Plaintiffs appeal as of right from the trial court’s June 12, 1999, opinion that granted defendant’s motion for summary disposition pursuant to MCR 2.116(C)(10). We reverse and remand.
On November 7, 1997, plaintiffs obtained from defendant a real estate loan that was secured by a mortgage on their home. In connection with the loan, *136 defendant prepared an adjustable rate note and a mortgage for plaintiffs. The settlement statement designated a $400 fee for “document preparation.” According to the documentation defendant provided plaintiffs, the document preparation fee was described as “a separate fee that some lenders or title companies charge to cover their costs of preparation of final legal papers, such as a mortgage, deed of trust, note or deed.” United States Dep’t of Housing & Urban Development, Buying Your Own Home, part III, § a (HUD-398-H[4], 1997) (http://www.hud.gov/fha/sfh/res/sc3secta.html).
In December 1998, plaintiffs filed suit, arguing that the charge for completing mortgage documents constituted the unauthorized practice of law by defendant, was illegal under the laws regulating banks in this state, violated the Michigan Consumer Protection Act (mcpa), MCL 445.901 et seq., and ignored the common law of the state of Michigan. This case was certified as a class action on March 22, 1999, to provide potential relief for any borrowers who had also been charged the “document preparation” fee. Plaintiffs filed a motion for partial summary disposition on March 26, 1999. On April 5, 1999, defendant moved for summary disposition pursuant to MCR 2.116(C)(8) and (10). The trial court granted defendant’s motion for summary disposition on the basis of MCR 2.116(C)(10). Plaintiffs now appeal the trial court’s decision.
This Court reviews de novo a grant or denial of summary disposition.
Spiek v Dep’t of Transportation,
Plaintiffs contend the “document preparation” fee is, under these circumstances, the unauthorized practice of law. We agree.
Michigan law prohibits the unauthorized practice of law by individuals. MCL 600.916. Moreover, MCL 450.681 specifically enjoins coiporations from practicing law without a license. That statute, in pertinent part, provides:
It shall be unlawful for any corporation or voluntary association to practice or appear as an attomey-at-law for any person other than itself in any court in this state or before any judicial body, or to make it a business to practice as an attomey-at-law, for any person other than itself].] . . . This section shall not apply to any corporation or voluntary association lawfully engaged in a business authorized by the provisions of any existing statute, nor to a corporation or voluntary association lawfully engaged in the examination and insuring of titles of real property, nor shall it prohibit a corporation or voluntary association from employing an attorney or attorneys in and about its own immediate affairs or in any litigation to which it is or may be a party [.]... But no corporation shall be permitted to render any services which cannot lawfully be rendered by a person not admitted to practice law in this state nor to solicit directly or indirectly professional employment for a lawyer.
However, these statutes fail to define precisely what constitutes the “practice of law.” Rather, such determinations have been left to the discretion of the courts.
State Bar of Michigan v Cramer,
Several Michigan cases have endeavored to provide relevant criteria to determine what activities amount to the practice of law. For example, the Court, in
Grand Rapids Bar Ass’n v Denkema,
Our Supreme Court examined numerous cases from other jurisdictions and noted:
The preparation of conveyances of real estate and personal property by the defendant for others, for a consideration, comes within the usual and ordinary definition of “practice of law” The preparation of legal papers in connection with his business as a loan broker has been held to be the practice of law. [Id. at 66, citing Ferris v Snively, 172 Wash 167;19 P2d 942 (1933); State ex rel Wright v Barlow, 131 Neb 294;268 NW 95 (1936).]
The Court also agreed with the proposition that the preparation of legal documents, when done as a business, constitutes the practice of law.
Denkema, supra
at 66-67, citing
People v Alfani,
The Court in Denkema further discussed whether the preparation of documents, without providing counsel or advice with regard to the effects of those documents, is considered the practice of law.
