In re Hamblen

• Decision Date: 20 December 2006
• Docket Number: Bankruptcy No. 05-95217JB.,Bankruptcy No. 05-95215JB.,Bankruptcy No. 05-95216JB.,Adversary No. 06-6394.
• Citation: 360 B.R. 362
• Parties: In re Charles Randall HAMBLEN and Janet Smith Hamblen, Brookstone Fine Wood Products, Inc., Closet & Storage Solutions, LLC, Debtors. S. Gregory Hays, Chapter 7 Trustee for Charles Randall Hamblen and Janet Smith Hamblen, Brookstone Fine Wood Products, Inc., and Closet & Storage Solutions, LLC, Plaintiff, v. Hamblen Family Irrevocable Trust; Lonna Harris, individually and as Trustee of the Hamblen Family Irrevocable Trust; Sara Ann Jones Smith, individually and as Trustee of the Hamblen Family Irrevocable Trust; Grant K. Gibson, individually and as Trustee of the Hamblen Family Irrevocable Trust, of NPPH HC, of 230 Woodward Trust, of 625 Atwood Trust, and of 12230 Cumming Highway Trust; NPPH HC, Janet Smith Hamblen, Charles Randall Hamblen, 12230 Cumming Highway Trust, 230 Woodward Trust, 625 Atwood Trust, and Halstin Company, LLC, Defendants.
• Court: U.S. Bankruptcy Court — Northern District of Georgia

360 B.R. 362

In re Charles Randall HAMBLEN and Janet Smith Hamblen, Brookstone Fine Wood Products, Inc., Closet & Storage Solutions, LLC, Debtors.

S. Gregory Hays, Chapter 7 Trustee for Charles Randall Hamblen and Janet Smith Hamblen, Brookstone Fine Wood Products, Inc., and Closet & Storage Solutions, LLC, Plaintiff, v. Hamblen Family Irrevocable Trust; Lonna Harris, individually and as Trustee of the Hamblen Family Irrevocable Trust; Sara Ann Jones Smith, individually and as Trustee of the Hamblen Family Irrevocable Trust; Grant K. Gibson, individually and as Trustee of the Hamblen Family Irrevocable

Trust, of NPPH HC, of 230 Woodward Trust, of 625 Atwood Trust, and of 12230 Cumming Highway Trust; NPPH HC, Janet Smith Hamblen, Charles Randall Hamblen, 12230 Cumming Highway Trust, 230 Woodward Trust, 625 Atwood Trust, and Halstin Company, LLC, Defendants.

Bankruptcy No. 05-95215JB.

Bankruptcy No. 05-95216JB.

Bankruptcy No. 05-95217JB.

Adversary No. 06-6394.

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

December 20, 2006.

A. Alexander Teel for Chapter 7 Trustee, Gregory Hayes, for Plaintiff.

Nicholas W. Wittenburg for Lonna Harris.

William Russell Patterson for Sara Ann Jones Smith.

Grant K. Gibson, pro se.

ORDER

JOYCE BIHARY, Bankruptcy Judge.

This adversary proceeding involves the question of whether the defendant trusts can appear as pro se litigants. The Court concludes that they cannot.

The plaintiff Chapter 7 Trustee seeks, among other things, to avoid certain transfers and to recover three pieces of real property for the bankruptcy estate. The properties are 230 Woodward Avenue and 625 Atwood Street, both located in Atlanta, Georgia and 12230 Cumming Highway, located in Canton, Georgia. Plaintiff alleges that the real estate records reflect that interests in these properties were conveyed to 230 Woodward Trust, 625 Atwood Trust, and 12230 Cumming Highway Trust, respectively. Plaintiff names five trusts as defendants in this proceeding,¹ and defendant Grant K. Gibson is named in the complaint as a defendant individually and as trustee of each of the defendant trusts. Mr. Gibson is not an attorney, but he filed a motion for a more definite statement on behalf of himself and the trusts.² Plaintiff contends that Mr. Gibson cannot represent the defendant trusts, as trusts can only be represented in court by a licensed attorney (Docket # 20). Mr. Gibson filed a response, arguing that he as a non-lawyer is entitled to represent the defendant trusts. As best tile Court can understand, Mr. Gibson argues that these are land trusts rather than business trusts, that he holds all the legal and equitable interests in these trusts, and that these trusts are deemed natural persons rather than artificial entities such that they have the same rights under law as an individual, including that of pro se representation in court (Docket # 27).

Plaintiff argues and Mr. Gibson agrees that only a licensed attorney may represent an artificial entity such as a corporation, partnership, association, or trust in federal court. Rowland v. California Men's Colony, 506 U.S. 194, 203, 113 S.Ct. 716, 721, 121 L.Ed.2d 656 (1993); C.E. Pope Equity Trust v. U.S., 818 F.2d 696, 697 (9th Cir.1987); See also Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir.1985) (stating the well established rule that a fictional legal person such as a corporation must be represented by a licensed attorney even when the non-attorney seeking to represent the corporation is its president and major stockholder); Knoefler v. United Bank of Bismark, 20 F.3d 347, 348 (8th Cir.1994) (holding that a nonlawyer trustee has no right to represent a trust pro se ). Mr. Gibson recognizes that "many types of entities, including LLCs, partnerships, unincorporated association [sic], clubs, guardians and even certain types of trusts," require representation by counsel in federal court. ("Defendant Gibson's Objection to Trustee's Motion to Strike," hereinafter "Mr. Gibson's Objection," at 4). He attempts to distinguish "Massachusetts style business trusts" from "Illinois style land trusts," contending that business trusts are required to have counsel in court, but that land trusts may be represented by their non-attorney trustees. The law cited by Mr. Gibson does not support his position.

