Doyle Shirt Manufacturing Corporation v. T. Michael O'Mara ( 1999 )

DOYLE SHIRT MANUFACTURING )
CORP., )
)
Plaintiff/Appellant, )
)
Appeal No. FILED
01-A-01-9711-CH-00670
v. ) April 7, 1999
) Putnam Chancery
T. MICHAEL O'MARA, et al, ) No. 96-409 Cecil Crowson, Jr.
) Appellate Court Clerk
Defendants/Appellees. )
)
COURT OF APPEALS OF TENNESSEE
APPEAL FROM THE CHANCERY COURT FOR PUTNAM COUNTY
AT COOKEVILLE, TENNESSEE
THE HONORABLE VERNON NEAL, CHANCELLOR
SAMUEL J. HARRIS
P. O. Box 873
Cookeville, Tennessee 38503
ATTORNEY FOR PLAINTIFF/APPELLANT
TOM CORTS
P. O. Box 198985
Nashville, Tennessee 37219-8985
ATTORNEY FOR DEFENDANTS/APPELLEES
AFFIRMED AND REMANDED
WALTER W. BUSSART, SPECIAL JUDGE
OPINION
This appeal involves the requirement of Tennessee Rule of Civil
Procedure 11.01 that pleadings be signed by an attorney or by a party if that party
is not represented by an attorney. Finding that the plaintiff did not comply with
Rule 11 within the statutory period of limitations, the Putnam County Chancery
Court granted summary judgment to the defendant. We affirm the decision of the
trial court.
I.
The facts are not in dispute. On October 23, 1996, Doyle Shirt
Manufacturing Corporation ("Doyle") filed a complaint against T. Michael
O'Mara alleging attorney malpractice for Mr. O'Mara's alleged failure to file a
timely adversary proceeding in a bankruptcy case on behalf of Doyle. The
president of Doyle, Robert Roggen, who is not an attorney, signed this
complaint. On November 5, 1996, Mr. O'Mara filed an answer to Doyle's
complaint asserting the following affirmative defense: "Complaint is void in as
much as the Complaint has not been signed by an attorney and a corporation
cannot proceed pro se." The first evidence of Doyle's attorney's presence in these
proceedings was on December 20, 1996 when this attorney filed a notice of
appearance and a motion to amend the complaint.
Mr. O'Mara moved for summary judgment on the grounds that Doyle's
complaint was "void because it was not signed by an attorney and the statute of
limitations for bringing a complaint had now run." In Mr. O'Mara's supporting
affidavit, he stated that Doyle had agreed with his recommendation not to file the
adversary proceeding. Nevertheless, Mr. O'Mara claims that on October 23,
1995, he sent by facsimile a letter to Doyle with the information that he had not
filed an adversary proceeding. The next day, on October 24, Mr. O'Mara
received a letter from Joan Ranney of Doyle which acknowledged receipt of the
October 23 letter and stated that Mr. O'Mara's "failure to [take the above action]
has forever barred the corporation from the possibility of recovering the losses
incurred by [the] embezzlement." Therefore, it is Mr. O'Mara's position that, as
of October 24, 1995, Doyle knew that Mr. O'Mara had not filed the adversary
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proceeding and thus Doyle's cause of action had accrued. Since Doyle failed to
file a valid complaint signed by an attorney within one year from the accrual of
its action on October 24, 1995, the complaint was properly dismissed.
Joan Ranney's affidavit was filed as an exhibit to Doyle's memorandum
opposing summary judgment. Ms. Ranney claims that as the secretary for Robert
Roggen, she was directed to obtain legal counsel to pursue Doyle's claim against
Mr. O'Mara. She stated that both she and Mr. Roggen were unaware that the
complaint had to be signed by an attorney. Ms. Ranney maintains that she made
every effort to obtain counsel from her home or office in Las Vegas, Nevada
before October 24, 1996. However, she was unsuccessful as attorneys were
unwilling to take the case due to the nature of the case as well as their friendship
with Mr. O'Mara. She stated that Doyle retained its present attorney on
November 22, 1996.
The trial court granted summary judgment to Mr. O'Mara stating that
his motion was well taken. On appeal, Doyle presents one issue for our review:
Whether a complaint alleging attorney malpractice, which
was signed only by the non-lawyer president of a corporate
plaintiff, and where said plaintiff was unable to obtain legal
counsel before the expiration of the statute of limitations,
may be amended so as to relate back as a timely filed
pleading?
The essence of Doyle's argument on appeal is that this court should reconsider
or distinguish the Tennessee Supreme Court's holding in Old Hickory
Engineering and Machine Co. v. Henry, 937 S.W.2d 782 (Tenn.1996).
II.
In Old Hickory, the court held "that a corporation cannot act pro se in
a court proceeding nor can it be represented by an officer or other non-lawyer
agent." Id. at 786. As in our case, the Old Hickory complaint had been signed
and filed by the non-lawyer president of the plaintiff corporation. The court
stated that "[t]he plaintiff's insistence, that the signing of the complaint by its
president constitutes compliance with Rule 11's provision that a pleading may
be signed by the party, is not consistent with policy or precedent. A corporation
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is an artificial entity, which 'cannot act or speak except through natural persons
duly authorized.'" Id. at 785 (quoting Great Am. Indem. Co. v. Utility
Contractors, Inc., 21 Tenn. App. 463, 471, 111 S.W.2d 901, 907 (1937)). To
hold otherwise would permit the corporation's president to engage in the
unauthorized practice of law. See Tenn. Sup. Ct. R. 7, § 1.01. In explaining the
policy considerations behind its decision, the court cited cases noting the skill,
training, character, supervision and discipline that is necessary for and should
accompany the practice of law. Old Hickory, 937 S.W.2d at 785-86 (citing
Third Nat'l Bank v. Celebrate Yourself Prod'ns, Inc., 807 S.W.2d 704, 706-07
(Tenn.App.1990) and Nicollet Restoration, Inc. v. Turnham, 486 N.W.2d 753,
754 (Minn.1992)).
