Gaynor v. Slade ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 DON GAYNOR; NANCY GAYNOR, Case No.: 21cv777-NLS 12 Plaintiffs, ORDER DENYING WITHOUT 13 v. PREJUDICE DEFENDANT’S EX PARTE MOTION FOR COUNSEL 14 CHAD SLADE; LINDA McCRAKEN; TO WITHDRAW and DOES 1 through 30, inclusive, 15 Defendants. [ECF No. 36] 16 17 Before the Court is Defendants’ ex parte motion for permission for their counsel to 18 withdraw. ECF No. 36. After due consideration and for the reasons stated below, the 19 Court DENIES WITHOUT PREJUDICE the motion. 20 I. BACKGROUND 21 Plaintiffs brought this action against Defendants for breach of a promissory note on 22 a piece of real property located in Montana. ECF No. 3. Defendants have been 23 represented by their counsel, George Straggas (“Straggas”), since the start of the 24 litigation when they filed their answer. ECF No. 6. The Court issued a scheduling order 25 on August 4, 2021, and on September 7, 2021, the parties consented to magistrate 26 jurisdiction. ECF Nos. 19, 24. On August 17, 2022, the Court held a Mandatory 27 Settlement Conference, but the case did not settle. ECF No. 35. 28 1 Just prior to the settlement conference, on August 16, 2022, Defendants notified 2 the Court that they retained a bankruptcy attorney, Deepalie Milie Joshi (“Joshi”), who 3 indicated that it was their intention to file for bankruptcy within three to five weeks. ECF 4 No. 36 at 3. Mr. Straggas states that he confirmed Defendants intention to file for 5 bankruptcy on September 15. Id. However, to date, the Court has not been notified that 6 such a petition has actually been filed. 7 II. DISCUSSION 8 “In ruling on a motion to withdraw as counsel, courts consider: (1) the reasons why 9 withdrawal is sought; (2) the prejudice withdrawal may cause to other litigants; (3) the 10 harm withdrawal might cause to the administration of justice; (4) the degree to which 11 withdrawal will delay the resolution of the case.” Garrett v. Ruiz, No. 11-CV-2540-IEG 12 WVG, 2013 WL 163420, at *2 (S.D. Cal. Jan. 14, 2013). “The decision to permit 13 counsel to withdraw is within the sound discretion of the trial court.” Atkins v. Bank of 14 Am., N.A., No. 15-CV-00051-MEJ, 2015 WL 4150744, at *1 (N.D. Cal. July 9, 2015) 15 (citations omitted). 16 Mr. Straggas requests to withdraw because he states that he has reached “an 17 irreconcilable divergence in case strategy” with Defendants, details of which he cannot 18 divulge due to attorney-client privilege. ECF No. 36 at 3. He states that Defendants have 19 consented to his withdrawal and agreed to represent themselves in pro per. Id. He also 20 states that he has taken steps to minimize any potential prejudice to all parties by 21 notifying his clients of their upcoming deadlines and notifying Plaintiffs’ counsel of his 22 request, to which they do not object. Id. at 3-4. He has also given the entire case file to 23 Ms. Joshi. Id. at 4. 24 While the Court recognizes the difficult position Defendants’ counsel finds 25 himself, in its discretion, it does not find it appropriate to permit withdrawal at this time. 26 Defendants have consented to their counsel’s request to withdraw and California Code of 27 Professional Conduct 1.16 does list this as a situation where counsel may request to 28 withdraw. See Cal. Code Prof. Conduct 1.16(b)(4). However, even where there is client 1 consent, courts still evaluate the other factors listed above. See Gurvey v. Legend Films, 2 Inc., No. 09–CV–942–IEG (BGS), 2010 WL 2756944, (S.D. Cal. Jul. 12, 2010) 3 (evaluating factors even where client consented to withdrawal). 4 The stage of the litigation is a factor that courts often emphasize when evaluating 5 the request to withdraw. Courts are more willing to permit withdrawal earlier in the case, 6 where chance of prejudice is usually lower. See Sihler v. Fulfillment Lab., Inc., 7 20cv1528-LL-MSB, 2022 WL 623865, at *2 (S.D. Cal. Mar. 3, 2022)(finding no 8 prejudice when case was in early stage and discovery had not been conducted); Tan v. 9 Quick Box, LLC. Gurvey v. Legend Films, Inc., No. 09–CV–942–IEG (BGS), 2010 WL 10 2756944, (S.D. Cal. Jul. 12, 2010) (no prejudice when case was still “in its infancy”). By 11 contrast, they are less willing where the case is late in the proceedings or when deadlines 12 are imminent because of increased prejudice. Robinson v. Delgado, No. CV 02-1538 13 NJV, 2010 WL 3259384, at *2 (N.D. Cal. Aug. 18, 2010) (denying withdrawal request 14 after trial in this “late state of proceedings” because law firm was familiar with case and 15 evidence presented at trial); Edwards v. Vemma Nutrition, No. CV-17-02133-PHX-DWL, 16 2019 WL 2492253, at *1 (D. Ariz. June 14, 2019) (denying motion to withdraw without 17 prejudice in light of upcoming deadlines a week after the request). 18 Here, the case is at a late stage and there are imminent deadlines. Mr. Straggas 19 conducted the fact and expert discovery in this case, and is the individual most familiar 20 with the facts and evidence of the case that would be brought during trial. Transferring 21 the case file to bankruptcy counsel, Ms. Joshi, does not alleviate the prejudice to the 22 parties and Court in terms of adjudication of this case in federal court. Further, the final 23 pretrial conference is set for October 28, 2022, with pretrial filings to begin starting 24 September 30, 2022. ECF No. 19. 25 Moreover, though Defendants state that they plan to file for bankruptcy, the Court 26 has not been notified that such a proceeding has been filed. Had the bankruptcy 27 proceedings begun and this case stayed per the bankruptcy proceeding, Defendants could 28 make a stronger case for lack of prejudice. See Tan, 2022 WL 1085062, at *2 (finding no 1 || prejudice where case had been stayed for six months pending bankruptcy proceedings). 2 || However, at this time, this case is set to more forward imminently with pretrial 3 || procedures and headed towards a trial. 4 Hr. CONCLUSION 5 Thus, based on the factors and reasons discussed above, the Court DENIES 6 || WITHOUT PREJUDICE Defendants’ counsel’s request to withdraw at this time. 7 IT IS SO ORDERED. 8 Dated: September 27, 2022 9 Mite. Lemme 10 Hon. Nita L. Stormes United States Magistrate Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28