Court Opinion

ID: 3048761
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:24:45.446099+00
Date Added: 2024-06-11T11:49:18.766723
License: Public Domain

Case: 12-14882       Date Filed: 09/11/2014     Page: 1 of 29

                                                                 [DO NOT PUBLISH]

                 IN THE UNITED STATES COURT OF APPEALS

                           FOR THE ELEVENTH CIRCUIT
                             ________________________

                                    No. 12-14882
                              ________________________

                         D.C. Docket No. 2:11-cv-00455-AKK

LAURA ELLEN LEWIS,

                                                                        Plaintiff-Appellant,

                                           versus

HASKELL SLAUGHTER YOUNG & REDIKER, LLC,

                                                                      Defendant-Appellee.

                              ________________________

                     Appeal from the United States District Court
                        for the Northern District of Alabama
                            ________________________

                                  (September 11, 2014)

Before HILL and COX, Circuit Judges, and MIDDLEBROOKS,* District Judge.

_______________________

*Honorable Donald M. Middlebrooks, United States District Judge for the Southern District of
Florida, sitting by designation.
               Case: 12-14882   Date Filed: 09/11/2014   Page: 2 of 29

PER CURIAM:

      Laura Ellen Lewis appeals the district court’s order awarding attorneys’ fees

to her former attorney, Alicia Haynes and Haynes’ firm, Haynes & Haynes, P.C.

(collectively referred to as “Haynes”), after Haynes terminated their attorney-client

relationship and filed a motion for an attorney’s lien on Lewis’ judgment in this

employment-discrimination action. For the following reasons, we affirm the

district court’s fee award.

                                         I.

      Lewis and Haynes entered into an attorney-client relationship that was

codified in a contingency fee agreement, which provided that Haynes would

receive forty-five percent of any recovery obtained during her representation of

Lewis and that she would be entitled to a lien on the judgment. The contract

expressly waived a fee in the absence of any recovery. The agreement also

provided that Haynes could terminate the agreement if Lewis made it

“unreasonably difficult” for Haynes to represent her or for any other “just cause,”

but it did not specify what fee, if any, Haynes would obtain in the event of such a

termination.

      Represented by Haynes, Lewis filed this employment-discrimination action

against Haskell Slaughter Young & Rediker, LLC, alleging violations of Title VII

of the Civil Rights Act of 1964 and various state law claims. During the discovery

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phase of this litigation, Lewis sent an email to an associate at Haynes’ firm

requesting various information about depositions and witnesses. Haynes

considered the e-mail to be derogatory, accusatory, and demanding. Shortly

thereafter, Haynes informed Lewis that she would be terminating their

attorney-client relationship. Haynes did not notify the district court of her

withdrawal until several weeks later. During the interim, Haskell Slaughter sent

Haynes an offer of judgment for $85,000, which Haynes forwarded to Lewis.

Lewis, represented by different counsel, filed a notice of acceptance of the

judgment, and, on the same day, Haynes filed a motion to withdraw and a notice of

attorney’s lien against the judgment, requesting quantum meruit recovery for her

work. Lewis opposed the fees request on the grounds that Haynes withdrew prior

to recovery and was not entitled to any fee.

           The district court recognized that Alabama law does not directly address

the questions presented here. Nevertheless, it considered the laws of other states

and concluded that Haynes was entitled to attorneys’ fees in quantum meruit

because just cause existed for the termination of the attorney-client relationship.

The district court awarded Haynes $38,250. 1

                                               II.

       1
        At an evidentiary hearing, Haynes expressly stated that she was not seeking recovery
under her contract with Lewis and was seeking recovery in quantum meruit in the amount of
$50,568.50. In additional briefing to the district court, Haynes voluntarily agreed to accept
$38,250, which was 45 percent of the $85,000 judgment.
                                               3
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       On appeal, Lewis contends that the district court abused its discretion by

awarding attorneys’ fees to Haynes. Lewis argues that Haynes forfeited her right

to any fee by unilaterally terminating the attorney-client relationship without just

cause. Additionally, Lewis asserts that the district court abused its discretion by:

(1) awarding fees under a quantum meruit theory, as Haynes had operated with

unclean hands; and, (2) by awarding an unreasonable amount of attorneys’ fees.

Moreover, Lewis contends that the district court erred by failing to enter a

judgment resolving the underlying suit between Lewis and Haskell Slaughter on

the date that she filed her notice of acceptance of judgment. 2

       We review decisions regarding attorneys’ fees and costs for an abuse of

discretion. Friends of Everglades v. S. Fla. Water Mgmt. Dist., 678 F.3d 1199,

1201 (11th Cir. 2012). An abuse of discretion exists “only when a decision is in

clear error, the district court applied an incorrect legal standard or followed

improper procedures, or when neither the district court’s decision nor the record

provides sufficient explanation to enable meaningful appellate review.” Id.

       The district court began by correctly observing that the rights and

obligations of a party to a contingency fee contract are governed by state law.

Zaklama v. Mount Sinai Med. Ctr., 906 F.2d 650, 652 (11th Cir. 1990). Alabama

law provides that, where a contingency fee arrangement exists, a law firm is not

       2
        We note that Haynes concedes that Lewis is entitled to a judgment on her employment-
discrimination claim, but contends that it is subject to her lien.
                                              4
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entitled to any fee until the firm recovers on the underlying claim or some part of

it. As a result, abandonment of the suit before the litigation ends deprives the firm

of any right to compensation. Troy v. Hall & Farley, 47 So. 1035, 1036 (Ala.

