AUTHORIZED PRACTICE COMMITTEE MEETING
Doubletree by Hilton, Riverfront, New Bern, NC
July 22, 2014
3:00 PM Bradham Room
I. Full Committee Discussion Agenda
A. Prepaid Legal Plans
1. Report of Prepaid Legal Services Plans Activities
2. Prepaid Hearings:
· 12PP05 – Veritas Prepaid Legal Plan
· 10PP04 – LegalZoom.com, Inc.
B. Investigation Complete – For Decision
3. 14AP0031 – C. Stevens McLaurin: An out-of-state attorney holds himself out as able to provide legal services in North Carolina.
4. 13AP0048 – Mary Ella Hutchinson: Nonattorney who started a “Foreclosure Task Force” to provide borrowers facing foreclosure with legal advice and advocacy continues to provide legal services despite a prior warning from the Committee.
II. Consent Agenda
A. Letters of Caution
5. 14AP0029 – Christopher Ochoa: An out-of-state law firm attempts to provide legal services in North Carolina via an “of counsel” local attorney.
6. 14AP0002 – Bonnie Warner: Third year law student held herself out as “of counsel” of a nonprofit entity and provided legal advice without the supervision of a licensed attorney.
7. 14AP0028 – Digna Savinon dba C.A.M. Multiservice: Notary public holds her unofficial business out as able to provide legal services regarding immigration and business incorporation forms.
8. 14AP0030 – Juan Chavez: Spanish translator distributes a business card that indicates he can provide assistance with immigration forms.
9. 14AP0025 – American Finasco: A Texas corporation offers to provide debt settlement negotiation services to North Carolinians.
10. 13AP0073 – Constanza Sierra Marles: Nonattorney charged someone else eight-hundred dollars to complete a deferred action application on their behalf.
11. 13AP0077 – Michael Jackson Hollingsworth: Former Alabama attorney working as a paralegal holds himself out as able to represent someone in federal court.
12. 14AP0007 – Nancy Lovinggood: A notary drafted and executed a last testament and will for another.
13. 14AP0035 – Nancy Duckworth: Nonattorney advertises via business cards and fliers as able to provide legal document preparation services to others.
14. 14AP0033 – Maura Chavez dba Migrant Assistance: Spanish translator advertises as able to help complete immigration forms.
15. 14AP0034 – DeWarren Langley: Nonattorney law school graduate holds himself out as able to provide “legal research” and “legal reasoning” services to the general public.
16. 13AP0028 – David Jordan: Prepaid legal services plan salesman offers to provide legal services rather than a legal services plan.
17. 14AP0018 – Jackie Dearborn: Nonattorney offers legal document preparation services to Raleigh and Charlotte residents via the internet.
18. 14AP0026 – Dennis D’Amato: Out-of-state attorney offers to provide bankruptcy advice and representation to a North Carolina resident.
19. 14AP0044 – Hanna Hasl-Kelchner dba “The No Nonsense Lawyer”: An out-of-state attorney has created a North Carolina business that offers a variety of legal services to North Carolina residents.
20. 14AP0027 – Carlos Lopez dba Latin American Tax: Spanish tax preparer and notary advertises as able to provide legal services to the Hispanic community.
21. 14AP0039 – Paul Anthony dba Joseph, Anthony & Associates, LLC: An unlicensed Texas company offers to provide debt collection services to a North Carolina company.
22. 14AP0037 – Jeff Lissenden: A chiropractor advertises as able to file personal injury claims on behalf of his clients.
23. 14AP0036 – New South Financial, Inc.: An out-of-state business charged a North Carolina resident $4,500.00 to provide him with loan modification and foreclosure defense services.
24. 14AP0020 – Barbara Leigh Holeman: A nonattorney drafted legal documents for another.
25. 14AP0023 – Veritas Legal Plan: An unregistered prepaid plan marketed and provided legal services in North Carolina.
26. 13AP0049 – Chryss Pollard: A real estate paralegal is accused of holding herself out as able to facilitate a real estate closing.
27.14AP0041 – Kelly Hampton: An out-of-state attorney agrees to represent a North Carolina resident in a personal injury case via pro hac vice admission.
C. No Action
28. 12AP0033 – Mark Manuel: Nonattorney advised others on how to contest their foreclosures, appeared on their behalf in foreclosure hearings, and drafted and filed documents that he asserted had some legal significance in their foreclosure cases.
