There are certain protections given under CPLR 321 (c) but these can be waived.
WELLS FARGO BANK, NA v. KURIAN, 2021 NY Slip Op 4509 – NY: Appellate Div., 2nd Dept. July 21, 2021:
“….There are times in litigation when a party’s attorney dies, becomes physically or mentally incapacitated, is removed or suspended from the practice of law, or otherwise becomes disabled. These events occur through no fault of the party. Professor Vincent C. Alexander has summarized the disabling events within the scope of CPLR 321(c) as circumstances of force majeure (see Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, CPLR C321:3).
Here, the defendant’s loss of counsel was occasioned by the attorney’s suspension from the practice of law. The number of attorneys who are suspended from practicing law is, thankfully, limited. However, when it occurs, as with an attorney’s death, incapacitation, removal from an action, or other disability, CPLR 321(c) protects the client by automatically staying the action from the date of the disabling event. The obvious purpose of the stay is to vest the party who has lost counsel with a reasonable opportunity to obtain new counsel before further proceedings are taken (see Moray v Koven & Krause, Esqs., 15 NY3d 384, 389; Matter of Cassini, 182 AD3d 13, 41; Hendry v Hilton, 283 App Div 168, 171; Franklin Natl. Bank v Lake Credit Corp., 58 Misc 2d 981, 982 [Sup Ct, Nassau County]) and thereby avoid prejudice that might conceivably arise from the absence of counsel in the interim (see Fusco v Shailya Taxi Corp., 267 AD2d 86, 88). Orders or judgments that are rendered in violation of the stay provisions of CPLR 321(c) must be vacated (see Duandre Corp. v Golden Krust Caribbean Bakery & Grill, 140 AD3d 481; Soldovieri v Flack, 106 AD3d 717, 719; Galletta v Sui-Mei Yip, 271 AD2d 486; McGregor v McGregor, 212 AD2d 955, 956; Brogan v Mary Immaculate Hosp. Div. of Catholic Med. Ctr. of Brooklyn & Queens, 209 AD2d 663, 664; Feola v Moore McCormack Lines, 101 AD2d 784, 784-785).
The express language of CPLR 321(c) sets no particular time limit to the stay of proceedings that is automatically triggered by a qualifying event. Of course, the shield of a stay should not be used as an indefinite sword against any continuation of the action. CPLR 321(c) therefore provides any adversary party with a mechanism for lifting a stay—by serving a notice upon the nonrepresented party to obtain a new attorney. The notice is to be served personally or in such other manner as the court directs (see CPLR 321[c]). Once the notice contemplated by CPLR 321(c) is properly served (see Matter of Allstate Ins. Co. v Phillips, 128 AD2d 518, 519), the automatic stay of the action remains in effect for another 30 days, but is then lifted upon the expiration of that period. Thus, there are actually two ways in which a CPLR 321(c) stay may be lifted. One way is if the party that lost its counsel retains new counsel at its own initiative, or otherwise communicates an intention to proceed pro se (see Small Bus. Admin. v Mills, 203 AD2d 654, 655; Telmark, Inc. v Mills, 199 AD2d 579, 580-581). The second way is by means of the above-described notice procedure pursuant to CPLR 321(c) (see Matter of Cassini, 182 AD3d at 41; Leonard Johnson & Sons Enters. v Brighton Commons Partnership, 171 AD2d 1059, 1060; Carder v Ramos, 163 AD2d 732, 733).
Here, the plaintiff moved, inter alia, for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference on April 8, 2014, at a time when no event allowing for the lifting of the CPLR 321(c) stay had yet occurred. No new attorney had yet appeared on behalf of the defendant, and there is no indication that the defendant had elected to proceed pro se in the action during that time. Moreover, the plaintiff moved for summary judgment without having served a CPLR 321(c) notice demanding the appointment of new counsel and without abiding by the statutorily mandated 30-day waiting period that follows the notice.
Nevertheless, the defendant’s new counsel formally appeared in the action six days after the plaintiff’s summary judgment motion was filed, submitted papers in opposition to that motion, and cross-moved to dismiss the complaint insofar as asserted against the defendant, all within the original or adjusted briefing schedule. The defendant’s opposition papers and cross motion were considered by the Supreme Court on the merits. As a result, the protection afforded to parties under CPLR 321(c) when attorneys die or are incapacitated, removed, suspended, or otherwise disabled was no longer necessary or relevant, as the defendant had obtained counsel who timely opposed the plaintiff’s summary judgment motion and who sought affirmative relief by means of a cross motion to dismiss the complaint. The appearance and activities of the defendant’s new counsel operated, in effect, as a waiver of the protections otherwise afforded to the defendant by CPLR 321(c) (cf. Elmhurst Iron Works v Alfieri Gen. Contr. Co., 45 AD2d 971, 972).
Waiver has long been defined as the voluntary and intentional relinquishment of a known right (see Clark v West, 193 NY 349, 360). It is a doctrine of general application confined to “no particular class of cases” but which “implies an election to dispense with something of value, or forego some advantage which the party waiving it might at its option have demanded or insisted upon” (id. at 360). Here, the defendant retained new counsel while the CPLR 321(c) stay of proceedings was in effect, and timely opposed the plaintiff’s motion for summary judgment. Under such circumstances, the defendant elected to forego the protections afforded by CPLR 321(c).
Therefore, we hold that even in the absence of service of a notice to appoint new counsel upon the unrepresented party as procedurally required by CPLR 321(c), a continuing stay under the statute may be waived by the unrepresented party’s affirmative conduct of retaining new counsel, effective as of the time that new counsel formally appears in an action. Here, since the defendant’s waiver of the stay occurred before her opposition papers were due in response to the plaintiff’s motion, inter alia, for summary judgment and for an order of reference, the fact that the plaintiff filed its motion on an earlier date, when the stay was still in effect, is of no moment. Further, in regards to the suspension of the original attorney of record, the defendant’s opposition papers and cross motion did not include any argument, at that time, that the motion before the Supreme Court violated the stay provisions of CPLR 321(c), further bolstering our conclusion that any issue regarding the existence of a stay had been waived (see Matter of Cassini, 182 AD3d 53).
The facts of this appeal are distinguishable from Livore v Malik (305 AD2d 641), as relied upon by the defendant. In Livore, the Supreme Court granted a defendant’s unopposed motion for summary judgment when neither the court nor the parties were aware that the plaintiff’s attorney had been suspended from the practice of law. This Court held that an order and a judgment of the Supreme Court must be vacated, as they were entered in violation of CPLR 321(c) (see Livore v Malik, 305 AD2d at 641). In Livore, an order and a judgment were entered in violation of CPLR 321(c) while the action was stayed, whereas here, the appearance and participation of the defendant’s new counsel operated as a waiver of the statutory stay. Thus, Livore does not control the result here.