Mr. Gibson first distinguishes business trusts from land trusts by noting that business trusts can file for bankruptcy protection while land trusts cannot. He presents this material in both the body of his objection and in a lengthy footnote. (Mr. Gibson's Objection at 6-7, 6 n. 1). There are several problems with Mr. Gibson's presentation of the law. First, he refers to several cases without proper citation; he gives the names of some cases without providing the Court or opposing counsel with the name of the reporter, book number, page number, name of court, or year of decision. In some cases, he provides the name of the case and name or location of the court, but omits any mention of the other information required for a proper citation. Second, Mr. Gibson appears to have copied most of the material on page 6 of his Objection from a 1997 article titled Off-Balance-Sheet Financing: Synthetic Leases, by John C. Murray, 32 Real Prop. Prob. & Tr. J. 193, 206-07 and nn. 17, 22 (1997), but Mr. Gibson fails to cite the article. (Mr. Gibson's Objection at 6 n. 1). Mr. Gibson repositions some of Mr. Murray's text, removes citations and other text which Mr. Murray includes, and renumbers Mr. Murray's subscript footnote numbers.

Third, Mr. Gibson uses Mr. Murray's discussion of four cases, In re Sung Soo Rim Irrevocable Intervivos Trust, 177 B.R. 673, 675-76 (Bankr.C.D.Cal.1995); Shawmut Bank Connecticut v. First Fidelity Bank (In re Secured Equip. Trust of Eastern Air Lines, Inc.), 38 F.3d 86 (2d Cir.1994); In re Medallion Realty Trust, 103 B.R. 8, 10-13 (Bankr.D.Mass.1989); and In re Gonic Realty, 50 B.R. 710, 711-12 (Bankr.N.H.1985), but none of these cases is relevant to the issue here. In each case, the issue was whether the trust debtor qualified for bankruptcy protection as a business trust pursuant to 11 U.S.C. § 101(9)(A)(v), not whether the trust could appear in Court without counsel. Significantly the trusts in these four cases were represented by counsel.

Perhaps the most remarkable part of Mr. Gibson's Objection appears in the third paragraph of his footnote on page 6. Again, Mr. Gibson appears to have copied material from Mr. Murray's article without citation. However, in this paragraph, he alters Mr. Murray's text by inserting a clause about Georgia law. Specifically, Mr. Murray's article contains the following sentence:

Florida, Hawaii, Indiana, North Dakota, and Virginia have statutes that permit land trusts, while states such as California and Kansas have permitted the creation of land trusts through court decisions.

Murray at n. 22. In his footnote, Mr. Gibson splices that sentence and adds language so that his Objection reads as follows:

Florida, Hawaii, Indiana, North Dakota, and Virginia have statutes that permit land trusts. Georgia has enacted the `Georgia Trust Act' which allows Trusts to hold Land, while states such as California and Kansas have permitted the creation of land trusts through court decisions.

(emphasis added). By this insertion, Mr. Gibson intimates that Georgia law has a statute that allows land trusts. But Mr. Murray did not include Georgia in his list of states with such a statute, and the parties have not cited any authority holding that Illinois style land trusts are recognized in Georgia. More importantly, however, none of this is relevant to whether a non-lawyer trustee can represent the defendant trusts in court.

Mr. Gibson has not presented the trust instruments or identified the beneficiaries, but contends the trusts should be allowed to appear in court without counsel because they "are organized under authority of the Georgia Trust Act, as `Land Trusts.'" (Id. at 5). The Georgia Trust Act is found at O.C.G.A. §§ 53-12-1 to 394 (1997), and was enacted in its present form in 1991. To support his claim that the defendant trusts operate as " Illinois'-style Property Holding Trusts" and not "`Massachusetts' style business trusts," which, he argues, do not require representation in court by a licensed attorney, he points to four sections of the Georgia Trust Act: O.C.G.A. §§ 53-12-4 ("Jurisdiction"), 53-12-51 ("Creation of beneficial interests in property by deed; conditions; recordation; time of termination or renewal"), 53-12-53 ("Operation of trust under business or trade name"), and 53-12-55 ("Powers of trustees generally; resignation; removal; appointment of successor"). The last three sections are contained in Article 3 of the Georgia Trust Act. Commentary concerning these provisions suggests that they create trusts akin to Massachusetts style business trusts, not Illinois style land trusts. The introductory comment to Article 3 states: "[t]his article allows the creation in Georgia of a type of business trust. Bogert, Trusts And Trustees, 2d ed. § 247 (Rev.1992). It apparently is rarely utilized." O.C.G.A. tit. 53, article 3, section 50, cmt. (1997) (emphasis added); See also George Gleason Bogert, George Taylor Bogert, and Amy Morris Hess, Trusts and Trustees § 247 n. 42 at 172 (rev.2d ed.2005) which lists this portion of the Georgia Code as among those state statutes recognizing the validity of business trusts. Bogert's interpretation is confirmed in an article written by the reporter to the Georgia Trust Code Revision Committee recognizing that the provisions of Article 3 "authorize the creation in Georgia of what is commonly known as a Massachusetts business trust. ..." Anne S. Emanuel, The Georgia Trust Act, 28 Ga. St. B.J. 95, 99, n. 7 (1991) (emphasis added). Thus, Mr. Gibson's reliance on Article 3 of the Georgia Trust Act for his argument that the defendant trusts are organized under O.C.G.A....