Lucas Subway Midmo, Inc. v. Mandatory Poster Agency, Inc.

• Court: Missouri Court of Appeals
• Writing for the Court: Gary D. Witt, Judge
• Citation: Lucas Subway Midmo, Inc. v. Mandatory Poster Agency, Inc., 524 S.W.3d 116 (Mo. App. 2017)
• Decision Date: 25 April 2017
• Docket Number: No. WD 79834,WD 79834
• Parties: LUCAS SUBWAY MIDMO, INC., on behalf of Itself and on behalf of all others similarly situated, Appellant, v. The MANDATORY POSTER AGENCY, INC. d/b/a Corporate Records Service, Respondent.

524 S.W.3d 116

LUCAS SUBWAY MIDMO, INC., on behalf of Itself and on behalf of all others similarly situated, Appellant,

v.The MANDATORY POSTER AGENCY, INC. d/b/a Corporate Records Service, Respondent.

No. WD 79834

Missouri Court of Appeals, Western District.

April 25, 2017

Application for Transfer to Supreme Court Denied May 25, 2017

Application for Transfer Denied August 22, 2017

Kari A. Schulte and Matthew A. Clement, Jefferson City, MO, for appellant.

Glenn Davis and Charles N. Insler, St. Louis, MO, for respondent.

Before Division Four: Mark D. Pfeiffer, Chief Judge, Presiding, Lisa White Hardwick, Judge and Gary D. Witt, Judge

Gary D. Witt, Judge

Appellant Lucas Subway MidMo, Inc. ("Lucas Subway") sued The Mandatory Poster Agency, Inc. d/b/a Corporate Records Service ("MPA") for the unauthorized practice of law, money had and received, and violations of the Missouri Merchandising Practices Act, seeking class certification on all claims. The Cole County Circuit Court denied Lucas Subway's request for class certification and ultimately granted summary judgment to MPA on all counts. Lucas Subway now appeals both rulings. We reverse and remand.

Factual and Procedural Background¹

Lucas Subway owns and operates several Subway restaurants in Missouri, which are principally located in the Lake of the Ozarks area. MPA is a Michigan corporation, which operates Corporate Records Services that prepares annual minutes for corporations. MPA markets its product through direct mail solicitations containing an Annual Minutes Solicitations Form ("Form"). The Form is sent to a corporation's registered agents and offers to prepare annual corporate minutes if the corporation provides the names of its shareholders, officers and directors. When annual minutes are purchased, the information from the Form is manually entered into MPA's computer system which then populates a corporate minutes form with the corporation's unique information, including the specific company's name and address and the names of its shareholders, officers and directors. The company-specific annual minutes are then printed and mailed to the corporation with instructions to sign the minutes and place them in the corporate minute book. The cover letter sent with the minutes states that: "Your company will be in full compliance with the corporate minute records requirement after the Unanimous Consent documents are signed and dated." MPA does not employ any attorneys to draft or oversee the creation of these documents. Nor is MPA licensed to practice law in the State of Missouri.

Lucas Subway purchased corporate minutes from MPA for $125 in March of 2013. In April of 2013, the State of Missouri, through its Attorney General, filed an action against MPA for various remedies under the Missouri Merchandizing Practices Act ("MMPA"), Section 407.020² ("MMPA Action"). The MMPA Action followed an inquiry by the Office of the Chief Disciplinary Counsel concerning whether MPA was engaging in the unauthorized practice of law in Missouri. Following correspondence from MPA, the Office of the Chief Disciplinary Counsel declined to take any action against MPA. The Attorney General, however, continued with the MMPA Action, alleging that MPA's solicitation materials were deceptive and misleading. On August 12, 2013, MPA entered into an Assurance of Voluntary Compliance agreement ("AVC") with the State of Missouri. The AVC required that MPA alter its solicitations, pay $3,500 in costs and penalties, and send written notice to all of MPA's Missouri customers alerting customers that they have the right to a full refund of any payments made to MPA if they were "not satisfied" with the corporate minutes they received.

Lucas Subway did not seek a refund under the MMPA Action. Instead, on August 7, 2013, it filed suit against MPA in Cole County alleging that MPA (1) engaged in the unauthorized practice of law in violation of section 484.020, (2) unlawfully received money from Lucas Subway for legal services which it could not provide, and (3) committed various violations of the MMPA ("Petition"). The Petition also sought class certification on behalf of MPA's other Missouri customers from the time period beginning five years prior to the date the Petition was filed.

The circuit court denied Lucas Subway's request for class certification and also denied its request to appeal the order under Rule 84.035.³ MPA filed a Motion for Summary Judgment on June 2, 2015 ("Motion"). On June 21, 2016, the circuit court granted MPA's Motion finding, inter alia , that MPA's actions did not constitute the unauthorized practice of law. Lucas Subway now appeals both the court's order denying class certification and its order granting summary judgment in favor of MPA.

