### THE STATE OF SOUTH CAROLINA In The Supreme Court

Ex Parte: Edward J. Westbrook, Petitioner,

In Re: The Murkin Group, LLC, Respondent.
Appellate Case No. 2018-002263

ORIGINAL JURISDICTION

Opinion No. 27957 Submitted February 28, 2020 – Filed March 18, 2020

JUDGMENT DECLARED

Edward J. Westbrook, of Ri chardson, Patrick, Westbrook & Brickman, LLC, of Charleston, pro se

. Theodore von Keller, of Craw ford & von Keller, LLC, of Columbia, for Respondent.

PER CURIAM: This case is before us in our original jurisdiction to determine whether Respondent, the Murkin Group, LLC (Murkin), engaged in the unauthorized practice of law (UPL). We hold Murkin has engaged in UPL.

UNDERLYING FACTS

In April 2017, the Wando River Grill (Restaurant) became dissatisfied with the service of its linen supplier (Cintas) and Cintas' ability to supply the type of linens Restaurant needed. Restaurant contacted anot her supplier to secure some or all ofits required linens and notified Cintas of its need to suspend at least a portion of Cintas' services. Cintas claimed Restaur ant's suspension of service constituted a breach of the parties' contract, invoke d a liquidated damages provision in the contract, sought more than $8,000 in dama ges, and hired Murkin to collect the outstanding debt. 1 Petitioner, a South Carolina atto rney, represented Restaurant in the resulting dispute.

In April 2018, Murkin sent a demand-for-payment letter to Restaurant demanding $ 8,106.43 . Email communications follow ed between Murkin and Restaurant regarding Restaurant's issues with Cintas' pa st performance of the parties' contract and possible reinstatement of the contract, and Cintas' provision of linens. Murkin claimed Cintas would waive its damages claim if Restaurant paid a "one-time processing fee for the reinstatement" of services and signed cer tain "documentation that [Restaurant] need[ed]" to sign to rein state Cintas' service. Murkin prepared and sent a reinstatement agreement to Restaurant with signature lines for Restaurant and "The Murkin Group, on behalf of Cintas Corporation – Charleston, SC."

Because the Murkin-prepared reinstatement agreement materially altered the terms of the parties' original contract and imposed new obligations on Restaurant and because the agreement's terms were contra ry to discussions Cintas personnel had directly with Restaurant, Restaurant sent the proposed reinstatement agreement to Petitioner. Restaurant's manager also informed Murkin he was attempting to continue a dialogue with Cintas to resu me Cintas' linen service, but Cintas personnel refused to respond. Murkin informed Restaurant's manager all communications were to be handled through Murkin.

After learning of Murkin's response to Restaurant manager, Petitioner contacted Murkin, indicated Restaurant had issu es with Cintas' performance under the

1 Murkin is a Florida limited liability company that provides debt collection services to its clients in exchange for a contingency fee. Murkin a dvertises itself as ha ving "in-house collection specialists." Pursuant to its Se rvice Agreement with its clients, once an account is turned over to Murkin, the client agrees to cease all communication w ith the debtor regarding the account and allow Murkin to be the sole point of contact. The Service Agreement provides that the client authorizes Murkin to act as its agent and to collect the accounts according to Murkin's policies and procedures. The agreement further provides, "In the event it becomes necessary to forward Client's Accounts to an attorney for legal action, Client directs and authorizes [Murkin], as its agent, to assign the Accounts to an attorney as designated by [Mur kin] . . . . [Murkin] must receive authorization from the Client prior to filing a laws uit or settling an account."parties' contract, and requested Murkin have its South Carolina counsel contact him directly. In response, Murkin's repres entative stated, "Whether or not this gets forwarded to local counsel[] is a deci sion which our office will make, with our client, when we feel it appropriate," a nd reiterated any reso lution of the matter would require Restaurant to sign Mu rkin's reinstatement agreement.

