Unreported / Non-Citable
Background
Plaintiffs Laszlo G. Peterfai and Sarah Jane Peterfai filed a class action complaint on September 14, 2023, against multiple moving companies and individuals, including Travis Ackermann, Ackermann Express LLC, and Monopoly Moving LLC. On October 9, 2026, defense counsel Thomas S. Carter filed a motion to withdraw as counsel for these three defendants pursuant to Federal Rule of Civil Procedure 78(b), Local Civil Rules 7.1(d)(1) and 83.3, and California Rule of Professional Conduct 1.16. Counsel asserted that the defendants had failed to remit payment for balances owed throughout September 2026 despite requests for payment per the engagement agreement, making ongoing representation impossible.
The court evaluated the motion under the four-factor test from Leatt Corp. v. Innovative Safety Tech., LLC: (1) the reasons for withdrawal; (2) potential prejudice to other litigants; (3) harm to the administration of justice; and (4) delay in case resolution. Counsel declared that defendants had been on notice of the intent to withdraw since approximately September 8, 2026, when counsel emailed defendants requesting they sign substitution of attorney forms and informed the corporate entities they would need to obtain new counsel because they could not appear unrepresented in court. Plaintiffs' counsel was also notified of the withdrawal motion.
The Court’s Holding
The court found good cause for withdrawal based on the defendants' failure to pay attorney fees, citing Indymac Fed. Bank, F.S.B. v. McComic and Leatt Corp. for the proposition that failure to pay attorney's fees can be a valid ground for withdrawal. The court found limited risk of prejudice to litigants because defendants had over a month's notice of counsel's intent to withdraw and the litigation was in a relatively nascent stage of fact discovery with no hearings currently set, citing Consumer Fin. Prot. Bureau v. Glob. Fin. Support, Inc.
The court granted the motion to withdraw subject to specific conditions. Counsel must file a certificate of proof of service within seven days of the order, including the last known address of each defendant. Individual defendant Travis Ackermann was given 21 days from the date of the order to retain new counsel and file a notice of appearance; failure to do so would result in him being deemed to proceed pro se, subject to Local Civil Rule 83.11 requirements. Corporate defendants Ackermann Express LLC and Monopoly Moving LLC were given 30 days to retain new counsel and file a notice of appearance; failure to obtain counsel by this deadline may result in entry of default and ultimately default judgment against the LLC defendants, consistent with Civil Local Rule 83.3(j) and In re Am. West Airlines, which hold that corporations may appear in court only through an attorney.
Key Takeaways
- Courts may grant attorney withdrawal motions based on client non-payment of fees when the client has received adequate notice and the case is at an early stage.
- Individual defendants who fail to secure new counsel within the court-ordered deadline will be deemed to proceed pro se and must comply with local rules governing self-representation.
- Corporate defendants (LLCs and corporations) cannot proceed pro se and must retain licensed counsel; failure to do so within the court-ordered timeframe may result in default judgment.
- Withdrawing counsel must file a certificate of proof of service demonstrating that all affected defendants were served with the withdrawal order and their last known addresses.
- The court balanced the attorney's right to withdraw against potential prejudice, finding minimal harm where discovery is nascent and no hearings are scheduled.
Why It Matters
This order illustrates the procedural safeguards courts impose when granting withdrawal motions in multi-defendant cases involving both individual and corporate parties. By imposing staggered deadlines (21 days for the individual, 30 days for the corporate entities) and requiring proof of service with last known addresses, the court ensures defendants receive actual notice while protecting the integrity of the judicial process. The order also reinforces the well-established rule that artificial entities must be represented by licensed counsel, with default judgment as the consequence of non-compliance.