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settlementplaintiffattorneystatuteappealcorporationconsumer protectionclass actionlegal counsel
settlementplaintiffdefendantattorneystatuteappealcorporation

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Dressel v. Ameribank, 468 Mich. 557, 664 N.W.2d 151

Facts

In 1997, the plaintiffs obtained a real estate loan from Ameribank secured by a mortgage on their home. The bank charged a $400 fee for 'document preparation' on its settlement statement, which it described as a fee to cover the costs of preparing final legal papers. The plaintiffs alleged that this fee constituted the unauthorized practice of law and violated the Michigan Consumer Protection Act, leading to a class action certification in 1999.

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.'

Issue

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.

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.

Rule

The practice of law is regulated by statute, and it is unlawful for any corporation to practice as an attorney for any person other than itself. The unauthorized practice of law statutes aim to protect the public from unskilled practitioners.

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 ….

Analysis

The court analyzed whether the bank's actions constituted the practice of law by determining if the completion of standard mortgage forms required legal knowledge or discretion. It concluded that the bank merely completed a standard form that was publicly available and did not provide legal advice or counsel, thus not engaging in the practice of law.

In performing the act of completing the standard form mortgage, defendant was acting as an amanuensis, a kind of secretary for plaintiffs. No legal knowledge or discretion was involved in the document's completion. The bank did not counsel plaintiffs with regard to the legal validity of the document or the prudence of entering into the transaction.

Conclusion

The Supreme Court reversed the Court of Appeals decision and reinstated the circuit court order in favor of the bank, concluding that the bank did not engage in the unauthorized practice of law.

Accordingly, we reverse the Court of Appeals decision and reinstate the circuit court order granting summary disposition in favor of defendant.

Who won?

Ameribank prevailed in the case because the Supreme Court found that its actions did not constitute the unauthorized practice of law, as it merely completed standard forms without providing legal counsel.

We hold that a person engages in the practice of law when he counsels or assists another in matters that require the use of legal discretion and profound legal knowledge. Defendant completed standard mortgage forms for plaintiffs and charged a fee for the service. But it did not counsel or assist plaintiffs in matters requiring legal discretion or profound legal knowledge.

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