As our economy continues its slow recovery, many corporations continue to stay as “lean” as possible, cutting costs wherever they can. However, corporations cannot save expenses by responding to litigation pro se (individually, rather than with an attorney).
In Washington State, corporations cannot appear in court without an attorney—this includes filing documents with the court. In a 1998 court case, Lloyd Enterprises Inc. v. Longview Plumbing and Heating Co., the trial court entered a default judgment when, after the attorney for one of the parties, Berry, Inc., withdrew, Wade Berry, president of Berry, Inc., filed legal documents with the Superior Court himself on behalf of the corporation. The attorneys for the other parties moved to strike the documents signed by Berry. The Court gave Berry, Inc. 20 days to file an answer signed by an attorney. When the corporation failed to do so, the court entered default judgments against Berry, Inc. The corporation appealed, and the Court of Appeals upheld the judgments, stating:
” Because corporations are artificial entities that can only act through their agents,
we agree with the general common law rule, recognized by courts in other
jurisdictions, including all federal courts, that corporations appearing in court
proceedings must be represented by an attorney.”
Another case, Biomed Comm, Inc., v. State Dept. of Health Bd. of Pharmacy, upheld the Lloyd Enterprises decision and made it clear that if a non-lawyer files legal documents in court on behalf of a corporation, the court should provide reasonable time for the corporation to have the documents signed by an attorney and re-filed before the case is dismissed. In Biomed, the Superior Court dismissed the case after the corporation’s Board chair filed a petition for review, only one day before the deadline, that was not signed by an attorney. The Court of Appeals reversed the dismissal and sent the case back down to the Superior Court for further proceedings.
The lesson to be learned here is that if you run a business and are involved in a dispute that may proceed to court, you should hire an attorney as soon as you can. Keep in mind, the requirement for corporations to be represented by an attorney in federal court extends (in most circumstances) to partnerships and other associations as well—so you’re not off the hook by simply dissolving the corporation and appearing pro se on behalf of a partnership.
In Washington State, your attorney must be licensed to practice in Washington (or admitted pro hac vice). Some businesses attempt to work around this requirement by having the corporation assign its claim to an individual who then appears without an attorney in court. This is not feasible, and will likely result in potential negative consequences for your business. One last thing to keep in mind is that this requirement does not apply to cases in small claims court where the parties are not allowed to have attorneys appear for them.
If you’re interested in learning more about defending your business in a dispute, please don’t hesitate to contact us today to schedule your free 30-minute consultation.
