Brief⁽¹⁾

This bill amends the Small Claims Procedure Act to provide that a corporation may be represented by a full-time employee or officer in a small claims court case.

The House Committee deleted a provision of the bill which would allow only the president or treasurer of the corporation to act as a representative in small claims

The House Committee also added a provision which would add a limited liability company into the definition of "person" in this statute.

Background

This bill was requested by the Kansas Bankers Association. The bill was requested following a Kansas Court of Appeals ruling in 1997 that held corporations were an artificial entity separate from individuals acting on its behalf and, therefore, could not represent itself to argue a case before a small claims court. Other proponents included representatives of Petroleum Marketers and Convenience Store Association of Kansas, Community Bankers Association of Kansas, Kansas Cooperative Council, Central Kansas Credit Union, Cleaver Farm and Home, the Mid America Lumberman's Association, the Kansas Cooperative Council, and the Kansas Chamber of Commerce. Conferees noted that as a result of the court opinion corporations are excluded from utilizing small claims courts in some places. Often corporations will have disputed debts that are too small to justify the employment of an attorney. They testified that this legislation will allow corporations to have equal access to small claims court.

A representative of the Kansas Bar Association testified in opposition to this legislation. He noted that corporations appear in small claims courts using full-time employees and this involves the unauthorized practice of law. The representative also testified that the Kansas judicial system has the responsibility to determine who can represent others in the court system. He noted that small claims court was intended for individual persons to use not as a debt collection tool for the business community.

The Senate Committee amended the bill to restrict the representation of the corporation to only the president or treasurer of the corporation assuming that neither individual is an attorney.

Senator Vratil testified in opposition to S.B. 97 before the House Committee. He cited the case of Atchison Homeless Shelters Inc. v. County of Atchison, 24 Kan App. 2d 454, which held that corporations that are represented by individuals in court, rather than attorneys, foster the unauthorized practice of law.

This bill has no fiscal impact.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html.