Operating Eng. Local 139 Health v. Rawson Plumbing

• Decision Date: 20 February 2001
• Docket Number: No. 00-C-1030.,00-C-1030.
• Citation: 130 F.Supp.2d 1022
• Parties: OPERATING ENGINEERS LOCAL 139 HEALTH BENEFIT FUND, Operating Engineers Central Pension Fund, Operating Engineers Local 139 Skill Improvement Fund, and Dale Miller, Plaintiffs, v. RAWSON PLUMBING, INC., Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

130 F.Supp.2d 1022

OPERATING ENGINEERS LOCAL 139 HEALTH BENEFIT FUND, Operating Engineers Central Pension Fund, Operating Engineers Local 139 Skill Improvement Fund, and Dale Miller, Plaintiffs, v. RAWSON PLUMBING, INC., Defendants.

No. 00-C-1030.

United States District Court, E.D. Wisconsin.

February 20, 2001.

Philip O'Brien, Milwaukee, WI, for Plaintiff.

ORDER

ADELMAN, District Judge.

Plaintiffs seek payments allegedly due under collective bargaining agreements and pension trust plans. Defendant Rawson Plumbing, Inc. timely filed an "answer to summons" denying any indebtedness and asserting a counterclaim that in fact plaintiffs owe it money. Plaintiffs previously requested entry of judgment under Fed.R.Civ.P. 55(a) and moved for default judgment under Rule 55(b), alleging that defendant had failed to appear or otherwise defend within the meaning of Rule 55(a). The Clerk of Court properly declined to enter default in the face of defendant's answer, and I denied plaintiffs' motion for default judgment for the same reason.

I ordered the parties to appear for a status conference on February 15, 2001. Defendant neither appeared nor requested that it be rescheduled. At the conference, plaintiffs renewed their requests for entry of default and default judgment. Plaintiffs rely upon an important defect in defendant's answer; it is signed by Mark P. Derouin, who is presumably an officer or director of Rawson Plumbing, Inc., but is not an attorney admitted to practice in this court or in the state courts of Wisconsin. It has been the law for the better part of two centuries that a corporation may appear in the federal courts only through licensed counsel. Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 201-02, 113 S.Ct. 716, 121 L.Ed.2d 656 (1993) (citing Osborn v. President of Bank of United States, 22 U.S.(9 Wheat.) 738, 829, 6 L.Ed. 204 (1824)). Although other parties may appear pro se under 28 U.S.C. § 1654, corporations may not; a corporation is a legal entity with an independent legal existence unto its own, separate from the interest of its president and founder. Strong Delivery Ministry Ass'n v. Bd. of Appeals of Cook County, 543 F.2d 32, 34 (7th Cir.1976) (per curiam). Defendant's attempted answer, signed by a non-attorney, therefore cannot stand.

Plaintiffs' preferred remedy is to enter default and default judgment immediately. This would require treating defendant's attempted answer as a nullity, rather than merely a defectively-signed pleading. Plaintiffs cite no authority to treat an attempted answer as a nullity, and I am unable to find any. Moreover, Rule 55(b)(2) requires that before default judgment may be entered, a party that has "appeared in the action" must be given notice. This requirement is satisfied "where that party has actually made some presentation or submission to the district court in the pending action," Zuelzke Tool & Engineering Co. v. Anderson Die Castings, Inc., 925 F.2d 226, 230 (7th Cir.1991) (emphasis omitted), and thus appears to be satisfied by a defective pleading. Moreover, there is a strong policy favoring the adjudication of cases on their merits over default judgment. Sec. Ins. Co. of Hartford v. Schipporeit, Inc., 69 F.3d 1377, 1381 (7th Cir.1995). In addition, it is not obvious to a layperson that a non-attorney corporate officer may not appear pro se on a corporation's behalf. Given the significance of summary default or dismissal, a corporation attempting to proceed pro se must be provided notice that it is required to appear by counsel, just as a pro se plaintiff must be provided notice of the serious consequences of failing to submit affidavits in response to a motion for summary judgment. Lewis v. Faulkner, 689 F.2d 100, 102 (7th Cir.1982). Imposing a default judgment, without advance notice or warning, upon a corporation that attempted to answer a complaint might well violate the Fifth Amendment's due process requirements. Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers, 357 U.S. 197, 209, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958) ("There are constitutional limitations upon the power of courts, even in aid of their own valid processes, to dismiss an action without affording a party the opportunity for a hearing on the merits of his cause").

I believe that the best approach here is to treat defendant's attempted answer as though it were unsigned. Rule 11(a) requires all pleadings, motions, and other papers to be signed by an attorney of record for the party or (if the party is unrepresented) by the party. To be sure, the answer here is signed, but not by a person authorized to represent the corporation in federal court. See Kovilic Constr. Co. v. Missbrenner, 106 F.3d 768, 772 (7th Cir.1997) (suggesting that court might regard documents signed by person without authority to do...