Pro Se LLCs and Entry of Default in the Business Court

A few points to keep in mind when the world of pro se plaintiffs meets the world of closely held entities in the Business Court, courtesy of Monday's decision in Bodie Island Beach Club Ass'n, Inc. v. Wray:

  • A letter written by a physician who was served both individually and as registered agent for an LLC served as an answer for the physician only, not for the LLC.  The letter was written on the physician's personal letterhead and did not purport to answer on behalf of the LLC.
  • Even if the physician's answer were purportedly on behalf of the LLC, it would have been an invalid appearance by the LLC, which, like all corporations, may not appear pro se.
  • A physician in such circumstances was deemed to be a sophisticated investor capable of following court rules.
  • The Court may enter default on its own motion (i.e., the "or otherwise" clause of Rule 55(a)).
  • If an answer were filed, even if untimely, entry of default under Rule 55(a) would be inappropriate even when entered by the Court rather than the clerk.
  • When no answer was  filed, however, a proposed answer filed with a motion to amend does not bar entry of default.
  • Failure to respond to a summons for five months was dilatory, not mere technical error.
  • Although a plaintiff's conduct may waive its right to entry of default, no such waiver occurred when the plaintiff moved for summary judgment against the LLC within two months of failure to answer and when the LLC waited another two and a half months to submit a proposed answer.

Full Order

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