J. H. Marshall & Associates, Inc. v. Burleson

correct, Hahn. That Mr. Mr.

Chairman. I Fuqua. know no other com-

Mr. grants property exemp-

munity that tax type organizations.

tions for these important the District

It certainty should know with

Columbia expect way of the collection

what to tax

of real estate revenue the contri- the funds need-

bution that will make to maintenance and City

ed for its currently pend-

operation. litigation In courts,

ing in District of the local maintains that

Columbia Government

section 47-801a it now reads does (h) as exempt property by non-profit held if,

housing corporation. appears, But as uncertainty is a scintilla now

there respect

existing with to entitlement of exemption privilege of tax

properties held certain of these non-

profit institutions, uncertainty passage

should be laid to rest. The bill, incorporating as it does section accomplish will this end both retro-

spectively prospectively. INC., ASSOCIATES,

J. H. MARSHALL & Machines, assignee of Leon Office

Inc., Appellant, BURLESON, Appellee.

William A.

No. 6159. Appeals.

District of Columbia

Argued April 17, 1972.

Decided Dec.

Rehearing 7, 1974. Feb. Denied

589

account said appellee (here- to be owed inafter Burleson) called for merchandise purchased by Burleson Marshall’s as- signor, Machines, Leon Office Inc. Harry Ryan, Jr., Washington, C., Burleson, L. D. appeared a lawyer, through appellant. counsel and including filed an answer defense, asserting affirmative the debt had Skiba, Washington, C., Francis D. J. paid been full accord satisfaction Wise, vice, pro bar of hac appellant’s assignor accepted when his fi- special court, leave of with whom William payment nal disput- settlement of full Burleson, Washington, C., se, A. pro D. ed He filed a claim. also counterclaim as- brief, appellee. Lynne was on the D. serting that he (Burleson) licensed Perkins, C., Washington, D. also entered practice Columbia, in the District of law appearance appellee. for that Marshall collection agency a unli- was censed and to unauthorized in law YEAGLEY, Before and KELLY Asso- Columbia, the District of but inten- was HOOD, Judges, ciate Judge, and Chief tionally doing and therefore in so “stands Retired. court”; contempt of this that Marshall commenced this action on the of basis YEAGLEY, Judge: Associate assignment colorable permit so toas it to attempt engage to in the unauthorized appeal is an judgment This from a of practice of doing it which was “inten- Superior of Court the District of Col- tionally maliciously,” and wherefore Burle- holding appellant umbia engaged was $10,000 son compensatory claimed and in perma- unauthorized of $40,000 punitive damages Marshall, nently enjoining appellant from conducting and sought permanent injunction to re- any nature, further of activities and engaging strain Marshall from in the un- dismissing against appellee.1 its claim authorized law. of Appellant raises these contentions: denying Marshall filed an answer al- Superior (1) That the Court was with- legations in counterclaim and Burleson’s issue; out hear the to subsequently a motion dismiss. Burle- opposition then son filed an Marshall’s (2) procedure proper That was not fol- motion to and for dismiss also motion issue; lowed in raising and solely respect summary judgment with (3) engaged That was in request permanent injunction. his for a of law. parties con- agreed Marshall begun by appellant, The action was fol- ducted its debt collection business as (hereinafter collection agency, called Mar- lows : shall) in the Small Claims Conciliation (1) incorporated Marshall Superior Branch of the Dis- was Court purpose for assignee open District of Columbia trict of Columbia of an enjoined Superior (4)Retaining litigate 1. The counsel those activities agreements, assignments e., i. Court invalid re- were: (1) contingency Soliciting ceived on fee bases. accounts for collection they advertising collect; no fee unless (2) Agreeing accounts, by litiga- collect commenced This action was Small Superior necessary, paying any valid, tion if without Claims Branch of the Court but adequate, argument legally the oral motions enforceable on the contested considera- before, by, assignments; tion for such came perior decided Su- and was sitting (3) contingency Judge Retaining fee Civil Calendar based portion collected; a fixed amount Control. appellee for ment for Burleson on motion conducting agent as an business summary judgment, collection, adjustment, compromise and set- dismissed it complaint finding that kinds, purchasing all Marshall’s tlement of debts of receivable, engaged of all the unauthorized debts and claims accounts kinds, permanent law. The court then issued a powers necessary possessing all business; injunction restraining Marshall from con- to conduct this in its ducting agency its collection business (2) publicly solicits accounts Marshall affirm, style.4 modify the usual but We charge “no for collection and advertises opinion. with this consistent collect”; unless we trial, did not reach the is- Since the court not before damages, sue its busi- (3) Marshall conducts us. purported assignments taking ness by monetary receiving any

