66 Ohio Misc. 2d 22 | Board of Commissioners On The Unauthorized Practice of Law State of Ohio | 1994
This matter came on for an evidentiary hearing before the Board of Commissioners on the Unauthorized Practice of Law (“board”) on October 4, 1993 in
Relator Cleveland Bar Association was represented by Mary L. Cibella, Cleveland, Ohio, and David A. Kutik of Jones, Day, Reavis and Pogue, Cleveland, Ohio. Respondent Robert R. Yurich represented himself and the other respondents, to wit: Dennis Yurich, Yurich and Associates, and Guardian Group.
In its complaint, relator alleges that respondents Dennis Yurich, Yurich and Associates (also known as “Yurich Associates” and “Yurich & Associates”) and Guardian Group are not licensed or otherwise authorized to practice law in the state of Ohio and that respondent Robert R. Yurich is an attorney at law licensed and authorized to practice law in the state of Ohio. These allegations were admitted by respondents in their answer, which was filed herein on May 24,1993. Relator also alleges that respondents Dennis Yurich, Yurich and Associates, and Guardian Group engaged in the unauthorized practice of law by, among other things, rendering legal advice to Ohio residents concerning the need and advisability of various types of trusts; preparing trust documents for Ohio residents; and charging and collecting fees from Ohio residents in exchange for legal services rendered to or on behalf of those individuals. The complaint also alleged that respondent Robert R. Yurich “instigated, assisted, aided and encouraged” the other respondents to engage in the unauthorized practice of law. In essence, relator avers that respondent Robert R. Yurich aided and abetted the other respondents in the unauthorized practice of law.
In their answer, the respondents deny that respondents Dennis Yurich, Yurich and Associates, and Guardian Group had ever engaged in the unauthorized practice of law. Respondents also deny that Robert R. Yurich had ever aided or abetted the other respondents to engage in the unauthorized practice of law.
On May 26, 1993, the parties filed herein a document entitled “Stipulation of Facts and Waiver of Notice and Hearing.” By this document, the parties stipulated certain facts and waived their respective rights to an evidentiary hearing before the board. The parties stipulated
“1. The Relator is an association whose members include attorneys-at-law, most of whom are practicing in Cuyahoga County, Ohio.
*24 “2. Respondent Robert Yurich is an attorney at law licensed to practice in the State of Ohio.
“3. Respondent Dennis Yurich is an individual and is not licensed or otherwise authorized to practice law in the State of Ohio.
“4. Respondent Yurich & Associates is or was a corporation organized under the laws of the State of Ohio. With the assistance of Respondent Robert Yurich, Yurich & Associates was formed by Respondent Dennis Yurich, who was also a director, officer and stockholder of that corporation. Respondent Yurich & Associates was not licensed or otherwise authorized to practice law in the State of Ohio.
“5. Respondent Guardian Group is a corporation organized and existing under the laws of the State of Ohio. Respondent Guardian Group is a successor to Respondent Yurich & Associates through a name change or otherwise. Respondent Guardian Group is not licensed or otherwise authorized to practice law in the State of Ohio.
“6. Respondents Dennis Yurich, Yurich & Associates and Guardian Group participated in an effort to market ‘living trusts’ which would be prepared, at least in part, by Respondent Robert Yurich. As part of this effort, Respondent Dennis Yurich, through Respondents Yurich & Associates and Guardian Group, hired ‘representatives,’ many of whom were not licensed or otherwise authorized to practice law in the State of Ohio. Respondents Dennis Yurich, Yurich & Associates and Guardian Group, or representatives hired by them, organized seminars to explain the alleged benefits of ‘living trusts.’ Respondent Robert Yurich was the principal speaker at these seminars. Persons attending these seminars were asked to indicate whether they would want a ‘consultation’ regarding ‘living trusts.’ Following the ‘leads’ procured through these seminars or procured otherwise, the representatives of Respondents Yurich & Associates and Guardian Group, would:
“a. provide advice to persons regarding the merits of a ‘living trust’ for those persons’ specific circumstances;
“b. pursuant to forms and guidelines developed by Respondents Robert Yurich and Dennis Yurich collect information to be used to prepare a ‘living trust’ document; and
“c. collect checks for Respondents Yurich & Associates and Guardian Group and, on occasion, for Respondent Robert Yurich.
