IN THE SUPREME COURT OF FLORIDA (Before a Referee) THE FLORIDA BAR, Petitioner, vs. CASE NO. SC10-1652 TFB No(s).: 20093037(18A) WILLIAM E. PACE, Respondent. THE FLORIDA BAR S OBJECTION TO THE REPORT OF REFEREE Ghunise L. Coaxum Bar Counsel The Florida Bar The Gateway Center 1000 Legion Place, Suite 1625 Orlando, Florida 32801-5200 (407) 425-0473 Attorney No. 0077348 Lori S. Holcomb UPL Counsel The Florida Bar 651 East Jefferson Street Tallahassee, Florida 32399-2300 (850) 561-5600 Attorney No. 501018
TABLE OF CONTENTS TABLE OF CITATIONS. SYMBOLS AND REFERENCES... Page ii iv STATEMENT OF THE CASE AND FACTS. 1 SUMMARY OF THE ARGUMENT... 3 ARGUMENT.. 4 A TRUST IS A FICTITIOUS ENTITY AND AS SUCH CANNOT APPEAR IN COURT PRO SE OR BE REPRESENTED BY A NONLAWYER TRUSTEE CONCLUSION.. 12 CERTIFICATE OF SERVICE... 14 CERTIFICATE OF TYPE, SIZE AND STYLE 15 i
TABLE OF CITATIONS Cases Page The Florida Bar v. Embassy of Heaven Church,. 4 761 So. 2d 835 (Fla. 1997) The Florida Bar v. Hughes, 824 So. 2d 154 (Fla. 2000).. 6 The Florida Bar v. Smania, 710 So. 2d 835 (Fla. 1997).. 5 The Florida Bar v. Sperry, 140 So. 2d 587, 591 (Fla. 1962), 5 (judgment vacated on other grounds), 373 U.S. 379 (1963) EHQF Trust v. S&A Capital Partners, Inc, et. al,. 3,7,8,9 947 So. 2d 606 (Fla. 4 th DCA 2007) Nicholson Supply Co. v. First Federal Savings & Loan... 6 Association, 184 So. 2d 438 (Fla. 2d DCA 1966) Southeastern Associates, Inc. v. First Georgia Bank,.. 6 362 So. 2d 967 (Fla. 1 st DCA 1978) Szteinbaum v. Kaes Invescsiones Valores,... 6 476 So. 2d 247 (Fla. 3d DCA 1985) U.S. v. Lena, 2007 WL 4578336 (S.D. Fla. 2007).. 6,7,9 Back Acres Pure Trust v. Fahnlander, 233 Neb. 28,... 9 443 N.W. 2d 604 (1989) Beaudoin v. Kibbie, 905 P. 2d 939 (Wyo. 1995)... 9 C.E. Pope Equity Trust v. United States,. 10 818 F. 2d 696 (9 th Cir. 1987) Curry v. Kilgore, 2004 UT App. 112,.. 8 2004 WL 808673 (Utah Ct. App. 2004) ii
In re Ellis, 53 Haw. 23, 487 P. 2d 286 (1971)... 9 Jadair, Inc. v. United States Fire Ins. Co.,... 10 209 Wis. 2d 187, 204, 562 N.W. 2d 401, 407 (1997) Knoefler v. United Bank of Bismarck,. 10 20 F. 3d 347 (8 th Cir. 1994) Life Science Church v. Shawano County,... 9 221 Wis. 2d 331, 585 N.W. 2d 625 (1998) Mahoning County Bar Ass n v. Alexander, 9 79 Ohio St. 3d 1220, 681 NE. 2d 934 (1997) Oregon v. Loe, 65 B.R. 16 (D. Or. 1986). 10 Salman v. Newell, 110 Nev. 1333, 885 P. 2d 607 (Nev. 1994) 10 United States v. Stepard, 876 F. Supp. 214 (D. Ariz. 1994) 10 Williams v. Global Constr. Co. Ltd., 26 Ohio App. 3d 119, 10 498 N.E. 2d 500 (Ohio App. 1985) Ziegler v. Nickel, 64 Cal. App. 4 th 545, 8,9 75 Cal. Rptr. 2d 312 (Cal. 2d 1998) Florida Statutes 736, Fla. Stat. (2007). 5 736.0816, Fla. Stat. (2007). 5 736.0802, Fla. Stat. (2009). 6 454.18, Fla. Stat. (2007). 6,7 iii
SYMBOLS AND REFERENCES The Florida Bar shall be referred to as "The Florida Bar" or "the Bar." William E. Pace shall be referred to as Respondent. The Earl H. Pace Irrevocable Trust shall be referred to as the trust. The Report of Referee shall be referred to as "ROR" followed by the referenced Appendix page number(s). (ROR-A_) The transcript of the final hearing will be referred to as T followed by the cite page number(s). The Bar's exhibits will be referred to as "B-Ex." followed by the exhibit letter(s). (B-Ex. ) iv
STATEMENT OF THE CASE AND OF THE FACTS On or about August 24, 2010, The Florida Bar filed a Petition Against the Unlicensed Practice of Law against Respondent William E. Pace, alleging that Respondent engaged in the unlicensed practice of law when he represented the interests of the Earl H. Pace Irrevocable Trust in court. The allegations of the petition are very simple, since at least July 30, 2008 through August 13, 2009, Respondent acted as the attorney for the trust when not admitted to The Florida Bar, and therefore, engaged in the unlicensed practice of law. Respondent is the trustee of the trust. The trust was involved in an action regarding a parcel of land owned by the trust. Initially, the trust was represented by counsel. Sometime prior to July 24, 2008, counsel moved to withdraw. In approving the motion to withdraw, on July 24, 2008 the circuit court ordered Respondent to obtain substitute counsel within twenty days (B-Ex. A). Instead, Respondent began filing pleadings on behalf of the trust in the circuit court and later in the appellate court (B-Ex. B, B-Ex. C, B-Ex. D, B-Ex. E). Respondent argued that he had the authority to represent the trust as he was the trustee of the trust and was acting pro se (B-Ex. C, B-Ex. H). 1