1908) (holding that the firm was not entitled to compensation where it had

abandoned the case by not doing anything other than reading briefs and court

opinions filed in the case for years).

      However, the attorneys in Troy voluntarily abandoned the case without just

cause. Id. In Howard v. McCarson, 110 So. 296, 297 (Ala. 1926), the Alabama

Supreme Court opined that where an attorney abandons his client “without

justifiable cause . . . he forfeits all right to compensation, even for services already

rendered . . . . ” (emphasis added). The district court noted that this language

implies that an attorney who withdraws with justifiable cause may be entitled to

recover reasonable compensation. The district court did not abuse its discretion in

reaching this conclusion.

      Furthermore, in Triplett v. Elliott, 590 So. 2d 908, 910 (Ala. 1991), the

Alabama Supreme Court affirmed the award of fees to an attorney who was

discharged without cause, or otherwise prevented from full performance. The

Court held that under such circumstances, the attorney is entitled to be reasonably

compensated for services rendered before such discharge. Id. The Court said this

also appears to be the prevailing rule where the contract calls for a contingent fee.

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Id. Finally, the Court opined that a “presumption of correctness” accompanies the

trial court’s judgment when it has made findings of fact in actions regarding

attorneys’ liens. Id.

      Although there appears to be no Alabama case in which it is the attorney

demanding fees who terminated the attorney-client relationship prior to a

successful recovery, from the foregoing cases we infer that the Alabama courts

would award fees to an attorney who withdraws with just cause prior to the

conclusion of a contingent fee contract. We conclude that the Alabama courts

would follow the modern majority rule that an attorney who withdraws from a case

for good cause or with appropriate justification may recover in quantum meruit for

services he rendered prior to the withdrawal. See In re Carlson, 263 F.3d 748, 750

(7th Cir. 2001) (establishing that a lawyer has a legally enforceable interest “in a

potential contingent fee . . . before judgment or settlement . . . even if he withdraws

rather than being terminated, provided that the withdrawal is for good cause.”).

      The issue in this case, then, is whether Haynes withdrew with just cause.

This is, of course, a legal conclusion we draw from the facts of the case. See

Augustson v. Linea Aerea Nacional-Chile S.A., 76 F.3d 658, 663 (5th Cir. 1996).

Broadly speaking, “just cause exists when the client has engaged in culpable

conduct.” Id. Examples would be insistence on the assertion of a fraudulent

claim; failure to cooperate; refusal to pay; humiliation of the attorney or other

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similar conduct on the part of the client. Id. The focus is on the cause of the

attorney-client disagreement and the reason for the withdrawal. Id. The district

court findings of fact in this regard are presumed correct absent clear error.

Triplett, 590 So. 2d at 910.

      In this case, the district court found that the evidence demonstrated that, at

the time she sent the email, Lewis no longer trusted or accepted the professional

decisions of Haynes and her firm. The court concluded that Lewis’ testimony at

trial that she called Haynes “clueless” indicated a complete lack of confidence in

Haynes. Furthermore, the evidence was that the parties’ relationship had

completely deteriorated to the extent that Haynes could no longer continue her

representation of Lewis. From these facts, the district court concluded that Haynes

was justified in her withdrawal from representation of Lewis and that it was no

longer in Lewis’ best interest that Haynes represent her.

      Furthermore, the district court rejected Lewis’ claim that Haynes acted with

unclean hands in her conduct of the case or her withdrawal. The court engaged in

a lengthy and thoughtful consideration of the facts regarding this claim, including

the nature of the lawsuit and the various factors impacting settlement, and

concluded that Haynes and her firm conducted the litigation in a competent and

professional manner with “no evidence of wrongful or unprofessional conduct by

Haynes or [her firm].”

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      Thus, under the rule the district court concluded that Alabama would follow,

Haynes and her firm are entitled to recovery in quantum meruit of just

compensation for services rendered. Haynes and her firm worked on this matter

for eighteen months and performed, among other things, settlement negotiations,

drafting of the EEOC charge and complaint, and extensive paper discovery. The

district court determined that $38,250.00 was a reasonable award in quantum

meruit. We find no abuse of discretion here.

                                             III.

      For the foregoing reasons, we affirm the judgment of the district court

awarding Haynes attorneys’ fees in the amount of $38, 250.00. The case shall be

remanded, however, so that the district court may enter a separate judgment for

Lewis nunc pro tunc as of April 26, 2012, the date she accepted defendant’s offer

of judgment.

               AFFIRMED and REMANDED.

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MIDDLEBROOKS, District Judge, dissenting:

      A lawyer is a fiduciary, entrusted to handle a client’s affairs with

competence, diligence, and loyalty. In the face of looming discovery deadlines,

and with virtually no discovery completed, lawyer Alicia Haynes emailed her

client: “I have decided the best course of action is to withdraw from your case

effective immediately . . . . Your file has been boxed and is in the lobby with the

receptionist.” Instead of seeking permission from the court to withdraw or taking

steps to protect the interests of her client, Ms. Haynes gave a “heads up” to

opposing counsel notifying him of her withdrawal. The opposing party promptly

filed an Offer of Judgment, exposing the client to costs if not accepted within

fourteen days. Only after a notice of acceptance was filed through other counsel

was permission to withdraw sought.

