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Downtown Disposal Services, Inc v. the City of Chicago et al

November 1, 2012

DOWNTOWN DISPOSAL SERVICES, INC.,
APPELLEE,
v.
THE CITY OF CHICAGO ET AL.,
APPELLANTS.



The opinion of the court was delivered by: Justice Burke

JUSTICE BURKE delivered the judgment of the court, with opinion.

Justices Freeman, Garman, and Theis concurred in the judgment and opinion.

Justice Karmeier dissented, with opinion, joined by Chief Justice Kilbride and Justice Thomas.

OPINION

¶ 1 In this case, we must determine whether a complaint for administrative review filed by a corporation's president, on behalf of the corporation, is a nullity because the president is not an attorney. For the reasons that follow, we conclude that the complaints are not void.

¶ 2 BACKGROUND

¶ 3 Between December 2007 and March 2008, the City of Chicago's department of transportation issued plaintiff, Downtown Disposal Services, Inc., four notices for violating City ordinances pertaining to several of its dumpsters. The notices required Downtown Disposal to appear at administrative hearings on various dates between February and April 2008. When Downtown Disposal failed to appear at any of the hearings, the department of administrative hearings entered default judgments against Downtown Disposal requiring it to pay costs and penalties.

¶ 4 On August 18, 2008, Peter Van Tholen, president of Downtown

Disposal, filed four motions to set aside the default judgments, alleging the company did not receive notice of the hearings. On September 19, 2008, at a consolidated hearing, Van Tholen advised the administrative law officer that for the previous five years, Downtown Disposal had made several attempts to change its address on file with the City, but the City had not made the change in its records. Because of the City's failure, Downtown Disposal did not receive the violation notices. Following Van Tholen's testimony, the administrative law officer denied Downtown Disposal's motions, finding that the City sent the notices to the address on file for Downtown Disposal and that Downtown Disposal failed to provide any evidence it had changed its address before the violations were mailed. Thereafter, the following colloquy occurred:

"Administrative Law Officer Harris: However, you do have a right to appeal the decision--

Mr. Van Tholen: I will.

Administrative Law Officer Harris:-to the Circuit Court. That's fine, sir. You have a right to appeal the decision to the Circuit Court within 35 days of today's date, and you would do that in Room 602 of the Daley Center."

¶ 5 On October 16, 2008, Van Tholen filled out four blank pro se complaints for administrative review. On the preprinted form supplied by the clerk's office, Van Tholen filled in plaintiff's name, its address, the date of the administrative decision, and the docket number. Van Tholen signed the forms. Service was then made upon the City by certified mail. On April 19, 2009, attorney Richard D. Boonstra filed appearances on behalf of plaintiff in each of the cases.

¶ 6 On July 29, 2009, the City moved to dismiss the complaints pursuant to section 2-619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2-619(a)(9) (West 2008)), arguing that because a non-attorney, Van Tholen, filed the complaints on behalf of Downtown Disposal, a corporation, they were null and void. On September 23, Boonstra filed motions for leave to file amended complaints, arguing that the lack of an attorney's signature was a technical defect which could be cured by filing an amended complaint signed by an attorney. In addition, in January of 2010, Downtown Disposal filed a motion for summary judgment, arguing that because the City was a municipal corporation, the violations had to be signed by an attorney and, since they were not, the underlying actions filed by the City were null and void ab initio.

¶ 7 Following a hearing on January 29, 2010, the circuit court of Cook County granted the City's motions to dismiss, finding it was compelled to follow authority from the First District of the appellate court holding that actions filed by non-attorneys on behalf of a corporation are null and void. Based on this ruling, the court declared Downtown Disposal's motions for leave to amend the complaints and motion for summary judgment moot.

¶ 8 In ruling on the question before it, the trial court found "this is a troubling issue" because, in administrative review cases, the trial courts are "confronted with non-attorneys filing pleadings" on a daily basis. After pointing out that the appellate court had held that filling in a form was the unauthorized practice of law, the trial court stated as follows:

"If you review the Complaint that's filed in the Administrative Review cases, it is just that. It is a prepared form. It is handed to anyone who walks into the Clerk's office. They merely have to fill in names and fill in the date that the Findings and Decision was entered against them, and it has form language as to why they are appealing the matter and it initiates this process."

After again stating it was compelled to follow the decisions of the appellate court, the trial judge identified certain issues he believed should be revisited. Specifically:

"The actual issue in this case as to the filing of this form, is it the unauthorized practice of law?

And then there is [sic] other considerations, such as here where the refiling of an action is not available to the party that it would be time barred by dismissal of the pending action, is that too severe a sanction to impose?

Coupled with the clearly erroneous legal instructions which are being given by the administrative law officers at the City of Chicago Department of Administrative Hearings, where they inform non-attorneys who appear before them representing corporations that you, quotation marks, 'You have the right to appeal this,' and they direct these people to the 6th Floor of Daley Center to file an appeal in these matters."

The trial court further questioned whether a non-attorney representing a corporate entity before the administrative hearings in the City might not also be engaged in the unauthorized practice of law. Plaintiff appealed.

¶ 9 The appellate court reversed and remanded. 407 Ill. App. 3d 822.

