Disciplinary Counsel v. Nordic Title Agency, Inc., and Hall (Slip Opinion)

D
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Disciplinary Counsel v. Nordic Title Agency, Inc., and Hall, Slip Opinion No. 2021-Ohio-
2210.]




                                        NOTICE
     This slip opinion is subject to formal revision before it is published in
     an advance sheet of the Ohio Official Reports. Readers are requested
     to promptly notify the Reporter of Decisions, Supreme Court of Ohio,
     65 South Front Street, Columbus, Ohio 43215, of any typographical or
     other formal errors in the opinion, in order that corrections may be
     made before the opinion is published.



                         SLIP OPINION NO. 

2021-OHIO-2210

    DISCIPLINARY COUNSEL v. NORDIC TITLE AGENCY, INC., AND HALL.
  [Until this opinion appears in the Ohio Official Reports advance sheets, it
  may be cited as Disciplinary Counsel v. Nordic Title Agency, Inc., and Hall,
                         Slip Opinion No. 

2021-Ohio-2210

.]
Unauthorized practice of law—Preparing and filing deeds to real property that
        were not reviewed by an attorney constitutes the unauthorized practice of
        law—Corporate conduct constituting the unauthorized practice of law
        cannot be imputed to a corporate officer who has not actively participated
        in the conduct—Civil penalty imposed against corporation.
      (No. 2021-0246—Submitted March 31, 2021—Decided July 1, 2021.)
       ON FINAL REPORT by the Board on the Unauthorized Practice of Law
                        of the Supreme Court, No. UPL 18-02.
                             _______________________
        Per Curiam.
        {¶ 1} In a September 2018 complaint, relator, Disciplinary Counsel,
charged respondents Nordic Title Agency, Inc., and Dwane Hall, the
                             SUPREME COURT OF OHIO




corporation’s president, chief executive officer, and sole owner, with engaging in
the unauthorized practice of law in Ohio. Specifically, the complaint alleged that
Nordic Title drafted and recorded more than 100 deeds and affidavits transferring
real property that had not been reviewed by a licensed attorney. Nordic Title and
Hall answered the complaint in October 2018.
       {¶ 2} The parties submitted joint stipulations of fact. In August 2019, Hall
filed a motion seeking a ruling that he cannot be held personally liable for the acts
of Nordic Title’s employees as a matter of law and consequently, that no penalties
should be imposed against him. A few days later, relator filed a motion for
summary judgment seeking a judgment and civil penalties against Nordic Title
and Hall. Thereafter, the parties filed briefs, in which they essentially agreed that
Nordic Title, through its employees, engaged in the unauthorized practice of law
by preparing and filing 514 property deeds that had not been reviewed by an
attorney. They disagreed as to whether Hall could be held personally liable for
Nordic Title’s unauthorized practice of law.
       {¶ 3} Upon review, a three-member panel of the Board on the
Unauthorized Practice of Law issued a report recommending that this court (1)
find that Nordic Title engaged in the unauthorized practice of law but Hall did
not, (2) impose a $10,000 civil penalty against Nordic Title, and (3) grant Hall’s
motion asking that penalties not be imposed against him. The board adopted the
panel’s report and recommendations, and no objections have been filed.
       {¶ 4} For the reasons that follow, we agree that Nordic Title engaged in
the unauthorized practice of law but Hall did not, and we agree that Hall is not
personally liable for the corporation’s conduct.       We therefore grant relator’s
motion for summary judgment against Nordic Title, grant Hall’s motion, and
impose a $10,000 civil penalty against Nordic Title.




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                               January Term, 2021




                            The Stipulated Conduct
       {¶ 5} At all times relevant herein, Nordic Title was an Ohio corporation.
The corporation is not and has never been admitted to the practice of law in Ohio
or any other state. Indeed, “[a] corporation cannot lawfully engage in the practice
of law; nor can it do so indirectly through the employment of qualified lawyers.”
Judd v. City Trust & Savs. Bank, 

