The Real Estate Bar Ass'n For Mass. Inc. v. Nat'l Real Estate Info. Serv. & Another.1

• Decision Date: 25 April 2011
• Docket Number: SJC–10744.
• Citation: 459 Mass. 512,946 N.E.2d 665
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: The REAL ESTATE BAR ASSOCIATION FOR MASSACHUSETTS, INC.v.NATIONAL REAL ESTATE INFORMATION SERVICES & another.1

459 Mass. 512
946 N.E.2d 665

The REAL ESTATE BAR ASSOCIATION FOR MASSACHUSETTS, INC.
v.
NATIONAL REAL ESTATE INFORMATION SERVICES & another.1

SJC–10744.

Supreme Judicial Court of Massachusetts, Suffolk.

Submitted Nov. 2, 2010.Decided April 25, 2011.

[946 N.E.2d 670]

Douglas W. Salvesen (Anthony B. Fioravanti with him), Boston, for the plaintiff.Michael D. Ricciuti (Michael DeMarco with him), Boston, for the defendants.The following submitted briefs for amici curiae:William P. O'Donnell, Norwood, Anthony J. Vigliotti, Robert F. Kelley, Lawrence, John R. Buckley, Jr., F. Sydney Smithers, IV, & Andrea F. Nuciforo, Jr., Pittsfield, for Register of Deeds for Berkshire County & others.Matthew J. Maiona, Boston, for the New England Chapter of the American Immigration Lawyers Association.Martha Coakley, Attorney General, Emily M. Armstrong, Assistant Attorney General, for the Commonwealth.Robert J. Muldoon, Jr., & Jessica G. Kelly, Boston, for the Massachusetts Bar Association.

[946 N.E.2d 671]

Harvey Weiner & Timothy M. Pomarole, Boston, for Legal Assistance Corporation of Central Massachusetts & others.Thomas Frisardi & Kendra A. Kinscherf, Boston, for North American Bar–Related Title Insurers & another.Present: IRELAND, SPINA, COWIN, CORDY, BOTSFORD, & GANTS, JJ.²BOTSFORD, J.

[459 Mass. 513] The United States Court of Appeals for the First Circuit has certified two questions to this court in accordance with S.J.C. Rule 1:03, as appearing in 382 Mass. 700 (1981). See Real Estate Bar Ass'n for Mass. v. National Real Estate Info. Servs., 608 F.3d 110, 119–120 (1st Cir.2010) ( REBA III ). The questions arise in the context of litigation pursued by the Real Estate Bar Association for Massachusetts, Inc. (REBA), against the defendants National Real Estate Information Services, Inc., and National Real Estate Information Services (collectively, NREIS). See id. at 113–114. See also Real Estate Bar Ass'n for Mass. v. National Real Estate Info. Servs., 642 F.Supp.2d 58 (D.Mass.2009) ( REBA II ); Real Estate Bar Ass'n for Mass. v. National Real Estate Info. Servs., 609 F.Supp.2d 135 (D.Mass.2009) ( REBA I ). REBA claims that certain activities undertaken by NREIS in Massachusetts constitute the unauthorized practice of law; in making the claim, REBA focuses on NREIS's provision of real estate settlement services to mortgage lenders [459 Mass. 514] and its issuance of real estate title insurance policies as a title insurance agent. See REBA III, supra at 113. The certified questions are as follows:

“1. Whether NREIS's activities, either in whole or in part, based on the record in this case and as described in the parties' filings, constitute the unauthorized practice of law in violation of Mass. Gen. Laws ch. 221, §§ 46 et seq.

“2. Whether NREIS's activities, in contracting with Massachusetts attorneys to attend [real estate] closings, violate Mass. Gen. Laws ch. 221, §§ 46 et seq.”

Id. at 119–120.³ For the reasons stated below, we conclude that certain of the real estate settlement activities undertaken by NREIS do not constitute the unauthorized practice of law, but we cannot determine, based on the record before us, whether other of the described settlement activities may do so. As to the second question, the limitations of the record prevent us from providing a definitive answer. Nevertheless, we conclude that the closing or settlement of the types of real estate transactions described in the record require not only the presence but the substantive participation of an attorney on behalf of the mortgage lender, and that certain services connected with real property conveyances constitute the practice of law in Massachusetts.