      I agree with the majority that the case should be remanded for entry of

judgment nunc pro tunc as of April 26, 2012. However, I cannot join the majority

opinion affirming an award of attorney’s fees for two reasons:

      (1) Under Federal Rule of Civil Procedure 68, upon the filing of the written

notice accepting the offer, judgment should have been immediately entered by the

clerk. The ancillary decision awarding fees is “beyond the pale of existing

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jurisdiction, and thus must be a nullity.” Broughten v. Voss, 634 F.2d 880, 883

(5th Cir. 1981).1

       (2) Counsel’s unilateral and precipitous withdrawal without consultation

with the client or permission from the tribunal constituted abandonment of the suit

and precludes compensation. Not only did counsel terminate representation before

obtaining permission from the trial judge, but also the trial judge employed an

erroneous standard, first in granting the tardy motion to withdraw and then in

finding justification sufficient to warrant compensation.

       For these reasons, as discussed in detail below, I respectfully dissent.

                                                I.

       In remanding this case so that the district court can enter judgment nunc pro

tunc as of April 26, 2012, the majority recognizes that pursuant to Federal Rule of

Civil Procedure 68, judgment should have been entered by the clerk immediately

upon filing of the notice accepting the offer of judgment. 2 A Rule 68 offer of

judgment and acceptance is self-executing. See Perkins v. U.S. W. Commc’ns, 138
F.3d 336, 338 (8th Cir. 1998) (“Rule 68 leaves no discretion in the district court to

do anything other than enter judgment once an offer of judgment has been

accepted.”); Mallory v. Eyrich, 922 F.2d 1273, 1279 (6th Cir. 1991) (“By directing
1
  Bonner v. City of Pritchard, 666 F.2d 1206, 1209 (11th Cir. 1987) (en banc), adopted as
binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981.
2
  Rule 68 provides in part: “If, within 14 days after being served, the opposing party serves
written notice accepting the offer, either party may then file the offer and notice of acceptance,
plus proof of service. The clerk must then enter judgment.” Fed. R. Civ. P. 68.
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that the clerk shall enter judgment after proof of offer and acceptance have been

filed, the explicit language of the rule signifies that the district court possesses no

discretion to alter or modify the parties’ agreement.”). The district court’s

jurisdiction under 18 U.S.C. § 1331, which was based upon Title VII of the Civil

Rights Act of 1964, was therefore at an end and any relief from judgment could

only have been sought pursuant to Federal Rule of Civil Procedure 60. See

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 114 S. Ct. 1673 (1994).

The district court lacked jurisdiction to decide the subsequently filed motion to

withdraw and notice of lien. 3

       Under circumstances even less clear than those presented here, our

predecessor circuit has held that a district court lacked ancillary jurisdiction to

resolve a fee dispute between a party and withdrawing counsel. See Broughten,
634 F.2d at 882-83. Jurisdiction there involved the federal securities laws and,

during the course of the litigation, the plaintiff fell behind on payments to counsel

and the law firm moved to withdraw. Id. at 881. The trial judge required the

plaintiff to show cause why counsel should not be allowed to withdraw. Id. The

plaintiff responded that the law firm had used improper billing methods, the firm

3
  We always have the “power” and “obligation” to examine the district court’s subject matter
jurisdiction. See Fitzgerald v. Seaboard Sys. R.R., Inc., 760 F.2d 1249, 1251 (11th Cir. 1985)
(citing Philbrook v. Glodgett, 421 U.S. 707, 95 S. Ct. 1893 (1975); City of Kenosha, Wis. v.
Bruno, 412 U.S. 507, 511, 93 S. Ct. 2222, 2225 (1973)). We review questions of subject matter
jurisdiction de novo. See Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 408 (11th Cir.
1999) (citations omitted).
                                              11
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had agreed to go forward if she made payment of a certain amount (which had

been paid), and her lawsuit would be prejudiced if the firm were allowed to

withdraw. Id. After a hearing, the trial judge allowed the law firm to withdraw but

ordered that it was not entitled to any further fee. Id.

      Writing for the Fifth Circuit, Judge Tjoflat found that the fee decision was

outside of the court’s jurisdiction and therefore a nullity. Id. at 883. In doing so,

he saw a distinction in the trial court’s role in cases where a client sought to

discharge and substitute counsel and those where a lawyer seeks to withdraw

voluntarily from representation. Id. at 882-83. Where a client seeks to change

counsel during the pendency of a case, Judge Tjoflat found the law “well settled”

that a district court could condition substitution on the payment of fees or the

posting of security. Id. at 882 (quoting Nat’l Equip. Rental, Ltd. v. Mercury

Typesetting Co., 323 F.2d 784, 786 (2d Cir. 1963)). However, where a lawyer

seeks to withdraw voluntarily, the trial judge’s responsibility is “to assure that the

prosecution of the lawsuit before it is not disrupted by the withdrawal of counsel,

and that the withdrawal of counsel is for good cause.” Id. at 882-83. “This by itself

is adequate to protect the interests of the parties before the court and assure fair

treatment of the court’s officers.” Id. at 883.

