Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-07729/USCOURTS-cand-3_18-cv-07729-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1692 Fair Debt Collection Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOSHUA M. FRAZIER,

Plaintiff,

v.

AMERICAN CREDIT RESOLUTION, 

INC.,

Defendant.

Case No. 18-cv-07729-TSH 

ORDER GRANTING MOTION TO 

WITHDRAW AS COUNSEL

Re: Dkt. No. 26

I. INTRODUCTION

Gordon Rees Scully Mansukhani, LLP (“GRSM”) seeks to withdraw as counsel for 

Defendant American Credit Resolution, Inc. (“ACR”) on the grounds that the attorney-client 

relationship has deteriorated and ACR has breached its contractual obligations and otherwise made 

it unreasonably difficult for GRSM to carry out its representation effectively. Mot., ECF No. 26. 

No opposition has been filed. The Court finds this matter suitable for disposition without oral 

argument and VACATES the August 8, 2019 hearing. See Civ. L.R. 7-1(b). Having considered 

the record in this case and relevant legal authority, the Court GRANTS the motion for the 

following reasons.

II. BACKGROUND

Plaintiff Joshua Frazier filed this case on December 26, 2018, alleging violations of the 

Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. Compl., ECF No. 1. ACR retained 

GRSM to defend it and GRSM attorney Allison Jean Fernandez appeared on ACR’s behalf. 

Kappas Decl. ¶ 3, ECF No. 26-1. After the parties tentatively reached an agreement to resolve the 

matter, Frazier’s counsel filed a Notice of Settlement. ECF No. 21. Shortly thereafter, Fernandez 

left GRSM and Angelo Kappas took over as counsel, attempting to facilitate communications with 

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ACR regarding compliance with the settlement agreement. Kappas Decl. ¶ 3. However, despite 

keeping ACR apprised of the case status and relevant deadlines, GRSM did not receive any 

communication from ACR in the weeks leading up to this motion. Id. At present, ACR is 

“essentially incommunicado” and GRSM has been unable to secure its cooperation with the terms 

of the parties’ agreement. Id. ¶¶ 3-5. Further, although ACR agreed to pay GRSM’s legal fees 

and expenses, it has failed to pay counsel for the majority of work performed this year. Id. ¶ 2. 

GRSM filed the present motion on June 25, 2019. It provided notice of the motion to ACR 

both prior to and after its filing. Id. ¶ 6.

III. LEGAL STANDARD

The Court’s Civil Local Rules authorize an attorney to withdraw as counsel of record if: 

(1) written notice has been given reasonably in advance to the client and all other parties in the 

action; and (2) the attorney obtains leave of Court. Civ. L.R. 11-5(a). In this District, the conduct 

of counsel, including the withdrawal of counsel, is governed by the standards of professional 

conduct required of members of the State Bar of California. Civ. L.R. 11-4(a)(1); see Nehad v. 

Mukasey, 535 F.3d 962, 970 (9th Cir. 2008) (applying California Rules of Professional Conduct to 

attorney withdrawal). California Rule of Professional Conduct 1.16 provides several enumerated 

grounds pursuant to which counsel may properly seek to withdraw from a representation. 

“Courts consider several factors when considering a motion for withdrawal, including: (1) 

the reasons counsel seeks to withdraw; (2) the possible prejudice that withdrawal may cause to 

other litigants; (3) the harm that withdrawal might cause to the administration of justice; and (4) 

the extent to which withdrawal will delay resolution of the case.” Atkins v. Bank of Am., N.A., 

2015 WL 4150744, at *1 (N.D. Cal. July 9, 2015) (citing Deal v. Countrywide Home Loans, 2010 

WL 3702459, at *2 (N.D. Cal. Sept. 15, 2010)). “When addressing a motion to withdraw, the 

consent of the client is not dispositive.” Robinson v. Delgado, 2010 WL 3259384, at *2 (N.D. 

Cal. Aug. 18, 2010) (citing CE Resource, Inc. v. Magellan Group, LLC, 2009 WL 3367489, at *2 

(E.D. Cal. Oct.14, 2009)). Instead, the decision to permit counsel to withdraw is within the sound 

discretion of the trial court. United States v. Carter, 560 F.3d 1107, 1113 (9th Cir. 2009). 

