Court Opinion

ID: 4230484
Source: CourtListenerOpinion
Date Created: 2017-12-20 14:19:53.371661+00
Date Added: 2024-06-11T14:42:32.232087
License: Public Domain

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Ohio
State Bar Assn. v. Century Negotiations, Inc., Slip Opinion No. 2017-Ohio-9110.]

                                          NOTICE
      This slip opinion is subject to formal revision before it is published in an
      advance sheet of the Ohio Official Reports. Readers are requested to
      promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
      South Front Street, Columbus, Ohio 43215, of any typographical or other
      formal errors in the opinion, in order that corrections may be made before
      the opinion is published.

                          SLIP OPINION NO. 2017-OHIO-9110
       OHIO STATE BAR ASSOCIATION v. CENTURY NEGOTIATIONS, INC.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
    may be cited as Ohio State Bar Assn. v. Century Negotiations, Inc., Slip
                             Opinion No. 2017-Ohio-9110.]
Unauthorized practice of law—Corporation may not lawfully practice law—
        Advising debtors on their relationship with creditors, drafting, negotiating,
        reviewing, and validating credit agreements, and settling accounts with
        creditors for purposes of affecting debtors’ relationship with creditors
        constitutes practice of law—Permanent injunction issued.
    (No. 2017-0543—Submitted June 7, 2017—Decided December 20, 2017.)
   ON FINAL REPORT by the Board on the Unauthorized Practice of Law of the
                             Supreme Court, No. UPL 13-08.
                                 ____________________
        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
                             SUPREME COURT OF OHIO

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

                                         2
                                January Term, 2017

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

                                          3
                             SUPREME COURT OF OHIO

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 to settle their delinquent debts as described above.
       {¶ 8} We adopt these stipulated facts and find that Century Negotiations,
Inc., has engaged in the unauthorized practice of law in Ohio.
                           An Injunction Is Warranted
       {¶ 9} Not only has Century Negotiations admitted that it engaged in the
unauthorized practice of law in the past, it has agreed to be enjoined from engaging
in the unauthorized practice of law in Ohio in the future and to provide written
notice of this proceeding to all of its Ohio customers. Based on those facts and the
mitigating effect of the company’s cooperation in these unauthorized-practice-of-
law proceedings, the voluntary termination of its debt-resolution operations in
Ohio, and the absence of any record evidence that the company’s customers were
harmed by its conduct, the board recommends that we enjoin the company from
future acts constituting the unauthorized practice of law but impose no civil penalty.
See Gov.Bar R. VII(8)(B)(1) and (4) and UPL Reg. 400(F)(4)(a) through (d). We
adopt the board’s recommendations.
       {¶ 10} Accordingly, Century Negotiations is enjoined from performing any
and all acts constituting the unauthorized practice of law in Ohio—including but
not limited to advising, counseling, or representing Ohio consumers; answering any
questions regarding the contractual relationship between such consumers and their
creditors; negotiating, validating, or settling a debt on behalf of such consumers;
preparing, validating, or reviewing such a settlement agreement; negotiating any
term or terms of a settlement agreement; or any other activity that would constitute
providing counsel on or reviewing, preparing, or drafting any matter regarding any

                                          4
                                 January Term, 2017

financial transaction between a consumer and his or her creditor when either the
consumer or the creditor is located in the state of Ohio.
        {¶ 11} In addition, Century Negotiations shall, at its sole cost and expense,
provide written notice of this proceeding by first-class U.S. Mail or other similar
method to all 3,056 Ohio consumers identified in a list attached as Exhibit A to the
parties’ stipulations. And within 180 days of the announcement of this decision,
David R. Leuthold, chief executive officer of Century Negotiations, or his
successor, shall file a sworn affidavit in this court that identifies (1) all of the Ohio
consumers on the list to whom the company provided such notice, (2) all of the
Ohio consumers on the list to whom the company was unable to provide such
notice, (3) the last known address attempted for the consumers the company was
not able to notify, and (4) the efforts undertaken by the company to locate those
consumers.
        {¶ 12} Costs are taxed to Century Negotiations, Inc.
                                                                Judgment accordingly.
        O’CONNOR, C.J., and O’DONNELL, KENNEDY, FRENCH, O’NEILL, FISCHER,
and DEWINE, JJ., concur.
                                 _________________
        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.
                                 _________________

                                           5