State Law

The trial court found that this activity was the unauthorized practice of "law business"(FN1) and awarded plaintiffs damages. This Court, in Eisel v. Midwest BankCentre, 230 S.W.3d 335 (Mo. banc 2007), a case severed from the original action, confirmed that charging a fee for legal document preparation was the practice of law business and companies who did so were liable for treble damages pursuant to section 484.020.2.(FN2)

In this appeal, Countrywide argues that the provision awarding treble damages in section 484.020.2 is unconstitutional on due process grounds. Further, Countrywide argues that the trial court had no authority to award prejudgment interest or actual damages to the plaintiffs who did not meet the requirements of the statute.

The provision for awarding treble damages in section 484.020.2 is constitutional. The trial court judgment of treble damages to plaintiffs who paid the fee within two years of suit and actual damages and prejudgment interest to plaintiffs who paid three to five years prior to suit is affirmed. The award of prejudgment interest for plaintiffs who recovered treble damages is reversed.

The provision for awarding treble damages in section 484.020.2 is constitutional. Although penal in nature, an award of treble damages does not require a finding of a culpable mental state. The statute allowing the treble damages here defines the prohibited conduct and sets out the prescribed penalty. Further, this Court has held in the analogous context of real estate brokers and escrow companies that the act of charging a separate fee for the completion of legal forms by non-lawyers constitutes the unauthorized practice of law business. See In re First Escrow, Inc., 840 S.W.2d 839 (Mo. banc 1992); Hulse v. Criger, 247 S.W.2d 855 (Mo. banc 1952). The trial court properly awarded treble damages to homeowners who paid the document-preparation fee within two years of suit as well as actual damages and prejudgment interest to homeowners who paid the fee three to five years before the suit. The plaintiff homeowners, however, only may obtain a single recovery. Accordingly, homeowners who paid the fee within two years of the suit may recover treble damages under section 484.020.2, while those who paid the fee within three to five years of the suit may recover the fee they paid under the theory of money had and received. The trial court erred in awarding prejudgment interest to homeowners who recovered treble damages but was within its discretion to award prejudgment interest to homeowners who recovered only actual damages under the theory of money had and received.

Full post as published by Showmeblawgs on March 21, 2008 (boomark / email).