A recent Tax Court order shows the Court allowing an attorney to withdraw from a case due to a fee dispute with his clients. Judge Carluzzo permits the withdrawal because he finds that the “Mr. Pilla’s representation of petitioners in this case cannot continue given the adversity that currently exists between them.” Before being allowed to withdraw, Mr. Pilla filed a motion to withdraw on June 16, 2016, and two separate supplements in the following months. I cannot see those documents on the Tax Court website and am drawing conclusions here from the court orders in the case. Even though it would require a trip to DC to see the full file for free, it is possible to get a picture of the case from the docket sheet and the orders entered by the Court which easily link from the Court’s docket. The fact that he had to file three separate documents and apparently detail how and on what he spent his time leads me to believe that exiting the case was painful and time consuming for Mr. Pilla. Perhaps there are lessons for others who might want to withdraw.
The case bears working through the docket to see how it got to the position of the attorney seeking to withdraw from the case. Perhaps by working through the docket you get a glimpse of the parties and a better opportunity to understand how they reached the point of departure. Petitioners filed their Tax Court petition on June 17, 2013. That fact alone makes the case stand out when reading an order regarding withdrawal of counsel in October of 2016. The Tax Court generally gets to cases in about one year. In smaller venues where the Court travels only once a year, the timing of the filing of the petition and the timing of the calendar could move that back or forward. I was a little surprised to see that it took 16 months for this case to originally appear on the Los Angeles trial calendar but I do not closely follow the time it takes to get to trial in that city. In any event, very few cases filed in 2013 remain on the Tax Court docket still awaiting trial.
The case landed on a trial calendar set for November 3, 2014, two years before the order on which this post will focus. At that time petitioners, representing themselves, filed a motion for continuance on October 3, 2014, one day outside the window when the Tax Court rules would deem such a motion as one filed for purposes of delay. Pro se petitioners do not normally time the filing of their motions to continue with such precision. So, I conclude petitioners here were either sophisticated or extremely lucky in the timing of their motion. Filing a motion to continue within the 30 day time period marked off by Tax Court Rule 133 as presumptively filed for delay does not mean that the Court will never grant a continuance, but filing before hitting that marker provides a better chance for relief since the party seeking the continuance does not need to overcome the presumption.
The IRS initially opposed the motion for continuance. The IRS normally opposes such motions. The Court scheduled the motion for a hearing at calendar call. Mrs. Brashear appeared and argued on behalf of the motion. The IRS relented and said that the parties were working on a stipulation. In a city like Los Angeles where the Tax Court travels almost monthly, continuing a case does not necessarily mean that the case would experience the year-long delay it might experience in a city the Court sits less frequently. Judge Marvel granted the continuance and retained jurisdiction. Judges will generally retain jurisdiction if they believe that the case may resolve itself without need to place it back in the general hopper where another judge would have to pick it up. When the judge retains jurisdiction, the judge normally orders a status report several weeks or a few months after the continuance to make sure the parties continue on the track they have signaled at the hearing and to make a decision whether to continue retaining the case or to send it back to the general pool for reassignment to another calendar.
The status report indicated that the type of progress hoped for at calendar call did not materialize. The parties could not agree on a stipulation. Apparently, they had several calls with Judge Marvel. Petitioners requested a pre-trial conference pursuant to Tax Court Rule 110. In an order dated March 31, 2015, Judge Marvel denied the request for the pre-trial conference, recounted the status of the case and cut the case loose from her control back to the general pool of cases for reassignment on a subsequent calendar. Her order discusses the rule regarding pre-trial conferences and may be of interest to anyone seeking such a conference.
Unlike many petitioners, the petitioners here did not sit around waiting for something to happen. They were energized by their case. Almost immediately following Judge Marvel’s order releasing the case from her jurisdiction, petitioners filed four motions and one request. This activity got the Court’s attention and Judge Carluzzo was assigned to the case by then-Chief Judge Thornton. Even though Judge Marvel’s order releasing jurisdiction would have placed the case in a general pool of unassigned cases at the Tax Court until placement of the case on another trial calendar in Los Angeles, when a case has this much activity, the Court wants to have someone assigned to manage it so that continuity would exist in the consideration of the multiple motions. Judge Carluzzo denied all four motions and the request within a relatively short period of time; however, the orders denying the motions do not make their way onto the Court’s docket sheet in a form I can link.
