Judge: Joel L. Lofton, Case: 20GDCV00609, Date: 2023-03-02 Tentative Ruling

Case Number: 20GDCV00609    Hearing Date: March 2, 2023    Dept: X

   Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE:     March 2, 2023                         TRIAL DATE: No date set.

CASE:                         LIDD ENTERPRISES INC., DANNY LAO, BESSIE LAO, individually and as Trustees of the DANNY AND BESSIE LAO FAMILY TRUST DATED MAY 5, 2005, v. AUTO BUYLINE SYSTEMS INC., ABS AUTO AUCTIONS, REMARKETIMS INC., OPENTRADE INC., CLEARMARKET INC., AUCTIONLANE INC., ABS OPEN TRADE INC., KEVIN AZZOUZ, MIKE RHEE AND LENNARD MENGWALL AND DOES 1 through 100, inclusive.

CROSS:                      AUTO BUYLINE SYSTEMS, INC. dba ABS AUTO AUCTIONS, v. LIDD ENTERPRISES INC., a California Corporation; DANNY LAO, an individual; KEVIN AZZOUZ, an individual; MIKE RHEE, an individual; REMARKETIMS INC., a Delaware Corporation; OPENTRADE INC., a Delaware Corporation; CLEARMARKET INC. a Delaware Corporation; AUCTIONLANE, INC., a Delaware Corporation; ABS OPENTRADE, INC., a Delaware corporation; LENNART MENGWALL, an individual and ROES 1-20, inclusive.

CASE NO.:                 20GDCV00609

MOTION TO BE RELIEVED AS COUNSEL

MOVING PARTY:               Counsel Brent M. Finch

RESPONDING PARTY:      No response filed.

SERVICE:                              Filed January 27, 2023

RELIEF REQUESTED

            Brent M. Finch, counsel for Defendants Kevin Azzouz, Auctionlane, Inc., RemarketIMS, Inc., and Mike Rhee, moves to be relieved as counsel of record.

BACKGROUND

            On June 15, 2021, Plaintiffs Lidd Enterprises Inc. (“LEI”), Danny Lao (“Danny”), and Bessie Lao (“Plaintiffs”) filed a second amended complaint alleging seven causes of action for (1) breach of contract, (2) waste, (3) negligence, (4) common count, (5) breach of oral agreement, (6) promissory estoppel, and (7) conversion.

            On May 10, 2021, Cross-Complainant Auto Buyline Systems, Inc. (“Cross-Complainant”) filed a first amended cross-complaint against LEI, Danny, Kevin Azzouz (“Azzouz”), Mike Rhee (“Rhee”), RemarketIMS Inc., (“RemarketIMS”), OpenTrade, Inc. (“OpenTrade”), Clearmarket Inc., Auction Lane, Inc., ABS OpenTrade, Inc., and Lennart Mengwall, alleging six causes of action for (1) declaratory relief, (2) breach of contract, (3) equitable indemnity, (4) implied contractual indemnity, (5) waste, and (6) promissory estoppel.

TENTATIVE RULING

            Finch’s motions to be relieved as counsel for Defendants Kevin Azzouz, Auctionlane, Inc., Remarketims, Inc., and Mike Rhee are GRANTED.

LEGAL STANDARD

Code of Civil Procedure §284(1) allows for a change or substitution of attorney “[u]pon the consent of both client and attorney, filed with the clerk, or entered upon the minutes.” If both parties do not consent to a substitution of attorney, Code of Civ. Proc. §284(2) allows for a substitution “[u]pon the order of the court, upon the application of either client or attorney, after notice from one to the other.” California Rules of Court Rule 3.1362 sets forth procedures for relieving counsel without the mutual consent of both parties.

Under California Rules of Court Rule 3.1362, an attorney seeking to withdraw by motion rather than by consent of the client, as here, is required to make that motion using approved Judicial Council forms. The motion also requires a declaration stating “in general terms, and without compromising the confidentiality of the attorney-client relationship why a motion under Code of Civil Procedure section 284(2) is brought instead of filing a consent under Code of Civil Procedure section 284(1).” (Cal. Rules of Ct., Rule 3.1362(c).)  Judicial Council form MC-052, the attorney’s declaration, requires that the client be provided no less than five days’ notice before hearing on the motion.  A proposed order prepared on form MC-053 must also be lodged with the court with the moving papers.

            California Rules of Court Rule 3.1362 subd. (d) also requires that the motion, notice of motion, the declaration, and the proposed order must be served on the client and all other parties who have appeared in the case. The notice served on the client by mail must be accompanied by a declaration stating facts that show that either the service address is current or “that [t]he service address is the last known residence or business address of the client and the attorney has been unable to locate a more current address after making reasonable efforts to do so within 30 days before the filing of the motion to be relieved.” (California Rules of Court Rule 3.1362 subd. (d)).

The Court of Appeals has recognized, “A lawyer violates his or her ethical mandate by abandoning a client [citation], or by withdrawing at a critical point and thereby prejudicing the client’s case.  [Citation.]  We are, however, aware of no authority preventing an attorney from withdrawing from a case when withdrawal can be accomplished without undue prejudice to the client’s interests.”  Ramirez v. Sturdevant (1994) 21 Cal. App. 4th 904, 915.

DISCUSSION

            Brent Finch (“Finch”), on behalf of Finch Tetzlaff, LLP, moves to be relieved as counsel of record for Defendants Kevin Azzouz, Auctionlane, Inc., RemarketIMS, Inc., and Mike Rhee. Finch provides separate declarations for each defendant. The declarations provide that there has been a breakdown of the attorney-client relationship because the client has not responded to communications and failed to pay expenses and fees under the legal services agreement. Further, as to the corporation defendants, Finch provides that the corporation lacks an active decision-maker to provide directions.

            For each defendant, Finch provides that the client was served by mail at the client’s last known address, which was confirmed by conversation.

CONCLUSION

            Finch’s motions to be relieved as counsel for Defendants Kevin Azzouz, Auctionlane, Inc., RemarketIMS, Inc., and Mike Rhee are GRANTED.

            Finch is ordered to submit a declaration or affirmatively inform the court at the hearing that Auctionlane, Inc. and RemarketIMS, Inc. understand that as corporations they cannot proceed in pro per status.

            Moving Party to give notice.

Dated:   March 2, 2023                                   ___________________________________

                                                                                    Joel L. Lofton

                                                                                    Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court indicating their

intention to submit.  Parties intending to appear are strongly encouraged to appear remotely.  alhdeptx@lacourt.org