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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24869
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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Customer Question

Without going into a lot of detail, we were recently sued, but never served and a summary judgment issued. We were not aware of any proceeding until we received the execution notice from the sheriff's department (Nassau County) , which gave us 10 days to pay. Since due process was not served, I filed an OSC applicaiton but the judge denied it because I was sued as a Professional Corporation, and the judge stated that I had to be reprsented by counsel. I know generally corporations need counsel but in this case, I am the sole owner and there is a compelling reason to allow this to go through, i.e. the sheriff will start taking money from me if I don't do something. Any suggestions? Are there exception to the rule about Pro Se vis a vis corporations?
Submitted: 2 years ago.
Category: Business Law
Expert:  Law Pro replied 2 years ago.
No, it's absolutely the law that corporations (professional or otherwise) have to have legal representation. Corporations are fictious entities and cannot represent themself in court. In fact, corporations AND voluntary associations must be represented by an attorney.

The general rule for corporate representation is that corporations are “artificial entities” and therefore may only appear in court through an attorney. And in fact, CLPR 321 states in relevant part “[a] party, other than one specified in section 1201 of this chapter, may prosecute or defend a civil action in person or by attorney, except that a corporation or voluntary association shall appear by attorney.”

As for that argument (that a single member LLC is not really a separate party and should be eligible for pro se representation), it was unequivocally rejected by the federal Court of Appeals in Lattanzio v. COMTA, 481 F.3d 137 (2nd Cir. 2007).The Lattanzio court, citing another decision, stated:

The principal rationale for ordinarily requiring representation by a licensed attorney is that the conduct of litigation by a nonlawyer creates unusual burdens not only for the party he represents but as well for his adversaries and the court. The lay litigant frequently brings pleadings that are awkwardly drafted, motions that are inarticulately presented, proceedings that are needlessly multiplicative. In addition to lacking the professional skills of a lawyer, the lay litigant lacks many of the attorney’s ethical responsibilities. . .

Sorry, there are no exceptions - the LLC must have legal representation.

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Customer: replied 2 years ago.
While I am perfectly aware of this provision, keep in mind that I signed a personal guarantee with this company, and am the sole owner operator and shareholder. therefore my interests are perfectly aligned with the corporation. Also, in the decision you mention it says that this does not apply to "courts NOT of record." Since this is just a request for the case the be restored, isn't there an argument that I am just trying to get this case restored to calendar so I can go back to the plaintiff (who did not serve s and c etc etc and against which we have affirmative defenses), to negotiate a settlement?
Expert:  Law Pro replied 2 years ago.
I understand - but a guarantee is not an assignment. Therefore, only the corporation has standing to defend the suit.

Assignment of rights under a contract is the complete transfer of the rights to receive the benefits accruing to one of the parties to that contract. For example, if Party A contracts with Party B to sell Party A's car to Party B for $10, Party A can later assign the benefits of the contract - i.e., the right to be paid $10 - to Party C. In this scenario, Party A is the obligee/assignor, Party B is an obligor, and Party C is the assignee. Such an assignment may be donative (essentially given as a gift), or it may be contractually exchanged for consideration. It is important to note, however, that Party C is not a third party beneficiary, because the contract itself was not made for the purpose of benefitting Party C. When an assignment is made, the assignment always takes place after the original contract was formed. An Assignment only transfers the rights/benefits to a new owner. The obligations remain with the previous owner. [Wikipedia]

You just "guaranteed" the obligation.

"Courts not of record" - agreed arbitration is an example of such.

No, you can make no personal arguments on behalf of the corporation - only an attorney can do that.


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