D. Litigation Updates
29. LegalZoom v. North Carolina State Bar
30. Lienguard, Inc.
31. World Law Group
32. Mortgage Information Services
33. Craig McGannon
34. Tonya Ford
35. Diane Carter
36. Nathan Curry
37. William Darden
AUTHORIZED PRACTICE COMMITTEE
April 23, 2014
The Authorized Practice Committee met on Wednesday, April 23, 2014 at 2:30 p.m. in Room 221 of the North Carolina State Bar, Raleigh, North Carolina. Members of the Committee attending were Michael L. Robinson, Chair; Howard L. Gum, Vice-Chair; Marcia Armstrong; Robert J. Bernhardt; Heidi C Bloom; David F. Branch, Jr.; W. Edward Bunch; Gerald Collins, Jr.; Tom Davis; Nicholas J. Dombalis, II; Theodore C. Edwards, II; Rebecca Eggers-Gryder; Nick Fountain; Mark P. Henriques; Alan S. Hicks; F. Fincher Jarrell; Debra L. Massie; William S. Mills; Harold G. Pope; William R. Purcell; Donna R. Rascoe; Lloyd C. Smith, Jr.; Matthew W. Smith; Marvin Sparrow; Kimberly S. Taylor; John S. Willardson; Roger A. Askew; Henry C. Babb; Sonny S. Haynes; Shelia Lambert; Andy Penry and Starling Underwood. Also attending were staff counsel David Johnson, Joshua Walthall and Katherine E. Jean and staff assistants Lori Brooks, Brittany Wilson and Becky Carroll. Guests attending were Raj Bahadur, Mary Ella Hutchinson, Pat F. Walker, Doug Brocker, Crystal Carlisle, Eric Edwards, Karen Kamerar and Johanna Kelley.
The Chair called the Committee to order at 2:28 p.m. The Chair informed the Committee members of their duty to avoid conflicts of interest and inquired of the members if anyone knew of any personal conflicts or appearance of conflict with respect to matters on the agenda in accordance with the State Ethics Act. In accordance with the requirements of the act, the following members reported their recusals on these agenda items:
· Mattthew W. Smith – Agenda item 24, Daniel Gillespie dba Gillespie’s Tax Service, LLC
· Rebecca Eggers-Gryder – Agenda item 17, Greg Frank dba Superior Consumer Advocacy Network
While in open session the Committee took action by majority vote of the members present as follows:
A. Letters of Caution to be Issued:
1. 13AP0048 – Mary Hutchinson: Nonattorney has started a “Foreclosure Task Force” to provide borrowers facing foreclosure with legal advice and advocacy.
2. 14AP0003 – Adam Gerard dba Granite Law: Out-of-state law firm offers to provide legal services in North Carolina via minimally involved North Carolina attorneys.
3. 14AP0008 – Harold Lucas dba Lucas Law Group, LLP: Pennsylvania lawyer lives in North Carolina and attempts to respresent North Carolina clients in foreclosure proceedings, despite a prior warning from the Committee.
4. 14AP0017 – Johanna Kelley dba D.E.A.R. Foundation: Nonattorney starts an organization in an attempt to provide legal services to immigrants.
5. 13AP0004 – Benjamin Lapin dba Stock Market Recovery Consultants, Inc.: A non-lawyer advertises to represent North Carolina residents in FINRA arbitration to recover stock market losses.
6. 13AP0076 – The McCann Law Group, LLP: Out-of-state law firm offers to provide legal services regarding foreclosures to North Carolina residents.
7. 13AP0079 – Clarence Robinson: Nonattorney prepared a number of estate planning documents for an elderly person.
8. 13AP0080 – Trevor Blast: Nonattorney tax accountant offers estate planning and audit representation services.
9. 14AP0004 – Terry F. Sharpe: Paralegal holds himself out as able to help someone with a case in district court and charges over $700.00 for his legal advice and document preparation services.
10. 14AP0005 – Alfred Odom: New York attorney charged a North Carolina resident to represent him in a variety of North Carolina civil actions without obtaining pro hac vice admission.
11. 14AP0016 – Kelly Davis: A nonattorney attempts to represent a friend in a personal injury claim.
12. 14AP0021 – Greg Frank dba Superior Consumer Advocacy Network: Nonattorney attempts to represent, advise and negotiate on behalf of debtors.