Restaurant did not sign the reinstatement agreement, and no South Carolina counsel for Murkin or Cintas contacted Petitioner. In response to Restaurant's refusal to sign, a Murkin representative emailed Petitioner and threatened the matter could "escalate, which potentially could cost your client a lot more[] if our clients [sic] wishes to file a suit action [sic], our attorney there[] would add on attorney fees, court costs, sh eriff fees for service of process and, of course, accrued interest." 2 The Murkin representativ e stated that, if Murkin did not hear back from Petitioner, Murkin would a ssume Restaurant was not willing to resolve the balance, and the representative would "make . . . spec ific recommendations on how I feel Cintas should proceed."

In November 2018, Petitioner emailed Murk in asking for the South Carolina Bar numbers of several Murkin employees "i f they are members of the Bar." The Murkin representative responded stating Pe titioner's desire to deal with Murkin's local counsel "means nothing, since that is a decision made betw een our client and our office." The representative further cl aimed authority to bind any attorney to whom Murkin referred the matter to settle for no less than Murkin demanded, stating, "our attorneys, once they r eceive signed Suit Authorization documents, executed by our client, will not settle for less [than the $8,106.43 discussed in April 2018] . . . . [Our a ttorneys] will also be direct ed[] to not accept payment arrangements on the balance . . . ."

In December 2018, Petitioner f iled a petition pursuant to the Court's request in Medlock v. University Health Services, Inc. , 404 S.C. 25, 28, 743, S.E.2d 830, 831 (2013), and In re Unauthorized Pr actice of Law Rules , 309 S.C. 304, 305, 422 S.E.2d 123, 124 (1992), that any individu al who becomes aware of conduct that might constitute UPL should bring a declaratory judgment action in the Court's original jurisdiction

.

2 This communication was legally misleading as th e linen service contract between Cintas and Restaurant did not allow a "[law]suit action," but required arbitrati on of any disputes. Additionally, the service contract did not provide for the recovery of attorney's fees.We referred the matter to th e Honorable Kristi F. Curtis as special referee to take evidence and issue a report containing proposed findings of fact and recommendations of law. The parties elected to move forward without discovery on a stipulation of facts. Oral argum ents were held at the Sumter County Courthouse on September 20, 2019. Judge Curtis filed her report on September 30, 2019, recommending this Court find Murkin's actions constituted UPL. Murkin filed exceptions to the report. Af ter careful consideration of the briefs and oral argument in this case, we hereby adopt Judge Curtis' recommendations and findings as discussed below.

In her proposed conclusions of law, Judge Curtis found Murkin went beyond the mere collection of a debt and crossed into UPL by:

(1) becoming involved in negotiating a contract dispute between Cintas and Restaurant and inter posing itself between the parties for the purpose of negotiating a settlement on behalf of Cintas;

(2) purporting to advise Cintas as to what legal action it should take;

(3) indicating to Restaurant that it woul d advise Cintas as to whether to accept a settlement offer;

(4) purporting to control whether and when the case would be referred to an attorney;

(5) purporting to control the actions of the attorney and claiming it could direct the attorney not to settle the claim or make payment arrangements with Restaurant;

(6) threatening to file suit and ma king specific claims about what types of damages would be r ecoverable in the lawsuit; and

(7) giving legal opinions and interpre ting the terms of the contract between Restaurant and Cintas.

LAW

Pursuant to the South Carolina Constitution, this Court has the duty to regulate the practice of law in South Carolina. S.C. Const. art. V, § 4; In re UnauthorizedPractice of Law Rules , 309 S.C. at 305, 422 S.E.2d at 124; see also S.C. Code Ann. § 40-5-10 (2011) (stating the Supreme Court has inherent power with respect to regulating the practice of law). The C ourt's duty to regulate the practice of law and the legal profession "is to protect the public from the potentially severe economic and emotional consequences which may flow from the erroneous preparation of legal documents or the inaccurate legal advice given by persons untrained in the law." Linder v. Ins. Claims Consultants, Inc. , 348 S.C. 477, 468– 87, 560 S.E.2d 612, 617 (2002).

