KLINEDINST PC 777 S. FIGUEROA St., Sulte 2800
Case 2:(12-cv-08333-ODW-JC Document 235 Filed 08/30/13 Page 1of10 Page ID #:4402
1 || Heather L. Rosing, Bar No. 183986 David M. Majchrzak, Bar No. 220860 2 || Philip W. Vineyard, Bar No. 233628 KLINEDINST PC
3 || 7778S. Figueroa St., Suite 2800
Los ee es, California 90017
4 || (213) 406-1100/FAX (213) 406-1101 hrosing@klinedinstlaw.com
5 || dmajchrzak@klinedinstlaw.com pvineyard@klinedinstlaw.com
Los ANGELES, CALIFORNIA 90017
6 tee for Respondent PRENDA 7 || LAW, INC. 8 , UNITED STATE DISTRICT COURT i" FOR THE CENTRAL DISTRICT OF CALIFORNIA 1] és INGENUITY 13, LLC,, Case No. 2:12-CV-08333-ODW (JCx) : Plaintiff, KLINEDINST PC'S NOTICE OF 13 RENEWED APPLICATION AND V. RENEWED APPLICATION TO 14 WITHDRAW AS COUNSEL FOR PRENDA LAW, INC. 1S |) JOHN DOE,, Dept: 1] 16 Defendant. Judge: _ __ Hon. Otis D. Wright Complaint Filed: September 27, 2012 iy. Trial Date: None set 18 % TO THE COURT, THE PARTIES, ALL RESPONDENTS AND THEIR 56 ATTORNEYS OF RECORD. 4 Please take notice that on August 30, 2013, Klinedinst PC and its attorneys, 5 Heather L. Rosing, David M. Majchrzak, and Philip W. Vineyard (collectively, ‘A “Klinedinst”), renewed their application to the Ninth Circuit Court of Appeals for A an order permitting Klinedinst to withdraw as counsel for Prenda Law, Inc. 9s (“Prenda”). Given the procedural status of this matter; i.e., the active portion of ‘i this litigation is now before the Ninth Circuit Court of Appeals in the manner of = eight consolidated appeals, and without guidance as to which court would - ultimately rule on Klinedinst’s renewed application, Klinedinst has filed identical 1 KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
KLINEDINST PC 777 S. FIGUEROA ST., SuITE 2800
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1 || versions of the application in both the Appellate and District Courts.
2 The bases for Klinedinst’s renewed application is that Prenda has failed to
3 || pay Klinedinst for its services and failed to execute a retention agreement
4 || memorializing the terms and conditions of Klinedinst’s representation of Prenda in
5 || this matter, including the appeal. Klinedinst has met and conferred with all parties
6 || participating in the appeal and/or their counsel, and no party or counsel has 7
communicated any opposition to Klinedinst’s renewed application.
9 Klinedinst PC
11 || DATED: August 30, 2013 By: _/s/ Philip W. Vineyard
io Heather L. Rosing David M. Majchrzak 13 Philip W. Vineyard Attorneys for PRENDA LAW, INC.
Los ANGELES, CALIFORNIA 90017
2
KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
KLINEDINST PC 777 S. FIGUEROA ST., SUITE 2800
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I MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF 2 RENEWED APPLICATION TO WITHDRAW AS COUNSEL
4 1. INTRODUCTION 5 Heather Rosing, David Majchrzak, and Philip Vineyard of the law firm
6 || Klinedinst PC (collectively, ““Klinedinst’”), current counsel of record for Prenda 7 || Law, Inc. (“Prenda”) in the Ninth Circuit and in the Order to Show Cause (“OSC”) 8 || proceedings held in the Central District (which are the subject of Prenda’s appeal),
9 || hereby re-apply to this court for an order authorizing Klinedinst’s withdrawal as
10 || counsel of record for Prenda. New facts justify Klinedinst’s renewed application:
11 |) ) Prenda has not executed Klinedinst’s attorney retention agreement despite 12 || multiple requests to do so; (ii) Prenda has not funded Klinedinst’s required retainer 13 || for representation in this matter; (111) Prenda has not paid Klinedinst’s last two
14 || invoices and currently owes an estimated $17,000 in fees and costs, $14,766.80 of
Los ANGELES, CALIFORNIA 90017
1S || which were incurred and billed in June and July; and (iv) Prenda has voluntarily 16 || dissolved itself, as earlier noticed to this court.’