133 Ohio St. 81

, 

12 N.E.2d 288

 (1937),
paragraph two of the syllabus. Hall was the chief executive officer, president, and
sole owner of Nordic Title and was actively involved in the daily management of
the corporation.
       {¶ 6} In approximately 2008, Nordic Title contracted with attorney Ryan
Kuhn to review deeds and other instruments transferring the title of real property,
and it agreed to pay him $50 per document. Nordic Title had an unwritten policy
that all such documents were to be reviewed by an attorney. Typically, a Nordic
Title employee (who was not an attorney) would insert relevant information—
including the names of the grantor and grantee and the legal description of the
property—into a deed template and then send the draft deed to Kuhn for his legal
review and approval.
       {¶ 7} In 2009, Kuhn received a call from the Franklin County Recorder’s
Office regarding an error in a deed. The deed stated, “This instrument prepared
by: Ryan Kuhn, Attorney,” but Kuhn had not prepared or reviewed the deed on
behalf of Nordic Title. At that time, Kuhn contacted Hall. Although the parties
stipulated that Hall did not recall that conversation, they also agreed that he (1)
informed Kuhn that an associate of Nordic Title had used an old deed that had
been prepared by Kuhn to draft a new deed for the associate’s own property, (2)
assured Kuhn that there were no other deeds falsely bearing Kuhn’s name, and (3)
promised that Nordic Title would not place Kuhn’s name on any deed that he had
not reviewed.




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                             SUPREME COURT OF OHIO




       {¶ 8} Kuhn continued to review deeds and affidavits for Nordic Title after
that incident. But in early 2015, the volume of documents Nordic Title submitted
to Kuhn for review decreased considerably after he declined a request to issue
title opinions on behalf of Nordic Title.
       {¶ 9} In July 2016, Kuhn received a call from the Morrow County
Engineer’s Office informing of him of an error in a deed that bore his name as the
preparer, though Kuhn had not prepared or reviewed the deed. Following that
call, Kuhn searched the Franklin County Recorder’s Office online records and
found multiple deeds that identified him as the preparer—though he had neither
prepared nor reviewed them.
       {¶ 10} The parties have stipulated that Nordic Title, through its
employees, prepared and filed at least 514 deeds or affidavits that falsely
identified Kuhn as the preparer—including 118 that were identified in relator’s
complaint. Although Kuhn had reviewed and submitted invoices for just two
documents from January through September 2016, Nordic Title attributed 111
deeds or affidavits to him and billed each client $50 for attorney preparation or
review of the document.
       {¶ 11} Instances in which Nordic Title failed to submit deeds for review
by Kuhn appear to have been random but occurred with increasing frequency as
the years passed. According to Hall, Nordic Title’s computer software showed
that two employees likely prepared the majority of the deeds in question—though
it was impossible to tell from the face of any deed who prepared it. No Nordic
Title employee has admitted to failing to send the deeds for Kuhn’s review, and
no employee has been able to explain why the deeds were not sent. Moreover,
there was no procedure in place to verify that the deeds were, in fact, reviewed by
Kuhn prior to closing.
       {¶ 12} There is no evidence that Hall prepared any of the deeds at issue or
that he directed his employees to forgo attorney review of any deeds. However,




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                                January Term, 2021




Hall did stipulate that he failed to ensure that Nordic Title used a licensed attorney
to draft or review legal documents on behalf of its clients. Hall attended closings
for many of the properties at issue and notarized the signatures on those deeds,
but he was not aware that Nordic Title’s employees had failed to submit the deeds
for Kuhn’s review. Hall was, however, aware that on several occasions Kuhn’s
invoices did not include charges for deeds that had been used at closings.
Although the fees for the review of the deeds and affidavits accumulated and
remained undisbursed, Hall had assumed that any disparity between the amount of
fees collected and the amounts paid to Kuhn was the result of Kuhn’s billing
practices. Accordingly, Hall had instructed an employee to transfer the unpaid
fees from Nordic Title’s trust account to its operating account and hold them until
Kuhn submitted his invoices.
       {¶ 13} After relator commenced his investigation, Hall and Nordic Title
took additional steps to ensure that deeds would be properly reviewed by an
attorney. In the fall of 2016, Hall met with Nordic Title employees to explain the
nature of relator’s investigation and why all deeds must be reviewed by an
attorney. And in November 2017, Nordic Title added a three-step process to its
closing checklist to ensure that every deed used in its transactions was approved
by an attorney.
       {¶ 14} There is no evidence that any of Nordic Title’s clients were harmed
by respondents’ failure to ensure that their deeds were reviewed by an attorney
prior to recording. Nordic Title and Hall have refunded the fees charged to their
clients with respect to the 118 deeds identified in relator’s complaint. They have
also voluntarily refunded the fees for the additional 396 sellers who have been
identified as paying for review of a deed or affidavit but who were not listed in
relator’s complaint. Of the 514 refund checks issued, 340 have been negotiated
for a total of $17,000. The remaining 174 were not deliverable as addressed and