13. 14AP0022 – Raj Bahadur: Nonattorney offers to provide legal services relating to immigration to the public.
14. 14AP0015 – Steven Szostek: An out-of-state attorney drafted a partnership agreement and quitclaim deeds for North Carolina residents.
15. 14AP0013 – Regina Boston: Nonattorney attempts to represent her brother by filing documents in superior court on his behalf.
16. 14AP0010 – Mark Silva dba Quicksilva Title, LLC: An out-of-state title insurance company offers to perform residential real estate closings “in all 50 states.”
17. 14AP0019 – Daniel Gillespie dba Gillespie’s Tax Service, LLC: Nonattorney tax preparer offers estate planning services.
18. 13AP0074 – Baum, Hedlund, Aristei & Goldman: California firm advertises via the internet and direct mail as able to represent North Carolina residents in car accident suits. The Committee also voted to refer the matter to the California Bar.
19. 14AP0011 – Marilyn Mazza dba Debt Defense Services, LLC: A business that is not a law firm attempts to represent debtors against creditors.
B. Letter of Caution to Cease and Desist to be issued:
1. 14AP0009 – Lance Denha dba The Law Offices of Lance Denha, P.A.: Out-of-state law firm attempts to provide foreclosure defense services to North Carolina residents via a local attorney.
2. 14AP0014 – Lorena Romero: Spanish translator continues to offer legal services regarding immigration forms despite a prior warning from the Committee.
C. Complaints Dismissed:
1. 14AP0012 – Paul Huebner: New York attorney erroneously held out on a “Uniform Application For Investment Adviser Registration” form that he was able to provide legal services in North Carolina.
2. 14AP0001 – Paul Pazzaglini: Someone using a non-attorney’s name and phone number advertised online as able to provide legal services.
D. Prepaid Plans
1. Counsel advised the Committee that amendments to seven plans had been received and registered during the quarter. In addition, annual registrations were received from all but two registered plans. The Committee was informed that staff had declined to register one plan that was resubmitted after staff had previously declined to register on initial application.
1. 14PARA01 – Michael R. Hammersley: Individual claims to be “North Carolina Certified Paralegal” despite not being so certified by the North Carolina State Bar. The Committee voted to close the investigation by sending respondent a letter asking him to cease and desist holding out as a “certified” paralegal.
2. 13AP0015 – William Darden: A nonlawyer’s response to the Committee’s Cease and Desist Letter from January 2014 indicates that he believes he did nothing wrong and that he is not going to cease his activities. The Committee voted to ask the Executive Committee to authorize counsel to seek an injunction.
3. 13AP0068 – Advisory Opinion – Axiom: Business that provides lawyers to other business corporations seeks advisory opinion. The Committee voted to take no action on the request for an advisory opinion.
4. 14AP0032 – Industrial Commission Request for Advisory Opinion. The Committee continued consideration of the request until the July meeting.
5. At 4:32 p.m., the Committee voted to go into closed session pursuant to N.C. Gen. Stat. § 143‑318.11(a)(3) to receive a report from counsel on the status of pending litigation matters. At 4:37 p.m., the Committee returned to open session. No action items were considered in closed session and none were proposed following the closed session.
There being no further matters before the Committee, the Committee adjourned at 4:38 p.m. on April 23, 2014.
January 24, 2003
Revised January 26, 2012
On the Role of Laypersons in the Consummation of Residential Real Estate Transactions
The North Carolina State Bar has been requested to interpret the North Carolina unauthorized practice of law statutes (N.C. Gen. Stat. §§84-2.1 to 84-5) as they apply to residential real estate transactions. The State Bar issues the following authorized practice of law advisory opinion pursuant to N.C. Gen. Stat. §84-37(f) after careful consideration and investigation. This opinion supersedes any prior opinions and decisions of any standing committee of the State Bar interpreting the unauthorized practice of law statutes to the extent those opinions and decisions are inconsistent with the conclusions expressed herein.As a result of its review of the activities of more than 50 nonlawyer service providers since the adoption of this opinion on January 24, 2003, including injunctions issued against two companies, the Committee is clarifying the opinion concerning issues that it has addressed since adoption of the opinion.
May a nonlawyer handle a residential real estate closing for one or more of the parties to the transaction?
