Elm Children's Educational Trust v. Wells Fargo Bank, N.A.

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
Assigned on Briefs December 10, 2014
ELM CHILDREN’S EDUCATIONAL TRUST v.
WELLS FARGO BANK, N.A.
Appeal from the Circuit Court for Knox County
No. 2-52-11 Harold Wimberly, Judge
No. E2013-02482-COA-R3-CV-FILED-DECEMBER 17, 2014
This Court entered an order in September of 2014 directing ELM Children’s Educational
Trust (“the Trust”) to show good cause why this appeal should not be dismissed for lack of
jurisdiction because the Notice of Appeal was signed by a non-attorney, non-party. The
Trust failed to show good cause. We hold that a non-attorney trustee may not represent a
purportedly pro se trust. As such, the Notice of Appeal signed by the non-attorney trustee
was insufficient to initiate an appeal on behalf of the Trust. This appeal, therefore, is
dismissed for lack of jurisdiction.
Tenn. R. App. P. 3 Appeal as of Right; Appeal Dismissed
Case Remanded
D. M ICHAEL S WINEY, J., delivered the opinion of the Court, in which J. S TEVEN S TAFFORD,
P.J., W.S., and K ENNY W. A RMSTRONG, J. joined.
ELM Children’s Educational Trust.
Summer H. McMillan, Knoxville, Tennessee, for the appellee, Wells Fargo Bank, N.A.
OPINION
Background
In February of 2011, the Trust filed suit against Wells Fargo Bank, N.A. (“the
Bank”) with regard to a foreclosure action by the Bank on real property owned by the Trust
and located in Knoxville, Tennessee. The complaint was signed by John Threadgill, Trustee,
who, at that time, was a licensed Tennessee attorney. In July of 2012, John Threadgill was
disbarred.
The Bank filed a motion for summary judgment in March of 2013. After a
hearing, the Trial Court granted the Bank summary judgment by order entered October 18,
2013. The Trial Court’s October 18, 2013 order reflects that the Trust was represented by
attorney Jonathan P. Harwell at that time.
On November 8, 2013, a Notice of Appeal was filed purportedly by the Trust.
The Notice of Appeal lists the appellant as “ELM Children’s Trust.” Furthermore, the Notice
of Appeal contains the style of the case, a section wherein it states: “Notice is given that
ELM Children’s Trust appeals the final judgment(s) of the Circuit Court of Knox County
filed on 18th Oct[.] 2013 to the Court of Appeals,” and a list of parties all of which contain
only the name of ELM Children’s Trust as the appellant. John Threadgill, Trustee is not
listed as a party to this appeal. Mr. Threadgill, however, signed the Notice of Appeal and the
certificate of service.
On September 10, 2014, this Court entered a show cause order stating, in
pertinent part:
John Threadgill, Trustee, filed the Notice of Appeal in this case on
behalf of Elm Children’s Educational Trust1 seeking review of an order of the
Circuit Court of Knox County entered on October 18, 2013. However, John
Threadgill is not an attorney licensed to practice law in the State of Tennessee 2
and, therefore, cannot appear or file pleadings on behalf of the trust appellant.
See Tenn. Sup. Ct. R. 7, § 1.01 (prohibiting the unauthorized practice of law);
Old Hickory Eng’g & Mach. Co., Inc., 937 S.W.2d 782, 785-86 (Tenn. 1996)
(holding that non-lawyer corporate officer could not sign pleading on behalf
1
The sole party to the appeal is Elm Children’s Educational Trust. John Threadgill is not a party to
this appeal.
2
John Threadgill was disbarred as an attorney in the State of Tennessee effective in July of 2012.
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of purportedly pro se corporate party); Maurice Morris-Bey v. Bank of
America, No. 2:11-cv-02999-JTF-dkv, 2013 U.S. Dist. LEXIS 109541 (W.D.
Tenn. Aug. 5, 2013) (dismissing case for failure to prosecute after adopting
report of magistrate judge finding that non-lawyer trustee had no authority to
represent trust, parties had been so advised, and trust had failed to retain
counsel); see also Knoefler v. United Bank of Bismark, 20 F.3d 347 (8th Cir.