17 This application is unopposed by any party and constitutes an emergency in
18 || that Klinedinst is providing services to a dissolved company, which has shown a
19 || historical and current incapacity to pay for the services rendered and which is
20 || unable to engage in revenue-producing business to assure payments to this firm in
21 || the future. Prenda is not an indigent individual reliant upon its counsel to avoid
22 || incarceration or other penalty, but was instead a for-profit entity established by an
23 || experienced attorney. Klinedinst should not be compelled to maintain its current 24 || representation of Prenda given the foregoing circumstances.
25 || I. STATEMENT OF RELEVANT FACTS
26 To refresh this court’s recollection, Klinedinst’s representation of Prenda
27 || had been expressly limited by agreement to the district court’s OSC proceedings,
' Appellate Court Dkt. Entry 17-1; District Court ECF No. 234.
3 KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
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1 || but upon conclusion of those proceedings and despite Prenda’s acquiescence to Klinedinst’s withdrawal, both the district court and the appellate court denied
Klinedinst’s applications to be relieved as counsel. Those rulings were based on
Bm GW be
(i) the discretion of the courts to grant the applications and (ii) the preclusion of a 5 || corporate entity from making formal appearances pro se before each court.”
Pursuant to those orders, Klinedinst continued its representation of Prenda before
ND
both courts and performed the acts necessary to protect Prenda’s interests in its
8 || appeal of the district court’s OSC and appellate bonding orders.” 9 On June 25, 2013, six days after the Court of Appeals denied Klinedinst’s
10 || Motion to Withdraw as Counsel, Klinedinst requested Prenda to execute a
11 || retention agreement with Klinedinst and to pay a reasonable retainer for future fees 12 || and costs incurred and arising from Prenda’s appeal.” ° As it awaited execution of 13 || the retention agreement and payment of the retainer, Klinedinst performed its
14 || obligations to Prenda as required by California’s Rules of Professional Conduct
Los ANGELES, CALIFORNIA 90017
1S || and the courts’ orders. (See, e.g., the filings referenced in fh. 3.) As of August 26, 16 || 2013, Prenda had yet to execute the retention agreement or pay the requested
17 || retainer, despite multiple requests to do so from June 25 through August 7, 2013.°
18 || In addition, Klinedinst has provided Prenda two invoices for Klinedinst’s fees and 19 || costs incurred in this matter, both of which remain unpaid.’ The invoices
20 || collectively total $14,766.80 in fees and costs incurred in June and July 2013, and
21 || Klinedinst has incurred an estimated additional $2,200 in the first two weeks of Appellate Court Dkt Entries 5-1, 13; District Court ECF Nos. 144, 147.
23 3 See, e.g., Appellate Court Dkt. Entries 6-1, 9-1, 11-1, 15-1, 17-1; District Court ECF Nos. 157, 157-1, 173, 181, 198, 221, 234.
* Pursuant to California Business & Professions Code section 6068, and erring on the side of caution, Klinedinst will not, absent a lawful court order, disclose the terms and conditions of its 26 || Proposed agreement, the amount of its requested retainer, the fees to be charged against it, or any other privileged information arising therefrom.
> See Declaration of Philip W. Vineyard, attached hereto, at 47. 28 ° Vineyard Dec., §8. 7 Vineyard Dec., 48, 9.
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KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
KLINEDINST PC 777 S. FIGUEROA ST., SuITe 2800
Los ANGELES, CALIFORNIA 90017
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1 |} August.®?