      Here, upon the filing of the acceptance of the offer of judgment, the case

was over. There was no risk of disruption of the court’s schedule and any risk of

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harm to the client caused by the sudden and voluntary withdrawal that had already

occurred. The issue of any attorney fee that might be owed, together with any

claim for malpractice based upon the actions of counsel, was within the jurisdiction

of the state courts and beyond the subject matter jurisdiction of the district court.

                                          II.

      In reviewing decisions involving conduct of lawyers, this Circuit applies the

“clearly erroneous” test while carefully examining the district court’s application

of relevant ethical standards. Brennan’s, Inc. v. Brennan’s Restaurants, Inc., 590
F.2d 168, 171 (5th Cir. 1979) (citing Woods v. Covington Cnty. Bank, 537 F.2d
804, 810 (5th Cir. 1976)). “District courts enjoy no particular functional advantage

over appellate courts in their formulation and application of ethical norms.”

Woods, 537 F.2d at 810.

      Assuming the district court had subject matter jurisdiction, the fundamental

issue in this appeal is whether the law firm appropriately and with just cause

withdrew from representing its client. Any award of fees depends upon the answer

to this question. If counsel abandoned the representation without just cause, under

Alabama law, fees are precluded. Howard v. McCarson, 110 So. 296, 297 (Ala.

1926); Amason v. Harton, 89 So. 37, 37 (Ala. 1921); Troy v. Hall & Farley, 157
So. 1035, 1036 (Ala. 1908).

      A.     Background

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          In March 2012, the case had been pending for thirteen months. 4 Plaintiff’s

counsel had filed five motions for extension of deadlines. In February 2012, the

trial judge indicated that no further extensions would be granted absent good cause,

and plaintiff’s subsequent motion (filed 2/24/12) had been denied except with

respect to expert reports. No depositions had been taken; no dispositive motions

had been filed; no expert reports had been exchanged.

4
    The docket in the district court reflects the following:

2/8/11            Complaint
3/28/11           Answer
                  Scheduling Order
                          Discovery deadline 12/16/11
                          Dispositive motions deadline 1/31/12
                          Trial 4/12
9/30/11           Plaintiff’s Motion for Extension of Time for all deadlines by 60 days
                  Order granting extension
                          Discovery deadline 1/16/12
                          Dispositive motions deadline 2/29/12
                          Trial 5/21/12
10/26/11          Plaintiff’s Motion for Extension of Time for expert reports
1/17/11           Joint Motion for 90 Extension of Time (filed by Plaintiff)
                  Order Granting Motion in Part
                          Discovery deadline 3/2/12
                          Dispositive motions deadline 4/16/12
                          Trial 7/12
2/16/11           Plaintiff’s Motion for 60-Day Extension of Time to complete discovery
                  Order Granting Motion for Extension of Time
                          Discovery Deadline 4/30/12
                          Plaintiff’s expert reports due 3/30/12
                          Dispositive motions deadline 5/15/12
                          No further extensions will be granted absent good cause shown
2/22/12           Plaintiff’s Motion to Modify Court’s Order Extending Deadlines
                  Order Denying Motion to Modify Extending Deadlines except:
                          Plaintiff’s expert report due 3/30/12
                          Defendant’s expert report due 4/16/12
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       On Friday, March 9, 2012, Ms. Lewis (the client) emailed Ms. Haynes’

associate, Ms. Cleveland: “[Haynes] rarely communicates with me, which makes

you my contact on outstanding issues. It’s unacceptable for you to be uninformed

on these things. Has there been no progress as to Becky, the expert, or depo prep

dates? . . . Just as there was no progress on the [motion] to compel for 2 weeks and

until I emailed to find out the discovery status. If no one tells me what’s going on,

I assume there has been no progress . . . all while time is passing.” Evidentiary

Hearing Notebook, at Tab 34. 5

5
 The exchange leading up to the March 9, 2012 email is unremarkable and simply shows a client
asking for information (and lawyers not being very helpful):

       Lewis to Cleveland: Hey I see they filed a [response] – they hadn’t as of 6 last
       night and I was hoping that somehow they wouldn’t[.] Anyway, it’s just test
       symbols for me on [P]acer, so will you send it to me, and our reply? . . . Thanks –
       lel.
                                              ***
       Cleveland to Lewis: Hi LEL! See attached, which was filed after 10:30 last
       night.
                                              ***
       Lewis to Cleveland: Thanks – just glancing at it, whatever they plan to produce
       by “March 30” will not work since depos are scheduled (at least to my
       knowledge) to start 3/26. Was the schedule ever finalized? Will you please send
       me the reply when it’s ready?
                                              ***
       Cleveland to Lewis: We hope to have it finalized next week, so please continue
       to hold those dates. I’ll forward you what we file, and will keep you updated.
       Thanks. Have a good weekend!
                                              ***
       Lewis to Cleveland: OK- but I sent a second message to you – What about
       Becky, the expert, and what about depo prep dates. . . . Where are you on those
       things?
                                              ***
       Cleveland to Haynes: Would you like to respond, or should I? Normally when I
       do, she gets more saucy, and when you do, it seems to pacify her. You just have
       that Midas touch!
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       On Monday March 12, 2012, Ms. Haynes responded:

       Based on your recent email message on Friday it appears you have no
       confidence in the manner I am litigating your case. The tone of your
       email was also very derogatory, accusatory, and demanding of me and
       my staff. As such I have decided the best course of action is to
       withdraw from your case effective immediately and for you to seek
       new counsel. . . . I have drafted and filed a reply to the defendant’s
       response in opposition to the motion to compel that we filed on your
       behalf. We will take no further action on your behalf. . . . Your file
       has been boxed and is in the lobby with the receptionist. You may
       pick this up at your convenience. . . . We wish you the best of luck in
       this endeavor.

