Opinion
No. 24988-3-III.
January 4, 2007.
Appeal from a judgment of the Superior Court for Lincoln County, No. 02-2-00133-6, Philip W. Borst, J., entered February 2, 2006.
Counsel for Appellant(s) Richard W. Kuhling, Paine Hamblen Coffin Brooks, Spokane, WA, 99201-3505.
Erin Angela Jacobson, Attorney at Law, Spokane, WA, 99201-3919.
Geoffrey John Aultman, Paine Hamblen Coffin Brooke Miller LLP, Spokane, WA, 99201-3505.
Counsel for Respondent(s) Robert Blaine Binger, Attorney at Law, Spokane, WA, 99260-2051.
Affirmed by unpublished opinion per Schultheis, A.C.J., concurred in by Kato and Kulik, JJ.
Corporations appearing in court proceedings must be represented by an attorney. Lloyd Enters., Inc. v. Longview Plumbing Heating Co., 91 Wn. App. 697, 701, 958 P.2d 1035 (1998). Ponderosa Hill, Inc., represented by its president, Gary Wight, filed a lawsuit against Spokane County (the County) on the last day of the statute of limitations period. Mr. Wight is not an attorney. Three years later, the trial court granted the County's motion to dismiss for Ponderosa's failure to properly sign the pleading. CR 11.
Mr. Wight and Ponderosa appeal, contending the trial court erred in dismissing Mr. Wight's separate complaint and in preventing Ponderosa from curing its CR 11 violation. They also argue that dismissal was not the appropriate remedy under CR 11. Because we conclude that Mr. Wight improperly signed the pleading as the agent of Ponderosa and that the trial court properly imposed the sanction of dismissal, we affirm.
Facts
In 1998, Mr. Wight, on behalf of Ponderosa, applied to the County for a building permit. When the application was denied, he appealed. The County hearing examiner upheld the denial on November 4, 1999. Three years later, on the last day of the three-year statute of limitations for responding to the hearing examiner's action (RCW 4.16.080), Mr. Wight filed a complaint in Lincoln County captioned, "Ponderosa Hill, Inc. and Gary D. Wight, Its President," and signed, "Gary D. Wight, Plaintiff and President of Plaintiff Ponderosa Hill, Inc." Clerk's Papers (CP) at 5, 13.
Mr. Wight was diagnosed with cancer after he filed the complaint and he did not take further action until Lincoln County filed a notice of dismissal on August 26, 2005 for want of prosecution. After Mr. Wight responded that he was "actively pursuing this matter" (CP at 14), the County filed a motion to dismiss on October 17, 2005 for violations of CR 11 and CR 41(b).
On November 16, 2005, five days before the hearing on the motion, Mr. Wight hired legal counsel, who represented him and Ponderosa at the hearing. The trial court continued the hearing for two months to allow the parties to address whether Mr. Wight's complaint complied with CR 11. After hearing additional argument, the trial court entered an order on February 2, 2006 granting the County's motion to dismiss. Mr. Wight and Ponderosa timely appealed.
Separating Individual and Corporate Claims
Mr. Wight first contends the trial court erred in dismissing his individual claim against the County along with Ponderosa's claim. Admitting that a corporation must be represented by an attorney, he asserts that he signed the complaint pro se, as an individual separate from the corporation. The trial court concluded that Mr. Wight's complaint violated CR 11 because it was not signed by an attorney. It also found that Mr. Wight signed as an agent of the corporation and not as an individual. Accordingly, the trial court dismissed the entire complaint as invalid. We review the trial court's interpretation of a court rule de novo. Spokane County v. Specialty Auto Truck Painting, Inc., 153 Wn.2d 238, 244, 103 P.3d 792 (2004). Review of the trial court's imposition of CR 11 sanctions is for abuse of discretion. Biggs v. Vail, 124 Wn.2d 193, 197, 876 P.2d 448 (1994).
