Unlucky Film Inc. v. Red Hawk Films, Inc.

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
UNLUCKY FILMS INC.,
Plaintiff,
vs.
RED HAWK FILMS, INC.,
Defendant.
2:24-CV-10149-TGB-EAS
HON. TERRENCE G. BERG
OPINION AND ORDER
GRANTING MOTION FOR
WITHDRAWAL OF
ATTORNEY RICHARD M.
SCHULMAN (ECF NO. 57),
DISMISSING UNLUCKY
FILMS INC.’S CLAIMS,
DIRECTING THE CLERK
OF THE COURT TO ENTER
DEFAULT AGAINST
UNLUCKY FILMS INC.,
DENYING RED HAWK
FILMS, INC.’S MOTION TO
EXPEDITE (ECF NO. 59) AS
MOOT,
AND DENYING RED HAWK
FILMS, INC.’S MOTION
FOR ENTRY OF A
DEFAULT JUDGMENT
(ECF NO. 60) WITHOUT
PREJUDICE.
The Plaintiff in this case, Unlucky Films Inc. (“Unlucky”) has been
stringing this case along for almost two years by repeatedly failing to pay
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the attorneys it hired to prosecute its case. Unlucky brought this action
in January 2024 against Defendant Red Hawk Films, Inc., alleging
breach of contract and breach of fiduciary duty, and seeking a declaratory
judgment. ECF No. 1. Defendant Red Hawk Films, Inc. (“Red Hawk”) has
filed counterclaims. ECF. No. 10. In what has become a familiar pattern
for Unlucky, its latest attorney, Richard M. Shulman, has filed a motion
to withdraw as counsel because Plaintiff is not paying him. ECF No. 57.
The motion to withdraw is well taken and will be GRANTED.
Moreover, because Unlucky’s unwillingness or inability to maintain
representation by counsel has repeatedly caused undue delay of these
proceedings, to the significant prejudice of Defendant Red Hawk, and
because it does not appear that Unlucky has the will or the resources
needed 	to 	fund 	this 	litigation 	against 	Red 	Hawk, 	the 	Court 	will
DISMISS Unlucky’s claims and DIRECT the Clerk of the Court to enter
a default against Plaintiff.1
1 	While the Court was preparing the present Order, Defendant filed
a “Motion for Entry of a Default Judgment.” ECF No. 60. However, “[a]n
entry of default and a default judgment are distinct events that require
separate treatment.” Ramada Franchise Sys., Inc. v. Baroda Enters.,
LLC, 220 F.R.D. 303, 304 (N.D. Ohio 2004). “[A] default judgment
cannot be granted until a default is entered by the Clerk.” Id. at 305. To
the extent that Defendant intended to move for an entry of default,
Defendant’s motion is DENIED as moot in light of the present Order.
To the extent Defendant intended to move for a default judgment,
Defendant’s motion is DENIED without prejudice as premature. See id.
(“To the extent plaintiff's motion, filed on December 9, 2003, was for a
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I. 	FACTUAL BACKGROUND
On January 19, 2024, Plaintiff, acting through its first counsel in
this action, Howard & Howard Attorneys PLLC, filed the operative
complaint in this action. See ECF No. 1. Howard & Howard Attorneys
PLLC did not stay on as counsel, however.
On March 28, 2024, Augustine O. Igwe P.C., Plaintiff’s second
counsel in this action, was substituted as counsel. ECF No. 15.
On April 18, 2024, Augustine O. Igwe P.C. moved to withdraw as
counsel for Plaintiff. ECF No. 18. In its motion, Augustine O. Igwe P.C.
submitted 	that 	“there 	is 	a 	complete, 	irreparable 	breakdown 	of 	the
attorney-client 	relationship” 	and 	“there 	have 	been 	no 	payment 	of
attorneys’ fees and expenses incurred.” Id. at PageID.355.
On April 30, 2024, during a telephonic status conference, Timothy
Mucciante, owner and representative of Plaintiff, was warned by the
Court of the requirement of counsel for parties who are corporate entities
and that the consequences of 	further withdrawals of counsel could
suggest a lack of diligence in prosecuting his case. See ECF No. 50,
default judgment under Fed. R. Civ. P. 55(b), the motion is overruled
without prejudice as premature.”). Once the Clerk enters a default in
accordance with this Order, Defendant may, pursuant to Fed. R. Civ. P.
