Friday, September 18, 2015

Non-Attorney Representation

Michael Bandler, MB&Co, Ltd. a/k/a Michael Bandler & Company v. Cohen Rosenthal & Kramer, LLP, 2015 VT 115

Mr. Bandler (Bandler) is the sole shareholder of a corporation, Michael Bandler & Company. He’s not an attorney.

Sometime in 2003, Bandler and his company sued Charter One Bank due to some issues involving an account. As often happens with civil cases, there was arbitration, and the case went back and forth between arbitration and court a few times. At some point, the case headed to class-action arbitration.

In 2012, Bandler, on behalf of the company, signed a retainer agreement with Cohen Rosenthal & Kramer (CRK), which I assume is a law firm, agreeing that CRK would represent the company at the arbitration. It was unclear whether CRK also represented Bandler individually, and according to the opinion, this is a point of dispute. In any case, Bandler and the company sued CRK surrounding this representation.

Let’s break here for a second. Bandler and company was self-represented.  Lots of people represent themselves in court. It happens all the time. Sometimes self-represented litigants are attorneys. Sometimes they’re not. There’s a rule about when a corporation can be represented by someone who isn’t an attorney. Even though the concept of a corporation as a person has been a topic in the news and the courts over the last few years, the truth is that if a corporation has to show up for court, some human person is going to have to actually show up and physically be there. The exception to the general rule allowing people to represent themselves, is that attorneys are supposed to represent corporations. Someone who isn’t an attorney can represent a corporation, but that’s an exception to that rule.

So, CRK files a motion to dismiss, saying that this isn’t the kind of situation where Bandler, who is not an attorney, would be allowed to represent the company. Intellectually, this seems kind of strange, considering the fact that Bandler is the sole shareholder of the corporation.

Nevertheless, the trial court agreed with CRK. The trial court looked at the rule about a nonattorney representing a corporation. First, that person has to demonstrate adequate legal knowledge and skills in order to represent the corporation. Second, the nonattorney would have to have a common interest with the corporation. The trial court looked at the second factor and thought that although Bandler was the sole shareholder, that he individually might have separate interests from that of the corporation. If so, it actually would make more sense to keep the individual and corporate claims separate.

Concerning the first factor, Bandler filed some papers he had written concerning the representation and invited the court to look at them.

Furthermore, it was not exactly clear whether or not CRK was retained to represent just the corporation or also the individual interests. Because of this, and because of the tenor of the situation, the court was concerned about moving forward with Bandler representing the corporation.

So, the trial court gave Bandler’s company 30 days to hire counsel. The court also told Bandler to make sure that his claims were adequately distinguished from the company’s claims so it would be clear going forward.

Mr. Bandler and the company sought interlocutory appeal, seeking a ruling from the Supreme Court on this issue alone. Bandler and company didn’t ask for an evidentiary hearing on the issue; rather they sought a legal ruling on whether the court violated due process by not telling the parties about its analysis in deciding its motion. The complaint is that if the parties had known what the court was thinking about, they would have had the opportunity to amend their pleadings.

SCOV affirms the trial court and says there was no error. The trial court has discretion to decide motions without a hearing. The trial court read the papers and motions that were filed and used that information to decide whether Bandler could go forward on his own as the corporation’s representation. Using that information, the trial court said the company needed to be represented.

SCOV also says this wasn’t a due process violation. Due process requires that parties have the chance to have their claims heard at a meaningful time and in a meaningful manner. The approach is flexible; sometimes there needs to be a hearing and sometimes there doesn’t, just depending on the situation

SCOV finds that here, Bandler and company filed motions, and CRK responded. Nobody asked for a hearing. Thus, the trial court was well within its power to read the filings and render a decision without a hearing.

SCOV finally says that if Bandler has individual claims against CRK that are separate from claims the company has, that he, as an individual is free to represent himself.

Justice Eaton concurs, and Chief Justice Reiber joins. They agree with the outcome, but are not crazy about the fact that interlocutory appeal was granted. It’s inefficient to litigate piecemeal, and so interlocutory appeals are usually reserved for specific circumstances. Their thought is that the legal question here really isn’t the kind that an interlocutory appeal would be used for, so it probably shouldn’t have happened in the first place. But it did, and they agree with the majority, so they concur.

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