Oregon State Bar v. John H. Miller & Co.

• Decision Date: 18 September 1963
• Citation: 235 Or. 341,385 P.2d 181
• Parties: OREGON STATE BAR, Appellant, v. JOHN H. MILLER & CO., Inc., a corporation, formerly Executive Estate Planners, Inc., a corporation, and John H. Miller, Respondents.
• Court: Oregon Supreme Court

Page 181

385 P.2d 181

235 Or. 341

OREGON STATE BAR, Appellant, v. JOHN H. MILLER & CO., Inc., a corporation, formerly Executive Estate Planners, Inc., a corporation and John H. Miller, Respondents.

Supreme Court of Oregon, In Banc.

Argued and Submitted July 1, 1983.

Decided Sept. 18, 1963.

James H. Clarke, Portland, argued the cause for appellant. With him on the briefs was Malcolm J. Montague, Portland.

Robert A. Leedy, Portland, argued the cause for respondents. With him on the brief were Barzee, Leedy & Tassock, Portland.

H. H. Perry, Jr., Albany, Ga., Wayland B. Cedarquist, Chicago, Ill., Jonathan F. Ells, Winsted, Conn., Raymond Reisler, Brooklyn, N. Y., Warren H. Resh, Madison, Wis., R. Carleton Sharretts, Jr., Baltimore, Md., George H. Turner, Lincoln, Neb., and Melvin F. Adler, Fort Worth, Tex., filed a brief as amicus curiae for the American Bar Assn.

Leonard L. Silverstein and Gerald H. Sherman, Washington, D. C., filed a brief as amicus curiae for Advanced Life Underwriting.

Before McALLISTER, C. J., and ROSSMAN, PERRY, SLOAN, O'CONNELL, GOODWIN and LUSK, JJ.

O'CONNELL, Justice.

Plaintiff seeks to enjoin defendants from the unauthorized practice of law. ORS 9.160. ¹ The trial court entered a decree enjoining defendants from carrying on certain activities related to the business of preparing estate plans. The decree also specified that certain conduct in carrying on the business of defendants did not constitute the practice of law. Plaintiff appeals praying for a modification of the decree on the grounds that it is vague and inconsistent and that it permits defendants to practice law in connection with the conduct of some of its business.

Defendant Miller is the principal stockholder and president of defendant, Executive Estate Planners, Inc. Mr. Miller is not a lawyer. The nature of defendants' business is described by Mr. Miller as follows:

'A service organization offering a service to aid in financial and estate planning of individuals. That primarily. They have ventured into the field of pension and profit-sharing plans for businesses, individuals--businesses, I think. We have sold life insurance, received commission on it. That is what we do.

'* * * The planning of a person's affairs in order to maximize the benefits to their family while living and in the event of death, and to attempt to conserve as much of the estate as possible consistent with the client or the estate owner's desires.'

Mr. Miller also engages in the business of selling insurance. He argues that the estate planning business is merely incidental to the business of selling insurance. However, it was clearly established that the estate planning business was carried on as a distinct enterprise offering service to clients irrespective of their insurance needs.

The defendant company solicits business through salesmen who are paid a percentage of the fee charged for an analysis of the client's estate. A variety of factors reflecting upon tax liability are considered in preparing the analysis. For example, a report to the client might contain suggestions relating to the transfer of assets, the making of gifts, the use of the marital deduction, the use of inter vivos and testamentary trusts, and other devices designed to minimize taxes. The client's will is examined for the purpose of determining the need for change with regard to reducing taxes. These and other suggestions are a standard part of the service performed by defendants.

Much of the advice contained in the report to the client could not be given without an understanding of various aspects of the law, principally the law of taxation. Most of the advice is in terms of 'suggestions.' In each instance the client is urged to consult his own attorney. But whether the report takes the form of suggestions for further study or as a recommendation that the suggestions be subjected to further scrutiny by a lawyer, the fact remains that the client receives advice from defendants and the advice involves the application of legal principles. This constitutes the practice of law.

Defendants contend that they employ the law in essentially the same manner as many types of businesses which require the understanding and application of legal principles by those who are not admitted to the bar, as for example, the architect who advises a prospective builder that a proposed structure does not conform to the applicable building code, or the travel agent who advises his customer of passport requirements. It must be conceded that frequently advice given in the course of carrying on a business is shaped by a knowledge of the applicable law. But the giving of such advice is not in every instance regarded as the practice of law. The legal ingredient in the advice may be so insubstantial as to call for the application of the principle of de minimis non curat lex. This is not to say that we adopt the view permitting the practice of law where the legal element is merely incidental to the business activity being carried on. ² To fall outside the proscription of the statute the legal element must not only be incidental, it must be insubstantial. It cannot be said that one who plans another person's estate employs the law only in an insubstantial way.

There remains only the question of the adequacy of the lower court's decree. The decree was as follows:

'1. Defendants are declared not to be engaged in the unauthorized practice of law when they perform the following activities:

'a. Collecting information on customer or potential customer's financial affairs, including kind and value of assets.

'b. Questioning customers as to the...