The Florida Bar received a complaint regarding Respondent s actions and began an investigation. As Respondent would not cease engaging in the unlicensed practice of law and was potentially causing harm to the trust, The Florida Bar filed its Petition. As noted in the record filed with this Court, Respondent filed several motions in this matter, at times attempting to reargue the merits of the underlying case involving the trust. The referee addressed all of the motions, and a final hearing was held on May 25, 2011. At the final hearing the referee indicated that he was inclined to rule in favor of Respondent and find that there was no unlicensed practice of law (T, Pg. 41). The referee reasoned that Respondent was not representing the interests of others while representing the trust as there was no evidence that there were other beneficiaries of the trust (T, Pg. 41). The Florida Bar did not present evidence that there were beneficiaries to the trust because whether there are beneficiaries is irrelevant. As this point is not relevant to the case at hand, The Florida Bar did not feel it necessary to present evidence of the issue at trial. However, when the referee indicated that he would rule in favor of Respondent due to the lack of evidence regarding beneficiaries, The Florida Bar asked for leave to supplement the record with evidence regarding other 2
beneficiaries. The Florida Bar did not supplement the record because The Florida Bar was unable to obtain a copy of the trust. On August 8, 2011, the referee filed his report which is the subject of this appeal. Relying upon EHQF Trust v. S&A. Capital Partners, Inc. et. al., 947 So. 2d 606 (Fla. 4 th DCA 2007), the referee found that because there was no evidence that there were beneficiaries of the trust other than Respondent, Respondent was acting pro se when he was representing the trust, and therefore, was not engaging in the unlicensed practice of law. The referee recommends that no action be taken by this Court against Respondent. SUMMARY OF THE ARGUMENT A trust is a fictitious entity and, as such, cannot appear in court pro se, but must be represented by a member of The Florida Bar. The referee s reliance on EHQF is correct; however, his interpretation of the case is clearly erroneous and not supported by the law. Although there are few Florida cases on point, other states have ruled that a trustee may not appear pro se and may not represent the interests of a trust. Any representation of the trust is the representation of another. While an individual may represent his own interests in court, an individual may not represent another s interests 3
unless licensed to practice law in Florida. Representation of another s interests is the unlicensed practice of law. Courts ruling directly on the issue of a trustee representing a trust pro se analogize the situation to a corporation appearing pro se, because a trust, just like a corporation, is a fictitious entity. A nonlawyer who represents the corporation is engaged in the unlicensed practice of law even if the nonlawyer is a shareholder of the corporation. Similarly, a trustee who represents a trust pro se is engaged in the unlicensed practice of law. The referee s conclusion of law to the contrary is clearly erroneous. Consequently, his recommendation must be overturned and this Court should find that Respondent engaged in the unlicensed practice of law and issue an injunction as requested by The Florida Bar. ARGUMENT A TRUST IS A FICTITIOUS ENTITY AND AS SUCH CANNOT APPEAR IN COURT PRO SE OR BE REPRESENTED BY A NONLAWYER TRUSTEE The present case involves the referee s interpretation of the law as applied to the facts of this case. The facts are not in dispute. Regarding a referee's legal conclusions, this Court has held that [a] referee's findings regarding guilt are presumed correct and will be upheld unless clearly 4
