In 1989 the Superior Court of New Jersey addressed alleged unauthorized practice of law by a real estate broker. The court held that a broker who represented a client before a planning board violated state law regarding the unauthorized practice of law.
Yates (Seller) agreed to sell real estate to Slimm (Buyer). Under the agreement, Seller was to obtain subdivision approval from the local planning board. Seller, an attorney who does not practice law, employed his broker, Craft (Broker), to obtain the required approval. Broker appeared before the board on several occasions, but Seller, whose presence was requested by the board, made no appearances. After board members voiced opposition to the proposed subdivision but before any decision was made, Broker withdrew the application. Slimm sued for specific performance of the contract and Seller argued that Broker's failure to obtain subdivision approval made the agreement unenforceable.
The Court found that Seller breached the sales agreement. He failed to make reasonable efforts to obtain subdivision approval because: (1) he failed to appear before the planning board himself despite the board's request; (2) the subdivision application was withdrawn before a final decision could be made by the planning board; and (3) any approval that might have been obtained would be unenforceable because he permitted a non-lawyer to process the subdivision application, thus participating in the unlawful practice of law. Seller was ordered to renew his application to the planning board. The court noted that the specific performance issue was reserved, but then addressed its unauthorized practice of law holding.
The Court stated that subject to certain exceptions that do not apply in this case, “no person shall practice law in this State unless that person is an attorney holding a . . . license.” The court also stated that the New Jersey Supreme Court holds the exclusive authority to determine who practices law. Under state case law, one who conducts litigation on anther's behalf is practicing law and must therefore be a lawyer. The court cited Kasharian v. Wilentz, 93 N.J. Super. 479, 226 A.2d 437 (App. Div. 1967), which held that an administrator was not able to maintain a wrongful death action. The court also noted that the primary interest of the State is to protect the public.
The Court noted that the practice of law is not confined to litigation but extends to many non-litigious fields which entail specialized knowledge and ability. It noted that only lawyers are allowed to conduct proceedings before an administrative agency, citing Stack v. P.G. Garage, Inc., 7 N.J. 118, 80 A.2d 545 (1951) (holding that non-lawyers may not appear before county boards of taxation)). It also noted findings from the Supreme Court's Committee on the Unauthorized Practice of Law. The Committee had held that an appearance before a Board of Adjustment on an application for a variance or special exception constituted unlawful practice of law (citing Opinion No. 13, 98 N.J.L.J. 17 (January 9, 1975)). It reached the same conclusion regarding appearances before planning boards (citing Opinion No. 16, 98 N.J.L.J. 553 (June 26, 1975)).
Based on the foregoing, the Court held that Broker's appearance before the planning board constituted the unauthorized practice of law. The court noted that the subdivision application concerned a single lot and was relatively simple, but that every application, no matter how elementary, involves questions of law which can be intricate. Thus, subdivision applications must be prevented by someone trained in, and licensed to practice, law if the public is to be protected. The court held that both Broker and Seller violated the law; Broker by representing Seller, and Seller, as an attorney assisting in the unauthorized practice of law. The court ordered Seller to resubmit his application through a licensed attorney. In also noted that recovery of compensation for legal services by one not permitted to practice law is not permitted. In a footnote at the end of the opinion, the court stated that Broker's violation of the law may prevent him from enforcing any commission agreement he had with Seller.
Slimm v. Yates, 236 N.J. Super. 558, 566 A.2d 561 (N.J. Super. Ct. App. Div. 1989).