Dutch Village Mall, LLC v. Pelletti
256 P.3d 1251
Wash. Ct. App.2011Background
- Dutch Village Mall (an LLC) must be represented by a lawyer in court to litigate; lay representation is generally prohibited.
- Jay Lei claimed to be sole owner, member, and officer of Dutch Village Mall and filed suit on its behalf for unpaid rent.
- Lei filed the complaint Feb 2, 2010 without counsel; Pelletti appeared through counsel Feb 18, 2010; Lei moved for default Feb 26, 2010.
- Pelletti sought to strike pleadings as not signed by an attorney; Lei refused to withdraw the motion for default.
- Court questioned Lei’s ability to represent the LLC; default motion was denied and terms for future determination were reserved.
- Trial court granted the motion to strike, requiring attorney signatures within 30 days and awarding sanctions; on appeal, the sanctions and representation issue were reviewed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must an LLC be represented by an attorney in court? | Lei contends single-owner LLCs may appear pro se as their owner represents themselves. | Pelletti argues the general rule requires licensed attorney representation for corporations/LLCs. | LLC must be represented by an attorney; no exception for single-member LLCs. |
| Is Willapa Trading Co. controlling to allow lay representation by an LLC? | Willapa Trading supports pro se-like representation for the owner of a single-member entity. | Willapa Trading is not controlling and does not authorize lay representation for an LLC. | Willapa Trading is aberrant and does not create a right to lay representation for LLCs. |
| Were CR 11 sanctions proper for signing/striking pleadings? | sanction supported by trial court for failure to have pleadings signed by an attorney. | Sanctions were proper under CR 11 for non-attorney representation and burden on court. | CR 11 sanctions were an abuse of discretion; sanctions reversed. |
| Was the decision to strike pleadings proper apart from sanctions? | Court should have allowed representation by owner pro se for the LLC. | Striking pleadings was proper absent attorney signature. | Strike of pleadings not signed by attorney was improper given lack of clear law at the time; reversed in part. |
| Should Pelletti be awarded attorney fees on appeal? | N/A in terms of issue phrasing; focus on propriety of sanctions and representation. | Requests attorney fees as a sanction for frivolous appeal. | Appeal is not frivolous; no fee award on appeal. |
Key Cases Cited
- Lloyd Enters., Inc. v. Longview Plumbing & Heating Co., 91 Wash.App. 697 (1998) (corporations must be represented by an attorney; general rule for representation)
- Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194 (1993) (abides by rule that artificial entities require representation by counsel)
- Marina Condo. Homeowner's Ass'n v. Stratford at the Marina, LLC, 161 Wash.App. 249 (2011) (applies Rowland to LLCs in Washington context)
- Willapa Trading Co. v. Muscanto, Inc., 45 Wash.App. 779 (1986) (aberrant precedent; not controlling for LLC representation rule)
- Biomed Comm, Inc. v. Dep't of Health, Bd. of Pharmacy, 146 Wash.App. 929 (2008) (CR 11 sanctions framework and standards)
- Loc Thien Truong v. Allstate Prop. & Cas. Ins. Co., 151 Wash. App. 195 (2009) (CR 11 sanctions abuse-of-discretion standard; chilling effect caution)
- Lattanzio v. COMTA, 481 F.3d 137 (2007) (distinct legal entity status; importance of corporate/LLC separation)