Reed v. Labor and Indus. Relations Com'n

• Decision Date: 13 March 1990
• Docket Number: No. 71882,K-M,71882
• Parties: Marjorie REED, Plaintiff-Appellant, v. LABOR AND INDUSTRIAL RELATIONS COMMISSION andart Corporation, Defendants-Respondents.
• Court: Missouri Supreme Court

Page 19

789 S.W.2d 19

Marjorie REED, Plaintiff-Appellant, v. LABOR AND INDUSTRIAL RELATIONS COMMISSION and K-Mart Corporation, Defendants-Respondents.

No. 71882.

Supreme Court of Missouri,

En Banc.

March 13, 1990.

As Modified on Denial of Rehearing May 15, 1990.

Dennis J. Capriglione, Nina Balsam, Legal Services of Eastern Missouri, Inc., St. Louis, for plaintiff-appellant.

Maurice B. Graham, Fredericktown, amicus curiae (Mo. Bar).

Ronald F. Harris, Labor and Industrial Relations Com'n, Sandy Bowers, Chief Counsel, Division of Employment Sec., Jefferson City, for defendants-respondents.

John J. Moellering, Jeffrey B. Hunt, Ronald A. Norwood, St. Louis, for K-Mart Corp.

James M. Talent, St. Louis, amicus curiae (Associated Industries of Missouri).

BILLINGS, Judge.

The issue in this case is whether the Labor and Industrial Relations Commission has jurisdiction of an appeal filed on behalf of a corporate employer by a non-attorney employee of the corporation. The court of appeals concluded the appeal was tainted by the corporation's unauthorized practice of the law, the appeal was null and void, and the Commission's denial of unemployment benefits could not stand; further, that the appeal be dismissed. The cause is retransferred to the court of appeals for decision on the merits.

K-Mart Corporation is a Michigan corporation doing business in Missouri. Marjorie Reed was employed in one of K-Mart's stores in the St. Louis area. She was discharged by K-Mart Corporation and filed a claim for unemployment benefits with the Missouri Division of Employment Security ("Division"). At an informal hearing, a Division deputy found Reed was discharged because of tardiness, which the deputy determined was not misconduct connected with work, and granted her benefits.

R.L. Kalajian, "unemployment compensation manager" for K-Mart Corporation, International Headquarters, Troy, Michigan, sent a letter to the Division requesting an appeal to the Division's Appeals Tribunal. The request was granted following a formal hearing before a referee. No attorney appeared at the hearing on behalf of K-Mart. The deputy's determination was affirmed by the referee. Again by way of letter from R.L. Kalajian, the decision was appealed to the Labor and Industrial Relations Commission ("Commission"). A majority of the Commission found in favor of K-Mart Corporation and denied Reed benefits. One Commission member dissented, asserting as one of his grounds that K-Mart Corporation must act through an attorney when appealing to the Commission. He argued that because Kalajian was not an attorney, the Commission had no jurisdiction to hear the merits.

Reed appealed the Commission's denial of benefits, which was affirmed by the circuit court. She appealed that decision and after the court of appeals' dismissal, this Court accepted transfer of the case.

This Court is the final arbiter in determining what constitutes the practice of law, Hulse v. Criger, 363 Mo. 26, 247 S.W.2d 855, 857 (banc 1952), and the General Assembly may not interfere with this inherent power. In re Thompson, 574 S.W.2d 365, 367 (Mo. banc 1978). However, the General Assembly has provided penalties for acts determined to be the unauthorized practice of law. Section 484.010, et seq. RSMo, 1986. ¹

K-Mart Corporation asserts its actions do not fall within the practice of law. For support, they refer to § 288.200.1 RSMo, 1986, which allows any "party" to file an application requesting review by the Commission of an Appeals Tribunal decision. They contend that the informal nature of the Commission's review reinforces their interpretation of § 288.200.1. In addition, K-Mart Corporation asserts that the The law does not treat individuals and corporations equally. The law allows an individual to bear the risk that representation without an attorney may entail. Natural persons may represent themselves in situations which, if done for someone else, would constitute the practice of law. Clark v. Austin, 340 Mo. 467, 101 S.W.2d 977, 982 (1937). Unlike individuals, corporations are not natural persons, Clark v. Austin, 340 Mo. 467, 101 S.W.2d at 982, but are creatures of statute. Businesses operating in corporate form are entitled to certain benefits that are denied to others. In addition to benefits, however, corporations also have certain restrictions placed upon them. One such restriction in Missouri is that a corporation may not represent itself in legal matters, but must act solely through licensed attorneys. Liberty Mut. Ins. Co. v. Jones, 130 S.W.2d at 955. In Clark v. Austin, 101 S.W.2d at 982, the Court held:

mere act of filing a petition for review does not rise to the level of active representation or the holding out of the corporate employee to the public as capable of performing legal acts. See Liberty Mutual Insurance Co. v. Jones, 344 Mo. 932, 130 S.W.2d 945 (banc 1939); Hulse v. Criger, 247 S.W.2d at 862.