Discussion

I.

Lucas Subway's first point on appeal alleges that the circuit court erred in granting summary judgment in favor of MPA. Specifically, Lucas Subway alleges that the court erred in determining that MPA was not conducting the unauthorized practice of law or, in the alternative, that the court erred in finding that MPA had valid defenses to Lucas Subway's claims.

This Court reviews an entry of summary judgment de novo. ITT Commercial Fin. Corp. v. Mid–Am. Marine Supply Corp. , 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is only appropriate where the moving party has demonstrated that, based on the undisputed facts, they are entitled to judgment as a matter of law. Id. ; Rule 74.04(c). When reviewing a trial court's grant of summary judgment, we review the record in the light most favorable to the party against whom summary judgment was entered. ITT Commercial Fin. Corp. , 854 S.W.2d at 376.

Missouri seeks to "protect the public from being advised or represented in legal matters by incompetent or unreliable persons" by restricting the practice of law only to licensed attorneys. Hulse v. Criger , 363 Mo. 26,247 S.W.2d 855, 857–58 (Mo. 1952). No person or entity "shall engage in the practice of law or do law business" in Missouri unless having been duly licensed by the State. Section 484.020.1.⁴ The legislature defines the "practice of law" as:

the appearance as an advocate in a representative capacity or the drawing of papers, pleadings or documents or the performance of any in such capacity in connection with proceedings pending or prospective before any court of record, commissioner, referee or any body, board, committee, or commission constituted by law or having authority to settle controversies.

Section 484.010.1. Section 484.010.2 goes on to define the "law business" as:

the advising or counseling for a valuable consideration of any person, firm, association, or corporation as to any secular law or the drawing or the procuring of or assisting in the drawing for valuable consideration of any paper, document or instrument affecting and relating to secular rights or the doing of any act for a valuable consideration in a representative capacity, obtaining or tending to obtain or securing or tending to secure for any person, firm, association or corporation any proper or property rights whatsoever.

These statutes "merely act in aid of" the Missouri Supreme Court's "regulation of the practice of law and cannot supersede or distract from the power of the judiciary to define and control the practice of law." Hargis v. JLB Corp. , 357 S.W.3d 574, 578 (Mo. Banc 2011) (internal quotations omitted). The judiciary is the "sole arbiter of what constitutes the practice of law." Id.

In Missouri, "charging a separate fee for the completion of legal forms by non-lawyers constitutes the unauthorized practice of law business." Carpenter v. Countrywide Home Loans, Inc. , 250 S.W.3d 697, 702 (Mo. banc 2008). Thus, we begin our inquiry with whether the corporate minutes prepared by MPA constitute a legal document. "Determining whether a particular form is legal in nature requires the court ‘to balance the protection of the public against a desire to avoid unnecessary inconvenience and expense.’ " McKeage v. TMBC, LLC , 847 F.3d 992, 1000 (8th Cir. 2017) (quoting Hargis , 357 S.W.3d at 584 )). "A key factor in this inquiry is the legal judgment or discretion required to prepare the form." Id. "However, once it has been determined that a particular document is legal in nature, the act of charging a fee for the preparation or completion of that document constitutes unauthorized law business, even when a non-lawyer does not exercise any legal judgment in completing the form. " Id. (emphasis added).

There are many documents that have legal effect that do not prevent them from being drafted by a layman. Hulse , 247 S.W.2d at 862 ; Hargis , 357 S.W.3d at 584–85. While Missouri has held that drafting documents such as promissory notes and deeds of trusts constitutes the practice of law, courts have yet to address the question of corporate minute books. See Zmuda v. Chesterfield Valley Power Sports, Inc. , 267 S.W.3d 712, 715 (Mo. App. E.D. 2008) (noting that the Missouri Supreme Court, in Eisel v. Midwest BankCentre , 230 S.W.3d 335 (Mo. banc 2007), found promissory notes and deeds of trusts to be legal documents but did not limit the drafting of other documents from also meeting this definition).

MPA argues that the corporate minutes are merely form documents and more akin to a document with legal effect rather than a legal document as contemplated by section 484.010. MPA characterizes its services as merely taking a form filled out by customers and entering the data into a computer to have a form populated by the computer. It emphasizes that its employees do not exercise discretion or judgment as to what to include in the documents. There is no "advising or counseling" of clients as contemplated by section 484.010.

Lucas Subway responds that the statute does not require a party to advise or counsel clients in order to be guilty of the unauthorized practice of law; it is enough for a party to draft a legal document for a client. While MPA may be utilizing an...