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Lucas Subway Midmo, Inc. v. Mandatory Poster Agency, Inc.

Court of Appeals of Missouri, Western District, Fourth Division

April 25, 2017


         Appeal from the Circuit Court of Cole County, Missouri The Honorable Jon E. Beetem, Judge

          Before Mark D. Pfeiffer, Chief Judge, Presiding, Lisa White Hardwick, Judge and Gary D. Witt, Judge.

          Gary D. Witt, Judge.

         Appellant Lucas Subway MidMo, Inc. ("Lucas Subway") sued The Mandatory Poster Agency, Inc. d/b/a Corporate Records Service ("MPA") for the unauthorized practice of law, money had and received, and violations of the Missouri Merchandising Practices Act, seeking class certification on all claims. The Cole County Circuit Court denied Lucas Subway's request for class certification and ultimately granted summary judgment to MPA on all counts. Lucas Subway now appeals both rulings. We reverse and remand.

         Factual and Procedural Background[1]

         Lucas Subway owns and operates several Subway restaurants in Missouri, which are principally located in the Lake of the Ozarks area. MPA is a Michigan corporation, which operates Corporate Records Services that prepares annual minutes for corporations. MPA markets its product through direct mail solicitations containing an Annual Minutes Solicitations Form ("Form"). The Form is sent to a corporation's registered agents and offers to prepare annual corporate minutes if the corporation provides the names of its shareholders, officers and directors. When annual minutes are purchased, the information from the Form is manually entered into MPA's computer system which then populates a corporate minutes form with the corporation's unique information, including the specific company's name and address and the names of its shareholders, officers and directors. The company-specific annual minutes are then printed and mailed to the corporation with instructions to sign the minutes and place them in the corporate minute book. The cover letter sent with the minutes states that: "Your company will be in full compliance with the corporate minute records requirement after the Unanimous Consent documents are signed and dated." MPA does not employ any attorneys to draft or oversee the creation of these documents. Nor is MPA licensed to practice law in the State of Missouri.

         Lucas Subway purchased corporate minutes from MPA for $125 in March of 2013. In April of 2013, the State of Missouri, through its Attorney General, filed an action against MPA for various remedies under the Missouri Merchandizing Practices Act ("MMPA"), Section 407.020[2] ("MMPA Action"). The MMPA Action followed an inquiry by the Office of the Chief Disciplinary Counsel concerning whether MPA was engaging in the unauthorized practice of law in Missouri. Following correspondence from MPA, the Office of the Chief Disciplinary Counsel declined to take any action against MPA. The Attorney General, however, continued with the MMPA Action, alleging that MPA's solicitation materials were deceptive and misleading. On August 12, 2013, MPA entered into an Assurance of Voluntary Compliance agreement ("AVC") with the State of Missouri. The AVC required that MPA alter its solicitations, pay $3, 500 in costs and penalties, and send written notice to all of MPA's Missouri customers alerting customers that they have the right to a full refund of any payments made to MPA if they were "not satisfied" with the corporate minutes they received.

         Lucas Subway did not seek a refund under the MMPA Action. Instead, on August 7, 2013, it filed suit against MPA in Cole County alleging that MPA (1) engaged in the unauthorized practice of law in violation of section 484.020, (2) unlawfully received money from Lucas Subway for legal services which it could not provide, and (3) committed various violations of the MMPA ("Petition"). The Petition also sought class certification on behalf of MPA's other Missouri customers from the time period beginning five years prior to the date the Petition was filed.

         The circuit court denied Lucas Subway's request for class certification and also denied its request to appeal the order under Rule 84.035.[3] MPA filed a Motion for Summary Judgment on June 2, 2015 ("Motion"). On June 21, 2016, the circuit court granted MPA's Motion finding, inter alia, that MPA's actions did not constitute the unauthorized practice of law. Lucas Subway now appeals both the court's order denying class certification and its order granting summary judgment in favor of MPA.