“7. The information and monies collected by the representatives of Respondents Yurich & Associates and Guardian Group were sent to Respondents Robert Yurich and Dennis Yurich who developed, respectively, (a) ‘living trust’ and other legal forms and (b) computer programs to generate these forms for specific*25 individuals. Upon receiving the client information collected by the representatives, Respondents Dennis Yurich, Yurich & Associates or Guardian Group would enter the data in a computer and generate ‘living trusts’ and other legal documents for individuals residing in the State of Ohio. These documents would then be reviewed by Respondent Robert Yurich. In a majority of instances, Respondent Robert Yurich personally met with individuals after the documents were prepared and assisted the individuals with the execution of the documents. On a few occasions, however, Respondent Robert Yurich did not personally meet with the individuals; all personal dealings with the individuals (including execution of the documents) were handled by representatives of Respondents Yurich & Associates or Guardian Group.
“8. Relator believes that: (a) The activities of Respondents Dennis Yurich, Yurich & Associates and Guardian Group constitute the unauthorized practice of law through, inter alia, providing legal advice and preparing legal documents; (b) Respondent Robert Yurich instigated, assisted, aided and encouraged this unauthorized practice of law; and (c) Respondents will continue to engage in or otherwise aid and encourage the unauthorized practice of law unless permanently enjoined.
“9. Respondents have agreed to refrain henceforth from conduct which constitutes the unauthorized practice of law.
“10. Further, the parties hereby waive their right to notice of and appearance-before this board.”
The board adopts the stipulation of facts to the extent stated hereinafter.
In their stipulation, the parties waived their respective rights to an evidentiary hearing before this board. However, upon consideration of the stipulations of the parties, the board concluded that said stipulations failed to fully detail the conduct of the respondents. Accordingly, the board ordered the parties to appear and present evidence herein. The board conducted an evidentiary hearing on October 4, 1993, whereat respondents Robert R. Yurich and Dennis Yurich were the only witnesses who appeared and testified.
This matter is submitted for decision upon the complaint, answer, stipulations of fact, and the testimony and exhibits presented during the October 4, 1993 evidentiary hearing. The board also has the briefs that have been submitted on behalf of the parties.
Gov. Bar R. VH(2)(A) states: “The unauthorized practice of law is the rendering of legal services for others by anyone not registered under Rule VI or certified under Rule II, Rule IX, or Rule XI of the Rules for the Government of the Bar of Ohio.” Respondents Dennis Yurich, Yurich and Associates, and Guardian Group have stipulated, and the record demonstrates, that they are not,
Robert R. Yurich has been licensed and authorized to practice law in the state of Ohio since 1964. However, between 1964 and 1990, Robert earned most of his income from various business ventures rather than as an attorney. In 1990, Robert was introduced to the subject of “living trusts” and concluded that the marketing and preparation of living trusts would be a lucrative business opportunity. Robert shared the idea with his younger brother, Dennis Yurich, not an attorney, who claims some computer expertise. To realize this new business opportunity, Robert formed Yurich and Associates, an Ohio for-profit corporation, for Dennis. Dennis was the sole officer, director, and shareholder of Yurich and Associates. Dennis hired, supervised, and paid all employees of Yurich and Associates. Robert was never a director, officer, or employer of Yurich and Associates. Even so, to avoid any confusion as to whether Robert had any ownership interest in Yurich and Associates, the name was later changed to Guardian Group. Hereinafter, Yurich and Associates and Guardian Group are sometimes referred to collectively as the “Yurich Corporations.”
The Yurich Corporations provided financial planning services and various office administrative services, including computer programming services. In fact, Robert contracted with the Yurich Corporations for his accounting services, bookkeeping services, secretarial services, computer programing services, and document preparation services. However, the primary purpose of the Yurich Corporations was to market and sell living trusts. We review how the Yurich Corporations marketed and sold living trusts in the paragraphs below.
To generate living trust business for the Yurich Corporations, Dennis retained Robert to develop brochures (see Appendix A) touting the benefits and advantages of living trusts and inviting prospective customers ■ to a free seminar to learn about estate planning and living trusts. As indicated in the brochures, Robert was the featured speaker at each seminar. The Yurich Corporations mailed these brochures to prospective living trust customers, mostly residing in Cuyahoga County, Ohio, and other parts of northern Ohio. The Yurich Corporations made all of the arrangements for the seminars.
