*1 TITLE COMPANY AND ABSTRACT AMERICAN RICE and Afreda E. Adkins v. George and Robert S.W.3d 705 03-754 of Arkansas Court Supreme 17, 2004 delivered Opinion June *3 PLLC, Allison, DoverDixon Home Mark H. for by: appellants. P.A., Nichols& H. and Mark W. Campbell, by: GregoryCampbell Nichols; Firm, Russell, RobertsLaw A. Robert by: Jr., Matthew C. Hutsell; Firm, Thrash, Law Thrash ThomasP. for by: appellees. *4 This us to appeal initially requires Glaze, Ju sti sti ce.ce. a circuit court has jurisdiction Tom consider a that raises the unautho- complaint questions concerning rized of law. areWe also with a concern- practice presented question of the trial court’s order the matter as a ing sufficiency certifying classaction. Rice, in this case are and Alfreda who appellees George a home in Little Rock in of 1999.

purchased Appellant June American Abstract & Title acted as the (“American”) Company settlement and escrow for the sale. The Rices filed a agent CEO, Adkins, American and its Robert complaint against alleging that American had in the unauthorized of law engaged practice had violated of the Arkansas Trade Practices provisions Deceptive action, Act. The Rices also moved to the matter as a class certify to name as classmembers “all who document seeking persons paid such as for the of documents fees legal preparation preparation deeds, notes; who settlement or closing mortgages, paid had held escrow American and/or who [fee]; money by earned interest.” a class to the case certified as

American objected being action, had that the not made the Rices contending requisite addition, Civ. P. In American under Ark. R. 23. alleged showings that the trial did “a critical not have to decide court jurisdiction n — n i.e., threshold whether conduct consti- question [American’s] so, tutes the unauthorized of law.” This was American of because define argued, regulate jurisdiction law is vested in this court and the Court on Committee Supreme the Unauthorized Practice of Law or “the Commit- (“CUPL,” tee”). 7, 2003, After a on the Pulaski Circuit hearing, County April

Court entered of fact and conclusions of and certified findings class “All who American persons following persons: paid fee, Abstract a document fee and/or preparation closing in American Abstract’s escrow account since money May order, 1997.” From that has American appealed, raising two the trial court did not arguments: 1) have following matter subject- to determine whether American in the jurisdiction engaged law; the trial court’s class certifi- 2) cation order is not sufficient.

We first address American’s that the trial court argument lacked to determine whether it in the unau- engaged thorized of law. American contends that the sole body before whom such issues can be raised is the Committee. American Const, bases its on Ark. amend. enacted argument on November 1938. Amendment 28 people provides “[t]he Court shall make rules law Supreme regulating conduct of at law.” professional attorneys 18,1978,

On December this issued a court curiam per opinion it established the Court Committee on the whereby Supreme Unauthorized Practice Law. See Rule Court a Com- Creating Law, mitteeon the UnauthorizedPractice 960 (1978) Appx. In that stated the curiam). (per opinion, following:

The this Constitution laws of state vest in the Supreme duty Court the authority regulate to of law to practice thereto, the unauthorized law.Pursuant prohibit practice 1,1979, asofFebruary to becomeeffective ruleis following adopted inquiriesdealing of and mattersor to allcomplaints and shallapply of law. the unauthorizedpractice “ order, that of the CUPL inquiries the Rules provide Under [a]ll of law shall be the unauthorized to practice relating complaints Committee, the Administrative through directed to the writing, of Court Ilia of the Rules Creating SeeRule Office of Courts.” of Law (hereinafter Unauthorized Practice on the Committee “Rules”). exclusive that CUPL contends this language gives