As both parties recognize, Washington law generally requires that individuals appearing in court on behalf of another party must be licensed attorneys. Lloyd, 91 Wn. App. at 701. "Because corporations are artificial entities that can act only through their agents, . . . corporations appearing in court proceedings must be represented by an attorney." Id. The complaint here was filed by Mr. Wight, a nonlawyer officer of Ponderosa. Accordingly, it violated CR 11's requirement that every pleading of a party represented by another must be signed by an attorney. When a pleading is not so signed, it must be stricken "unless it is signed promptly after the omission is called to the attention of the pleader." CR 11(a). Further, if a pleading is signed in violation of this rule, the trial court has discretion to impose an appropriate sanction on the party who signed it. CR 11(a).
Mr. Wight contends he signed the complaint in two capacities, as an agent for Ponderosa and as an individual. Generally, a person signing a document — such as a contract — signs in his or her personal capacity. Wilson Court Ltd. P'ship v. Tony Maroni's, Inc., 134 Wn.2d 692, 700, 952 P.2d 590 (1998). Descriptive language following a signature is usually considered merely descriptive of the person and does not foreclose that person's personal liability. Id. When the face of the document does not otherwise indicate the signer's capacity, however, a signature with added descriptive language may create an ambiguity. Id.
In this case, the complaint heading indicates a single "Plaintiff": "Ponderosa Hill, Inc. and Gary D. Wight, Its President." CP at 5. In the designation of parties, however, "Plaintiff Ponderosa Hill, Inc." and "Plaintiff, Gary D. Wight" are listed as separate parties, with Mr. Wight described as "President of Ponderosa Hill, Inc., and one of it's [sic] owners." CP at 6. Thereafter, the complaint refers to "plaintiff" Mr. Wight as the person who owned real property, who applied for a nonconforming use, and who appealed the denial of a building permit. CP at 7-8. On other occasions, the complaint refers to the "plaintiffs" and their property rights. CP at 9-13. The complaint is signed, "Gary D. Wight, Plaintiff and President of Plaintiff Ponderosa Hill, Inc." CP at 13. The confusion of singular and plural plaintiffs creates an ambiguity. But Mr. Wight's role as sole owner (along with his wife) and president of Ponderosa defeats his contention that he sued on his own behalf.
Lloyd is instructive. In Lloyd, the president of a corporation filed an answer to a complaint pro se on behalf of his wife and the corporation. When the plaintiff moved to strike the answer for violation of CR 11, the trial court granted the motion and dismissed the claims. 91 Wn. App. at 702. On appeal, dismissal of the president's individual claim was affirmed because "it would be inequitable to allow him to establish the protections of a corporation and then not require that he also face the burdens of incorporation." Id. at 702-03. Significantly, the president was also the sole owner (along with his wife) of the corporation. He asserted that his wife and the corporation had assigned their interests to him. However, his unique relationship as president and majority shareholder supported his identity as the agent of the corporation:
"A shareholder who owns all or practically all of a corporation's stock is not entitled to sue as an individual because the shareholder cannot employ the corporate form to his advantage in the business world and then choose to ignore its separate entity when he gets to the courthouse."
Id. at 703 n. 5 (quoting Zimmerman v. Kyte, 53 Wn. App. 11, 18, 765 P.2d 905 (1988)) (internal quotation marks omitted).
The record shows that Ponderosa purportedly assigned its interests in this cause of action to Mr. Wight on November 1, 2002. Even if the assignment was valid (which the County disputes), it is clear that Mr. Wight's role as president and sole owner of the corporation is indistinguishable from his role as pro se plaintiff in this action. Consequently, the trial court did not err in striking his complaint. Id. at 702-03.
Sanctions for CR 11 Violations
Mr. Wight next contends the trial court should have allowed him to cure the defective signature on the complaint under CR 11(a). The rule provides that an unsigned pleading "shall be stricken unless it is signed promptly after the omission is called to the attention of the pleader." CR 11(a). Citing Lloyd, 91 Wn. App. at 700, Mr. Wight asserts that the trial court should have given him a period of time to file an amended complaint properly signed by an attorney. And that amended complaint, he argues, should have been allowed to relate back to the original date of filing.