         Lucas Subway's first point on appeal alleges that the circuit court erred in granting summary judgment in favor of MPA. Specifically, Lucas Subway alleges that the court erred in determining that MPA was not conducting the unauthorized practice of law or, in the alternative, that the court erred in finding that MPA had valid defenses to Lucas Subway's claims.

         This Court reviews an entry of summary judgment de novo. ITT Commercial Fin. Corp. v. Mid-Am. Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc 1993). Summary judgment is only appropriate where the moving party has demonstrated that, based on the undisputed facts, they are entitled to judgment as a matter of law. Id.; Rule 74.04(c). When reviewing a trial court's grant of summary judgment, we review the record in the light most favorable to the party against whom summary judgment was entered. ITT Commercial Fin. Corp., 854 S.W.2d at 376.

         Missouri seeks to "protect the public from being advised or represented in legal matters by incompetent or unreliable persons" by restricting the practice of law only to licensed attorneys. Hulse v. Criger, 247 S.W.2d 855, 857-58 (Mo. 1952). No person or entity "shall engage in the practice of law or do law business" in Missouri unless having been duly licensed by the State. Section 484.020.1.[4] The legislature defines the "practice of law" as:

the appearance as an advocate in a representative capacity or the drawing of papers, pleadings or documents or the performance of any in such capacity in connection with proceedings pending or prospective before any court of record, commissioner, referee or any body, board, committee, or commission constituted by law or having authority to settle controversies.

         Section 484.010.1. Section 484.010.2 goes on to define the "law business" as:

the advising or counseling for a valuable consideration of any person, firm, association, or corporation as to any secular law or the drawing or the procuring of or assisting in the drawing for valuable consideration of any paper, document or instrument affecting and relating to secular rights or the doing of any act for a valuable consideration in a representative capacity, obtaining or tending to obtain or securing or tending to secure for any person, firm, association or corporation any proper or property rights whatsoever.

         These statutes "merely act in aid of" the Missouri Supreme Court's "regulation of the practice of law and cannot supersede or distract from the power of the judiciary to define and control the practice of law." Hargis v. JLB Corp., 357 S.W.3d 574, 578 (Mo. Banc 2011) (internal quotations omitted). The judiciary is the "sole arbiter of what constitutes the practice of law." Id.

         In Missouri, "charging a separate fee for the completion of legal forms by non-lawyers constitutes the unauthorized practice of law business." Carpenter v. Countrywide Home Loans, Inc., 250 S.W.3d 697, 702 (Mo. banc 2008). Thus, we begin our inquiry with whether the corporate minutes prepared by MPA constitute a legal document. "Determining whether a particular form is legal in nature requires the court 'to balance the protection of the public against a desire to avoid unnecessary inconvenience and expense.'" McKeage v. TMBC, LLC, 847 F.3d 992, 1000 (8th Cir. 2017) (quoting Hargis, 357 S.W.3d at 584)). "A key factor in this inquiry is the legal judgment or discretion required to prepare the form." Id. "However, once it has been determined that a particular document is legal in nature, the act of charging a fee for the preparation or completion of that document constitutes unauthorized law business, even when a non-lawyer does not exercise any legal judgment in completing the form." Id. (emphasis added).

         There are many documents that have legal effect that do not prevent them from being drafted by a layman. Hulse, 247 S.W.2d at 862; Hargis, 357 S.W.3d at 584-85. While Missouri has held that drafting documents such as promissory notes and deeds of trusts constitutes the practice of law, courts have yet to address the question of corporate minute books. See Zmuda v. Chesterfield Valley Power Sports, Inc., 267 S.W.3d 712, 715 (Mo. App. E.D. 2008) (noting that the Missouri Supreme Court, in Eisel v. Midwest BankCentre, 230 S.W.3d 335 (Mo. banc 2007), found promissory notes and deeds of trusts to be legal documents but did not limit the drafting of other documents from also meeting this definition).