American to the and all matters to consider pertaining any never that of law. The Rices they unauthorized respond practice in the declare that American was asked the trial court to engaging law; instead, that their alleged unauthorized complaint practice trade was false and constituted deceptive American’s conduct 4-88-101, Ann. (Repl. in violation of Ark. Code etseq. practices § Trade Practices Act. Arkansas 2001), Deceptive that the has with American CUPL We do not agree this one. The rules of over matters such as exclusive jurisdiction that, it while the make this court CUPL plain creating claims vested with the authority investigate Committee is nevertheless, to the unauthorized relating it reach whatever decision itself has no may CUPL power enforce III Rule For example, provides any given investigation. regarding unauthorized to the that relating complaints inquiries “[a] Committee, of law shall be directed to writing, of the When the Administrative Office Courts.” through it make a such an or may CUPL receives inquiry complaint, does the action course of conduct does or determination that or of law. SeeRule Ilia unauthorized (empha not constitute that, Moreover, IIIc in the event the Rule sis added). provides it makes a an in which finding CUPL issues advisoryopinion law, it the unauthorized “may someone has engaged in the seeking enjoin an action or actions bring proper court[s] deemed to constitute that conduct added.) (Emphasis law[.]” Rules further clarifies any

The to these Appendix take is discretionary, remedial action the CUPL purely might that, under to Rule 7 notes rather than mandatory. Appendix IIIc, relief in the seek the Committee injunctive Rule “may *6 not if issuance of the does advisory opinion appropriate court[s] of those acts or course of conduct the Commit- result in cessation law.” to be the unauthorized tee has practice pronounced is without either author- CUPL added.) Plainly, (Emphasis — affirmative action on its own other or the to take ity ability any — a to see to it that a than advisory issuing nonbinding opinion ceases in the unauthorized of law. Without party engaging practice rules, its cannot to enforce own Committee clearly ability that a be vested exclusive to consider jurisdiction allegations or has in the unauthorized of law. person entity engaged words, In other CUPL does not have the to enforce its authority court, without in circuit where it can opinions filing complaint obtain a declaration law finding unlawfully person practicing and an to force the unauthorized injunction person stop CUPL, most, matters; at shares in these practice. jurisdiction most the Committee does not have exclusive certainly, authority these matters. that, further

We out over the this court has point years, decided numerous cases the unauthorized involving law, without the CUPL or whether the trial mentioning deciding court that heard the case was without to have done so. jurisdiction Chandler, In Lenders Title v.Co. 353 Ark. 107 S.W.3d 157 this court determined that the (2003), trial court’s class certifica- insufficient, tion order was and remanded the matter to the circuit court. if the circuit court did not have Certainly, jurisdiction Lenders, consider the same issues in this court would have re- CUPL, instead, manded the case to the but we sent it back to the trial court.

Likewise, 36 S.W.3d Knight Day, this court held that an accountant (2001), did not commit con- law, structive fraud in the unauthorized by engaging the trial court’s to that effect affirming without ever ruling that the trial court did not have mentioning to make jurisdiction Rather, that determination in the first the court place. simply noted, at conclusion of the that because “the circum- opinion, stances of this case involve of the unauthorized allegations we direct the Clerk to forward a of this hereby copy to the CUPL. 343 Ark. at 408. opinion” v. National Smith Knight, Similarly, Inc., 827 S.W.2d 146 Systems, Cashflow (1992), this court reviewed and affirmed a determination trial court .that the actions of National Cashflow appellee Systems law, without the unauthorized

did not constitute court had no that the trial or declaring considering a determination. make such *7 exclusive jurisdiction

