THE STATE OF SOUTH CAROLINA In The Supreme Court

Rogers Townsend & Thomas, PC, Petitioner/Respondent,

v.

Stephen H. Peck, Thoma s Moore, and Community Management Group, LLC, Respondents/Petitioners.

Appellate Case No. 2011-199626

IN THE ORIGI NAL JURISDICTION

Opinion No. 27707 Heard November 7, 2016 – Filed February 22, 2017

DECLARATORY JUDG MENT ISSUED

Robert P. Wood, of Rogers T ownsend & Thomas, PC, of Columbia, for Petitioner/Respondent.

Matthew Evan Pecoy and Peter Gerard M cGrath, both of McGrath Law Firm, PA, of Mt. Pleasant, for Respondents/Petitioners.

PER CURIAM: The Court accepted this declar atory judgment action in our original jurisdiction to determine whether Community Management Group, LLC; its president, Stephen Peck; and its employee, Tom Moore, engag ed in the unauthorized practice of law wh ile managing homeowners' associa tions. We find Community Management Group engage d in the unauthorized practice of law.I. Background

Community Management Group manage s homeowners' associations and

condominium associations in Char leston, Dorchester, and Berkele y Counties. The company manages the associati ons' grounds and common areas, enf orces covenants and rules , and takes care of financial matters, inclu ding collecting

assessments for the associa tions. Until we issued a temporary injunction in connection with this case, when a homeowner in an association did not pay an overdue assessment, Community Man agement Group—without the invo lvement of an attorney—prepared and recorded a notice of lie n and related documents; brought an action in magistrate' s court to collect the debt; and after obtaining a judgment in magistrate's court, filed the judgment in circuit c ourt. Community Management Group also advertised t hat it could perform these se rvices.

We referred the cas e to the Honorable S tephanie P. McDonald 1 to act as special

referee. Judge McDonald recommended we fi nd Community Management Group engaged in the unauthor ized practice of law.

II. Unauthorized Practice of Law

The supreme court has the power to regulate the practice of law

. See S.C. C ONST

. art. V, § 4; S.C. Code Ann. § 40- 5-10 (2011) (recognizing "[t]he inherent power of the Supreme Court with respect t o regulating the practice of la w"); Linder v. Ins. Claims Consultants, Inc. , 348 S.C. 477, 486, 560 S.E. 2d 612, 617 (2002) ("Under the South Carolina Constitution, t his Court has the duty to reg ulate the practice of law in South Carolina."). Gener ally, the practice of law inclu des "the preparation of pleadings, and other papers i ncident to actions and special proceedings, and the management of such actions and pr oceedings on behalf of clients before judges

and courts." State v. Despain , 319 S.C. 317, 319, 460 S.E.2d 576, 577 (1995) (quoting In re Duncan, 83 S.C. 186, 189, 65 S.E. 210, 211 (1909)). The practice of

law "extends to activities . . . which entail specialized legal knowledge and ability."

Linder , 348 S.C. at 487, 560 S.E.2d at 617 (quoting State v. Buyers Serv. Co., Inc.

, 292 S.C. 426, 430, 357 S.E.2d 15, 17 (1987)). "Other than thes e general statements, there is no compreh ensive definition of the practic e of law. Rather, what constitutes the practice of l aw must be decided on the fac ts and in the context

of each individual case." Roberts v. LaConey , 375 S.C. 97, 103 , 650 S.E.2d 474,

1 At the time, Judge McDonald wa s a circuit court judge.477 (2007) (citing Linder , 348 S.C. at 487, 560 S.E.2d at 617-18); see also Medlock v. Univ. Health Serv., Inc. , 404 S.C. 25, 28, 743 S.E.2d 830, 831 (2013) ("We have encouraged any interested individual to bring a decla ratory judgment action in this Court's original j urisdiction to determine the v alidity of any questionable conduct.").

III. Agent

In an administrative order titled In re Unauthorized Practice of Law Rules Proposed by South Carolina Bar , 309 S.C. 304, 422 S. E.2d 123 (1992), we modified prior case law to "allo w a business to be represented by a non-lawyer officer, agent or employee." 309 S.C. at 306, 422 S.E.2d at 12 4 (modifying State

ex rel. Daniel v. Wells , 191 S.C. 468, 5 S.E.2d 181 (193 9)). We also promulgated South Carolina Magistrate Court Rule 21, which provides, "A bus iness . . . may be represented in a civil magistra tes court proceeding by a non-la wyer officer, agent, or employee . .



