Reported / Citable
Background
Andrew J. Mitchell, an incarcerated former public adjuster proceeding pro se, sued State Farm Fire and Casualty Company and State Farm Mutual Automobile Insurance Company. He alleged that the insurers failed to include him on settlement checks and disbursements for claims he adjusted.
Mitchell provided those services through Mitchell Adjusting International LLC, of which he was the sole member. Although he sued individually and as assignee of MAI’s receivables, the attached insurance authorization identified MAI as the additional payee on the relevant payments.
The Court’s Holding
Magistrate Judge Andrew M. Edison recommended that the district court conditionally dismiss the action without prejudice unless Mitchell appears through licensed counsel within 30 days after adoption of the recommendation.
The recommendation concluded that MAI is the real party in interest because the claims arise from its contracts and its right to payment. An LLC may appear in federal court only through counsel, and Mitchell cannot evade that rule by taking an assignment of MAI’s claims and prosecuting them pro se.
Key Takeaways
- An LLC must be represented by licensed counsel in federal court.
- An assignment of an LLC’s claims to its sole member does not permit the member to litigate those claims pro se.
- Mitchell may object within 14 days; if the recommendation is adopted, he would have 30 days to obtain counsel before dismissal without prejudice.
Why It Matters
The recommendation reinforces that the federal rule requiring business entities to retain counsel cannot be bypassed through an assignment of company claims to a nonlawyer owner. The proposed dismissal is without prejudice and gives the company an opportunity to proceed through licensed counsel.