“We do not desire to be understood as saying that the mere act of drawing a promissory note, chattel mortgage, real estate mortgage, deed or other similar instruments would constitute the practice of law, where the person so drawing them acts merely as an amanuensis and does not advise or counsel as to the legal effect and validity of such instruments.” [Denkema, supra at 67, quoting Barlow, supra at 296.]
Ultimately, the Court concluded that “[t]he activities of the defendant in connection with the probate of estates in which he was not personally interested come within the prohibition of the Michigan statute.” Denkema, supra at 69. Thus, Denkema provides that the preparation of legal documents constitutes the practice of law when it is done as a business, by an uninterested party, and when advice or counsel is given concerning the effect of those documents.
About fifteen years later, in
Ingham Co Bar Ass’n v Walter Neller Co,
*140 The Walter Neller Court compared the facts in Denkema with the facts of the case before it, stating that
[t]he difference between the Denkema Case and the one at bar is that in the former the defendant appeared to be in the business of executing these instruments rather than doing so without extra compensation and as incidental to another lawful business — the situation at bar. [Id. at 222 (emphasis added).]
The Court held that “[t]here cannot be any objection to a licensed broker doing such work [filling in standardized forms of agreements of purchase and sale, land contracts, deeds, and mortgages] without compensation when it is incidental to his business.” Id. at 229 (emphasis added).
The
Walter Neller
decision was upheld in
State Bar of Michigan v Kupris,
Despite the numerous cases pertaining to real estate brokers, Michigan case law has yet to declare specifically that charging a separate fee for the preparation’ of legal documents by a banking institution
*141
constitutes the unauthorized practice of law. However, such a conclusion is supported by a significant body of case law in other jurisdictions. After examining the case law of other states that have decided this issue, we find that the majority have concluded that filling in legal documents incidental to one’s business, for a fee, constitutes the unauthorized practice of law.
1
In fact, the Indiana Supreme Court has specifically confronted the question whether lay bank employees may fill in blanks on standardized forms.
Miller v Vance,
There are some states that have taken the opposite position and do not agree that compensation for legal
*142
services, performed by a non-attorney, can transform those services into the unauthorized practice of law. See
Perkins v CTX Mortgage Co,
137 Wash 2d 93;
If a charge is made for the services, it is likely that both the actor and the recipient, as reasonably intelligent nonlawyers who are reasonably familiar with similar transactions, understand the legal question to be difficult or doubtful. An uncompensated service is much more likely to involve only uncomplicated questions. Hence, whether the service was performed for or without a fee is relevant to and a factor in, even though not determinative of, the decision whether the service constituted the unauthorized practice of law. [Id.]
Thus, even under the Minnesota analysis, if the existence of a fee was not determinative it would still be an important factor.
This Court agrees with the majority opinion of the states that charging a fee can take an otherwise incidental act into the realm of the unauthorized practice of law. We agree that drafting mortgage documents was incidental to defendant’s business; however, the key issue is the fact that a fee was charged for those services. As indicated above, several Michigan cases dealing with realtors have highlighted the fact that when a separate fee is charged, certain acts become *143 the unauthorized practice of law. See Kupris, supra at 696; Walter Neller, supra at 229. It is particularly notable that the Court in Walter Neller specifically included the provision “without compensation” in its conclusion that brokers who fill in documents incidental to their business are not practicing law. Id.
In
Bay Co Bar Ass’n v Finance System, Inc,
“[W]here the collection practice involves the preparing of legal papers, furnishing legal advice and other legal services, the compensation allowed must be assumed to be in part allowed to pay for the legal services so rendered. No matter how one looks at it, this constitutes the rendering of legal services for others as a regular part of a business carried on for financial gain.” [Finance System, supra at 442.]
Thus, the Court clearly considered the compensation to be demonstrative of the collection agencies’ involvement in the unauthorized practice of law.