This Court has long held the practice of law is not confined to litigation, but encompasses activities and actions in othe r areas that "entail specialized legal knowledge and ability." State v. Buyers Serv. Co. , 292 S.C. 426, 430, 357 S.E.2d 15, 17 (1987). However, the Court has al so recognized "it is neither practicable nor wise to attempt a comprehensive defin ition" of what constitutes the practice of law but, instead, "to decide what is and wh at is not the unauthorized practice of law in the context of an actual case or controversy." In re Unauthorized Practice of Law Rules , 309 S.C. at 305, 422 S.E.2d at 124.

In Crawford v. Central Mortgage Co. , the Court found a mortgage company's execution of loan modifications at the request of distressed borrowers did not constitute UPL because the loan modificati ons were merely adjustments to existing loans made to accommodate defaulted borrowers. Crawford , 404 S.C. 39, 47, 744 S.E.2d 538, 542 (2013). The Crawford Court held requiring attorney supervision over such actions would create a cost to th e consumer that outweighed the benefit, and the existence of a robust regulator y regime and competent non-attorney professionals militated such requirements. Id. The instant matter is substantially different from Crawford in which the mortgage co mpany was acting on its own behalf and not through a third party. Here , Murkin is not a party to the contract between Restaurant and Cintas, but a third-party non-lawyer attempting to negotiate a contract modificat ion on behalf of its client.

In Roberts v. LaConey , the respondent and a creditor entered into an assignment wherein the respondent agreed to collect a judgment in exchange for 66.6% of the amount recovered. Roberts , 375 S.C. 97, 101, 650 S.E.2d 474, 476 (2007). The respondent wrote letters to the debtor in which he offered lega l opinions and made threats about the consequences the debt or would face if the debtor did not cooperate and satisfy the j udgment. The respondent furt her threatened the debtor with legal actions, including threateni ng to have the debtor "ARRESTED and brought to court in restraints the way Moses was brought before Pharaoh in themovie, 'The Ten [C]ommandements.'" Id. at 102–03, 650 S.E.2d at 477. The Roberts Court found the purported "assignment" executed between the parties was actually an agreement to coll ect a debt for a fe e; therefore, the respondent was not acting entirely on his own behalf, but on beha lf of the original judgment holder. Id. The Court further held the respondent 's preparing pleadings, filing documents with the circuit court in his own name, sendi ng letters to the debtor that contained legal opinions, and identifying himself as "acting as 'Plaintiff's Attorney[]'" constituted UPL. Id. at 104–05, 650 S.E.2d at 478.

In Linder , the Linders hired ICC, a public insu rance adjuster company, to assist with the filing of a claim with their insurance company after their home was damaged in a fire. Linder , 348 S.C. at 483–84, 560 S. E.2d at 615–16. ICC's advertisements described the company as a "professional Loss Consulting Firm" that represented their client's "best intere st" in handling property damage claims. Id. at 484–85, 560 S.E.2d at 616. ICC also stated in a client fact sheet, "REMEMBER, your insurance company has already appoi nted a professional to protect THEIR interest. ICC WILL PROTECT YOURS!" Id. at 485, 560 S.E.2d at 616–17. The Linders entered into a contr act with ICC in whic h they agreed to pay ICC a percentage of the amount th e company recovered on their insurance claim. ICC notified the Linders' insuranc e company that ICC should be contacted for "any further information and negotia tions" concerning the Linders' claim. Id. at 484, 560 S.E.2d at 616. When the Linders' insurance company re jected their claim for the full value of their gun collection, ICC advised the Linders the guns should be covered under their policy. Id. at 484, 560 S.E.2d at 616.

