Blume Constr., Inc. v. State

• Decision Date: 07 December 2015
• Docket Number: No. 20150103.,20150103.
• Citation: 872 N.W.2d 312
• Parties: BLUME CONSTRUCTION, INC., Petitioner and Appellant v. STATE of North Dakota by JOB SERVICE NORTH DAKOTA, Respondent and Appellee.
• Court: North Dakota Supreme Court

872 N.W.2d 312

BLUME CONSTRUCTION, INC., Petitioner and Appellant

v.STATE of North Dakota by JOB SERVICE NORTH DAKOTA, Respondent and Appellee.

No. 20150103.

Supreme Court of North Dakota.

Dec. 7, 2015.

Seth A. Thompson (argued) and Lawrence A. Dopson (on brief), Bismarck, N.D., for petitioner and appellant.

Michael T. Pitcher, Assistant Attorney General, Office of the Attorney General, Bismarck, N.D., for respondent and appellee.

McEVERS, Justice.

[¶ 1] Blume Construction, Inc. ("Blume") appeals from a district court judgment affirming a Job Service North Dakota decision, finding Blume did not file a valid appeal and the agency's determination assigning Blume a penalty tax rate was final. Blume argues the referee erred in finding Blume's attorney engaged in the unauthorized practice of law and the appeal request the attorney filed was void. We affirm.

I

[¶ 2] Blume received a notice of determination from Job Service dated November 8, 2013, informing Blume that it would be assigned a penalty tax rate for unemployment insurance. The notice stated the agency conducted an audit and concluded there was a transfer of ownership and payroll between Blume and another company that was knowingly done to obtain a lower tax rate for unemployment insurance. The notice informed Blume it would be assigned the highest tax rate assignable for the next three years. The notice advised Blume the determination would become final unless a written appeal was made to Job Service within fifteen days.

[¶ 3] On November 21, 2013, Job Service received an electronic appeal request for Blume signed by Craig Fidler. A telephone hearing was scheduled for February 27, 2014. Prior to the hearing, Blume requested the hearing be postponed because it had retained the service of Fidler, who was identified as a licensed attorney from Colorado. Fidler was not licensed to practice law in North Dakota. In approximately May 2014, Fidler notified the referee he was unable to secure a sponsoring attorney licensed in North Dakota. During that same time period, the referee was informed a North Dakota attorney would be representing Blume.

[¶ 4] A hearing was scheduled for June 26, 2014. On the morning of the hearing, the referee became aware the electronic appeal was filed by Fidler. The hearing was not held. In a July 1, 2014, decision, the referee concluded pro hac vice admission was required for a nonresident attorney who engaged in the practice of law by appearing in an action filed in an administrative agency, Fidler did not properly register or move for pro hac vice admission under Admission to Practice R. 3, and the appeal request was void because it was filed by a nonresident attorney who was not admitted to practice in North Dakota. The referee concluded the determination was final in the absence of an appeal by the employer.

[¶ 5] Blume requested review of the referee's decision. Blume argued Job Service is estopped to reverse its previous decision accepting the appeal, Job Service did not timely advise Blume there appeared to be a defect in the filing, and Blume was deprived of an opportunity to correct the defect. Blume also argued the appeal was valid, it authorized Fidler to sign the appeal on behalf of the corporation, it could have authorized any third-person to complete and submit the form, and completion and submission of the appeal form does not constitute engaging in the practice of law. Job Service denied Blume's request for review.

[¶ 6] Blume appealed to the district court. The district court affirmed the referee's decision.

II

[¶ 7] Courts exercise limited review in appeals from an administrative agency under the Administrative Agencies Practice Act, N.D.C.C. ch. 28–32. Carlson v. Workforce Safety & Ins., 2009 ND 87, ¶ 10, 765 N.W.2d 691. In an appeal from a district court's review of an agency's decision, this Court reviews the agency's decision. Risovi v. Job Serv. N.D., 2014 ND 60, ¶ 7, 845 N.W.2d 15. Under N.D.C.C. §§ 28–32–46 and 28–32–49, we must affirm the agency's decision unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

See also Risovi, at ¶ 7. We do not make independent findings of fact or substitute our judgment for that of the agency. Id. We apply a deferential standard of review to the agency's findings of fact, determining only whether a reasoning mind could have determined the factual conclusions were proved by the weight of the evidence. Id. Questions of law, including the interpretation of rules or statutes, are fully reviewable on appeal. Id.