erroneous... The Florida Bar v. Embassy of Heaven Church, 761 So. 2d 1053 (Fla. 2000). Here, the referee s findings are clearly erroneous. It cannot be disputed that nonlawyer representation of another in court constitutes the unlicensed practice of law. The Florida Bar v. Smania, 710 So. 2d 835 (Fla. 1997); The Florida Bar v. Sperry, 140 So. 2d 587, 591 (Fla. 1962), (judgment vacated on other grounds), 373 U.S. 379 (1963). There is no issue that Respondent is not a member of The Florida Bar and that he filed legal pleadings in court as William E. Pace, Trustee, Pro-Se. As noted by the referee, [t]here is no doubt that Respondent acted as a lawyer for the trust; the question is whether his pro-se representation of the trust was otherwise permissible (ROR, Pg. 2). What is in dispute is whether Respondent was representing himself as trustee and able to file pleadings on behalf of the trust or representing the interests of another the trust. The circuit court found that Respondent could not represent the trust and was required to have an attorney represent him as trustee. (B -Ex.-F). The referee found otherwise. It is The Florida Bar s position that the representation at issue here is representation of another entity and therefore is not permissible. A trust is a fictitious entity created by law. 736, Fla. Stat. (2007). The legal rights, responsibilities and liabilities of a trustee and trust are separate. Id. A trust 5
can hold and own assets, including land, as a separate legal entity. 736.0816, Fla. Stat. (2007). A trustee has a duty of loyalty to the trust and acts in a fiduciary capacity. 736.0802, Fla. Stat. (2009). It therefore follows that when acting on behalf of the trust, the trustee is acting on behalf of another. There are no cases from this Court dealing specifically with a trustee representing a trust pro se. 1 However, it has long been the law of Florida that a nonlawyer may not represent a corporation in court and that a corporation may not appear pro se. Szteinbaum v. Kaes Invescsiones Valores, 476 So. 2d 247 (Fla. 3d DCA 1985); Nicholson Supply Co. v. First Federal Savings & Loan Association, 184 So. 2d 438 (Fla. 2d DCA 1966). This is true even if the nonlawyer is the sole shareholder of the corporation. Southeastern Associates, Inc. v. First Georgia Bank, 362 So. 2d 967 (Fla. 1 st DCA 1978). The rationale is that a corporation is a fictitious entity. While a natural person may represent himself in court, [a] corporation is not a natural person. It is an artificial entity created by law and as such it can neither practice law nor appear or act in person. Nicholson at 440; 454.18, Fla. Stat. (2007). 1 In The Florida Bar v. Hughes, 824 So. 2d. 154 (Fla. 2000), this Court was faced with an action for indirect criminal contempt based on Hughes violation of an injunction against the unlicensed practice of law. The injunction prohibited Hughes from counseling, advising, and preparing documents for individuals in the creation of land trusts. Id. In the contempt proceeding there is discussion of Hughes appearing in court and filing pleadings on behalf of the trust. However, it is not clear whether Hughes was appearing pro se or through counsel. Consequently, that issue was not addressed by this Court. 6
There is no distinction between a trust and corporation for purposes of the right to appear pro se. U.S. v. Lena, 2007 WL 4578336 (S.D. Fla. 2007). Lena involved a trust being represented pro se by the trustee. The District Court noted that 28 U.S.C. 1654 allowed a person to represent himself, the same right that exists in 454.18, Fla. Stat. (2007). Although the Eleventh Circuit had not interpreted 28 U.S.C. 1654 with respect to a trust, the District Court noted that it is a well-settled principle of law that neither a corporation nor a partnership can appear pro se; rather, they must be represented by counsel and found no reason to make a distinction between a trust and a corporation for purposes of the right of self-representation under 1654. Id. Similarly, this Court should make no such distinction. In reaching its finding, the District Court relied in part on EHQF, the same case the referee relied on to find that Respondent had not engaged in the unlicensed practice of law. The Lena court cites to EHQF finding that state courts, including Florida's Fourth District Court of Appeal, have held that trustees may not appear pro se on behalf of a trust because the trustee represents the interest of others and would therefore be engaged in the unauthorized practice of law. Lena at 4578336. In the present case, the referee concluded that the interests of others as used by the court in EHQF related to beneficiaries. As there was no 7
