*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.
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.
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
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.
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
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.
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),
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),
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.
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.
For all these I dissent. respectfully