Ruiz v. Keratin Bar

Background

Angel Ruiz sued KeratinBar Inc. and later 1976 Haircare Inc. Ruiz, a hairdresser, alleged discrimination based on sex and sexual orientation under Title VII of the Civil Rights Act of 1964 and failure to accommodate Celiac Sprue under the Americans with Disabilities Act. Ruiz initially filed the case without a lawyer, then retained Borrelli & Associates, P.L.L.C. on a contingency-fee basis.

The case proceeded through discovery, summary-judgment proceedings, motions in limine, mediation, and settlement efforts. The court denied KeratinBar’s summary-judgment motion, allowed Ruiz to add 1976 Haircare Inc. as a defendant, granted Ruiz’s motion in limine, and granted in part and denied in part the defendants’ motion in limine. The trial was postponed because of the COVID-19 pandemic.

In September 2020, Ruiz raised concerns about his relationship with Borrelli. Borrelli then moved to withdraw as counsel of record and requested a charging lien of $193,638.19. A charging lien is a lawyer’s claim against money recovered in the case for legal services provided. Ruiz’s letters expressed both support for Borrelli’s qualifications and serious distrust and dissatisfaction with the firm.

Withdrawal of Counsel

Under Southern District of New York Local Civil Rule 1.4, a lawyer who has appeared in a case may withdraw only with the court’s permission and upon a showing of satisfactory reasons. The court explained that such reasons can include a client’s lack of cooperation, serious communication problems, or an irreconcilable conflict.

The court found ample evidence that the attorney-client relationship had completely broken down. Borrelli reported that Ruiz had verbally abused and insulted employees, continued berating attorneys and staff despite warnings, threatened to report the firm, and instructed the firm to communicate only by mail. Ruiz accused Borrelli of pressuring him to accept a lower settlement, endangering his health, and threatening to report him to immigration authorities. The court stated that it would not credit many of Ruiz’s allegations, but found that their seriousness demonstrated that the relationship was beyond repair.

The court held that Borrelli had satisfactory reasons and good cause to withdraw, even if Ruiz wished the firm to continue representing him. The court also noted that Ruiz’s own statements showed a severe rupture in the relationship.

Charging Lien

New York Judiciary Law § 475 permits an attorney to obtain a lien on a client’s monetary recovery for legal services provided in the case. The court explained that an attorney generally cannot enforce such a lien after being discharged for cause—that is, because of a significant breach of legal duty or similar misconduct. By contrast, personality conflicts, misunderstandings, or differences of opinion that do not involve attorney misconduct do not constitute discharge for cause.

The court found that Borrelli’s withdrawal was not a discharge for cause because the court granted the withdrawal motion. It also found that Ruiz had provided no evidence establishing significant misconduct or a breach of Borrelli’s legal duty. The court credited Borrelli’s work, including successful motion practice, opposition to summary judgment, preparation of pretrial filings, and preparation for trial. It concluded that the deterioration of the relationship, without proof of material mishandling of the case, did not eliminate Borrelli’s entitlement to a charging lien.

The court therefore held that Borrelli was entitled to a charging lien on Ruiz’s eventual recovery, if any. Because the amount of any recovery had not yet been determined, the court deferred ruling on the amount of the lien. The court stated that the lien’s amount would be determined after the final amount recovered in the case was known, using fairness as the overriding consideration.

Disposition and Next Steps Ordered by the Court

Judge Valerie Caproni granted Borrelli’s motion to withdraw as attorney of record and to affix a charging lien on any verdict, settlement, judgment, or final order in Ruiz’s favor. The court deferred ruling on the amount of the lien. The final pretrial conference and trial remained postponed because of the pandemic.

The court stated that Ruiz could proceed without a lawyer, retain new counsel, or register for the court’s electronic filing system. By January 8, 2021, Ruiz had to retain new counsel and have counsel file a notice of appearance, register as an electronic-filing user, or submit a letter through the court’s Pro Se Intake Unit providing his mailing address. The clerk was directed to terminate the pending motion.