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To Review the Surrounding Neighborhood Group’s Presentation Before the January 27, 2015 meeting of the City of Raleigh Planning Commission, please click on the following link to access the Powerpoint Presentation:
To Review the Surrounding Neighborhood Group’s Presentation Before the November 25, 2014 meeting of the City of Raleigh Planning Commission, please click on the following link to access the Powerpoint Presentation:
Recent court orders bring to an end a long-running case against an elaborate scheme that deceived consumers into buying overpriced manufactured homes and agreeing to loans they couldn’t afford.
In the case against Phoenix Housing Group and W.R. Starkey Mortgage, nearly $4.3 million in refunds for consumers have been obtained and the companies worked with federal authorities who brought criminal charges against several individual defendants.
In a Prior Post on this Blog, we noted how LegalZoom quickly settled a class action UPL lawsuit litigated in Missouri federal court after LegalZoom’s motion for summary judgment on the question of whether their “decision-tree” legal document preparation software enabled the company to illegally engage in the unauthorized practice of law in the “Show-me-State.” The federal district court judge in Missouri concluded in her 31 page Order that, indeed, a reasonable jury or fact-finder could well conclude that the LegalZoom’s on-line document preparation service constituted the unauthorized practice of law which is prohibited by Missouri statutes. That got LegalZoom’s attention. Instead of proceeding to litigate further to find out what the jury or fact-finder might then conclude in the trial scheduled and which would have been held just 3 weeks later, LegalZoom chose to quickly settle, paid over $6 million dollars (including over $1 million in attorney fees), and agreed to alter the manner in which the company conducted business in Missouri thereafter.
Now, the “music” is starting to get much louder here in NC after the North Carolina Business Court’s recent decisions in two quite similar cases involving LegalZoom and another company named Lienguard, both of whom are each battling the same UPL issues in the same North Carolina Court, before the same NC Judge, using the same NC attorneys, in two very pitched and acrimonious battles with the North Carolina State Bar. Can LegalZoom hear the music which sings loud and clear in the holding in the recent Order and Opinion in the Lienguard case, or is LegalZoom still tone deaf to the very real possibility that a large portion of their business model is illegal under the many UPL statutes across the country, including here in North Carolina?
Let’s set the table. Lienguard is a commercial business based in Illinois that offers commercial lien document preparation services across the country, including in NC. Lienguard maintains a website where those seeking to file a claim of lien can interact with Lienguard’s website to complete and prepare a claim of lien document created by Lienguard, and Lienguard “handles the rest.” It is more complicated than that, and if you want the details, review the full text of the Opinion and Order in the Lienguard case. But that is the basic gist. In response, the NC State Bar filed a complaint against Lienguard alleging, basically, that the company’s on-line preparation of claim of lien documents for their customers in NC, which the Court concluded were “legal documents” within the meaning of that term as set forth in Chapter 84 of the NC General Statutes, constituted the unauthorized practice of law and that such business practices by Liengaurd were illegal and should be enjoined. Thus, it is now illegal for Lienguard to provide or offer to provide (whether it be via an on-line or off-line service) legal document preparation services whereby Lienguard prepares or assists in the preparation of any claim of lien on behalf of a third party in North Carolina.
What does that mean for LegalZoom? Well, we do not know for certain just yet. The recent Order and Opinion in the LegalZoom case merely decided the parties’ preliminary joint motions for “judgment on the pleadings,” which is ordinarily a mechanism to dispose of meritless claims or defenses at very early stages of litigation. The Business Court’s recent decision essentially punted the decision on the penultimate UPL issue down the road for a later stage of the litigation (a subsequent hearing on “summary judgment” for all you litigators out there). The Business Court clearly indicated that it wants the parties to develop the case with more facts and information to inform its pending decision on the UPL question that is at the center of the LegalZoom case.
However, one has to think (which I would do if I were advising LegalZoom in this case), that if LegalZoom’s website assists NC consumers in the preparation of “legal documents” in a similar fashion to how Lienguard did with respect to the preparation of claims of lien, then it seems reasonable that the same or similar result may well be in store for LegalZoom (i.e., a declaratory judgment that all or part of their on-line legal document preparation services constitute UPL and an injunction to stop them from continuing to offer and engage in such illegal business practices here in NC). Is a deed or a lease concerning real property a “legal document?” Is a will? Is a trust agreement? What about documents which serve to legally separate and/or divorce two married individuals? What about the legal formation of a non-person entity such as a corporation or a limited liability company? Bankruptcy? Trademark documents? Power of attorney and healthcare power of attorney documents? LegalZoom offers to prepare all of these legal documents (and they are “legal documents”) via their website using their “patented” “decision-tree software.” To view a list of all of the legal documents which LegalZoom offers to prepare for a fee via its on-line document “decision-tree software” click HERE.
The holding in the Lienguard case has very serious implications for LegalZooom’s core business model here in NC. LegalZoom, can you hear the music now?
Read the Business Court’s Order and Opinion in the Lienguard case.
Read the Business Court’s Order and Opinion in the LegalZoom case.
Click on the Blog Post from Safran Law Firm which includes links to an Order from the North Carolina Business Court declaring Lienguard’s business practices to violate UPL statutes in North Carolina and enjoining Lienguard from preparing or offering to prepare claims of lien for businesses or consumers in NC.