own without name therefor, the sole consideration I collection; purpose effecting their jurisdictional ar- first consider We (4) prepares statements Marshall ap- gument appellant and whether Division claims files Civil injunction. pellee standing to seek an had Superior Claims Court or the Small As of the District Columbia a result claimed is less than (if Branch amount Procedure Act Court Reform and Criminal costs, $750), payment makes court 1970, February of effective became attorneys so then notifies its retained that 1, 1971, prior to the than two months more they appear designated can on the return Court, action, Superior filing this the of date; 1973, pursuant 11- to Code D.C. § equity jurisdiction had and 921(a)(2), civil (5) original Marshall cred- remits to the 1, 1973, August up $50,000 when to until by itor two-thirds of the amount collected Consequently, the limitation ended. such the litigation retains one-third of that and Superior jurisdiction over the Court had charge, amount as its of which service out the coun- civil and over suit Marshall pays attorney. Marshall its retained damages5 for stem- terclaim Burleson Additionally, argument at on the suit alleged wrongful ming from ap- summary judgment motion counsel him.6 pellant had conceded that sole Marshall discretion, and absolute either before or has denies that court No one suit, compromise after to or settle a claim governing right make rules inherent to collecting that it was without consultation courts, And practice it.7 of law before assignor. with the jurisdiction, have including those in this may concerning who promulgated court rules The trial denied Marshall’s motion authority them.8 The counterclaim, practice law before granted judg- to dismiss the agencies [sic] unau- the defendants been a victim of in the 3. District Colum- Collection of Further, practice as required bonded, of law.” thorized be bia are not to licensed duty court, may to call such, he of the has an officer but as is the case herein be practice atten- corporation court’s to the the unauthorized as a business under D.C. licensed 14, 1973, seq. 35, note See 29-901 et See note tion. Code infra. accompanying text. infra v. Connecticut of Conn. 7. Bar Ass’n 222, Co., supra. 140 A.2d 145 Conn. Bank Trust 4. & See note trial court set 5. It be noted should ; 75) (GS hearing Super.Ct.Civ.lt. Rule Rule dam- 8. later issue as to down for a community of reputation Colum- ages (injury the District the Rules of to XIII of Governing of defending Appeals the Bar suit) this not has bia Court costs April Columbia, adopted testimony on this facet of case. the District taken opposition contended to Burleson personally that he to dismiss “has motion injunction power of a to to remedy court issue no doubt the inherent of the jurisdiction punish prevent a situation over which it has court to such conduct recognized jurisdiction. well in this its This recurrence.12 discussing equitable powers court

the trial court before the Court Reform asserted, Consequently, when it is Lounge, Act said in Brown v. Greenwich agreed and the statement of facts here so Inc., D.C.App., (1967): 225 A.2d reflects, that is engaging one in the unau equitable powers Its are limited to those court, thorized of law before the necessary fully completely to exer- only to authority consider the cise its over actions involv- suit, plaintiff’s and to but dismiss ing personal property or for debt power it also has responsibility and the $10,000 damages jurisdictional within its enjoin constituting further activities Thus, limit. where action- essen- Although of law.13 tially recovery money judg- of a ordinarily sought such relief is in actions jurisdictional ment within the court’s associations, agree instituted bar we limit, may resort be had to an with the trial court the issue was accounting accomplish this result. properly raised Burleson. [Citations omitted.] Further, recognized it has been that a Canon of the Code of Profession Responsibility al power, by court has inherent of the American Bar As virtue court,14 sociation, part system, adopted by places judicial existence as a upon responsibili regulate all members of the and control the bar ty protect preventing “assist in public and to and the adminis the unauthorized defendant, a mem justice by forbidding tration unwar law.” and un ber of the bar the District of Columbia ranted intrusion