444 LLC 444 LLC v. ANKURA TRUST COMPANY LLC LLC LLC 444 LLC (2026)

The following e-filed documents, listed by NYSCEF document number (Motion 008) 135, 136, 137, 138, 139, 140, 141, 142, 143 were read on this motion for ATTORNEY -DISQUALIFY/RELIEVE/SUBSTITUTE/WITHDRAW.

In motion sequence 008, attorney Mikhail Y. Sheynker, Esq. and Howard E. Cotton of Baker Hostetler LLP (Baker Hostetler), move to be relieved as counsel for plaintiffs. Defendants Ankura Trust Company LLC, Feoh Capital LLC and 444 Park Ave South Owner LLC oppose the motion.

Attorneys Sheynker and Cotton affirm under penalty of perjury, that the withdrawal of representation of plaintiffs is warranted, due to the clients' failure to satisfy outstanding legal fees and comply with agreed pay arrangements (NYSCEF doc. nos. 136 at pg. 5, 137 at pgs. 4, 5, 7). The attorneys submit that the clients failed to comply with the terms of their engagement letter and rendered it unreasonably difficult for Baker Hostetler to continue the representation of the plaintiffs in this matter. Attorneys Cotton and Sheynker request a stay of this matter to permit plaintiffs time to find replacement counsel (NYCEF doc. nos. 137,138).

In opposition, defendants contend that the court should deny the application for a stay, as it will delay the resolution of this matter and unduly prejudice Lenders. Defendants submit that plaintiffs' are engaging in a calculated strategy to delay evidenced throughout the parties dealings in discovery and their purported violation of multiple court-ordered discovery deadlines (NYSCEF doc. nos. 80, 102, 124, 132, 134). Defendants submit that the instant application fails to establish plaintiffs' entitlement to a stay and asks that this court deny the application.

CPLR 321 (b) (2) provides:

"[a]n attorney of record may withdraw or be changed by order of the court in which the action is pending, upon motion on such notice to the client of the withdrawing attorney, to the attorneys of all other parties in the action or, if a party appears without an attorney, to the party, and to any other person, as the court may direct."

If an attorney deems it necessary to end the attorney-client relationship without the consent of the client, the attorney may move on such notice as may be directed by the court, to be relieved as counsel by court order (Farage v Ehrenberg, 124 AD3d 159 [2nd Dept 2014]). "The decision to grant or deny permission for counsel to withdraw lies within the discretion of the trial court, and the court's decision should not be overturned absent a showing of an improvident exercise of discretion" (Applebaum v Einstein, 163 AD3d 905, 907 [1st Dept 2018]). "An attorney may be permitted to withdraw from employment where a client refuses to pay reasonable legal fees" (id.; see Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.16[c][5]).

A stay of an action following an attorney withdrawal is only automatic under CPLR 321(c) on account of the death, removal or disability of an attorney (Transasia Commodities Inv. Ltd. v NewLead JMEG, LLC, 169 AD3d 591, 592 [1st Dept 2019]). Where the withdrawal is caused by the client's voluntary actions, the courts routinely exercise their discretion to deny a stay of proceedings (Sarlo-Pinzur v Pinzur, 59 AD3d, 608 [2d Dept. 2009]; CPLR § 321).

The court may decline to impose a stay where the court determines from the conduct of the parties that there has been a demonstrated pattern of willful noncompliance with court orders and a pattern of intentional delay of the litigation process (id.). Also, with respect to any claim of an inability to pay legal fees, the court may discount such claim in the absence of substantiation via financial records, and where the past conduct of a party evidences an intentional frustration of discovery and an intent to delay the litigation process (id.).

Here, attorneys Sheynker and Cotton submit sufficient evidence, by way of attorney affirmation, of a failure by the clients to fulfill their obligations under the fee agreements entered into with their attorneys of record. A party's failure to pay fees is sufficient grounds to grant leave to withdraw (Applebaum at 907). However, it is this court's view that a stay of the action is not warranted. Some evidence seems to exist to substantiate defendants' claim of frustration of the discovery process, and the instant application is based upon plaintiffs' alleged refusal to pay counsels' bills. Plaintiffs have not filed any opposition to their attorneys' request to withdraw; therefore, this court does not find that compelling reasons exist to impose a stay on this action. Where the attorney's withdrawal is caused by a voluntary act of the client, the court has the discretion to permit the matter to proceed without such a stay (Shurka v Shurka, 955 NYS2d 12, 13 [1st Dept 2012] citing, Sarlo-Pinzur v Pinzur, 59 AD3d 607, 608 [2d Dept 2009]). Counsel's application to withdraw is granted, but discovery in this matter, and argument on all outstanding motions shall proceed, forthwith.

Accordingly, it is hereby

ORDERED that the motion of Baker Hostetler LLP, to be relieved as counsel for plaintiffs (mot. seq. no. 008), is granted upon filing proof of compliance with the following conditions; and it is further

ORDERED that, within five (5) days from entry, said attorneys shall serve a copy of this order with notice of entry upon the former clients at their last known address by certified mail, return receipt requested, and upon the attorneys for all other parties appearing herein by filing on the New York State Courts Electronic Filing System; and it is further

ORDERED that, together with the copy of this order with notice of entry served upon the former clients, moving counsels shall forward a notice directing the former clients to appoint a substitute attorney within 30 days from the date of the mailing of the notice and the clients shall comply therewith, except that, in the event plaintiff David Moinian intends instead to represent himself, he shall notify the Clerk of the Part of this decision in writing within said 30-day period; and it is further

ORDERED that any new attorney retained by plaintiffs shall file a notice of appearance with the Clerk of the General Clerk's Office and the Clerk of the Part within thirty (30) days from the date the notice to retain new counsel is mailed; and it is further

ORDERED that the departing attorney shall, within five (5) days from entry, serve a copy of this order with notice of entry on the Clerk of the General Clerk's Office; and it is further

ORDERED that such service upon the Clerk of the General Clerk's Office, the filing of a notice of appearance as provided herein, and the filing of papers as aforesaid shall be made in accordance with the procedures set forth in the Protocol on Courthouse and County Clerk Procedures for Electronically Filed Cases (accessible at the "E-Filing" page on the court's website).

DATE August 20, 2026

ROBERT R. REED, J.S.C.

Robert R. Reed, J.