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Kendall State Bank v. Archway Insurance Services, LLC

United States District Court, Tenth Circuit

June 28, 2013

KENDALL STATE BANK, et al., Plaintiffs,
v.
ARCHWAY INSURANCE SERVICES, LLC, et al., Defendants.

MEMORANDUM AND ORDER

KATHRYN H. VRATIL, District Judge.

This matter comes before the Court on the Motion To Withdraw As Counsel For Defendants (Doc. #176) filed May 7, 2013 by Todd Butler and Stephanie Poyer. Butler and Poyer seek leave to withdraw as counsel for Union One Insurance Group, LLC pursuant to D. Kan. Rule 83.5.5. Plaintiffs Kendall State Bank, Bank of Commerce and Trust Company, First United Bank and Trust, Garden City State Bank and Peabody State Bank ("the Banks") oppose the motion. For the reasons set forth below, the Court sustains movants' motion to withdraw.

Factual Background

On January 8, 2013, the Court entered judgment in the Banks' favor against Union One and Nevada Investment Partners, LLC in the amount of $2, 000, 000. See Consent Judgment (Doc. #169). In an effort to execute the judgment, the Banks served on Union One interrogatories and requests for production pursuant to Rule 69, Fed.R.Civ.P. See Certificate of Service (Doc #175) filed April 9, 2013. Union One did not respond.

Shortly before the discovery response deadline, movants filed the instant motion. They represent that "Union One has been unable to obtain all information responsive to the discovery requests" and that movants "can no longer effectively represent [Union One] in this matter." (Doc. #176). As reasons for their request to withdraw, they cite outstanding legal fees and differences of opinion. See Memorandum In Support of Motion To Withdraw (Doc. #180) filed May 28, 2013.

Movants attach to their motion a letter of intent which they wrote to Kevin Kelly, Randall Siko and Eric Bossard. (Doc. #176 Ex. A). Kelly is general counsel for Alliance National Insurance, a corporation related to Union One. Siko and Bossard are Union One shareholders. The letter advised Kelly, Siko and Bossard of movants' intent to withdraw and of Union One's responsibility to comply with all court orders and procedural time limitations. The letter also advised them of the due date for a response to the Banks' interrogatories and requests for production, and that movants would shortly be serving them with a copy of the motion to withdraw.

Movants also filed proof of service, which certified service of the letter on Kelly, Siko and Bossard. Proof Of Service (Doc. #179) filed May 22, 2013. As evidence of service, movants presented a signed certified mail return receipt addressed to Kelly and signed by Jeanette Schultz, and purchase receipts for certified mail addressed to both Siko and Bossard, from whom movants did not receive return receipts. Id . Movants separately certified that they also served a copy of the motion to withdraw on Kelly and presented a second signed certified mail return receipt addressed to Kelly and signed by Jeanette Schultz. Proof Of Service (Doc. #178) filed May 22, 2013. They gave no indication that either Siko or Bossard received service. Id.

Subsequently, in a brief responsive to an unrelated motion, movants represented to the Court Union One's current state of existence and the extent of their efforts to contact the company after the Court entered judgment. Specifically, movants stated as follows:

The co-managing members of Union One resigned from their positions shortly after the judgment was read into the record.... Before resigning they gave [then Union One President and Chief Operating Officer, Mark Lunney] authority to manage the company[.] Union One ceased operating on March 31, 2013. All employees were let go. The officers resigned April 13, 2013.... The shareholders had no involvement in the day-to-day activities of the corporation and do not have the knowledge or ability to [provide post-judgment discovery information]. Union One has closed its doors after being unable to survive the $2 million dollar judgment the banks took against it, and its officers and employees are gone. The only person who has returned counsel's calls is the former Secretary of Union One who is the general counsel of another entity, Kevin Kelly.... [Movants have] contacted former officers and former employees. Mr. Lunney, who was in sole control of the company since December 14, 2012 has not returned any of the phone messages counsel left.

Defendants' Response To Plaintiffs' Motion To Compel Post-Judgement Discovery (Doc. # 182) filed June 11, 2013. Movants later learned that Lunney had resigned. See Doc. #176 at 2. They also note that Kelly "does not now represent Union One, does not work for Union One, and is not being compensated for the work he has been doing trying to get information to the Banks." Doc. #182 at 3.

Plaintiffs oppose the motion to withdraw for two reasons. First, they argue that movants fail to meet the technical requirements of D. Kan. Rule 83.5.5. They then argue that an order granting the motion would impermissibly leave Union One, a corporation, without counsel.

Analysis

The withdrawal of appearance by an attorney is governed by D. Kan. Rule 83.5.5, which requires that a court authorize withdrawal if the client will be left without representation. To obtain approval, counsel must file a motion which sets forth the reasons for withdrawal; advises the client that he or she is personally responsible for complying with court orders and procedural time lines; provides notice of impending deadlines; and provides the court with the client's current contact information. Withdrawing counsel must serve the motion on all attorneys of record, pro se parties and "on the withdrawing attorney's client either by personal service or by certified mail, with return receipt requested." R. 83.5.5(a). Counsel must then file with the court either ...


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