Before withdrawal is permitted, counsel must comply with California Rule of Professional 

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Conduct 1.16(d), which provides that counsel shall not withdraw from employment until the 

member has taken steps to avoid reasonably foreseeable prejudice to the rights of the client, 

including giving sufficient notice to the client to allow time for employment of other counsel, 

complying with Rule 1.16(e) (regarding the return of all client materials and property), and 

complying with all other applicable laws and rules. El Hage v. U.S. Sec. Assocs., Inc., 2007 WL 

4328809, at *1 (N.D. Cal. Dec. 10, 2007). Further, “[w]hen withdrawal by an attorney from an 

action is not accompanied by simultaneous appearance of substitute counsel or agreement of the 

party to appear pro se, leave to withdraw may be subject to the condition that papers may continue 

to be served on counsel for forwarding purposes . . . unless and until the client appears by other 

counsel or pro se.” Civ. L.R. 11-5(b).

IV. DISCUSSION

The Court finds good cause exists to permit GRSM’s withdrawal. California Rules of 

Professional Conduct 1.16(b)(4)-(5) state that a lawyer may withdraw from representing the client 

if:

(4) the client by other conduct renders it unreasonably difficult for the 

lawyer to carry out the representation effectively;

(5) the client breaches a material term of an agreement with, or 

obligation, to the lawyer relating to the representation, and the lawyer 

has given the client a reasonable* warning after the breach that the 

lawyer will withdraw unless the client fulfills the agreement or 

performs the obligation[.]

There is no question that ACR has made it unreasonably difficult for GRSM to carry out its 

representation given that it has stopped communicating with GRSM on any matters regarding this

case. See Garcia v. Zavala, 2019 WL 2088478, at *3 (N.D. Cal. May 13, 2019) (permitting 

withdrawal where client’s failure to communicate with attorney made it “unreasonably difficult to 

carry out representation.”); Beard v. Shuttermart of Cal., Inc., 2008 WL 410694 *3 (S.D. Cal. Feb. 

13, 2008) (same). Further, ACR has failed to pay counsel for most of the work performed this 

year. Failure to pay attorney’s fees provides a sufficient basis on which to grant a request to 

withdraw. See Garcia, 2019 WL 2088478, at *3 (granting motion to withdraw in part because 

defendant failed to replenish counsel’s retainer and “counsel is essentially working for free”); 

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Stewart v. Boeing Co., 2013 WL 3168269, *2 (C.D. Cal. Jun. 19, 2013) (permitting unpaid 

attorney to withdraw even though no substitute counsel had been retained and stating “[t]he failure 

of a client to pay attorney’s fees provides a sufficient basis on which to grant a request to 

withdraw from representation.”); see also Cal. R. of Prof’l Conduct 3-700(C)(1)(f) (permitting 

withdrawal if the client “breaches an agreement or obligation to the member as to expenses or 

fees”).

As to the remaining factors, GRSM has taken reasonable steps to avoid foreseeable 

prejudice to ACR in that it provided continuous updates regarding the status of this case and 

provided sufficient notice of its intent to withdraw. Kappas Decl. ¶¶ 5-6. There are no pending 

motions aside from this one and the Court recently granted the parties’ stipulation to extend the 

deadline to file a dismissal to allow for more time to finalize the settlement agreement. ECF No. 

28. Accordingly, the Court finds leave to withdraw is appropriate in these circumstances.

However, it is not clear that GRSM informed ACR that it must retain new counsel in order 

to continue to prosecute this action insofar as business entities can only appear through licensed 

counsel. See Civ. L.R. 3-9(b); Rowland v. Cal. Men’s Colony, Unit II Men’s Advisory Council, 

506 U.S. 194, 202 (1993) (“It has been the law for the better part of two centuries, for example, 

that a corporation may appear in the federal courts only through licensed counsel. As the courts 

have recognized, the rationale for that rule applies equally to all artificial entities.”) (citations 

omitted); Bourbeau v. Cognitive Code Corp., 693 F. App’x 499, 503 (9th Cir. 2017) (affirming 

district court’s dismissal based on corporation’s failure to retain counsel). Accordingly, the Court 

shall grant GRSM’s motion, on the condition that it remain counsel of record in ECF for 

forwarding purposes until ACR retains substitute counsel as provided by Civil Local Rule 11-5(b). 

V. CONCLUSION

For the reasons stated above, the Court GRANTS GRSM’s motion to withdraw as counsel 

for ACR on the condition that it shall continue to serve all papers from the Court and Frazier on 

ACR for forwarding purposes until ACR files a substitution of counsel. For all such documents, 

GRSM shall e-file proof of service. No chambers copy is required.

As ACR may not appear without counsel, it shall file substitution of counsel by August 29, 

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2019. If ACR has not filed substitution of counsel by that date, Frazier may request the Clerk 

enter its default pursuant to Federal Rule of Civil Procedure 55(a). The September 6, 2019 

deadline to file a dismissal or updated status report remains in effect.

IT IS SO ORDERED.

Dated: August 5, 2019

THOMAS S. HIXSON

United States Magistrate Judge

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