of unauthorized court, duty and an officer had a persons skilled into the law.10 bring of Marshall to the repeatedly It has held that even the activities been enactments, person statutory a court’s attention when he became aware absence of having jurisdic practice of their The court engaged in the unlawful law nature. may charge tion of unauthorized enjoined conducting be such to consider the Further, practice plaintiff’s action activity.11 held that a defense to it has been as mat having jurisdiction subject of the of law consti unauthorized ter, such contempt injunction against and there seems could issue an tutes of court ; juris- (1940) Depew F.2d 23 v. Wichita 9. At the time that case heard the was 117 403, Men, $10,000 49 at 142 Kan. P.2d was whereas Ass’n Credit dictional limitation (1935), denied, 710, 56 the case at bar filed was 1041 cert. 297 U.S. time was 574, (1936). $60,000. 80 L.Ed. S.Ct. 997 County, Realty Bump Conway-Bogue Polk Denver 12. v. District Court of Inv. Co. v. (1944). 623, Ass’n, 398, 5 914 P.2d 998 232 Iowa N.W.2d 135 Colo. 312 (1957) ; Baker, 321, A.2d In re 8 N.J. 85 supra. 11, cases at notes 10 cited See Fletcher, (1951) ; App.D.C. 505 In re 71 108, (1939) ; People Good F.2d 666 107 District of the X of the Rules Rule man, 346, 941, 944, 366 Ill. 8 N.E.2d cert. Governing Appeals Columbia denied, 777, 138, L.Ed. 302 58 S.Ct. 82 U.S. “[A] of Columbia. the District Bar of (1937) ; 601 Bar Ass’n v. Rhode Island establishing, lawyer as well should aid Ass’n, 122, R.I. A. Automobile Serv. 55 179 adequate enforcing, to of conduct standards (1935). 139 insuring public protect those who qualified ABA so.” to do law are 11. State v. Bonded Collections, Inc., 36 Responsibility, EC 8-7 Professional Code of 643, (1967) ; 154 250 In re Wis.2d N.W.2d lawyer 8-5, “a Also see EC at 34 143, Incorporated Consultants, 6 Ohio Misc. any appropriate authorities reveal should Smith, (1965) ; 216 912 N.E.2d Nelson v. improper may knowledge con- have of such he 382, (1944); P.2d Utah 634 Ameri deceptive (fraudulent, il- otherwise or duct” can Auto. Ass’n App.D.C. Merrick, 151, legal conduct). Marshall, upon restrictive urging us a unau- of the practice.15 issue When rule, reading of cites Yellowitz by the raised thorized law was J. Associates, Inc., D.C.App., Marshall quo H. & in a war- Attorney of Kansas General 1973, (1971) and D.C.Code of 284 A.2d 665 Supreme Court proceeding, § ranto Yellowitz, 28-3808, support position. said: Kansas Marshall, scope narrows the according to is called the matter in which The form against an as- permissive counterclaims impor not so the court’s attention is However, signee across the board. the court has Since tant. clearly in that case is limited. holding recognized proce any subject-matter, impermissive a counterclaim Yellowitz held complaint is charge dure which upon debt based against assignee of a given is entertained, charged one except assignor, where the tort notice, is there which proper specifically agreed assignee to under- conducted, ap fairly would hearing full liability. That is not take such ex rel. be sufficient. pear [State bar, present In the case at here. Perkins, 28 P. 138 Kan. Boynton v. upon not based Burleson counterclaim was (1943).] 2d assignor of the the acts omissions upon (Leon), but of the as- activities II plaintiff, signee (Marshall), The Yellowitz limitation relates herein. argument that Mar The second assignor of the and does not restrict torts is appeal raises on that Burleson’s shall upon based the acts of the counterclaims engaged is contention that Marshall assignee. he damages, be seeks an cannot The statute which Marshall con complaint by a raised counterclaim to a scope of the Burleson tends limits the raising debt. This method of this sort counterclaim, D.C.Code 28-380817 claim, unusual, procedurally albeit having after inapplicable been enacted proper. of this action. commencement Super.Ct.Civ.R. 13(b) Pursuant to : hold of a coun- that Burleson’s use We pleading may A state as a counterclaim issue terclaim to raise the of unauthorized any opposing party claim proper. assignee arising or occur- out transaction subject rence that is the matter of the Ill party’s opposing claim if such counter- ap- presented by this The third claim is within the of the operandi peal or not the modus is whether court. agency consti- as a collection of Marshall basically

