United States of America for the Use and Benefit of Just Construction, Inc. v. K.O.O. Construction, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA FOR Case No.: 19cv1753 JM (KSC) THE USE AND BENEFIT OF JUST 12 CONSTRUCTION, INC., 13 Plaintiff, ORDER GRANTING PLAINTIFF’S 14 v. COUNSEL’S MOTION TO 15 WITHDRAW K.O.O. CONSTRUCTION, INC.; and 16 GREAT AMERICAN INSURANCE COMPANY, 17 Defendants, 18 19 AND RELATED COUNTERCLAIMS. 20 21 22 On April 19, 2021, counsel for Just Construction Inc., (“JCI”) – Louis J. Blum and 23 Kelly A. Floyd of Finch, Thornton & Baird, LLP (“FTB”) – filed the instant motion to 24 withdraw as counsel of record for JCI “based on JCI’s failure to pay substantial amounts 25 owed to FTB” and “material breach of the services agreement with FTB.” (Doc. No. 60.) 26 By declaration, counsel avers that Mr. Romero was repeatedly advised that FTB would file 27 the instant motion to withdraw if payment issues were not resolved. (Doc. No. 60-1.) 28 Attached to the motion is a proof of service signed by an FTB employee stating that a copy 1 of the motion and its supporting declaration was mailed to Mr. Romero via Federal Express 2 on April 19, 2021. On April 26, 2021, with the court’s permission, Defendants filed a 3 statement of non-opposition that was conditional insofar as FTB is requesting a stay or 4 continuance of the trial date. (Doc. No. 69.) On May 3, 2021, the court held a hearing on 5 the motion during which Mr. Blum and Mr. Floyd appeared. Mr. Romero and counsel for 6 Defendants also appeared. 7 An attorney may not withdraw as counsel except by leave of court, permitting the 8 party to either appear on the party’s own behalf or substitute other counsel in as counsel of 9 record. CivLR 83.3(f)(1). The California Rules of Professional Conduct provide that 10 counsel may withdraw from representing a client where the client “breaches a material 11 term of an agreement with, or obligation, to the lawyer relating to the representation, and 12 the lawyer has given the client a reasonable warning after the breach that the lawyer will 13 withdraw unless the client fulfills the agreement or performs the obligation.” Cal. R. Prof. 14 Conduct, Rule 1.16(b). Additionally, “[a] lawyer shall not terminate a representation until 15 the lawyer has taken reasonable steps to avoid reasonably foreseeable prejudice to the 16 rights of the client, such as giving the client sufficient notice to permit the client to retain 17 other counsel.” Cal. R. Prof. Conduct, Rule 1.16(d). “In ruling on a motion to withdraw 18 as counsel, courts consider: (1) the reasons why withdrawal is sought; (2) the prejudice 19 withdrawal may cause to other litigants; (3) the harm withdrawal might cause to the 20 administration of justice; [and] (4) the degree to which withdrawal will delay the resolution 21 of the case.” See Golden Eye Media USA, Inc. v. Trolley Bags UK Ltd, Case No.: 3:18-cv- 22 02109-BEN-LL, 2021 WL 927359, at *3 (S.D. Cal. Mar. 11, 2021). 23 “Only natural persons representing their individual interests in propria persona may 24 appear in court without representation by an attorney permitted to practice pursuant to Civil 25 Local Rule 83.3”. CivLR 83.3(j). “All other parties, including corporations, partnerships 26 and other legal entities, may appear in court only through an attorney permitted to practice 27 pursuant to Civil Local Rule 83.3.” Id.; see also Laskowitz v. Shellenberger, 107 F. Supp. 28 397, 398 (S.D. Cal. 1952) (“Since a corporation cannot practice law, and can only act 1 ||through the agency of natural persons, it follows that it can appear in court on its own 2 || behalf only through a licensed attorney.”). An unrepresented entity is subject to default. 3 || See United States v. High Country Broadcasting Co., Inc., 3 F.3d 1244 (9th Cir. 1993). 4 Based on the papers filed by counsel for both parties, as well as the evidence taken 5 || and representations from counsel at the hearing, the court finds that FTB has continued to 6 || represent JCI without payment for an extended period of time. Moreover, no realistic plan 7 || for payment from JCI has been advanced to alleviate the financial hardship on FTB. FTB 8 advised the court it arranged for new counsel to substitute in for JCI provided a retainer 9 security be paid (or pledged) by JCI. Notwithstanding that the motion is unopposed, 10 || KOO has advised the court that its non-opposition is conditioned on the trial being reset in 11 |} August of 2021, which comports with the court’s trial calendar. KOO’s non-opposition, 12 well as the lingering COVID-19 symptoms of Mr. Romero at this juncture, weigh in 13 || favor of continuing the June 14, 2021 trial to a later date. 14 Accordingly, Plaintiff’s counsel’s motion to withdraw as counsel of record for JCI 15 || (Doc. No. 59) is GRANTED. The Clerk of Court SHALL update the docket to reflect the 16 || withdrawal of Louis J. Blum and Kelly A. Floyd, of Finch of Thornton & Baird, as counsel 17 ||of record for JCI. The May 21, 2021 pretrial conference date and the June 14, 2021 trial 18 || date, as well as related pre-trial dates and requirements, are VACATED. Mr. Blum and 19 Floyd SHALL immediately serve JCI with a copy of this order and, thereafter, file a 20 ||proof of service to confirm the same. Additionally, Mr. Romero and any other 21 ||representative from JCI, along with Mr. Blum and/or Mr. Floyd, SHALL appear on 22 ||Monday, May 24, 2021 at 10:00 a.m. in Courtroom 5D for a status conference in order to 23 || advise the court of any developments in securing new counsel, set a deadline to obtain new 24 ||counsel, and potentially set a new trial date in August of 2021. 25 IT IS SO ORDERED. 26 || Dated: May 3, 2021 He “af Dp 07 on. Jeffrey /I. Miller 3g nited States District Judge