Justices hearing arguments in a case involving the Massachusetts Real Estate Bar Association (REBA) and a national title conveyancing firm seemed at times perplexed yesterday by how to answer the questions at issue because of the relative paucity of discovery in the case.
Attormeys from REBA argued before the state’s highest court yesterday in its suit against Pittsburgh-based service provider National Real Estate Information Services (NREIS) for the unauthorized practice of law.
Edward M. Bloom, partner at and president-elect of REBA, said he was encouraged by the tenor and vigor of the justices’ questions.
"There’s no question that the factual record was pretty thin, and the judges seemed to be groping for answers," said Bloom. But "if you think your cause is right, it’s good to have an energized court, and the court was definitely really peppering everyone with questions. That’s only a good thing for us."
NREIS acts as a middleman for lenders, subcontracting different local attorneys to conduct title searches and attend closings, while it collects and fills out the necessary paperwork for the transaction. REBA filed its suit in Massachusetts lower courts in 2007 alleging that this business model constituted the unauthorized practice of law, as Massachusetts law requires attorneys to supervise the processing of such documents and give advice on their legal import.
The case was transferred to federal court in 2008 as NREIS is based outside the state. In 2009, the court granted NREIS’s request that the case be dismissed. REBA then appealed to the U.S. Court of Appeals for the First Circuit, which reversed NREIS’s victory and requested some clarification from the Supreme Judicial Court on what activities constitute the practice of law in Massachusetts.
Since NREIS’s initial motion for summary judgment was submitted early in the case, many questions remain. In the arguments before the SJC, justices asked about several factual issues for which neither side’s attorneys could cite clear evidence in the existing record, including the amount of the fee paid by NREIS to the closing attorney; whether the closing attorney has the ability to communicate with their client, the lender; and whether the closing attorney has available to them the necessary documents to certify title.
The SJC must now formulate an answer to the questions asked by the 1st Circuit outlining general guidelines about which aspects of the conveyancing process constitute the practice of law. The federal courts will then use that guideline as a basis for determining the outcome of the case.