No. Residential real estate transactions typically involve several phases, including the following: reviewing the purchase agreement for any conditions that must be met before closing; abstracting titles; providing an opinion on title; applying for title insurance policies, including title insurance policies that may require tailored coverage to protect the interests of the lender, the owner, or both[i]; preparing legal documents, such as deeds (in the case of a purchase transaction), deeds of trust, and lien waivers or affidavits; interpreting and explaining documents implicating parties’ legal rights, obligations, and options; resolving possible clouds on title and issues concerning the legal rights of parties to the transaction; overseeing execution and acknowledgement of documents in compliance with legal mandates; handling the recordation and cancellation of documents in accordance with North Carolina law; disbursing proceeds when legally permitted after legally-recognized funds are available and all closing conditions have been satisfied; and providing a post-closing final opinion of title for title insurance after all prior liens have been satisfied. These and other functions are sometimes called, collectively, the “closing” of the residential real estate transaction. As detailed below, the North Carolina General Assembly has determined specifically that only persons who are licensed to practice law in this state may handle most of these functions.[ii]
A person who is not licensed to practice law in North Carolina and is not working under the direct supervision of an active member of the State Bar may not perform functions or services that constitute the practice of law.[iii] Under the express language of N.C. Gen. Stat. §§
84‑2.1 and 84‑4, a non-lawyer who is not working under the direct supervision of an active member of the State Bar would be engaged in the unauthorized practice of law if he or she performs any of the following functions for one or more of the parties to a residential real estate transaction: (i) preparing or aiding in preparation of deeds, deeds of trust, lien waivers or affidavits, or other legal documents; (ii) abstracting or passing upon titles; or (iii) advising or giving an opinion upon the legal rights or obligations of any person, firm, or corporation.Under the express language of N.C. Gen. Stat. § 84‑4, it is unlawful for any person other than an active member of the State Bar to hold himself or herself out as competent or qualified to give legal advice or counsel or as furnishing any services that constitute the practice of law.Additionally, under N.C. Gen. Stat. § 84‑5, a business entity, including a corporation or limited liability company, may not provide or offer to provide legal services or the services of attorneys to its customers even if the services are performed by licensed attorneys employed by the entity.See, Duke Power Co. v. Daniels, 86 N.C. App. 469, 358 S.E.2d 87 (1987); Gardner v. North Carolina State Bar, 316 N.C. 285, 341 S.E.2d 517 (1986), and State ex rel. Seawell v. Carolina Motor Club, Inc., 209 N.C. 624, 184 S.E. 540 (1936).
Accordingly, a nonlawyer is engaged in the unauthorized practice of law if he or she performs any of the following functions in connection with a residential real estate closing (identified only as examples):
1. Abstracts or provides an opinion on title to real property;
2. Explains the legal status of title to real estate, the legal effect of anything found in the chain of title, or the legal effect of an item reported as an exception in a title insurance commitment except as necessary to underwrite a policy of insurance and except that a licensed title insurer, agency, or agent may explain an underwriting decision to an insured or prospective insured, including providing the reason for such decision;
3. Explains or gives advice or counsel about the rights or responsibilities of parties concerning matters disclosed by a land survey under circumstances that require the exercise of legal judgment or that have implications with respect to a party’s legal rights or obligations;
4. Provides a legal opinion, advice, or counsel in response to inquiries by any of the parties regarding legal rights or obligations of any person, firm, or corporation, including but not limited to the rights and obligations created by the purchase agreement, a promissory note, the effect of a pre-payment penalty, the rights of parties under a right of rescission, and the rights of a lender under a deed of trust;
5. Advises, counsels, or instructs a party to the transaction with respect to alternative ways for taking title to the property or the legal consequences of taking title in a particular manner;
6. Drafts a legal document for a party to the transaction or assists a party in the completion of a legal document, or selects or assists a party in selecting a form legal document among several forms having different legal implications;
7. Explains or recommends a course of action to a party to the transaction under circumstances that require the exercise of legal judgment or that have implications with respect to the party’s legal rights or obligations;
8. Attempts to settle or resolve a dispute between the parties to the transaction that will have implications with respect to their respective legal rights or obligations;
9. Determines that all conditions of the purchase agreement or the loan closing instructions have been satisfied in accordance with the buyer’s or the lender’s interests or instructions;
10 Determines that the deed and deed of trust may be recorded after an update of title for any intervening conveyances or liens since the preliminary opinion;
11. Determines that the funds may be legally disbursed pursuant to the North Carolina Good Funds Settlement Act, N.C. Gen. Stat. § 45A-1 et seq.[iv]
The foregoing list of examples of functions that constitute the practice of law is not exclusive, but reflects a range of responsibilities and duties that involve the following: the exercise of legal judgment; the preparation of legal documents such as deeds, deeds of trust, and title opinions; the explanation or interpretation of legal documents in circumstances that require the exercise of legal judgment; the provision of legal advice or opinions; and the performance of other services that constitute the practice of law.
