Editor’s Note.

Session Laws 2020-3, s. 4.16(a), provides: “Notwithstanding G.S. 84-1 , in response to the coronavirus emergency, a justice or judge of the General Court of Justice may administer the required oath prescribed for attorneys by G.S. 11-11 to an attorney remotely using a form of live video conferencing technology, provided the individual taking the oath is personally known to the justice or judge or provides satisfactory evidence of identity to the justice or judge.” Session Laws 2020-3, s. 4.16(b), provides for the expiration of this provision on December 1, 2020.

Session Laws 2020-3, s. 5, is a severability clause.

Session Laws 2021-3, s. 2.23(a), (b), provides: “(a) Notwithstanding G.S. 84-1 , in response to the coronavirus emergency, a justice or judge of the General Court of Justice may administer the required oath prescribed for attorneys by G.S. 11-11 to an attorney remotely using a form of live video conferencing technology, provided the individual taking the oath is personally known to the justice or judge or provides satisfactory evidence of identity to the justice or judge.

“(b) This section is effective when it becomes law and expires December 1, 2021.”

Legal Periodicals.

For article, “The Learned Profession Exemption of the North Carolina Deceptive Trade Practices Act: The Wrong Bright Line?,” see 15 Campbell L. Rev. 223 (1993).

For article, “Reginald Heber Smith and Justice and the Poor in the 21st Century,” see 40 Campbell L. Rev. 73 (2018).

CASE NOTES

Nonresident Attorneys. —

As this section requires the oath of allegiance to the State, it debars a citizen of another state from obtaining a license to practice law, and a nonresident attorney does not acquire the right to practice habitually in this State by having been previously allowed, through the courtesy of the courts, to appear in special cases. Manning v. Roanoke & T.R.R.R., 122 N.C. 824 , 28 S.E. 963, 1898 N.C. LEXIS 360 (1898).

CASE NOTES

Bankruptcy. —

Petition preparer engaged in the unauthorized practice of law under G.S. 84-2.1 by providing a debtor with advice and legal citations necessary to complete the debtor’s bankruptcy schedules; thus, he committed an unfair or deceptive act under 11 U.S.C. § 110(i). In re Springs, 358 B.R. 236, 2006 Bankr. LEXIS 4097 (Bankr. M.D.N.C. 2006).

CASE NOTES

What Constitutes Practicing Law. —

To constitute the practice of law, within the prohibition of this section, it is necessary that the person charged with its violation shall have customarily or habitually held himself out to the public as a lawyer, or that he has demanded compensation for his services as such. State v. Bryan, 98 N.C. 644 , 4 S.E. 522, 1887 N.C. LEXIS 340 (1887).

The fact that a person on one occasion acted as an attorney for a party to an action is some evidence for the jury to consider, but is not conclusive of the question. State v. Bryan, 98 N.C. 644 , 4 S.E. 522, 1887 N.C. LEXIS 340 (1887). See G.S. 84-4 .

Section Not Exhaustive. —

The last sentence in this section makes it clear that the statute does encompass all the activities that could be considered the practice of law. Toms v. Lawyers Mut. Liab. Ins. Co., 104 N.C. App. 88, 408 S.E.2d 206, 1991 N.C. App. LEXIS 992 (1991), cert. denied, 330 N.C. 618 , 412 S.E.2d 95, 1992 N.C. LEXIS 50 (1992).

Practice of law embraces the preparation of legal documents and contracts by which legal rights are secured. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962).

Not All Activities Within Definition Are Unlawful for Lay Persons. —

It was not the purpose and intent of this section to make unlawful all activities of lay persons which come within the general definition of practicing law. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337 (1962). See note to G.S. 84-4 .

The key as to whether attorney performed a professional service was not the act, but rather, the capacity in which he undertook the performance of the act. Toms v. Lawyers Mut. Liab. Ins. Co., 104 N.C. App. 88, 408 S.E.2d 206, 1991 N.C. App. LEXIS 992 (1991), cert. denied, 330 N.C. 618 , 412 S.E.2d 95, 1992 N.C. LEXIS 50 (1992).

Solicitation and Acceptance of Money for Investment. —

An attorney from outside the State coming to North Carolina and suggesting to the plaintiff that he be allowed to invest the plaintiff ’s money is not acting in any legal capacity when he accepts the money from the plaintiff for investment. Smith v. Travelers Indem. Co., 343 F. Supp. 605, 1972 U.S. Dist. LEXIS 13502 (M.D.N.C. 1972).

A licensed attorney who is a full-time employee of an insurance company may not ethically represent one of the company’s insureds as counsel of record in an action brought by a third party for a claim covered by the terms of the insurance policy or appear as counsel of record for the insured in the prosecution of a subrogation claim for property damage. Gardner v. North Carolina State Bar, 316 N.C. 285 , 341 S.E.2d 517, 1986 N.C. LEXIS 2088 (1986).

Law Firm’s Liability for Activities of Partner. —

In order to determine whether members of a law firm should be held liable for the activities of one of its partners, the court should consider (1) the provisions of the instrument empowering the firm to practice law, such as partnership agreements and articles of incorporation, as well as statutory provisions; (2) the construction which our courts have historically given the questioned activity or related ones; (3) where the partner has acted, or seemed to act, with the firm’s authority; this includes his position in the firm, the participation — if any — by the rest of the firm in the disputed activities, and any assurances given the client that this transaction would be handled through the firm; and finally, (4) whether the other members of the firm have assented to or ratified the acts. Shelton v. Fairley, 86 N.C. App. 147, 356 S.E.2d 917, 1987 N.C. App. LEXIS 2683 (1987).

Bankruptcy Petition Preparers. —

All of the bankruptcy petition preparer’s services fell within G.S. 84-2.1 since it included preparing and filing of petitions for use in court; but under 11 U.S.C.S. § 110, the preparer’s services had to be limited to typing the documents as directed by the preparer’s customers — therefore, providing documents that contained legal advice, thereby giving the customers the impression that the documents contained all of the information necessary as to whether or not to file bankruptcy and how to complete the forms, was an unfair and deceptive practice. In re Moore, 290 B.R. 287, 2003 Bankr. LEXIS 213 (Bankr. E.D.N.C. 2003).

By taking the information placed in the workbook by the customer and entering it by computer into the official forms, which differed from the workbook, the preparer and the company ceased to be mere scriveners, as allowed by 11 U.S.C.S. § 110, and, instead, engaged in “the preparation . . . of petitions for use in any court,” which fell within the definition of practice of law contained in G.S. 84-2.1 . In re Graham, 2004 Bankr. LEXIS 1678 (Bankr. M.D.N.C. Feb. 10, 2004).

Where pro se bankruptcy debtors retained a petition preparer to complete their bankruptcy petition and accompanying schedules and forms, the preparer engaged in the unauthorized practice of law by advising the debtors concerning an unlisted creditor and by maintaining a website which explained legal options and concepts related to bankruptcy. In re Medley, 2005 Bankr. LEXIS 2290 (Bankr. M.D.N.C. Nov. 10, 2005).

Paralegal violated 11 U.S.C.S. § 110 when she assisted two debtors in filing bankruptcy while she was not acting under the direct supervision of an attorney, and engaged in the unauthorized practice of law, in violation of G.S. 84-4 , when she gave each debtor legal advice; although the court could have imposed sanctions on the paralegal for each violation of § 110—including the fact that she did not disclose her fees to the court, signed documents on the debtors’ behalf, and did not disclose her role in either case in any of the documents that were filed—her violations could be addressed by requiring her to disgorge her fees, to pay each debtor $2,000, and enjoining her from committing future violations of § 110. In re Bodrick, 2016 Bankr. LEXIS 1668 (Bankr. W.D.N.C. Apr. 14, 2016).

Workbook Created by Bankruptcy Petition Preparers. —

Where bankruptcy petition preparers provided customers with a workbook and guide that contained advice to the customer concerning bankruptcy law and how the blanks in the workbook should be completed, the preparers engaged in the unauthorized practice of law. In re Langford, 2005 Bankr. LEXIS 3201 (Bankr. M.D.N.C. Nov. 9, 2005).

