770 F.3d 729
8th Cir.2014Background
- Debtor Richard Heyl filed Chapter 7 in August 2009; LorCon, LLC (filed by Conway’s counsel) submitted a proof of claim against Heyl.
- Conway and LorCon (through counsel) brought an adversary proceeding seeking a nondischargeability ruling under 11 U.S.C. § 523(a)(2)(A); the bankruptcy court denied relief after trial.
- Conway and LorCon did not directly appeal the merits; they later sought Rule 60 relief, which the bankruptcy court denied.
- On appeal to the BAP, Conway’s appellate counsel withdrew; Conway dismissed LorCon from the appeal and proceeded pro se.
- The BAP dismissed Conway’s appeal for lack of appellate standing; Conway appealed to this court and submitted supplemental materials to show standing.
- This court independently reviewed standing and held Conway lacked standing to pursue LorCon’s claim because the claim belonged to LorCon, Conway was not a lawyer authorized to represent the LLC, and his interest was merely derivative.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Conway have appellate standing to pursue LorCon’s bankruptcy claim? | Conway contends he may appeal and supplemented the record to show his interest. | Heyl argues the claim was LorCon’s; Conway cannot represent the LLC pro se and has only a derivative interest. | Dismissed: Conway lacks standing; appeal dismissed. |
| Can a non‑attorney member/agent litigate on behalf of an LLC in federal bankruptcy proceedings? | Conway implicitly argues he can pursue the LLC’s claim himself. | Heyl points to Missouri law and federal rules prohibiting non‑attorney corporate/LLC representation. | Held: Non‑attorney Conway cannot litigate for LorCon; LLC must be represented by counsel. |
| Can Conway assert a derivative interest (as member/owner) to pursue the LLC’s claim on appeal? | Conway asserts an interest in LorCon’s claim sufficient for appeal. | Heyl argues any interest is derivative and insufficient for appellate standing. | Held: Derivative interest is insufficient; Conway lacks standing, similar to shareholders in prior cases. |
| May this court consider Conway’s supplemental exhibits not in the record below to establish standing? | Conway submitted extra exhibits to show standing. | Heyl moved to strike; courts prefer the existing record. | Held: Supplemental exhibits do not alter outcome; motion to supplement denied and motion to strike granted. |
Key Cases Cited
- Sears v. U.S. Tr., 734 F.3d 810 (8th Cir. 2013) (appellate standing in bankruptcy limited to those directly and pecuniarily affected)
- Lattanzio v. Comm’n On Massage Therapy Accreditation, 481 F.3d 137 (2d Cir. 2007) (LLC must be represented by licensed counsel in federal court)
- Dakota Indus. v. Dakota Sportswear, Inc., 988 F.2d 61 (8th Cir. 1993) (narrow interest‑of‑justice exception for considering new evidence on appeal)
- Alexander v. Jensen‑Carter, 711 F.3d 905 (8th Cir. 2013) (affirming dismissal of bankruptcy appeal for lack of standing)