III

[¶ 8] Blume argues Job Service erred when it concluded Fidler engaged in the unauthorized practice of law and the appeal was void.

[¶ 9] Job Service's determination of an employer's rate of contributions becomes conclusive and binding upon the employer "unless, within fifteen calendar days after the mailing of the notice thereof ... the employer files a written appeal of the determination." N.D.C.C. § 52–04–10. Blume received a notice of determination dated November 8, 2013, and was required to file a written appeal of the determination within fifteen days to prevent the determination from becoming final. An appeal request signed by Fidler was filed on November 21, 2013, two days before the determination became final.

[¶ 10] "A corporation is an artificial person that must act through its agents." Carlson, 2009 ND 87, ¶ 26, 765 N.W.2d 691 (quoting Wetzel v. Schlenvogt, 2005 ND 190, ¶ 11, 705 N.W.2d 836 ). We have explained:

We have firmly adhered to the common law rule that a corporation may not be represented by a non-attorney agent in a legal proceeding. Just as one unlicensed natural person may not act as an attorney for another natural person in his or her cause, an unlicensed natural person cannot attorn for an artificial person, such as a corporation.

Carlson, at ¶ 26 (quoting Wetzel, at ¶ 11) (quotations omitted). "The proper remedy when a corporation is represented by a non-attorney agent is to dismiss the action and strike as void all legal documents signed and filed by the non-attorney." Carlson, at ¶ 26. "Whether a corporation can be represented by a non-attorney agent in a legal proceeding and what happens to the matter when a corporation is not represented by an attorney are questions of law ... [which] are fully reviewable on appeal." Id. at ¶ 13 (quoting Wetzel, at ¶ 10).

[¶ 11] Blume is a corporation, and there is no evidence in the record that Fidler is employed by Blume or that he is an officer or on the corporation's board of directors. Evidence established that Fidler was a licensed attorney in Colorado, but he was not licensed to practice law in North Dakota.

[¶ 12] "Except as otherwise provided by state law or supreme court rule, a person may not practice law, act as an attorney ... or commence, conduct, or defend in any court of record of this state, any action or proceeding in which the person is not a party concerned ..." unless the person is admitted to the bar of this state and has secured an annual license from the state board of law examiners. N.D.C.C. § 27–11–01. Pro hac vice admission is required for any nonresident attorneys licensed in another state and not licensed in North Dakota, "who engage in the practice of law in this state by appearing, either in person, by signing pleadings, or by being designated as counsel in actions filed in ... administrative agencies[.]" Admission to Practice R. 3(A).

[¶ 13] Evidence establishes Fidler signed the appeal request and Blume requested the hearing be postponed because it had retained Fidler's services. Fidler engaged in the practice of law in this state by signing the appeal request and being designated as counsel in the action before Job Service. There is no evidence in the record that he applied for pro hac vice admission. Blume, however, argues Fidler did not engage in the unauthorized practice of law because the safe harbor provisions of N.D.R. Prof. Conduct 5.5(b) apply and protect his activities.

[¶ 14] Rule 5.5, N.D.R. Prof. Conduct, deals with the unauthorized practice of law and provides "safe harbors" for nonresident attorneys:

(b) A lawyer admitted to practice in another jurisdiction and not in this jurisdiction who performs legal services in this jurisdiction on a temporary basis does not engage in the unauthorized practice of law in this jurisdiction when:

....

(3) with respect to matters for which registration or pro hac vice admission is available under Admission to Practice R.3, the lawyer is authorized to represent a client or is preparing for a matter in which the lawyer reasonably expects to be so authorized;

....

(5) the lawyer performs a service that may be performed by a person without a license to practice law or without other authorization from a federal, state or local governmental body.

[¶ 15] We have previously interpreted N.D.R. Prof. Conduct 5.5(b)(3) and (5) and explained:

[T]he plain language of [the rule] provides safe harbors from the unauthorized practice of law for lawyers admitted to practice law in another jurisdiction and not in North Dakota who temporarily perform legal services in North Dakota if: (1) pro hac vice admission is available under Admission to Practice R. 3 and the lawyer is authorized to represent a client,

...