Industrial v. Polytop, (1st Cir. 2001)

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[NOT FOR PUBLICATION-NOT TO BE CITED AS PRECEDENT]

United States Court of Appeals

For the First Circuit

No. 00-1766

GEORGE E. LIEBERMAN,

Movant, Appellant,

INDUSTRIAL DISTRIBUTION CORPORATION,

Plaintiff, Appellee,

v.

POLYTOP CORPORATION; GERHARD HUTTER;

WOODROW WILSON; ROBERT HARDING,

Defendants.

No. 00-1827

GEORGE E. LIEBERMAN,

Movant, Appellant,

INDUSTRIAL DISTRIBUTION CORPORATION,

Plaintiff, Appellee,

v.

POLYTOP CORPORATION; GERHARD HUTTER,

Defendants, Appellees,

WOODROW WILSON; ROBERT HARDING,

Defendants.



APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. Ernest C. Torres, U.S. District Judge]

Before

Torruella, Chief Judge,

Campbell, Senior Circuit Judge,

and Stahl, Circuit Judge.

George E. Lieberman and Tillinghast, Licht, Perkins, Smith

& Cohen on brief for appellant.

Gerhard P. Hutter on brief pro se.

February 21, 2001

Per Curiam. The court has determined that oral

argument may be dispensed with in this case. See Fed. R.

App. P. 34(a)(2)(C); 1st Cir. Loc. R. 34(b). After a

thorough review of the record and of the parties'

submissions, we find that we do have jurisdiction over this

interlocutory appeal, and we reverse the lower court's

decision denying appellant George E. Lieberman's

("Lieberman's") motion to withdraw from his representation

of his clients, Industrial Distribution Corporation ("IDC")

and Gerhard Hutter ("Hutter").

This is an appropriate interlocutory appeal under

the collateral order doctrine. See Cohen v. Beneficial

Indus. Loan Corp., 337 U.S. 541, 546 (1949). An order which

does not terminate an action by disposing of all rights of

the parties nevertheless is reviewable if: 1) the order

conclusively resolves an important question 2) which is

entirely separate from the merits and 3) if the matter will

evade adequate review on appeal. Id.; United States v.

Quintana-Aguayo, 235 F.3d 682, 684 (1st Cir. 2000). It is

clear that the order below conclusively resolved an important

question entirely separate from the merits: the question of

whether appellee's attorney should be allowed to withdraw.

Furthermore, we find that the matter will evade adequate

review on appeal. An order requiring an attorney to continue

representing a client in a civil action without compensation

may subject the attorney to irreparable harm and amounts to

an order of specific performance. See Whiting v. Lacara, 187

F.3d 317 (2d Cir. 1999). We may proceed to the merits.

"The grant or denial of an attorney's motion to

withdraw in a civil case is a matter addressed to the

discretion of the trial court and will be reversed on appeal

only when the trial court has abused its discretion." See

Andrews v. Bechtel Power Corp., 780 F.2d 124, 135 (1st Cir.

1985) (quoting Washington v. Sherwin Real Estate, Inc., 694

F.2d 1081, 1087 (7th Cir. 1982)). We conclude that in this

instance, the lower court did abuse its discretion.

Rhode Island District Court Local Rule 4(d)

provides that "[t]he Rules of Professional Conduct of the

Rhode Island Supreme Court shall be the standard of conduct

for all attorneys practicing before this court," and the

supreme court rules in turn provide the grounds upon which

an attorney may seek leave to withdraw. Those rules in part

provide that an attorney may withdraw if:

(4) the client fails substantially to

fulfill an obligation to the lawyer

regarding the lawyer's services and has

been given reasonable warning that the

lawyer will withdraw unless the

obligation is fulfilled;

(5) the representation will result in an

unreasonable financial burden on the

lawyer or has been rendered unreasonably

difficult by the client; or

(6) other good cause for withdrawal

exists.

R.I. S. Ct. R. 1.17(b)(4) - (6). These factors provide

grounds for withdrawal even where withdrawal cannot be

accomplished "without material adverse effect on the

interests of the client." See R.I. S. Ct. R. 1.17(b) ("[A]

lawyer may withdraw from representing a client if withdrawal

can be accomplished without material adverse effect on the

interests of the client, or if . . . (4) the client fails

substantially . . . .") (emphasis added).

Clearly Hutter has "fail[ed] substantially to

fulfill an obligation to [Lieberman] regarding the lawyer's

services," R.I. S. Ct. R. 1.17(b)(4), because he has failed

to pay Lieberman over $80,000 in fees owed to him, in

derogation of their written fee agreement. Before moving to

withdraw, Lieberman also gave him sufficient warning that a

failure to bring his account up to date would result in his

withdrawal from the case. Though only three weeks passed

between the time the first bill became past due and the time

Lieberman moved to withdraw, three additional weeks passed

before the district court heard and denied the motion. In

that interim, Hutter's private attorney revealed that Hutter

had no money to pay Lieberman, and Hutter indicated he had

no reasonable prospect of being able to pay him unless the

litigation was successful. Also, in previous months

Lieberman repeatedly had to remind Hutter to bring the

retainer back up to its required balance, so Lieberman's

quick action once the first payment became past due seems

reasonable.

Thus, withdrawal under the circumstances certainly

would have been consistent with the Local Rules. Further,

Lieberman faces substantial additional financial exposure

should he be required to go forward. Several pretrial

matters have yet to be resolved, and the trial itself will

last more than a week. Counsel already has expenses that

have not been reimbursed, and there may well be additional

substantial expenses that will need to be incurred at trial.

It simply expects too much of counsel to expend the

additional energy necessary to go to trial, and to front the

necessary expenses, without any real assurance that he will

be paid for any of it, especially where he already is owed

a substantial sum and the client has violated the written fee

agreement. Further, if counsel does not expend the necessary

effort and does not front the trial expenses, he very well

could expose himself to civil liability to his client. We

refuse to place counsel in such a position. Under these

circumstances, the lower court abused its discretion in

refusing to let Lieberman withdraw.

Furthermore, Hutter was less than forthcoming with

Lieberman when he signed the fee agreement. Apparently

Hutter knew from the beginning that he would be unable to pay

his legal fees if he were not successful in the litigation.

It appears that he and his wife expected that as a practical

matter, Lieberman's representation of them at some point

would evolve into a contingency arrangement, whereby

Lieberman was to be paid (if at all) out of the proceeds of

the litigation. But that was not the arrangement to which

Lieberman agreed. Under these circumstances, fairness

dictates that Hutter, not Lieberman, suffer the consequences

of his own failure to honor his agreement.

Further, we do not think the decision here should

hinge entirely on the assertion that the case was nearly

ready for trial. Despite the court's apparent attempts to

move this case to trial quickly, that goal does not seem to

have been realistic. At least one discovery dispute was

outstanding; that dispute had been referred to a magistrate

judge, who had not set the matter for hearing until

approximately two weeks after the trial judge had planned to

try the case. A partial summary judgment motion was not

fully briefed until approximately two weeks before the trial

date, and that, too, had been referred to the magistrate

judge. Moreover, the opposing party apparently is not

pushing to get the matter to trial, as it agreed to a stay

of all proceedings pending this appeal. Though certainly a

district court should consider the stage of the litigation

when deciding an attorney's motion to withdraw, here we find

that the timing issues should not have been determinative.

Appellant's motion to strike is denied. Appellee's

motion to file reply brief is allowed. The decision of the

lower court is reversed, and the case is remanded for further

proceedings consistent with this order.

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