55(b), file a motion for a default judgment accompanied by a proposed
order for default judgment, listing the appropriate judgment amounts.
See id.
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PageID.954. Mr. Mucciante indicated his understanding and that there
would be no further withdrawals of counsel. Id.
On May 1, 2024, Rossman, P.C., Plaintiff’s third counsel in this
action, was substituted as counsel. ECF Nos. 20, 21.
On July 15, 2024, Rossman, P.C., moved to withdraw as counsel for
Plaintiff. ECF No. 25. In its motion, Rossman, P.C. submitted that
“[t]here has been an irreconcilable breakdown of the attorney-client
relationship 	with 	Plaintiff” 	and 	that 	“Plaintiff 	has 	been 	repeatedly
notified about the issues giving rise to the breakdown in the attorney-
client relationship over the course of the past two months [and] Plaintiff
has been given repeated, reasonable warnings that the [Rossman, P.C.]
would withdraw unless the issues were resolved.” Id. at PageID.381–82.
On August 13, 2024, during an in-person hearing, Mr. Mucciante,
was 	again 	warned 	by 	the 	Court 	on 	the 	consequences 	of 	further
withdrawals of counsel. See ECF No. 50, PageID.954 (The Court reviewed
a rough transcript of this hearing, confirming same.) Mr. Mucciante
again indicated his understanding and that there would be no further
withdrawals of counsel. Id.
On August 14, 2024, Traverse Legal, PLC, Plaintiff’s fourth counsel
in this action, was substituted as counsel. ECF No. 28.
On October 4, 2024, Traverse Legal, PLC, moved to withdraw as
counsel for Plaintiff. ECF No. 31. In its motion, Traverse Legal, PLC
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submitted 	that 	“there 	is 	a 	complete, 	irreparable 	breakdown 	of 	the
attorney-client relationship.” Id. at PageID.608.
On October 25, 2024, Evia Law PLC, Plaintiff’s fifth counsel in this
action, was substituted as counsel. ECF No. 33. On November 21, 2024,
Evia Law PLC moved to withdraw as counsel for Plaintiff. ECF No. 36.
On December 3, 2024, Evia Law PLC withdrew its motion to withdraw.
ECF No. 39.
On April 3, 2025, Evia Law PLC, moved to withdraw as counsel for
Plaintiff. ECF No. 47. In its motion, Evia Law PLC requested withdrawal
“for nonpayment of Counsel’s fees for work done on this matter.” Id. at
PageID.923. 	Evia Law PLC 	submitted that 	“Plaintiff 	has indicated
payments have been sent and appear to be in process, but they have not
yet been received.” Id.
On July 11, 2025, during an in-person hearing, the Court addressed
counsel’s motion to withdraw and asked Mr. Mucciante whether any of
Plaintiff’s attorneys had been paid. Mr. Mucciante was unable to answer
that question without looking at “the accounting.” See 	ECF No. 58,
PageID.1060 (The Court consulted a rough transcript of this hearing.)
See ECF No. 58, PageID.1060. The Court warned Mr. Mucciante that a
corporate entity could not proceed in court without an attorney and that
if he did not comply with his obligation to obtain a lawyer, the Court
would see that as an indication that he is unable to prosecute the case,
and his complaint would be dismissed. See ECF No. 58, PageID.1060.
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On July 16, 2025, in a text-only order, the Court ordered Plaintiff
to have new counsel file an appearance. In that order, the Court again
warned Plaintiff that “[i]f no new counsel enters an appearance for
Plaintiff Unlucky … the Court will consider whether Plaintiff’s repeated
failures to retain counsel present sufficient grounds to dismiss the
complaint for failure to prosecute.” See Text-only Order dated July 16,
2025.
On July 18, 2025, in a text-only order, the Court repeated its
admonishment, stating: “Plaintiff's repeated failures to retain counsel in
this matter having introduced undue delay and prejudice to the opposing
party, failure to meet this deadline may result in dismissal for failure to
prosecute.” See Text-only Order dated July 18, 2025.
On July 25, 2025, Richard M. Shulman, Plaintiff’s sixth counsel in
this action, made an appearance as counsel. ECF No. 55.
As the parties had requested an expeditious trial in this matter, the
Court set a pretrial conference date of November 3, 2025 and a trial date
of November 20, 2025. See Text-only Order dated September 4, 2025.
On October 1, 2025, approximately one month before trial was set
to begin, Plaintiff’s counsel, Mr. Shulman, moved to withdraw as counsel
for Plaintiff on the grounds of non-payment by Mr. Mucciante. ECF No.
