Non-Lawyer Representation Of Corporation Didn’t Fit Within Exceptions

Generally, an Iowa corporation may not represent itself through non-lawyer employees or representatives. Here, the sole question for the Iowa Court of Appeals was whether the president of a company (a non-lawyer) could represent the company’s interests in a mechanic’s lien foreclosure case.  The company president argued that while he is not an attorney, he has a fiduciary duty to protect the interests of the company and to represent the company in disputes. He further argued that the traditionally accepted notion that a non-lawyer cannot represent his company’s interests in a court of law should be invalidated. 

The appellate court disagreed, holding fast to the traditional view that Iowa business corporations (formed under Iowa Code Ch. 490) are formed to conduct lawful operations and non-lawyer representation by a company representative is not lawful and is not included in the statutorily enumerated powers of the Iowa Code. In Iowa, and other states, a corporation is a legal entity that is separate and distinct from the shareholders of the company. There are few exceptions to this general rule. Non-lawyer representation has only been allowed a handful of times when “the corporation and its representatives are so closely related that their identities are virtually indistinguishable” (closely-held corporations). There are also a few statutory exceptions for non-lawyer representation, including small claims actions where the amount in controversy is $5000 or less. 

The appellate court rebutted the president’s claims of the general rule’s unconstitutionality, stating that the legal precedent has been followed by courts for over 200 years. The appellate court also pointed out that “when a business accepts the advantages of incorporation, it must also bear the burdens, including the need to hire counsel to sue or defend in court.”  In re Timberline Builders, Inc., No. 0-304/09-0168, 2010 Iowa App. LEXIS 568 (Iowa Ct. App., Jun. 16, 2010).