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Dillon v. Otis Elevator Co.

Appellate Division of the Supreme Court of the State of New York
22 A.D.3d 1, 800 N.Y.S.2d 385, 2005 N.Y. App. Div. LEXIS 8130 (2005)
ELI5:

Rule of Law:

A law firm retained by an insurer to defend an insured may withdraw from representation when the insured's persistent non-cooperation makes effective representation unreasonably difficult, even if the insurer has also disclaimed coverage, provided the withdrawal motion is based on the client's conduct and not as a vehicle to test the insurer's disclaimer.


Facts:

  • Bush Elevator Corp. (Bush) was sued in a personal injury action arising from an elevator service contract.
  • Bush's liability insurer, CNA/Continental Casualty Company (CNA), retained the law firm of White Fleischner & Fino, LLP (WF&F) to defend Bush.
  • Nathan Glick, Bush's principal, flouted a court order compelling his appearance for a deposition.
  • Bush also failed to respond to discovery demands for elevator inspection reports and work tickets.
  • A Bush employee told a WF&F investigator to "get the hell out" of Bush's office and denied that Glick existed.
  • As a result of this non-cooperation, CNA notified Bush that it was disclaiming insurance coverage for the personal injury action.

Procedural Posture:

  • A personal injury action was filed against Bush Elevator Corp. in the Supreme Court, Bronx County (trial court).
  • During discovery, the trial court entered an order of preclusion against Bush for its failure to cooperate, barring it from offering its principal as a witness and from introducing certain documents.
  • The law firm for Bush, White Fleischner & Fino, LLP (WF&F), filed a motion in the trial court to withdraw as counsel.
  • The plaintiff in the underlying personal injury action opposed the motion.
  • The Supreme Court granted WF&F's motion to withdraw.
  • The plaintiff appealed the trial court's order to the intermediate appellate court.

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Issue:

Does a law firm, retained by an insurer, have the right to withdraw from representing an insured client whose persistent and flagrant non-cooperation has made effective representation unreasonably difficult, even though the insurer has separately disclaimed coverage for that same non-cooperation?


Opinions:

Majority - Sullivan, J.

Yes. A law firm may withdraw from representation when the client's conduct makes it unreasonably difficult for the lawyer to carry out their employment effectively. The court distinguished this case from precedents where withdrawal was deemed an improper vehicle to test an insurer's disclaimer. Here, WF&F's motion was not an attempt to litigate CNA's disclaimer; rather, it was based independently on Bush's absolute refusal to cooperate with its own counsel, which constitutes good cause for withdrawal under professional responsibility rules. The court noted that CNA had already commenced a separate declaratory judgment action to resolve the coverage dispute, demonstrating that the withdrawal motion was not a substitute for that proper procedure. To deny withdrawal would be to trap attorneys in an untenable position, compelling them to represent clients who refuse to communicate or cooperate in their own defense.



Analysis:

This decision clarifies the boundary between a law firm's ethical obligations to a client and the strategic actions of the insurer that retained the firm. It establishes that a client's own obstructive conduct can create an independent basis for counsel's withdrawal, separate from any coverage dispute between the client and the insurer. The ruling provides a crucial escape valve for insurer-retained counsel facing a completely uncooperative client, reinforcing that the attorney-client relationship has its own duties and breaking points regardless of the insurance context. Future cases will likely look to the specific conduct of the client to determine if withdrawal is based on the practical impossibility of representation rather than as a disguised challenge to a coverage disclaimer.

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