Dressel v. Ameribank

Decision Date24 June 2003
Docket NumberDocket No. 119959, Calendar No. 1.
Citation664 N.W.2d 151,468 Mich. 557
PartiesPaul DRESSEL and Theresa Dressel, Plaintiffs-Appellees, v. AMERIBANK, Defendant-Appellant.
CourtMichigan Supreme Court

Drew, Cooper & Anding (by John E. Anding, Christopher G. Hastings, and Bridget C. Kehoe), Grand Rapids, for the plaintiffs-appellees.

Warner Norcross & Judd LLP (by William K. Holmes, Molly E. McFarlane, and Carin L. Ojala), Grand Rapids, for the defendant-appellant.

May, Simpson & Strote, P.C. (by Thomas C. Simpson), Bloomfield Hills, for amici curiae the Michigan Land and Title Association.

Financial Law Associates, P.C. (by Michael A. Kus and Marsha J. Greco), Troy, for amici curiae the Michigan Association of Community Bankers.

DKW Law Group, PC (by John E. Jacobs and Walter J. Goldsmith), Southfield, for amici curiae the Michigan Mortgage Lenders Association and the Michigan Mortgage Brokers Association.

Bodman, Longley & Dahling LLP (by Lloyd C. Fell, James J. Walsh, George G. Kemsley, and Sandra L. Jasinski), Cheboygan, for amici curiae The Huntington National Bank and Rock Financial, Inc.

Howard & Howard Attorneys, P.C. (by Joseph B. Hemker and James H. Geary), [Kalamazoo,], for amici curiae The Michigan League of Community Banks.

Donald C. Heikkinen, Lansing, for amici curiae the Michigan Bankers Association. Young & Susser, P.C. (by Rodger D. Young and Kevin B. Hirsch), Southfield, for amici curiae Homestead U.S.A., Inc.

Lyngklip & Taub Consumer Law Group, PLC (by Ian B. Lyngklip), Southfield, for amici curiae the National Consumer Law Center and the National Association of Consumer Advocates.

Elaine Sterrett Isely, Grand Rapids, for amici curiae the Michigan Migrant Legal Assistance Project, Inc.

Janet K. Welch, Lansing, MI, for the State Bar of Michigan.

McClelland & Anderson, LLP (by Gregory L. McClelland and Marc D. Matlock), Lansing, for amici curiae the Michigan Association of Realtors.

Stuart Law Offices, P.C. (by Mark F. Stuart), Marshall, for amici curiae the Calhoun County Bar Association.



With this case we determine whether a lender that charges a fee for the completion of standard mortgage documents engages in the unauthorized practice of law under M.C.L. § 450.681. The Court of Appeals held that the lender is so engaged and reversed a circuit court order granting summary disposition in favor of defendant. We conclude that such conduct does not constitute the practice of law and, accordingly, reverse the Court of Appeals judgment and reinstate the circuit court order in favor of defendant.


In 1997, plaintiffs obtained from defendant Ameribank a real estate loan secured by a mortgage on their home. In connection with the loan, the bank prepared an adjustable rate note and a mortgage. On its settlement statement, it designated a $400 fee for "document preparation." It provided written material to plaintiffs stating that the document preparation fee was "a separate fee that some lenders charge to cover their cost of preparation of final legal papers, such as a mortgage, deed of trust, note or deed."1

Plaintiffs brought suit alleging that the charging of a fee for completing the mortgage documents constituted the unauthorized practice of law and violated the Michigan Consumer Protection Act (MCPA), M.C.L. § 445.901 et seq. In March of 1999, the case was certified as a class action to provide potential relief for other borrowers who also had been charged a document preparation fee by lending institutions.

The circuit court granted summary disposition to defendant under MCR 2.116(C)(10) and denied reconsideration. On appeal to the Court of Appeals, plaintiffs again argued that defendant's assessment of a document preparation fee constituted the unauthorized practice of law. The Court of Appeals ruled for the plaintiffs, noting that the statutes governing the unauthorized "practice of law" do not specifically define that term and that this Court has never decided the issue. It held that the charging of a separate fee for the preparation of legal documents by an interested party constitutes the unauthorized practice of law. It held, also, that neither of the exceptions to the statutes proscribing the unauthorized practice of law2 applied to defendant's conduct.3 The Court of Appeals concluded that defendant had violated the MCPA and the Savings Bank Act (SBA), M.C.L. § 487.3101 et seq. Because the trial court had erred in dismissing plaintiffs' claims of unauthorized practice of law, the Court reasoned, it erred also in dismissing the SBA and MCPA claims. Basic to these conclusions was the determination that, because defendant was engaged in the unauthorized practice of law, its activities were proscribed by the Credit Reform Act's prohibition on excessive fees. MCL 445.1857(3). Consequently, given that the fees were excessive under the Credit Reform Act, they were not authorized by the SBA. M.C.L. § 487.3430(1)(a).