Evidentiary Hearing Notebook, at Tab 35.

       On March 16, 2012, Ms. Haynes followed up her email with a certified letter

to her client:

       This will confirm our conversation of March 12, 2012, where I
       informed you I am withdrawing from your case effective immediately.

       I drafted and filed a reply to the defendant’s response in opposition to
       the motion to compel that we filed on your behalf. We will take no
       further action on your behalf unless court filings require immediate
       attention. I will officially withdraw with the court from your case on
       April 2, 2012. Please let me know if you need assistance finding
       counsel.

                                              ***
       Haynes to Cleveland: Tell her I am handling and out of town until [n]ext
       week[.]
                                              ***
       Cleveland to Lewis: Alicia is handling these matters. She is out of town until
       next week. I’ll follow up with her and let you know. Thanks.

Evidentiary Hearing Notebook, at Tabs 33, 34.

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       I have also enclosed a copy of the current docket sheet in this matter
       for your review in regard to deadlines and the status of pending
       motions.

       Your file has been boxed and is in the lobby with the receptionist.
       You may pick this up at your convenience.

Evidentiary Hearing Notebook, at Tab 36. Ms. Haynes did not file a motion to

withdraw on April 2, 2012, as promised. On April 9, 2012, she emailed her client:

       Laura Ellen, Have you had a chance to locate other representation? I
       have not had anyone contact me about your client file nor have you
       picked up your file. I am planning on withdrawing with the court
       today and your other counsel should be apprised so they can file a
       notice of appearance. Thanks, Alicia.

Evidentiary Hearing Notebook, at Tab 40.

       Then, in what she described as a “heads up,” Ms. Haynes told her opposing

counsel, “I [will] be withdrawing from the file.” Evidentiary Hearing Tr. at 10.

Opposing counsel quickly responded with an offer of judgment under Rule 68. 6

On April 26, 2012, new counsel appeared for Ms. Lewis. That same day, Ms.

Lewis accepted the offer of judgment and then Ms. Haynes sought court approval

to withdraw as counsel.

       B.      “Your file has been boxed and is in the lobby with the receptionist”

       This Court has said that before granting a motion to withdraw, “it is

incumbent on the court to assure that the prosecution of the lawsuit before it is not

6
 The operation of this Rule, particularly with respect to an abandoned plaintiff seeking new
counsel late in litigation, both ratchets up the pressure on the plaintiff and works to discourage a
new lawyer from taking her case.
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disrupted by the withdrawal of counsel and that the withdrawal of counsel is for

good cause.” Mekdeci v. Merrell Nat’l Labs., 711 F.2d 1510, 1521-22 (11th Cir.

1983) (quoting Broughten, 634 F.2d at 882-83)). Under standards employed by the

federal courts, withdrawal should be denied where the client’s rights will be

prejudiced by the delay caused by replacing counsel and where the trial calendar of

the court will be dislocated so as to impede the interest of justice. Id. at 1522 n.17.

       In evaluating conduct of lawyers, this Court has looked to the Code of

Professional Responsibility, ABA Canons, Ethical Considerations and Disciplinary

Rules, Local Rules, and state case law. See id.; Woods, 537 F.2d at 810.7

Recently, in deciding whether lawyers effectively abandoned their client in an

Alabama death penalty case, the Supreme Court relied in part on the Restatement

(Third) of Law Governing Lawyers (1998). See Maples v. Thomas, 132 S. Ct. 912,

922-23 (2012) (citing 1 Restatement (Third) of Law Governing Lawyers § 31 cmt.

f (1998)).

       Local Rule 83.1(e) of the United States District Court for the Northern

District of Alabama prohibits the withdrawal of counsel without the court’s

approval and states: “attorneys shall be held at all times to represent the parties for

whom they appear of record . . . until, after formal motion and notice to such

7
  Alabama law does not address what constitutes just cause for a lawyer to voluntarily withdraw
from representation and preserve an entitlement to compensation. The Alabama Supreme Court
declined our invitation to provide guidance.
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parties and to opposing counsel, they are permitted by order of court to withdraw

from such representation.” N.D. Ala. L.R. 83.1(e); see also ABA Model Code of

Professional Responsibility, DR 2-110(A)(1) (1980) (lawyer may not withdraw

without permission when tribunal rules so provide); Restatement (Third) of Law

Governing Lawyers § 31(1) (2000) (“[a] lawyer must comply with applicable law

requiring notice to or permission of a tribunal when terminating a representation”);

Id. § 31 cmt. c (“the lawyer should ordinarily continue to act for the client until the

tribunal has approved withdrawal”; “A lawyer seeking leave of a tribunal to

withdraw should avoid disclosure of confidential client information to the extent

feasible.”).