2 On or about August 1, 2013, Klinedinst learned that Prenda was the subject 3 || of a voluntary dissolution in the state of Illinois, the state in which Prenda was
4 || organized.'” Klinedinst researched the applicable laws to ensure Prenda was able
5 || to continue its appeal in the Ninth Circuit and thereafter prepared and filed on
August 2, 2013, a notice of Prenda’s voluntary dissolution in the appellate and
6 7 || district courts.'' On August 7, 2013, Klinedinst informed Prenda via e-mail that if 8 || the retention agreement was not executed and the retainer and past-due invoices 9 |) not paid by August 9, 2013, Klinedinst would move the courts for an order 10 || permitting its withdrawal.'* Klinedinst explained in that e-mail the ramifications 11 || of an order granting the proposed motion, but notwithstanding these disclosures, 12 || Prenda has yet to execute the retention agreement or pay the requested retainer or 13 || past-due invoices.” 14 Klinedinst met and conferred with its client, each of the pro se appellants (to 15 || the extent that each of them continue to use their last known e-mail addresses), and 16 || counsel for the appellee and putative John Doe on August 16, 2013, to determine if 17 || any of them would oppose Klinedinst’s renewed application.'* As of August 26, 18 || 2013, no party or his or its counsel has provided notice of any opposition to the 19 |! substance of this renewed application.’
20 This application will be concurrently filed with both the district and
21 || appellate courts.
23 * Vineyard Dec., 99.
24 * Prior to June 26, 2013, Prenda’s defense had been funded by its errors and omissions insurer. Vineyard Dec., 3, 6.
'° Vineyard Dec., 410. 26 " Appellate Court Dkt. Entry 17-1; District Court ECF No. 234; Vineyard Dec., {11.
'? Vineyard Dec., 412. i Vineyard Dec., §9/8, 12. 28 '4 Vineyard Dec., 414. 'S Vineyard Dec., 415.
5 KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
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Los ANGELES, CALIFORNIA 90017
1 |} WI. ARGUMENT 2 A. Authorities for Klinedinst’s Motion to Withdraw 3 Central District Local Rule 83-2.3.2 states the following: 4 Motion for Withdrawal. An attorney may not withdraw as : counsel except by leave of court. An application for leave to withdraw must be made upon written notice given 6 - reasonably in advance to the client and to all other parties who have appeared in the action. i 8 Similarly, Local Rule 83-2.3.4, in relevant part, states the following: 9 Organizations. An attorney requesting leave to withdraw e from representation of an organization of any kind (including corporations, limited liability corporations, Wl partnerships, limited liability partnerships, unincorporated associations, trusts) must give written notice to the 12 organization of the consequences of its inability to appear pro Se. 13 14 Central District Local Rule 83-2.3.5 concludes the following: 15 Delays by Substitution of Attorneys. Unless good cause is Yr shown and the ends of justice require, no substitution or : relief of attorney will be approved that will cause delay in 17 prosecution of the case to completion. 18 B. _ Klinedinst Satisfies The Analysis Determining Whether An 19 Application To Withdraw As Counsel Is Proper. 20 In its order denying Klinedinst’s initial attempt to withdraw as Prenda’s
21 || counsel, the district court cited to Huntington Learning Ctrs., Inc. v. Educ.
22 || Gateway, Inc., 2009 U.S. Dist. LEXIS 69618 (C.D. Cal. 2009) (“HLC”) for the 23 || analysis that must be undertaken to determine whether a request for withdrawal 24 || should be denied or granted.'® The questions to be considered constitute the
25 || following:
26 1. The reasons why withdrawal is sought; 27 2. The prejudice withdrawal may cause to other litigants; 28
16 RCE, No. 147, 1:21-27.
6 KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
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Los ANGELES, CALIFORNIA 90017
l 3. The harm withdrawal might cause to the administration of
, justice; and
3 4. The degree to which withdrawal will delay resolution of the
case.
4
5 || These questions are repeated in analyses in venues throughout the First, Second,
6 || Fourth, Sixth, and Ninth Circuits, all while considering the application of the
7 || underlying state’s Rules of Professional Conduct.'*
g 1. Why withdrawal is sought.