If the subject-matter CUPL in the in these cases were engaging to consider whether parties have at least would this court unauthorized can it, is an issue that mentioned since subject-matter jurisdiction 28, Atkins, Ark. v. 317 Skelton be raised sua See e.g., City sponte. District, Ark. 277 Head v. Caddo Hills School 504 (1994); 875 S.W.2d 206, Bratcher, Ark. 482, Bratcher v. 36 246 (1982); App. 644 S.W.2d is always open, (1991) jurisdiction 821 S.W.2d 481 (subject-matter waived, court sua can be raised sponte). cannot be by court did Therefore, that the trial we American’s argument reject claims the Rices’ regarding have to consider not of law. American’s alleged for the American’s second now turn to point We in this case was order the class reversal: the trial court’s certifying Procedure the Arkansas Rules of Civil not sufficient. Rule 23 of It states: for a class-action suit. details the requirements sue or be sued as or members of a class (a) may One more (1) if the class is so on behalf of all only representative parties there are (2) of all members is impracticable, numerous that joinder class, the claims or (3) law fact common to the or questions the claims or are typical defenses of the representative parties class, will (4) fairly of the the representative parties defenses interests of the class. protect adequately as a class action if the An action be maintained (b) may satisfied,and the court finds that (a) of subdivision are prerequisites to the members of the class of law or fact common questions members, individual over any affecting only predominate questions for the that a action is to other availablemethods superior class As as prac- efficient of the soon adjudication controversy. fair and of an action as a class brought ticable after the commencement action, it be so determine order whether is to by the court shall section be conditional and it may maintained. An order under this the merits. amended before the decision on be altered or may Richardson, 834, 403 (2000). Inc. v. 341 Ark. 20 S.W.3d See also BPS on numerous occasions of Rule 23 We have reviewed provisions certified, that, to be six in order for a class-action suit and have held

9 must factors be met. certification must seeking Specifically, party establish: ad (1) (2) (4) numerosity; commonality; (3) typicality; Id.; seealso (5) (6) & Mega equacy; predominance; superiority. Life Ins. 954 S.W.2d Health v. Jacola, (1997). certification, a When we review class-action we will review trial court’s of the factors which certifi analysis upon cation must be based. have issue we held Specifically, whether to classis not certify determined whether the plaintiff or have stated a cause will of action or on the plaintiffs prevail merits, but rather whether the are of Rule 23 met. requirements BPS, have We also observed it is immaterial supra. totally whether the will succeed on merits or even if it states petition Pearson, See cause action. BNL Equity Corp. S.W.3d 838 An order or (2000). class certifica denying granting tion is from the merits of the case. Direct Gen. Ins. Co. v. separate Lane, Ark. 944 S.W.2d 528 Farm Bureau (1997) (citing *8 Holders, Mutual Ins. Co. v. Farm Bureau 918 Policy S.W.2d 129 (1996)). we do not into the delve merits of Although the case, claims in a class-action we underlying will potential the review trial court’s order to determine whether the require BPS, ments Rule 23 are satisfied. supra. In this American three the six challenges only appeal, therefore,

Rule 23 we need requirements; not address or consider — the other three requirements numerosity, commonality, — here. We are left with the typicality three only remaining requirements: With predominance, superiority, adequacy. to the the trial respect court found predominance requirement, that the “mere fact that individual issues and defenses be raised may the regarding individual cannot recovery members defeat class certification where there are common questions concerning American Abstract’s which must be alleged wrongdoing resolved for all class members.” The court further found that a common American, had been and that the wrong alleged common against issues over individual issues that arise. predominated any might erred, American contends that the trial court because there are “individual issues of reliance and and whether each class damages, advice, member and whether in sought legal each case American Abstract advice would gave issues.” legal common outweigh

The trial court did not abuse its discretion in conclud that ing predominance Rule had been requirement 23(b) satisfied. This court has held that the starting point examining

10 issue is “whether a common has been predominance wrong the defendant. alleged See USA CheckCashers LittleRock against” of supra. Island, BPS, v. Here, S.W.3d (2002); the “common is the that American violated the wrong” allegation Arkansas Trade Practices Act it handled and Deceptive way fees; document charged fees this closing alleged wrong common to member of the class. every issue,

