State Bar of Arizona v. Arizona Land Title & Trust Co.
Citation and Court
90 Ariz. 76 (1961), Supreme Court of Arizona
Facts
Arizona Land Title & Trust Co., a title insurance company, routinely prepared deeds, mortgages, contracts for sale of real estate, and other legal documents for its customers as part of its title insurance business. The State Bar of Arizona sought an injunction, arguing that the preparation of these documents constituted the unauthorized practice of law.
Issue
Whether a title insurance company that prepares legal instruments such as deeds, mortgages, and contracts as part of its business engages in the unauthorized practice of law.
Holding
The Arizona Supreme Court held that the preparation of legal instruments by a non-lawyer title company, even as an incident to its title insurance business, constitutes the unauthorized practice of law and may be enjoined.
Rule / Doctrine
The preparation of legal documents such as deeds, mortgages, and real estate contracts constitutes the practice of law because it requires legal knowledge and judgment and may affect the legal rights of the parties. Non-lawyers, including corporations, are not permitted to prepare such documents for others, even as an ancillary service, unless an exception applies. The public interest in competent legal representation justifies restricting such activities to licensed attorneys.
Significance
State Bar of Arizona v. Arizona Land Title & Trust is a leading unauthorized practice of law case in the real estate context, illustrating the breadth of what constitutes “practicing law” and the tension between professional self-regulation and the business interests of non-lawyer entities that provide quasi-legal services. It is frequently contrasted with N.Y. County Lawyers Ass’n v. Dacey on the boundary between permissible legal information services and unauthorized practice.