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were returned to Nordic Title. Nordic Title has submitted those refunds, totaling
$8,750, to Ohio’s Division of Unclaimed Funds.
        {¶ 15} Nordic Title ceased operation on December 14, 2018, and filed a
certificate of dissolution with the Ohio Secretary of State on February 13, 2019.1
A related company, Nordic Title Agency, L.L.C., was dissolved in 2010.
Nordic Title Engaged in the Unauthorized Practice of Law, But Hall Did Not
        {¶ 16} This court has original jurisdiction over the admission to the
practice of law in Ohio, the discipline of persons so admitted, and “all other
matters relating to the practice of law,” Article IV, Section 2(B)(1)(g), Ohio
Constitution, which includes the regulation of the unauthorized practice of law,
Greenspan v. Third Fed. S. & L. Assn., 

122 Ohio St.3d 455

, 

2009-Ohio-3508

, 

912
N.E.2d 567

, ¶ 16. The purpose of that regulation is to “protect the public against
incompetence, divided loyalties, and other attendant evils that are often associated
with unskilled representation.” Cleveland Bar Assn. v. CompManagement, Inc.,

104 Ohio St.3d 168

, 

2004-Ohio-6506

, 

818 N.E.2d 1181

, ¶ 40.
        {¶ 17} We have defined the unauthorized practice of law to include both
the “rendering of legal services for another” and the “[h]olding out to the public
or otherwise representing oneself as authorized to practice law in Ohio” by any
person who is not authorized to practice law under our rules.                Gov.Bar R.
VII(2)(A)(1) and (4). And we have consistently held that the practice of law
encompasses the preparation of legal documents and instruments upon which
legal rights are secured or advanced. See Akron Bar Assn. v. Greene, 

77 Ohio
St.3d 279

, 280, 

673 N.E.2d 1307

 (1997); Land Title Abstract & Trust Co. v.
Dworken, 

129 Ohio St. 23

, 28, 

193 N.E. 650

 (1934). A nonlawyer’s preparation
of deeds conveying real property without a lawyer’s supervision constitutes the
unauthorized practice of law. See Toledo Bar Assn. v. Chelsea Title Agency of

1. R.C. 1701.88 provides that an action proceeding against a corporation at the time of its
dissolution may be prosecuted to judgment.




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                                January Term, 2021




Dayton, Inc., 

100 Ohio St.3d 356

, 

2003-Ohio-6453

, 

800 N.E.2d 29

, ¶ 7; Lorain
Cty. Bar Assn. v. Kennedy, 

95 Ohio St.3d 116

, 

766 N.E.2d 151

 (2002).
       {¶ 18} “Summary judgment may be granted when properly submitted
evidence, construed in favor of the nonmoving party, shows that the material facts
in the case are not in dispute and that the moving party is entitled to judgment as a
matter of law because reasonable minds can come to but one conclusion, and that
conclusion is adverse to the nonmoving party.” Ohio State Bar Assn. v. Heath,

123 Ohio St.3d 483

, 

2009-Ohio-5958

, 

918 N.E.2d 145

, ¶ 9; see Civ.R. 56(C).
The board found that relator had satisfied this standard with respect to Nordic
Title and that the corporation had engaged in the unauthorized practice of law by
preparing and filing property deeds that had not been reviewed by an attorney but
that relator failed to meet his burden of proof with respect to Hall.
       {¶ 19} It is undisputed that Nordic Title engaged in the unauthorized
practice of law through its employees. It is a fundamental rule of corporate law
that shareholders, officers, and directors are not normally liable for the debts of a
corporation.    Belvedere Condominium Unit Owners’ Assn. v. R.E. Roarke
Companies, Inc., 