9 In this case, not only had Prenda agreed to limit Klinedinst’s representation 19 || to the OSC proceedings, but it has since failed to pay Klinedinst for its continuing 7 efforts in protecting Prenda’s right to an appeal, inclusive of motions opposing D multiple orders imposing over $230,000 in appellate bonding requirements.
3 Although the research, preparation, and compilation of the appellate materials have 14 || yet to impose a significant burden on Klinedinst, the November 19, 2013,
15 submission deadline for opening briefs and supporting records requires that
16 || Klinedinst ramp up its efforts within the next few weeks, all under the nearly
17_ || guaranteed threat that it will receive no payments for that work.
18 Non-payment of fees is a valid basis for federal courts to grant motions to
19 withdraw, even if the offending client is a corporation.'” Klinedinst is already
20
'’ See Id. at 2.
21 '8 See Kelly v. Cuomo (In re Cuomo), 2013 Bankr. LEXIS 2511, at 60-62 (Bankr. D. Nev. 2013) (citing Brown & Bain, P.A. v. O'Quinn, 518 F.3d 1037, 1039-42 (9th Cir. 2008); Brandon v.
22 Blech, 560 F.3d 536, 537-38 (6th Cir. 2009); Jo Ann Howard & Assocs., P.C. v. Cassity, 2012 U.S. Dist. LEXIS 8691, at 8-11 (E.D. Mo. 2012); Nat'l Career College, Inc. v. Spellings, 2007 23 || U.S. Dist. LEXIS 50705, at 5-7 (D. Haw. 2007); Hammond v. T.J. Litle & Co., Inc., 809 F. Supp. 156, 162-63 (D. Mass. 1992); Irwin v. Mascott, 196 F. App'x 455, 455 (9th Cir. 2006); Rophaiel v. Alken Murray Corp., 1996 U.S. Dist. LEXIS 7796, at 2-4 (S.D.N.Y. 1996);
25 Malarkey v. Texaco, Inc., 1989 U.S. Dist. LEXIS 8764, at 1-2 (S.D.N.Y. 1989); In re Schley, 2012 Bankr. LEXIS 2135 at 6 (Bankr. E.D. Va. 2012); Danvers Sav. Bank v. Cuddy (In re
26 Cuddy), 322 B.R. 12, 17 (Bankr. D. Mass. 2005); Goldstein v. Albert (In re Albert), 277 B.R. 38, 50-51 (Bankr. S.D.N.Y. 2002).
'° See Moss Landing Commer. Park LLC v. Kaiser Aluminum Corp., 2009 U.S. Dist. LEXIS 25772, at 2-3 (N.D. Cal. 2009)(ruling an LLC must immediately retain new counsel following
7 KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
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—
owed nearly $17,000 in fees and costs, and the bulk of work on Prenda’s appeal
2 || has not even started. It would be extremely prejudicial to Klinedinst if it were
we
forced to continue Prenda’s appeal to its conclusion with no retention agreement (1) 4 |) setting out the basis of Klinedinst’s representation and (ii) establishing a 5 || contractual basis to recoup its fees and costs in the completion of Prenda’s appeal.
Indeed, Section 12.30 of Illinois’s Business Corporation Act states that one of the
6
7 || effects of Prenda’s dissolution is to preclude it from carrying on “any business
8 || except that necessary to wind up and liquidate its business and affairs...”°” With 9 || Prenda dedicating whatever is left of its resources to the defense of clients in other
10 || venues or for satisfying court orders in this matter, Klinedinst is almost assured of
11 || receiving no payment for what will likely be over six months of substantial work.
12 2. The prejudice withdrawal may cause to other litigants.
13 If the court were to grant Klinedinst’s renewed application, the opposing
14 |) John Doe would arguably still have a binding order against Prenda from the OSC
Los ANGELES, CALIFORNIA 90017
IS || proceedings. Thus, John Doe’s status quo remains. The other appellants are pro 16 || se. Prenda not going forward with its appeal does not preclude the other appellants 17 || from briefing and arguing their appeals. Finally, the dismissal of Prenda’s appeal, 18 || assuming subsequent counsel is not retained, does not in any way require a change 19 || in briefing deadlines for the consolidated appeal. Therefore, none of the remaining
20 || parties to the appeal are prejudiced in any way.
