Dayton Bar Ass'n v. Lender's Service, Inc.

• Decision Date: 21 December 1988
• Docket Number: No. 87-1878,87-1878
• Citation: 532 N.E.2d 120,40 Ohio St.3d 96
• Parties: DAYTON BAR ASSOCIATION, Appellee, v. LENDER'S SERVICE, INC., Appellant.
• Court: Ohio Supreme Court

Page 96

40 Ohio St.3d 96

532 N.E.2d 120

DAYTON BAR ASSOCIATION, Appellee, v. LENDER'S SERVICE, INC., Appellant.

No. 87-1878.

Supreme Court of Ohio.

Submitted Oct. 19, 1988.

Decided Dec. 21, 1988.

Syllabus by the Court

The mere use of legal terms of art as headings on a title abstract or similar form does not, standing alone, operate as an expression of an opinion by the title searcher as to the legal effect of entries made under such headings, and thus does not constitute the practice of law. (State, ex rel. Doria, v. Ferguson [1945], 145 Ohio St. 12, 30 O.O. 241, 60 N.E.2d 476, followed.)

Appellant, Lender's Service, Inc., is a Pennsylvania corporation licensed to conduct business in Ohio. Its business includes providing real property appraisals and "property reports" for its clients. For a $40 fee, the "property reports" are provided to financial institutions making secured loans on real estate, typically second mortgages, and are prepared as follows:

The lending institution will place an order with Lender's Service which includes the name and address of the loan applicants, and a description of the property to be mortgaged. This information is then communicated to Lender's Service's property searchers in the various counties in the state of Ohio. The searcher locates the recorded deed where the grantee named is the same person as the applicant and the property description is the same as provided in the order. The appropriate information is then listed under the headings, "Present Title Holder (Grantee)" and "From Whom Acquired (Grantor)." Also included in the report is assessment and tax information on the property, as well as mortgages and other liens against the property. However, the searcher does not report mortgages or liens that are shown on the public record to be released or satisfied. When the search is complete, the searcher telephones the Lender's Service office in either Cleveland or Columbus and reports the results. The client service representative in the office then types the final report, containing the same information as listed above. None of the searchers is an attorney and the "property report" is not reviewed by an attorney prior to its submission to the client lending institution.

Appellee, Dayton Bar Association, filed a complaint against Lender's Service and thirteen other corporations and individuals with the Board of Commissioners on the Unauthorized Practice of Law, pursuant to Gov.Bar.R. VII. On February 7, 1984, the board entered an order authorizing the Dayton Bar Association to commence an action against Lender's Service, and others, for the purpose of obtaining a judicial determination as to whether Lender's Service had engaged in the unauthorized practice of law. The bar association's action seeking a permanent injunction against Lender's Service was filed on February 22, 1984 in the Court of Common Pleas of Montgomery County.

Following a bench trial beginning on July 10, 1986, the court ruled that Lender's Service's use of the "property report" forms presented at trial and as described above constitutes the unauthorized practice of law. The court enjoined Lender's Service from using the terms "present title holder" and "from whom (title) acquired" on its forms, and further enjoined the searchers from deciding whether to include or exclude a purported release or cancellation or a lien from such forms.

The court of appeals affirmed, with one judge dissenting.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Bieser, Greer & Landis and Michael W. Krumholtz, Dayton, for appellee.

Lloyd & Weissenberger and John A. Lloyd, Jr., Cincinnati, for appellant.

HOLMES, Justice.

The sole issue presented for our consideration in this case is whether appellant, in furnishing for a fee the information contained in its property reports, is engaged in the unauthorized practice of law. For reasons which follow, we conclude that appellant is not so engaged, and thus reverse the judgment of the court of appeals.

In Land Title Abstract & Trust Co. v. Dworken (1934), 129 Ohio St. 23, 27, 1 O.O. 313, 315, 193 N.E. 650, 652, this court held that furnishing an opinion as to the condition or validity of title to real estate, "whether in a so-called statement or certificate of title, falls within the realm of the practice of law." TheDworken decision also held that a corporation may not lawfully practice law in Ohio. Id. at paragraphs two and three of the syllabus. See, also, Judd v. City Trust & Savings Bank (1937), 133 Ohio St. 81, 10 O.O. 95, 12 N.E.2d 288; State, ex rel. Green, v. Brown (1962), 173 Ohio St. 114, 18 O.O.2d 361, 180 N.E.2d 157; Gov.Bar R. 1. This court held that the title guaranty company in Dworken was authorized by statute solely to prepare abstracts of title, and was not authorized to issue an opinion thereon. Id. 129 Ohio St. at 32-33, 1 O.O. at 317, 193 N.E. at 654.

Later, in Gustafson v. V.C. Taylor & Sons, Inc. (1941), 138 Ohio St. 392, 20 O.O. 484, 35 N.E.2d 435, this court adopted what has been called the "simple instrument" doctrine in a case approving the practice of real estate brokers filling in preprinted, blank real estate purchase contracts. The court held that "the supplying of simple, factual material such as the date, the price, the name of the purchaser, the location of the property, the date of giving possession and the duration of the offer requires ordinary intelligence rather than the skill peculiar to one trained and experienced in the law." Id. at 397, 20 O.O. at 486, 35 N.E.2d at 437. See, also, Note, An Analysis of the Unauthorized Practice of Law in Ohio (1964), 33 U.Cin.L.Rev. 401, 412.

Finally, in State, ex rel. Doria, v. Ferguson (1945), 145 Ohio St. 12, 30 O.O. 241, 60 N.E.2d476, paragraph one of the syllabus, this court explicitly held what the Dworken decision had implied: "One who furnishes to another a certificate or memorandum containing a statement of the substance of documents or facts appearing on the public records, which affect the title to real estate, without expressing any opinion as to the legal significance of what is found or as to the validity of the title, is not engaged in the practice of law."

In that case, Doria, an attorney, was retained by an engineer of the State Highway Department to furnish certificates of title on various parcels of real estate through which the department desired to construct a road. Doria did so, but when he presented his bill for services to the State Auditor, the...