2010 Ohio 6257
Ohio2010Background
- Relator filed a three-count UPL complaint against Foreclosure Alternatives, Inc. (FAI), Kert Alexakis, and Lance Trester alleging unauthorized practice of law in foreclosure actions.
- FAI solicited homeowners facing foreclosure, had non-attorney personnel manage pleadings, negotiate with lenders, and coordinate with licensed attorneys.
- Non-attorneys provided legal advice, counselling, and settlement negotiation in foreclosure contexts without Ohio bar licensure.
- Alexander and Trester were officers/employees; Trester used name “Baker” to conceal ties to father’s felony conviction.
- Two specific foreclosures (Chandlers and a second homeowner) resulted in sheriff’s sales after FAI’s involvement; homeowners suffered loss of homes.
- Board found unauthorized practice of law and recommended injunctions and civil penalties; the Supreme Court adopted and imposed the sanctions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAI and agents engaged in unauthorized practice of law | FAI and Trester provided legal services. | FAI contends activities were non-attorney services. | Yes; UPL found; injunction issued. |
| Whether an injunction against further UPL is warranted | Prevents ongoing unauthorized practice. | Untethered from continuing conduct. | Warranted; injunction entered. |
| Whether civil penalties are justified and amount | Penalties appropriate to deter misconduct. | Penalties excessive or misapplied. | Penalties imposed: $15,000 against FAI/Alexakis, $5,000 against Trester. |
| Whether joint and several liability applies to penalties | Relator seeks joint/several liability. | Each liable party bears its own liability. | Imposed jointly and severally against FAI and Alexakis; Trester separately. |
Key Cases Cited
- Kolodner, 103 Ohio St.3d 504 (2004-Ohio-5581) (UPL includes nonattorneys advising or negotiating for debtors)
- Telford, 85 Ohio St.3d 111 (1999-Ohio-) (UPL includes nonlawyers giving legal advice to debtors)
- Mullaney, 119 Ohio St.3d 412 (2008-Ohio-4541) (laypersons engage in UPL by advising about legal rights and settlement terms)
- Foreclosure Solutions, 123 Ohio St.3d 107 (2009-Ohio-4174) (civil penalties for large-scale foreclosure-assistance arrangements)
- Willard, 123 Ohio St.3d 15 (2009-Ohio-3629) (UPL context with attorney involvement as limited by conduct)
- Patterson, 124 Ohio St.3d 93 (2009-Ohio-6166) (UPL implications of nonlawyer handling foreclosure settlements)