ECKLES v. ATLANTA TECHNOLOGY GROUP INC

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Supreme Court of Georgia.

ECKLES d/b/a Atlanta Technology Group v. ATLANTA TECHNOLOGY GROUP, INC.

No. S96A1507.

Decided: March 03, 1997

Sonya Y. Ragland,Womble Carlyle Sandridge & Rice, Atlanta, for Plaintiff. Hale Speigelberg, Atlanta, for Defendant.

In 1990, Andrew Jackson Eckles began operating a sole proprietorship under the unregistered trade name “Atlanta Technology Group” (“ATG”).   In the years that followed, Eckles devoted all of his time and resources to the development of his business, which has continuously used the trade name “ATG.”   In May of 1994, Eckles received several telephone calls from confused customers who informed him that Atlanta Technology Group, Inc. (ATGI), which had been incorporated in Delaware in 1993, also was using the trade name “ATG.”   Concerned about the likelihood of name confusion and its undesirable consequences, Eckles contacted an officer of ATGI and informed him that ATGI was infringing on his trade name.   When Eckles was unsuccessful in his efforts to reach a compromise, he filed this action seeking an interlocutory and permanent injunction prohibiting ATGI from using “ATG” for trade or business purposes.   After conducting a hearing, the trial court entered an order holding that ATGI's use of the trade name “ATG” did not infringe upon Eckles' use thereof.   From that order, Eckles brings this appeal.

1. As a general rule, geographical names and descriptive words are incapable of appropriation as a trade name.  Womble v. Parker, 208 Ga. 378(1), 67 S.E.2d 133 (1951).   However, when a business entity's use of such words causes the public to understand that the goods or services of that business entity are designated thereby, then those words do acquire a secondary meaning which is protected under the law.  Future Professionals, Inc. v. Darby, 266 Ga. 690, 692(3), 470 S.E.2d 644 (1996);  Giant Mart Corp. v. Giant Discount Foods, Inc., 247 Ga. 775, 776, 279 S.E.2d 683 (1981);  Womble v. Parker, supra.   Under the undisputed evidence of record, Eckles' use of “ATG” over the years has caused that name to become closely associated with his products and services and “ATG” is now understood by the public to designate his products and services.   Therefore, it is undisputed that “ATG,” although descriptive, has acquired secondary meaning as a trade name pertaining to Eckles' goods and services.

In Georgia, a trade name is protected by the common law and by several statutes.   One of those statutes is the Uniform Deceptive Trade Practices Act (UDTPA), which provides protection to a trade name when another's use of the same or similar name “causes [a] likelihood of confusion or of misunderstanding as to the source, sponsorship, approval, or certification of goods or services.”  OCGA § 10-1-372(a)(2).   For Eckles to obtain relief under UDTPA, he was not required to show that he suffered monetary damages or that ATGI intended to cause confusion or misunderstanding to the public.  OCGA § 10-1-373.   Moreover, protection would not be dependent upon Eckles' registration of “ATG” as his trade name, since “ ‘all that is required (for relief under UDTPA) is that the use of a name cause confusion to others (who are) using reasonable care.’ ”  Future Professionals, Inc. v. Darby, supra at 691(2), 470 S.E.2d 644.   The undisputed evidence of record establishes that ATGI's use of “ATG” has caused confusion and misunderstanding on the part of the public.   On more than one occasion, customers have misdirected their inquiries and legal documents have been misserved.   Accordingly, based upon the unrefuted evidence of record, it is clear that Eckles is entitled to injunctive relief under UDTPA and that the trial court's contrary ruling is erroneous and must be reversed.

2. ATGI has been represented in this case by one of its corporate officers who is not a licensed attorney.   Because this court has not previously determined whether it is permissible for a corporation to have as its legal representative an individual who is not licensed to practice law in the courts of this state, we take this occasion to address that issue.