At each seminar, Robert lectured on the benefits of living trusts and generally discussed estate planning and probate law. At the conclusion of each seminar, those in attendance were offered a one-hour free consultation with one of the
The “non-legal” services that the Yurieh Corporations performed for their living trust customers were numerous. Initially, the representative provided the customer with a blank “Confidential Personal-Financial Information Form” (see Appendix E). This form, hereinafter referred to as “CPF,” was prepared by Robert to assist the Yurieh Corporations in gathering needed information. The CPF is a comprehensive questionnaire which requires the customer to provide extensive personal and financial information. The form is very sophisticated and required the representatives to assist the customer in responding to the questions. Questions relate to, among other topics, the identification and disposition of assets, the execution of a power of attorney, the making of living will declarations', selection of guardians for minor children, and selection of executors for a pour-over will. Many of the terms used in the CPF are peculiar to the practice of law.
The representative then conducted an interview with the customer wherein he reviewed the completed CPF and the various documents. During this interview, the customer was given an opportunity to ask the representative any questions that he or she had about the information requested in the CPF, estate planning, living trusts, and related matters. Although some of the customers’ questions most certainly were legal in nature and required the expertise of an attorney, the representatives answered the questions and thereby rendered legal advice and opinions.
After the interview, the representative (rather than an attorney) determined if the person should have a living trust from an estate planning standpoint. This determination was reached after the representative made an estate asset analysis, including analyzing potential probate fees and federal estate tax consequences. The representative then explained to the customer why he or she should or should not have a living trust.
If the representative determined that the customer should have a living trust, it was the policy of the Yurich Corporations to recommend Robert to prepare the living trust and provide all related legal services. However, the customer was told that he or she could select any attorney. The board notes that ninety-five percent of Robert’s living trust revenue was generated by referrals made by the Yurich Corporations. These referrals resulted in approximately $320,000 in revenues for Robert between 1990 and 1993.
If the customer selected Robert as his or her attorney, the Yurich Corporations recompiled the information contained on the CPF by inputing it to a computer. Through a computer program developed by Dennis, the computer generated various documents that were used by Robert in analyzing the customer’s particular trust and estate needs. These computer-generated documents, the CPF, and all related documents were then given to Robert for his review. After he reviewed the documents, Robert would then arrange an appointment
After the living trust was prepared and reviewed by Robert and signed by the person, the representative would, if needed, help the person transfer certain types of assets, such as stock certificates, into the trust and help the person change beneficiaries on insurance, annuities, and retirement plans. After he or she completes these functions, the representative is paid -a commission which is a percentage of the fee charged by the Yurich Corporations. The board finds that the Yurich Corporations charged fees of $500 per couple and $850 per person for their “non-legal” services performed in relation to the preparation of living trusts. On average, the Yurich Corporations generated revenues of $1,000 to $8,000 a month.
The Yurich Corporations ceased doing business sometime prior to October 4, 1993, the date of the evidentiary hearing before the board in this matter. Currently, Dennis works as a paralegal for Robert. Dennis no longer employs any outside representatives in connection with the preparation of living trusts.
The Supreme Court of Ohio set forth the clearest definition of what constitutes the “unauthorized practice of law” in the case of Land Title Abstract & Trust Co. v. Dworken (1934), 129 Ohio St. 23, 1 O.O. 313, 193 N.E. 650. In the first paragraph of its syllabus, the court held:
“The practice of law is not limited to the conduct of cases in court. It embraces the preparation of pleadings and other papers incident to actions arid special proceedings and the management of such actions and proceedings on behalf of clients before judges and courts, and in addition conveyancing, the preparation of legal instruments of all kinds, and in general all advice to clients and all action taken for them in matters connected mth the law.” (Emphasis added.)
In McMillen v. McCahan (C.P.1960), 83 Ohio Law Abs. 1, 11, 14 O.o.2d 221, 229, 167 N.E.2d 541, 550, the court described three activities generally included in the practice of law:
“It is clear that a licensed attorney in the practice of law generally engages in three principal types of professional activity. These types are legal advice and instructions to clients to inform them of their rights and obligations; preparation for clients of documents and papers requiring knowledge of legal principles which*30 is not possessed by an ordinary layman; and appearance for clients before public tribunals, which possess the power and authority to determine rights of life, liberty and property according to law, in order to assist in the proper interpretation and enforcement of law.”
Paragraph one of the syllabus of Green v. Huntington Natl. Bank of Columbus (1965), 4 Ohio St.2d 78, 33 O.O.2d 442, 212 N.E.2d 585, reads:
“A bank or trust company which provides specific legal information in relation to the specific facts of a particular person’s estate for the purpose of obtaining a more beneficial estate condition in relation to tax and other legal consequences of death is giving legal advice.”