Scrivening. —

Although the North Carolina courts apparently have not addressed the issue, most courts have concluded that although a non-attorney may not create a document for another person or advise on how the document should be prepared, merely typing or “scrivening” a petition or legal document for another person does not constitute the practice of law. This distinction has been made in dealing with petition preparers under 11 U.S.C.S. § 110. In re Lazarus, 2005 Bankr. LEXIS 1093 (Bankr. M.D.N.C. Mar. 14, 2005).

Scrivener’s exception to the practice of law applied because a taxpayer’s director of financial support filled out blanks on a standardized, fill-in-the-blank appeal form and filed it with the North Carolina Property Tax Commission, which required no exercise of legal judgment; therefore, the taxpayer did not avail itself of nonattorney representation before the Commission requiring notice, and the Commission did not err in denying the county’s motion to dismiss. In re Harris Teeter, LLC, 271 N.C. App. 589, 845 S.E.2d 131, 2020 N.C. App. LEXIS 435 (2020), cert. denied, 376 N.C. 544 , 851 S.E.2d 49, 2020 N.C. LEXIS 1160 (2020), aff'd, 378 N.C. 108 , 861 S.E.2d 720, 2021- NCSC-80, 2021 N.C. LEXIS 714 (2021).

Bail Agent Permitted To File Motion To Set Aside Forfeiture. —

Trial court properly granted a bail agent’s motion to set aside the forfeiture of a corporate surety’s bond pursuant to G.S. 15A-544.5 because it did not err in concluding that a bail agent was permitted to file a motion to set aside; a bail agent may file a motion to set aside forfeiture as the filing of such motion does not constitute an appearance before a judicial body and therefore does not constitute a violation of G.S. 84-4 regarding the unauthorized practice of law, and filing a motion to set aside a bond forfeiture is not considered an appearance before a judicial body in the manner contemplated by G.S. 84-4 and, therefore, does not constitute the practice of law. State ex rel. Guilford County Bd. of Educ. v. Herbin, 215 N.C. App. 348, 716 S.E.2d 35, 2011 N.C. App. LEXIS 1875 (2011).

Filing Notice of Appeal With North Carolina Property Tax Commission. —

Filing the notice of appeal form constitutes neither an “appearance” before the North Carolina Property Tax Commission nor the practice of law; filing the Notice of Appeal and Application for Hearing does not constitute an appearance or legal representation requiring notice under G.S. 105-290(d2), and it does not violate the general purpose of North Carolina’s prohibition on the corporate practice of law. In re Harris Teeter, LLC, 271 N.C. App. 589, 845 S.E.2d 131, 2020 N.C. App. LEXIS 435 (2020), cert. denied, 376 N.C. 544 , 851 S.E.2d 49, 2020 N.C. LEXIS 1160 (2020), aff'd, 378 N.C. 108 , 861 S.E.2d 720, 2021- NCSC-80, 2021 N.C. LEXIS 714 (2021).

Defendant Not Practicing Law. —

Defendant was not engaged in the “practice of law” when defendant sent a letter and accompanying pages to a witness set to testify against a friend defendant made in jail, because defendant did not hold defendant out as an attorney or as having a law degree, and conceded that defendant’s information on the law was acquired through 20 years of being in trouble. The letter did not constitute a “legal document,” and defendant repeatedly urged the witness not to rely on defendant and seek advice from an attorney. State v. Williams, 186 N.C. App. 233, 650 S.E.2d 607, 2007 N.C. App. LEXIS 2122 (2007).

Assisting In Unauthorized Practice. —

Lawyer violated N.C. R. Prof. Conduct 5.5(d) because the lawyer knowingly assisted a corporation in engaging in the unauthorized practice of law. N.C. State Bar v. Livingston, 257 N.C. App. 121, 809 S.E.2d 183, 2017 N.C. App. LEXIS 1046 (2017), cert. denied, 371 N.C. 112 , 812 S.E.2d 853, 2018 N.C. LEXIS 380 (2018).

CASE NOTES

This section is constitutional and valid, the right to practice law being subject to legislative regulation within constitutional restrictions and limitations, and the statute not being in contravention of any provision of the State or federal Constitutions. State ex rel. Seawell v. Carolina Motor Club, Inc., 209 N.C. 624 , 184 S.E. 540, 1936 N.C. LEXIS 309 (1936).

The purpose of this section is for the better security of the people against incompetency and dishonesty in an area of activity affecting general welfare. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

A pleading filed by an attorney who is not authorized to practice law in this State is not a nullity. Theil v. Detering, 68 N.C. App. 754, 315 S.E.2d 789, 1984 N.C. App. LEXIS 3425 (1984).

The right to practice law is personal and may not be exercised by a corporation either directly or indirectly by employing lawyers to practice for it. State ex rel. Seawell v. Carolina Motor Club, Inc., 209 N.C. 624 , 184 S.E. 540, 1936 N.C. LEXIS 309 (1936).

The practice of law is not limited to the conduct of cases in court, but embraces, in its general sense, legal advice and counsel and the preparation of legal documents and contracts by which legal rights are secured, although such matter may or may not be pending in court. State ex rel. Seawell v. Carolina Motor Club, Inc., 209 N.C. 624 , 184 S.E. 540, 1936 N.C. LEXIS 309 (1936).

Services of Motor Clubs Held to Violate Section. —

Where defendant corporations, as a part of their services, were engaged in giving legal advice, in employing attorneys for members, in allowing lay members of the incorporated club to write letters on club stationery to persons involved in accidents with members of the club advising that such persons were liable in damages in law for negligence in causing such accidents, and in drawing up receipts stating that a certain sum was received as settlement of such damages when collections were made as a result of such letters, they were held to be engaged in the practice of law in violation of this section. State ex rel. Seawell v. Carolina Motor Club, Inc., 209 N.C. 624 , 184 S.E. 540, 1936 N.C. LEXIS 309 (1936).

Right to Enjoin Unlawful Practice of Law. —

A cemetery lot owner could not enjoin a cemetery corporation from practicing law without a license — a criminal offense, since he had an adequate remedy at law by having the corporation indicted and convicted by the State. Mills v. Carolina Cem. Park Corp., 242 N.C. 20 , 86 S.E.2d 893, 1955 N.C. LEXIS 468 (1955).

Section Does Not Confer Absolute Monopoly in Preparation of Legal Documents. —

This section was not enacted for the purpose of conferring upon the legal profession an absolute monopoly in the preparation of legal documents. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

Persons Having Primary Interest in Transaction May Prepare Necessary Papers. —

A person, firm or corporation having a primary interest, not merely an incidental interest, in a transaction, may prepare legal documents necessary to the furtherance and completion of the transaction without violating this section. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

Automobile, furniture, and appliance dealers prepare conditional sale contracts. Banks prepare promissory notes, drafts and letters of credit. Many lending institutions prepare deeds of trust and chattel mortgages. Owner-vendors and purchasers of land prepare deeds. All such activities are legal and do not violate the statute so long as the actor has a primary interest in the transaction. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

Corporations. —

Although a corporate employee was allowed to prepare legal documents, and a corporation need not have been represented by an attorney in a small claims case, a corporation involved in litigation needed to be represented by a duly admitted and licensed attorney-at-law and was not allowed to proceed pro se unless doing so in accordance with certain specific exceptions; the trial court’s decision to allow the corporation’s president to file pleadings on behalf of the corporation was reversed. LexisNexis, Div. of Reed Elsevier v. Travishan Corp., 155 N.C. App. 205, 573 S.E.2d 547, 2002 N.C. App. LEXIS 1635 (2002).

Although corporations were not required to be represented by attorneys in hearings before the Office of Administrative Hearings (OAH), pursuant to G.S. 150B-23 (referring to “attorney or representative” of a party), the DMV was exempted from the provisions of the Administrative Procedure Act authorizing contested cases to be brought in the OAH, G.S. 150B-1(e)(8), and therefore, in a hearing before the DMV, a corporation was required to be represented by an attorney. In re Twin County Motorsports, Inc., 230 N.C. App. 259, 749 S.E.2d 474, 2013 N.C. App. LEXIS 1135 (2013), rev'd, 367 N.C. 613 , 766 S.E.2d 832, 2014 N.C. LEXIS 959 (2014).