Before this we must consider “whether leaving this BPS, over individual question predominates questions.” Ark. at 845. American that the individual rather argues questions, than the common for it questions, claims predominate; example, that, with to the of interest earned on respect American’s question account, escrow it would have to be determined whether any interest was earned at all on each class member’s particular funds that However, were into escrow account. deposited there are still common issues to member class. In every MegaLife, out that it has pointed use of a “bifurcated approved when, even there are process” though common fundamentally members, to all questions issues, class pertain there are certain such as not be amenable to class-wide damages, may determi R.R., nation. See also Summonsv. Missouri Pac. supra (affirming class action of who claimed a plaintiffs individu variety highly alized but which damages, were occasioned damages by single accident; common of the railroad’s question negligence existence of strict over individual liability predominated issues of causation and the extent of Because the damages). preliminary, common issues can be resolved before individual issues in this any case, the element has been predominance satisfied. See Fraley *9 Co., Williams Ford Tractor& Equip. S.W.3d 423 (1999). American next that the trial court erred argues in finding that a classaction would be to other available methods for superior the fair and efficient of the adjudication With controversy. respect to this that, the trial court found requirement, the time during issue, at 10,000 American had

period handled “in excess of real estate fees, closings document routinely charge preparation [d] fees, and closing interest on escrow accounts. It is fair to retainfed] both sides and the most efficient the common way handling issues of law and fact them in the by resolving form of a class action. It is also efficient and fair to both sides to avoid a of lawsuits.” multiplicity fails, that this

On American argues finding appeal, that the because the trial court did not even address its argument the would be a better forum for issues raised by CUPL resolving Rices, the in the nor did the court resolution of case explain why circuit court would be to the before Com superior proceeding However, American mittee. in addition to whether engaged issue is raised the Rices by whether American violated Trade Practices Act. Deceptive is This not that the is CUPL answer. question equipped Therefore, the trial court’s failure this to address particular ques is tion not error.

American also that the court’s certification argues order suffers from the same that held this court fatal infirmity case, Lenders Title. In that this court as insufficient rejected common issues raised in the Plaintiffs finding com “[t]he would the class and a class is plaint predominate action throughout method which to address the superior issues raised in Title, Here, however, case.” Lenders at Ark. 347. the trial court’s conclusion with is more respect superiority significantly detailed than the in LendersTitle. This court has held that finding if superiority satisfied class certification is a requirement case, more efficient and isit fair to both sides. way handling Island, case, USA CheckCashersv. In same this court also supra. that the noted “avoidance of a multitude of suits lies at the heart class action any certification.” Id. 82. at Unlike the trial court’s Title, order in Lenders which stated bare conclusions without facts, the court’s order here sets supporting out reasoned expla nation for a class action is why the trial Specifically, appropriate. suits, court found that a class action would avoid a multiplicity 10,000 the fact that American handled “in given excess of real Therefore, estate in the time frame closings” covered this suit. by Title, on American’s reliance Lenders for its that the trial argument insufficient, court’s order is is unavailing. American the trial

Finally, court’s challenges findings with'respect adequacy. of Rule adequacy requirements were described 23(a)(4) Cashers, this court in USA Check Inc. v. Hand, as follows: supra, . . . requirement adequacy specifically states that [T]he will

“representative parties the inter- fairly adequately protect *10 P. This court has 23(a)(4). previously the Ark. R. Civ. estsof class.” 23(a)(4)to three elements: require Rule interpreted be counsel must (1) qualified, experi- the representative there (2) to conduct the litigation; and able generally enced the or interest between conflicting no evidence of collusion be class; the must (3) and the and representative representative action, in the familiarity some minimal level interest display in decision ability and to assist challenged, practices the the to the conduct of making litigation. as Cashers, Direct 349 Ark. at 79-80 (citing Mega Life, supra; USA Check Lane, Ins. Gen. Co. supra). were class whether the Rices adequate

