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Wednesday, May 02, 2007

Ind. Decisions - Several interesting decisions from the Supreme Court today

In Charter One Mortgage Corp. v. Kyle Condra, a 7-page, 5-0 opinion, with a long list of amicus attorneys on the heading from the Office of the Comptroller of the Currency, Justice Boehm writes:

We hold that the preparation of mortgage documents by non-attorneys does not necessarily constitute the practice of law and that a lender’s charging a fee for the preparation does not convert it into the unauthorized practice of law.
The facts here are:
In 2003, Condra filed a class action against Charter One. His complaint for money had and received and unjust enrichment alleged that Charter One’s document preparation fee was prohibited under Indiana law because charging a fee for documents prepared by non-lawyers constituted the unauthorized practice of law. Pursuant to Indiana Trial Rule 12(B)(6), Charter One filed a motion to dismiss the complaint for failure to state a claim upon which relief could be granted.
Underlaying this action is a 1984 decsion, Miller v. Vance, where, as the Court writes:
[W]e considered whether the preparation of a mortgage instrument by a bank employee who was not an attorney constituted the unauthorized practice of law. We concluded that filling in blanks on a form mortgage instrument did not constitute the practice of law because it “require[d] only the use of common knowledge regarding the in-formation to be inserted.” This activity did not involve any fiduciary relationship, confidences, or the giving of legal advice. As explained in Miller, it would be an “unreasonable burden” on the public to conclude that the completion of such routine documents was the practice of law reserved to attorneys. That decision was consistent with the majority of other jurisdictions that had considered the issue.We did, however, caution that the “lay bank employee may not give advice or opinions as to the legal effects of the instruments he prepares or the legal rights of the parties” and state that “[t]he bank may not make any separate charge for the preparation of the mortgage instrument.” Relying on this language from Miller, Condra contended that the $175 fee he was charged for the preparation of mortgage documents by non-attorneys constituted the unauthorized practice of law.
In response:
Charter One asserted that it was an operating subsidiary of a national bank, Charter One Bank, N.A.1 It therefore was governed by federal regulations promulgated under the National Bank Act by the Office of the Comptroller of the Currency (“OCC”). Among those regulations is a provision that allows national banks and their operating subsidiaries to charge incidental fees for legal services provided by non-lawyers in the preparation of real estate loan documents. Charter One contended that the OCC regulations expressly preempt any conflicting state law. The trial court denied the motion but certified its order for interlocutory appeal.

The Court of Appeals affirmed, holding this Court’s jurisdiction over the unauthorized practice of law is not preempted by the federal regulations at issue.

Today's opinion continues: "We find it unnecessary to decide this case on federal preemption grounds." The Court looks at some other states:
We agree, however, with the Supreme Courts of Michigan, Washington, and Illinois that there is no unauthorized practice of law when form mortgage documents are prepared by non-attorneys. We also agree that the mere charging of a fee does not transform per-missible conduct into the unauthorized practice of law. * * *

We therefore reaffirm the holding of Miller that filling in the blanks of standard mortgage documents is not the practice of law. The purpose of restricting the practice of law to licensed and trained attorneys is to protect the public from serious harm from unknowledgeable legal advice. We do not believe that purpose is effectuated by prohibiting charging fees for mortgage document preparation by non-attorneys. If charging a fee subjected this act to regulation as the practice of law, either the fees would be eliminated or attorneys would be required to perform the activity. Requiring an attorney for such a routine task would produce only inconvenience and added cost to the public. Eliminating the charge would presumably result in additional charges buried in loan fees not tied to the completion of loan documents. Resolution of the economics of that are best left to the legislature or the competitive forces in the marketplace for loans.

In short, if the completion of legal documents is ordinarily incident to a lender’s financing activities, it is generally not the practice of law, whether or not a fee is charged. To the extent that Miller suggests otherwise, it is disapproved.

Conclusion This case is remanded to the trial court with instruction to grant Charter One’s motion to dismiss for failure to state a claim.

In City of Carmel, Indiana v. Carl Michael Steele, et al. , an 11-page, 5-0 opinion, Justice Rucker writes:
When a municipality proceeds to annex territory as a result of a petition requesting it to do so, the legal description of the territory as set forth in the annexation ordinance determines whether the territory is contiguous to a municipality’s corporate boundaries. Here, the trial court looked beyond the ordinance to the legal description in the petition that inspired the ordinance. We conclude that to do so in this case was beyond the scope of trial court review. * * *

The legal description in annexation Ordinance C-265 describing territory the City of Carmel sought to annex demonstrates that the territory is contiguous to the City’s corporate boundaries. The trial court thus erred in failing to deny the Steeles’ appeal and dismiss the proceeding. We therefore reverse the judgment of the trial court.

In Tommy McElroy v. State of Indiana, a 10-page, 5-0 opinion, Justice Rucker writes:
The issue presented is whether the trial court abused its discretion when it imposed enhanced concurrent sentences for two counts of reckless homicide and one count of criminal recklessness. Finding that the valid aggravating factor is substantiated by the trial court’s sentencing statements and that it supports an enhanced sentence, we conclude there was no abuse of discretion. * * *

The sentence imposed by the trial court is supported by the sentencing orders, and the defendant’s eight-year sentence is not inappropriate under Indiana Appellate Rule 7(B). Affirmed.

Posted by Marcia Oddi on May 2, 2007 11:20 AM
Posted to Ind. Sup.Ct. Decisions