[O]ne is engaged in the practice of law when he, for a valuable consideration ... appears in a representative capacity as an advocate in proceedings pending or prospective, before any court, commissioner, referee, board, body, committee, or commission constituted by law or authorized to settle controversies, and there, in such representative capacity, performs any act or acts for the purpose of obtaining or defending the rights of their clients under the law.

This definition encompasses a broad range of activities in which a non-attorney corporate employee may not engage on behalf of the corporation. It is the character of the acts done, and not the place where they are committed, that constitutes the decisive factor in determining whether the acts fall within the practice of law. Hoffmeister v. Tod, 349 S.W.2d 5, 13 (Mo. banc 1961).

In Clark v. Austin, 101 S.W.2d at 982, this Court held that lay railroad employees could not represent persons before the Public Service Commission. The employees were appearing at hearings, prepared and filed pleadings, gave advice as to certain facts to establish, and cross-examined witnesses. The Court held this was the unauthorized practice of law, saying:

The law recognizes the right of natural persons to act for themselves in their own affairs, although the acts performed by them, if performed for others, would constitute the practice of law. A natural person may present his own case in court or elsewhere, although he is not a licensed lawyer. A corporation is not a natural person. It is an artificial entity created by law. Being an artificial entity it cannot appear or act in person. It must act in all its affairs through agents or representatives. In legal matters, it must act, if at all, through licensed attorneys.... (Emphasis added).

* * * * * *

Since a corporation cannot practice law, and can only act through the agency of natural persons, it follows that it can appear in court on its own behalf only through a licensed attorney. It cannot appear by an officer of the corporation who is not an attorney, and may not even file a complaint except by an attorney, whose authority to appear is presumed; in other words, a corporation cannot appear in propria persona. A judgment rendered in such a proceeding is void. (Emphasis added).

Clark v. Austin, 101 S.W.2d at 982-83.

In Hoffmeister v. Tod, 349 S.W.2d at 17, attending and participating in hearings before the Division of Employment Security and the Division of Workers' Compensation and advising other employees as to their rights under certain laws were held to be the unauthorized practice of law when performed by non-attorney corporate employees.

The Court also held a contract void because the contract allowed a non-attorney, self-appointed "rate expert" to transact legal business for clients in state and federal The initial claim, objected to by K-Mart Corporation's local personnel employee Kathy Meinhardt, was decided by the Division deputy in employee Reed's favor. K-Mart Corporation's non-attorney employee Kalajian appealed the decision to the Appeals Tribunal by letter. On November 17, 1986, a second letter was sent by Kalajian from the Michigan headquarters, requesting the Commission review the decision of the Appeals Tribunal.

courts. Curry v. Dahlberg, 341 Mo. 897, 110 S.W.2d 742, 746-47, 112 S.W.2d 345 (banc 1937). See also Property Exchange & Sales, Inc., (PESI) by Jacobs v. Bozarth, 778 S.W.2d 1 (Mo.App.1989) (dismissal upheld on grounds that a non-attorney corporate officer assigned a corporation's claims cannot file and maintain an action without the representation of a duly licensed attorney); Credit Card Corporation v. Jackson County Water Co., 688 S.W.2d 809 (Mo.App.1985) (a brief filed by a non-attorney on behalf of a corporation was held void and required dismissal of the corporation's appeal); Dobbs Houses, Inc. v. Brooks, 641 S.W.2d 441 (Mo.App.1982) (upholding a regulation prohibiting a non-attorney employee from representing a corporation before the Missouri Commission on Human Rights while allowing an individual to represent him/herself).

On the Court's own motion, pursuant to Rule 81.12(e), the Court ordered the record supplemented. The supplemental record disclosed a letter dated January 8, 1987, from Kalajian to the Commission informing them K-Mart Corporation had received the brief filed by Reed's attorney. Kalajian explicitly stated that the letter was the employer's (K-Mart Corporation's) written response to the employee's brief. The letter then set forth the reasons K-Mart Corporation believed the Appeals Tribunal was in error and requested a reversal. Although presented in letter form, in substance this letter represented a brief filed by a non-attorney employee for K-Mart Corporation. A copy of the application for review and the letters concerning the same sent by Kalajian are attached to this opinion as an appendix.

The facts thus presented demonstrate the level of activity which Kalajian, the non-attorney employee, represented the...