evidence regarding beneficiaries, the referee concluded that Respondent did not engage in the unlicensed practice of law. This finding is clearly erroneous. When taken in its entirety, it is clear that other(s) contemplated by the EHQF court necessarily includes the trust. EHQF involved an appeal filed by the trustee of a trust. In holding that the appeal would be dismissed unless an amended notice of appeal was filed by an attorney, the court held that Section 454.23, Florida Statutes (2006), prohibiting the unlicensed practice of law, provides no exception for representation of a trust. Although Florida has not previously addressed the issue, other states have concluded that a trustee cannot appear pro se on behalf of the trust, because the trustee represents the interests of others and would therefore be engaged in the unauthorized practice of law. Id. The other decisions the EHQF court relied on all found that a trust could not appear pro se or be represented by a trustee. Seven cases were cited. The first two cases mention beneficiaries. Curry v. Kilgore, 2004 UT App. 112, 2004 WL 808673 (Utah Ct.App.2004); Ziegler v. Nickel, 64 Cal.App.4th 545, 75 Cal.Rptr.2d 312 (Cal.2d 1998). Perhaps the referee relied more on those cases when making his conclusion of law. If so, the referee s reading of those cases was too narrow. The mention of beneficiaries was not the basis for the rulings. The basis for the rulings, both 8
of which found that the trustee could not represent the trust, was that the trustee was representing the interests of the trust and thus engaging in the unlicensed practice of law. In fact, the Ziegler court relies on the following from the Supreme Court of Nebraska in finding the activity was not allowed: It is true that, as a general rule, a trust is not a legal personality, and the trustee is the proper person to sue or be sued on behalf of such trust. However,... a trustee's duties in connection with his or her office do not include the right to present argument pro se in courts of the state, because in this capacity such trustee would be representing interests of others and would therefore be engaged in the unauthorized practice of law. Back Acres Pure Trust v. Fahnlander, 233 Neb. 28, 443 N.W.2d 604 (1989). Ziegler at 547. The remaining five cases relied on by the EHQF court do not discuss beneficiaries. All found that the trustee was not authorized to represent the trust. Life Science Church v. Shawano County, 221 Wis.2d 331, 585 N.W.2d 625 (1998); Mahoning County Bar Ass'n v. Alexander, 79 Ohio St.3d 1220, 681 N.E.2d 934 (1997); Beaudoin v. Kibbie, 905 P.2d 939 (Wyo.1995); Back Acres Pure Trust v. Fahnlander, 233 Neb. 28, 443 N.W.2d 604 (1989); In re Ellis, 53 Haw. 23, 487 P.2d 286 (1971). 2 As 2 The Ellis court found that the nonlawyer trustee was engaged in the unlicensed practice of law when he represented the trust in court. However, under the limited circumstances of the bankruptcy case, the court allowed the nonlawyer to appear if it could be shown that the trust did not have assets to hire an attorney. While allowed in the particular case, the general proposition that the conduct is the unlicensed practice of law stands. 9
with the court in Lena, supra, the analogy of a corporation appearing pro se was made. For example, the court in Life Science noted that: The Wisconsin Supreme Court has ruled that nonlawyers such as officers, directors, and shareholders may not represent corporations in Wisconsin courts. See, Jadair, Inc. v. United States Fire Ins. Co., 209 Wis.2d 187, 204, 562 N.W.2d 401, 407 (1997). The Supreme Court of Wisconsin ruled that corporations may appear in Wisconsin courts only by means of a lawyer licensed to practice law in Wisconsin; nonlawyers may appear only on their own behalf. See,id. Jadair applies a universal principle, which we conclude applies to trustees who seek to speak for another's interests in court. Trustees stand in a role similar to officers, directors, and shareholders of corporations. They are nonlawyers attempting to represent the legal interests of someone else-the legal interests of their trust and the trust beneficiaries. As the Jadair court recognized, nonlawyers who attempt to speak for the legal interests of others are engaged in the unauthorized practice of law. By analogy to Jadair, we hold that trustees may appear in Wisconsin courts without licensed legal counsel only to represent their own legal interests in their individual capacities, not to represent the legal interests of their trusts or trust beneficiaries in their representative, fiduciary capacities as trustees. 