World Award Foundation Inc. v. Anbang Insurance Goup

• Court: Supreme Court of Delaware
• Decided: October 26, 2020
• Docket: 254, 2020
• Status: Published

Opinion

IN THE SUPREME COURT OF THE STATE OF DELAWARE

WORLD AWARD FOUNDATION § INC., AMER GROUP LLC, AN § BANG GROUP LLC, and AB § No. 254, 2020 STABLE GROUP LLC, § § Court Below: Court of Chancery Plaintiffs Below, § of the State of Delaware Appellants, § § C.A. No. 2019-0605-JTL v. § § ANBANG INSURANCE GROUP § CO. LTD., CBIRC, and BEIJING § GREAT HUA BANG § INVESTMENT GROUP CO. LTD., § § Defendants Below, § Appellees. §

Submitted: October 9, 2020 Decided: October 26, 2020

Before VALIHURA, VAUGHN, and TRAYNOR, Justices.

ORDER

(1) Yan Zhao filed a pro se notice of appeal in this matter. Because all of

the appellants are entities, on August 7, 2020, the Clerk of the Court directed the

appellants to have counsel enter an appearance by August 21, 2020 or a notice to

show cause would issue. On August 21, 2020, Mr. Zhao submitted a motion for

additional time to procure Delaware counsel; the deadline was extended to

September 23, 2020. On September 23, 2020, Mr. Zhao submitted an additional

request for an extension, which the Court denied. (2) On September 25, 2020, the Senior Court Clerk issued a notice to show

cause as to why the appeal should not be dismissed for failure of counsel to appear

for the entity appellants. In response to the notice to show cause, Mr. Zhao states

that he is a director of appellants World Award Foundation Inc. and An Bang Group

LLC. He also states that he is a director of, and owns 5.1% of the “shares of common

stock[]” of, appellants Amer Group LLC and AB Stable Group LLC. He states that

he has exhaustively, but unsuccessfully, attempted to retain counsel to represent the

appellants in this appeal. He contends that the outcome of the litigation substantially

impacts his individual rights, and that he therefore should be permitted to participate

in the appeal on his own behalf or to proceed on the appellants’ behalf.

(3) We conclude that the action must be dismissed. In Delaware, a

corporation or other entity “can act before a court only through an agent duly

licensed to practice law.”1 Moreover, under Delaware law, a nonparty does not have

standing to take an appeal to this Court, and a “mere interest in the outcome of

1 Parfi Holding AB v. Mirror Image Internet, Inc., 2009 WL 189862, at *1 (Del. Jan. 12, 2009). See also Transpolymer Indus., Inc. v. Chapel Main Corp., 1990 WL 168276, at *1 (Del. Sept. 18, 1990) (“A corporation, though a legally recognized entity, is regarded as an artificial or fictional entity, and not a natural person. While a natural person may represent himself or herself in court even though he or she may not be an attorney licensed to practice, a corporation, being an artificial entity, can only act through its agents and, before a court only through an agent duly licensed to practice law.” (citation omitted)); Evergreen Waste Servs. v. Unemployment Ins. Appeal Bd., 2011 WL 2601600 (Del. June 30, 2011) (“[T]his Court may not entertain an appeal by a corporation where the corporation is not represented by counsel.”); Ivize of Milwaukee, LLC v. Complex Litigation Support, LLC, 2009 WL 3720673 (Del. Nov. 6, 2009) (applying rule to limited liability companies); Harris v. RHH Partners, LP, 2009 WL 891810 (Del. Ch. Apr. 3, 2009) (applying rule to limited partnership in litigation brought by the limited partnership’s sole limited partner).

2 litigation will not suffice to confer standing on a nonparty.”2 Therefore, Mr. Zhao’s

failure to intervene in the Superior Court “works a forfeiture of any claim to

appellate standing.”3

(4) Mr. Zhao also filed two documents entitled “Appellant’s Rule 58

Motion for Emergency Relief to Allow Appellants to Avail Legal Representation

from Out-of-State Counsels Under Exist[e]nce of Major Disaster” and “Appellant’s

Motion []for Declaratory Relief by the Honorable Court to Determine and Declare

Exist[e]nce of Major Disaster.” In these documents, Mr. Zhao requests that, in light

of the COVID-19 pandemic, the Court permit the appellants to proceed in this appeal

represented by attorneys admitted to practice in New York or the District of

Columbia and not in Delaware.

(5) The request is denied. Rule 58 sets forth certain circumstances under

which, in the event that a major disaster causes an emergency that affects the justice

system, attorneys admitted in other jurisdictions and not in Delaware may provide

legal services in Delaware on a temporary basis. The rule requires that the legal

services be provided “on a pro bono basis without compensation, expectation of

compensation or other direct or indirect pecuniary gain to the lawyer” and “assigned

and supervised through an established not-for-profit bar association, pro bono

2 Bryan v. Doar, 918 A.2d 1086, 1086-87 (Del. 2006) (internal quotation omitted). 3 Parfi, 2009 WL 189862, at *1 (internal quotation omitted).

3 program or legal services program or through such organization(s) specifically

designated by this Court.” Mr. Zhao has not provided any information suggesting

that these requirements are met in this case; to the contrary, in his response to the

notice to show cause, he asserts that the appellants have billions of dollars of assets.

NOW, THEREFORE, IT IS ORDERED, under Supreme Court Rule 29(b),

that the appeal is DISMISSED. The request to proceed without representation by

Delaware counsel is denied.

BY THE COURT:

/s/ James T. Vaughn, Jr. Justice