57.
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II. 	SHULMAN’S MOTION FOR WITHDRAWAL
In his Motion for Withdrawal, Mr. Shulman describes that he
“undertook to represent Plaintiff based on his client’s representations
that payment would be forthcoming for his involvement, and despite his
client’s assurances that payment would be forthcoming, no such payment
has been accomplished.” ECF No. 57, PageID.1055.
Eastern District of Michigan Local Rule 83.22(b) 	applies “[t]he
Rules of Professional Conduct adopted by the Michigan Supreme Court
… to” attorneys who practice in this court. See Davis v. State Farm Fire
& Cas. Co., 351 F. App’x 990, 991 (6th Cir. 2009) (applying the Michigan
Rules of Professional Conduct in reviewing of a district court in the
Eastern District of Michigan’s denial of a motion to withdraw). Rule
1.16(b) of the Michigan Rules of Professional Conduct states, in relevant
part that,
Except as stated in paragraph (c), after informing the client
that the lawyer cannot do so without permission from the
tribunal for the pending case, a lawyer may withdraw from
representing a client … if:
…
(4) 	the client fails substantially to fulfill an obligation to the
lawyer regarding the lawyer’s services and has been
given reasonable warning that the lawyer will withdraw
unless the obligation is fulfilled;
(5) 	the 	representation 	will 	result 	in 	an 	unreasonable
financial burden on the lawyer or has been rendered
unreasonably difficult by the client; or
(6) 	other good cause for withdrawal exists.
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Mr. 	Shulman 	submits 	that 	“Plaintiff 	has 	repeatedly 	indicated
payments have been sent and appear to be in process, but they have not
yet been received. Counsel has given Plaintiff reasonable notice of this
request 	for 	withdrawal, 	has 	allowed 	time 	for 	employment 	of 	other
counsel, and will return Plaintiff’s materials.” ECF No. 57, PageID.1057.
In light of these facts, the Court finds the requirements for withdrawal
under Rule 1.16(b) of the Michigan Rules of Professional Conduct are
present in this situation. Accordingly, the Court GRANTS Shulman’s
Motion for Withdrawal.
III. 	PLAINTIFF’S 	FAILURE 	TO 	PROSECUTE 	AND 	TO
DEFEND
Over the past 22 months, Plaintiff has been represented by six
different counsels in the course of this litigation. Every one of them has
moved to withdraw. The basis for each of these withdrawals appears to
be 	Plaintiff’s failure 	to 	compensate 	counsel 	— a circumstance 	that
Plaintiff’s representative, Mr. Mucciante, assured the Court on more
than one occasion would not recur. The Court has no reason to believe
that this pattern — an appearance by counsel followed by a motion to
withdraw due to nonpayment — will not continue ad infinitum should
the case be allowed to go forward. Indeed, the record supports the
opposite conclusion.
But Unlucky is a corporate entity, and as this Court repeatedly
advised Mr. Mucciante, a corporation cannot make an appearance in
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federal court except through an attorney. Doherty v. Am. Motors Corp.,
728 F.2d 334, 340 (6th Cir. 1984) (“a corporation cannot appear in federal
court except through an attorney”); see also NK Beer Wine, Inc. v. United
States, No. 08-067, 2009 WL 1874031, at *1 (W.D. Mich. June 29, 2009)
(“Lack of resources does not excuse Plaintiff’s failure to have counsel
appear on its behalf.”). For this reason, the Court warned Plaintiff, on
multiple occasions, that failure to retain counsel could lead to dismissal
of the action. The Court specifically inquired of Mr. Mucciante as to
whether he had paid any of his attorneys, but he was unable to give an
answer. Now, for the sixth time, Plaintiff is without counsel. As the Court
warned Mr. Mucciante in at least one hearing, Unlucky has invoked the
Court’s jurisdiction by filing a formal complaint and hailing Red Hawk
into federal court. As a corporate plaintiff, Unlucky must have counsel to
represent it and plead its case — and that means compensating counsel
for services rendered. At one time or another in the course of this case,
both parties have characterized their claims as emergencies. And yet, due
to Plaintiff’s dilatory and reckless conduct in failing to retain counsel, the
case has languished. To the extent that Unlucky has been gambling on
the Court to once again allow it to delay the case by not failing to pay its
lawyer, it is fair to say that Unlucky’s luck has run out. Thus, for the
reasons below, the Court will dismiss this action and direct the Clerk of
the Court to enter a default against Plaintiff.
