Consumer Attorney Services, P.A., The McCann Law Group, LLP, and Brenda L. McCann, Individually and as Owner and/or Officer of Consumer Attorney Services, P.A. and The McCann Law Group, LLP, Appellants (Defendants below),
State of Indiana, Appellee (Plaintiff below).
from the Marion Superior Court, No. 49D11-1401-PL-1477 The
Honorable John F. Hanley, Judge
Petition to Transfer from the Indiana Court of Appeals, No.
ATTORNEYS FOR APPELLANTS Kevin P. Podlaski Micah J. Nichols
Beers Mallers Backs & Salin, LLP Fort Wayne, Indiana
ATTORNEYS FOR APPELLEE Curtis T. Hill, Jr. Attorney General
T. Craft David L. Steiner Deputy Attorneys General
Attorney Services, P.A., The McCann Law Group, LLP, and
Brenda McCann (collectively "Defendants") appeal
the trial court's denial of their motion for summary
judgment, claiming they are all expressly or impliedly exempt
from liability under each of the four statutes cited by the
State in this civil suit. Finding that none of the Defendants
properly fit within these statutory exemptions, we affirm.
and Procedural History
CAS is a Florida corporation
that purports to specialize in foreclosure- and
mortgage-related legal defense work, requiring non-refundable
retainers and monthly fees up front to be automatically
deducted from bank accounts. McCann was an attorney licensed
in Florida, who acted as CAS's manager. CAS subcontracted
with at least five Indiana attorneys to provide local
services, who executed "Of Counsel, "
"Associate, " and/or "Partnership"
agreements with CAS. Under the "Partnership"
agreement, the attorney acquired a 1% non-voting interest in
CAS, and was to be involved with client intake and screening,
to administer the referral of Indiana cases to other Indiana
lawyers employed by CAS, and to provide clients with direct
legal services as needed. Under the "Associate"
agreements, CAS handled all aspects of client intake and
communication, document preparation, and billing, with the
attorney's role limited to speaking with clients only
when directly asked by the client, and meeting with them only
once prior to filing any legal documents such as a bankruptcy
petition (in order to obtain appropriate signatures), and
speaking with opposing counsel only when
"necessitated." Appellant's App. at 86. Under
the "Of Counsel" agreements, the lawyer was a
completely independent contractor, but was to perform
essentially the same functions as under the Associate
agreement. All of these agreements were entered into
before CAS registered as a foreign entity authorized
to do business in Indiana.
homeowners quickly began to register complaints with the
Office of the Indiana Attorney General regarding CAS's
treatment of their foreclosure and loan-modification cases.
The OAG's investigation revealed that at no point between
initial contact and retention did the majority of the Indiana
homeowners in question have any contact with an
Indiana-licensed attorney, and moreover that the legal
services they did receive after retention were
"perfunctory." Appellant's App. at 252. Of the
cases the OAG investigated, no home owners obtained a
successful loan modification. And all of the conduct in
question (including the majority of the complaints examined)
also occurred prior to CAS's registration with the
Indiana Secretary of State.
State then brought this civil suit against Defendants,
alleging their conduct violated four Indiana consumer
protection statutes: (1) the Credit Services Organizations
Act (CSOA), Indiana Code chapter 24-5-15 (2016); (2) the
Mortgage Rescue Protection Fraud Act (MRPFA), Indiana Code
article 24-5.5 (2016); (3) the Home Loan Practices Act
(HLPA), Indiana Code article 24-9 (2016); and (4) the
Deceptive Consumer Sales Act (DCSA), Indiana Code chapter
24-5-0.5 (2016). Defendants moved for summary judgment,
claiming they were all statutorily exempted from liability.
The trial court denied the motion, but certified its order
for interlocutory appeal. Our Court of Appeals affirmed in
part, reversed in part, and remanded, finding that CAS was
exempt from liability under everything but a portion of the
DCSA claim, while McCann was not exempt under any of the four
statutes. Consumer Attorney Servs., P.A. v. State,
53 N.E.3d 599, 612 (Ind.Ct.App. 2016), reh'g
denied. We hereby grant the State's petition to
transfer and vacate the Court of Appeals' decision below.
Ind. Appellate Rule 58(A).
review of a grant or denial of a motion for summary judgment,
we stand in the same position as the trial court: the movant
bears the initial burden of designating evidence
affirmatively negating that there is any genuine issue of
fact as to a determinative issue, at which point the burden
shifts to the non-movant to demonstrate such a genuine issue
of fact indeed exists. Hughley v. State, 15 N.E.3d
1000, 1003-04 (Ind. 2014); Ind. Trial Rule 56(C). And
although our review is de novo, "a trial
court's judgment comes to this court clothed with a
presumption of validity, and the appellant bears the burden
of proving that the trial court erred." Schwartz v.
Heeter, 994 N.E.2d 1102, 1105 (Ind. 2013) (internal
the CSOA, the MRPFA, the HLPA, Nor the DCSA Provides an