United States District Court, E.D. Pennsylvania
Darnell Jones, II J.
Michelle Rozovics and Lance Rogers (or “Movants”
for purposes of this Memorandum) move to withdraw as counsel
for Defendants in this case pursuant to Local Rule
5.1(c). For the reasons set forth below, the
motion is DENIED. Additionally, based on counsel's prior
representations that the parties have reached a settlement,
this case is dismissed pursuant to Local Rule
to the filing of this motion to withdraw, counsel had
notified this Court that “the parties reached a
settlement for all claims and counterclaims” during a
June 20, 2016 settlement conference with the Honorable Lynne
A. Sitarski, United States Magistrate Judge. ECF No. 89. This
Court was also advised that counsel for Defendants (i.e.,
Movants) was in the process of drafting the formal agreement,
which they expected to be finalized within 14 days.
Id. The following day, this Court entered an order
placing this matter in suspense pending formalization of the
settlement agreement. ECF No. 90. Thereafter, on three
separate occasions, the parties filed joint status reports in
which they continued to affirm the existence of a settlement
agreement, but requested an extension of time to allow
Defendants the opportunity to evaluate the implications of
that agreement in light of certain undisclosed criminal
allegations raised during the settlement conference. ECF Nos.
92, 94, and 96. This Court generously granted the requested
extensions. ECF Nos. 93, 95, and 98. In this Court's last
order, dated September 8, 2016, the parties were directed to
file a joint status report no later than November 7, 2016.
ECF No. 98. The parties have failed to comply with that
order. On November 21, 2016, Movants filed the present motion
to withdraw in which they again confirmed that the parties
“had reached a settlement of all claims and
counterclaims during the June 20, 2016 Settlement Conference,
” but did not indicate whether the settlement agreement
had been formalized. Movs.' Br. 3, ECF No. 99. Plaintiffs
have not opposed the motion.
upon notification that the parties have settled, a district
court enters an order dismissing the action pursuant to Local
Rule 41.1(b), even if the settlement agreement has not yet
been executed or reduced to writing. See, e.g., Mood v.
Encore Kitchen & Bath Distribs., Inc., No.
10-83, 2011 U.S. Dist. LEXIS 5375, at *4 (E.D. Pa. Jan. 19,
2011) (dismissal entered before agreement was formalized);
McCune v. First Judicial Dist. of PA Prob.
Dep't, 99 F.Supp.2d 565 (E.D. Pa. 2000) (dismissal
entered even though agreement had not been executed).
present case, this Court did not immediately enter a Rule
41.1(b) dismissal upon notification of the settlement, and
instead placed the matter in suspense, to allow the parties
time to formalize the settlement agreement and give
Defendants the opportunity to assuage their concerns over the
criminal allegations raised during the settlement conference.
The time has now come to bring this matter to its natural
conclusion and enter an order dismissing this case pursuant
to Local Rule 41.1(b). Consequently, the motion to withdraw
is most instructive in this situation because there, as here,
the court denied withdrawal in light of the fact that the
parties had settled and the case was ripe for dismissal under
Local Rule 41.1(b). 99 F.Supp.2d at 566. In that case, the
parties had orally agreed to settle after a mediation
conference, but the plaintiff declined to sign the documents
and ceased communications with her attorney. When the court
informed the parties that the case was set for trial, the
plaintiff resurfaced and reaffirmed her commitment to settle.
Upon receiving notification of the settlement, the court
dismissed the case as prescribed by Local Rule 41.1(b). The
plaintiff subsequently moved to vacate the dismissal order
and to reinstate a prior motion by counsel to withdraw.
Id. at 565.
court denied the motion to vacate, stating: “It is the
law of this Circuit that ‘an agreement to settle a
lawsuit, voluntarily entered into is binding upon the
parties, whether or not made in the presence of the Court,
and even in the absence of a writing.'”
Id. at 566 (quoting Green v. John H. Lewis &
Co., 436 F.2d 389, 390 (3d Cir.1970)). Counsel's
representations that the parties had settled were enough to
trigger dismissal even though the settlement agreement had
not yet been executed. Likewise, the court denied the motion
to withdraw, finding that “the relationship between
Plaintiff and her counsel does not appear to be so strained
that Counsel could not continue to represent the Plaintiff
for the purpose of executing the settlement that has already
been reached.” Id. The court noted that
“withdrawal of counsel at this point will simply delay
the action further to the prejudice of the [opposing
circumstances in the present case call for the same course of
action as in McCune. Because this case is ripe for a
Local Rule 41.1(b) dismissal, Movants will not be
significantly burdened by continuing their representation
through the execution of the settlement agreement or the
completion of any subsequent proceedings arising out of the
Local Rule 41.1(b) dismissal. By contrast, this Court's
ability to administer this case speedily and efficiently
would be significantly hampered by withdrawal.