Court of Appeals erred in affirming an order by trial court finding that a corporation engaged in the unauthorized practice of law by appearing through a corporate officer before the Department of Motor Vehicles because an administrative agency was not an “action or proceeding” and, thus, a nonattorney could appear or proceed on behalf of a corporation before an administrative hearing officer without engaging in the unauthorized practice of law. In re Twin County Motorsports, Inc., 367 N.C. 613 , 766 S.E.2d 832, 2014 N.C. LEXIS 959 (2014).

Preparation of Documents by Employees of Corporations. —

A person who, in the course of his employment by a corporation, prepares a legal document in connection with a business transaction in which the corporation has a primary interest, the corporation being authorized by law and its charter to transact such business, does not violate the statute, for his act in so doing is the act of the corporation in the furtherance of its own business. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

Work Performed by Law Firm’s Non-Attorney Staff Employees. —

Censure was an appropriate discipline for an experienced attorney’s conduct because the attorney did not exercise the proper supervisory authority sufficient to ensure that the work of a law firms’ non-attorney staff employees with regards to a real estate closing was compatible with the attorney’s professional obligations as the closing attorney. N.C. State Bar v. Scott, 241 N.C. App. 477, 773 S.E.2d 520, 2015 N.C. App. LEXIS 514 (2015).

Preparation of Bankruptcy Petition. —

Where pro se bankruptcy debtors retained a petition preparer to complete their bankruptcy petition and accompanying schedules and forms, the preparer engaged in the unauthorized practice of law by advising the debtors concerning an unlisted creditor and by maintaining a website that explained legal options and concepts related to bankruptcy. In re Medley, 2005 Bankr. LEXIS 2290 (Bankr. M.D.N.C. Nov. 10, 2005).

Assisting a debtor in choosing how to characterize exemptions fell directly within the definition of “unauthorized practice” of law in North Carolina. Therefore, the bankruptcy petition preparer engaged in the unauthorized practice of law in the State of North Carolina. In re Johnson, 2012 Bankr. LEXIS 1816 (Bankr. E.D.N.C. Apr. 25, 2012).

Paralegal violated 11 U.S.C.S. § 110 when she assisted two debtors in filing bankruptcy while she was not acting under the direct supervision of an attorney, and engaged in the unauthorized practice of law, in violation of G.S. 84-4 , when she gave each debtor legal advice; although the court could have imposed sanctions on the paralegal for each violation of § 110—including the fact that she did not disclose her fees to the court, signed documents on the debtors’ behalf, and did not disclose her role in either case in any of the documents that were filed—her violations could be addressed by requiring her to disgorge her fees, to pay each debtor $2,000, and enjoining her from committing future violations of § 110. In re Bodrick, 2016 Bankr. LEXIS 1668 (Bankr. W.D.N.C. Apr. 14, 2016).

Non-attorney owner who created a web-based company that prepared Chapter 7 bankruptcy petitions violated 11 U.S.C.S. § 110 and engaged in the unlawful practice of law in violation of G.S. 84-4 when he used information that was provided by a debtor who lived in North Carolina to prepare the debtor’s petition and schedules and gave the debtor advice about the Bankruptcy Code; although a Massachusetts attorney who worked for the owner was not a “petition preparer,” he was subject to sanctions because he signed documents the owner prepared that contained misrepresentations and served copies of the debtor’s petition on creditors and other parties, even though he was not licensed to practice law in North Carolina. In re Johnson, 2016 Bankr. LEXIS 3526 (Bankr. W.D.N.C. Sept. 28, 2016).

Workbook Created by Bankruptcy Petition Preparers. —

Where bankruptcy petition preparers provided customers with a workbook and guide that contained advice to the customer concerning bankruptcy law and how the blanks in the workbook should be completed, the preparers engaged in the unauthorized practice of law. In re Langford, 2005 Bankr. LEXIS 3201 (Bankr. M.D.N.C. Nov. 9, 2005).

A deed of trust is a legal document. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

The grantor or the beneficiary in a deed of trust may prepare the instrument with impunity if the latter is extending credit to the former; the named trustee may not do so, for his interest is only incidental. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

Any adult person desiring to do so may prepare his own will. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

A person involved in litigation, though not a lawyer, may represent himself and either defend or prosecute the action or proceeding in a tribunal or court, even in Supreme Court, and may prepare and file pleadings and other papers in connection with the litigation. State v. Pledger, 257 N.C. 634 , 127 S.E.2d 337, 1962 N.C. LEXIS 415 (1962) (commented on in 41 N.C.L. Rev. 225 (1963)) .

Bail Agent Permitted To File Motion To Set Aside Forfeiture. —

Trial court properly granted a bail agent’s motion to set aside the forfeiture of a corporate surety’s bond pursuant to G.S. 15A-544.5 because it did not err in concluding that a bail agent was permitted to file a motion to set aside; a bail agent may file a motion to set aside forfeiture as the filing of such motion does not constitute an appearance before a judicial body and therefore does not constitute a violation of G.S. 84-4 regarding the unauthorized practice of law, and filing a motion to set aside a bond forfeiture is not considered an appearance before a judicial body in the manner contemplated by G.S. 84-4 and, therefore, does not constitute the practice of law. State ex rel. Guilford County Bd. of Educ. v. Herbin, 215 N.C. App. 348, 716 S.E.2d 35, 2011 N.C. App. LEXIS 1875 (2011).

Bail agent who, as an agent for the corporate surety, is appointed by an insurance company by power of attorney to execute or countersign bail bonds for the insurance company in connection with judicial proceedings is not prohibited from filing a motion to set aside a bond forfeiture. G.S. 15A-531(3) ; a bail agent may appear pro se at a hearing on a motion to set aside forfeiture if the agent has a financial liability to the surety as a result of the bond, but a bail agent is prohibited from appearing at the motion hearing in court to represent the corporate surety. State ex rel. Guilford County Bd. of Educ. v. Herbin, 215 N.C. App. 348, 716 S.E.2d 35, 2011 N.C. App. LEXIS 1875 (2011).

Evidence Insufficient to Support Conviction for Unauthorized Practice of Law. —

Letter and accompanying pages defendant sent to a witness set to testify against a friend defendant made in jail did not constitute the unauthorized practice of law, because defendant did not hold defendant out as an attorney or as having a law degree, defendant conceded that defendant’s information on the law was acquired through 20 years of being in trouble, the letter did not constitute a “legal document,” and defendant repeatedly urged the witness not to rely on defendant and seek advice from an attorney. State v. Williams, 186 N.C. App. 233, 650 S.E.2d 607, 2007 N.C. App. LEXIS 2122 (2007).

Violation Not Shown. —

In a foreclosure action, the trial court did not err by finding the note evidenced a valid debt petitioners owed. While no attorney was present at closing, petitioners failed to prove that two individuals who advised them as to their rights and obligations under the mortgage engaged in the unauthorized practice of law under G.S. 84-4 so as to render the debt invalid. In re Gray, 225 N.C. App. 46, 741 S.E.2d 888, 2013 N.C. App. LEXIS 57 (2013).

Administrator’s Wrongful Death Complaint Was Not a Nullity. —

Fact that wrongful death complaint was signed by the estate administrator and not by an attorney did not render the complaint a nullity, and the denial of healthcare providers’ motion to dismiss the complaint was proper; any defect in the administrator’s complaint was cured by the subsequent appearance of a properly licensed and admitted counsel. Reid v. Cole, 187 N.C. App. 261, 652 S.E.2d 718, 2007 N.C. App. LEXIS 2355 (2007).

Disqualification of Attorneys Acting Pro Se. —

It was not an abuse of discretion to disqualify a law firm’s attorneys from representing the firm in a fee collection case because (1) the attorneys would be necessary trial witnesses, the attorneys’ testimony would encompass material, disputed issues, and none of N.C. R. Prof. Conduct 3.7’s exceptions applied, (2) N.C. R. Prof. Conduct 3.7 literally supported disqualification, as the case did not involve the attorneys’ ability to represent the attorneys but to represent the firm in a suit against a third party while serving as witnesses for the firm as to disputed fact issues, and (3) the North Carolina Court of Appeals had no authority to create an exception to the Rule. Harris & Hilton, P.A. v. Rassette, 252 N.C. App. 280, 798 S.E.2d 154, 2017 N.C. App. LEXIS 185 (2017).