The court noted that "appellate court decisions have differed in their adherence to the automatic application of the nullity rule," and held that, in the case at bar, the purposes underlying the nullity rule, protection of litigants and the public as well as the integrity of the court system, would not be furthered by its application. Accordingly, the appellate court reversed the trial court's decision and remanded for further proceedings.

¶ 10 We granted the City's petition for leave to appeal (Ill. S. Ct. R. 315 (eff. Feb. 26, 2010)), and allowed the Illinois State Bar Association to file an amicus brief on behalf of the City.

¶ 11 ANALYSIS

¶ 12 Unauthorized Practice of Law

¶ 13 We must first determine whether Van Tholen engaged in the unauthorized practice of law when he filed the complaints for administrative review on behalf of plaintiff corporation.

¶ 14 This court has the inherent power to define and regulate the practice of law in this state. Ford Motor Credit Co. v. Sperry, 214 Ill. 2d 371, 382 (2005). Our rules are intended to safeguard the public from individuals unqualified to practice law and to ensure the integrity of our legal system. Sperry, 214 Ill. 2d at 383. See also Herman v. Prudence Mutual Casualty Co., 41 Ill. 2d 468, 479 (1969) (citing Chicago Bar Ass'n v. Quinlan & Tyson, Inc., 34 Ill. 2d 116 (1966)); City of Chicago v. Witvoet, 12 Ill. App. 3d 654, 655-56 (1973) (requirements for practicing law are imposed for the "protection of litigants against the mistakes of the ignorant and the schemes of the unscrupulous and the protection of the court itself in the administration of its proceedings from those lacking the requisite skills").

¶ 15 There is no mechanistic formula to define what is and what is not the practice of law. In re Discipio, 163 Ill. 2d 515, 523 (1994); People ex rel. Chicago Bar Ass'n v. Barasch, 406 Ill. 253, 256 (1950). Rather, we examine the character of the acts themselves to determine if the conduct is the practice of law (Quinlan & Tyson, Inc., 34 Ill. 2d at 120) and each case is largely controlled by its own peculiar facts (People ex rel. Chicago Bar Ass'n v. Tinkoff, 399 Ill. 282, 289 (1948)).

¶ 16 Plaintiff contends that there was no unauthorized practice of law because Van Tholen merely filled in blanks on a simple form that did not require the use of any legal expertise. We disagree. It is not the simplicity of the form that is important but the fact that an appeal was pursued on behalf of a corporation by a non-attorney.

¶ 17 A corporation must be represented by counsel in legal proceedings. See Nixon, Ellison & Co. v. Southwestern Insurance Co., 47 Ill. 444, 446 (1868) (as early as Lord Coke's time, corporations could not appear in person but had to appear by an attorney). See also Nispel v. Western Union R.R. Co., 64 Ill. 311 (1872). This rule arises from the fact a corporation is an artificial entity that must always act through agents and there may be questions as to whether a particular person is an appropriate representative. For example, while an officer of a corporation, i.e., an individual such as Van Tholen, may believe review of an administrative decision is in the best interests of a company, it may, in fact, not be. The interests of the corporate officers and that of the corporation, a distinct legal entity, are separate. See, e.g., Upjohn Co. v. United States, 449 U.S. 383, 390-92 (1981) (rejecting proposition that senior managers and corporation have identical interests). It is not every case where the views or interests of a principal and the corporation mesh. By requiring an attorney to represent a corporation in legal proceedings, this problem is mitigated.

¶ 18 A complaint for administrative review is essential to preserve one's right to appeal an administrative decision and invokes the appellate review mechanism. The filing of the complaint affects the substantial legal rights of the party seeking administrative review, in this case, Downtown Disposal. As such, only an individual representing the corporation itself can ascertain whether it is best for a corporation to pursue review of an administrative decision and invoke the appellate mechanism.

¶ 19 Accordingly, when Van Tholen filed the complaints for administrative review, he engaged in the unauthorized practice of law. He was not an attorney representing the interests of the corporation and could not file for administrative review on behalf of Downtown Disposal.

¶ 20 Having reached this conclusion, we must now determine the consequences of Van Tholen's conduct and decide whether the complaints for administrative review were a nullity.

¶ 21 Nullity Rule

ΒΆ 22 Courts in this country, including this court, unanimously agree that a corporation must be represented by counsel in legal proceedings. However, courts disagree on the consequences the lack of representation has on actions taken by non-lawyers on behalf of a corporation. Some courts, including our appellate court, have held that such actions are a nullity and warrant dismissal, the entry of a default judgment against the corporation, or vacatur of any judgment rendered. The defect is deemed incurable and goes to the court's power to exercise subject matter jurisdiction. See Siakpere v. City of Chicago, 374 Ill. App. 3d 1079, 1081 (2007) (complaint for administrative review filed by corporate officer on behalf of corporation a nullity); Midwest Home Savings & Loan Ass'n v. Ridgewood, Inc., 123 Ill. App. 3d 1001 (1984) (notice of appeal filed on behalf of corporation by person not entitled to practice law held to be a nullity); Housing Authority v. Tonsul, 115 Ill. App. 3d 739 (1983) (judgment void even if layperson merely signs complaint and all other appearances are by attorney). See also Land Management, Inc. v. ...


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