A case involving a dispute over whether attorneys should be required to conduct real estate closings in Massachusetts has been referred to the state’s highest court.
The U.S. Court of Appeals for the First Circuit yesterday ruled that the Massachusetts Supreme Judicial Court should hear the years-long suit involving the Real Estate Bar Association and National Real Estate Information Services.
The decision was a victory for REBA.
REBA’s executive director, Peter Wittenborg, said the group was pleased and relieved at the news after last fall’s judgment by a federal court, which would have required the group to pay nearly $1 million to its adversary. Yesterday’s decision vacated the earlier judgment against REBA.
"It was a real setback and a moment of trial and tribulation," he said, referring to last year’s judgement. "I’m very proud of our leadership. There were people who would have raised the white flag at that juncture, and our guys and gals stuck with it."
In 2006, REBA sued NREIS, a national title conveyancing firm, claiming that NREIS’s operations in the Commonwealth constituted the unauthorized practice of law under Massachusetts statutes. In Massachusetts, title certifications and closings are performed by an attorney. In other states notaries or other third-party conveyancing firms routinely provide such services.
NREIS had successfully petitioned to have the case moved to federal district court, where a judge ruled against REBA in 2009, awarding NREIS more than $900,000 in court costs and attorney’s fees. REBA appealed that decision, and yesterday the U.S. Court of Appeals for the First Circuit agreed, noting in its ruling that the state’s highest court "had never opined on these modern conveyancing practices by nonlawyers and had last addressed the general topic of conveyancing in 1935."
Given the lack of a clear precedent, and because the ruling would affect many cases involving legal practice in the state, the appeals court ruled that "such policy judgments are best left to the SJC, which is responsible for defining the practice of law in Massachusetts."
Yesterday’s move by the appellate court means that REBA will not have to pay the fees and has a fresh opportunity to obtain a final ruling in its favor which could bar NREIS and similar companies from practicing in Massachusetts.
"[The appellate judge is] setting the terms and the context of the case using language that we wanted. The actual text of the question is our text of the question. So we feel that not only was it a very strong opinion, it positions us well for the next step of the case," said Wittenborg.
