Zapata v. McHugh
893 N.W.2d 720
| Neb. | 2017Background
- John Zapata filed suit pro se as an individual and as an assignee, alleging damages (lost rent and repair costs) arising from conduct toward Coljo Investments, LLC (the assignor).
- The complaint and related disclosures asserted Zapata paid consideration to Coljo and claimed assigned rights under Neb. law; Coljo itself was not named as a party.
- The district court raised, and the parties briefed, whether an assignee may prosecute claims derived from an LLC pro se.
- The court dismissed Zapata’s action as a nullity, holding he engaged in the unauthorized practice of law by prosecuting claims that belonged to an LLC without counsel.
- The court relied on precedent that business entities (including LLCs) cannot appear pro se and that assignment cannot be used to circumvent the requirement of attorney representation.
- Zapata appealed; the Nebraska Supreme Court affirmed the dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May an assignee bring suit pro se on claims that derive from an LLC? | Zapata: as the assignee and a party in his own right, he may proceed pro se under statutes permitting parties to litigate in their own person. | The action derives from an LLC (a distinct legal entity) and thus must be litigated by licensed counsel; assignment cannot avoid that requirement. | Held: No. An assignee suing on an LLC’s claims must be represented by counsel; an assignment does not permit a layperson to circumvent the rule. |
| Does prosecuting such an assigned claim pro se constitute unauthorized practice of law and make proceedings a nullity? | Zapata: his filings should be permitted; captioning as an individual and assignee shows he is a party in his own right. | Defendants/court: a nonlawyer prosecuting a claim that belongs to a separate entity is engaging in unauthorized practice; pleadings are void. | Held: Yes. Zapata engaged in unauthorized practice; his filings were a nullity and dismissal was proper. |
| Can the caption alone (naming Zapata "as an individual and as Assignee") establish an independent individual interest apart from the assignor? | Zapata: caption shows he is suing personally and thus may proceed pro se. | Court: capacity is determined by pleadings substance, not caption; pleadings show rights derived from the LLC/assignor. | Held: Caption alone insufficient; pleadings show he litigated the assignor’s claims, so pro se appearance is barred. |
| Was raising the unauthorized-practice issue timely, given pretrial development? | Zapata: defendants/ court raised it late; issue untimely. | Court: filings were a nullity as a matter of law, so timeliness challenge fails. | Held: Timeliness objection rejected; unauthorized-practice defect rendered proceedings null regardless of timing. |
Key Cases Cited
- Palazzo v. Gulf Oil Corp., 764 F.2d 1381 (11th Cir. 1985) (assignment cannot be used to avoid requirement that a corporation’s claims be litigated by counsel)
- Jones v. Niagara Frontier Transp. Authority, 722 F.2d 20 (2d Cir. 1983) (corporations and similar entities cannot appear pro se)
- Steinhausen v. HomeServices of Neb., 289 Neb. 927 (2015) (Nebraska precedent: LLC claims must be prosecuted by licensed counsel; caption alone insufficient)
- Bischoff v. Waldorf, 660 F. Supp. 2d 815 (E.D. Mich. 2009) (policy reasons support dismissal of pro se suits by assignees asserting corporate claims)
- Shamey v. Hickey, 433 A.2d 1111 (D.C. 1981) (assignee acting as collection agent cannot avoid counsel requirement; dismissal appropriate)