May a nonlawyer who is not acting under the supervision of a lawyer licensed in North Carolina (1) present and identify the documents necessary to complete a North Carolina residential real estate closing, direct the parties where to sign the documents, and ensure that the parties have properly executed the documents; and (2) receive and disburse the closing funds?
Yes. So long as a nonlawyer does not engage in any of the activities referenced in Opinion 1, or in other activities that likewise constitute the practice of law, a nonlawyer may: (1) present and identify the documents necessary to complete a North Carolina residential real estate closing, direct the parties where to sign the documents, and ensure that the parties have properly executed the documents; or (2) receive and disburse the closing funds.
Although these limited duties may be performed by nonlawyers, this does not mean that the nonlawyer is handling the closing.Since, as described in issue 1 above, the closing is a collection of services, most of which involve the practice of law, a lawyer must provide the necessary legal services.[v]And, since N.C. Gen. Stat. § 84‑5 prohibits nonlawyers from arranging for or providing the lawyer or any legal services, nonlawyers may not advertise or represent to lenders, buyers/borrowers, or others in any manner that suggests that the nonlawyer will (i) handle the “closing;” (ii) provide the legal services associated with a closing, such as providing title searches, title opinions, document preparation, or the services of a lawyer for the closing; or (iii) “represent” any party to the closing. [vi]The lawyer must be selected by the party for whom the legal services will be provided.
Notwithstanding this opinion, evidence considered by the State Bar with respect to this advisory opinion indicates that, at the time documents are presented to the parties for execution, a lawyer who is present may identify or be asked about important issues affecting the legal rights or obligations of the parties. A lawyer may provide important legal guidance about such issues, but a nonlawyer is not permitted to do so. Moreover, a consumer’s retention of a licensed North Carolina lawyer provides financial protection to the consumer. The North Carolina Rules of Professional Conduct require a lawyer to properly handle all fiduciary funds, including residential real estate closing proceeds. In the event a lawyer mishandles the closing proceeds, the lawyer is subject to professional discipline, and the State Bar Client Security Fund may provide financial assistance for a person injured by the lawyer’s improper application of funds. On the whole, the evidence considered by the State Bar indicates that it is in the best interest of a consumer to be represented by a lawyer with respect to all aspects of a residential real estate transaction.
The evidence the State Bar has considered suggests, however, that performing administrative or ministerial activities in connection with the execution of residential real estate closing documents and the receipt and disbursement of the closing proceeds does not necessarily require the exercise of legal judgment or the giving of legal advice or opinions. Indeed, the execution of closing documents and the disbursement of closing proceeds may be accomplished—and often have been accomplished—by mail, by email, or by other electronic means, or by some other procedure that would not involve the lawyer and the parties being physically present at one place and time. The State Bar therefore concludes that it should not be presumed that performing the task of overseeing the execution of residential real estate closing documents and receiving and disbursing closing proceeds necessarily involves giving legal advice or opinions or otherwise engaging in activities that constitute the practice of law.
Nonlawyers who undertake such responsibilities, and those who retain their services, should also be aware that (1) the North Carolina State Bar retains oversight authority concerning complaints about activities that constitute the unauthorized practice of law; (2) the North Carolina criminal justice system may prosecute instances of the unauthorized practice of law; and (3) that N.C. Gen. Stat. §84‑10 provides a private cause of action to recover damages and attorneys’ fees to any person who is damaged by the unauthorized practice of law against both the person who engages in unauthorized practice and anyone who knowingly aids and abets such person. In addition, non-lawyers and consumers should bear in mind that other governmental authorities such as the Federal Trade Commission, the North Carolina Attorney General, district attorneys, and the banking commissioner, have jurisdiction over unfair trade practices and violations of requirements regarding lending practices.
