Background
Michael Scott Jacobson, acting as trustee of the Jacobson Family Trust, sued First Community Credit Union (FCCU) in the District Court of McIntosh County. He alleged that he presented negotiable instruments totaling $8,500,000 on the Trust’s behalf and that FCCU refused to accept or ledger the instruments, open a Trust account, or provide a written explanation for its refusal. He sought declaratory relief, injunctive relief, and damages for the Trust. His complaint referenced a related federal case, and he filed a second complaint containing similar allegations before FCCU responded.
FCCU moved to dismiss and submitted a document Jacobson purportedly filed in the federal case. It contained “trust notes” issued by the Trust to FCCU describing Jacobson as a “Living Man” and stating that the notes were “[i]ssued by a State Citizen, not a 14th Amendment U.S. Citizen.” The Supreme Court identified those labels and phrases as characteristic of the sovereign citizen movement, whose theories courts summarily reject as frivolous.
The district court considered the federal-case documents and exhibits attached to the second complaint as embraced by the pleadings or part of the public record. It concluded that Jacobson, who is not a licensed attorney, could not maintain an action for the Trust. It nevertheless analyzed his claims under Uniform Commercial Code provisions in N.D.C.C. chapter 41-03, determined that FCCU was not bound by Jacobson’s self-created instruments, and rejected his contention that they were legal tender. The court entered judgment dismissing the case with prejudice. Jacobson subsequently sought judicial notice of various documents, including a recorded affidavit, appealed, and filed three appellate documents requesting judicial notice of items including court dockets, statutes, and the affidavit.
The Court’s Holding
The Supreme Court held that Jacobson lacked authority to represent the Trust’s beneficiaries because he is not an attorney. Filing documents and appearing in court for another constitutes the practice of law, and North Dakota law restricts that practice to licensed attorneys except as otherwise provided by state law or Supreme Court rule. Although the Court had previously held that a non-attorney cannot represent a corporation, it had not decided whether a non-attorney trustee could represent trust beneficiaries. It noted that other jurisdictions recognize possible exceptions, including where the trustee is the real party in interest, is the sole beneficiary, or seeks instructions concerning trustee duties.
Those circumstances did not authorize Jacobson’s lawsuit. He described himself as appearing pro se in his fiduciary capacity, but the record showed that he was not the Trust’s only beneficiary. The action sought to enforce beneficiary rights and recover damages from a third party. By commencing the action and filing legal documents for the beneficiaries, Jacobson represented others. He neither claimed authorization to practice law in North Dakota nor asserted an applicable exception. The Court therefore concluded that he was not authorized to file the lawsuit.
Because Jacobson lacked authorization, every legal filing he signed, including the notice of appeal, was void. The action was void from its inception. Consequently, the district court’s dismissal judgment did not adjudicate the merits and should have been entered without prejudice rather than with prejudice. The Court denied Jacobson’s appellate motions as void and dismissed the appeal.
The Court separately addressed Jacobson’s appellate conduct. His briefing contained fictitious statutes and cases, cited real authorities for propositions they did not support, mischaracterized the district court’s order, and included inaccurate record citations. His non-attorney status did not excuse disregard of the rules. The pervasive inaccuracies violated N.D.R.App.P. 28(l) and warranted sanctions under N.D.R.App.P. 13. The Court also found the appeal frivolous and awarded reasonable attorney’s fees and double costs under N.D.R.App.P. 38. It awarded FCCU a $2,500 sanction, $2,500 in attorney’s fees, and double costs, all assessed against Jacobson individually rather than in his capacity as trustee.
Key Takeaways
- A non-attorney trustee may not litigate on behalf of other trust beneficiaries merely by appearing in a fiduciary capacity.
- Unauthorized filings, including the notice of appeal, were void; dismissal for unauthorized practice should have been without prejudice.
- The Court awarded FCCU $2,500 in sanctions, $2,500 in attorney’s fees, and double costs against Jacobson individually.
- Jacobson’s appellate motions were denied as void, and the appeal was dismissed.
Why It Matters
The decision resolves an open question under North Dakota law by applying unauthorized-practice principles to a non-attorney trustee’s third-party litigation for trust beneficiaries. It also distinguishes the voidness of unauthorized filings from a merits adjudication, explaining why the dismissal should not have been with prejudice.
The opinion additionally underscores that self-representation does not excuse fabricated authorities, inaccurate citations, or mischaracterizations of court orders. The monetary awards were tied to the pervasive inaccuracies and frivolousness of this appeal, and the Court expressly imposed them on Jacobson personally, not on the Trust.