Mitchell v. GeoVera Insurance — magistrate judge recommends dismissal unless company obtains counsel

Reported / Citable

Background

Andrew J. Mitchell, an incarcerated former public adjuster proceeding without a lawyer, sued GeoVera Insurance and GeoVera Advantage Insurance Company. Mitchell had provided adjusting services through Mitchell Adjusting International LLC (MAI), a Texas LLC of which he was the sole member.

Mitchell alleged that the insurers failed to include him on settlement checks and disbursements for claims he adjusted. He asserted contract, public-adjuster-statute, bad-faith, unjust-enrichment, and federal claims, purportedly in his individual capacity and as assignee of MAI’s receivables.

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 reasoned that MAI is the real party in interest because the alleged claims arise from its adjusting business and contracts. An LLC may appear in federal court only through counsel. Even assuming MAI validly assigned its claims to Mitchell, the assignment would not permit Mitchell, who is not a lawyer, to prosecute the company’s claims pro se.

Key Takeaways

• A limited liability company must be represented by licensed counsel in federal court.
• A sole member cannot avoid that rule by taking an assignment of the LLC’s claims and litigating them pro se.
• Mitchell may object to the recommendation, and the proposed dismissal would be without prejudice if counsel does not appear.

Why It Matters

The recommendation applies the rule against nonlawyer representation of artificial entities to an attempted assignment from a sole-member LLC to its owner. It treats the substance of the claims—not the assignment label—as controlling where the company’s contractual rights are at issue.

The ruling is a reminder that businesses seeking to enforce their claims in federal court must retain counsel, even where the business has only one owner and that owner claims to hold the assigned receivables.