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The Court’s authority to take such action derives from Rule 41(b)
and Rule 55(a) of the Federal Rules of Civil Procedure.
“Rule 41(b) of the Federal Rules of Civil Procedure confers on
district courts the authority to dismiss an action for failure of a plaintiff
to prosecute the claim or to comply with the Rules or any order of the
court.” Schafer v. City of Defiance Police Dep’t, 529 F.3d 731, 736 (6th Cir.
2008); see also Rogers v. City of Warren, 302 F. App’x 371, 375 n.4 (6th
Cir. 2008) (“it is well-settled that the district court can enter a sua sponte
order of dismissal under Rule 41(b)”). When a corporation has failed to
maintain representation by counsel, courts have dismissed the action
under Rule 41(b). See, e.g., Canal Ins. Co. v. Schaefer, No. 23-01059, 2025
WL 2415791, at *4 (M.D. Tenn. Aug. 20, 2025) (dismissing an action
under Rule 41 and finding “that by failing to obtain new counsel for
months, Patriot has shown no interest in prosecuting its counterclaims
and has effectively abandoned them in this case.”); J & P Recovery, Inc.
v. R.C. Dolner, Inc., No. 00-5761, 2002 WL 1774058, at *2 (E.D. Pa. Aug.
1, 2002) (dismissing an action under Rule 41(b) when Plaintiff “failed to
pay the fees necessary to retain counsel”).
Similarly, Rule 55(a) of the Federal Rules of Civil Procedure confers
on district courts the authority to enter a default sua sponte against a
litigant who has failed to defend an action. See, e.g., Zobele Mexico, S.A.
de C.V. v. TSS Techs., Inc., No. 18-596, 2019 WL 1130752, at *2 (S.D.
Ohio Feb. 13, 2019) (recommending “that the Clerk’s Office enter a
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default against the corporate Defendant based upon its failure to secure
counsel”), adopted, No. 18-596, 2019 WL 1125873, at *1 (S.D. Ohio Mar.
12, 2019) (filing an Entry of Default under Rule 55(a)); Daniel Def., LLC
v. Tactical Edge, LLC, No. 21-334, 2023 WL 4561602, at *1 (S.D. Ga. July
17, 2023) (“The Court is empowered to direct entry of default 	sua
sponte.”); Allstate Prop. & Cas. Ins. Co. v. Haslup, No. 10-0191, 2012 WL
12953465, at *6 n.6 (N.D. Ga. Jan. 12, 2012) (collecting cases for the
proposition that “a court can enter default under Rule 55(a) sua sponte
against a litigant who has failed to answer the complaint or otherwise
defend a pending action”), affirmed, 502 F. App’x 845 (11th Cir. 2012).
When a corporation has failed to maintain representation by counsel,
courts have entered a default under Rule 55(a). See, e.g., Zobele Mexico,
S.A. de C.V., 2019 WL 1125873, at *1 (doing so sua sponte); Sec. & Exch.
Comm’n v. Rsch. Automation Corp., 521 F.2d 585, 589 (2d Cir. 1975)
(“where a corporation repeatedly fails to appear by counsel, a default
judgment may be entered against it pursuant to Rule 55”); 	J & P
Recovery, Inc., 2002 WL 1774058, at *1 (“A failure to comply with a court
order to engage counsel may also fairly be viewed as a failure to defend
which justifies an entry of a default judgment under Fed. R. Civ. P.
55(b)(2).”); 	Dill 	v. 	Willowbrook 	Foods, 	LLC, 	No. 	12-525, 	2013 	WL
12123857, at *1 (S.D. Ohio June 4, 2013), adopted, Dill v. SFI Holding,
LLC, No. 12-525, 2013 WL 12123858 (S.D. Ohio July 9, 2013) (entering
default because “Willowbrook has failed to secure counsel or otherwise
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respond to the Court’s Orders”); see also Ackra Direct Mktg. Corp. v.
Fingerhut Corp., 86 F.3d 852, 856–57 (8th Cir. 1996) (holding that
corporate defendant was technically in default on date court allowed
counsel to withdraw).