This rule identical to Fed.R. practice of law. tuted the unauthorized purpose Civ.P. The of the federal 13(b). agency” ais

rule, rule, term “collection The and likewise that of the local all activities apply can give pleading term and generic the same freedom to the collecting debts of pursuit independent carried of claims a defendant However, American as in plaintiff others. plaintiff as the Merrick, App.D.C. 73 v. pleading against a Old Automobile Ass’n claims defendant. ques not do 151, we upon (1940), 23 right plead restrictions coun- 117 F.2d negoti- as such services collection terclaims been removed.16 tion here have ex- concurring opinion. cannot the counterclaim the effect 15. See jurisdictional limit the court. of ceed the (1972). 3 Moore’s Federal Practice 13.18 Note, however, Superior Columbia the District of 4 of rule 17.Section Act of 1971. rule to Consumer Credit Protection does add a limitation on the federal 594

ating, adjusting settling practice, and claims without occupation, draft- of litigation, seeking threat of payment ing rights documents are creat- ed, request, modified, written letter or oral nor do we surrendered or secured are propriety legal aspects have before us the of refer- practice all of of law. Consequently, operation ral services.18 re Shoe Mfrs. Protective [In view, agency, Ass’n, of a 369, 746, in our does 295 3 N.E.2d Mass. 748 necessarily (1936).] and of itself consti- tute the of law.19 process A but settling lawsuit is one requires The raised preliminarily issue legal right wrong. issue prac- consideration of what constitutes the Many disposed are of without suit. But Throughout years many tice of law. disposition others, of such issues for presented ques- courts have been with that negotiation, hire, advice and is as tion responded and have in numerous but much the though proc law as ways. similar following passages pleadings, trial, ess and with or without opinions of various courts state are necessary. legal were Counsel as to sta examples well reasoned of their view rights, respect tus and and conduct problem: thereto, special are as much a function English of the and the Ameri solicitor According generally to the understood lawyer can diagnosis, prognosis, as are definition of the of law in this prescription special are in field country, preparation embraces the of medicine. . . . v. [Fitchette pleadings, papers and other incident Taylor, 582, 910, 191 254 Minn. N.W. special actions and proceedings, and the also, 911 People See ex rel. Ill. management of such pro actions and Peoples’ St. Ass’n Yards Stock ceedings on behalf of clients before Bank, 462, 344 St. Ill. 176 N.E. 901 judges courts, and, addition, con (1931); Opinion In re Justices veyancing, preparation legal in Senate, 607, 289 Mass. N.E. kinds, struments of and, general, all Eley Miller, 529, (1935); Ind.App. clients, all advice to and all action taken 535, Depew (1893); 34 N.E. 836 for them in matters connected with the Men, Ass’n Wichita of Credit 142 Kan. Duncan, law. . . re . 83 S.C. [In denied, 403, 49 1041 (1935), P.2d cert. 186, 65 210, 211 (1909).] S.E. 297 U.S. 56 S.Ct. 80 L.Ed. 997 Consultants, (1936); Incorporated In re directing manag- [T]he 6 Ohio Misc. N.W.2d ing legal the enforcement of claims and (1965).] the establishment legal rights others, is necessary where it to form and upon opinions

