865 N.E.2d 602 (Ind. 2007), 49S05-0612-CV-497, Charter One Mortg. Corp. v. Condra

Docket Nº:49S05-0612-CV-497.
Citation:865 N.E.2d 602
Party Name:CHARTER ONE MORTGAGE CORPORATION, Appellant (Defendant below), v. Kyle CONDRA, on behalf of himself and others similarly situated, Appellee (Plaintiff below).
Case Date:May 02, 2007
Court:Supreme Court of Indiana

Page 602

865 N.E.2d 602 (Ind. 2007)

CHARTER ONE MORTGAGE CORPORATION, Appellant (Defendant below),


Kyle CONDRA, on behalf of himself and others similarly situated, Appellee (Plaintiff below).

No. 49S05-0612-CV-497.

Supreme Court of Indiana

May 2, 2007

Page 603

David P. Sanders, Michael T. Brody, Chicago, IL, Elizabeth G. Porter, Washington, D.C., David C. Campbell, Karl L. Mulvaney, Indianapolis, IN, Attorneys for Appellant.

Daniel P. Stipano, Deputy Chief Counsel, Horace G. Sneed, Director, Ernest Clifford Barrett, III, Senior Counsel, Litigation Division, Office of the Comptroller of the Currency, Washington, D.C., Susan W. Brooks, United States Attorney, Southern District of Indiana, Shelese Woods, Assistant United States Attorney, Indianapolis, IN, Attorneys for Amicus Curiae The Office of the Comptroller of the Currency.

Irwin B. Levin, Richard E. Shevitz, Scott D. Gilchrist, Eric S. Pavlack, Kelley J. Johnson, Indianapolis, IN, Attorneys for Appellee.

Page 604

On Petition To Transfer from the Indiana Court of Appeals, No. 49A05-0501-CV-30

BOEHM, Justice.

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.

Facts and Procedural History

In 2002, Kyle Condra borrowed $89,600 to purchase real estate. His loan from Charter One Mortgage Corporation ("Charter One") was secured by a mortgage on the property. In connection with the loan, Charter One charged Condra a $175 fee for the completion of a deed and mortgage. These documents were prepared by Charter One's agents or employees who were not licensed to practice law.

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. The trial court granted Charter One's request to stay all proceedings in the matter, including class certification, pending its ruling on Charter One's motion to dismiss.

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. Charter One Mortgage Corp. v. Condra, 847 N.E.2d 207 (Ind.Ct.App. 2006). We granted transfer. 860 N.E.2d 599 (Ind.2006).

Standard of Review

A motion to dismiss for failure to state a claim tests the legal sufficiency of the claim, not the facts supporting it. Hosler ex rel. Hosler v. Caterpillar, Inc., 710 N.E.2d 193, 196 (Ind.Ct.App. 1999), trans. denied. Thus, our review of a trial court's grant or denial of a motion based on Trial Rule 12(B)(6) is de novo. Sims v. Beamer, 757 N.E.2d 1021, 1024 (Ind.Ct.App. 2001).


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