Friday, December 24, 2010

Withdrawal Granted For Substantial Fianancial Hardship

From the web page of the Rhode Island Supreme Court:

NAIAD Inflatables of Newport, Inc. (NAIAD), engaged the law firm of Duffy & Sweeney, Ltd. (D&S) to defend it in a civil lawsuit brought in 2005 by the plaintiff, Stafford J. King, III.  Soon, however, NAIAD became delinquent in its financial obligations to D&S.  Concerned with both a large receivable and a looming trial date, D&S filed a motion to withdraw from the case.  This motion was unopposed by the client or by opposing counsel.  A justice of the Superior Court denied the firm’s motion.  On the grounds of abuse of discretion by the hearing justice, the law firm timely appealed.

 D&S filed a motion to withdraw based upon NAIAD’s failure to fulfill its financial obligations under the engagement agreement.  Supported by an affidavit of counsel, the motion was properly certified and forwarded to all parties of interest in compliance with the Rules of Civil Procedure.  Providing its client with ample notice, D&S made numerous requests for payments, sent reminder invoices, and warned NAIAD that D&S—based on a signed engagement agreement between the parties—would seek to withdraw as counsel if the client failed to bring the balance current.  Further, D&S informed NAIAD that it would have the right to object before the Superior Court in the event that such a motion was filed.  Denying the unopposed motion, the hearing justice cited Article V, Rule 1.16 of the Supreme Court Rules of Professional Conduct, and ruled that granting the motion would have a “materially adverse effect” on the interests of the clients.

In reversing the Superior Court’s denial of counsel’s motion to withdraw, the Supreme Court said that the hearing justice did not accord adequate weight to the hardship and substantial financial burden that would befall D&S if the law firm were required to continue in its representation of a nonpaying client.  Moreover, the Court was of the opinion that the law firm’s request to withdraw was not presented at such a critical point in the litigation process that withdrawal would be detrimental to either the court or the client.

The opinion is linked here. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2010/12/from-the-web-page-of-the-rhode-island-supreme-court-naiad-inflatables-of-newport-inc-naiad-engaged-the-law-firm-of.html

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