1994) (holding inter alia that a non-lawyer trustee may not represent trust pro
se in federal court); see also Tenn. Code Ann. § 23-3-103 (criminalizing the
unauthorized practice of law). Consequently, it appears that the Notice of
Appeal is insufficient to initiate an appeal on behalf of the trust appellant. See
Tenn. R. Civ. P. 11.01 (“Every pleading, written motion, and other paper shall
be signed by at least one attorney of record in the attorney’s individual name,
or, if the party is not represented by an attorney, shall be signed by the
party.”)3 .
(footnotes in original).
The Trust did not respond to our September 10, 2014 order to show cause.
Instead, Mr. Threadgill filed a response arguing, in pertinent part, that the federal cases cited
in our September 10, 2014 order are not applicable because they have “no relevance to the
Tennessee Rules of Civil Procedure,” or, in the alternative, because they are trial court cases,
which allegedly implies that this issue “can only be raised at the trial court level and not
when the case is ready for argument in the Tennessee Court of Appeals.”4 Mr. Threadgill’s
response further argues that “John Threadgill, Trustee was the party [who filed this appeal].”
Discussion
Pursuant to Tenn. R. App. P. 13(b), “[t]he appellate court shall also consider
whether the trial court and appellate court have jurisdiction over the subject matter, whether
or not presented for review, . . . .” Tenn. R. App. P. 13(b). Thus, we sua sponte raise the
3
The Tennessee Rules of Civil Procedure are applicable because, pursuant to Tenn. R. App. P. Rules
3 and 4, the notice of appeal shall be filed with the trial court clerk. See Tenn. R. App. P. 3 (regarding
initiation of an appeal as of right by timely filing of notice of appeal with clerk of the trial court); Tenn. R.
App. P. 4 (providing time for filing notice of appeal with the clerk of the trial court as required by Tenn. R.
App. P. 3).
4
The argument that this issue can be raised only at the trial court level is disingenuous as the Trust
was represented in the Trial Court by a licensed attorney. Thus, any attempt to raise the issue at the trial
court level in this case would have been moot.
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issue of whether the Notice of Appeal signed by the non-attorney trustee on behalf of the
purportedly pro se Trust properly invoked the jurisdiction of this Court.
To begin, we note that the Notice of Appeal filed in this case clearly and
unequivocally states that the appellant is “ELM Children’s Trust.” Nowhere within the
Notice of Appeal is John Threadgill, Trustee listed or designated as a party to this appeal.
John Threadgill, Trustee is not a party to this appeal. The only appellant involved in this
appeal is the Trust.
Since the Trust is the only appellant in this case, we must determine whether
a non-attorney trustee may represent a trust in our Tennessee courts. As for Mr. Threadgill’s
argument that federal case law does not apply, while the federal case law as discussed is not
binding upon this Court, we find the reasoning adopted by the federal courts to be persuasive
with regard to this matter which apparently is of first impression in Tennessee. The federal
courts have analogized the representation of a trust in federal court to the representation of
a corporation in federal court and have held that a non-attorney may not represent either a
corporation or a trust in federal court as such representation would constitute the
unauthorized practice of law. E.g.,Knoefler v. United Bank of Bismark, 20 F.3d 347 (8th Cir.
1994) (holding inter alia that a non-lawyer trustee may not represent a trust pro se in federal
court).
As is the case under federal law, trusts and corporations under Tennessee law
are artificial legal entities. While our Tennessee courts have not directly addressed the issue
of whether a non-attorney trustee may represent a trust in court, our Supreme Court has
addressed the issue of whether a non-attorney may represent a corporation in court and has
held that a non-attorney may not represent a corporation in our Tennessee courts. E.g., Old
Hickory Eng’g & Machine Co, Inc. v. Henry, 937 S.W.2d 782 (Tenn. 1996). Our Supreme
Court discussed the rational behind its decision in Old Hickory Eng’g & Machine Co, Inc.
stating:
Allowing the president of the corporation to make the affirmations
required by Rule 11 would constitute the unauthorized practice of law. The
rule and the policy consideration are well stated in Third National Bank in
Nashville v. Celebrate Yourself Productions, Inc., 807 S.W.2d 704 (Tenn. Ct.