OPINIONS OF ATTORNEY GENERAL

North Carolina’s unauthorized practice of law statutes probably fall under the savings provision set forth in 29 U.S.C. § 1144(b)(4) for “generally applicable” criminal law and are therefore probably not preempted by ERISA, due to the fact that violation of those statutes is a criminal offense; on the other hand, the unauthorized practice of law statutes are preempted by 31 C.F.R. §§ 10.2 and 10.3 to the extent that those statutes would restrict to licensed attorneys the preparation or the aiding in the preparation of documents necessary to establish ERISA plans qualified by the Internal Revenue Service. See opinion of Attorney General to Mr. David Johnson, Committee Counsel, The North Carolina State Bar, Authorized Practice Committee, Pension Plan Subcommittee, 2003 N.C. Op. Att'y Gen. 4 (6/20/03).

Editor’s Note.

Session Laws 2007-323, s. 1.2, provides: “This act shall be known as the ‘Current Operations and Capital Improvements Appropriations Act of 2007’.”

Session Laws 2007-323, s. 32.5 is a severability clause.

Effect of Amendments.

Session Laws 2007-200, s. 4, effective July 8, 2007, inserted “has agreed to be responsible for filing a registration statement with the North Carolina State Bar,” in the middle of subdivision (5).

Session Laws 2007-323, s. 30.8(k), effective August 1, 2007, and applicable to all costs assessed or collected on or after that date, substituted “two hundred twenty-five dollars ($225.00), of which two hundred dollars ($200.00)” for “one hundred twenty-five dollars ($125.00), of which one hundred dollars ($100.00)” near the beginning of subdivision (7).

Session Laws 2021-60, s. 1.1, effective July 1, 2021, inserted “to the relevant forum,” in the introductory paragraph, and rewrote subdivision (7).

Legal Periodicals.

For note on equal protection and residence requirements, see 49 N.C.L. Rev. 753 (1971).

For article, “In Defense of Occupational Licensing: A Legal Practitioner’s Perspective,” see 43 Campbell L. Rev. 423 (2021).

CASE NOTES

Purpose. —

The purpose of this section is to afford the courts a means to control out-of-state counsel and to assure compliance with the duties and responsibilities of attorneys practicing in this State. North Carolina Nat'l Bank v. Virginia Carolina Bldrs., Inc., 57 N.C. App. 628, 292 S.E.2d 135, 1982 N.C. App. LEXIS 2693 (1982), rev'd, 307 N.C. 563 , 299 S.E.2d 629, 1983 N.C. LEXIS 1107 (1983).

Conditions in the statute are mandatory; until they have been met, a court has no discretion to admit out-of-state counsel to practice before it. North Carolina Nat'l Bank v. Virginia Carolina Bldrs., Inc., 57 N.C. App. 628, 292 S.E.2d 135, 1982 N.C. App. LEXIS 2693 (1982), rev'd, 307 N.C. 563 , 299 S.E.2d 629, 1983 N.C. LEXIS 1107 (1983).

A pleading filed by an attorney not authorized to practice law in this State is not a nullity. Theil v. Detering, 68 N.C. App. 754, 315 S.E.2d 789, 1984 N.C. App. LEXIS 3425 (1984).

When Attorneys Not Considered as Participating Attorneys. —

Where two attorneys purportedly appearing for defendants in appeal from criminal conviction are not members of the North Carolina Bar and are not authorized to appear in a case in compliance with this section, they are not considered as participating attorneys. State v. Daughtry, 8 N.C. App. 318, 174 S.E.2d 76, 1970 N.C. App. LEXIS 1549 (1970).

United States Constitution does not protect pro hac vice proceedings. Leonard v. Johns-Manville Sales Corp., 57 N.C. App. 553, 291 S.E.2d 828, 1982 N.C. App. LEXIS 2669 (1982).

Procedural due process is not required in the granting or denial of petitions to practice pro hac vice in the courts of another state. Leonard v. Johns-Manville Sales Corp., 57 N.C. App. 553, 291 S.E.2d 828, 1982 N.C. App. LEXIS 2669 (1982).

It is not a right but a discretionary privilege which allows out-of-state attorneys to appear pro hac vice in a state’s courts without meeting the state’s bar admission requirements. In re Smith, 301 N.C. 621 , 272 S.E.2d 834, 1981 N.C. LEXIS 1009 (1981).

Admission of counsel in this State pro hac vice is not a right but a discretionary privilege; it is permissive and subject to the sound discretion of the court. Leonard v. Johns-Manville Sales Corp., 57 N.C. App. 553, 291 S.E.2d 828, 1982 N.C. App. LEXIS 2669 (1982).

When Court’s Discretionary Power Invoked. —

Unless and until an application under this section meets the requirements of the statute, the court’s discretionary power is not invoked. Holley v. Burroughs Wellcome Co., 56 N.C. App. 337, 289 S.E.2d 393, 1982 N.C. App. LEXIS 2434 (1982).

Proper Care Requires Employment of Licensed Counsel. —

To exercise proper care a party must not only pay proper attention to the case himself, he must employ counsel who is licensed or entitled to practice in the court where the case is pending. North Carolina Nat'l Bank v. Virginia Carolina Bldrs., Inc., 57 N.C. App. 628, 292 S.E.2d 135, 1982 N.C. App. LEXIS 2693 (1982), rev'd, 307 N.C. 563 , 299 S.E.2d 629, 1983 N.C. LEXIS 1107 (1983).

Local Custom Does Not Abrogate Section. —

The fact that a custom may have grown up among Virginia attorneys practicing near the North Carolina state line to ignore the requirements of this section in no way abrogates or excuses out-of-state counsel from complying with this section. North Carolina Nat'l Bank v. Virginia Carolina Bldrs., Inc., 57 N.C. App. 628, 292 S.E.2d 135, 1982 N.C. App. LEXIS 2693 (1982), rev'd, 307 N.C. 563 , 299 S.E.2d 629, 1983 N.C. LEXIS 1107 (1983).

Party cannot nullify this section merely by responding to actions of noncomplying out-of-state attorney in the courts of this State. North Carolina Nat'l Bank v. Virginia Carolina Bldrs., Inc., 57 N.C. App. 628, 292 S.E.2d 135, 1982 N.C. App. LEXIS 2693 (1982), rev'd, 307 N.C. 563 , 299 S.E.2d 629, 1983 N.C. LEXIS 1107 (1983).

No Right to Representation by Counsel Not Licensed in State. —

Parties do not have a right to be represented in the courts of this State by counsel who are not duly licensed to practice in this State. Leonard v. Johns-Manville Sales Corp., 57 N.C. App. 553, 291 S.E.2d 828, 1982 N.C. App. LEXIS 2669 (1982).

Appellate court found it necessary to strike the second child and wife’s brief, as well as their motions to dismiss and for sanctions; their counsel, who was apparently admitted to practice in Florida, was not licensed to practice in North Carolina, counsel failed to comply with G.S. 84-4.1 , and no other counsel appeared on their behalf. Hill v. Hill, 181 N.C. App. 69, 638 S.E.2d 601, 2007 N.C. App. LEXIS 65 (2007).

An out-of-state attorney has no absolute right to practice law in another forum. It is permissive and subject to the sound discretion of the court. State v. Hunter, 290 N.C. 556 , 227 S.E.2d 535, 1976 N.C. LEXIS 1121 (1976), cert. denied, 429 U.S. 1093, 97 S. Ct. 1106, 51 L. Ed. 2d 539, 1977 U.S. LEXIS 673 (1977).