       Ms. Haynes’ communication to her client that she was withdrawing from

representation “effective immediately” and that “your file has been boxed and is in

the lobby with the receptionist” was a blatant violation of the rules of court and the

laws governing counsel. In failing to timely file a motion to withdraw, she denied

the trial judge the opportunity to exercise his responsibility to determine whether

withdrawal so late in the litigation would prejudice Ms. Haynes’ client or,

alternatively, to extend the deadlines to allow the client to obtain new counsel. In

ceasing representation yet failing to seek permission from the court, the client was

placed in limbo. This effectively left the client stranded at a very vulnerable time

in the litigation. Then, inexplicably, Ms. Haynes made it worse by giving

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opposing counsel a “heads up” advising of her client’s precarious and defenseless

posture.

       In this vulnerable position, opposing counsel presented a Rule 68 offer of

judgment. According to the Supreme Court, application of Rule 68 requires

plaintiffs to “think very hard” about whether continued litigation is worthwhile.

Marek v. Chesny, 473 U.S. 1, 11, 105 S. Ct. 3012, 3017 (1985). This Court has

explained that Rule 68 operates with a two-part approach as follows:

       First, Rule 68 allows a defendant to make a firm, non-negotiable offer
       of judgment. Unlike traditional settlement negotiations, in which a
       plaintiff may seek clarification or make a counteroffer, a plaintiff
       faced with a Rule 68 offer may only accept or refuse. If he accepts,
       the court automatically enters judgment in his favor; if he refuses, the
       case proceeds. Second, the Rule encourages plaintiffs to accept
       reasonable offers through what is referred to as its “cost-shifting”
       provision, which forces a plaintiff who refuses an offer and then
       ultimately recovers less at trial than the offer amount to pay the costs
       incurred from the time of the offer.

Util. Automation 2000, Inc. v. Choctawhatchee Elec. Co-op., Inc., 298 F.3d 1238,

1240-41 (11th Cir. 2002).8

       Ms. Haynes breached her duty to her client in curtailing representation and

then waiting until the offer of judgment was made and accepted to seek approval to

8
  Rule 68 can present particular problems for plaintiffs and their counsel in civil rights and
employment discrimination claims. Marek is demonstrative. The plaintiff, suing under 42
U.S.C. § 1983, rejected an offer of judgment for $100,000 “including costs now accrued and
attorney’s fees.” Id. at 1241 n.3 (quoting Marek, 473 U.S. at 9, 105 S. Ct. 3012). The case went
to trial and plaintiff was awarded $60,000. Plaintiff filed a request for costs and attorney’s fees
totaling around $171,000 ($32,000 for costs and fees incurred prior to the offer and $139,000
incurred after the offer). The parties agreed on the $32,000. However, the defendants opposed
the $139,000, relying on Rule 68’s cost-shifting provision, and the Supreme Court agreed. Id.
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withdraw from the court. It is hard to imagine a more total abandonment of a

client’s cause. Based on counsel’s failure to withdraw and her abandonment of her

client, any request for fees should have been denied.

       C.      The District Court Failed to Apply the Correct Legal Standard

       It is unclear what standard the district court employed in considering

whether Ms. Haynes was entitled to fees. The court expressly said it was adopting

the standard announced by the Fifth Circuit in Augustson v. Linea Area Nacional-

Chile S.A., 76 F.3d 658 (5th Cir. 1996), applying Texas law. 9 See Order at p.14.

Under the rule set forth in Augustson, “an attorney [who], without just cause,

abandons his client before the proceeding for which he was retained has been

conducted to its termination, or if such attorney commits a material breach of his

contract of employment, he thereby forfeits all right to compensation.” Augustson,
76 F.3d at 662 (quotations omitted). Whether “just cause” exists will depend on

the facts of each particular case, and “[g]enerally, just cause exists when the client

has engaged in culpable conduct.” Id. at 663 (citations omitted). 10

       As the Fifth Circuit pointed out, “[t]he objectives of a hearing on cause to

withdraw differ from the objectives of a hearing on attorney’s fees, and because of

9
  The district court adopted the Fifth Circuit standard applying Texas law based on the absence
of Alabama law. See supra n.7.
10
   The Augustson court gave examples of cases from various jurisdictions where just cause was
found. These include “where the client attempts to assert a fraudulent claim; fails to cooperate;
refuses to pay for services; degrades or humiliates the attorney; or retains other counsel with
whom the original attorney cannot work.” Id.
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these differences circumstances can arise that would authorize a trial court to

permit counsel to withdraw but retain no fee.” Id. at 664. “When considering a

motion to withdraw, a trial court is given broad discretion in order to protect the

best interests of the client.” Id. That is similar to the standard employed in this

Circuit: withdrawal should be denied where the client’s rights will be prejudiced or

where the court’s calendar will be disrupted. See Mekdeci, 711 F.2d at 1521-22;

Broughten, 634 F.2d at 882-83. “In such a setting, the court generally focuses on

the presence of circumstances harmful to the attorney-client relationship, and

inquiry into the cause of these circumstances is irrelevant. At a lien hearing,

however, the focus of attention is on the cause of attorney-client problems.”

Augustson, 76 F.3d at 664.

