Honeedew Investing LLC v. Abadi

Background

Honeedew Investing LLC brought an action under Article 10 of the New York Debtor and Creditor Law against Jose Abadi. Honeedew alleged that Carlos Abadi and/or Barbara Abadi, who were not parties to this action, made fraudulent conveyances to Jose Abadi without consideration and intending to conceal assets from Honeedew’s outstanding state-court judgment. Honeedew sought relief including setting aside the conveyances, allowing execution against the transferred property, and awarding a money judgment for the amount Jose Abadi received.

Jose Abadi was served in October 2021. After the Clerk entered a certificate of default and Honeedew moved for default judgment, Abadi appeared, opposed the motion, and later filed an answer. Honeedew then filed an amended complaint, and Abadi answered it. Abadi hired Liston Abramson LLP in January 2022. The opinion states that Abadi was 92, had experienced COVID-19 and pneumonia requiring hospitalization, had not fully recovered, and had Parkinson’s disease. He also cited limited financial resources.

While discovery was ongoing, Honeedew asked the court to compel Abadi’s deposition in the United States, compel complete discovery responses, and consider sanctions for an alleged violation of Rule 26. On May 18, 2022, Abadi instructed his lawyers to stop taking action in the case other than seeking permission to withdraw. He said he would no longer participate because of his age, health, and finances. His lawyers stated that they had discussed the consequences with him and that he understood the risk of a default judgment.

Legal Standard

Under Local Civil Rule 1.4 of the Southern District of New York, an attorney who has appeared in a case must obtain the court’s permission to withdraw. The attorney must show satisfactory reasons. Courts consider both the reasons for withdrawal and the effect of withdrawal on the timing and progress of the case. The decision is within the trial court’s discretion.

Court’s Analysis

The court held that Abadi’s discharge of his attorneys was a satisfactory reason for withdrawal. Abadi stated under oath that he had discharged the lawyers, ended his engagement with the firm, would no longer participate, and understood the possible consequences. The court stated that it could not force Abadi to continue participating and that his lawyers could not continue acting when he had discharged them and instructed them to take no further action.

The court rejected Honeedew’s argument that Abadi needed additional medical or financial documentation. The court explained that Abadi was not asking to postpone a deposition based on a medical condition. Instead, he was effectively choosing to default, which the court said he had the right to do for any reason, including poor health or financial problems.

The court also held that withdrawal would not disrupt the case or unfairly harm Honeedew. Discovery was still ongoing, the case was not close to trial, and Abadi was not seeking replacement counsel. The court noted that the case could continue without Abadi’s participation and that Honeedew might ultimately seek a default judgment. The court also found no indication that the withdrawal motion was being used as a pretext for delay.

Disposition

Judge Valerie Figueredo granted the motion to withdraw as counsel. The Clerk was directed to terminate the motion at ECF No. 51. Abadi was warned that failing to defend or participate in the case could result in sanctions, including striking his answer and entering a default judgment against him. The order decided only the request for counsel’s withdrawal; it did not decide the merits of Honeedew’s fraudulent-conveyance claims or enter a default judgment.