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Ohio State Bar Association v. Century Negotiations, Inc.

Supreme Court of Ohio

December 20, 2017

Ohio State Bar Association
v.
Century Negotiations, Inc.

          Submitted June 7, 2017

         On Final Report by the Board on the Unauthorized Practice of Law of the Supreme Court, No. UPL 13-08.

          Fanger & Associates, L.L.C., and Jeffrey J. Fanger; and Eugene P. Whetzel, Bar Counsel, for relator.

          McNeal, Schick, Archibald & Biro Co., L.P.A., and Marilyn J. Singer, for respondent.

          PER CURIAM

         {¶ 1} On November 6, 2013, relator, Ohio State Bar Association, filed a complaint with the Board of Commissioners on the Unauthorized Practice of Law alleging that Century Negotiations, Inc., engaged in the unauthorized practice of law by conducting debt-settlement negotiations on behalf of Ohio consumers.

         {¶ 2} The parties submitted agreed stipulations and waived a formal hearing on May 8, 2015. Consistent with those stipulations, the board found that Century Negotiations engaged in the unauthorized practice of law by conducting debt-settlement negotiations for over 3, 000 Ohio customers. Because the company cooperated in relator's investigation and the board proceedings, ceased operations in Ohio, and further agreed not to engage in the unauthorized practice of law in this state in the future, the board concluded that no civil penalty was warranted. We adopt the board's findings and recommendation and issue an injunction prohibiting Century Negotiations, Inc., from engaging in further conduct that constitutes the practice of law in Ohio.

         Findings of Fact

         {¶ 3} Century Negotiations is a Pennsylvania corporation that provides debt-resolution services to its clients. From 2005 through 2015, those clients included 3, 056 Ohio consumers. The company is not and has never been admitted to the practice of law in Ohio or any other state. Indeed, "[a] corporation cannot lawfully engage in the practice of law; nor can it do so indirectly through the employment of qualified lawyers." Judd v. City Trust & Savs. Bank, 133 Ohio St. 81, 12 N.E.2d 288 (1937), paragraph two of the syllabus; see also Prof.Cond.R. 5.4(d)(1) through (3) (prohibiting a lawyer from practicing in the form of a professional corporation or association authorized to practice law for a profit if a nonlawyer is an owner, director, or officer of the corporation, or has the right to direct or control the professional judgment of the lawyer).

         {¶ 4} Century Negotiations admitted that it rendered legal services in Ohio to Ohio residents. Specifically, the company stipulated that it provided advice and counsel to Ohio consumers; negotiated, drafted, reviewed, and validated settlement agreements on behalf of those consumers; validated term agreements; and advised consumers as to the terms of their credit contracts and subsequent settlement agreements for the purpose of affecting the contractual relationship and liability of those consumers with respect to their debts and their respective creditors.

         Century Negotiations, Inc., Engaged in the Unauthorized Practice of Law

         {¶ 5} The Supreme Court of Ohio has original jurisdiction regarding admission to the practice of law, the discipline of persons so admitted, and all other matters relating to the practice of law in Ohio. Article IV, Section 2(B)(1)(g), Ohio Constitution; Royal Indemn. Co. v. J.C Penney Co., Inc., 27 Ohio St.3d 31, 34, 501 N.E.2d 617 (1986). Accordingly, this court has exclusive jurisdiction to regulate the unauthorized practice of law in Ohio. Greenspan v. Third Fed. S. & L. Assn., 122 Ohio St.3d 455, 2009-Ohio-3508, 912 N.E.2d 567, ¶ 16; Lorain Cty. Bar Assn. v. Kocak, 121 Ohio St.3d 396, 2009-Ohio-1430, 904 N.E.2d 885, ¶ 16. The purpose of that regulation is to "protect the public against incompetence, divided loyalties, and other attendant evils that are often associated with unskilled representation." Cleveland Bar Assn. v. CompManagement, Inc., 104 Ohio St.3d 168, 2004-Ohio-6506, 818 N.E.2d 1181, ¶ 40.

         {¶ 6} The unauthorized practice of law is the rendering of legal services for another by any person not admitted or otherwise certified to practice law in Ohio. Gov.Bar R. VII(2)(A)(1). The unauthorized practice of law includes the " 'preparation of pleadings and other papers incident to actions and special proceedings and the management of such actions and proceedings on behalf of clients before judges and the courts.' " Land Title Abstract & Trust Co. v. Dworken, 129 Ohio St. 23, 28, 193 N.E. 650 (1934), quoting People v. Alfani, 227 N.Y. 334, 337-338, 125 N.E. 671 (1919). "[T]he practice of law includes 'making representations to creditors on behalf of third parties, and advising persons of their rights, and the terms and conditions of settlement.' " Cincinnati Bar Assn. v. Telford, 85 Ohio St.3d 111, 113, 707 N.E.2d 462 (1999), quoting Cincinnati Bar Assn. v. Cromwell, 82 Ohio St.3d 255, 256, 695 N.E.2d 243 (1998). Therefore, it follows that the unauthorized practice of law encompasses the negotiation of collection claims on behalf of debtors. See, e.g., Ohio State Bar Assn. v. Kolodner, 103 Ohio St.3d 504, 2004-Ohio-5581, 817 N.E.2d 25.

         {¶ 7} Here, Century Negotiations admitted that it engaged in the unauthorized practice of law by negotiating with creditors on behalf of Ohio residents in an attempt ...


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