       In Augustson, as here, withdrawing counsel had taken no depositions and

retained no expert witnesses to testify at trial. Id. at 661. The trial judge found

that the clients had either lost faith or never had faith in the lawyer’s ability

sufficient to trust the firm’s judgment. Id. at 662. 11 Nevertheless, the Fifth Circuit

held that, at least where a lawyer could continue without violating ethical

obligations, cause to withdraw under Texas Disciplinary Rule of Professional

11
  Unlike this case, in Augustson, counsel sought and obtained permission from the court to
withdraw, citing Texas Disciplinary Rule of Professional Conduct 1.15(b). See Tex. Disciplinary
R. Prof. Conduct 1.15(b)(4), (6) (allowing withdrawal where “a client insists upon pursuing an
objective that the lawyer considers repugnant or imprudent or with which the lawyer has
fundamental disagreement,” or where “the representation will result in an unreasonable financial
burden on the lawyer or has been rendered unreasonably difficult by the client”).
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Conduct 1.15(b) did not necessarily establish cause to recover compensation. Id. at

664. The Augustson court found that counsel had no justification or cause to

withdraw that would preserve an entitlement to compensation:

         A contrary rule would also encourage attorneys to withdraw from
         “bad” cases on the grounds that the client uncooperatively insists on
         going to trial, allowing the attorney to avoid the risks of representation
         without losing the benefits of an eventual recovery. It is in such “bad”
         cases that a client will have the most trouble finding another attorney,
         and the existence of an attorney’s lien will make the search all the
         more difficult.

Id. 12

         In the instant case, the district court failed to consider the cause of the

attorney-client problems and reached a result inconsistent with Augustson. Instead,

the district court relied almost entirely on the state of the attorney-client

relationship at the time of withdrawal. The court, citing an unpublished decision

from the Seventh Circuit, found there to be “sufficient cause” for an attorney to

terminate the attorney-client relationship because “Lewis no longer trusted or

accepted the professional decisions of Haynes and the Firm.” See Goyal v. Gas

Tech. Institute, 389 F. App’x 539, 544 (7th Cir. 2010) (citing an Illinois state court

holding which provides “an attorney may withdraw from a contingent fee case and

seek reasonable compensation for his services when a client’s actions in rejecting
12
   No modern reported Texas case in a contingency fee case has ever found just cause sufficient
to permit an attorney to withdraw but still be compensated. See David Hricik, Dear Lawyer: If
You Decide It’s Not Economical to Represent Me, You Can Fire Me as Your Contingent Fee
Client, But I Agree I Will Still Owe You a Fee, 64 Mercer L. Rev. 363, 379 (2013).

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his attorney’s professional judgment result in a complete breakdown of the

attorney-client relationship”). 13 Further, the district court found “sufficient

evidence supporting Haynes and the Firm’s entitlement to just compensation for

services rendered,” and then found “no evidence that Haynes or the Firm acted

outside of the professional norms for zealously pursuing Lewis’ interests in the

underlying matter.”

       Other cases cited by the district court are inconsistent with its decision. For

example, the district court cited a Missouri Supreme Court decision, where the

court reversed an award of attorney’s fees with a remand for specific findings. See

Int’l Materials Corp. v. Sun Corp., Inc., 824 S.W.2d 890 (Mo. 1992). There,

examples of the type of client conduct that could justify withdrawal preserving

entitlement to compensation included perjury by the client; a client accusing the

attorney of dishonesty; a client’s refusal to communicate; or a total breakdown in

communication between the attorney and client caused by the client. Id. at 894.

The district court also looked to a Montana case, but there the Montana Supreme
13
   The attorney-client breakdown in Goyal occurred because of the client’s refusal to settle. The
Seventh Circuit found that the attorney’s withdrawal and collection of fees was justified under
Illinois law because the “complete breakdown” in the attorney-client relationship was caused by
the client’s recalcitrance in negotiating the case in the manner the attorney thought best. Id. at
543 (quoting Kannewurf v. Johns, 632 N.E.2d 711, 714 (Ill. App. Ct. 1994)). Moreover, in
Goyal, the retainer agreement provided for counsel’s withdrawal and collection of fees if the
client unreasonably withheld consent to a settlement. Id. at 540-41.
         However, as the district court in this case pointed out, Goyal’s holding is contrary to the
rulings in Augustson and the majority of jurisdictions, where “the failure of the client to accept a
settlement offer does not constitute just cause for a withdrawing attorney to collect fees.”
Augustson, 76 F.3d at 663. Nevertheless, the district court appears to have applied the minority
Illinois standard to this case.
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Court also reversed an award of attorney’s fees, concluding good cause did not

exist for withdrawal. See Bell & Marra, PLLC v. Sullivan, 6 P.3d 965, 971-72

(Mont. 2000) (financial concerns of the attorneys was not good cause to withdraw

justifying compensation).

       Just cause that can preserve entitlement to compensation as defined in the

decisions listed above—and by most other jurisdictions that have considered the

issue—requires egregious, intentional client conduct that frustrates the ability of a

lawyer to complete representation. See, e.g., Faro v. Romani, 641 So. 2d 69 (Fla.