[i] By statute, title insurance in North Carolina can be issued only after the title insurance company has received an opinion of title from a licensed North Carolina attorney who is not an employee or agent of the company and who “has conducted or caused to be conducted under the attorney's direct supervision a reasonable examination of the title.”N.C. Gen. Stat. § 58‑26‑1.
[ii] Except as permitted under State v. Pledger, 257 N.C. 634, 127 S.E.2d 337 (1962), which allows a party having a “primary interest” in a transaction to prepare deeds of trust and other documents to effectuate the transaction.
[iii] The State Bar notes that the North Carolina General Assembly and Supreme Court are the entities that have the power to make the ultimate determination whether an activity constitutes the practice of law.
[iv] Since the original adoption of this opinion, the Committee has reviewed numerous complaints concerning nonlawyers, many of whom hold out to the closing parties that they will conduct “closings,” including disbursement of funds, at any time of day, including after normal business hours.However, under the Good Funds Settlement Act, N.C. Gen. Stat. § 45A‑4, funds may not be disbursed until the deed and deed of trust (if any) have been recorded, which in most counties requires physical delivery to the Register of Deeds during normal business hours.Accordingly, while execution of the documents may be conducted at any time, the actual “closing” and disbursement of funds may not occur until after the required documents are recorded.
[v] Except as permitted under State v. Pledger, supra, or by an individual pro se.
[vi] Almost without exception, these nonlawyer service providers are corporations or limited liability companies that market their services to lenders, not consumers.Most are also title insurance agents.Accordingly, lenders commonly inform borrowers that the nonlawyer will be conducting the closing without any meaningful opportunity for the borrower to decide to retain a lawyer to protect its interests.Additionally, when the nonlawyer is a title insurance agent, the borrower usually is given no choice on insurer or available rates.The Committee expresses no opinion whether these actions may violate N.C. Gen. Stat. § 75‑17, which prohibits a lender from requiring its borrower to obtain a policy of title insurance from a particular insurance company, agent, broker or other person specified by the lender.Title companies (and other parties) may refer lenders or borrowers to attorneys at their customer’s request, but may not require the use of a specific attorney or charge a fee for any such referral.
Quasi-Judicial Hearings on Zoning and Land Use
May a person who is not a lawyer appear before planning boards, boards of adjustment, or other governmental bodies conducting quasi-judicial hearings in a representative capacity for another party?
At its October 2005 meeting, the Authorized Practice Committee responded to an inquiry concerning the propriety of a person who is not a lawyer appearing before planning boards, boards of adjustment, and city and county government in a representative capacity. The committee's advisory opinion distinguished appearances on legislative concerns, such as general rezoning cases and ordinance amendments, from appearances on behalf of petitioners for special use permits and variances, which are quasi-judicial matters. The committee has received comments from a number of interested parties, including architects, land use planners, and city and county attorneys as a result of that opinion. The committee is issuing this advisory opinion to supplement the prior opinion.
First, the committee reiterates that the adoption of ordinances and amendments to official zoning maps (i.e. general rezoning cases) by the elected officials in city and county governments are legislative in nature and that any interested person may appear and speak on such matters before governmental bodies, even as representatives of groups or interested parties, without engaging in the unauthorized practice of law. Nonetheless, the general statutory prohibitions on unauthorized practice of law still apply even to persons who appear before governmental bodies on legislative matters. Non-lawyers may not hold themselves out as attorneys, provide legal services or advice, or draft any legal documents with regard to such matters. See N.C. Gen. Stat. §§ 84 2.1 and 4.
The law is clear that hearings on applications for special use permits and variances under zoning ordinances, as well as appeals from staff level interpretations related to permits, are quasi-judicial proceedings. N.C. Gen. Stat. §§ 153A-345 and 160A-381 and 388. See, Humble Oil & Refining Co. v. Bd. of Aldermen of Chapel Hill , 284 N.C. 458, 202 S.E.2d 129 (1974) and Woodhouse v. Board of Comm'rs of Nags Head , 299 N.C. 211, 261 S.E.2d 882 (1980). (For simplicity, the quasi-judicial hearings before these bodies are hereafter referenced to as a “variance hearing” unless the context indicates otherwise.) The governmental body before which the variance hearing is conducted sits in a judicial role of applying the standards of an ordinance to the particular circumstances of a particular party. Accordingly, the role of the governmental body is to receive evidence and make decisions based upon the evidence presented.