American challenges at the class because failed they testify appear representatives, further, the Rices American asserts certification hearing; class members have a conflict of interest with other might potential on to a share of the interest earned who would be entitled trial did escrow accounts. American claims the court American’s issues, its these and that it therefore abused discretion not analyze its order. entering However, states that “there is order specifically between the evidence of collusion or interests no conflicting class”; that the named and members representative plaintiffs of interest “named have level significant plaintiffs displayed have the to assist in decision as to the this action and ability making and that the Rices had conduct of litigation”; given deposi case had communicated with class counsel. These tions on address the issues raised American not findings only appeal, of Rule 23(a)(4). but also they satisfy requirements Because the trial to hear and class-certification consider this because the order complaint, sufficient, we affirm.

Thornton, dissents. J.,

Hannah, not J., participating. Thornton, I believe that Because dissenting. Ju ,,

Ray s s laws of state vest in the tice tice of law Court duty authority regulate Supreme law,” the unauthorized and because prohibit

13 rule a Committee on the Unauthorized court creating adopted committee to that over “all Practice of Law delegating authority of and matters or with the unauthorized dealing complaints inquiries law,”11 of dissent. practice respectfully to While the of law duty authority regulate practice Constitution, in inherent our 1874 it is out in set specifically

Amendment 28 the Constitution. The full text that amend- of ment reads:

The shall Court make rules of law Supreme regulating and the of attorneys conduct at law. professional addition, 28, Id. In to the of Amendment the General prior adoption number of enactments Assembly passed legislative including, among many subjects, establish standards for admission legislation to the of for of a Board calling of Law appointment Examiners, individual from prohibiting judges conferring admission bar, disbarment, to the and legislation rules for prescribing suspension, of For seeArk. discipline attorneys. Code Ann. 16- examples, § 22-201 206 through 1999) 16-22-401 414 (Repl. through § 1999). (Repl. Amendment 28 vested exclusive clearly power regulate court, of law in the supreme but those statutory that did not conflict with the

provisions court’s exclusive duty were Burris, allowed to continue to exist. authority In McKenzie v. 330, 255 Ark. 500 S.W.2d 357 (1973), court stated that its under Amendment 28 to power regulate law is Id. “supreme exclusive.” to the grant authority Committee on the Unautho-

rized Practice of Law is similar to that exercised the Committee on Professional Conduct. This court has held that the Committee Conduct, on Professional its has exercising authority, clearly in trial litigation courts aimed at pre-empted regulating profes- Mauss, 188, sional See conduct. Myers Ark. 662 S.W.2d 805 Merritt, 659, (1984); Davis v. 480 S.W.2d 924 (1972) that the (holding did not have to form chancery a committee of local to act on attorneys charges professional conduct). promulgated Both per curiam paragraph are the first this court’s quotations establishing 18,1978,

78-11 of December the Committee on the Unauthorized Practice of Law. Unauthorized Practice Law on the

Before the Committee that a number of I note was created Committee”) (“the of law had the unlawful been define and efforts to regulate or abandoned. modified announced and then ' Block, in Ark. Bar. Ass’n v. In our court ruled use, the services that the without (1959), 323 S.W.2d 912 *12 to do with forms an of printed having attorney, twenty-five transactions, the as for such forms agreements including property forfeiture, estate, deeds, declarations of of real sale warranty rentals, notes, sale, and and of leases bills of assignments promissory was means of forms of property, by printed pledges personal of of law. The use one such as an unauthorized practice prohibited of to not be an unauthorized instrument was considered Block, in offers namely, law supra, acceptances. Block, did In Blockv. Ark. not last supra, long. holding Ass’n, this Ark. 345 S.W.2d 471 court (1961),

Bar with the trial court to an injunction allowed modify respect v. forms for loan and Creekmore of the preparations applications, Izard, emasculated Block. (1963), 367 S.W.2d in Arkansas out that towns many The court in Creekmorepointed a and held that a real estate broker did not have resident lawyer be where his customer declines to lawyer, employ permit- may, forms, real estate ted to fill in the blanks in standardized printed the of the business where in the usual course broker’s arising Id. form been by printed approved lawyer. the called for the to exercise

