Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_08-cv-01871/USCOURTS-casd-3_08-cv-01871-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition For Removal--Other Contract

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- 1 - 08cv1871-IEG (WVG)

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

INDYMAC FEDERAL BANK, F.S.B.,

formerly known as Indymac Bank, F.S.B.,

Plaintiff,

CASE NO. 08-CV-1871 - IEG (WVG)

ORDER GRANTING MOTION TO

WITHDRAW AS ATTORNEY

[Doc. No. 18]

vs.

R. BARRY MCCOMIC, an individual;

MCCOMIC CONSOLIDATED, INC., a

California corporation; TRANS WEST

HOUSING, INC., a California corporation;

and DOES 1-100, inclusive,

Defendants.

The law firm of Hecht Solberg Robinson Goldberg & Bagley LLP and Jerold H. Goldberg

(collectively, “Movants”) represent all Defendants in this case. They move to withdraw as counsel for

all of Defendants due to Defendants’ failure to pay their legal fees as agreed upon. They state that

Defendants have also assented to the withdrawal and indicated that they will secure new counsel.

However, no new counsel has been retained yet. For the reasons set forth below, the Court GRANTS

the motion to withdraw and ORDERS that corporate Defendants McComic Consolidated, Inc. and

Trans West Housing, Inc. obtain new counsel within 30 days of the filing of this Order.

BACKGROUND

I. Procedural history

This is a breach of guaranty case. Plaintiff filed its complaint on August 22, 2008 in the

Case 3:08-cv-01871-IEG-WVG Document 22 Filed 05/18/10 Page 1 of 3
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- 2 - 08cv1871-IEG (WVG)

Superior Court for the County of San Bernardino. On October 14, 2008, Defendants removed the case

to this Court. Defendants filed an answer to the complaint on October 21, 2008.

II. Present motion

Movants now request the Court’s permission to withdraw as counsel for all of Defendants.

According to Movants, good cause for withdrawal exists because Defendants have failed to pay their

legal fees and have also assented to the withdrawal. (Goldberg Decl. ¶ 8.) Movants also indicate that

the corporate Defendants were informed that they do not have the right to appear in propria persona

in federal court. (Id. ¶ 13.) Finally, Movants point out that there are currently no immediately

scheduled hearings in this matter except for a mandatory settlement conference on June 3, 2010. (Id.

¶ 14.) Accordingly, Movants argue there is no resulting prejudice from their withdrawal.

DISCUSSION

“An attorney may not withdraw as counsel except by leave of court, and the decision to grant

or deny counsel’s motion to withdraw is committed to the discretion of the trial court.” Beard v.

Shuttermart of Cal., Inc., No. 07-CV-594-WQH (NLS), 2008 WL 410694, at *2 (S.D. Cal. Feb. 13,

2008) (internal quotation marks and citations omitted); see also CIV. L.R. 83.3(g)(3). In ruling on a

motion to withdraw as counsel, courts consider: (1) the reasons why withdrawal is sought; (2) the

prejudice withdrawal may cause to other litigants; (3) the harm withdrawal might cause to the

administration of justice; and (4) the degree to which withdrawal will delay the resolution of the case.

Beard, 2008 WL 410694, at *2 (citations omitted).

In the present case, good cause for withdrawal exists. First, Defendants have failed to pay

Movants their legal fees as agreed upon and have indicated that they would be unable to make those

payments. (Goldberg Decl. ¶¶ 4, 8-9.) Failure to pay attorney’s fees can be a valid ground for

withdrawal. See Canandaigua Wine Co. v. Edwin Moldauer, No. 1:02-cv-06599 OWW DLB, 2009

WL 89141, at *2 (E.D. Cal. Jan. 14, 2009); Cal. Rules of Professional Conduct Rule 3-700(C)(1)(f).

Second, Defendants have assented to the Movants’ withdrawal as counsel. (Goldberg Decl. ¶ 8.) Rule

3-700(C)(5) of the California Rules of Professional Conduct expressly allows withdrawal where the

client “knowingly and freely assents to termination of the employment.”

There is also no indication that the Movants’ withdrawal would cause any prejudice to other

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 See, e.g., CE Res., 2009 WL 3367489, at *3 (“It would be an injustice to leave [the corporate

defendant] in a judicial stalemate until a replacement attorney could be located.”).

- 3 - 08cv1871-IEG (WVG)

litigants or that it would harm or delay the administration of justice. Rather, this case is still in its

infancy and, except for a mandatory settlement conference, there are no immediately scheduled

hearings. Moreover, there is no prejudice to Defendants because they have been on notice of the

Movants’ intent to withdraw at the very least since March 25, 2010. (See Goldberg Decl. ¶ 6.)

Granting the motion, however, would leave corporate Defendants McComic Consolidated, Inc.

and Trans West Housing, Inc. without counsel. “It is a longstanding rule that corporations and other

incorporated associations must appear in court through an attorney.” CE Res., Inc. v. Magellan Group,

LLC, No. 2:08-cv-02999-MCE-KJM, 2009 WL 3367489, at *2 (E.D. Cal. Oct. 14, 2009) (citing In

re Am. West Airlines, 40 F.3d 1058, 1059 (9th Cir. 1994) (per curiam)). Moreover, the Civil Local

Rules for the Southern District of California provide that corporations may appear in court only

through an attorney. See CIV.L.R. 83.3(k). While some courts have relied on this requirement to deny

a motion to withdraw as counsel,1

 the Court believes that such outcome would not be in everyone’s

best interest in this case. Accordingly, GOOD CAUSE appearing, the Court GRANTS the motion to

withdraw, but also ORDERS that corporate Defendants McComic Consolidated, Inc. and Trans West

Housing, Inc. obtain substitute counsel within 30 days of the filing of this Order. This should not be

prejudicial to the corporate Defendants because they already had almost a month since receiving the

Movants’ formal notice of intent to withdraw to find new counsel. (See Goldberg Decl. ¶ 12.)

CONCLUSION

For the foregoing reasons, the Court GRANTS the Movants’ motion to withdraw as counsel

for all Defendants and ORDERS the corporate Defendants to obtain new counsel within 30 days of

the filing of this order. The new counsel should make an appearance on behalf of Defendants

McComic Consolidated, Inc. and Trans West Housing, Inc. by no later than June 17, 2010.

IT IS SO ORDERED.

DATED: May 18, 2010

IRMA E. GONZALEZ, Chief Judge

United States District Court

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