21 \ /// 22 |} /// 23
24 || the district court’s granting a motion to withdraw filed by the LLC’s counsel); Das v. WMC Mortg. Corp., 2011 U.S. Dist. LEXIS 119058, at 6 (N.D. Cal. 2011)(‘‘Plaintiffs’ failure to pay
ve legal fees is grounds for granting a motion to withdraw.”); Fischer v. Biman Bangladesh Airlines, 1997 U.S. Dist. LEXIS 10405, at 2 (S.D. N.Y 1997)(permitting withdrawal of corporate 26 || defendant’s counsel based on failure to pay counsel’s fees); Ferruzzo v. Superior Court, 104 Cal. App. 3d 501, 504 (1980)(“An attorney may be allowed to withdraw without offending the rule against corporate self-representation.”).
*° See 805 ILCS 5/12.30
8 KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL
KLINEDINST PC 777 S. FIGUEROA ST., Suite 2800
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1 2 The harm withdrawal might cause to the administration of 2 justice. 3 Much like the arguments immediately above, Klinedinst’s withdrawal in no
4 || way jeopardizes any of the deadlines set by the appellate court. There are no
5 || pending hearings or proceedings in the district court, and to Klinedinst’s
6 || knowledge, there is nothing that Prenda might argue on appeal that is necessary to 7 || any other appellant’s or appellee’s arguments. In fact, if Prenda does not retain
8 || subsequent counsel and continue its appeal, the appellate court will have one less
9 || brief to consider, and the district court will have one less party with which to worry 10 |) in the case of a potential remand. 11 Prenda still has nearly three months by which to retain subsequent counsel 12 || and have an appellate brief filed. It is not an indigent appellant in need of an 13 || attorney’s help; it is a law firm, which specialized in copyright and technology-
14 || related matters. Prenda is a sophisticated entity able to take care of its own
Los ANGELES, CALIFORNIA 90017
15 || interests; thus, Klinedinst’s withdrawal has little to no effect on the administration
16 || of justice.
17 4. The degree to which withdrawal will delay resolution of the 18 case. 19 The court may ameliorate any concerns for delay by placing Prenda on a
20 || reasonable deadline for the retention of subsequent counsel, thereby ensuring that 21 || Prenda’s new counsel has sufficient time to prepare and file Prenda’s appeal within 22 || the previously established schedule. Failure to abide by the deadline will result in 23 || the dismissal of Prenda’s appeal pursuant to the preclusion of a corporation
24 || appearing pro se before the federal courts. That hypothetical dismissal again
25 || would have no impact on the remaining appellate parties’ deadlines to file their
26 || respective briefs.
27 || IV. CONCLUSION
28 Based on the foregoing facts and legal authorities, and Klinedinst’s
9
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1 || exhibition of good faith and strident efforts in the protection of Prenda’s legal and
2 || financial interests, the court should grant Klinedinst’s renewed application to
3 || withdraw as counsel of record for Prenda. Simply, had Prenda been able to pay its 4 || bills and the required retainer, as well as execute Klinedinst’s retention agreement, 5 || Klinedinst would not be before this court a second time. However, the
6 || circumstances dictate as much, leaving Klinedinst with a heavy burden that
7
requires the court’s intervention.
9 Klinedinst PC
11 |} DATED: August 30. 2013 Bv: _/s/ Philin W. Vinevard —
Heather L. Rosing 12 David M. Majchrzak
Philip W. Vineyard 13 eter 7 for Respondent PRENDA LAW. I
15642841v1
Los ANGELES, CALIFORNIA 90017
10 KLINEDINST PC'S NOTICE OF RENEWED APPLICATION AND RENEWED APPLICATION TO WITHDRAW AS COUNSEL