Doe v. McMaster, 25508.
Decision Date | 05 August 2002 |
Docket Number | No. 25508.,25508. |
Citation | 585 S.E.2d 773,355 S.C. 306 |
Parties | John DOE, Alias, Petitioner, v. Henry D. McMASTER, Attorney General for the State of South Carolina, Respondent, and South Carolina Bankers Association and South Carolina Bar, Intervenors. |
Court | South Carolina Supreme Court |
David A. Wilson, of Horton, Drawdy, Ward & Jenkins, of Greenville, for petitioner.
Attorney General Henry D. McMaster, Deputy Attorney General Treva G. Ashworth, and Assistant Deputy Attorney General J. Emory Smith, Jr., all of Columbia, for respondent.
John T. Moore, C. Mitchell Brown and B. Rush Smith, III, all of Nelson, Mullins, Riley & Scarborough, of Columbia, for Intervenor South Carolina Bankers Association.
John S. Nichols, of Bluestein & Nichols, of Columbia; and F. Earl Ellis, Jr., of Ellis, Lawhorne & Sims, of Columbia, for Intervenor South Carolina Bar.
Edward G. Menzie and Brian C. Bonner, both of Nexsen, Pruet, Jacobs & Pollard, of Columbia, for Amicus Curiae American Financial Services Associates.
ORDER WITHDRAWING ORIGINAL OPINION AND SUBSTITUTING SUBSEQUENT OPINION ON REHEARING
Opinion No. 25508, filed August 5, 2002, is hereby withdrawn and the following opinion substituted s/ Jean H. Toal, C.J s/ James E. Moore, J s/ John H. Waller, Jr., J s/ E.C. Burnett, III, J. s/ Costa M. Pleicones, J.
John Doe ("Doe"), a lawyer, petitioned this Court in its original jurisdiction to determine whether his business association with a lender bank ("Lender") and a title insurance company ("Title Company") constitutes the unauthorized practice of law in violation of Rule 5.5(b), of Rule 407 SCACR.1 This Court granted the petition to provide declaratory judgment and appointed the Honorable Edward B. Cottingham as referee. We conclude Doe's business association, when conducted as herein below prescribed, is proper.
The parties have stipulated Lender contacted Doe to supervise the execution and recordation of loan documents under the following scenario:
The issue of unauthorized practice of law in the area of real estate closings is a prolonged legal issue assuming growing national prominence.3 The South Carolina Constitution provides the Supreme Court with the duty to regulate the practice of law in the state. See S.C. Const. art. V, § 4; In re Unauthorized Practice of Law Rules, supra; see also S.C.Code Ann. § 40-5-10 (1986).
"The generally understood definition of the practice of law `embraces the preparation of pleadings, and other papers incident to actions and special proceedings, and the management of such actions and proceedings on behalf of clients before judges and courts.'" State v. Despain, 319 S.C. 317, 319, 460 S.E.2d 576, 577 (1995) (quoting In re Duncan, 83 S.C. 186, 189, 65 S.E. 210, 211 (1909)). The practice of law, however, "is not confined to litigation, but extends to activities in other fields which entail specialized legal knowledge and ability." State v. Buyers Service Co., Inc., 292 S.C. 426, 430, 357 S.E.2d 15, 17 (1987). For this reason, this Court has consistently refrained from adopting a specific rule to define the practice of law. In re Unauthorized Practice of Law Rules, 309 S.C. at 305, 422 S.E.2d at 124 ( ). Instead, the definition of what constitutes the practice of law turns on the facts of each specific case. Id.
This Court last addressed the unauthorized practice of law in the context of real estate closings in State v. Buyers Service Co., Inc., supra. Buyers Service divided the purchase of residential real estate into four steps: 1) title search; 2) preparation of loan documents; 3) closing; and 4) recording title and mortgage.
Initially, Doe suggests the present case is different from Buyers Service because the buyer and Lender are attempting to refinance an existing mortgage and not to purchase new property. This distinction is without significance.