In Ohio State Bar Assn. v. Berning (1982), Shelby C.P. No. 81-CV-346, unreported, the court found that the following activity by a non-lawyer constituted the unauthorized practice of law:
“(a) advising and counseling residents of Ohio with respect to the laws of Ohio governing the probate of decedents’ estates and the tax laws of Ohio and the United States;
“(b) advising and counseling residents of Ohio that a specific type of trust agreement would be suitable for their respective estates and should be established; and
“(c) preparing and drafting trust agreements, deeds to real property for residents of Ohio, and the supervision of the execution of those documents in Ohio to carry into effect the advice and counsel given, as aforesaid.”
In Ohio State Bar Assn. v. Martin (1994), 66 Ohio Misc.2d 15, 642 N.E.2d 75, the board followed the court’s holding in Beming, supra. The board held that a living trust is a legal instrument or document which significantly affects the legal rights of an individual concerning the taxability, control, and disposition of his or her assets. Accordingly, we further held that where a non-attorney prepares a living trust for another and provides advice relative to their legal rights and responsibilities in trust and tax matters, he or she is engaging in the unauthorized practice of law. However, the board held that the mere gathering of information to be used to prepare trusts and other legal documents does not necessarily constitute the practice of law.
We find that the foregoing cases are controlling and dispositive in this matter. The uncontroverted evidence before this board establishes that Dennis and the Yurich Corporations did more than merely gather information to be used by Robert in preparing living trusts and other legal documents as respondents argue in their briefs. The board finds that the representatives not only gathered information but also provided advice to living trust customers relative to their individual legal rights and responsibilities in trust, estate, and tax matters.
After careful consideration of the pleadings, stipulations, exhibits, the arguments of counsel, pre-hearing and post-hearing briefs, and the applicable law, it is the conclusion of this board that relator has proven certain allegations of the complaint to the extent required by Gov.Bar R. VII, that respondents Dennis Yurich, Yurich and Associates, and Guardian Group engaged in the unauthorized practice of law, and that relator should be authorized to proceed pursuant to Gov.Bar R. VII(8).
The board therefore authorizes relator to commence an action in a court of competent jurisdiction for the purpose of obtaining a judicial determination whether respondents Dennis Yurich, Yurich and Associates, and Guardian Group engaged in the unauthorized practice of law and for the appropriate injunctive relief permanently enjoining respondents from doing so.
Pursuant to Gov.Bar R. VII(9), and to the extent authorized, relator may seek reimbursement from the board for expenses and attorney fees incurred in the further prosecution of this matter.
In its complaint, relator also alleges that respondent Robert R. Yurich aided and abetted the other respondents in engaging in the unauthorized practice of law. Relator also seeks to enjoin Robert R. Yurich from engaging in such conduct in the future. Gov.Bar R. VII(2)(B) provides: “The Board of Commissioners is empowered and charged to receive, entertain, inquire into, take evidence, make findings and submit recommendations concerning complaints of unauthorized practice of law.” Inasmuch as Robert R. Yurich is an attorney at law licensed and authorized to practice law in the state of Ohio, the board finds that it is without jurisdiction to grant the relief requested by relator.
A copy of this opinion shall be served upon relator, respondents, all counsel of record, Disciplinary Counsel, the Cuyahoga County Bar Association, and the Ohio State Bar Association.
So ordered.
APPENDIX A Brochures from Yurich and Associates and Guardian Group
APPENDIX B Representative Agreement
APPENDIX C Living Trust Seminar Evaluation
APPENDIX D Disclosure and Compliance Form
APPENDIX E Confidential Personal-Financial Information Form
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Attorneys, court costs, executors, appraisors, federal taxation, or leave everything possible to your loved ones.
If It Makes Total Sense,
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Living Trusts have existed for several hundred years, but many lawyers are not familiar with the procedure. And why should they be? They stand to lose all the large legal fees involved with probate.
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It never hurts to ask. And asking for more information on Living Trusts takes just 60 seconds. Simply fill out the enclosed reply card, affix a stamp, and mail. Or call (216) 884-8881.
Yurich Associates will send you, FREE, The Living Trust Information Package, complete with published articles from noted newspapers and journals.
Tiiis brochure Is solely (or your information. Jt has been prepared (or Yurich Associates by Robert R. Yurich. a registered Ohio attorney since 1964. specializing in Living Trusts.
