Preview:

ATTORNEYS FOR APPELLANT David P. Sanders Michael T. Brody Chicago, Illinois Elizabeth G. Porter Washington, D.C. David C. Campbell Karl L. Mulvaney Indianapolis, Indiana ATTORNEYS FOR AMICUS CURIAE THE OFFICE OF THE COMPTROLLER OF THE CURRENCY Daniel P. Stipano Deputy Chief Counsel Office of the Comptroller of the Currency Washington, D.C. Horace G. Sneed Director, Litigation Division Office of the Comptroller of the Currency Washington, D.C. Ernest Clifford Barrett, III Senior Counsel, Litigation Division Office of the Comptroller of the Currency Washington, D.C. Susan W. Brooks United States Attorney Southern District of Indiana Shelese Woods Assistant United States Attorney Indianapolis, Indiana

ATTORNEYS FOR APPELLEE Irwin B. Levin Richard E. Shevitz Scott D. Gilchrist Eric S. Pavlack Kelley J. Johnson Indianapolis, Indiana

______________________________________________________________________________

In the

Indiana Supreme Court
_________________________________ No. 49S05-0612-CV-497 CHARTER ONE MORTGAGE CORPORATION, Appellant (Defendant below), v. KYLE CONDRA, ON BEHALF OF HIMSELF AND OTHERS SIMILARLY SITUATED,

Appellee (Plaintiff below). _________________________________ Appeal from the Marion Superior Court, No. 49D03-0311-PL-2102 The Honorable Patrick L. McCarty, Judge _________________________________ On Petition To Transfer from the Indiana Court of Appeals, No. 49A05-0501-CV-30 _________________________________ May 2, 2007 Boehm, Justice. We hold that the preparation of mortgage documents by non-attorneys does not necessarily constitute the practice of law and that a lender's charging a fee for the preparation does not convert it into the unauthorized practice of law. Facts and Procedural History In 2002, Kyle Condra borrowed $89,600 to purchase real estate. His loan from Charter One Mortgage Corporation ("Charter One") was secured by a mortgage on the property. In connection with the loan, Charter One charged Condra a $175 fee for the completion of a deed and mortgage. These documents were prepared by Charter One's agents or employees who were not licensed to practice law. In 2003, Condra filed a class action against Charter One. His complaint for money had and received and unjust enrichment alleged that Charter One's document preparation fee was prohibited under Indiana law because charging a fee for documents prepared by non-lawyers constituted the unauthorized practice of law. Pursuant to Indiana Trial Rule 12(B)(6), Charter One filed a motion to dismiss the complaint for failure to state a claim upon which relief could be granted. The trial court granted Charter One's request to stay all proceedings in the matter, including class certification, pending its ruling on Charter One's motion to dismiss.

2

Charter One asserted that it was an operating subsidiary of a national bank, Charter One Bank, N.A. 1 It therefore was governed by federal regulations promulgated under the National Bank Act by the Office of the Comptroller of the Currency ("OCC"). Among those regulations is a provision that allows national banks and their operating subsidiaries to charge incidental fees for legal services provided by non-lawyers in the preparation of real estate loan documents. Charter One contended that the OCC regulations expressly preempt any conflicting state law. The trial court denied the motion but certified its order for interlocutory appeal. The Court of Appeals affirmed, holding this Court's jurisdiction over the unauthorized practice of law is not preempted by the federal regulations at issue. Charter One Mortgage Corp. v. Condra, 847 N.E.2d 207 (Ind. Ct. App. 2006). We granted transfer. 860 N.E.2d 599 (Ind. 2006). Standard of Review A motion to dismiss for failure to state a claim tests the legal sufficiency of the claim, not the facts supporting it. Hosler ex rel. Hosler v. Caterpillar, Inc., 710 N.E.2d 193, 196 (Ind. Ct. App. 1999), trans. denied. Thus, our review of a trial court's grant or denial of a motion based on Trial Rule 12(B)(6) is de novo. Sims v. Beamer, 757 N.E.2d 1021, 1024 (Ind. Ct. App. 2001). When reviewing a motion to dismiss, we view the pleadings in the light most favorable to the nonmoving party, with every reasonable inference construed in the nonmovant's favor. City of New Haven v. Reichhart, 748 N.E.2d 374, 377 (Ind. 2001). A complaint may not be dismissed for failure to state a claim upon which relief can be granted unless it is clear on the face of the complaint that the complaining party is not entitled to relief. Id. (citing McQueen v. Fayette County Sch. Corp., 711 N.E.2d 62, 65 (Ind. Ct. App. 1999), trans. denied).

1

Condra conceded that Charter One was an operating subsidiary of a national bank. Charter One Mortgage Corp. v Condra, 847 N.E.2d 207, 211 n.3 (Ind. Ct. App. 2006). For this reason, the Court of Appeals did not address whether this fact was outside the pleadings for purposes of a 12(B)(6) motion. We decline to address this procedural point for the additional reason that Charter One's status under the National Bank Act is irrelevant to our disposition of the case.

3

Unauthorized Practice of Law Pursuant to the Indiana Constitution, this Court has original jurisdiction over "the unauthorized practice of law." Ind. Const. art. 7,

Download Charter One Mortgage Corp. v. Kyle Condra.pdf

Indiana Law