to act as to what those importance Of to this considera rights are and as to the legal methods only tion is not the nature activities adopted them, which must be to enforce relationship involved but also the between giving furnishing legal agency attorneys the collection and the rights advice as to such methods agency who A collection sue on the claim. by yet hood, 18. We no means wish a to indicate contra none were cited or there- discussed opinion in, presumably to Brotherhood of Trainmen Railroad because of the in difference Virginia Virginia Bar, v. ex rel. State 377 issues. 1, 1113, (1964). U.S. 84 S.Ct. 12 89 L.Ed.2d Supreme There the Merrick, Court held that the union supra 19. American Auto. Ass’n v. being membership organization, 11; Thompson, Cal.App. a its activities note Cohn v. 128 regard v. Supp. 783, in this in (1932) ; Depew behalf of members were 16 P.2d 364 “clearly protection 11; Men, supra within the of the First Wichita Ass’n of Credit note pre- State v. Dudley Co., Amendment.” The 852, ease at bar does not & 340 Mo. 102 S.W. Many , sent denied, 693, constitutional considerations. 2d 895 cert. 302 U.S. 58 S.Ct. predated 12, the (1937). cited herein authorities Brother- 82 L.Ed. 535

595 recog- refused to jurisdictions a several have interpose between itself properly cannot validity assignments. the of such attorney seeking to collect nize an creditor and People Corporation, di Discount either v. To do so Securities claim. the creditor’s Bump 551, v. assignment (1935); 198 N.E. 681 by 361 Ill. indirectly, an rectly or County, 232 Iowa the unau District Court Polk otherwise, held to be has been 623, County Bay (1944); 5 914 practice of law.20 N.W.2d thorized Inc., 345 System, Finance Ass’n v. statute, by D.C.Code Congress The 434, (1956); 76 23 State Mich. N.W.2d assignee 1973, 28-2303, provided that the 339, 69 Agency, 167 Tenn. Sanford James thereon “may maintain an action of a debt (1934). S.W.2d 895 Super.Ct.Civ.R. 17(a) in his own name”. pros- action shall be provides “[ejvery that enacting statutory provision In the in in- party real name of the ecuted allowing assignee an to site in his own by party authorized that “a terest” and name, Congress not have intended could name without may own sue statute pro the the statute to be utilized to evade party whose bene- him the for joining with unauthorized hibition the Consequently, brought”. action is fit the by laymen, only sought rather but undertaken, the assignment is a when valid debt, assigned to allow suit on a which is and court by statute assignee is authorized convenience, brought to be procedural for in his own litigation to conduct the rule assignee. in the name of the party as the real interest. name permit The courts themselves will not case, albeit a lim- in this assignment The laymen represent- appear court a one,21 its face.22 appears to be valid on ited policy capacity. The of the courts ative thereby acqiured Assuming appellant that regard may in this legislature and the be on the debt to right to cause suit by subterfuge not be circumvented name, answers brought in its own neither permit layman taking assignment a an as to whether eliminates nor practic- carry on the business of him to by assignment on a contin- obtaining the ing law.23 bringing action as gent fee and in basis regard to the of those With activities did, unau- engaged it was others, attempt collect debts for who that practice of note thorized law. We 19; Dudley Co., supra file suit.” Marshall does not become the note 20. & State Consultants, supra Incorporated actual of the claim as owner it would under note In re outright assignment Corp., an People for valid considera- Discount 11. In v. Securities tion, only purports acquired a (1935), to have 551, it it was 198 N.E. 681 361 Ill. contingent attorney by interest of the claim. one-third employment an held that corporation which collected collection People Corp., supra v. Securities Discount contingent fee basis claim on 20, an as note where it was held that such client constituted unauthorized signment agen between creditor and collection 308, Bump law; Barnett, 16 Iowa 235 fraud, subterfuge cy was a sham and mere (1944), held it was where N.W.2d 579 agency enable in its own to maintain suit assignment bringing of suit under name, by at suit be handled was to paid attorney employed by collection assignor torney employed but agency unauthorized was collection assignee (the agency) Depew law; Ass’n v. Wichita affairs the un such a state of constituted 11, Men, supra note where Credit Bump law; v. District authorized furnishing to an business held Bay County, supra 12; of Polk note department attorney aof the collection Inc., System, County Finance Bar Ass’n v. association, the retention with credit men’s (1956) ; N.W.2d 23 Mich. attorney’s fee, portion constituted Agency, Tenn. v. James Sanford practice of law. S.W.2d assign assignment purports herein Smith, supra note at 639 Nelson v. Associates, Inc. Marshall the debt to H. & J. 154 P.2d. premises, authority in in its “with full name, to effect collection thereof and/or with or assignment, without an it has been small arising claims for its members out of held that agency may a collection automobile Federal accidents. The Circuit legal threaten action on behalf of appeal. another Court the decree modified attempt in the to collect recognizing claims.24 It has that it in While found no case also been held that one who confers which it with was held that the collection or ar- clients, legal advises them as to their bitration of claims alone amounted to the rights, practice and then takes the business to an the court observed: “But attorney arranges giving prior with him to look the of advice to collection of a engaged practice after it in urging legal propositions court is in the claim and the person law.25 in with the from whom discussions attempted collection is does involve the In Richmond Association of Credit Men practice performed only may law and be Association, v. Bar 167 Va. 189 S.E. by lawyers Consequently, . . . (1937), incorporated an credit associa- operation appellant’s court found the tion was held to engaged be in the unlaw- department claim to be unlawful. Ameri- practice ful of law where it was clear that Merrick, supra 26, can Automobile Ass’n v. employed lawyer association a to effect App.D.C. at 117 F.2d at 25. See collections, right discharge had the him County Bay Sys- also Bar Ass’n v. Finance supervise conduct, and to gave orders tem, supra. reports him, and received fixed his compensation In sustaining injunction and was a suit for an in- the real master in by Association, stituted situation. This Utah State Bar conclusion was reached despite language Supreme explained the Utah collection contract (the foregoing that it rationale in this agency) acting manner: as agent for the The creditor. court found The fact that the defendants some association, by that the placing itself be- employ instances a regularly licensed at tween lawyer the creditor by and the prepare torney to a suit does not make assuming and maintaining control over their legal. conduct cannot One do lawyer, had destroyed absorbed and the re- through employee agent an or an personal lation of direct confidence and re- which he cannot do himself. . sponsibility ought to exist between prohibition against attorney and client. layman applies . . . alike years layman directly

