In the district courts non-attorney businesspeople often appear for their business instead of hiring an attorney. The scenarios are common: your client gets sued in conciliation court and rather than calling you, appears for the LLC he is a member of without you; or the corporation you help set up for a friend makes that friend as the only shareholder, the CEO, and the CFO, so she appears since she is basically a d/b/a. But the common law conflicts with this practice, because an entity, such as a corporation, cannot personally appear.
Federal court case law is clear on all entities: there must be an attorney representing the entity. Kipp v. Royal & Sun Alliance Personal Ins. Co., 209 F.Supp.2d 962, 962-963 (E.D.Wis. 2002). The Minnesota Supreme Court has stated a rule on corporations: regardless of whether you have one shareholder or 1 million shareholders an attorney must represent the corporation. Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753, 754 (Minn. 1992). Courts follow this same line of reasoning to require LLCs to appear with counsel. 301 Clifton Place L.L.C. v. 301 Clifton Place Condominium Association, 783 N.W.2d 551, 560 (Minn. Ct. App. 2010).
The same analysis presumably applies to partnerships because they are entities that are legally separate from their members of partners. In contrast, a d/b/a or a sole proprietorship is legally the same as the individual, so that individual can represent the sole proprietorship pro se because the two are legally the same.
In practice, it is not always clear the type of entity that is being run. In many cases the individual appearing for the business doesn’t even know what type of entity the business is.
This is further complicated by statutory law. There are codified exceptions to the general rule that an entity needs an attorney to represent it in certain situations involving housing court, conciliation court and district court. Minn. Stat. 491A.02 subd. 4(a) permits certain business entities to appear without an attorney in Conciliation Court and 481.02 subd. 3 481.02 subd. 3 likewise permits a non-attorney appearance by an entity. There are not appellate cases on every type of legal entity appearing without counsel and because of the lack of specific guidance a court may allow the non-attorney appearance.
Here is what you need to know.
The Minnesota Supreme Court has said to the legislature: you can’t tell us who we can or cannot allow to appear in court. We are the only ones with the power to decide who can appear because only the judicial branch can decide who can practice law in a court of Minnesota. We say, if you are a corporation you must have an attorney represent you. See Nicollet . Appellate courts have applied this analysis to LLCs and non-profits. Partnerships should follow the same rules because they are statutorily separate entities from their partners.
An appearance is actually going to court, but it also includes any paperwork that may be filed. Save Our Creeks v. City of Brooklyn Park, 699 N.W.2d 307, 309 (Minn. 2005). So an answer to a conciliation court complaint is an appearance.
A d/b/a may be a corporation or an LLC. A d/b/a is not legally distinct from the entity or individual. It is basically an alias. If the d/b/a is ACorp d/b/a B Company there must be an attorney. But if it is John Doe d/b/a B Company, John Doe could appear pro-se if B Company is being sued.
Conciliation Court and Housing Court, for those in the 2nd and 4th, is part of the District Court. Thus, despite the statutes, the judicial rules for representation apply.
Your client’s case has a solid chance of being dismissed if there is an appearance by a legal entity without attorney. There is a four factor test to determine the consequences for the non-attorney appearance: “1) the corporation acts without knowledge that its action was improper; (2) upon notice, the corporation diligently corrects its mistake by obtaining counsel, but in no event may it appear in court without an attorney; (3) the non-attorney’s participation in the action is minimal; and (4) the non-attorney’s participation results in no prejudice to the opposing party.” Save Our Creeks. Many judges will allow a continuance for an opportunity to get counsel, but the more the non-attorney does or the more likely the non-attorney is aware that an attorney is needed, the more likely the case will result with a dismissal or default judgment. University Auto Sales
The answer to the question of whether an entity needs an attorney in court is simply “yes.” Despite the fact that many agents of business entities have appeared in court instead of an attorney, and despite the fact that the legislature has attempted to create exceptions to the common law rule, the longstanding common law rule still applies. Although district courts may allow some leeway, entities need an attorney to appear in any court proceeding in the district courts and the failure to do so can mean automatic dismissal or a judgment against the entity.