Nw. Bldg. Co. v. Nw. Distrib. Co.

• Decision Date: 29 August 2012
• Docket Number: No. S–11–0283.,S–11–0283.
• Citation: 285 P.3d 239,2012 WY 113
• Parties: NORTHWEST BUILDING COMPANY, LLC, a Wyoming Limited Liability Company, Appellant (Plaintiff), v. NORTHWEST DISTRIBUTING CO., INC., a Wyoming Corporation, Appellee (Defendant).
• Court: Wyoming Supreme Court

285 P.3d 239

2012 WY 113

NORTHWEST BUILDING COMPANY, LLC, a Wyoming Limited Liability Company, Appellant (Plaintiff),

v.NORTHWEST DISTRIBUTING CO., INC., a Wyoming Corporation, Appellee (Defendant).

No. S–11–0283.

Supreme Court of Wyoming.

Aug. 29, 2012.

Representing Appellant: Greg L. Goddard, Christopher M. Wages and Tucker J. Ruby of Goddard, Wages & Vogel, Buffalo, Wyoming. Argument by Mr. Ruby.

Representing Appellee: Thomas J. Klepperich, Dan B. Riggs and Amanda K. Roberts of Lonabaugh and Riggs, LLP, Sheridan, Wyoming. Argument by Ms. Roberts.

Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.

KITE, Chief Justice.

[¶ 1] Northwest Building Company, LLC (Contractor) performed construction services for Northwest Distributing Co., Inc. (Owner) on a Taco John's/Good Times facility in Gillette, Wyoming. Contractor brought an action against Owner seeking payment for its services, and Owner counterclaimed. After Contractor's attorney moved to withdraw, the district court ordered Contractor to find substitute counsel by the pretrial conference. When Contractor was unable to find substitute counsel by the deadline, the district court sanctioned it by dismissing its complaint and granting judgment in favor of Owner on its counterclaims. Contractor appealed, raising a number of procedural issues.

[¶ 2] We affirm.

ISSUES

[¶ 3] Contractor presents several issues for our review:

1. Whether the District Court abused its discretion when it allowed [Contractor's] counsel to withdraw when no new counsel had entered a written appearance on [Contractor's] behalf.

2. Whether the District Court abused its discretion when it dismissed all of [Contractor's] claims with prejudice and entered judgment against [Contractor] on all of [Owner's] counterclaims in its Order Granting Motion to Withdraw and Imposing Sanctions, and denied [Contractor's] motion to set aside those sanctions in its Order Denying Motion to Set Aside Sanctions.

3. Whether the District Court erred when it considered [Contractor's] Notice of Appeal, dated May 31, 2011, appealing the District Court's Order Granting Motion to Withdraw and Imposing Sanctions and Order Denying Motion to Set Aside Sanctions premature.

4. Whether the District Court erred when it maintained jurisdiction over the case, proceeded to a hearing on the damages owed [Owner] on [Owner's] counterclaims on July 29, 2011, and awarded [Owner] damages pursuant to its counterclaims in its Judgment, dated September 19, 2011.

5. Whether the District Court abused its discretion when it struck [Contractor's] Statement of the Evidence or Proceedings from the record on appeal in its entirety.

Owner's statement of the issues is similar.

FACTS

[¶ 4] The underlying facts are of little relevance to the issues on appeal, so we will simply provide some basic background of the controversy. In Spring 2006, Owner and Contractor entered into an oral agreement for construction services on a Taco John's/Good Times facility in Gillette. Disputes arose over the scope and quality of Contractor's work and its right to payment.

[¶ 5] On October 31, 2008, Contractor filed suit against Owner stating claims for payment of debt, unjust enrichment, lost business opportunity and breach of the implied covenant of good faith and fair dealing. Owner responded denying liability and counterclaiming for breach of contract and unjust enrichment. The case proceeded, and the district court granted Owner's motion to strike Contractor's expert witness and motion for partial summary judgment on Contractor's lost business opportunity claim.

[¶ 6] On March 22, 2011, Contractor's attorney filed a motion to withdraw, and the district court held a hearing on the motion on April 12, 2011. At that time, the district court indicated that it was going to allow Contractor's attorney to withdraw and ordered it to obtain substitute counsel by the pretrial conference on April 19, 2011. The court stated that substitute counsel would have to be ready for trial commencing May 24, 2011.

[¶ 7] Although it attempted to find substitute counsel by the April 19 deadline, Contractor was unable to finalize a representation agreement with its new counsel by that date. Pursuant to Owner's motion for sanctions, the district court dismissed Contractor's complaint, entered judgment against Contractor on Owner's counterclaims and stated that a hearing to determine Owner's damages would be convened at a later date. A few days later, Contractor finalized an agreement with new counsel who entered an appearance and filed a motion to set aside the sanctions. The district court denied the motion to set aside the sanctions.