A to the few after that decision a case person and to the arose this indirect wherein com- through agent employee. an mittee or It is of the Bar im Association of the Dis- layman material may trict of said select Columbia for the suppression of duly licensed attorneys agents as his of law obtained employees through practices whom he practices certain attorney law. If the agent be fact the Association, American Automobile employee layman, of a his act is wherein the sought Association to collect e., supra i. union, Bump Barnett, 20; association or 24. does not consti- note Co., supra Dudley 19; Incorpo tute the unauthorized of law. How- & note In re ever, supra considering Consultants, court was a different rated note e., representation type representation, i. supra, Boynton Perkins, 25. State ex rel. of “a member in cases in- which involve the quoted approval Depew with v. Wichita membership whole, terest of the as a or of Men, supra See Ass’n of Credit note part” adding substantial “in circumstances in generally 1152, 1155 (1969); 27 A.L.R.3d New through which its interests own are involved Albuquerque, Inc., Mexico v. Credit Bureau of large portion the interest whole or (N.M.1973). 514 P.2d 40 membership.” The decree of the trial only respect. court was modified holding The case was cited attorney by intermediary, that control of an profit another for a and services to principal). advice layman (his Such the Simply fee because contingent on a basis. in the ille engaging be principal would attorney, by the an hired appellant an through such utilizes law if he gal practice of present actually himself corporation, to a third legal services agent rendered appellant from not remove the regular court does compensation and as a party for practice. sphere unauthorized the practice.27 customary business Since, stated, taking an the as we have the trial In a recent case which more pro- to circumvent the assignment order court here felt “on all fours” with was against will hibitions bar, Supreme case at Court Wiscon- that an accomplish goal, the fact not that sin, complaint upholding State practitioner, agent of the unauthorized seeking Bar Association is himself authorized who practice the unauthorized does actually performs legal some services said: entire taint from the not remove cannot do is axiomatic that one It scheme. Thus have a where the we situation employee agent through an or which Belle, individual, defendants, La himself. he cannot do Collections, Inc., corporation, Bonded advise the creditor when to start law escape the cannot conclusion [W]e Upon taking assignment a limited suit. representing business of engaging who, at attorney the defendants hire an controlling assignors the interests direction, their The commences suit. proceedings taken in suits on to be lawsuit, admit, direction defendants assignors retain assigned claims vested in them not in the creditor who is interest, defendants, is en- done successful, If the suit is the true client. of law. gaging When agency pockets the collection a fee for as an at- this is done not licensed one services that ha rendered. We conclude it constitutes the unauthorized torney bitual conduct of this nature for a fee by him in practice of whether done constitutes law.28 through regardless person agent, layman be a of whether the latter From the aforementioned cases County Bar attorney. [Bay licensed point readily one can gleaned: be Inc., supra at System, Ass’n Finance v. agency may legal not solicit the claim omitted).] (citations 29 of 76 N.W.2d basis; contingent may action on a not fee suit; advise the creditor when to start Procedures, here as were followed may attorney not employ an to institute usurpation the real in a Marshall, result and carry litigation on the under the con management of Ms law- role in the client’s trol and direction agency to enforce attorney in the role of suit as well as legal rights of the creditor.29 prod- to sue. The end advising the client Marshall, re- agency, is that the credit uct taking assignment advancing fee taining contingent under the circumstances and conditions as lawyer, whom costs, services of sells the present change themselves here cannot directs, destroying thereby it controls and providing legal basic fact attorney and client.30 privity between supra Smith, 27. at 640 of Nelson v. note 11; Smith, supra 22; note v. Nelson note 154 P.2d. Agency, supra note Sanford State v. James Inc., supra Collections, v. State Bonded note at 256 of 154 N.W.2d. 30.Likewise, a col- has held that this court agency real estate licensed as a lection 20; Barnett, supra Bump note bringing precluded an action broker County Dudley supra 19; Bay Co., note & requiring unpaid real under a statute rent Inc., supra System, Bar Ass’n Finance prohibiting to be licensed brokers estate agencies perform (a) legal Collection perform services Furnish advice or which are both convenient and in legal represent useful services or that is com- field, so, business in the petent pro- the but course of to do judicial or institute carrying they guard ceedings on that business must on behalf or other of creditors persons; engaging in activities that consti- tute the of law. (c) assignment Solicit and receive protec- public The has an interest in the of purpose accounts for the of suit relationship