Prohibition of Habitual Practice in Courts of State by Nonresident Counsel. —

This section forbids the courts from allowing nonresident counsel, when citizens of other states and not holding license from the North Carolina Supreme Court, from practicing habitually in our courts, and they cannot acquire the right to do so. State v. Hunter, 290 N.C. 556 , 227 S.E.2d 535, 1976 N.C. LEXIS 1121 (1976), cert. denied, 429 U.S. 1093, 97 S. Ct. 1106, 51 L. Ed. 2d 539, 1977 U.S. LEXIS 673 (1977).

Effect of Partial Compliance with Section. —

In a criminal prosecution the trial court did not err in permitting the defendant’s retained counsel from Alabama to appear before the court in his behalf without complying strictly with the provisions of this section for two reasons. First, the defendant was allowed to have those counsel whom he wanted to defend him. They were retained by him and allowed to practice in the North Carolina courts on his motion. At no time during the proceedings did he express concern regarding their competency, and any such objection was waived. Secondly, the statute was not designed for his protection, and did not vest in him any rights to counsel other than what he would ordinarily possess in the absence of the statute. State v. Scarboro, 38 N.C. App. 105, 247 S.E.2d 273, 1978 N.C. App. LEXIS 2093 (1978), cert. denied, 295 N.C. 652 , 248 S.E.2d 256, 1978 N.C. LEXIS 1116 (1978), cert. denied, 440 U.S. 938, 99 S. Ct. 1286, 59 L. Ed. 2d 497, 1979 U.S. LEXIS 1039 (1979).

Conditional Application for Admission for Limited Purpose. —

This section does not permit an out-of-state attorney to move for admission for a limited purpose in this State on a conditional basis. The requirement of subdivision (3) of this section calls for a firm commitment from the movant which is contrary in spirit to a conditional application for admission for a limited purpose. In re Smith, 45 N.C. App. 123, 263 S.E.2d 23, 1980 N.C. App. LEXIS 2621 (1980), rev'd, 301 N.C. 621 , 272 S.E.2d 834, 1981 N.C. LEXIS 1009 (1981).

Sufficiency of Declaration Under Subdivision (1). —

A declaration by an applicant that he is a member in good standing of the Bar of another state and is duly licensed and admitted to practice in that state is sufficient to meet the requirements of subdivision (1) of this section. Holley v. Burroughs Wellcome Co., 56 N.C. App. 337, 289 S.E.2d 393, 1982 N.C. App. LEXIS 2434 (1982).

Statement of North Carolina Counsel Insufficient Under Subdivision (2). —

The requirement under subdivision (2) of this section cannot be met by substituting the statement of North Carolina counsel and the statement must be signed by the client. Holley v. Burroughs Wellcome Co., 56 N.C. App. 337, 289 S.E.2d 393, 1982 N.C. App. LEXIS 2434 (1982).

Association with Local Attorney. —

Subdivision (5) of this section allows courts to control out-of-state counsel and assure compliance with the duties and responsibilities of an attorney practicing in the courts of this State, and the association of out-of-state counsel with a local attorney satisfies a reasonable interest of the courts in having a member of the Bar of this State responsible for the litigation; thus, this statute is specifically designed to insure that the court has ready jurisdiction over those appearing only occasionally before it by insuring that counsel who appear regularly before it participate in the case. In re Smith, 301 N.C. 621 , 272 S.E.2d 834, 1981 N.C. LEXIS 1009 (1981).

Same — Requirement May Not Be Waived. —

A trial judge cannot waive the requirement of subdivision (5) of this section which states that local counsel be associated before an out-of-state attorney is admitted to limited practice in the courts of this State because unless and until subdivisions (1) through (5) are complied with, the court has no discretion whatever. In re Smith, 301 N.C. 621 , 272 S.E.2d 834, 1981 N.C. LEXIS 1009 (1981).

Same — Ineligible Attorney May Not Be Held In Contempt. —

An out-of-state attorney could not be held in and punished for willful contempt of court for failure to comply with an order of the trial court that he appear as an attorney in a criminal case where there had been no general appearance by local counsel as required by this section and the out-of-state attorney thus never acquired eligibility to appear in the case and was never an attorney in the case admitted to limited practice in North Carolina. In re Smith, 301 N.C. 621 , 272 S.E.2d 834, 1981 N.C. LEXIS 1009 (1981).

Withdrawal of Out-of-State Counsel Controlled. —

It does not seem equitable to allow adequately compensated trial counsel to withdraw after they have exhausted defendant’s resources and to cast the burden of court appointment upon new counsel. Conduct in this regard by out-of-state counsel is controllable under subdivision (3) of this section as an initial condition upon which he is allowed to appear for trial. State v. Nickerson, 13 N.C. App. 125, 185 S.E.2d 326, 1971 N.C. App. LEXIS 1170 (1971), cert. denied, 280 N.C. 304 , 186 S.E.2d 179, 1972 N.C. LEXIS 1242 (1972), cert. denied, 408 U.S. 925, 92 S. Ct. 2503, 33 L. Ed. 2d 336, 1972 U.S. LEXIS 2057 (1972).

Substantial Right to Representation by Attorney Properly Admitted Under Section. —

Plaintiff had a substantial right to have attorney of her choice, who had been properly admitted pro hac vice under this section represent her in her lawsuit, and order removing him as counsel affected a substantial right of the plaintiff and was immediately appealable. Goldston v. AMC, 326 N.C. 723 , 392 S.E.2d 735, 1990 N.C. LEXIS 289 (1990).

A judge’s order removing counsel who was admitted pro hac vice affected a substantial right of plaintiffs and was immediately appealable. Smith v. Beaufort County Hosp. Ass'n, 141 N.C. App. 203, 540 S.E.2d 775, 2000 N.C. App. LEXIS 1391 (2000), aff'd, 354 N.C. 212 , 552 S.E.2d 139, 2001 N.C. LEXIS 936 (2001).

Denial of Motion for Admission Pro Hac Vice Is Interlocutory. —

Order denying plaintiff’s motion to reconsider order denying attorney’s motion for admission pro hac vice is an interlocutory order and is not immediately appealable; it does not come within the statutory appeals in G.S. 1-277(a) or 7A-27(d). Leonard v. Johns-Manville Sales Corp., 57 N.C. App. 553, 291 S.E.2d 828, 1982 N.C. App. LEXIS 2669 (1982).

Prejudicial error not found where the reviewing court was unable to determine from the record whether local counsel appeared with the out-of-state counsel and there was no record of objection from petitioners. In re Bean, 132 N.C. App. 363, 511 S.E.2d 683, 1999 N.C. App. LEXIS 112 (1999).

Pro Hac Vice Status Properly Revoked. —

Attorney’s pro hac vice status was properly revoked because (1) the attorney did not disclose the attorney’s prior discipline, and (2) such disclosure was mandatory. Ge Betz, Inc. v. Conrad, 231 N.C. App. 214, 752 S.E.2d 634, 2013 N.C. App. LEXIS 1294 (2013).

Summary Revocation of Grant of Admission Allowed. —

The express language of G.S. 84-4.2 allows a superior court judge the authority and discretion to summarily revoke an earlier order granting pro hac vice admission pursuant to G.S. 84-4.1 . Smith v. Beaufort County Hosp. Ass'n, 141 N.C. App. 203, 540 S.E.2d 775, 2000 N.C. App. LEXIS 1391 (2000), aff'd, 354 N.C. 212 , 552 S.E.2d 139, 2001 N.C. LEXIS 936 (2001).

Revocation of Pro Hac Vice Status Unwarranted. —

Conduct of plaintiff’s counsel in Kentucky had been found not to violate Kentucky Rules of Professional Conduct, and N.C. Rev. R. Prof. Conduct 8.5 could not be used to revoke counsel’s pro hac vice status under G.S. 84-4.1 ; a finding that counsel violated N.C. R. Prof. Conduct 4.3 was improper under Revised Rule 8.5, and was a misapprehension of law that was material and changed the outcome. Sisk v. Transylvania Cmty. Hosp., 194 N.C. App. 811, 670 S.E.2d 352, 2009 N.C. App. LEXIS 42 (2009), rev'd, 364 N.C. 172 , 695 S.E.2d 429, 2010 N.C. LEXIS 414 (2010).