Similarly, the Court of Appeals concluded that, because defendant was in violation of the SBA, plaintiffs' claims under the MCPA were also valid. MCL 445.904(2)(d); see also Smith v. Globe Life Ins. Co., 460 Mich. 446, 467, 597 N.W.2d 28 (1999). Thus, the Court of Appeals reversed the order of the circuit court and remanded the case. We granted leave to appeal.


Issues concerning the proper interpretation of statutes are questions of law that we review de novo. Hoste v. Shanty Creek Mgt., Inc., 459 Mich. 561, 569, 592 N.W.2d 360 (1999). Similarly, this Court applies a de novo standard when reviewing motions for summary disposition made under MCR 2.116(C)(10), which tests the factual support for a claim. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998). We consider the facts in the light most favorable to the nonmoving party, in this case, the plaintiffs. Smith, supra at 454, 597 N.W.2d 28.


In Michigan, the practice of law is regulated by statute. MCL 450.681 provides, in part:

It shall be unlawful for any corporation or voluntary association to practice or appear as an attorney-at-law for any person other than itself in any court in this state or before any judicial body, or to make it a business to practice as an attorney-at-law, for any person other than itself ....

It is the cardinal principle of statutory construction that courts must give effect to legislative intent. Omelenchuk v. City of Warren, 466 Mich. 524, 528, 647 N.W.2d 493 (2002). When reviewing a statute, courts must first examine the language of the statute. If the intent of the Legislature is clearly expressed by the language, no further construction is warranted. Helder v. Sruba, 462 Mich. 92, 99, 611 N.W.2d 309 (2000).

In the past, this Court concluded that it is impossible to formulate a specific and enduring definition of the practice of law "`for the reason that under our system of jurisprudence such practice must necessarily change with the everchanging business and social order.'" State Bar of Michigan v. Cramer, 399 Mich. 116, 133, 249 N.W.2d 1 (1976), quoting Grand Rapids Bar Ass'n v. Denkema, 290 Mich. 56, 64, 287 N.W. 377 (1939). We disagree with that conclusion.

Although formidable, the task of formulating a definition of the practice of law is not impossible. The full meaning of the language in M.C.L. § 450.681, and in its sister provisions,4 prohibiting the unauthorized "practice of law" and engagement in the "law business" may not be immediately apparent. However, the language is capable of being construed. In order to accomplish that, we review the purposes of the unauthorized practice of law statutes.

These purposes are discernable from the regulations governing the legal profession that preceded and coincided with the enactment of the statutes. From them, it is possible to extrapolate a sufficiently accurate definition of the "practice of law" to guide parties in their dealings with each other.


Regulation of the legal profession began early in the English legal tradition. See, generally, 1 Pollock & Maitland, History of English Law (Boston: Little, Brown, & Co., 2d ed., 1899), pp. 211-217; Baker, An Introduction to English Legal History (London: Butterworths, 3d ed., 1990), pp. 21, 179. In our nation, also, regulation of the practice of law has been an innate characteristic of the legal tradition. See Pound, The Lawyer from Antiquity to Modern Times (St Paul: West, 1953), pp. 130, 135-136; see, e.g., 2 Works of John Adams (Boston: Little & Brown, 1850), pp. 45-50.

In the period between the American Revolution and the Civil War, however, regulation of the profession receded.5 By the turn of the last century, increasing concern had developed that the spread of unlicensed practitioners was harmful to the profession and dangerous to the public. See Comment, Unauthorized practice of law-The full service bank that was: Bank cashier enjoined from preparing real estate mortgages to secure bank loans, 61 Ky. L. J. 300, 303-304 (1972).

Thus, at the time our unauthorized practice of law statutes were enacted, there was a trend toward restoring the organized bar as a means of regulating the practice of law. At the core of this movement and of all other attempts to regulate the practice was an interest in protecting the public from the danger of unskilled persons practicing law. See Comment, supra at 301-302, 304. It became the basic purpose for our unauthorized practice statutes. As we stated in Cramer, "`Laymen are excluded from law practice ... solely to protect the public.' ... It is this purpose of public protection which must dictate the construction we put on the term `unauthorized practice of law'". Id., at 134, 249 N.W.2d 1, quoting Oregon State Bar v. Security Escrows, Inc., 233 Or. 80, 87, 377 P.2d 334 (...

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