1994) (the existence of grounds for withdrawal does not translate into an attorney’s

right to be paid for work performed unless client’s conduct makes continued

performance impossible or would cause the attorney to violate an ethical rule); 14

Staples v. McKnight, 763 S.W.2d 914 (Tex. App. 1988) (attorney’s withdrawal

because she thought client intended to present perjured testimony not sufficient

justification to warrant compensation where actual falsity of testimony was not

established); Estate of Falco v. Decker, 188 Cal. App. 3d 1004, 1014 (1987)

(“While a personality clash between the parties may provide good reason for

allowing the attorney to withdraw, it is not necessarily a justifiable reason for

purposes of awarding fees.”). If a single email sent by a client questioning the

14
   The district court says that it declined to follow the “more stringent” Florida standard set forth
in Faro. Yet, Faro is cited with approval in the Fifth Circuit’s opinion in Augustson that the
district court purports to adopt. See Augustson, 76 F.3d at 663.
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handling of her case and expressing discontent about repeated delay constitutes just

cause, the standard becomes meaningless. Demanding clients are not unusual. If

just cause can be applied in this manner, it simply becomes a license to walk away

from what a lawyer might think is a bad case.

      The district court appears to have simply determined whether Ms. Haynes

should have been permitted to permissively withdraw. Section 32 of the

Restatement (Third) of the Law Governing Lawyers describes the circumstances

where a lawyer can voluntarily withdraw from representation. The rationale for

lawyer withdrawal rules is that, except in limited circumstances, a lawyer must

persist despite unforeseen difficulties and carry through the representation for its

intended conclusion. Id. § 32 cmt. c. “A lawyer who withdraws, or tries to

withdraw, other than as allowed by this Section is subject to professional discipline

and breaches a duty to the client.” Id. § 32 cmt. a (internal citations omitted).

      The portion of Section 32 pertinent in this case is (3)(h), which provides: “a

lawyer may withdraw from representing a client if . . . the representation has been

rendered unreasonably difficult by the client or by the irreparable breakdown of the

client-lawyer relationship.” Id. § 32(3)(h). Withdrawal under this subsection is

subject to Subsections (4) and (5). Subsection (4) states that “a lawyer may not

withdraw if the harm that withdrawal would cause significantly exceeds the harm

to the lawyer or others in not withdrawing.” Id. § 32(4). Subsection (5) provides

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that “a lawyer must comply with applicable law requiring notice to or permission

of a tribunal when terminating a representation.” Id. § 32(5).

      “Before withdrawing a lawyer must seek to protect the interests of the client

by communicating, if feasible, with the client concerning the basis for withdrawal

and requesting any corrective action that the client might be able to take.” Id. § 32

cmt. h(i) (internal citation omitted). Further, Comment n to Section 32 provides:

      a lawyer may be required to consult with a client when a lawyer is
      considering permissive withdrawal under § 32(3). For example, a
      lawyer may receive an instruction of the client that the lawyer
      considers to render the representation unreasonably difficult (see §
      32(3)(h)) . . . . The lawyer must consult with the client about the
      instruction, if withdrawal can be accomplished only with material
      adverse effect on the client (compare § 32(3)(a)) and if it reasonably
      appears that reconsideration or other action by the client could, within
      a reasonable time, remove the basis for the withdrawal.

Id. § 32 cmt. n.

      “Whether material adverse effect results is a question of fact. The client

might have to expend time and expense searching for another lawyer. The

successor lawyer might have to be paid what in effect are duplicated fees for

becoming familiar with the matter.” Id. § 32 cmt. h(ii). “In considering

permissive withdrawal (Subsection (3)), a lawyer should take into account whether

the tribunal may refuse permission. The tribunal may do so, for example, because

of adverse effect on the court’s docket.” Id. § 32 cmt. d.

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      In reviewing whether Ms. Haynes’ withdrawal would have a material

adverse effect on her client, I turn to the timing of Ms. Haynes’ withdrawal.

Counsel’s withdrawal came at the end of discovery, when the district court had

already warned that no further extensions would be granted. Consider the

predicament facing Ms. Haynes’ client as she sought new counsel. Before

undertaking representation, a lawyer would have to assess whether it would be

possible to complete discovery, find and retain an expert and file an expert report,

deal with the expected dispositive motion, and prepare for trial in the limited time

remaining. Would the trial judge agree to yet another extension of the deadlines?

With time ticking on the offer of judgment, a prospective lawyer would also have

to consider whether it would be possible to give the client informed advice and if

the offer was refused: “Will I be paid for my work?” The record demonstrates that

Ms. Haynes’ withdrawal would have had a material adverse effect on her client,

suggesting withdrawal should not have been permitted.

      The district court failed to apply the rigorous “just cause” standard sufficient

to preserve an entitlement to compensation as described in Augustson and followed

in the majority of jurisdictions. Instead, it seems to have simply determined (on an

after-the-fact basis) whether there was sufficient cause to allow counsel to

permissively withdraw. Even under that relaxed standard, there was no

consideration of the material adverse effect suffered by the client.

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                                        III.

      In sum, judgment should have been entered on April 26, 2012, and the

district court lacked jurisdiction to decide the attorney fee dispute. Moreover, Ms.

Haynes failed to seek permission to withdraw from the district court as required by

the local rules, the Code of Professional Conduct, and decisions of this Court. She

failed to consult with her client before terminating the representation, made no

showing that she considered whether her client would suffer materially adverse

effects by reason of her late termination, and harmed her client by notifying

opposing counsel of her intention to withdraw. The trial judge applied an

uncertain standard and erroneously awarded compensation to a lawyer who

abandoned her client. As a matter of law, there was no justification or cause to

withdraw that afforded an entitlement to compensation. I, therefore, respectfully

dissent.

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