G.S. 84-4.1 and G.S. 84-4.2 do not require the trial court to make any findings of fact or conclusions of law. Smith v. Beaufort County Hosp. Ass'n, 141 N.C. App. 203, 540 S.E.2d 775, 2000 N.C. App. LEXIS 1391 (2000), aff'd, 354 N.C. 212 , 552 S.E.2d 139, 2001 N.C. LEXIS 936 (2001).

CASE NOTES

The express language of this section allows a superior court judge the authority and discretion to summarily revoke an earlier order granting pro hac vice admission pursuant to G.S. 84-4.1 . Smith v. Beaufort County Hosp. Ass'n, 141 N.C. App. 203, 540 S.E.2d 775, 2000 N.C. App. LEXIS 1391 (2000), aff'd, 354 N.C. 212 , 552 S.E.2d 139, 2001 N.C. LEXIS 936 (2001).

G.S. 84-4.1 and G.S. 84-4.2 do not require the trial court to make any findings of fact or conclusions of law. Smith v. Beaufort County Hosp. Ass'n, 141 N.C. App. 203, 540 S.E.2d 775, 2000 N.C. App. LEXIS 1391 (2000), aff'd, 354 N.C. 212 , 552 S.E.2d 139, 2001 N.C. LEXIS 936 (2001).

The application of this section is purely discretionary; thus, this section allows revocation where there was no change in circumstances, no misconduct, and no other evidence to “warrant” the revocation. Smith v. Beaufort County Hosp. Ass'n, 141 N.C. App. 203, 540 S.E.2d 775, 2000 N.C. App. LEXIS 1391 (2000), aff'd, 354 N.C. 212 , 552 S.E.2d 139, 2001 N.C. LEXIS 936 (2001).

Trial court did not abuse its discretion when it revoked the pro hac vice status of two out-of-state attorneys pursuant to G.S. 84-4.2 where there was evidence that the attorneys made ex parte contact with defendant’s retained expert, an unrepresented person. Sisk v. Transylvania Cmty. Hosp., Inc., 364 N.C. 172 , 695 S.E.2d 429, 2010 N.C. LEXIS 414 (2010).

Remand of Revocation of Pro Hac Vice Admission Required. —

Revocation of attorney’s pro hac vice admission had to be remanded because the attorney was erroneously found in criminal contempt, requiring a reevaluation of the revocation. Ge Betz, Inc. v. Conrad, 231 N.C. App. 214, 752 S.E.2d 634, 2013 N.C. App. LEXIS 1294 (2013).

CASE NOTES

Constitutionality. —

State prosecutors were properly granted summary judgment in action to enjoin enforcement of North Carolina’s unauthorized practice of law statutes because statutes did not unconstitutionally restrict trade association’s associational rights, statutes survived intermediate scrutiny and did not unlawfully burden association’s freedom of speech as state had established reasonable fit between statutes and substantial government interest in regulating legal profession to protect clients, statutes did not deny association due process as there was rational basis to restrict corporate ownership of professional businesses to protect consumers, statutes were not vague, and statutes did not violate state constitution’s Monopoly Clause. Capital Associated Indus. v. Stein, 922 F.3d 198, 2019 U.S. App. LEXIS 11447 (4th Cir.), cert. denied, 140 S. Ct. 666, 205 L. Ed. 2d 438, 2019 U.S. LEXIS 7540 (2019).

Purpose. —

The main purpose of this section is to prohibit corporations from performing legal services for others. Duke Power Co. v. Daniels, 86 N.C. App. 469, 358 S.E.2d 87, 1987 N.C. App. LEXIS 2724 (1987).

A licensed attorney who is a full-time employee of an insurance company may not ethically represent one of the company’s insureds as counsel of record in an action brought by a third party for a claim covered by the terms of the insurance policy or appear as counsel of record for the insured in the prosecution of a subrogation claim for property damage. Gardner v. North Carolina State Bar, 316 N.C. 285 , 341 S.E.2d 517, 1986 N.C. LEXIS 2088 (1986).

Signing of Complaint by Employee Was Not Unauthorized Practice of Law. —

Electric utility company, by having its lay employee sign a complaint in a small claim action to collect an unpaid power bill, did not practice law in violation of the provisions of this section. Duke Power Co. v. Daniels, 86 N.C. App. 469, 358 S.E.2d 87, 1987 N.C. App. LEXIS 2724 (1987).

A private cause of action did not exist for an alleged unauthorized practice of law by a corporation; therefore, decedent’s heirs could not recover for an alleged breach of fiduciary duty by a university that had drafted a will for the decedent whereby the decedent transferred her assets to the university. Baars v. Campbell Univ., Inc., 148 N.C. App. 408, 558 S.E.2d 871, 2002 N.C. App. LEXIS 30 (2002).

Assisting In Unauthorized Practice. —

Lawyer violated N.C. R. Prof. Conduct 5.5(d) because the lawyer knowingly assisted a corporation in engaging in the unauthorized practice of law. N.C. State Bar v. Livingston, 257 N.C. App. 121, 809 S.E.2d 183, 2017 N.C. App. LEXIS 1046 (2017), cert. denied, 371 N.C. 112 , 812 S.E.2d 853, 2018 N.C. LEXIS 380 (2018).

Motion to Set Aside Bail Forfeiture. —

Because the appellate court concluded that a surety engaged in the unauthorized practice of law within the meaning of G.S. 84-5 by allowing a corporation’s officer to sign and file a motion to set aside a bond forfeiture, it concluded that the trial court did not err by denying the motion. State v. Cash, 270 N.C. App. 433, 841 S.E.2d 589, 2020 N.C. App. LEXIS 206 (2020).

CASE NOTES

Constitutionality. —

State prosecutors were properly granted summary judgment in action to enjoin enforcement of North Carolina’s unauthorized practice of law statutes because statutes did not unconstitutionally restrict trade association’s associational rights, statutes survived intermediate scrutiny and did not unlawfully burden association’s freedom of speech as state had established reasonable fit between statutes and substantial government interest in regulating legal profession to protect clients, statutes did not deny association due process as there was rational basis to restrict corporate ownership of professional businesses to protect consumers, statutes were not vague, and statutes did not violate state constitution’s Monopoly Clause. Capital Associated Indus. v. Stein, 922 F.3d 198, 2019 U.S. App. LEXIS 11447 (4th Cir.), cert. denied, 140 S. Ct. 666, 205 L. Ed. 2d 438, 2019 U.S. LEXIS 7540 (2019).

CASE NOTES

Constitutionality. —

State prosecutors were properly granted summary judgment in action to enjoin enforcement of North Carolina’s unauthorized practice of law statutes because statutes did not unconstitutionally restrict trade association’s associational rights, statutes survived intermediate scrutiny and did not unlawfully burden association’s freedom of speech as state had established reasonable fit between statutes and substantial government interest in regulating legal profession to protect clients, statutes did not deny association due process as there was rational basis to restrict corporate ownership of professional businesses to protect consumers, statutes were not vague, and statutes did not violate state constitution’s Monopoly Clause. Capital Associated Indus. v. Stein, 922 F.3d 198, 2019 U.S. App. LEXIS 11447 (4th Cir.), cert. denied, 140 S. Ct. 666, 205 L. Ed. 2d 438, 2019 U.S. LEXIS 7540 (2019).

CASE NOTES

Constitutionality. —

State prosecutors were properly granted summary judgment in action to enjoin enforcement of North Carolina’s unauthorized practice of law statutes because statutes did not unconstitutionally restrict trade association’s associational rights, statutes survived intermediate scrutiny and did not unlawfully burden association’s freedom of speech as state had established reasonable fit between statutes and substantial government interest in regulating legal profession to protect clients, statutes did not deny association due process as there was rational basis to restrict corporate ownership of professional businesses to protect consumers, statutes were not vague, and statutes did not violate state constitution’s Monopoly Clause. Capital Associated Indus. v. Stein, 922 F.3d 198, 2019 U.S. App. LEXIS 11447 (4th Cir.), cert. denied, 140 S. Ct. 666, 205 L. Ed. 2d 438, 2019 U.S. LEXIS 7540 (2019).

Editor’s Note.