tion of the and confi- trust thereon; attorney that exists between an and dence special- attorney An at law a client. is ist, profes- the well trained learned in (e) purpose Solicit accounts for the sion and sworn as an officer of the court having any legal proceed- action or court high to maintain accordance standards ings instituted thereon or solicit accounts approved with a court of Profession- Code any purpose any instigation at the Responsibility31 designed protect al attorney; public. preparation pleadings, The Employ (f) or terminate the giving legal regarding the set- services advice attorneys arrange or the terms tling of claims or the institution of suit are compensation which, for such services on behalf pub- of the practices the interest lic, authority of creditors historically without written have been reserved to the so; do professional. trained (g) Intervene creditor and at- this, between Recognizing duty protect torney any manner con- public, which would the American Bar Association exploit trol or the services of the attor- pro- in concert with business and various ney or which direct services would those groups fessional issues of Prin- Statements agency; interest of the ciples Respect with to the Practice of Law. ABA in group working One such with the (h) any Demand or man- obtain regard industry. the collection The proper compensation ner a share of the principles recently statement of most issued performed attorney services Lawyers the National Conference of account, collecting irrespective of Agencies persuasive is a in- Collection may agency whether or not the have feeling dication mutual of both the of the previously attempted collection thereof. industry bar and the collection that there proper need to define what are what improper practices.32 are attorney shall he free at all [T]he times to communicate with creditor prohibited following practices set provided agen- (i) further upon forth in statement directly bear cy may attempt to control or before us: issues any suggest imply wise it has any right to control the actions of the agency may not: [T]he argument ease, bringing growing in this direction Clerk of a suit out of real court, corporation. communicated with the Unau- estate activities unlicensed Inc., Associates, thorized Practice of Law Committee Harrison v. H. Marshall J. & Association the District of Columbia D.C.App., A.2d 404 Inc., Association, and the American Collectors 31. Rule X of the Rules of the District indicating filing the court would welcome the Appeals Governing Columbia curiae, of briefs amicus but none was forth- Bar of the District of Columbia. coming. thought have We their views would been useful. Unfortunately, we did not have the benefit of an amicus curiae. Prior to the scheduled aid lawyer should not EC 3-8 Since interfere with attorney or otherwise encourage layman relationship between attorney-client in association he should not attorney, (ii) and the creditor legal share layman or otherwise with a in which the manner decisions attorney, layman. . fees with a . . by the be handled claim is to claim brought, is to be suit whether 3 states: Note 1 under Canon settled, whether compromised or is to be unauthorized “The of the condemnation returned, any and oth- is to be the claim designed protect the practice of is to law of the decision requiring the er matters persons public legal by un- services be left instance shall in each creditor prohibition skilled in the The law. attorney the creditor and solely to the to insure lay intermediaries is intended other each direct with communication lawyer to the client loyalty the of the at- and the attorney desires when so possibly intervening and unimpaired by .33 . . . torney be so shall advised Cheatham, Avail- conflicting interests.” Responsi- Legal The ability of Services: Responsibility of Professional The Code Lawyer and of bility of the Individual Association, adopted the American Bar, Organized 12 U.C.L.A.L.Rev. 14, supra, in note by as indicated this court (1965). considera- ethical sets under Canon 3 forth practice of that as Marshall further contends why tions the unauthorized corporate charter prevented. They grant are: a result of the of a should be from the to conduct District of Columbia prohibition The 3-1 EC is its collection and to do what business grounded by layman practice of law necessary carry purposes, its its ac to out integrity public for of the in the need and by tivities are sanctioned the charter competence of those who undertake and ap provisions the relevant of the D.C.Code of the Because legal services. to render Thus, plicable corporations. Marshall to of the fiduciary personal character and operations, being reasons that its condoned relationship the inher- and lawyer-client legislative by Congress acting as the sys- legal complex of our ently nature body District, not constitute for the do assured tem, public can better be This con unauthorized of law. compe- responsibility and requisite corporate tention the cloak of the stretches is confined if the language tence and the beyond charter far Congress.35 intent of require- subject are to to those who upon imposed regulations ments and corporation powers The legal profession. of the members in- charter never enunciated its were Directory 63C 33. 5 Martindale-Hubbell Law assisting appellant by unauthorized duct follow-up principles to are These practice of law. Regulate to License “The Model Act May pursu- argues upon agreed Agencies”, 35.Marshall Collection granted the groups 29-904 it was § ant The to D.C.Code National Conference power specific participating to: were: complain sued, and defend America; and be A. “Sue Associated Bureaus Credit name”; Association; corporate in its American Collectors “Purchase, or otherwise take ... B. ' Management; National Association of Credit own, hold, acquire, . . . and to America; League Law Commercial personal real and in and with deal otherwise property, Bar Association. The American therein, any . . .” interest or Copies from the are available of this Act League or America Law Commercial power neces- all and exercise “To have C. sary Association. American Bar any all or effect to or convenient corporation is form- purposes for which the opinion suggested in its trial court (b), 29-904 [Now D.C.Code ed.” attorneys con- unethical risk “retained” (o).] (d) and creditor, dependent on collection from engage to in the to authorize it tended contemplates or au- and which the debtor behalf of another practice of to sue in enforcement for that thorizes the assignments of claims or to solicit party, of either suit, in the name brought le- they purpose. intended Neither were lawyer law; employing a attorney at ille- would be galize activity that otherwise assignor of the creditor attempted, nor on behalf gal. Congress has never so; do authority to inclination, specific written usurp the without any demonstrated the creditor between interposing itself regulation power of the in the courts on handling legal action lawyer practice of Such law. legal ac- maintaining claim; instituting or judi- in the always been vested control others; appropriating tions for Corporation system. The cial Act adjudged fees attorney sums use as D.C.Code, powers own although granting broad except assigned claims against debtors on corporations carry their business- prop- fide judgment is its bona such when es, specifically or grant does not either erty. corporation to implication authority for a Corporate