1. Background. REBA initiated this action against NREIS in the Superior Court in November, 2006. The amended complaint alleges that certain business activities of NREIS constitute the unauthorized practice of law in violation of G.L. c. 221, §§ 46 and 46A,⁴ and seeks declaratory

[946 N.E.2d 672]

and injunctive relief pursuant [459 Mass. 515] to G.L. c. 221, § 46B.⁵ The challenged activities include services NREIS provides in connection with Massachusetts mortgage transactions that REBA claims are integral components of real estate “conveyancing.” REBA also challenges NREIS's issuance of real estate title insurance policies as a title insurance agent for underwriters. ⁶ NREIS removed the case to the United States District Court for the District of Massachusetts on diversity grounds, and counterclaimed pursuant to 42 U.S.C. § 1983 (2006) that REBA's lawsuit violated the dormant commerce clause, art. 1, § 8, cl. 3, of the United States Constitution. On cross motions for summary judgment, a District Court judge allowed NREIS's motion, concluding as a matter of law that NREIS's activities did not constitute the unauthorized practice of law in Massachusetts. See REBA I, 609 F.Supp.2d at 143–144. The judge also found in favor of NREIS on its counterclaim and ordered REBA to pay attorney's fees and costs in the amount of $904,076.17. See REBA II, 642 F.Supp.2d at 73. REBA appealed, and the Court of Appeals vacated the District Court judgment on the unauthorized practice of law claim. REBA III, 608 F.3d at 117–118. The court concluded that there was “no controlling precedent that establishes a definition for ‘conveyancing’ or the extent of activities that constitute conveyancing,” and certified the two questions set forth above to this court.⁷ Id. at 118, 126.

[459 Mass. 516] We briefly set forth the relevant facts, based on the parties' pleadings and the prior proceedings, reserving additional details for our discussion of the questions. REBA is a Massachusetts bar association with approximately 3,000 real estate attorneys as members. REBA was formerly known as the Massachusetts Conveyancers' Association, Inc., and the organization has a long history of attempting, through both legislation and litigation, to confine conveyancing activities in the Commonwealth to Massachusetts attorneys. See REBA III, supra at 115–116, and cases cited. NREIS is a business entity based in Pennsylvania.⁸ NREIS describes itself

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as both a multi-State real estate settlement services provider, or “vendor manager,” and a title insurance agency. The record before us does not demonstrate that any NREIS employee is licensed to practice law in Massachusetts.

As a vendor manager, NREIS provides services for mortgage lenders related to the settlement, or closing, of real estate mortgage transactions. These services may include some or all of the following: (1) contracting for title examination searches relating to specific properties to be performed by third parties; (2) obtaining other third-party reports or public records relating to those properties; (3) contracting with a third party to draft deeds for mortgage loan transactions if a lender so requests; (4) drafting Federal HUD–1 or HUD–1A settlement statements; (5) arranging for a Massachusetts attorney to attend a “closing” on behalf of the lender; (6) transmitting the lender's documents to the closing attorney prior to the actual closing, and reviewing those documents postclosing for proper execution; (7) ensuring the recording of documents related to the mortgage at the appropriate registry of deeds; and (8) disbursing settlement funds. REBA claims that many if not all of these activities, at least when undertaken in the context of “conveyancing,” constitute or involve the practice of law and therefore must be performed, supervised, or overseen by an attorney. NREIS, on the other hand, describes its vendor management services as “managerial, administrative,[459 Mass. 517] clerical or ministerial,” and maintains that in performing them, it is not practicing law.

As a title insurance agency, NREIS issues title insurance commitments and policies to both lenders and borrowers on behalf of title insurance underwriters. To issue a policy, NREIS takes the information from a title examination conducted by a third party and creates a title commitment based on guidelines promulgated by the particular underwriter for which NREIS is acting as an agent. NREIS then issues the title insurance policy to the lender or borrower consistent with the requirements and exceptions outlined in the title commitment. REBA maintains that because issuing title insurance policies requires some examination of the legal title to a property, NREIS is engaging in the unauthorized practice of law.

2. Practice of law. The two certified questions focus on the unauthorized practice of law; to answer them, of course, we must be concerned in the first instance with what constitutes the practice of law. The subject is one within the exclusive power of the courts to determine. Lowell Bar Ass'n v. Loeb, 315 Mass. 176, 180, 52 N.E.2d 27 (1943) (judicial department “is necessarily the sole arbiter of what constitutes the practice of law” in Massachusetts). Nevertheless, as G.L. c. 221, §§ 46–46B, illustrate, the Legislature may assist the judiciary in enforcing and discharging the duty to control the practice of law with appropriate statutory enactments. See Opinion of the Justices, 289 Mass. 607, 612, 194 N.E. 313 (1935). The purpose in limiting the practice of law to authorized members of the bar is not to protect attorneys from competition but rather to protect the public welfare. Lowell Bar Ass'n v. Loeb, supra. Matter of the Shoe Mfrs. Protective Ass'n, 295 Mass. 369, 372, 3 N.E.2d 746 (1936). See Opinion of the Justices, supra at 613–614, 194 N.E. 313.

“It is not easy to define the practice of law.” Lowell Bar Ass'n v. Loeb, supra at 180, 52 N.E.2d 27. Whether a

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particular activity constitutes the practice of law “must be decided upon its own particular facts” because “it is impossible to frame any comprehensive and satisfactory definition” of the term. Matter of the Shoe Mfrs. Protective Ass'n, supra at 372, 3 N.E.2d 746. See Matter of Chimko, 444 Mass. 743, 749, 831 N.E.2d...