In the instant case, the evidence establishes and Doyle does not dispute
that it knew about its cause of action on October 24, 1995 when it sent a fax to
Mr. O'Mara stating that his conduct had "forever barred" Doyle from a certain
legal remedy. The statute of limitations for attorney mal-practice is one year
from the date of accrual. Tenn. Code Ann. § 28-3-104(a)(2) (Supp.1998).
Therefore, the issue is whether Doyle's filing on October 25, 1996 or its Motion
to Amend its Complaint on December 20, 1996 satisfied the requirements of
Rule 11. In light of the clear holding of the supreme court in Old Hickory which
was based upon very similar facts, we find that Doyle's complaint signed by its
non-attorney corporate president was inadequate.
In addition, we decline Doyle's invitation to reconsider the Supreme
Court's ruling. The Court of Appeals is an intermediate appellate court whose
duty is to "apply the law as promulgated by the legislature or as announced by
the Supreme Court. This Court is bound by the Supreme Court's decisions under
the doctrine of stare decisis and in no way is it the function of this court to
intentionally reverse the holding of the Supreme Court." Hollingsworth v.
Safeco Ins. Co., 782 S.W.2d 477, 479-80 (Tenn.App.1988).
We must next address the issue of whether Doyle's attempt to correct
its filing brought its complaint within Rule 11 compliance. In Old Hickory, the
court cited the following amendment to Rule 11 as "declarative of the policy and
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practice regulating court proceedings in that particular": "An
unsigned paper shall be stricken unless omission of the signature is corrected
promptly after being called to the attention of the attorney or party." Tenn. R.
Civ. P. 11.01. The principle of this amendment means that "the status of [a]
complaint [signed by a non-attorney corporate president] on the date it was filed
was as though it contained no signature, and, because of that deficiency, it was
subject to being stricken from the record." Old Hickory, 937 S.W.2d at 786.
The Old Hickory court stated that "[t]he construction most favorable to the
plaintiff in this case is that the plaintiff was notified of the fatal deficiency in the
complaint by the defendant's motion to dismiss on April 13, 1994, and the
plaintiff took no action until its attorney filed a notice of appearance on May 20,
1994." Id. The court found that this was "not 'prompt' action." Id.
In the case at bar, viewing the evidence in a light most favorable to
Doyle, it was notified of the complaint's deficiency on November 5, 1996, when
Mr. O'Mara filed an answer to Doyle's complaint arguing as an affirmative
defense that the complaint was void because it had not been signed by an
attorney and a corporation cannot proceed pro se. While Ms. Ranney states that
Doyle's attorney was retained by November 22, 1996, the first action taken by
this attorney was on December 20, 1996, when he filed a notice of appearance
and a motion to amend the complaint. The particular facts in Old Hickory are
instructive. There, the court found that a 37-day delay was not "prompt action."
In light of the court's conclusion, we can not say that the 45-day delay in the
instant case was "prompt action."
Doyle insists that the facts of this case are distinguishable from those
in Old Hickory due to the particular nature of an attorney malpractice action. In
Doyle's words, the significance of the distinction arises from a situation "where
the reality of the legal marketplace makes it exceedingly difficult to obtain legal
counsel." Under the statute, Doyle had one year to find an attorney. We
recognize that this task may have required some effort especially since the search
was made from Doyle's office in Nevada. However, we are convinced that one
year was a reasonable amount of time in which Doyle could have found and
retained an attorney.
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III.
Finally we address Mr. O'Mara's contention that this is a frivolous
appeal because the facts here are so similar to those in Old Hickory. Section
27-1-122 of the Tennessee Code allows this court to award damages for the
prosecution of a frivolous appeal. "A frivolous appeal is one that is 'devoid of
merit,' Combustion Engineering, Inc. v. Kennedy, 562 S.W.2d 202 (Tenn.1978),
or one in which there is little prospect that it can ever succeed." See Industrial
Dev. Bd. of Tullahoma v. Hancock, 901 S.W.2d 382, 385 (Tenn.App.1995)
(citing Black's Law Dictionary, 601(5th Ed.1979)). While the facts are very
similar, they are not identical. We find that this appeal is not frivolous.
IV.
In conclusion, we affirm the trial court's grant of summary judgment to
the defendant below, Mr. O'Mara. We find that the complaint filed by Doyle on
October 23, 1996 was inadequate under Rule 11, Tenn. R. Civ. P., and under the
case of Old Hickory Engineering and Machine Co. v. Henry, 937 S.W.2d 782(Tenn.1996). Furthermore, we find that Doyle's motion to amend its complaint
45 days after being notified of the complaint's defect did not constitute prompt
action in light of the court's holding in Old Hickory. While we do not find that
Doyle's appeal was frivolous, it is our opinion that the costs of appeal should be
taxed to Doyle.
_______________________________
WALTER W. BUSSART, SPECIAL JUDGE
CONCUR:
______________________________________
HENRY F. TODD, PRES. JUDGE, M.S.
______________________________________
WILLIAM C. KOCH, JR., JUDGE
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