App. 1990). In that case, the court declined to allow two shareholders of a
closely held corporation, who were not attorneys, to represent the corporation
in a bank’s action for default of a promissory note. The bank had filed suit
against the corporation, as well as its three shareholders who were guarantors
of the corporation’s note. The shareholders contended that by preventing them
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from representing the indigent corporation, it was denied due process. Finding
no merit to this argument, the Court of Appeals held:
The purpose of our statutes regulating the practice of law
is to prevent the public’s being preyed upon by those who, for
valuable consideration, seek to perform services which require
skill, training and character, without adequate qualifications.
Haverty Furniture Co. v. Foust, 174 Tenn. 203, 124 S.W.2d 694(1939). When a corporation is a party to a lawsuit, these statutes
imply a representation that is distinct from an officer or other
corporate employee. Id. at 214, 124 S.W.2d 694. It is well
established that a corporation cannot practice law, nor can it
employ a licensed practitioner to practice for it. State ex rel.
Loser v. National Optical Stores Co., 189 Tenn. 433, 225
S.W.2d 263 [1949]; State v. Retail Credit Men’s Ass’n, 163
Tenn. 450, 43 S.W.2d 918 (1931).
To allow [the shareholders] to act as legal representatives
of [the corporation] in this lawsuit would be a direct violation of
the rules of our Supreme Court which provide:
No person shall engage in the “practice of law” or
the “law business” in Tennessee, except pursuant
to the authority of this court, as evidenced by a
license issued in accordance with this Rule, or in
accordance with the provisions of this Rule
governing special or limited practice.
Tenn. Sup. Ct. R. 7, § 1.01.
Id. at 706-707.
Old Hickory Eng’g, 937 S.W.2d at 785-86. Tennessee provides protections for the public
against the unauthorized practice of law. See Tenn. Code Ann. § 23-3-103 (2009)
(criminalizing the unauthorized practice of law).
Mr. Threadgill argues that he should be allowed as the trustee of the Trust to
represent the Trust in court, implying that his interests and the Trust’s interests are
synonymous. A trustee and a trust, however, are two separate entities. They are not
interchangeable. This is evidenced by the fact that a trustee may be replaced, removed, or
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substituted without destruction of the trust. See, e.g., Tenn. Code Ann. § 35-15-414(b)
(2007) (providing “The court may . . . remove the trustee and appoint a different trustee . .
. .” ); Tenn. Code Ann. § 35-15-701(b) (2007) (providing “[a] person designated as trustee
who has not yet accepted the trusteeship may reject the trusteeship.”); Tenn. Code Ann. § 35-
15-704 (2007) (providing for the appointment of a successor trustee in the event of a vacancy
in trusteeship); Tenn. Code Ann. § 35-15-707 (2007) (addressing duties of a trustee who has
resigned or been removed); Tenn. Code Ann. § 35-15-1001 (2007) (providing that a court
may suspend or remove a trustee, among other things, to remedy a breach of trust).
As a trustee and a trust are two separate entities, it follows that, while ideally
their interests would be harmonious, in reality their interests may not be so. Thus, we find
that a situation wherein a non-attorney trustee is attempting to represent a trust in court is
analogous to a situation wherein a non-attorney corporate officer or shareholder is attempting
to represent a corporation in court.
Given all of the above, we hold that a non-attorney trustee may not represent
a trust in our Tennessee courts. As Tenn. R. Civ. P. 11 requires that “[e]very pleading,
written motion, and other paper shall be signed by at least one attorney of record in the
attorney’s individual name, or, if the party is not represented by an attorney, shall be signed
by the party,” and the Notice of Appeal in this case was not signed by an attorney, the Notice
of Appeal was insufficient to initiate an appeal on behalf of the Trust. We, therefore, dismiss
this appeal for lack of jurisdiction.
Conclusion
This appeal is dismissed for lack of jurisdiction, and this cause is remanded to
the Trial Court for collection of the costs below. The costs on appeal are assessed against
the appellant, ELM Children’s Educational Trust.
_________________________________
D. MICHAEL SWINEY, JUDGE
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