Former G.S. 84-10 pertained to violation of G.S. 84-9 as a misdemeanor.

CASE NOTES

Sufficiency of Writing. —

The power of attorney which a lawyer may be required to file, pursuant to this section, is some writing addressed to him by the client or an agent for the client. Therefore, letters written by the client to third persons expressing gratification because of the employment of a particular attorney will not suffice to supply the want of power. Day v. Adams, 63 N.C. 254 , 1869 N.C. LEXIS 47 (1869).

A power of attorney, signed by the purchaser of a note, in the name of the payee, is sufficient authority under this section for an attorney-at-law to appear in a cause in court, although the agent has no written authority to make the power. Johnson ex rel. Adams v. Sikes, 49 N.C. 70 , 1856 N.C. LEXIS 25 (1856).

A power of attorney given by a married woman to dismiss an action need not be registered. Hollingsworth v. Harman, 83 N.C. 153 , 1880 N.C. LEXIS 33 (1880).

Right to Question Authority of Attorney. —

While an attorney who claims to enter an appearance for any party to an action may be required to produce and file a power or authority as provided in this section, once an attorney has entered an appearance and has been recognized by the court as an attorney in the cause, the opposite party may not call in question his authority. Henderson v. Henderson, 232 N.C. 1 , 59 S.E.2d 227, 1950 N.C. LEXIS 403 (1950).

Time of Demand for Authority. —

The defendant has the right, because of this section to demand the authority at the return term of a summons. Reece v. Reece, 66 N.C. 377 , 1872 N.C. LEXIS 72 (1872).

If the demand for the power of attorney is made at the return term, it is the practice and within the discretion of the judge to extend the time; if, however, such demand is not made at the proper time, and before the right to appear has been recognized, it comes too late, unless there are peculiar circumstances tending to excuse the party for not making it in apt time. Reece v. Reece, 66 N.C. 377 , 1872 N.C. LEXIS 72 (1872).

After an attorney has entered an appearance and has been recognized by the court as attorney in the cause, no written authority can be required of him at a subsequent time. This means that the opposite party shall not call in question his authority, unless he does so within the time and in accordance with the provision of this section. Day v. Adams, 63 N.C. 254 , 1869 N.C. LEXIS 47 (1869); City of New Bern v. Jones, 63 N.C. 606 , 1869 N.C. LEXIS 158 (1869).

When Client Present. —

If a written authority is required under this section the attorney must produce the same, even if his client is present at the bar of the court. Day v. Adams, 63 N.C. 254 , 1869 N.C. LEXIS 47 (1869).

Special Appearance for Nonresident. —

Upon special appearance of the attorneys of a husband who was a nonresident and a fugitive from justice, and whose property had been attached by his wife, for the purpose of moving to dismiss the action, the court should, on motion made, have required them to file their written authority under this section. Walton v. Walton, 178 N.C. 73 , 100 S.E. 176, 1919 N.C. LEXIS 391 (1919).

CASE NOTES

This section is not exhaustive, and the courts have power to order counsel to pay costs of cases in which they have been guilty of gross negligence (even of a kind not included in this section), such conduct being a sort of contempt. Ex parte Robins, 63 N.C. 309 , 1869 N.C. LEXIS 66 (1869).

CASE NOTES

The elements of fraud are: (1) False representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party. Jordan v. Crew, 125 N.C. App. 712, 482 S.E.2d 735, 1997 N.C. App. LEXIS 236 (1997).

Constructive Fraud. —

Constructive fraud differs from actual fraud in that the intent to deceive is not an essential element. Jordan v. Crew, 125 N.C. App. 712, 482 S.E.2d 735, 1997 N.C. App. LEXIS 236 (1997).

Constructive Fraud Shown. —

Trustee had a fiduciary relationship to plaintiffs and in the performance of his obligation to file annual accountings defendant trustee did not act openly, fairly, and honestly, which was tantamount to constructive fraud; thus, the trial court did not err in awarding double damages. Estate of Smith ex rel. Smith v. Underwood, 127 N.C. App. 1, 487 S.E.2d 807, 1997 N.C. App. LEXIS 767 (1997).

Section Not Limited to Actual Fraud Cases. —

This section does not limit its applicability to cases of actual fraud. Booher v. Frue, 98 N.C. App. 570, 394 S.E.2d 816, 1990 N.C. App. LEXIS 444 (1990).

Aliens Prevented from Practicing. —

No one should be presented to the public under the panoply of such a license (to practice law), against whom an injured suitor would not have the full benefit of such remedy as the laws of the State provide, in the event of fraudulent or negligent practice. An alien could not be admitted to practice, as actions under this section would be removable to the United States courts. Ex parte Thompson, 10 N.C. 354 , 10 N.C. 355 , 1824 N.C. LEXIS 83 (1824).

Presumption of Fraud. —

The relation of attorney and client is one of a fiduciary character, and gives rise to a presumption of fraud when the former, in dealing with the latter, obtains an advantage. Egerton v. Logan, 81 N.C. 172 , 1879 N.C. LEXIS 160 (1879).

Fraud Not Found. —

Any damages sustained by plaintiffs due to problems with trademarks they thought they were acquiring did not proximately result from any acts or omissions of defendants attorneys, where two corporate officers of plaintiffs companies were informed before the acquisition by a vice-president of defendant company that the trademarks, which were very similar to and thus conflicted with the marks of another company, were not federally registered and that applications for their registration had been rejected; the knowledge of the president or agent of a corporation is imputed to the corporation itself. Jay Group, Ltd. v. Glasgow, 139 N.C. App. 595, 534 S.E.2d 233, 2000 N.C. App. LEXIS 975 (2000).

When an attorney mishandles client funds, there is a presumption of fraud as a matter of law, and this section applies. Ehlenbeck v. Patton, 58 B.R. 149 (W.D.N.C. 1986).

In consumers’ putative class suit against companies and individuals that operated a debt elimination and credit repair scheme that allegedly engaged in fraud, the consumers’ derivative damages claim failed because the consumers failed to state a viable claim for fraud or conspiracy to commit any fraud or fraudulent practice. Taylor v. Bettis, 976 F. Supp. 2d 721, 2013 U.S. Dist. LEXIS 140908 (E.D.N.C. 2013), aff'd, 693 Fed. Appx. 190, 2017 U.S. App. LEXIS 12626 (4th Cir. 2017).

In a bankruptcy proceeding in which client of bankrupt attorney filed a proof of claim relating to attorney’s embezzlement of money delivered to him in trust, the bankruptcy judge did not err in finding client’s actual damages, then doubling the damages pursuant to this section, and finding the entire amount nondischargeable. Ehlenbeck v. Patton, 58 B.R. 149 (W.D.N.C. 1986).

Bankruptcy Trustee Standing. —

G.S. 84-13 makes an attorney who commits any fraudulent practice liable for double damages to the party injured. One can safely assume that this would include a client corporation as well as its creditors; thus, as the debtor’s legal successor, the bankruptcy trustee would have standing to sue. Mitchell v. Greenberg, 2003 Bankr. LEXIS 2468 (Bankr. W.D.N.C. May 27, 2003).

No Independent Basis for Relief. —

As plaintiffs’ substantive claims for constructive fraud and duress were dismissed, their causes of action for violation of G.S. 84-13 , disallowance of claims, liens against property of the estate, and punitive damages were necessarily dismissed as well, as they were actually remedies and did not provide independent bases for relief. Outer Banks Ventures, Inc. v. Tinkham, 556 B.R. 199, 2016 Bankr. LEXIS 2960 (Bankr. E.D.N.C. 2016).

The provision for double damages applies only after a factual determination at trial of fraudulent practice by an attorney and, thus, did not apply where plaintiffs accepted defendant’s offer of judgment tendered pursuant to G.S. 1A-1 , Rule 68. Estate of Wells v. Toms, 129 N.C. App. 413, 500 S.E.2d 105, 1998 N.C. App. LEXIS 559 (1998).