[¶ 8] On May 31, 2011, Contractor filed a notice of appeal from the order granting the motion to withdraw and imposing sanctions and the order denying its motion to set aside the sanctions. Because the various court hearings had not been reported, Contractor also filed a “Statement of the Evidence or Proceedings” pursuant to W.R.A.P. 3.03, which Owner objected to as including improper argument and information that was not provided during the evidentiary hearings.

[¶ 9] The parties eventually stipulated to the amount of Owner's damages, and, on September 19, 2011, the district court entered judgment in accordance with the stipulation. It also ordered the parties to supplement their submissions regarding the statement of the evidence. Contractor filed a second notice of appeal from the judgment awarding Owner damages, but did not file a supplement to its statement of the evidence and the district court struck it from the record.

DISCUSSION

1. Motion to Withdraw

[¶ 10] Contractor claims the district court erred by allowing its attorney to withdraw without requiring substitute counsel to first enter an appearance. “[I]ssues concerning the withdrawal of counsel ... are matters which are left to the sound discretion of the trial court and will not be upset on appeal absent a demonstrated abuse of discretion.” Byrd v. Mahaffey, 2003 WY 137, ¶ 5, 78 P.3d 671, 673 (Wyo.2003).

An abuse of discretion is found only when a court acts in a manner which exceeds the bounds of reason under the circumstances. The ultimate issue is whether the trial court could reasonably conclude as it did.

Id.

[¶ 11] Rule 102(c) of the Uniform Rules for District Courts governs the procedure for an attorney to withdraw from a case:

(c) Counsel will not be permitted to withdraw from a case except upon court order. Except in the case of extraordinary circumstances the court shall condition withdrawal of counsel upon the substitution of other counsel by written appearance. In the alternative, the court shall allow withdrawal upon a statement submitted by the client acknowledging the withdrawal of counsel for the client, and stating a desire to proceed pro se. An attorney who has entered a limited entry of appearance shall be deemed to have withdrawn when the attorney has fulfilled the duties of the limited entry of appearance.

(emphasis added). The requirement for substitute counsel is mandatory under Rule 102(c). Sims v. Day, 2004 WY 124, ¶ 11, 99 P.3d 964, 968–69 (Wyo.2004). The only exceptions to the rule are when the client consents to proceed pro se, see, e.g., McGuire v. Solis, 2005 WY 129, ¶ 13, 120 P.3d 1020, 1024 (Wyo.2005), or extraordinary circumstances exist. The district court stated that because Contractor is an “entity,” it had to be represented by an attorney and could not proceed pro se.U.R.D.C. 101.¹ Consequently, the only justification for allowing Contractor's attorney to withdraw before substitute counsel entered an appearance was the existence of extraordinary circumstances.

[¶ 12] Contractor's attorney filed a motion stating several reasons for withdrawal, including Contractor failed to: produce income tax returns needed by its expert to prepare his report, which resulted in the expert being stricken as a witness; accept a certified mailing from counsel and respond to a regular mailing; and consistently pay for his services. After a hearing, the district court concluded that the attorney should be allowed to withdraw without substitute counsel first entering an appearance, but did not specifically find that extraordinary circumstances existed.

[¶ 13] In Byrd, we addressed the “extraordinary circumstances” requirement of Rule 102(c). The district court in that case also did not make a specific finding that extraordinary circumstances existed; however, we concluded the requirement was met because the record demonstrated that Byrd refused to keep appointments, did not respond to telephone calls, refused to execute a deed in accordance with an earlier agreement, communicated directly with the opposing party, refused to make payments to the opposing party as required by court order, and did not cooperate with discovery requests. Id., ¶¶ 15–16, 78 P.3d at 675–76. The record also demonstrated that Byrd failed to “cooperate and obstructed the orderly progression” of the case, placing his counsel in a very difficult position. Id., ¶ 16, 78 P.3d at 676.

[¶ 14] In Sims, by contrast, we concluded extraordinary circumstances did not exist when the attorney's motion to withdraw simply stated that representation had been “rendered unreasonably difficult by the client—due to the client's neglect in communicating and complying with requests of [c]ounsel.” We additionally concluded that the district court erred in allowing withdrawal of counsel because the client had not been given an opportunity to respond to the attorney's allegations before the motion was granted. Sims, ¶¶ 11–13, 99 P.3d at 969.

[¶ 15] Comparing the circumstances in Byrd with the reasons set forth in the motion to withdraw in this case, we cannot say that Contractor's attorney's motion satisfied the extraordinary circumstances requirement. Byrd's actions were a great deal more egregious then those set out in the motion here. The first reason cited by Contractor's attorney for withdrawal—failure...