January 2013 • Volume 101 • Number 1 • Page 10
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Corporate pleadings improper - but not void - when signed by non-attorney
In Downtown Disposal, the Illinois Supreme Court ruled that filings signed by a non-attorney are not null-and-void UPL and may be amended by lawyer.
The Illinois Supreme Court has reversed course from earlier appellate decisions by holding that court filings signed by a non-attorney officer of a corporation are not a nullity and may be amended by legal counsel.
The court found that all jurisdictions in the United States follow a rule that requires corporations to be represented by counsel in legal proceedings. Illinois appellate districts have interpreted that rule to mean that any legal document filed in court by a non-attorney on behalf of a corporation was a nullity that failed to vest subject-matter jurisdiction in the court.
In Downtown Disposal Services, Inc., v. City of Chicago, 2012 IL 112040, a divided court acknowledged that other jurisdictions are split on whether those non-attorney court filings are void or merely defective and subject to amendment. Despite the history of Illinois reviewing courts enforcing the nullity rule, the supreme court opted to follow recent precedent from the 7th Circuit U.S. Court of Appeals and allow the pleadings to be amended by the corporation's legal counsel.
"Courts in this country, including this court, unanimously agree that a corporation must be represented by counsel in legal proceedings. However, courts disagree on the consequences the lack of representation has on actions taken by nonlawyers on behalf of a corporation," Justice Anne Burke wrote for the 4-3 majority.
The court stated that some jurisdictions have held that such actions are a nullity and warrant dismissal of the case or a default judgment against the corporation due to an incurable failure to vest jurisdiction in the court.
Other jurisdictions, including the federal appeals court in Illinois, take the approach that actions by non-attorneys on behalf of corporations are curable defects, which allows the corporation reasonable time to obtain counsel to make any necessary amendments. The supreme court said this approach liberally construes the rules of civil procedure to emphasize substance over form to advance the policy of favoring resolution of cases on their merits.
"The [appellant] urges us to follow the line of authority holding that any unauthorized practice of law by a nonattorney is a nullity. We decline to do so," the court wrote.
Downtown Disposal facts and holding
In Downtown Disposal, the City of Chicago charged the defendant disposal company with multiple ordinance violations. After its failure to appear before the city's Department of Administrative Hearings, default judgments were entered against the corporation.
The president of the corporation, who was not a lawyer, appeared before an administrative law officer seeking to have the default judgments set aside. The request was denied, and the president then filed paperwork in the circuit court seeking judicial review of the administrative judgments.
Believing it was bound by the aforementioned appellate court decisions, the circuit court dismissed the complaint for administrative review as null and void because the documents were filed by a non-lawyer. The corporation then obtained legal counsel and appealed the circuit court's decision. This time, the appellate court declined to enforce the nullity rule and remanded the case to the circuit court for further proceedings.
According to the supreme court decision, the appellate court determined that "the purposes underlying the nullity rule, protection of litigants and the public as well as the integrity of the court system, would not be furthered by its application" against Downtown Disposal.
In affirming the appellate court's reversal, the supreme court majority found that pleadings filed by non-attorneys are legally flawed due to the underlying unauthorized practice of law. But those flaws do not relate to the subject-matter jurisdiction of the case and can be cured by granting leave for a licensed attorney to appear on behalf of the corporation and amend the pleadings.
"We conclude that…the lack of an attorney's signature was not jurisdictional and, therefore, did not render the proceedings null and void," the supreme court held. "Moreover, in the instant case, application of the nullity rule would be a harsh result since neither of the purposes underlying the rule are implicated and an alternative remedy was available."
Blurring the UPL bright line
Illinois State Bar Association general counsel Charles Northrup said the association intervened in the case at the supreme court level by filing an amicus brief in support of enforcing the nullity rule. He said the ISBA Unauthorized Practice of Law Task Force gets involved with other unauthorized-practice cases several times a year.
"The UPL task force, as well as ISBA's amicus committee, looked at the Downtown Disposal case and felt strongly that we needed to weigh in in support of the strict application of the nullity rule," Northrup said. The ISBA Board of Governors agreed. "Non-lawyers drafting wills, preparing no-fault divorces, representing corporations,…that's a problem because the task force gets a lot of complaints from people who have been given bad 'legal advice' and now they're paying the price," Northrup said.
Prior to this supreme court decision, Northrup said the nullity rule was a "very clear, black-and-white" rule that was easy for courts to apply.
"Now with the supreme court's majority opinion, they've thrown a little bit of ambiguity into the mix and it's no longer such a bright-line rule," Northrup said. "Now, we potentially will have judges in 102 counties determining what is, and what is not, the sort of [curable] unauthorized practice. It was good the majority said upfront 'yes, this was the unauthorized practice of law,' we just wish they would have taken the extra step to apply the nullity rule on this one."
Northrup said proponents of a bright-line nullity rule believe the unauthorized practice of law is a threat to consumers who can face extreme hardships when given improper legal advice and services. For example, a lawsuit brought by a non-lawyer might have defects that could not be cured within the statute of limitations, or judgments rendered in favor of improperly represented litigants could later be vacated due to the unauthorized involvement of a non-attorney.
In Downtown Disposal, the city argued that non-attorney representation of corporations would become commonplace without enforcement of the nullity rule, thus causing a rapid increase in the potential pitfalls that can arise. The supreme court, however disagreed.
"We agree with the Seventh Circuit that circuit court judges will be vigorous enforcers of the rule prohibiting nonattorneys from representing corporations," the majority wrote. "Based on the foregoing principals…[w]e hold that the lack of an attorney's signature on a complaint for administrative review filed on behalf of a corporation does not render the complaint null and void or mandate dismissal in all instances. In situations where a nonattorney signs a complaint for administrative review on behalf of a corporation, the trail court should afford the corporation an opportunity to retain counsel and amend the complaint if the facts so warrant."