In Lloyd, a plaintiff filed complaints against Berry, Inc. Wade Berry, the president of Berry, Inc. and a nonlawyer, filed answers pro se. The plaintiff later moved to strike all the documents filed by Mr. Berry acting for the benefit of the corporation. After granting the motion, the trial court gave Berry, Inc. 20 days to file an answer signed by an attorney. When Berry, Inc. failed to comply, the trial court entered an order of default. On appeal, Division One of this court held that the trial court properly struck the documents for violation of CR 11 because the corporation did not promptly cure the omission. Lloyd, 91 Wn. App. at 702. Here, the trial court did not specifically allow Mr. Wight to sign an amended complaint after granting the County's motion to dismiss. The difference between this case and Lloyd, however, is that an amended complaint would have been untimely here unless it related back to the original filing date.
CR 11 is modeled after Federal Rule of Civil Procedure 11 (Rule 11); therefore, this court may look to federal cases interpreting Rule 11 for guidance in construing the state rule. Bryant v. Joseph Tree, Inc., 119 Wn.2d 210, 218-19, 829 P.2d 1099 (1992). In a case from the Fifth Circuit, Gonzales v. Wyatt, 157 F.3d 1016 (5th Cir. 1998), the court distinguished between a late correction of an unsigned pleading by a pro se party and a late correction by a party represented by a nonlawyer. Gonzales notes that the purpose under Rule 11 for requiring unrepresented parties to sign the pleadings is to make certain that the named parties actually assented to the filing of the action on their behalf.
157 F.3d at 1021. When the pro se party files an unsigned pleading, that purpose may be met by allowing the party to promptly sign and refile, with relation back to the original date of filing. Id. But when the pleading is signed by a nonlawyer on behalf of another party, no signing or ratification by the "'represented'" party is effective after the statute of limitation has run. Id. at 1022.
Mr. Wight, a nonlawyer, signed the complaint on behalf of Ponderosa. Because Ponderosa could not be represented by a nonlawyer, the complaint was, in effect, unsigned. Lloyd, 91 Wn. App. at 701-02. Any attempt to cure that defect would not relate back to the original filing date. Gonzales, 157 F.3d at 1022. Accordingly, the trial court had no reason to allow Ponderosa a reasonable time to correct the defect under CR 11(a).
The imposition of sanctions for violations of CR 11 is discretionary. Biggs, 124 Wn.2d at 200. And a trial court should impose the least severe sanction that is adequate to serve the purpose. Bryant, 119 Wn.2d at 225. Here, due to Mr. Wight's status as an agent of Ponderosa and because a proper signature by an attorney would not relate back to the original filing date, the trial court was compelled to dismiss the complaint. The trial court did not abuse its discretion.
The County's additional argument that dismissal is also justified for a violation of CR 41(b)(2) is without merit. This rule allows the clerk to dismiss a civil action on the ground that no action of record has been taken during the preceding 12 months. CR 41(b)(2); Miller v. Patterson, 45 Wn. App. 450, 454-55, 725 P.2d 1016 (1986). In order for dismissal to occur, however, the clerk must notify the parties and allow 30 days for the filing of a status report. CR 41(b)(2)(A). If the clerk does not receive a timely status report, the case must be dismissed without prejudice on the motion of the clerk. CR 41(b)(2)(A). Mr. Wight filed a status report within 30 days after the clerk's motion for dismissal, and the clerk never dismissed the complaint. Consequently, dismissal under CR 41(b)(2)(A) was not warranted.
Affirmed.
A majority of the panel has determined that this opinion will not be printed in the Washington Appellate Reports but it will be filed for public record pursuant to RCW 2.06.040.
KATO, J. and KULIK, J., cocur.