         MPA argues that the corporate minutes are merely form documents and more akin to a document with legal effect rather than a legal document as contemplated by section 484.010. MPA characterizes its services as merely taking a form filled out by customers and entering the data into a computer to have a form populated by the computer. It emphasizes that its employees do not exercise discretion or judgment as to what to include in the documents. There is no "advising or counseling" of clients as contemplated by section 484.010.

         Lucas Subway responds that the statute does not require a party to advise or counsel clients in order to be guilty of the unauthorized practice of law; it is enough for a party to draft a legal document for a client. While MPA may be utilizing an internal form, it is providing to customers a fully completed document with the representation or advice that the document complies with the legal requirements of Chapter 351. The inclusion of this representation or advice runs afoul of Chapter 484 as interpreted by Missouri courts. Neither Chapter 351 nor the Missouri Secretary of State provide form corporate minutes to be used in lieu of actually holding an annual meeting. MPA has read Missouri's statutory requirements and drafted a form it believes to be compliant, gathers information from customers to complete the form, and then provides to customers corporate minutes which it represents to be, in its judgment, compliant with the legal requirements of Chapter 351. Although rudimentary, such actions are the exercise of legal judgment.

         MPA tries to align this case with that of In re Thompson, in which the Missouri Supreme Court allowed William Thompson to sell "divorce kits" to Missouri residents, despite Thompson's lack of Missouri law license. 574 S.W.2d 365, 366 (Mo. banc 1978). The kits contained various forms relating to an action for an uncontested dissolution of marriage. Id. "Blank spaces, with instructions on practice forms, [were] provided for the insertion of specific items applicable to the parties involved in the dissolution." Id. The Missouri Supreme Court found that the sale of these kits was not the unauthorized practice of law, so long as Thompson refrained "from giving personal advice as to legal remedies or the consequences flowing therefrom." Id. at 369. This case is distinguishable in two key ways. First, MPA provided completed documents to its customers. Although a small distinction, it is a bright line test that is repeatedly noted by Missouri Courts. "[C]harging a separate fee for the completion of legal forms by non-lawyers constitutes the unauthorized practice of law." Carpenter, 250 S.W.3d at 702. We can find no occasion where courts have permitted an unlicensed person or company to provide completed legal documents for a separate fee. Second, and more importantly, MPA is making legal judgments and representations regarding the effect of its documents. Thompson provided blank "kits" for customers to use to obtain a divorce but left it to the consumer to fill in the forms and did not make any representations as to the legal remedies or consequences associated with the use of those kits. MPA states in its letter to clients that, once the minutes have been signed and dated, "[y]our company will be in full compliance with the corporate minute records requirement." This is clearly beyond what was allowed in Thompson.

         This case is more akin to McKeage. In McKeage plaintiffs brought suit against a boat retailer alleging that charging a $75 "document fee" to cover the costs of preparing and/or completing documents associated with the boat purchase constituted the unauthorized practice of law. 847 F.3d at 996. The prepared documents included the contract itself; a bill of sale; a power of attorney form; and title, license, and registration documents. Id. Analyzing Missouri law, the Eighth Circuit found that the forms filled out by the seller included documents Missouri has deemed legal in nature--namely, power of attorney forms--as well as forms that have not yet been addressed in Missouri. Id. at 1000-01. Because the power of attorney was a legal document, it was immaterial whether the person filling out the form exercised discretion in filling in the information. Id.;[5] see also Bray v. Brooks, 41 S.W.3d 7, 11-13 (Mo. App. W.D. 2001) (finding that broker engaged in the unauthorized practice of law by drafting: offer, counteroffer, an addendum, a corporate resolution authorizing the sale of the corporate assets, a promissory note, a security agreement to the note, a real estate lease, and a covenant not to compete).

         We find a corporate minutes document to be similar to that of a power of attorney and a corporate resolution. Both have legal requirements and legal effect. Corporate minutes must meet the legal requirements of Chapter 351, and MPA exercised its judgment to read the requirements of that chapter, draft minutes it believes comply with those requirements, and represents to its customers that the documents MPA provides, once signed, place the customer in compliance with corporate minute record requirements of the State of Missouri. See ...

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