FCS Advisors, LLC v. Island Fabrication LLC

Background

FCS Advisors, LLC, doing business as Brevet Capital Advisors, brought the action against Island Fabrication LLC and other defendants over alleged breaches of two contracts. According to the opinion, the contracts concerned the purchase of Employee Retention Credit Accounts, which provided short-term funding to the defendants in exchange for the plaintiff’s right to receive Internal Revenue Service refund payments made into those accounts. The plaintiff alleged that the defendants kept the refund money instead.

The action was still in the discovery phase. The opinion states that document discovery was not complete and that no motions were pending other than a request for an order of attachment against the defendants. The opinion refers to initial case-management conferences on both November 7, 2023, and October 13, 2023; it does not explain that discrepancy.

Motion to Withdraw

Sanford Greenberg of Greenberg Freeman, L.L.P., counsel of record for Island Fabrication LLC, NCI Holdings LLC, and Kent Schluter, moved to withdraw. In an affidavit, counsel stated that the defendants had not paid legal fees incurred in the action, in violation of the written retainer agreement, and that a defendant had told the firm that the defendants could not pay future legal fees. The defendants consented to the withdrawal, and FCS Advisors did not oppose it.

Withdrawal required the court’s permission under Local Civil Rule 1.4. That rule requires an attorney to show satisfactory reasons for withdrawal and requires the court to consider the case’s procedural posture and whether the attorney claims a retaining or charging lien. A lien is a claimed right to secure payment from property or a recovery in the case.

Court’s Analysis

The court found that nonpayment of legal fees was a legitimate reason for withdrawal. It also found that withdrawal would not significantly delay the case because the action was still at a relatively early stage. The firm stated that it would not assert a retaining or charging lien, and counsel filed a declaration and proof of service that satisfied the procedural requirements of Local Civil Rule 1.4.

Ruling

Judge Katharine H. Parker granted Mr. Greenberg and the firm’s motion to withdraw as counsel of record for the defendants. The Clerk was directed to terminate Mr. Greenberg and the firm as counsel of record, and Mr. Greenberg was directed to mail the order to the defendants. The court advised that the corporate entities could not proceed without counsel and ordered a defendants’ representative to appear at the May 6, 2024 status conference.