Additionally, a court may sanction a corporate party that fails to
maintain representation by counsel by dismissing the action or entering
a default under Federal Rules of Civil Procedure 16 and 37. See, e.g.,
United Parcel Serv. Co. v. DNJ Logistic Grp., Inc., No. 16-00609, 2019
WL 5579553, at *5 (W.D. Ky. June 6, 2019) (finding that corporate party’s
continued failure to retain new counsel” was “unreasonable” and in “bad
faith”), adopted, No. 16-00609, 2019 WL 5586542 (W.D. Ky. July 2, 2019).
The circumstances of this case compel the Court to dismiss the case
under Rule 41(b) and direct the Clerk of the Court to enter a default
under Rule 55(a). In reaching this decision, the Court considers factors
identified by the Sixth Circuit as relevant in reviewing a district court’s
dismissal for failure to prosecute. See Schafer v. City of Defiance Police
Dep’t, 529 F.3d 731, 742 (6th Cir. 2008). In Shafer, in evaluating whether
a district court’s dismissal was justified, the Sixth Circuit considered the
following factors: “(1) whether the party's failure is due to willfulness,
bad faith, or fault; (2) whether the adversary was prejudiced by the
dismissed party's conduct; (3) whether the dismissed party was warned
that failure to cooperate could lead to dismissal; and (4) whether less
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drastic 	sanctions 	were 	imposed 	or 	considered 	before 	dismissal 	was
ordered.” Id.
First, Plaintiff’s inability to maintain representation by counsel is
the result of its own willful conduct, including its failure to compensate
counsel. The recurring nature of this behavior, and Plaintiff’s failure to
honor assurances previously made to the Court, reflects, at best, a
disregard for the responsibilities attendant to litigation, and, at worst, a
calculated misuse of the judicial process.
Second, 	this 	pattern 	— 	which 	has 	recurred 	six 	times 	— 	has
prejudiced Defendant, see ECF No. 58, PageID.1061 (submitting that
Defendant has incurred “real damage” as a result of Plaintiff’s failure to
maintain representation by counsel), and has impeded the process of this
case. 2
Third, Plaintiff has been repeatedly warned that the Court would
consider whether Plaintiff’s repeated failures to retain counsel present
sufficient grounds to dismiss the complaint for failure to prosecute.
2 	As an indicator of the kind of prejudice Plaintiff’s gamesmanship
has introduced in this case, Red Hawk found it necessary to file a
“Motion to Expedite,” ECF No. 59, pleading for an immediate hearing or
status conference to address Plaintiff’s motion to withdraw in view of
the impending trial date and Defendant’s desire not to postpone the
matter yet again. In view of the Court’s decision memorialized in the
instant Order, Defendant’s Motion to Expedite, ECF No. 59, is hereby
DENIED AS MOOT.
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Fourth, the Court has already tried admonishment as a form of
sanction to deter Plaintiff from repeating the conduct. But it has now
recurred six times and there is no reason to believe that this pattern
would cease if Plaintiff were to be given another opportunity to retain
counsel. 	Over 	the 	course 	of 	this 	litigation, 	Plaintiff 	has 	given 	no
indication that it has the means to retain counsel or the wherewithal to
maintain representation.
As another court stated well, “Plaintiff invoked the judicial process
and then failed to pay the fees necessary to retain counsel. Plaintiff’s
actions have made impossible the proper and efficient litigation of this
case.” J & P Recovery, Inc., 2002 WL 1774058, at *2. That is the pattern
of conduct that occurred in this case and it must end.
IV. 	CONCLUSION
Accordingly, the Court GRANTS Attorney Shulman’s Motion for
Withdrawal. Additionally, the Court DISMISSES Unlucky Films Inc.’s
Complaint and DIRECTS the Clerk of the Court to enter a default
against Unlucky Films Inc. The Court also DENIES AS MOOT Red
Hawk Films, Inc.’s Motion to Expedite (ECF No. 59) and 	DENIES
without prejudice Red Hawk Films, Inc.’s Motion for Entry of a Default
Judgment (ECF No. 60).
In 	light 	of 	this 	Order, 	the 	final 	pretrial 	conference 	and 	the
settlement conference (currently scheduled for November 3, 2025) and
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the bench trial currently (currently scheduled for November 20, 2025) are
cancelled.
Once the Clerk enters a default in accordance with this Order,
Defendant Red Hawk Films, Inc., may file a motion for default judgment
under Federal Rule of Civil Procedure 55(b) by October 31, 2025.
SO ORDERED.
Dated: October 23, 2025 	s/Terrence G. Berg
HON. TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
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