRR 1200.0, Rule 1.16 [b] [emphasis added].)

Permissive withdrawal is governed by subdivision (c) of Rule 1.16:

(c) Except as stated in paragraph (d), a lawyer may withdraw from representing a client when:

(1) withdrawal can be accomplished without material adverse effect on the interests of the client;

(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 with which the lawyer has a fundamental disagreement;

(5) the client deliberately disregards an agreement or obligation to the lawyer as to expenses or fees;

(6) the client insists upon presenting a claim or defense that is not warranted under existing law and cannot be supported by good faith argument for an extension, modification, or reversal of existing law;

(7) the client fails to cooperate in the representation or otherwise renders the representation unreasonably difficult for the lawyer to carry out employment effectively;

(8) the lawyer's inability to work with co-counsel indicates that the best interest of the client likely will be served by withdrawal;

(9) the lawyer's mental or physical condition renders it difficult for the lawyer to carry out the representation effectively;

(10) the client knowingly and freely assents to termination of the employment;

(11) withdrawal is permitted under Rule 1.13(c) or other law;

(12) the lawyer believes in good faith, in a matter pending before a tribunal, that the tribunal will find the existence of other good cause for withdrawal; or

(13) the client insists that the lawyer pursue a course of conduct which is illegal or prohibited under these Rules.

(22 NYCRR 1200.0, Rule 1.16 [b] [emphasis added].) No paragraph in subdivision (c) of Rule 1.16 was referenced by moving counsel.

In addition to the Rules of Professional Conduct, CPLR 321 (b) (2) states, "An attorney of record may withdraw or be changed by order of the court in which the action is pending, upon motion on such notice to the client of the withdrawing attorney, to the attorneys of all other parties in the action or, if a party appears without an attorney, to the party, and to any other person, as the court may direct."

Furthermore, when an attorney seeks to be relieved of counsel, moving papers must contain specific allegations in order to be relieved as counsel; conclusory statements are not sufficient (see Kramer v Salvati, 88 AD2d 583 [2d Dept 1982]). In Kramer, the Appellate Division found that the moving papers of plaintiffs' attorneys seeking to be relived of their responsibilities based their application on "various differences," but there was "no specification whatsoever of this conclusory assertion" (id. at 583). Supreme Court's denial of the attorneys' motion was sustained.

It must be emphasized that when an attorney undertakes to represent a defendant in a civil action, there exists a presumption that the representation will continue in good faith throughout the course of the litigation (see Moustakos v Bouloukos, 112 AD2d 981 [2d Dept 1985]; Blondell v Malone, 91 AD2d 1201 [4th Dept 1983]). An attorney cannot unilaterally terminate a relationship with clients simply by failing to perform services expressly or impliedly authorized by them (see Leffler v Mills, 285 AD2d 774 [3d Dept 2011]). One should not enter into a client representation with the aforethought that the attorney can earn a quick fee and then let the client loose. "As the saying goes, `in for a penny, in for a pound' (Edward Ravenscroft, The Canterbury Guests; Or, A Bargain Broken, act v, scene 1 [1695])" (People v Graves, 163 AD3d 16, 22 [4th Dept 2018]).

Here, Defendants' counsel's only explanation for being discharged was a conclusory one-sentence statement: "In June of 2023 undersigned counsel was advised that the Defendants no longer with [sic] to be represented by counsel and forwarded a letter confirming the same." The sentence appears to convey that the Defendants forwarded a letter confirming a desire not to be represented by counsel. Actually, counsel prepared an affidavit for the individual Defendant to sign both on his own behalf and on behalf of Company Defendants. The affidavit was sent along with a cover letter. The affidavit was never signed and returned by the individual Defendant. (See NYSCEF Doc No. 78.)

Since no details were provided by counsel, this Court is left in the dark as to why the breakdown in the attorney-client relationship occurred, whether Defendants truly wished to have counsel relieved, and whether they understood the consequences of being without an attorney. One would presume that if they wished counsel to no longer represent them, they would have signed the affidavit and returned it. At a minimum, they would have sent something in writing acknowledging their intentions. However, there is nothing from them.

This does not mean that as a sine qua non a client must execute a writing to memorialize a desire to have counsel relieved as their attorneys. But when counsel offers nothing more than an enigmatic one-line statement without details and without an offer to explain the situation in camera, and despite having the opportunity to sign something to the effect that they don't want the attorneys representing them, the clients do not return it executed, this raises a question on the Court's part as to what has transpired. This Court cannot acquiesce so easily to rendering parties to litigation, especially Defendants in a breach of contract case, without legal representation.

Relieving oneself of counsel is not a unilateral affair. Counsel must show good cause to be relieved. Here, Defendants' counsel has not demonstrated good and sufficient cause with sufficient allegations. Present are none of the above cited reasons for permitting dissolution of the attorney-client relationship — such as a failure to pay legal fees, a failure to cooperate, client actions rendering it difficult to carry out the representation, lack of a meritorious defense, illegal conduct taking place, or the client proposes to undertake illegal conduct. The present circumstances, including the lack of an in-camera explanation and the non-return by Defendants of the pre-written affirmation, prompt this Court to decline to exercise its discretion to relieve counsel from representation.

IV. Conclusion

Accordingly, it is hereby ORDERED that Defendants' counsel's motion to be relieved is DENIED.

[1] The Code of Professional Responsibility was replaced by the Rules of Professional Conduct in 2009."