A corporation is a “person.”  OCGA 1-3-3(14).   Because it is a “person,” a corporation certainly is entitled to receive due process and equal protection from this state.  Caldwell v. Hosp. Auth. of Charlton County, 248 Ga. 887, 888(1), 287 S.E.2d 15 (1982).  Art. I, Sec. I, Par. XII of the Ga. Const. of 1983 also provides that “[n]o person shall be deprived of the right to prosecute or defend, either in person or by an attorney, that person's own cause in any of the courts of this state.”   Accordingly, if a corporation were also a “person” with the capability of representing its “own cause,” then that corporate entity could avail itself of this constitutional right to self-representation without regard to its own lack of a license to practice law.   However, a corporation is an artificial, not a natural, person.   As an artificial person, a corporation “can act, and does act, alone through its agents.   It deals with other corporations and with natural persons by its agents;  it can deal with the world in no other way.”   The Scofield Rolling Mill Co. v. State of Ga., 54 Ga. 635, 639(1) (1875).   For this reason, it has long been recognized by the courts of other jurisdictions that “[a] corporation ․ can appear only by attorney, while a natural person may appear for himself.”  Osborn v. Bank of United States, 22 U.S (9 Wheat.) 738, 830, 6 L.Ed. 204 (1824).   Not only has this principle long been recognized, it has been almost universally accepted.   See Anno., 8 ALR5th 653.   Thus, notwithstanding that a corporation is a “person” for the purpose of receiving due process and equal protection from the state, it has been held that a corporation is not a “person” for the purpose of exercising a constitutional right to legal self-representation, since it cannot represent itself and can only be represented by its agents.   See Ex parte Lamberth, 242 Ala. 165, 5 So.2d 622 (1942).

Even though this principle has long been recognized and almost universally accepted, there are cases from our Court of Appeals which reach a contrary result.  Universal Scientific, Inc. v. Wolf, 165 Ga.App. 752, 302 S.E.2d 616 (1983);  Knickerbocker Tax Systems, Inc. v. Texaco, Inc., 130 Ga.App. 383, 203 S.E.2d 290 (1973);  Dixon v. Reliable Loans, Inc., 112 Ga.App. 618, 145 S.E.2d 771 (1965).   However, all of these Court of Appeals cases are based upon statutory provisions.   Contrary to the rationale of these cases, no statute is controlling as to the civil regulation of the practice of law in this state.   Only this court has the inherent power to govern the practice of law in Georgia.   It is the creation and regulation of the State Bar of Georgia, through the decisions and orders of this court, that now constitute “the exclusive means of governing the practice of law in Georgia.”  Huber v. State, 234 Ga. 357, 359, 216 S.E.2d 73 (1975).   Thus, in Huber v. State, supra at 360, 216 S.E.2d 73, we specifically held that Ga. L.1931, p. 191, as amended, which includes provisions such as OCGA § 15-19-52, “no longer controls the practice of law in Georgia․”  When a legislative enactment relating to admission to the practice of law conflicts with rules for admission adopted or approved by the judiciary, “the legislative enactment must give way.”  Merco Const. Engineers, Inc. v. Municipal Ct. for the Long Beach Judicial Dist. of L.A. County, 21 Cal.3d 724, 147 Cal.Rptr. 631, 633, 581 P.2d 636, 638 (1978).   See also The State v. Bartholomew County Ct., 270 Ind. 41, 383 N.E.2d 290, 292 (1978).   Accordingly, insofar as the Court of Appeals cases rely upon statutes, rather than decisions and orders of this court, as authority for a corporation's right to legal representation by a layman, those cases cannot constitute viable authority for that proposition.

The qualifications of the individual “representing a corporation ․ in court is one of vital judicial concern.   Such person is clearly engaged in the practice of law in a representative capacity.”  Merco Const. Engineers, Inc. v. Municipal Ct. for the Long Beach Judicial Dist. of L.A. County, supra, 147 Cal.Rptr. at 634, 581 P.2d at 639.   Thus, it is clear that permitting a corporation to be represented by a layman would constitute a major exception to the requirement that a legal representative be a licensed attorney who is subject to the authority of the courts of which he or she is an officer.   Indeed, there appears to be no reason why the prohibition against legal representation by a layman should not apply when the party represented is a corporation rather than a natural person.   Natural persons with no license to practice law are not permitted to act as “attorneys” and represent other natural persons in their legal affairs.   Likewise, “non-attorney agents are not allowed to represent corporations in litigation, for a wholly unintended exception to the rules against unauthorized practice of law would otherwise result.”  Oahu Plumbing and Sheet Metal, Ltd. v. Kona Const., Inc., 60 Haw. 372, 590 P.2d 570, 573-574 (1979).   Having accepted the benefits of incorporation, a corporation must also accept the burdens, “including the need to hire counsel to sue or defend in court.  [Cits.]  Thus, the requirement that a corporation appear through an attorney in no way deprives it of due process.  [Cit.]” Woodford Mfg. Co. v. A.O.Q., Inc., 772 P.2d 652, 654 (Colo.App.1988).