67 Ohio St.3d 274

, 287, 

617 N.E.2d 1075

 (1993), citing Presser,
Piercing the Corporate Veil 1-4 (1991). Ohio law has long recognized, however,
that a corporate officer may be held personally liable for actions of the
corporation if the officer was a participant in the wrongful act. See, e.g., Young v.
Featherstone Motors, Inc., 

97 Ohio App. 158

, 172, 

124 N.E.2d 158

 (1954). And
we have held:


       The corporate form may be disregarded and individual
       shareholders held liable for wrongs committed by the corporation
       when (1) control over the corporation by those to be held liable
       was so complete that the corporation has no separate mind, will, or
       existence of its own, (2) control over the corporation by those to be




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                             SUPREME COURT OF OHIO




       held liable was exercised in such a manner as to commit fraud or
       an illegal act [or a similarly unlawful act] against the person
       seeking to disregard the corporate entity, and (3) injury or unjust
       loss resulted to the plaintiff from such control and wrong.


Belvedere at paragraph three of the syllabus, as modified by Dombroski v.
WellPoint, Inc., 

119 Ohio St.3d 506

, 

2008-Ohio-4827

, 

895 N.E.2d 538

, ¶ 29
(modification is indicated by the bracketed language above).
       {¶ 20} Here, the evidence shows that Hall did not prepare any of the deeds
or affidavits at issue and that the corporation’s policy required all deeds and other
legal instruments to be reviewed by an attorney. Relator has not identified any
legal authority holding that corporate conduct constituting the unauthorized
practice of law may be imputed to a corporate officer who has not actively
participated in that conduct. Nor has relator shown that Hall exercised such
complete control over the corporation that it had no separate mind, will, or
existence of its own. Therefore, relator cannot establish all three of the elements
necessary to pierce the corporate veil and hold Hall personally responsible for the
acts of Nordic Title.
       {¶ 21} After thoroughly reviewing the record and evidence submitted by
the parties, we agree with the board’s assessment that relator is entitled to
judgment as a matter of law that Nordic Title engaged in the unauthorized
practice of law, but that he failed to meet his burden of proof with respect to Hall.
We also agree that Hall is entitled to a judgment as a matter of law that he cannot
be held personally responsible for the corporation’s actions constituting the
unauthorized practice of law.
                          A Civil Penalty Is Warranted
       {¶ 22} After weighing the factors set forth in Gov.Bar R. VII(8)(B)
(including the degree of cooperation in the investigation, the number and




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                                January Term, 2021




flagrancy of the violations, and the resulting harm), the board recommends we
impose a civil penalty of $10,000 on Nordic Title for preparing and recording at
least 514 deeds to transfer title to real property even though those documents had
not been reviewed by an attorney.
       {¶ 23} We acknowledge that Hall and Nordic Title fully cooperated in
relator’s investigation of this matter but agree with the board’s assessment that the
sheer number of deeds that were not reviewed by an attorney demonstrates that
there was a systemic failure within the corporation.         The evidence shows,
however, that once that failure came to light, Hall and the corporation took
decisive action, not only to prevent such a failure going forward but to refund the
$50 fee paid by each of the affected clients—$25,750 in all. On these facts, we
agree that a $10,000 civil penalty is sufficient to punish Nordic Title for its
unauthorized practice of law and to serve as a deterrent to others.
                                    Conclusion
       {¶ 24} Accordingly, we hold that relator is entitled to judgment as a matter
of law that Nordic Title Agency, Inc., engaged in the unauthorized practice of
law, and that Dwane Hall is entitled to judgment as a matter of law that he cannot
be held personally responsible for the corporation’s actions constituting the
unauthorized practice of law. Nordic Title Agency, Inc., is hereby ordered to pay
a civil penalty of $10,000. Costs are taxed to Nordic Title Agency, Inc.
                                                             Judgment accordingly.
       O’CONNOR, C.J., and KENNEDY, FISCHER, DEWINE, DONNELLY, STEWART,
and BRUNNER, JJ., concur.
                               _________________
       Joseph M. Caligiuri, Disciplinary Counsel, and Lia J. Meehan and Stacy
Solochek Beckman, Assistant Disciplinary Counsel, for relator.
       The Behal Law Group, L.L.C., and Jack D’Aurora, for respondents.
                               _________________




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