The Linder Court found public insu rance adjusting was not per se UPL. However, the Court found ICC's adjusters impermissibly engaged in UPL when they (1) advised clients of their rights, duties, or privileges under an insurance policy regarding matters requiring le gal skill or knowledge, i.e., interpreting the policy for clients; (2) advised clients on whether to accept a settlement offer from an insurance company; (3) became involved in the coverage dispute between the client and the insurance company; and (4 ) utilized advertising that would lead clients to believe that public adjusters prov ided services that required legal skill. Id. at 493, 560 S.E.2d at 621.

DISCUSSION

In the instant case, Murkin—s imilarly to the respondent in Roberts and ICC in Linder —engaged in UPL when it interprete d Cintas' service contract withRestaurant, gave legal opinions as to what damages were recoverable under the Cintas-Restaurant contract, sought to negotia te the contract dispute between Cintas and Restaurant, and purported to advise Cintas on whether to accept a settlement offer and to negotiate th e amount of settlement.

Other states have addressed the issue of whether a collection agency engages in UPL when an agency specifical ly claims it controls, or implies it has the right to control, the actions of a licensed attorney. See J.H. Marshall & Assocs. v. Burleson , 313 A.2d 587, 594–95 (D.C. 1973) (fin ding collection agency that was, in essence, selling the services of a lawyer whom it controlled and directed engaged in UPL, and holding the agency could not "properly interpose itself between a creditor and an attorney seeking to collect the creditor' s claim. To do so either directly or indirectly, by assignment or otherwise, has been held to be the unauthorized practice of law"); see also State ex rel. St ate Bar of Wis. v. Bonded Collections, Inc. , 154 N.W.2d 250, 256–59 (Wis. 1967) (holding collection agency that advised creditor when to file a lawsuit, hired an attorney, directed the attorney when to file suit, and directed the lawsuit, engaged in UPL); Richmond Ass'n of Credit Men v. Bar Ass'n , 189 S.E. 153, 158 (Va. 1937) (holding collection agency that (1) hired an attorney to perform colle ctions, (2) retained the right to discharge him, (3) supervised his conduct, (4) gave him orders, and (5) received reports from him engaged in UPL).

In the instant case, Murkin similarly enga ged in UPL when it purported to advise Cintas when to file suit, gave legal opi nions on what types of damages would be sought, and purported to control the acti ons of the attorney and to direct the attorney not to settle the case or accept payment arrangements.

Finally, while Murkin characterizes its ac tion as "debt collection," we agree with Judge Curtis' conclusion that the true natu re of the underlying matter is a contract dispute. Restaurant was not delinquent in paying an invoice, nor had it refused to pay for services rendered. Restaurant terminated the se rvice contract with Cintas prior to its expiration and, while the contract contained a liquidated damages clause, these alleged damages were not an ad mitted debt but a contract dispute. As Judge Curtis concluded:

At the very [least], once Restauran t expressed issues with Cintas' performance under the Agreement and disputed whether it owed any additional monies to Cintas under the Agreement, this became a contract dispute. Murkin's agents then continued to represent Cintasin the matter, advising Cintas on wh at legal action to take, advising Cintas when to turn the matter ove r to an attorney, interpreting the contract provisions, recommending settlement figures and purporting to advise Cintas on when to accept settlement, giving legal opinions as to what damages would be recovera ble in a lawsuit, and purporting to control and direct any future atto rneys who would work at Murkin's direction. All of these actions constitute the unauthorized practice of law.

CONCLUSION

Based on the forgoing, we find the record supports Judge Curtis' findings and hold Murkin's actions constituted UPL. See Buyers Serv. Co. , 292 S.C. at 430, 357 S.E.2d at 17; see also Crawford , 404 S.C. at 47, 744 S.E.2d at 542; Roberts , 375 S.C. at 104–05, 650 S.E.2d at 478; Linder , 348 S.C. at 560 S.E.2d at 617. We enjoin Murkin from engaging in any further such conduct.

JUDGMENT DECLARED.

BEATTY, C.J., HEARN, FEW and JAMES, JJ., concur. KITTREDGE, J., not participating.