Furthermore, despite defendant’s arguments to the contrary, we find no applicable exceptions to justify defendant’s actions. Defendant claims that it was acting on its own behalf when it prepared plaintiffs’ mortgage and that the “pro se exception,” in MCL 450.681 and MCL 600.916, allows individuals and com- *144 parties to prepare legal documents for themselves. Thus, defendant opines that its actions were not the unauthorized practice of law because it was an interested party to the transaction. However, we believe that the separate fee for the preparation of mortgage documents by a bank crosses the threshold of providing services for the bank’s own benefit and engaging in a business where a profit is made from manufacturing legal documents without the requirement of licensure from the state bar. If the preparation of the mortgage documents for defendant’s customers was not a service, but rather incidental to its business as defendant claims, then there would be no basis for the separate charge to defendant’s customers. Thus, the trial court erred in concluding that the preparation of legal documents by an interested party, where a fee is charged, is not the unauthorized practice of law.
Defendant’s claim that it is authorized under the Savings Bank Act, MCL 487.3101 et seq., to charge a fee for the preparation of legal documents is also unfounded. The Savings Bank Act provides for the incorporation of savings banks within this state. This act grants a savings bank, incorporated under the statute, the power to “engage in the business of banking and exercise all powers incidental to the business of banking or which further or facilitate the purposes of a savings bank.” MCL 487.3401(1). The Savings Bank Act farther allows a bank to “collect interest and charges on loans . . . [a]s permitted by the credit reform act.” MCL 487.3430(l)(a).
The Credit Reform Act, MCL 445.1851 et seq., allows a bank to “charge ... a borrower ... all fees and charges that are agreed to or accepted by the *145 borrower . . . MCL 445.1857(1). This grant of authority to charge fees is limited, however, to fees that are not excessive. MCL 445.1857(3). An excessive fee is defined by the act to be a fee that “exceeds the amount allowed in section 6(1), (2), or (3), section 7, or any other applicable law or statute of this state.” MCL 445.1852(f). Charging a fee for the preparation of legal documents constitutes the unauthorized practice of law under MCL 450.681. Thus, the grant of authority in the Credit Reform Act to charge nonexcessive fees does not authorize a document preparation fee for legal documents because such fees would be in violation of MCL 450.681. Therefore, defendant was not authorized by law to charge a document preparation fee for plaintiffs’ mortgage.
Defendant further raises the argument that automobile dealers are statutorily permitted to charge fees for contract preparation under the Motor Vehicle Sales Finance Act, MCL 492.101 et seq. However, a review of that act shows that it does not specifically authorize a fee for legal documents. MCL 492.117, 492.131.
Plaintiffs also included, in their complaint, causes of action under the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq. The trial court’s opinion reasoned that because the remainder of plaintiffs’ claims were erroneously premised on the theory that either defendant had engaged in the unauthorized practice of law or had illegally charged plaintiffs a fee, plaintiffs could not prevail on any of their theories of relief. Plaintiffs now argue that because the trial court’s underlying assumptions on the unauthorized practice of law and fee issues were erroneous, *146 the trial court erred in dismissing their MCPA claims. We agree.
“The mcpa is a remedial statute designed to prohibit unfair practices in trade or commerce and must be liberally construed to achieve its intended goals.”
Forton v Laszar,
However, MCL 445.904(2)(d), as amended by
*147 Accordingly, we reverse the decision of the trial court and find that defendant engaged in the unauthorized practice of law when it charged a separate fee for the preparation of legal documents. We remand to the trial court for further proceedings consistent with this opinion. We do not retain jurisdiction.
Notes
See Comment,
Too many hands in the cookie jar: the unauthorized practice of law by real estate brokers,
75 Or L R 889, 900 (1996); see also
In re First Escrow, Inc,
However, the Court later concluded that the defendant’s actions fell within the exception and thus individuals could file a cause of action under the mcpa if the defendant’s actions were made unlawful by chapter 20 of the Insurance Code, MCL 500.2001 et seq. Smith, supra at 467.