Order Relieving Counsel Stays the Action

Fan v Sabin,

___ AD3d ___, 2015 NY Slip Op 01400 [1st Dept., 2015]

When a court grants an attorney leave to withdraw as attorney of record in an action, the action is stayed by operation of CPLR 321 (c) until 30 days after notice to retain new counsel is served upon the client. The circumstances in which a court may vacate the automatic stay and direct the action to proceed are rare, and were not present here. Therefore, the court had no power to decide a summary judgment motion against the now unrepresented client, and Supreme Court’s order granting the motion was reversed.

The action grew out of a love affair gone sour, and involved claims of negligence and fraud. Defendant moved for summary judgment at the same time as answering, and for monetary sanctions. Plaintiff’s counsel cross-moved for leave to withdraw and for a stay so that plaintiff could find new counsel.

On the return of the motion, the court stated on the record that the defendant had established that the action was without merit, and that defendant’s motion was granted. Plaintiff’s counsel argued that the defendant’s motion was really one to dismiss pursuant to CPLR 3211, and that for the purposes of the motion the court would need to accept the allegations of the complaint as true. The court cut off argument at that point, since the plaintiff had not submitted any opposition on the merits of defendant’s motion. The court did grant counsel’s motion to be relieved, and by order made on the same date as the argument, granted defendant’s motion to dismiss.

The Appellate Division reversed. The effect of granting counsel’s motion to dismiss was that the action was stayed by operation of CPLR 321 (c), until 30 days after notice to retain new counsel is served on the client, and the stay deprived the court of the power to decide the motion for summary judgment. The Appellate Division noted that the motion court’s action, in preventing counsel from arguing the merits, left the “plaintiff without counsel to fend for herself.”

Plaintiff’s counsel, in supporting his application for leave to withdraw, had apparently specified the areas of disagreement with the client over strategy, which the Appellate Division described as “ill-advised”. This disagreement, however, did not constitute the client’s “fault,” which might justify the exercise of the court’s power to vacate the automatic stay. As noted by the Court of Appeals in Moray v Koven & Krause, the purpose of the stay is to protect a client who finds himself without counsel through no fault of his own, and the court’s power to direct the action to continue without a stay is intended to prevent undue hardship to the adversary, as where a provisional remedy is involved or where a time limit will expire in the meantime. Recall that the stay provision of CPLR 321 (c) applies broadly, to situations such as death and disability of counsel, and not only where counsel is relieved on his own application.

The Appellate Division also noted that there is authority for denying the stay where the client’s fault consists of a failure to co-operate with counsel. In Sarlo-Pinzur v Pinzur, the client failed to provide financial information in a matrimonial case. Counsel was granted leave to withdraw, and the court refused to adjourn the trial. When the now-unrepresented client left the courtroom, judgment against him was rendered on his default, and was affirmed.

Defendant’s counsel in Fan found himself in a difficult situation. The nature of his disagreement with the client apparently precluded opposing the plaintiff’s motion on its merits. Yet, the mere pendency of his cross-motion seeking leave to withdraw carried with it no automatic stay (see, Zacher v Oakdale Islandia Limited Partnership, 271 A.D.2d 441, [2d Dept., 2000]). A motion for leave to withdraw must be brought on by way of an order to show cause (CPLR 321 [b]), and it might have been prudent for counsel to have inserted in the proposed order to show cause a provision staying all proceedings in the action. The court might have stricken the provision, but in that way not only the soon-to-be-ex client but the soon-to-be-relieved attorney would both have been protected.