It is the responsibility of this court to provide effective standards for admission to the practice of law and for the discipline of those admitted to practice.   Litigation must be projected through the courts according to established practice by lawyers who are of high character, skilled in the profession, dedicated to the interest of their clients, and in the spirit of public service.   In the orderly process of the administration of justice, any retreat from those principles would be a disservice to the public.   To allow a corporation to maintain litigation and appear in court represented by corporate officers or agents only would lay open the gates to the practice of law for entry to those corporate officers or agents who have not been qualified to practice law and who are not amenable to the general discipline of the court.

Union Savings Assn. v. Home Owners Aid, Inc., 23 Ohio St.2d 60, 262 N.E.2d 558, 561 (1970).  “ ‘The right to practice law is not a natural or constitutional right, nor an absolute right or a right de jure, but is a privilege or franchise.’ ”  Sams v. Olah, 225 Ga. 497, 504(7), 169 S.E.2d 790 (1969).   An attorney is an officer of the court and, as such, has a responsibility to the courts and to the public which is no less significant than the obligation he owes to his clients.  “ ‘The office of attorney is indispensable to the administration of justice and is intimate and peculiar in its relation to, and vital to the well-being of, the court.’  [Cit.]” Gordon v. Clinkscales, 215 Ga. 843, 846(2), 114 S.E.2d 15 (1960).

As the overwhelming majority of other jurisdictions have found, we conclude that allowing laymen to serve as unlicensed attorneys for corporations would be contrary to the public interest and, in the exercise of our inherent power over the practice of law in this state, we hereby prohibit such representation.   By so holding, we necessarily overrule Universal Scientific, Inc. v. Wolf, supra, Knickerbocker Tax Systems, Inc. v. Texaco, Inc., supra, Dixon v. Reliable Loans, Inc., supra, and any other case which authorizes laymen to provide legal representation to corporations.   However, because our holding not only is predicated upon overruling those cases, but also represents an issue of first impression for this court which heretofore was not clearly foreshadowed, we further conclude that our holding should have prospective effect only.   See Federated Mut. Ins. Co. v. DeKalb County, 255 Ga. 522, 341 S.E.2d 3 (1986).   We are free to “choose any relevant date in the interest of justice.  [Cits.]” Strickland v. Newton County, 244 Ga. 54, 55(1), 258 S.E.2d 132 (1979).   In the interest of justice, we limit the applicability of our holding to those civil actions instituted on and after the date that this opinion appears in the advance sheets.   See Renner v. State, 260 Ga. 515, 518 (3) (b), fn. 2, 397 S.E.2d 683 (1990);  Brown v. State, 247 Ga. 298, 299, 275 S.E.2d 52 (1981), overruled on other grounds, Wilson v. Zant, 249 Ga. 373, 380(2), 290 S.E.2d 442 (1982).

Judgment reversed.

Because I believe that both the public welfare and our legal system will be better served if corporations ordinarily are prohibited from appearing in trial and appellate courts without representation by a licensed attorney, I generally concur with the rule laid down in division two of the majority opinion.   I believe, however, that there must be some flexibility permitted in the application of this rule, and therefore I would not completely foreclose all possibility that an exception to this rule could be made as a trial court, acting in its discretion, deems appropriate.