### . . "

The central question of this ac tion is whether the word "agent" in Unauthorized Practice of Law and Rule 21 includes a third party agent like Community Management Group. We find "agent" does not include non-lawyer third party entities or individuals. "Agent"—in Unauthorized Practice of Law and Rule 21— includes individuals who are not officers or employees of a bus iness, but who have

some nexus or connection to the business arising out of its cor porate structure. For example, a member of a corporati on's board of directors who is not an officer or employee would qualify as an "a gent" under these provisions. H owever, we now clarify that we never intended to permit non-lawyer third party entities or individuals to be an agent under Unauthorized Practice of Law or Rule 21.

IV. Community Management Group's Actions

We find Community Management Group engaged in the unauthorized practice of law when it (A) represented asso ciations in magistrate's court, (B) filed judgments in circuit court, (C) prepared and recorded liens, and (D) advertised that it could perform the services we now cla rify constitute the unauthorized practice of law.

A. Representing Associations in Magistrate's Court

Community Management Group brought actions in magistrate's court on behalf of associations to collect unpaid a ssessments owed to the associat ions. Community Management Group did not hire a lawyer for these magistrate cou rt proceedings;instead, it sent Moore to represe nt the associations. The only way Community Management Group could have performed these services without en gaging in the unauthorized practice of law is if it were an "agent" as refere nced in Unauthorized Practice of Law and Rule 21. See Wells , 191 S.C. at 480, 5 S.E.2d at 186 (stating "[i]n legal matters" a corporatio n "must act, if at all, throug h licensed attorneys"), modified by Unauthorized Practice of Law , 309 S.C. at 305-06, 422 S.E.2d at 124. We acknowledge that prior to our decision today the meaning of "agent" in Unauthorized Practice of Law and Rule 21 was not clear. However, we have now clarified "agent" does not include third party entities or indi viduals.

Community Management Group argue s—relying on our recent decisio n in

Medlock —it was not the unauthorized prac tice of law to represent assoc iations in magistrate's court because the representation did not require s pecialized legal skill or knowledge. In Medlock , we held "a non-attorney may present claims against an estate and petition for allowance of claims in the probate cour t on behalf of a business entity without engaging in the unauthorized practice o f law." 404 S.C. at 26–27, 743 S.E.2d at 831. We not ed, "It is the character of th e services rendered,

and not the denomination of the tribunal where the services are rendered, that

determines whether such services constitute the practice of law ." 404 S.C. at 28, 743 S.E.2d at 831. We then proceed ed to examine the "character" of presenting a claim and seeking allowance of the claim in probate court. We stated,

To file a claim in the proba te court, a claimant must merely deliver to the pers onal representative and the probate court a written statem ent of the claim indicating its basis, the claimant's na me and address, the amount claimed, and the date upon which the claim is due. Similarly, a petition for a llowance of a claim in the probate court merely require s a creditor to complete a one-page standard form, located on the South Carolina Judicial Department website, r equesting the probate court allow the claim and attesting that such claim is valid, timely presented, and has not been paid. None of these activities require the professional judgment of an attorney or entail specialized l egal knowledge and ability.

404 S.C. at 28, 743 S.E.2d at 831–32 (2013) (cita tion omitted).We find the services required to represent a business in magistrate's court are not comparable to making a claim against an estate or petitioning f or the allowance of the claim in probate court. We th erefore decline to extend the reasoning of

Medlock to Community Management Group a nd other third-party agents representing businesses in magistrate's court.

B. Filing Judgments in Circuit Court

After entering judgment, the mag istrate's court typically maile d Community Management Group a transcript of the judgment. The transcripts came with instructions on how to file the judgment in circuit court. Wit hout consulting an attorney, Community Management Group filed the judgments in circuit court.

We find Community Management Group engaged in the unauthorized practice of law by filing judgments in circuit court. South Carolina Code section 22-3-300 (2007) provides that at the requ est of the prevailing party, a magistrate judge will provide a transcript of a judgmen t, which may be filed in circu it court. Upon filing the magistrate's court judgment in circuit court, the judgment becomes a circuit court judgment. § 22-3-300. It would be the unauthorized prac tice of law for Community Management Group to rep resent an association in circu it court to obtain a judgment against a homeowner. See Renaissance Enter. Inc. v. Summit Teleservices, Inc. , 334 S.C. 649, 652-53, 515 S.E.2d 257, 258-59 (1999) (finding it was the unauthorized practice of law for non-lawyers to represe nt a corporation in circuit court). Thus, it is the unauthorized practice of law f or Community Management Group to obtain a circ uit court judgment for the ass ociations by filing the magistrate's court j udgment in circuit court.