pursue practice of law. the ordered. So in this area gives greater form latitude no noncorporate than does form.36 in KELLY, Judge (concurring Associate result): the con examined what

We have as practice of law stitutes the unauthorized standing, appellee’s courts; what enunciated various state counterclaim, way to seek of a in generally law constitutes the appellant’s against in agencies, and to one, appears reference for it the is a troublesome and particular in to the functions reference universally, in those cases that almost in the pursued by appellant in- activities permanent such suits for which allow hold course of its We collection business. pursuing class actions junction, are counsel Associates, is that Inc. H. Marshall & other affected and in behalf of themselves J. and under engaged are legal profession or members of authority to judicial system our is without association recognized bar joined by duly practices condoned Nevertheless, do so. cannot be Such in grievance committee. right recognize the this court. We Ass’n Northern Jersey New attempt to collect 184, to solicit and to Asso., 123 A.2d 22 Mtg. N. N.J. J. therefor, claims, and to charge to a fee that a held 498, it was (1956), 504 where and purchase outright for a valid claims enjoin un- standing to bar association had legally consideration. How in- enforceable but that practice of the authorized seen, ever, activities, go as have we stand- attorneys may have no such dividual Accord beyond permissible area. well ing, said: the court that ingly, trial court agree we with the peculiar to rights Attorneys enjoy they appellant insofar as the activities of outside by those themselves, enjoyed practice of law constitute the unauthorized to only an incident profession, but However, modify enjoined. must be we And because public welfare. in that the of the trial court so order indi- right, as their nature of incidental junction as follows: will read no they have the bar members of vidual absence complain in the standing enjoined, to Appellant hereby from arising to themselves date, injuries advising specific creditors after this from: no ba- illegal practice, receiving alleged bring suit; soliciting or when to damage. irreparable any claim collec- sis assignments of claims or debts for 1 supplied.] assignor [Emphasis . . payment, to the . tion under which Legal also See Touchy Founda Lietz, Mun.Ct., Houston N.Y.S. 136 Buxton v. (Tex.1968). tion, 690 Sup., 432 S.W.2d aff'd 46 N.Y.S. prosecute his standing bring and coun- then, au- to It of settled seems on the basis brought ? thority, appellee may terclaim that not have appel- enjoin equity suit original in Morton, In Club Sierra U.S. lant from the unauthorized (1972), the L.Ed.2d 636 S.Ct. he raise issue as law but that could standing plain Supreme that Court makes a suit him for collection defense to except in process, judicial invoke debt, time a show- being there at that authorization, specific statutory cases of Once ing specific injury to himself. per- party has a depends upon whether decided, my in opinion raised it is outcome, that economic sonal stake court was disposing of issue trial for stand- injury furnishes the foundation complaint, not limited to a dismissal sue, ing special interest contempt, but holding appellant appellee As outcome not sufficient. unique these circumstances could alleged injury no to himself economic permanently enjoin appellant from un- special apparently only relies sua of the law either authorized member of the interest as individual sponte appellee’s request. or at bar, standing bring the feel he has no I counterclaim. HOOD, Judge, (concur- Chief Retired ring part dissenting : part) opinion The court’s cites numerous cases practice of law was where unauthorized agree that I under authorities cited enjoined, those cases but the actions in bringing of conduct general of brought by attorney were prosecuting against appellee this action or a com state or a bar association constituted the of unauthorized having of mittee of a bar association some appellee and that this to was available An standing. ficial or semi-official exam as a against defense to the action him. ple type is American of this of action But agree appellee I do not had a Merrick, App.D.C. Automobile Ass’n v. 73 right bring to and maintain his counter- 151, (1940), action 117 F.2d 23 where injunction appel- claim restraining for an Sup on the brought was the Committee lant engaging in the unauthorized pression of Law of Practice Unauthorized practice of law.1 Bar of the District Association as Assuming, says, that under court concurring in the Columbia. As noted present a rules defendant has the same a bar opinion, it has held that state been independent freedom of pleading claims such standing maintain has to association against plaintiff plaintiff action, of the bar single member but a defendant, appel- we must view standing in the absence has no such separate lee’s and inde- counterclaim as New injury himself. showing specific to pendent it claim. I not think So viewed do New Bar Ass’n Northern Jersey v. can be sustained. 184, Assoc., A.2d Mtg. Jersey N.J. Optometric Delaware See also (1956). appellee In alleged his counterclaim ishe 223, Sherwood, 128 A. Corp. Del.Ch. licensed to law and has active 2d 812 practice, allegation but he made no ac- this that when appellant’s It be observed activities interfered with or should heard, to admission filed and adversely practice. affected his He did tion was awas not, likely not, the District Columbia allege that his bar could District the United States function brought counterclaim was on behalf of the That the District Columbia.2 legal profession. appellee gives Court then What ap- part present plays no in the referring part it 1. I court peal. am not to that of the coun- sought $50,000 damages. terclaim which part ap- That of the counterclaim does not seq. pear upon by et 11-2101 have D.C.Code to been acted trial recognized my opinion court when the court the District Columbia In sustained action, Suppres- appellee’s to appellant’s Association’s Committee on defense to he proper granted sion Unauthorized as a him all the relief which was Practice entitled, should party enjoining to seek the and the counterclaim have unauthorized inclined, practice. If the trial American Automobile Ass’n been dismissed. so Merrick, upon 1, 1972, appropri- April As of this court could have called supra. investigate was appellant’s court authorized to make rules for ex- ate bar committee to amination, qualification to take action it deemed and admission activities and such bar, its this members bar of best. eligible court became foregoing For the hold reasons I would District of Columbia courts.3 Under improperly that the issued.

newly acquired authority this court estab- lished a bar of Co- unified the District of

lumbia, and, among things, other established

a Committee on Unauthorized Practice of

Law, provided prac- that unauthorized is “subject injunctive

tice in a relief

proceeding to be the Com- commenced ap- mittee Practice.”4 Unauthorized It Joseph BERGER, Petitioner, R. pears me that there clearly recognized that actions BOARD OF PSYCHOLOGIST EXAMINERS enjoin FOR the DISTRICT OF CO be brought by should a committee of the LUMBIA, Respondent. bar and not an individual member of Nos. Leaving bar. aside the standing sue, procedure the established Appeals. District of Columbia action, of committee investiga- after due Argued March tion, orderly leads process to a more than filing indiscriminate of actions individu- Decided Dec. lawyers. al Finally, question I

trial court to issue injunction. As be- noted,

fore at a issued

time when control over

was vested in the United States District

Court. While recognize authority I

the trial court “to maintain its freedom law,”5

from unauthorized power punish contempt one guilty

who is of unauthorized court,6

law in that enjoined the court here

many court, this, activities outside the me, infringement seems to anwas on the

prerogative of the District Court at regulate

time to the law

the District of Columbia. seq. Brown, 156, 166, D.C.Code U.S.App.D.C. et 11-2501 5. In re (1971). F.2d

4. See our rule 46B. Mozie, App.D.C. 255, 6. Heiskell 82 F.2d

Case Details

Case Name: J. H. Marshall & Associates, Inc. v. Burleson

Court Name: District of Columbia Court of Appeals

Date Published: Dec 28, 1973

Citation: 313 A.2d 587

Docket Number: 6159

Court Abbreviation: D.C.