Only three states, including Georgia, permit corporations to appear in court through an agent who is not a licensed attorney.1  At least thirty-eight states, and several federal courts, have issued opinions in support of the majority rule that a corporation generally may not appear pro se in trial and appellate courts, but rather must be represented by an attorney.2  While I recognize the need for some flexibility with regard to this issue, I believe the majority rule to be better for several reasons.   First, as an artificial person, a corporation is entirely subject to government regulation, and nothing in Georgia's statutory grant of corporate powers indicates that corporations are entitled to appear pro se in trial and appellate courts.3  I agree with the majority that it is precisely because so many rights are accorded to corporations in Georgia that they must be expected to bear their share of concomitant burdens.   As a general rule, I believe that this should include the need to hire legal counsel in order to sue or defend in court.4

Second, it is axiomatic that due to the complexities of legal practice, the appearance of non-attorneys in trial and appellate courts sometimes results in poorly drafted pleadings and substantial procedural problems.5  Corporate disputes may especially be prone to the type of complicated legal and factual issues that would benefit most from the involvement of an attorney as opposed to a layperson, and ensuring the presence of legal representation in such disputes can only promote their expeditious and just resolution in our courts.

Finally, I believe that if corporations are represented in court only by licensed attorneys appearing on their behalf, the important distinction between a corporation and its directors and shareholders is more likely to be maintained.   A corporation cannot appear without some form of representation.   If non-attorneys are allowed to represent corporations, it necessarily follows that a corporate “self” appearing in court will be the officers, directors, and shareholders who undertake such representation.6  A rule that ordinarily requires corporations to have independent legal representation would ensure that it is the best interest of a corporation that is represented in court, and not the interest of any one individual in that corporation.

As stated, I believe it would be desirable, however, to allow for some flexibility in the application of a rule requiring that corporations be represented in court by a lawyer, and not to foreclose all possibility that an exception to such a requirement could be made as the trial courts, in their wisdom, deem appropriate.   Universal application of such a rule might be less desirable in certain tribunals, and might impose undue hardships in certain situations.   For that reason, some state courts, including our own, have permitted corporations to be represented by non-attorneys in small claims court or courts not of record,7 and when appearing before administrative bodies.8  Other courts have permitted closely-held corporations to appear pro se in the trial courts upon a showing of financial need, or in bankruptcy cases.9  These cases, and others like them, can be used to provide guidance to the trial courts in determining, in their discretion, whether certain exceptions should be allowed to the general prohibition against a corporation appearing in our courts without the representation of an attorney.   Because division two of the majority opinion does not allow for the development of such exceptions, I concur specially in its result.

FOOTNOTES

1.   See Universal Scientific, Inc. v. Wolf, 165 Ga.App. 752, 752-53, 302 S.E.2d 616 (1983);  New England Capital Corp. v. Finlay Co., 137 N.H. 226, 624 A.2d 1358 (1993);  Meyer v. Sarpy, 175 So.2d 387 (La.App. 4th Cir.1965).

2.   See 8 ALR 5th 653 § 3[a] (1992 and Supp.1996);  19 CJS Corporations § 715 p. 369.

3.   See OCGA §§ 14-2-301, 14-2-302.

4.   See e.g., Hawkeye Bank & Trust Nat. Assoc. v. Baugh, 463 N.W.2d 22 (Iowa 1990).

5.   See In re Las Colinas Dev. Corp., 585 F.2d 7, 12 (1st Cir.1978), cert. denied, 440 U.S. 931, 99 S.Ct. 1268, 59 L.Ed.2d 487 (1979).

6.   See Merco Const. Engineers, Inc. v. Municipal Court for Long Beach Judicial Dist. of Los Angeles County, 21 Cal.3d 724, 147 Cal.Rptr. 631, 581 P.2d 636 (1978);  Baugh,supra.

7.   See Dixon v. Reliable Loans, Inc., 112 Ga.App. 618, 145 S.E.2d 771 (1965);  Oahu Plumbing & Sheet Metal Ltd. v. Kona Const. Inc., 60 Haw. 372, 590 P.2d 570 (1979).

8.   See North Miami Gen. Hosp. Inc. v. Plaza, 425 So.2d 1140 (Fla.App.1982);  IdahoState Bar Assoc. v. Idaho Public Util. Comm., 102 Idaho 672, 637 P.2d 1168 (1981).

9.   See In re Holliday's Tax Serv., Inc., 417 F.Supp. 182 (E.D.N.Y.), aff'd, 614 F.2d 1287 (2d Cir.1976).

CARLEY, Justice.

All the Justices concur, except SEARS, J., who concurs specially.