Opinion
98-CV-0685E(M)
November 17, 2000
James P. Davis, Esq., Attorney for Plaintiff.
Patrick J. Berrigan, Esq., Attorney for Defendant.
MEMORANDUM and ORDER
Joe Welch, through his attorney James P. Davis, Esq., filed a Complaint November 2, 1998 against his former employer, the Niagara Falls Gazette ("the Gazette"), alleging that his employment had been unlawfully terminated because of his race and in retaliation for his filing an earlier charge of discrimination with the EEOC, both motivations being in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2 et seq. Welch requested damages in the amount of $275,000 on each of the above causes of action. The Gazette filed an answer February 5, 1999. Discovery ended January 7, 2000 and no dispositive motions have been filed. On February 16, 2000, the Court set October 10, 2000 as the date for trial to commence. On September 28, 2000, Davis called the undersigned stating that he would be filing a motion to withdraw as counsel because he was having difficulty getting Welch to either accept a settlement in the amount of $10,000 or pay the $15,000 Davis stated he would need to take the case to trial. Davis, on October 6, filed his motion to withdraw and an affirmation in support thereof. In his affirmation in support of his motion to withdraw, Davis states that he has informed Welch that there are only two ways to dispose of the case — either settle or go to trial. Davis states that he considers the $10,000 settlement offer to be reasonable — in part due to the "Plaintiff's inability to fund a full blown trial and to defray miscellaneous costs and other trial related costs" — yet Welch refuses to accept it. Aff. in Supp. of Mot. to Withdraw at 2. Davis further states that the "amount offered approximately two months ago was far, far less than the present $10,000.00 now on the table." Ibid. Davis asserts a second basis for withdrawal in that Welch refuses to cooperate with him in preparing for trial. Davis states that Welch "does not return telephone calls, is virtually impossible to reach, and he does not respond to letters, neither by regular nor certified mail." Ibid.
A hearing on the motion to withdraw was set for October 13. At the October 13 hearing, Davis and Welch appeared and gave diametrically opposed recitations of the background underlying Davis's motion to withdraw. The following facts are gleaned from the October 13 hearing. The statements were made in open court, although not under oath. According to Davis when he took the case Welch paid him $1,500 for which Davis agreed to represent him up until settlement — i.e., he agreed to represent Welch only until the time of trial. Davis asserts that he told Welch that, if the case had to go to trial, they would at such time agree on the additional amount required to try the case. Davis states that he had one price to cover the case up until settlement and another price to go to trial. Davis stated that payment was to be by the hour and that he never takes contingency fee cases without a written retainer. No written retainer has been adduced. Davis states that Welch has been uncooperative in that he has refused to produce documents, such as his tax returns, requested during his deposition. Davis stated, in contradiction to his affirmation in support of his motion to withdraw, that the $10,000 settlement offer was first made during Welch's deposition and that he also concluded during that deposition that Welch would have difficulty carrying his burden of proof. Davis states that Welch would keep the entire $10,000 if he accepted the settlement and, if Welch did not, that he will turn over his case file to a new attorney as soon as one was retained by Welch. Davis concludes by stating that, because Welch cannot afford to go to trial, he will not represent him.
In his Affirmation in Support of his Motion to Withdraw, Davis stated that the "amount offered approximately two months ago was far, far less than the present $10,000.00 now on the table." Aff. in Sup. of Mot. to Withdraw at 2.
Welch states that he gave Davis $3,900 or $4,000 when he retained Davis, which amount he understood to be the total amount for a full representation. He states Davis did not state that additional money would be required to go to trial until his deposition, at which time he asserts Davis stated he would need an additional $12,000 to try the case. Welch further stated that the $3,900 or $4,000 was to cover expenses and that Davis was going to keep one-third of any recovery as a contingency fee. Welch states that Davis has neither conducted any discovery nor interviewed any of his witnesses. Welch does not want to settle and states that, not only did Davis refuse to let him speak with Magistrate Judge Maxwell during a settlement conference, but that Davis told Judge Maxwell that he had full authority to settle, when in fact he did not. Welch states that Davis told him — in contradiction to Davis's present statement — that $7,000 in legal fees would be deducted from the settlement offer were he to accept it.
