Reported / Citable
Background
Andrew J. Mitchell, an incarcerated former public adjuster proceeding without counsel, sued Cincinnati Insurance Company over settlement checks and disbursements connected to insurance claims he adjusted. Mitchell provided those services through Mitchell Adjusting International LLC (MAI), a Texas LLC of which he was the sole member.
Mitchell alleged that Cincinnati failed to include his name on settlement payments. He asserted contract, Texas public-adjuster, bad-faith, unjust-enrichment, and federal claims, suing individually and as the purported assignee of MAI’s receivables. The documents attached to the complaint directed insurers to name MAI as an additional payee on settlement checks.
The Court’s Holding
Magistrate Judge Andrew M. Edison recommended that the court conditionally dismiss the action without prejudice unless Mitchell appears through licensed counsel within 30 days after adoption of the recommendation. The recommendation does not itself finally dismiss the case.
The magistrate judge concluded that MAI is the real party in interest because it was the entity identified as payee and the entity through which Mitchell provided adjusting services. An LLC may appear in federal court only through counsel. Even assuming MAI validly assigned its receivables and business claims to Mitchell, the assignment would not permit him, a nonlawyer, to prosecute what are substantively MAI’s claims pro se.
Key Takeaways
- A limited liability company must be represented by licensed counsel in federal court.
- A sole member cannot evade that requirement by taking an assignment of the LLC’s claims and proceeding pro se.
- The parties may object to the memorandum and recommendation within 14 days; if adopted, Mitchell would have 30 days to obtain counsel before dismissal without prejudice.
Why It Matters
The recommendation reinforces that the federal pro se statute permits individuals to represent only their own interests, not those of separate business entities. The rule applies even when the individual is the LLC’s sole owner and alleges an assignment of the entity’s claims.