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WHITE CONSOL. INDUS. v. ISLAND KITCHENS

March 21, 1995

WHITE CONSOLIDATED INDUSTRIES, INC., Plaintiff
v.
ISLAND KITCHENS, INC., Defendant



The opinion of the court was delivered by: DANIEL H. HUYETT, 3RD

 HUYETT, J.

 The law firm of Corash & Hollender, P.C. of Scarsdale, New York, and local counsel, Gerber & Koestel of Reading, Pennsylvania ("Petitioners"), have moved the Court for leave to withdraw from representation, in this action, of Defendant Island Kitchens, Inc. The motion is supported by a memorandum of law and the affidavit of Paul Hollender, a partner in Petitioner Corash & Hollender. Petitioners served the motion to withdraw on Plaintiff and Petitioners' client and it has not been contested. For the reasons discussed below, the Court will grant Petitioners' Motion to Withdraw.

 I. BACKGROUND

 In the underlying action, Plaintiff White Consolidated Industries, Inc., a Delaware corporation with principal place of business in Berks County, Pa., has invoked the Court's diversity jurisdiction to sue Island Kitchens, Inc., a New York corporation with principal place of business in Staten Island, New York, for breach of a distributorship agreement. Plaintiff alleges Defendant took delivery of Plaintiff's products but failed to pay for them. Plaintiff seeks damages of the contract price of the items, $ 155,939.00 and $ 11,066.73 in interest.

 Defendant Island Kitchens, Inc. has a single shareholder and officer, Joseph Cappadora, who appears to be a resident of New Jersey. Island Kitchens, through its principal Mr. Cappadora, initially retained Petitioner Corash & Hollender ("the Firm") on December 17, 1993 to assist in the sale of Island Kitchen's assets. Hollender Aff. ("Aff.") at 1. The "General Retainer Agreement" executed between Cappadora and Corash & Hollender provided "in the event the Client requests the Firm to do additional work not presently contemplated by this agreement, the terms of this agreement shall become the contract for legal services for such additional work . . . ." Ex. A to Aff. at 2 ("Ex. A") *fn1" . The Firm subsequently undertook representation of Cappadora and Island Kitchens in this action and several suits being litigated in the state of New York. Aff. at 2. On August 4, 1994, Petitioner Corash and Hollender filed an answer, in this action, asserting counterclaims on behalf of Defendant Island Kitchens.

 Cappadora's initial retainer check bounced. Ex. B. The retainer agreement stated that Cappadora agreed to pay "for all disbursements and expenses reasonably incurred by the Firm . . . as and when billed" and to maintain his account current at all times by "paying the most recent bill within 30 days from the statement date . . . ." Ex. A at 1. Cappadora was late with subsequent payments for services rendered and, by February of 1994, had accumulated an unpaid balance with the Firm of $ 3,955.00. Aff. at 2.

 On February 11, 1994, Cappadora proposed a handwritten modification to the retainer agreement which the Firm accepted. Under the modification, Cappadora agreed to remunerate the Firm on an installment basis by making payments, every three weeks, of three to five hundred dollars. Ex. C. Cappadora subsequently defaulted on his obligations under the modification by making only two payments of $ 500 over the ensuing sixteen week period. Aff. at 3. In response to the Firm's demands for payment, Cappadorra made payments of $ 3,000 and $ 1,000, respectively, in May and June, 1994. Id.

 Cappadora failed to make any additional payments after June, 1994. Id. By August 31, 1994, Cappadora owed the Firm in excess of $ 20,000. During the first week of September, 1994, the Firm made several unsuccessful attempts to contact Mr. Cappadora by telephone. The retainer agreement states:

 
In the event that Client fails to make any payment . . . within thirty (30) days after a bill is rendered (or such request is made), the Firm, upon notice to the Client, may declare this agreement terminated; and client hereby, in advance, authorizes the Firm to cease working on this matter and grants the Firm the authority to withdraw from the case.

 Ex. A at 2. On September 7, 1994, the attorney working on Cappadora's legal matters sent him a demand letter stating:

 
Since you have not returned any of my calls, Paul Hollender has directed me to advise you that, unless we receive a payment in the amount of $ 2,500 by September 13, 1994, the firm will have no other recourse but to make an appropriate application to withdraw as your attorneys in each of the legal actions in which it currently represents you.

 Ex. E at 1. Corash & Hollender sent the letter by certified mail and it was received by Mr. Cappadora. The requested payment, $ 2,500, represented approximately 10% of Cappadora's then outstanding balance. Aff. at 4. Cappadora did not make any additional payments in response to the letter. Id.

 On September 20, 1994, Corash & Hollender served the instant motion on Mr. Cappadora by certified mail. The motion was filed September 22, 1994, without a supporting affidavit or memorandum of law. At a telephone conference conducted September 29, 1994, the Court determined that Petitioner Corash & Hollender lacked status to proceed as it was in violation of Local Civil Rule 13. By Order dated September 30, 1994, the Court ordered Petitioner Corash & Hollender to obtain associate counsel admitted to practice before this Court, as required by Rule 13, and "file a memorandum of law and affidavit setting forth the legal and factual basis for its motion to withdraw." White Consol. Indus., Inc. v. Island Kitchens, Inc., 884 F. Supp. 176 (E.D.Pa. filed 1994).

 Corash and Hollender associated Petitioner Gerber & Koestel as local counsel on behalf of Island Kitchens and filed a memorandum of law and affidavit in support of the motion on October 19, 1994. As of October 18, 1994, the date the supporting documents were served on Mr. Cappadora, Cappadora owed the Firm $ 28,828.03. Aff. at 3; Ex. D.

 In their memorandum, Petitioners state "Defendant Island is no longer providing any information necessary to defend this matter." Pet. Mem. at 2. Petitioners also state that in the time since they filed their motion to withdraw, "the Defendant has effectively ceased all operations having lost all of its assets and retail premises, and Mr. ...


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