Pursuant to Rule 83.2(b) of the Local Rules of Civil Procedure, "[a]n attorney who has appeared as an attorney of record for a party may withdraw by permission of the Court for good cause shown***." An attorney's "withdrawal over a client's objections is not often litigated and as a result there is little written on the subject"; however it is "generally said of the attorney-client relationship that when an attorney is retained to conduct a legal proceeding, he enters into an entire contract to conduct the proceeding to a conclusion and he may not abandon his relation without reasonable or justifiable cause." Malarkey v. Texaco, Inc., No. 81 Civ. 5224 (CSH), 1989 WL 88709, at *1 (S.D.N.Y. July 31, 1989). In the "absence of a compelling justification, the Court will not relieve an attorney of his obligations." Foster v. City of New York, No. 96 Civ. 9271 (PKL), 2000 WL 145927, at *4 (S.D.N.Y Feb. 7, 2000). An attorney will be allowed to withdraw from representation if he genuinely lacks faith in the merits of the case, such that he cannot present his client's case to the court in good faith because an attorney could be sanctioned for litigating a meritless claim. Vaughn v. AT T Corp., No. 96 CIV 0989 (LAK), 96 CIV 6060 (LAK), 1998 WL 760230, at *1 (S.D.N.Y. Oct. 30, 1998); Moolik v. Natwest Bank, N.A., No. 95 CIV 2226 (CSH), 1996 WL 411691, at *3-4 (S.D.N.Y. July 23, 1996); Foster, at *4 Davis has stated that he is perfectly willing to take this case to trial — if Welch pays him an additional $12,000 to $15,000 — and therefore he cannot be allowed to withdraw on the basis that he lacks faith in the merits of his client's case inasmuch as he obviously does not. The reasons behind Davis's motion to withdraw are that Welch (1) will not accept what Davis considers to be a reasonable settlement offer, (2) is being uncooperative and (3) cannot fund a trial.
Internal citations and quotations omitted.
Davis asserts that his motion to withdraw as counsel for Welch should be granted because Welch refuses to accept a settlement of $10,000 — an amount which Davis considers to be reasonable. However, under New York law, a client's refusal to accept a settlement offer is not good cause for an attorney to withdraw. The client decides whether or not to accept a settlement offer, and this decision is binding on his attorney even if it is against the attorney's advice. Marrero v. Christiano, 575 F. Supp. 837, 839 (S.D.N.Y 1983); Vaughn, at *1. An attorney may not withdraw simply because he later comes to believe that his client's case is weaker than his evaluation when he first took the case; the "possibility that a client's case appears less meritorious during the litigation is a risk that an attorney takes when he agrees to represent the client." Vaughn, at *1. Even where there is a "difference of opinion between counsel and a plaintiff on the merits of the claim" or where counsel believes that "the amount of potential recovery does not warrant the effort of a trial *** [,] the obligation undertaken by counsel in accepting a retainer might require counsel to proceed to trial especially when, as here, counsel wishes to withdraw before trial." Cohen v. Tzimas, 515 N.Y.S.2d 173, 174 (Sup.Ct. N.Y Co. 1987). Davis's motion to withdraw on the basis that Welch refuses to accept the settlement will therefore be denied.
Davis further complains that Welch refuses to follow his instructions. "A client need not follow all of his lawyer's advice. A client may choose instead to ignore the advice and suffer the consequences." Blackmun v. Kaufman, No. 88 Civ. 796 (PNL), 1991 WE 156237, at *1 (S.D.N.Y Aug. 7, 1991). A client's retention of an attorney is not necessarily an agreement by the client to follow the attorney's advice in every instance, nor is the agreement by the attorney to represent the client conditioned on the client's acceptance of all of the attorney's recommendations. Ibid. Insofar as Davis argues that Welch has been uncooperative in producing documents requested during his deposition — specifically his tax returns — and in failing to respond to Davis's communications, the Court notes that this is not enough of a basis to withdraw. Charles Weiner Corp. v. D. Jack Davis Corp., 448 N.Y.S.2d 998, 999 (N.Y.C. Civ. Ct. 1982) (leave to withdraw on above grounds denied); Whiting v. Lacara, 187 F.3d 317, 321 (2d Cir. 1999) (leave to withdraw based on client's failure to cooperate denied where there was no evidence in the record that the client was uncooperative other than statements of the attorney). Davis's motion to withdraw based on Welch's alleged lack of cooperation will therefore be held in abeyance. Should it become evident that Welch and Davis did in fact agree to representation only until the time of settlement — the Court will then address such issue during the evidentiary hearing.