C. Preparing and Recording Liens

When homeowners did not pay over due assessments, Community Mana gement Group prepared lien documents and recorded them in the county w here the property was located. A legal des cription of the homeowners' p roperty was
attached to the documents. We f ind it was the unauthorized practice of law for Community Management Group to pre pare and record the lien docum ents.

As Community Management Group c onceded, it prepared the lien documents for the purpose of "put[ting] a cl oud on the title," so a property could not be sold without the homeowner paying the overdue assessments. In prepa ring the documents, Community Management Group sought to define an assoc iation'srights with regard to the homeown er's property and the associat ion's entitlement to be repaid a debt. Community Man agement Group's purpose for fil ing the lien

documents demonstrates the lien documents were "instruments," w hich include "written legal document[s] that define[] r ights, duties, entitl ements, or liabilities

. . . ." Instrument , B LACK ' S L AW D ICTIONARY (10th ed. 2014) ("Also termed legal

instrument ."). Preparing and recording le gal instruments constitutes the unauthorized practice of law. See Wells , 191 S.C. at 473-74, 5 S.E.2d at 183 ("According to the generally understood definition of the pract ice of law . . . it embraces . . . the preparation of legal instruments of all kind s . . . ."); see also State

v. Robinson , 321 S.C. 286, 290, 468 S.E.2d 290, 292 (1996) ("This Court ha s defined the practice of law to include the preparation and fili ng of legal documents . . . ."); Buyers Serv. , 292 S.C. at 434, 357 S.E.2d at 19 (holding recording

instruments after a real estate transfer is the practice of law because "it is an aspect of conveyancing and affects legal rights"). Thus, we find Comm unity Management Group engaged in the unauthorized practice of law by preparing and recording lien documents.

D. Advertising

Community Management Group advertised for many of the services we have found constitute unauthorized pr actice of law, including that it could "handle collections, lien filing and Small Claims Court actions in hous e." Community Management Group also advertised it could file judgments withou t the use of an attorney. It is the unauthorized practice of law for a non-law yer to advertise he can provide legal services. Thus, Co mmunity Management Group advertising it could file liens, represent associatio ns in magistrate's court, and f ile judgments without the use of an attorney was the unauthorized practice of law.

E. Other Actions

Rogers Townsend also asks that we find Community Management Gro up engaged in the unauthorized practice of l aw by (1) interpreting covenan ts for homeowners, (2) addressing disputes between homeowners and associations, an d (3) advising associations on remedies to collect unpaid assessments. Howeve r, Rogers Townsend did not include specifi c facts or details about Commun ity Management Group performing these services. W e have stated it is best to decide "what is and what is not the unauthorized prac tice of law in the context of an actual case or controversy." Unauthorized Practice of Law

, 309 S.C. at 305, 422 S.E.2d at 124. Without specific facts, we cannot determine that Community Mana gement Groupwas practicing law by interpreti ng covenants for homeowners, ad dressing disputes

between homeowners and associa tions, or advising associations o n remedies to collect unpaid assessments.

V. Injunction

Rogers Townsend asks that we permanently enjoin Community Management Group from any actions we find were the unauthorized practice o f law. An injunction is a drastic remedy, w hich courts should apply with caution. Hampton

v. Haley , 403 S.C. 395, 409, 743 S.E. 2d 258, 265 (2013). An injunction should be issued only "where no adequa te remedy exists at law." Id. After we issued the temporary injunction, Community Management Group stopped repres enting associations in magistrate's c ourt, filing judgments in circuit court, and preparing and recording liens without an a ttorney. Additionally, Peck te stified Community Management Group has no interest in resuming these activities. We decline to issue a permanent injunction in this situation.

VI. Conclusion

We find Community Management Group engaged in the unauthorized practice of law by (1) representing associa tions in magistrate's court, (2) filing judgments in circuit court, (3) preparing a nd recording lien documents, and (4) advertising it could provide legal services.

BEATTY, C.J., KITTREDGE, FEW, JJ., and Acting Justice James E. Moore, concur. Acting Justice Costa M . Pleicones not participating.