This brochure Is printed on Environment.4* A paper for the environmentally concerned. KH1X RECYCLED PAPER,
Wednesday, November 11, 2pm or 7pm Holiday Inn, 1-77 & Rockside with guest Robert Yurich Attorney at Law since 1964.
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This seminar, which includes an information package, is FREE, however all seats must be reserved for seating is limited. Call 884-3881 today to reserve your seat.
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This brochure is solely (or your information, it has been prepared for Guardian Group, by Robert Yurich, a registered Ohio Attorney since 1964. This brochure is printed with soy ink on Evergreen, a paper for the environmentally concerned.
EXHIBIT "D"
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Living Trust Seminar Evaluation
Please help us to improve the seminar by completing this evaluation.
• How was the length of the seminar?_too short _OK_too long
• Could you hear at all times? _yes _no
• Was the facility comfortable? _yes _no
• Did the visuals on the screen help you? _yes _no
• Were all the topics you expected covered? _yes _most_few
• Do you feel you have benefitted from coming today? yes _no
• How did you find out about the seminar? _newspaper _phone _mail _radio _TV _friend _other_
• Would you recommend the seminar to a friend? _yes _no Friend's name __ Phone_
• If you could change something about the seminar what would it be?
• Comments__
• Would you like a one hour free consultation about your suitability for for a Living Trust? _yes _no, if yes please complete:
Name:_ Phone: __
Address:__
• Thank you for completing this evaluation and attending our seminar.
DISCLOSURE AND COMPLIANCE
I UNDERSTAND THAT MY REPRESENTATIVE IS NOT AN ATTORNEY OR CERTIFIED TAX AUTHORITY AND THAT I SHOULD CONSULT AN ATTORNEY AND/OR TAX ACCOUNTANT FOR LEGAL OR TAX ADVICE.
I understand that my representative is accumulating information in order to analyze the current value of my estate and I understand that this information will be compiled and then used by me to determine if I should consider consulting an attorney for the purpose of preparing a Living Trust for me.
I understand that I will take responsibility for consulting an attorney to prepare any legal documents required to transfer assets into my Living Trust, except that I may request my representative to prepare'non-legal letters such as change of beneficiaries notifications.
I understand that the Living Trust will be prepared based on facts that I have given the representative. This information is complete with respect to assets listed and desires I have of my estate. Any omission cannot result in liability to the Guardian Group, Inc., Roben Yurich or the representative.
I understand that should I acquire a Living Trust, it is my/our sole responsibility to transfer whatever assets I wish into the trust and that there may be recording and other fees required in funding a trust.
I understand that I will pay one fee to the Guardian Group, Inc. for the preparation of financial data service and a separate fee to Roben Yurich, Attorney-At-Law, in the event that Roben Yurich is my choice for legal consul. I understand the fee paid to the Guardian Group, Inc. is not for any legal services.
I understand that if I happen to change my mind, I have three days from the date of the receipt in which I can notify the Guardian Group, Inc. and I will be entitled to receive a full refund.
I have read and fully understand all of the above.
DO NOT SIGN BEFORE READING THE ABOVE STATEMENTS
Client Signature Date Spouse Signature Date
Client Pnnted Name Spouse Pnnted Name
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. The board remains mindful that ‘‘[i]n all cases coming before this Board on stipulations by the parties, the Board is required to make its own determination of whether the facts support a finding that the unauthorized practice of law has been committed." Disciplinary Counsel v. Brown (1992), 61 Ohio Misc.2d 792, 794, 584 N.E.2d 1391, 1392.
. The Yurieh Corporations employed several persons as representatives. These persons were mostly insurance agents, financial planners, and stockbrokers. One or two may have been attorneys. Each representative was required to sign a Representative Agreement (see Appendix B) with the Yurieh Corporations. Pertinent here is that in paragraph "d" of the Representative Agreement, the representative agreed that he or she “shall not in any manner give or attempt to provide tax or legal advice to any prospect or client of the Company.” Also, Dennis and Robert testified that they instructed the representatives to answer only financial questions. However, during the hearing before the board, Robert conceded that it was left up to the representatives to distinguish between financial questions and legal questions. Robert admitted that it was possible that the representatives may have answered legal questions.
. Notwithstanding this disclaimer, the evidence before this board establishes that the representatives from time to time rendered legal and tax advice by answering certain questions asked by potential customers.
. In all but a few cases, Robert either personally met with or talked to the customer. In some cases, Robert never met with the customer.