221 Wis.2d at 333, 334. 3 This Court should make a similar analogy and hold that a trust may not be represented by a trustee regardless of whether there are beneficiaries to the trust. 4 This Court should also follow the 3 See also Knoefler v. United Bank of Bismarck, 20 F.3d 347, 347-48 (8th Cir.1994); C.E. Pope Equity Trust v. United States, 818 F.2d 696, 697-98 (9th Cir.1987); United States v. Stepard, 876 F.Supp. 214, 215 (D.Ariz.1994); Salman v. Newell, 110 Nev. 1333, 885 P.2d 607, 608-09 (Nev.1994); Williams v. Global Constr. Co., Ltd., 26 Ohio App.3d 119, 498 N.E.2d 500, 502 (Ohio App.1985); Oregon v. Loe, 65 B.R. 16, 18 (D.Or.1986). 4 Even if it were a requirement that there be beneficiaries in order for the trustee to be found to be acting on behalf of others, a point with which The Florida Bar does not agree, the record indicates that there were or may be beneficiaries to the Earl H. Pace trust other than Respondent. In a pleading filed in the circuit court requesting permission to appear pro se, Respondent asserts that [t]he title to property held by the Earl H. Pace Irrevocable Trust is vested in the Trustee as a natural person. There is no title vested in the 10
rulings of the other states and find that Respondent engaged in the unlicensed practice of law when he represented the trust, and therefore, should be enjoined. beneficiaries at this time, therefore self representation by the Trustee is not representing any other persons before this court. (Emphasis supplied.) (B Ex.-C) 11
CONCLUSION A trust is a fictitious entity. As such, a trust cannot appear in court pro se or be represented by a nonlawyer trustee. In representing the trust, Respondent engaged in the unlicensed practice of law. The referee s conclusion of law and recommendation finding that Respondent did not engage in the unlicensed practice of law are clearly erroneous and must be overturned. The Florida Bar is requesting that this Court find that Respondent engaged in the unlicensed practice of law and enjoin him from continuing to do so. Respectfully submitted, JOHN F. HARKNESS, JR. Executive Director The Florida Bar 651 East Jefferson Street Tallahassee, Florida 32399-2300 (850) 561-5600 Attorney No. 123390 LORI S. HOLCOMB UPL Counsel The Florida Bar 651 East Jefferson Street Tallahassee, Florida 32399-2300 (850) 561-5600 Attorney No. 501018 12
AND GHUNISE L. COAXUM Bar Counsel The Florida Bar 1000 Legion Place, Ste. 1625 Orlando, Florida 32801-1050 (407)425-0473 Attorney No. 0077348 By: Ghunise L. Coaxum Bar Counsel 13
CERTIFICATE OF SERVICE I HEREBY CERTIFY that the original and seven (7) copies of The Florida Bar s Exception to the Report of Referee have been sent by First Class Mail to the Clerk of the Court, The Supreme Court of Florida, Supreme Court Building, 500 South Duval Street, Tallahassee, Florida, 32399-1927; a copy of the foregoing has been furnished by electronic filing to the Clerk of the Court; a copy of the foregoing has been furnished by First Class Mail to, Respondent, William E. Pace, 403 Sunrise Drive, Cocoa Beach, Florida 32931, ; and a copy of the foregoing has been furnished by First Class Mail to Lori S. Holcomb, UPL Counsel, The Florida Bar, 651 East Jefferson Street, Tallahassee, Florida 32399-2300, this 30 th day of August, 2011. Respectfully submitted, Ghunise L. Coaxum Bar Counsel Florida Bar No. 077348 14
CERTIFICATE OF TYPE, SIZE AND STYLE Pursuant to Florida Rule of Appellate Procedure 9.210(a), the undersigned counsel does hereby certify that The Florida bar s Exception To The Report of Referee is submitted in 14 point proportionately spaced Times New Roman font. Ghunise L. Coaxum Bar Counsel Florida Bar No. 0077348 15