Variance hearings require the governmental body hearing the matter to observe certain formalities. Evidence, including witness evidence, is presented to the hearing body, although the Rules of Evidence need not be strictly observed. All witnesses before the body must be sworn and their testimony is subject to cross-examination. The hearing body has the power and authority to issue subpoenas to compel witness testimony. A record of the proceedings must be preserved. The decision is to be based upon the evidence presented at an open hearing, and not on extraneous matters or personal knowledge of the members of the board. The applicant has the burden of proof. The board must make written findings of fact to support its decision. And, the decision of the board is reviewable by the courts on appeal based solely upon the record of the proceedings.
The committee believes that the law is also clear that an appearance on behalf of another person, firm, or corporation in a representative capacity for the presentation of evidence through others, cross-examination of witnesses, and argument on the law at a quasi-judicial proceeding is the practice of law. N.C. Gen. Stat. §§ 84 2.1 and 4. Consequently, because the variance hearings are by definition quasi-judicial proceedings, the committee concludes that it is the unauthorized practice of law for someone other than a licensed attorney to appear in a representative capacity to advocate the legal position of another person, firm, or corporation that is a party to the proceeding.
The committee has been urged to recognize that architects, landscape architects, land use planners, and engineers play a vital role at these quasi-judicial proceedings by presenting necessary facts and information on behalf of their clients at variance hearings. The committee agrees that the information these professionals can present is critical to the decision before the hearing body. These professionals are subject matter experts whose expert opinions, as witnesses, must be presented to the hearing body. They are witnesses who are in the best position to explain to the hearing body the facts of the proposed design and its anticipated effects on a variety of factors, including traffic, environment, and aesthetics, within the framework of matters properly under consideration at the variance hearing. The committee does not believe that the role of legal advocate by attorneys in quasi-judicial proceedings should interfere with or inhibit the role of non-lawyer professionals who speak as witnesses and present information at these quasi-judicial proceedings. In fact, their roles should be complementary.
It is axiomatic that the committee has no authority to amend or formulate exceptions to the statutes. In issuing an advisory opinion, it simply articulates how it believes a court would ultimately resolve the question for the guidance of the public. The committee cannot recognize or create exceptions to the law as expressed by the legislature and the courts. Further, we believe, as a practical matter, that effective representation of parties in variance hearings is becoming increasingly dependent upon legal advocacy of the rights of the parties with an eye toward compiling a supportable record in the event of an appeal. These are the skills an attorney provides. While it is true that many of these hearings involve routine and non-controversial matters, even questions about matters such as the height of residential fences may become the subject matter of an appeal where the appellate courts may only consider the record produced at the variance hearing. See Robertson v. Zoning Board of Adjustment for the City of Charlotte , 167 N.C. App. 531, 605 S.E.2d 723 (2004). It is difficult to predict in advance when a matter may require a comprehensive record for appellate purposes. Therefore, with this further elaboration, the committee re-affirms its initial opinion expressed by letter dated October 31, 2005, that the representation of another person at a quasi-judicial hearing is the practice of law.
That said, this opinion should not be interpreted to diminish the role and expertise of land use professionals as witnesses at variance hearings. These professionals may still present their evidence in support of the position of their clients. However, they may not examine or cross-examine other witnesses or advocate the legal position of their clients.
The committee's opinion is also not intended to affect the ability of city and county planning staff to present factual information to the hearing board, including a recitation of the procedural posture of the application, and to offer such opinions as they may be qualified to make without an attorney for the government present, as the committee understands is the proper, current practice and role of the planning staff. Further, nothing in this opinion should be interpreted as limiting the ability of a corporate officer or employee from testifying on factual matters on behalf of a corporate party during a hearing or suggesting that individual parties may not represent themselves before these boards.
In sum, the committee is of the opinion that land use professionals, including architects, engineers, and land use planners, may appear and testify as to factual matters and any expert opinions that they are qualified to present at quasi-judicial proceedings, but the presentation of other evidence, including the examination and cross-examination of witnesses, making legal arguments, and the advocacy for results on behalf of others before quasi-judicial zoning and land use hearings, is the practice of law that may be performed only by licensed attorneys at law.
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