The dissent in Creekmore court Amendment 28 to “make rules exclusive authority granted by . the of law . . Id. regulating [.]” However, out in Bar Ass’n as this County pointed Pope (1981), 624 S.W.2d 828 policy Suggs, public the interest of the considerations raise issues of best public not be the basis of whether the filling should resolved on simply of out of these forms constitutes the unauthorized practice simple law, it is in the best but rather consideration whether upon the the to continue. We stated interest of to allow public Ass’n, Bar Pope County supra, ... not much are The ultimateissue so whetherrealtors practicing forms, the these routine but whether it is in filling law when out we that to interestof the to allowthem to do so ... feel public best thereby relief injunctive requested, denying public grant in the they to conduct real estatetransactions manner which right over halfa satisfac- have been transactedfor century, apparent tion, all suchtransactionsto beconducted requiring throughlawyers, wouldnot bein the interest. public

Id. added). (Emphasis

The determination called for exercise of question exclusive to define court’s supreme authority regulate unauthorized and the Committee was created the court for the over issues purpose exercising jurisdiction of law. In order to address relating considerations, public Committee was policy composed four and three members who are lawyers not public lawyers. 18, 1978,

On December this court and conferred delegated all its to the Committee as follows: authority All

III. inquiries to the complaintsrelating unauthorized prac- committee,

tice of law shall be directed to the in writing, through Clerk the Arkansas Court. Supreme *13 of Rules Court a Committee on the Creating Unauthorized Practice ofLaw, view, 264 Ark. In Appendix (1978). couldbe my nothing more clearly Committee was expressed. exclusive granted juris- diction to define the unauthorized to conduct practice decisions, issue render hearings, and subpoenas, to enforce its deci- sions. More our case law view. This specifically, supports my

has stated that Amendment 28 repeatedly vested exclusive author- ity regulate of law in profession this court. re practice In Anderson, 312 Ark. 851 S.W.2d 408 (1993); Ark. Bar Ass’n v. Bank, Union Nat’l 230 Ark. 323 S.W.2d 912 see also (1954); McKenzie, supra.

Rule III of the Rules of Court a Committee on the Creating Unauthorized Practice of Law has been revised to now read as follows:

All inquiries to the complaints unauthorized relating practice Committee, law shall be directedto writing, through AdministrativeOffice Courts.

R. Com. Un. Prac. L. Ill (2004) added). The (emphasis plain rule is language to the mandatory. Every relating complaint to the on “shall be directed” Committee unauthorized oflaw practice then of Law. Id. That Committee may the Unauthorized Practice oflaw has occurred whether an unauthorized determine practice interest in is advance the public take what action appropriate Ass’n, Bar For with our holding County supra. accordance Pope on the matter an advisory the Committee issue may opinion example, needed, and, relief against engaging if injunctive parties pursue The Committee an administrative oflaw. Id. similar to and evidence investigatory gathering powers body Conduct, v. Ark. Ct. on Professional see Sexton Sup. Committee Cond., 439, 774 S.W.2d 114 (1989), Comm.On Prof. Fund, Neal, seeNosalv. 888 S.W.2d 634 Client Security documents, and a violation of It can individuals (1994). subpoena our court. R. Un. is treated as Com. such contempt subpoena of law also constitute Prac. L. II. The unauthorized may 2004) Ann. 16-22-209 of court under Ark. Code (Supp. contempt § as other of court offense. and can be any contempt prosecuted I reach conclusion other than the think it is untenable to any The trial court lacks subject-matter jurisdiction following: or define the unauthorized oflaw to and regulate proceed to the unau- with a class action based relating upon complaint court has ordered that all issues thorized of law. This oflaw must be directed to the to the unauthorized relating Committee. reasons,

For all these I dissent. respectfully