In re the Motion of Franke

55 A.3d 713, 207 Md. App. 679, 2012 WL 3715779, 2012 Md. App. LEXIS 95
CourtCourt of Special Appeals of Maryland
DecidedAugust 29, 2012
DocketNo. 2577
StatusPublished
Cited by9 cases

This text of 55 A.3d 713 (In re the Motion of Franke) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Motion of Franke, 55 A.3d 713, 207 Md. App. 679, 2012 WL 3715779, 2012 Md. App. LEXIS 95 (Md. Ct. App. 2012).

Opinion

KRAUSER, C.J.

The principal issue before us is whether an attorney may file an interlocutory appeal when his motion to withdraw as counsel has been denied. The attorney is Frederick R. [681]*681Franke, Jr. Franke was retained by Raymon K. Nelson, M.D. (“Raymon”), to represent Raymon in his capacity as the trustee of the Trust of his late brother, Ralph L. Nelson, M.D. (“Ralph, Sr.”). The beneficiaries of the Trust are Ralph, Sr.’s wife, Myra Nelson (“Myra”), and his son, Ralph L. Nelson, Jr. (“Ralph, Jr.”).

When Myra filed a petition in the Circuit Court for Anne Arundel County, seeking, among other things, the appointment of a co-trustee, because Raymon had purportedly mismanaged the Trust, Raymon hired Franke to represent him in this matter. After paying Franke a retainer and, later, as the case progressed, additional legal fees, Raymon reimbursed himself, with funds from the Trust, relying on provisions of the Trust Agreement that purportedly permitted him to do so.1

After discovery had advanced, Myra, together with Ralph, Jr., who had been added as a party, amended what had become their joint petition to demand that Raymon be removed as trustee, that a trustee be appointed in Raymon’s place, and that he be required to pay damages for misappropriation of Trust funds. Granting that request in part, the circuit court removed Raymon as trustee, replacing him with an interim trustee.

By that time, Raymon owed Franke more than $120,000 in legal fees. Unable to draw funds from the Trust, as a result of his removal as trustee, Raymon made no further payments to Franke though Franke continued to represent him in this matter.

[682]*682About two months before trial, Franke notified Raymon that, largely because of Raymoris failure to pay any pending or projected legal fees and costs, he intended to file a motion to withdraw as Raymoris counsel. The motion was first granted by one judge and then denied by another. From the ultimate denial of that motion, Franke noted this appeal, claiming that, in refusing to grant his motion to withdraw, the court had abused its discretion and that, under the collateral order doctrine, that ruling was an appealable order. Then, pending the resolution of this appeal, at the request of Franke and with no opposition from Myra and Ralph, Jr., the circuit court stayed these proceedings indefinitely.

Because we hold that the circuit court’s order rejecting Franke’s request to withdraw is appealable under the collateral order doctrine and that the circuit court abused its discretion in so ruling, we vacate the circuit court’s order and direct that court to grant Franke’s request to withdraw as counsel for Raymon,

Background

When, in 2004, Ralph, Sr., discovered that he was suffering from a rare and lethal form of cancer, he established, with the assistance of counsel, a trust (the “Trust”) to receive the assets of his estate for the benefit of his wife, Myra, and his son, Ralph, Jr. He named as co-trustees his brother, Raymon, and himself. But, following the death of Ralph, Sr., later that year, Raymon became the sole trustee of the Trust.

Between 2005 and the spring of 2008, relations between the decedent’s wife and brother deteriorated, because of, among other things, Raymoris substantial delays in, or perhaps avoidance of, communicating essential information regarding the financial condition of the Trust, to her. It was not until January 2008, Myra claims, that Raymon provided her with an accounting of the Trust for 2005. That accounting stated that the Trust had a balance of $2,556,702.09, as of the beginning of that year. Four months later, pressed by Myra to proride further information, Raymon supplied her with an accounting of the Trust’s assets for 2006, but not for 2007. Then, as a [683]*683result of an additional document provided by Raymon, Myra learned that the Trust’s assets had declined in value from $2,556,702.09 to approximately $1,610,000 as of June 2008, a loss of $946,702.

Suspecting that Raymon was misappropriating Trust funds, Myra filed a petition in the Anne Arundel County circuit court, requesting that the circuit court assume jurisdiction over the Trust; order an accounting of the Trust’s assets; prohibit Raymon “from spending any Trust funds for any purpose” other than to provide a monthly allowance to Myra; require Raymon to show cause why he should not be removed as trustee; and appoint a co-trustee. Several weeks later, Raymon hired Franke to represent him, paying him a $10,000 retainer, and later, as the case progressed, at least $24,437.39 in additional legal fees. Raymon then reimbursed himself, for the fees he had paid Franke, with funds from the Trust.2

A second amended petition, filed by Myra and Ralph, Jr., requested that the court immediately remove Raymon as trustee and appoint, in his place, Myra’s cousin “or some other suitable individual” as trustee, as well as a demand for damages of $1,500,000 for fraudulent misappropriation and intentional dissipation of Trust funds. Four months later, Myra and Ralph, Jr., filed a motion for a preliminary injunction, requesting that Raymon be enjoined from reimbursing himself with monies from the Trust. Judge Pamela L. North, who had been specially assigned to the case, removed Raymon as trustee and appointed, in his stead, Myra’s cousin as interim trustee.

Trial on the remaining claims, relating to Raymon’s purported misappropriation of Trust assets, was scheduled for February 2, 2010. Two months before that date, Franke sent a [684]*684letter to Raymon, notifying him of Franke’s intent to file a motion to withdraw as his counsel. Almost two weeks after that, Franke filed a motion to withdraw his appearance, hand-delivering a courtesy copy to Judge North.

In that motion, Franke stated that he was owed more than $120,000 in legal fees; that he had, nonetheless, continued representing Raymon “because of the potential prejudice” that might have occurred “with discovery still outstanding and with a hearing set for a Motion for a Preliminary Injunction”; that “since the ruling on thé Preliminary Injunction,” he had “overseen the turnover of trustee responsibilities” to the interim trustee and had “undertaken efforts to settle the matter” to no avail; that he had served Raymon with notice, as required by the Maryland rules; and that trial was scheduled “two months from the notice of intention to withdraw.” There were, he suggested, “other reasons for the withdrawal” and that those reasons had “created a conflict making continued representation problematic.”

Raymon opposed the motion, contending that “at this late stage in the matter, having completed discovery and other trial preparation work,” and with trial to begin in five weeks, he “would likely sustain irreparable harm and an unfair trial if Counsel were to withdraw.” Any conflicts between himself and Franke were, he claimed, “financially based.”

Although the instant case had been specially assigned to Judge North, Franke’s motion was, for some unknown reason, presented to a different circuit court judge: Judge Paul A. Hackner. After Judge Hackner granted the motion, the Clerk of the Circuit Court sent notice to Raymon, advising him that his “failure to have new counsel enter his appearance” within fifteen days after service of the notice “shall not be grounds for postponing any further proceedings, concerning the case.”

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Cite This Page — Counsel Stack

Bluebook (online)
55 A.3d 713, 207 Md. App. 679, 2012 WL 3715779, 2012 Md. App. LEXIS 95, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-motion-of-franke-mdctspecapp-2012.