Third Circuit has held that counsel “is entitled”
to withdraw once their appearance “serves no meaningful
purpose, ” otherwise district courts have wide
discretion to consider a variety of interests in deciding
motions to withdraw on a case-by-case basis. Ohntrup v.
Makina Ve Kimya Endustrisi Kurumu, 760 F.3d 290, 295 (3d
Cir. 2014). In assessing whether counsel's appearance no
longer serves a meaningful purpose, courts should balance
“the burden imposed on the potentially withdrawing
counsel if the status quo is maintained, the stage of the
proceedings, and prejudice to other parties.”
Buschmeier v. G&G Investments, Inc., 222
F.App'x 160, 164 (3d Cir. 2007); see also Ohntrup v.
Firearms Ctr., Inc., 802 F.2d 676, 680 (3d Cir. 1986)
(in denying withdrawal, “the district court fairly
balanced [moving counsel's] concerns with the court's
need for effective communication and efficient
administration” at the tail end of the proceedings).
Movants seek to withdraw for three reasons. First, they claim
a conflict of interest has arisen between them and their
clients. Defendants' former counsel has sued both Movants
and Defendants in state court for unpaid legal fees relating
to this case. Movants anticipate needing to file a
counter-claim against Defendants in the state court
proceedings, potentially putting Movants in an adverse
position vis-à-vis their clients. Second, Defendants
have ceased all communications with Movants. And third,
Defendants have failed to pay Movants' outstanding
invoices for legal fees. Movs.' Br. 4-5. While all these
reasons may be valid grounds for granting leave to withdraw,
Movants have cited no case law in support of their arguments,
much less any law that mandates withdrawal. This
Court's own research revealed cases in which motions to
withdraw were denied under substantially similar
circumstances. See, e.g., In re DVI, Inc. Sec.
Litig., No. CIV.A. 03-5336, 2014 WL 5430998, at *2 (E.D.
Pa. Oct. 24, 2014) (withdrawal denied, even though client
owed substantial amounts of legal fees, because filings were
still pending and the court's ability to bring the case
to resolution efficiently would be affected);
Alzheimer's Inst. of Am., Inc. v. Avid
Radiopharmaceuticals, No. 10-6908, 2011 U.S. Dist. LEXIS
140345, at *18 (E.D. Pa. Dec. 7, 2011) (the Local Rules and
Pennsylvania's Rules of Professional Conduct permit the
court to order counsel to remain in the case, despite
apparent conflict, to avoid further delays); Stevenson v.
Rosemont Coll. of the Holy Child Jesus, No. 08-cv-1833,
2008 U.S. Dist. LEXIS 103554, at *4 n.7 (E.D. Pa. Dec. 23,
2008) (“it would be harmful to the administration of
justice to allow counsel to withdraw with dispositive motions
pending, ” even though counsel had lost all contact
with client). Furthermore, given Movants' commitment to
ensure the settlement agreement is formalized, their
appearance continues to serve a meaningful purpose until such
time as the parties execute that agreement or any subsequent
proceedings arising under Local Rule 41.1(b) are completed.
Court is conscious of the practical problems Movants may face
in continuing their representation but, as in
McCune, there is no indication that the relationship
with their clients is so strained that they could not remain
on this case for the limited purpose of executing the
settlement agreement or completing any subsequent proceedings
arising out of the Local Rule 41.1(b) dismissal. The parties
will not be prejudiced by this decision because, even if the
agreement is never executed or even reduced to writing, it
still provides a basis for seeking relief outside the
contours of this litigation. See Good v. Pennsylvania, R.
Co., 384 F.2d 989, 990 (3d Cir. 1967) (it is a basic
principle of contract law that a settlement agreement duly
authorized by counsel is “valid and binding despite the
absence of any writing or formality”).
the motion to withdraw is denied, and this case is dismissed
with prejudice and without costs pursuant to Local Rule
41.1(b). Movants must continue their representation of
Defendants in this case through the completion of any
subsequent proceedings arising under Local Rule 41.1(b),
unless and ...