How can I defend an unlimited lawsuit against my LLC in California if I can't afford a lawyer? Lawsuit has no merits.

Asked over 2 years ago - Carlsbad, CA

Is there any way around this rule that I must have an attorney to represent me as a defendant against an unlimited lawsuit for the LLC I own?

A lawsuit has been served against myself as an individual and my LLC. The lawsuit against my limited liability company claims I underpaid by $98,000. I have bank statements proving I paid $72,000 MORE than the statement they attached as evidence.

In their unlimited lawsuit, they are claiming breach of agreement, breach of book account and breach of account stated. There was no written agreement. We came to an oral agreement each month as to how much we owed. I had no intention of countersuing as the amount we paid each month was in a verbal agreement between their CEO and myself.

An added complication is my business is in default as I could not afford a lawyer to defend me. Plaintiff mismanaged my business and lost my major source of revenue and my business is pretty much bankrupt.

Their lawyer told me ""our system sucks"" when I asked him if I could defend myself.

There never was any written contract. The only reason it got to default is I could not afford an attorney to represent me in the unlimited lawsuit against me.

I know I need to vacate the default against me as an individual. I will be including my proposed answer so the judge can see there is no merit to the case against me and my LLC.

As I cannot represent my own LLC do I just file the motion to default under the same case number but only name myself as the defendant? It is sickening that I cannot clear my company’s name even though it is pretty much out of business but it as a point of justice.

The plaintiff's lawyer himself told me the system sucks, his own words so in reality they can ""win"" against my LLC even though they have no case and I do, purely because I do not have the financial means to hire an attorney?

Does anyone want to help me out there…? Technically we overpaid if we go by their accounts that they filed.

Attorney answers (4)

  1. Frank Wei-Hong Chen

    Contributor Level 20

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    Answered . Unfortunately, the LLC must be represented by an attorney in order to participate in litigation. If there is a default judgment entered against the LLC or you individually, it should be fairly easy to get it set aside, but again, this will require an attorney.

    In the breach of agreement cause of action, is that based upon a written contract which contains an attorney's fee provision? An attorney's fee provision is one which says that in the event of litigation, the prevailing party shall be entitled to recover reasonable attorney's fees and costs. If so, then all the more reason to hire an attorney.

    In California, limited liability companies (LLCs) are treated the same as corporations. Both are entities which must be in good standing in order to participate in litigation in any court. California case law has held that a corporation cannot represent itself in court, either in propria persona or through an officer or agent who is not an attorney. (Merco Constr. Engineers, Inc. v. Municipal Court (1978) 21 Cal. 3d 724, 729.) See also Van Gundy v. Camelot Resorts, Inc. (1983) 152 Cal.App.3d Supp. 29, 32; Caressa Camille, Inc. v. Alcoholic Beverage Control Appeals Bd. (2002) 99 Cal.App.4th 1094, 1101; citing Merco Constr. Engineers, Inc. v. Municipal Court (1978) 21 Cal.3d 724, 727, 729 and Paradise v. Nowlin (1948) 86 Cal.App.2d 897, 898.

    A motion to strike under Code of Civil Procedure section 435 et seq. is traditionally used to reach pleading defects that are not subject to demurrer. (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal. App. 4th 1141, 1146 [striking complaint subscribed only by non-attorney president], citing 5 Witkin, Cal. Proc., 4th ed., Pleading, § 960, p. 420.)

    This rule appears to be the law throughout the United States. In Rowland v. California Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 113 S.Ct. 716, 121 L.Ed.2d 656 (1993), the U.S. Supreme Court indicated that artificial entities must appear by counsel.

    The information presented here is general in nature and is not intended, nor should be construed, as legal advice.... more
  2. Michael Charles Doland

    Contributor Level 20

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    Answered . The analysis of Mr. Chen is correct - there is no way around the LLC lawsuit provision requiring an attorney to make an appearance in Court regarding an LLC lawsuit.

    If you have overpaid by $72,000 you may be able to find an attorney who will take the matter on a contingent fee. In order to interest an attorney for a contingent fee, make sure you put your entire version of the story in writing and assemble every document you think might be evidence.

    Time is of the essence in moving forward with your unlimited lawsuit. Start looking this weekend. Search San Diego and Long Beach close by.

    The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may... more
  3. Charles F Basil

    Contributor Level 12

    15

    Lawyers agree

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    Answered . There are only two ways if you want to defend it--hire an attorney or do it yourself. Also, in my state (which is not CA) the owner of an LLC can't represent it, unless he/she is a lawyer. This is because the LLC is a separate legal "person" and you can't represent another person unless you are entitled to practice law (i.e., a lawyer). However as the LLC is near bankrupt it might not matter to you.

    Even as to your personal liability, I don't really recommend your defending the matter yourself, because while you know the facts better than a lawyer, you need to know the rules of the court and how to manage a lawsuit properly.

    It sounds like you might have a counterclaim against the plaintiff if you say they wronged you. This is even more reason to get a lawyer.

    Good luck

  4. Kevin Samuel Sullivan

    Pro

    Contributor Level 20

    12

    Lawyers agree

    Answered . you are going to need to hire a lawyer to represent the LLC in order to respond to the lawsuit. you can represent yourself individually.

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