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Board of Trustees of Sign v. PS Services Co., LLC

United States District Court, N.D. California, San Francisco Division

April 2, 2018

PS SERVICES CO., LLC, Defendant.


          LAUREL BEELER United States Magistrate Judge


         Nicholas Gregoratos moves to withdraw as counsel for the defendant PS Services Co. LLC.[1]Peter Steele, the managing member of PS Services, agreed to Mr. Gregoratos's request to withdraw.[2] The plaintiffs do not oppose Mr. Gregoratos's motion.[3]

         The court can decide the matter without oral argument and vacates the April 29, 2018 hearing. Civil L.R. 7-1(b). The court giants the unopposed motion and - for the reasons discussed below - directs Mr. Gregoratos to accept service on behalf of PS Services until substitute counsel appears.


         Under Civil Local Rule 1 l-5(a), "[c]ounsel may not withdraw from an action until relieved by order of Convert after written notice has been given reasonably in advance to the client and to all other parties who have appeared in the case." Until the client obtains other representation, motions to withdraw as counsel may be granted on the condition that current counsel continue to serve on the client all papers from the court and from the opposing parties. Civil L.R. 1 l-5(b).

         Withdrawal is governed by the California Rules of Professional Conduct. Nehad v. Mukasey, 535 F.3d 962, 970 (9th Cir. 2008) (applying California Rules of Professional Conduct to attorney withdrawal); see also Dieter v. Regents of Univ. of Cal, 963 F.Supp. 908, 910 (E.D. Cal. 1997). Rule 3-700(C) provides that an attorney may withdraw if the client "knowingly and freely assents to temination of the employment." Cal. R. Prof 1 Conduct 3-700 (C)(5).

         In compliance with California Rule of Professional Conduct 3-700(A)(2), counsel may not "withdraw from employment until [counsel] has taken reasonable steps to avoid reasonably foreseeable prejudice to the rights of the client." These steps include: (1) giving due notice to the client; (2) allowing time for employment of other counsel, pursuant to Rule 3-700(D); and (3) complying with applicable laws and rules. Cal. R. Prof 1 Conduct 3-700(A)(2); El Hage v. U.S. Sec. Assocs., Inc., No. 06-CV-7828-TEH, 2007 WL 4328809, at *1 (N.D. Cal. Dec. 10, 2007).

         The decision to permit counsel to withdraw is within the sound discretion of the trial court. United States v. Carter, 560 F.3d 1107, 1113 (9th Cir. 2009). Courts consider several factors when deciding a motion for withdrawal, including: "(1) the reasons counsel seeks to withdraw; (2) the possible prejudice that withdrawal may cause to other litigants; (3) the harm that withdrawal might cause to the administration of justice; and (4) the extent to which withdrawal will delay resolution of the case." Deal v. Countrywide Home Loans, No. 09-CV-01643-SBA, 2010 WL 3702459, at *2 (N.D. Cal. Sept. 15, 2010).


         1. Good Cause

         The parties settled their case in a written settlement agreement and stipulated to entity of judgment against PS Services in the form of a Judgment by Consent.[4] Mr. Gregoratos advised Mr. Steele, the managing partner of PS Services, dining this process. More specifically, they had an oral agreement that Mr. Gregoratos would review and advise Mr. Steele, at no charge, regarding the Judgment by Consent, Settlement Agreement, and Stipulation for Entity of Judgment filed on August 17, 2017.[5] As part of that advisement, Mr. Gregoratos told Mr. Steele that if he failed to make the payments required by the Stipulation, the plaintiffs were entitled to collect the entire judgment.[6] He also told Mr. Steele that he did not handle civil and business matters, and if the case needed to be litigated in any fashion, Mr. Gregoratos would not be able to represent him.[7] It was with that understanding that Mr. Gregoratos agreed to assist Mr. Steele at no cost in negotiating and reviewing the Settlement Agreement.[8]

         In February, the plaintiff moved for a writ of execution because PS Services did not make its payments.[9] The court issued the writ of execution.[10] On March 13, 2018, the plaintiffs served Mr. Steele and PS Services with a notice of deposition for Mr. Steele and a request for production of documents.[11] On March 15, 2018, Messieurs Gregoratos and Steele agreed that Mr. Steele would need to find new counsel and that Mr. Gregoratos could not represent him in the deposition or otherwise in the case.[12] Mr. Gregoratos advised Mr. Steele that he needed to find new counsel and gave him two referrals.[13] PS Services has not retained new counsel, and Mr. Steele "wishes to proceed pro se, as a ...

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