United States District Court, D. Minnesota
Anthony E. Patterson, ANTHONY E. PATTERSON PC, and Matthew L.
for plaintiff and counter defendant.
Smith, BERGER KAHN, Corte Madera, for defendant/counter
MEMORANDUM OPINION AND ORDER ON REPORT AND
RECOMMENDATION OF MAGISTRATE JUDGE
R. TUNHEIM Chief Judge United States District Court.
E. Patterson and Matthew L. Fling (“Counsel”) are
counsel of record for Plaintiff Jalin Realty Capital
Advisors, LLC, and Counter Defendant Rhythm Stone Media Group
LLC (collectively “Jalin”). On July 28, 2017,
Counsel moved to withdraw without substitution. (Mot. to
Withdraw as Counsel R., July 28, 2017, Docket No. 160.)
Defendant/Counter Claimant Hartford Casualty Insurance
Company (“Hartford Insurance”) responded that it
opposed withdrawal “only if such withdrawal would
interfere with moving ahead with Hartford's pending fee
motion.” (Resp. to Mot. to Withdraw at 2, Aug. 1, 2017,
Docket No. 166.)
briefing and a hearing, United States Magistrate Judge Leo I.
Brisbois issued a Report and Recommendation
(“R&R”) that the Court deny Counsel's
motion, finding that Counsel failed to meet their burden to
establish good cause to withdraw without substitution.
(R&R, Sept. 8, 2017, Docket No. 172.) In response,
Counsel filed objections and supplemental evidence and
requested reconsideration of the R&R. (Objs. to the
Court's Am. R&R (“Objs.”), Sept. 22,
2017, Docket No. 173.) The Court will accept this new
evidence, sustain Counsel's objections, and adopt in part
and reject in part the R&R.
the filing of a report and recommendation by a magistrate
judge, “a party may serve and file specific written
objections to the proposed findings and
recommendations.” Fed.R.Civ.P. 72(b)(2);
accord D. Minn. LR 72.2(b)(1). “The objections
should specify the portions of the magistrate judge's
report and recommendation to which objections are made and
provide a basis for those objections.” Mayer v.
Walvatne, No. 07-1958, 2008 WL 4527774, at *2 (D. Minn.
Sept. 28, 2008). “The district judge must determine de
novo any part of the magistrate judge's disposition that
has been properly objected to.” Fed.R.Civ.P. 72(b)(3);
accord D. Minn. LR 72.2(b)(3). “The district
judge may accept, reject, or modify the recommended
disposition; receive further evidence; or return the matter
to the magistrate judge with instructions.”
Fed.R.Civ.P. 72(b)(3); accord D. Minn. LR
do not object to the Magistrate Judge's discussion of the
matter at issue or the standard of review. (R&R at 5-6.)
Nor do they object to the Magistrate Judge's finding that
Rhythm Stone's dissolution does not provide good cause
for withdrawal. (R&R at 7.) Consequently, the Court will
adopt those portions of the Report.
Counsel do object to the Magistrate Judge's
recommendation that their motion be denied. That
recommendation was made due to the “sparse
record” then available, on which Counsel “failed
to meet their burden to establish good cause.” (R&R
at 8.) Specifically, the Magistrate Judge noted that Counsel
asserted without evidence that Jalin had been notified of the
motion to withdraw and that Jalin had not paid Counsel.
(R&R at 6-7.) “[A]rgument of counsel is not
evidence.” (Id. (quoting Smiley v. Gary
Crossley Ford, Inc., 859 F.3d 545, 557 (8th
now seeks to resolve that shortcoming with a sworn
declaration expressly stating that Counsel's scope of
representation was fulfilled, that Counsel has not been paid,
that Jalin has no intention of paying, that hardship would
result from being required to stay on as counsel, and that
Jalin has consented to withdrawal. (Decl. of Anthony E.
Patterson ¶¶ 3-8, Sept. 25, 2017, Docket No. 174.)
The Court “has discretion to receive new evidence
without any special justification.” United States
v. Hayden, 759 F.3d 842, 846 (8th Cir. 2014).
The Court exercises that discretion to consider this new
evidence, which properly establishes to the Court both the
fact of notice to Jalin (as required by Local Rule 83.7(c))
and Jalin's refusal to pay.
Magistrate Judge explained, the District of Minnesota has
adopted the Minnesota Rules of Professional Conduct, which
provide that a lawyer may withdraw from a representation if
“good cause for withdrawal exists.” Sanford
v. Maid-Rite Corp., 816 F.3d 546, 549 (8th
Cir. 2016) (quoting Minn. R. Prof'l Conduct 1.16(b)(7)).
Withdrawal is presumptively appropriate when good cause
exists and the client has been notified. Id. A
client's refusal to pay provides good cause for
withdrawal. Id. at 550 (citing Brandon v.
Blech, 560 F.3d 536, 538 (6th Cir. 2009)
(“[C]ompelling attorneys to continue representing
clients who refuse to pay imposes a severe burden.”).
presumption may be disregarded if withdrawal would severely
prejudice the client (for instance, if counsel waited
“until the client is over a barrel”) or third
parties (for instance, if counsel waited until the eve of an
imminent deadline). Id. (quoting Fid. Nat'l
Title Ins. Co. v. Intercounty Nat'l Title Ins. Co.,
310 F.3d 537, 540 (7th Cir. 2002)). But neither
scenario is present here. Jalin has been notified and
consented to withdrawal. And Hartford Casualty opposes it
“only” if it “would interfere with moving
ahead with Hartford's pending fee motion.” Because
a corporate entity cannot proceed pro se, some delay might
result. On the other hand, Hartford Casualty would be
entitled to default judgment if Jalin is unable to secure
substitute counsel, which would “expedite the case,
rather than delay it.” Id. (citing Erie
Molded Plastics, Inc. v. Nogah, LLC, 520 F. App'x
82, 85 (3d Cir. 2013); Fid. Nat'l Title Ins.
Co., 310 F.3d at 541. As such, in light of Counsel's
additional evidence and absent any countervailing prejudicial
concerns, the Court will grant the motion to withdraw.
on the foregoing, and all the files, records, and proceedings
herein, the Court SUSTAINS Plaintiff's
objections [Docket No. 173], and REJECTS in part and
ADOPTS in part the Report and Recommendation of the
Magistrate Judge [Docket No. 172]. The Court
REJECTS the Magistrate Judge's Report
and Recommendation to the extent it is ...