Davis has stated that, because Welch refuses to accept a settlement, he should be allowed to withdraw because Welch is unable to fund a trial. This appears to be the motivating reason underlying Davis's motion to withdraw, as it is not unusual for a client to reject a settlement. Davis and Welch differ sharply on their fee agreement — even on the amount that Welch has already paid, although it is apparently somewhere between $1,500 and $4,000. Insofar as Davis, for some unknown reason, failed to reduce his fee agreement with Welch to writing, the undersigned cannot grant the motion to withdraw on the basis that Welch is unable to fund a trial because there is no proof that Welch agreed to do so in the first place. Accordingly an evidentiary hearing will be conducted to determine the nature of the fee agreement between Davis and his client and the amount paid by Welch to date. Charles Weiner at 265 (requiring detailed account of fees received where attorney sought to withdraw for nonpayment of bills); Whiting at 321 (leave to withdraw based on the non-payment of fees denied on ground that facts were not alleged with sufficient particularity). Davis's motion to withdraw based on Welch's inability to fund a trial will therefore be denied.
Should it become evident during the evidentiary hearing that Welch and Davis did in fact agree to representation only until the time of settlement, the Court will then address such issue.
District courts have discretion to deny an attorney's motion to withdraw and such decisions are given considerable deference. Whiting at 320. The court has a substantial interest in preventing an attorney from withdrawing on the eve of trial. Id. at 323. A court rarely orders an attorney of record to continue to represent a client over his desire to withdraw — in effect requiring specific performance by the attorney — although such does occur. Goldman v. Pyramid Communications, Inc., 362 F. Supp. 694, (S.D.N.Y 1973); Malarkey at *2-3. When a court denies an attorney leave to withdraw it is usually because the client's rights will be prejudiced by the delay necessitated in obtaining replacement counsel or because the court's trial calendar will be adversely affected. Ibid.; Rinder v. Cannon Mills, Inc., 486 N.Y.S.2d 858, 859 (Sup.Ct. Rockland Co. 1985); Whiting at 320-321. Here, by filing his motion for leave to withdraw October 6 — four days before trial was scheduled to commence — Davis has already adversely affected this Court's trial calendar; at this point granting his motion to withdraw will only prolong the delay in trial already caused. The main issue to be considered is therefore whether allowing Davis to withdraw will prejudice the rights of his client, Welch. Although Welch understandably stated that he would like a new attorney during the hearing on Davis's motion to withdraw he has not been successful in obtaining one to date. Insofar as a new attorney would have nothing to work with other than the complaint, the answer and the deposition of Welch were he or she to take over this case, it appears highly unlikely that Welch will be able to retain substitute counsel for the sole purpose of trying this case. In light of the foregoing, equity clearly militates in favor of requiring Davis to take this case to trial even though he desires to withdraw.
Welch's prospects for retaining a new attorney do not appear hopeful as no dispositive motions have been filed in this case and, as stated by Welch during the October 13 hearing — and not contradicted by Davis, Davis has neither conducted any formal discovery nor even interviewed any of the witnesses named by Welch.
One further issue that must be addressed is the evidentiary hearing to determine the fee agreement between Davis and Welch and the amount paid to date. At such hearing Welch and Davis are instructed to bring copies of all relevant correspondence between themselves and copies of any records relating to the payment of fees such as endorsed checks or bank deposits. (Davis should bring copies of any written retainer agreements he has entered into with past clients wherein he agreed to representation only up until settlement and copies of his time sheets inasmuch as he stated he took this case on an hourly basis at the October 13 hearing.) Welch should also bring any information regarding his efforts to obtain new counsel inasmuch as, should he be able to find a new attorney, this matter will be much simplified.
Accordingly it is hereby ORDERED that Davis's motion for leave to withdraw is denied without prejudice, that an evidentiary hearing shall be scheduled and conducted to determine the fee structure entered into between Davis and Welch and that, thereafter and on a date to be fixed by the undersigned, the parties shall appear to set a new date for trial.