In refinancing a real estate mortgage the four steps in the initial purchase situations still exist. A title examination is conducted to determine the current status of the title and any new encumbrances; new loan documents and instruments must be crafted to ensure buyer obtains funds to pay off an existing mortgage and Lender receives a mortgage to protect its interest; buyer and Lender must close on the loan; and the settlement of the old mortgage and recordation of the new mortgage must be perfected. In sum, refinancing affects identical legal rights of the buyer and Lender as initial financing and protection of these rights is the crux of the practice of law.
The title search portion of the present case encompasses stipulated facts 2 through 6. Doe asserts Title Company has a right to furnish title because it is incidental to its business.
In Buyers Service, this Court addressed a commercial title company's preparation of title abstracts for persons other than attorneys or themselves. The State in the case argued the buyer relies on the title search to determine if he receives good, marketable title. We agreed and rejected the title company's argument that it did not need attorney supervision because the title search was merely incidental to their own business. Instead, we found the title search company could conduct title examinations only under the supervision of a licensed attorney because the "examination of titles requires expert legal knowledge and skill" and the search affected the rights of buyers. Id. at 432, 357 S.E.2d at 18.
According to the stipulated facts it appears Title Company conducts a title search and prepares a commitment, for the benefit of the Lender, without supervision by a licensed attorney. While Doe notes the Title Company is licensed to do business in South Carolina, we rejected the incidental-tobusiness approach in Buyers Service.
Title Company's title search and preparation of title documents for the Lender, without direct attorney supervision, constitutes the unauthorized practice of law. The title search and subsequent preparation of related documentation is permissible only when a licensed attorney supervises the process. In order to comply with this Court's ruling Doe must ensure the title search and preparation of loan documents are supervised by an attorney.
Stipulated facts 7 and 8 concern Lender's preparation of loan documents as well as the attorney's review of the documents and subsequent curative work, if needed. Doe argues the preparation of real estate documents constitutes the practice of law, but Lender has a pro se right to prepare documents where it is a party. We disagree.
South Carolina law recognizes an individual's ability to appear pro se with leave of the court. See S.C.Code Ann. § 40-5-80 (Supp.2002). Corporations, which are artificial creatures of state law, do not have a right to appear pro se in all instances. See S.C.Code Ann. § 40-5-320 (1986). We granted corporations the ability to appear pro se, with leave of the court, in civil magistrate's court. See In re Unauthorized Practice of Law, supra. We explicitly rejected a corporation's ability to appear pro se in a state circuit or appellate court. Renaissance Enterprises, Inc. v. Summit Teleservices, Inc., 334 S.C. 649, 515 S.E.2d 257 (1999). The right of a corporation to practice law by completing real estate loan documents is not co-extensive with an...
To continue reading
Request your trial-
Boone v. Quicken Loans, Inc.
...association with a lender and title company did not violate "the proscription against the unauthorized practice of law." 355 S.C. 306, 316, 585 S.E.2d 773, 778 (2003). McMaster was a declaratory judgment action brought by a lawyer seeking a determination of whether his association with a le......
-
Brown v. Coe
...special proceedings, and the management of such actions and proceedings on behalf of clients before judges and courts. Doe v. McMaster, 355 S.C. 306, 585 S.E.2d 773 (2003); State v. Despain, 319 S.C. 317, 460 S.E.2d 576 (1995); In re Duncan, 83 S.C. 186, 65 S.E. 210 "The adjudicative power ......
-
Matrix Financial Serv. Corp.. v. Frazer
...of its unauthorized practice of law. All real estate and mortgage loan closings must be supervised by an attorney. Doe v. McMaster, 355 S.C. 306, 585 S.E.2d 773 (2003); State v. Buyers Serv. Co., 292 S.C. 426, 357 S.E.2d 15 (1987). Performing a title search, preparing title and loan documen......
-
Crawford v. Cent. Mortg. Co., 27273.
...of each case. Id. Previously, in State v. Buyers Service Company, Incorporated, 292 S.C. 426, 357 S.E.2d 15 (1987) and Doe v. McMaster, 355 S.C. 306, 585 S.E.2d 773 (2003), this Court addressed the unauthorized practice of law in the context of real estate transactions. In Buyers Service, w......