Tag: Unauthorized Practice of Law

N.C. Ct. of Appeals: HSBC Bank v. PRMC, Inc.- Representation of Corporation by Non-Attorney

Summary:

In 2004, PRMC, through its president and sole shareholder, Zulfiquar M. Khan, borrowed $1,950,000 from Business Loan Center, L.L.C. (“BLC”), with the note including an “Unconditional Guarantee” from Mr. Khan and a Deed of Trust against a hotel and all personal property. In September 2007, Mr. Khan, PRMC and BLC agreed to a four month reduced payment on the note, with the allonge including a release (in bold and all capitals) by both parties of all claims against each other. This same language was again included in a July 2008 payment deferral agreement. BLC filed a Chapter 11 bankruptcy in September 2008, with its reorganization being confirmed on November 12, 2010.… Read More

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Bankr. W.D.N.C.: In re Banner- Unauthorized Practice of Law by National Bankruptcy Law Firm

Summary:

Ms. Banner filed a ‘bare bones’ Chapter 13 petition signed by her attorney, Joseph Kosko, who was a local partner in the law firm of Volks Anwalt, which solicited Banner as a client through direct mail. After missing numerous deadlines for filing the completed petition, ultimately the bankruptcy court held multiple contempt hearing regarding the representation by Kosko, Volks Anwalt, and its sole owner and managing partner, Jessica McClean. The bankruptcy was actually filed after the 10-day upset period for the sale of Banner’s home, such that the property was not protected nor the foreclosure halted.

The bankruptcy court found that Volks Anwalt’s business plan was developed by McClean and included a marketing plan that used direct mailings targeting individuals subject to foreclosure proceedings.… Read More

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Bankr. M.D.N.C.: In re Abbington Partners, L.L.C.- Dismissal of Corporate Bankruptcy Case filed without Attorney Representation

Summary:

Corporate Debtor Abbington Partners, filed a Chapter 7 bankruptcy without representation by counsel. It had previously a bankruptcy in Massachusetts, which had been dismissed for lack of attorney representation. Reiterating that “[i]t has been the law for the better part of two centuries . . . that a corporation may appear in the federal courts only through licensed counsel.” In re Tamojira, Inc., 20 F. App’x 133, 133-34 (4th Cir. 2001), the bankruptcy court here also dismissed the case , especially as “the fact and circumstances of this case [did] not warrant anything other than a strict interpretion of this requirement.”

Commentary:

A quick look at the website for Abbington Partners ( http://www.abbingtonpartners.com/our-team) shows that the CEO has not only a “ life-long interest in law” but touts his family’s long legal experience.… Read More

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Bankr. M.D.N.C.: Walter v. Freeway Foods- Application of Attorney-Client Privilege if Attorney is Unlicensed

Summary:

Walter sought discovery relating to communications between Waffle House and Jonathan Waller, who had served as general counsel to Waffle House since 2001. Waffle House, asserting attorney-client privilege, directed Waller not to respond. The difficulty, however, was that Waller provided legal services for Waffle House in Georgia, but only held an inactive law license in Illinois and no where else. Despite this, Waffle House reasonably believed that Waller was a licensed attorney and that its communications were privileged.

The bankruptcy court held that the attorney-client privilege belongs to the client and must meet the following conditions:

(1) the attorney-client relation must have existed at the time of the communication;
(2) the communication must have been in confidence;
(3) the communication must relate to a matter concerning which the attorney is employed or is being professionally consulted;
(4) the communication must have been made in the course of seeking or giving legal advice for a proper purpose; and
(5) the privilege must be asserted by the client.… Read More

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N.C. Court of Appeals: In re Gray- Foreclosure does Require Showing that the Underlying Debt was not Illegal

Summary:
The Homeowners argued that their mortgage closing was conducted by two non-attorneys, whose advice regarding their rights and obligations constituted the unauthorized practice of law under N.C.G.S. § 84-4. As such, relying on In re Foreclosure of a Deed of Trust Executed by Bradburn, 199 N.C. App. 549, 551, 681 S.E.2d 828 (2009), they argued that the contract was void and unenforceable.

In Bradburn, the Court of Appeals had found that a mortgage made by a broker unlicensed under N.C.G.S. § 53-243.03, was “not void ab initio, but rather, may be voidable.” Here the Grays failed to make any specific factual allegations showing a violation of N.C.G.S.… Read More

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