Use Of Power Of Attorney By Non-Lawyer Assisting Homeowner In Foreclosure Actions Does Not Insulate Against UPL Charges

An Ohio court decision of the state Supreme Court addressing the issue of unauthorized practice of law ("UPL") described the activities of a non-attorney doing business as Kennedy, Katz & Rose and its approach in soliciting business with people facing foreclosure and other debt collection actions (case law links require free registration at FindLaw.com):

• [I]n his business, respondent [a non-attorney] searched a Hamilton County court index for recent filings of foreclosure proceedings and debt collection lawsuits. Respondent then mailed letters to the defendants in these debt related lawsuits requesting that they hire him to settle the cases. The letters contained a statement that Kennedy, Katz & Rose did not include attorneys and that the business could not represent the debtors or advise them in legal proceedings.

• When a defendant expressed interest in becoming a client, respondent had the defendant sign a power of attorney and a work agreement authorizing the respondent's business to negotiate a settlement in exchange for compensation. Respondent then would send a letter to the attorney representing the plaintiff in the debt-related litigation in an effort to settle the dispute.

In finding that the conduct constituted the unauthorized practice of law, the Ohio Supreme Court said the following:

• [A]s we recently held, the 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. Cromwell (1998), 82 Ohio St. 3d 255, 256, 695 N.E.2d 243, 244. Neither respondent's statements in his solicitation letters that he was not an attorney and was not giving legal advice nor the powers of attorney executed by his clients insulated respondent, a non-attorney, from the unauthorized practice of law. See Akron Bar Assn. v. Miller (1997). 80 Ohio St. 3d 6. 8-9, 684 N.E.2d 288, 291; Richland Cty. Bar Assn. v. Clapp (1998), 84 Ohio St. 3d 276, 278, 703 N.E.2d 771, 772.

Source: Cincinnati Bar Ass'n v. Telford, No. 98-2558, 85 Ohio St. 3d 111; 707 N.E.2d 462; 1999 Ohio LEXIS 688 (1999).

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