The case then gets set for trial in Los Angeles on January 26, 2016. That order, as is normal when cases get set on a calendar, comes out on June 30, 2015, approximately six months before the calendar. Because Judge Carluzzo signed the order and not the Chief Judge, I assume that he had already been assigned to handle the Los Angeles calendar set for January 26, 2016. This assignment efficiently allows him to hear the trial and continue to manage the case without involving other judges. At this point, Mr. Pilla, an attorney based in Minnesota, enters the case. It is unclear from the docket sheet and the orders why petitioners chose an attorney from a remote location. Federal tax practice is a nationwide practice, however, and this was certainly a permissible, if unusual, selection. A few months after Mr. Pilla entered the case, the parties jointly filed a motion for continuance of the trial set in January 2016. Filing a second motion for continuance generally requires a very good reason if you have any expectation of success. Here, the parties have had a long time, almost two and one half years, to prepare the case and petitioners have had an attorney for about three months at the time of the filing of this motion. The Court sets the motion for a hearing at calendar call which means that the parties also had to prepare for trial. They filed pre-trial memorandums required by the Court’s standing order and the IRS filed a stipulation of settled issues signaling some progress had occurred.
At calendar call, the Court granted the motion to continue. I speculate that the stipulation coupled with promises of future progress convinced Judge Carluzzo the case would settle or the issues would come into sharp focus. The Court entered an order stating Judge Carluzzo was no longer assigned to the case and two days before that order Mr. Pilla filed his request to withdraw from the case. He then filed a supplemental request before Chief Judge Thornton issued an order calling for the parties to respond to the request. The order came from the Chief Judge because the case no longer had a specific judge assigned to it. The IRS filed a notice of no objection. Generally, the IRS will object where it believes that withdrawal will delay the resolution of a case. Here, the case had recently come off a trial calendar and I suspect that the IRS saw no harm to the timing of the resolution of the case in not objecting to withdrawal.
Petitioners, however, must have really liked Mr. Pilla. As mentioned above, I have not spent the time or money to read the documents in the file, but petitioners filed a notice of objection to the withdrawal of Mr. Pilla, a declaration and a supplemental notice. One can only assume they were distraught at the prospect of losing their attorney, and, speaking of distraught, Judge Carluzzo reenters the case with the issuance of an order by the Chief Judge reassigning him to the case for the exclusive purpose of resolving the withdrawal of counsel. According to the docket sheet, he does that in short order denying the request to withdraw on the same day he was reappointed to the case; however, the order described on the docket sheet is not placed there through a link so it is not possible to see why the request was denied from my vantage point. (An order entered by Judge Carluzzo later in the case describes the denial as a “margin order” which I believe means the word denial was written on the motion with no order generated related to the determination.)
Three days later, Mr. Pilla filed another motion to withdraw which was accompanied by a declaration by Denise Witz who I assume works in his office and has something to do with accounts receivable. Petitioners dutifully filed an objection to this motion again, presumably, expressing their undying love for Mr. Pilla. On July 3, 2016, newly appointed Chief Judge Marvel issued an order setting a hearing on the motion to withdraw on October 3, 2016, in Los Angeles. Note that the order was issued by the Chief Judge and not Judge Carluzzo, presumably because Judge Carluzzo, having ruled on the motion, and having been reassigned solely for the purpose of ruling on the motion, was no longer the judge assigned to the case (sort of). The order does not mention Judge Carluzzo, however, from the next events, I suspect that he was already assigned to conduct a calendar beginning on October 3, 2016, in Los Angeles. If my assumption is correct, he must have had feelings that this case was like a bad penny.
Upon reentering the case, Judge Carluzzo enters another order which provides an excellent description of the events of the case to this point and tells the undoubtedly unhappy Mr. Pilla that he must travel to Los Angeles from Minnesota for the hearing on October 3. The order sympathizes with the cost Mr. Pilla will incur in his continued effort to withdraw from the case but also points out that in choosing to enter an appearance in a case far from his home he should have foreseen the need to possibly travel to the place of trial. This order makes clear that his reason for seeking to withdraw is the failure of petitioners to pay his bills. The order also makes clear that petitioners believe they have paid their bills. So, the case is now more than three years old and poised not for a trial on the merits but rather for a trial on the whether the petitioners have paid the attorney they hired more than two years after filing their petition.
At the hearing on October 3, Mr. Pilla chose not to attend but rather to submit a written statement in addition to the two motions and three supplements he had already filed. On October 25, 2016, in the order linked at the beginning of this post, Judge Carluzzo granted the motion to withdraw but also ordered Mr. Pilla to return all of petitioners’ files. Subsequently, the case has been set for trial in March of 2017. The docket sheet does not indicate that a new representative has entered the scene.
This post is perhaps too long but it demonstrates the difficulty that can be encountered in withdrawing from representation. Certainly not every request to withdraw involves this much effort, but every request does require thought about whether and when to make the attempt. Of course, the first step is deciding whether to accept the engagement and enter the appearance.