Dirty Linen

The South Carolina Supreme Court has held that a LLC engaged in the unauthorized practice of law in a breach of contract matter

Facts

In April 2017, the Wando River Grill (Restaurant) became dissatisfied with the service of its linen supplier (Cintas) and Cintas’ ability to supply the type of linens Restaurant needed. Restaurant contacted another supplier to secure some or all of its required linens and notified Cintas of its need to suspend at least a portion of Cintas’ services. Cintas claimed Restaurant’s suspension of service constituted a breach of the parties’ contract, invoked a liquidated damages provision in the contract, sought more than $8,000 in damages, and hired Murkin to collect the outstanding debt. Petitioner, a South Carolina attorney, represented Restaurant in the resulting dispute.

Findings

In her proposed conclusions of law, Judge Curtis found Murkin went beyond the mere collection of a debt and crossed into UPL by:

(1) becoming involved in negotiating a contract dispute between Cintas and Restaurant and interposing itself between the parties for the purpose of negotiating a settlement on behalf of Cintas;

(2) purporting to advise Cintas as to what legal action it should take;

(3) indicating to Restaurant that it would advise Cintas as to whether to accept a settlement offer;

(4) purporting to control whether and when the case would be referred to an attorney;

(5) purporting to control the actions of the attorney and claiming it could direct the attorney not to settle the claim or make payment arrangements with Restaurant;

(6) threatening to file suit and making specific claims about what types of damages would be recoverable in the lawsuit; and

(7) giving legal opinions and interpreting the terms of the contract between Restaurant and Cintas.

Conclusion

In the instant case, Murkin—similarly to the respondent in Roberts and ICC in Linder—engaged in UPL when it interpreted Cintas’ service contract with  Restaurant, gave legal opinions as to what damages were recoverable under the Cintas-Restaurant contract, sought to negotiate the contract dispute between Cintas and Restaurant, and purported to advise Cintas on whether to accept a settlement offer and to negotiate the amount of settlement.

Other states have addressed the issue of whether a collection agency engages in UPL when an agency specifically claims it controls, or implies it has the right to control, the actions of a licensed attorney.

Result

We enjoin Murkin from engaging in any further such conduct.

(Mike Frisch)