Filed: Feb. 28, 2001
Latest Update: Feb. 21, 2020
Summary: ____________________ whether appellees attorney should be allowed to withdraw. discretion of the trial court and will be reversed on appeal R. 1.17(b)(4), because he has failed Lieberman repeatedly had to remind Hutter to bring the lower court is reversed, and the case is remanded for further
[NOT FOR PUBLICATION–NOT TO BE CITED AS PRECEDENT]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 (1 st 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
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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
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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
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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
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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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