Double Damages Awarded. —

Where defendant was successor trustee and administrator of estate the trial court did not err in applying this section and allowing double compensatory damages against defendant. Melvin v. Home Fed. Sav. & Loan Ass'n, 125 N.C. App. 660, 482 S.E.2d 6, 1997 N.C. App. LEXIS 223 (1997).

Attorney breached the attorney’s fiduciary duty to the two clients by converting funds, which caused a loss to the two clients. Since the attorney’s conversion and breach of fiduciary duty were presumed to be fraudulent, the attorney was shown to have committed a fraudulent practice and the two clients were entitled to an award of compensatory damages and an award of double damages pursuant to G.S. 84-13 . N.C. State Bar v. Gilbert, 189 N.C. App. 320, 663 S.E.2d 1, 2008 N.C. App. LEXIS 541 (2008).

Double Damages Not Awarded. —

Defendants were entitled to summary judgment as to plaintiff’s claim for statutory damages pursuant to G.S. 84-13 arising from legal representation, because without a prima facie showing of actual or constructive fraud or any fraudulent practice, no claim for double damages arose under G.S. 84-13 . Wilkins v. Safran, 185 N.C. App. 668, 649 S.E.2d 658, 2007 N.C. App. LEXIS 1952 (2007).

Interest Improper on Punitive Double Damages. —

Trial court should not have awarded prejudgment interest and post-judgment interest on both the compensatory and the G.S. 84-13 punitive double damage award in the State bar’s action against the attorney for reimbursement of funds paid to the two clients after the attorney breached the attorney’s fiduciary duty to them and converted their funds. G.S. 24-5(b) only allowed interest to be awarded for compensatory damages. N.C. State Bar v. Gilbert, 189 N.C. App. 320, 663 S.E.2d 1, 2008 N.C. App. LEXIS 541 (2008).

CASE NOTES

The purpose of the statute creating the North Carolina State Bar is to enable the Bar to render more effective service in improving the administration of justice, particularly in dealing with the problem of admission to the Bar, and of disciplining and disbarring attorneys-at-law. Baker v. Varser, 240 N.C. 260 , 82 S.E.2d 90, 1954 N.C. LEXIS 428 (1954).

Effect of Proceedings Before State Bar. —

Where the status of plaintiff’s license as an attorney was at issue and was finally adjudicated in proceedings before the State Bar and the Bar Council, and plaintiff did not appeal the Bar’s order of disbarment, that judgment was conclusive as to those matters which were at issue and determined in those proceedings, and plaintiff could not relitigate the identical issue considered and finally determined in the proceedings before the State Bar. Vann v. North Carolina State Bar, 79 N.C. App. 166, 339 S.E.2d 95, 1986 N.C. App. LEXIS 1969 (1986).

Editor’s Note.

Session Laws 2006-66, s. 1.2, provides: “This act shall be known as ‘The Current Operations and Capital Improvements Appropriations Act of 2006.’ ”

Session Laws 2006-66, s. 28.6 is a severability clause.

Effect of Amendments.

Session Laws 2006-66, s. 22.23, as added by Session Laws 2006-221, s. 24, effective July 1, 2006, substituted “the business standard mileage rate set by the Internal Revenue Service per mile of travel” for “the rate per mile allowed by G.S. 138.6” at the end of the first sentence.

CASE NOTES

Promulgation of Rules. —

A rule requiring a candidate for the bar exam to have graduated from an ABA-accredited law school was properly adopted, even though it was not promulgated as a rule under the Administrative Procedure Act, as this section gives the State Bar Council specific directions on how to adopt rules, which the Council complied with. Bring v. North Carolina State Bar, 348 N.C. 655 , 501 S.E.2d 907, 1998 N.C. LEXIS 365 (1998).

North Carolina State Bar could not rely upon the felonious misconduct portion of N.C. St. Bar R. B.0111(e) to avoid dismissal of its claims for relief because that portion of the rule was not properly adopted under G.S. 84-21 , the enabling statute governing the State bar’s rulemaking authority; moreover, G.S. 84-21 did not contain a provision permitting only substantial compliance with its requirements, in contrast to G.S. 150B-18 , and the more specific directions of G.S. 84-21 governed over the general rule-making provision of the North Carolina Administrative Procedures Act. N.C. State Bar v. Brewer, 183 N.C. App. 229, 644 S.E.2d 573, 2007 N.C. App. LEXIS 1040 (2007).

Promulgation May Be Refused. —

This section empowers the Chief Justice of the Supreme Court to determine whether rules of the Board of Law Examiners are in compliance with this Article, of which G.S. 84-24 is a part, and to refuse them promulgation if they do not so comply. Keenan v. Board of Law Exmrs., 317 F. Supp. 1350, 1970 U.S. Dist. LEXIS 10007 (E.D.N.C. 1970).

CASE NOTES

Setting Aside Judgment of Disbarment. —

The court is without authority to set aside a judgment of disbarment on motion, especially since the enactment of this and subsequent sections. State v. Hollingsworth, 206 N.C. 739 , 175 S.E. 99, 1934 N.C. LEXIS 300 (1934).

Jurisdiction of Disciplinary Hearing Commission. —

Proceedings before the North Carolina State Bar Disciplinary Hearing Commission to discipline a sitting judge were dismissed because only the North Carolina Supreme Court or the North Carolina Judicial Standards Commission had jurisdiction to discipline sitting judges for conduct in office. N.C. State Bar v. Tillett, 369 N.C. 264 , 794 S.E.2d 743, 2016 N.C. LEXIS 1115 (2016).

North Carolina State Bar Has Jurisdiction over Unethical Conduct of Counsel. —

While the court has the inherent power to act whenever it is made to appear that the conduct of counsel in a cause pending in court is improper or unethical, questions of propriety and ethics are ordinarily for the consideration of the North Carolina State Bar which is now vested with jurisdiction over such matters. McMichael v. Proctor, 243 N.C. 479 , 91 S.E.2d 231, 1956 N.C. LEXIS 375 (1956).

Error in Dismissing Grievance Filed with State Bar. —

North Carolina State Bar and the trial courts of this State share concurrent jurisdiction over matters of attorney discipline; therefore, where individual filed a civil claim against attorney for alleged impropriety in handling an estate, and also filed a grievance with the State Bar alleging that the attorney’s actions violated the Rules of Professional Conduct, the trial court erred in naming the State Bar as a party and dismissing the grievance proceeding against the defendant. North Carolina State Bar v. Randolph, 325 N.C. 699 , 386 S.E.2d 185, 1989 N.C. LEXIS 595 (1989).

Confession of Guilt. —

Where an attorney has confessed in open court to four crimes, all involving moral turpitude, and he has been disbarred from practicing in the district court of the United States, disbarment must ultimately result regardless of this and the following sections. In re Brittain, 214 N.C. 95 , 197 S.E. 705, 1938 N.C. LEXIS 270 (1938).

North Carolina Court of Appeals Lacked Authority to Create Exception to Professional Conduct Rule. —

It was not an abuse of discretion to disqualify a law firm’s attorneys from representing the firm in a fee collection case because (1) the attorneys would be necessary trial witnesses, the attorneys’ testimony would encompass material, disputed issues, and none of N.C. R. Prof. Conduct 3.7’s exceptions applied, (2) N.C. R. Prof. Conduct 3.7 literally supported disqualification, as the case did not involve the attorneys’ ability to represent the attorneys but to represent the firm in a suit against a third party while serving as witnesses for the firm as to disputed fact issues, and (3) the North Carolina Court of Appeals had no authority to create an exception to the Rule. Harris & Hilton, P.A. v. Rassette, 252 N.C. App. 280, 798 S.E.2d 154, 2017 N.C. App. LEXIS 185 (2017).

Editor’s Note.

Session Laws 2002-147, s. 15, provides: “If the Private Security Officer Employment Standards Act of 2002 [S. 2238, 107th Cong. (2002)] is enacted by the United States Congress, the State of North Carolina declines to participate in the background check system authorized by that act as a result of the enactment of this act.” Congress ultimately did not enact the Private Security Officer Employment Standards Act of 2002. Congress ultimately did not enact the Private Security Officer Employment Standards Act of 2002.

Effect of Amendments.

Session Laws 2014-100, s. 17.1(o), effective July 1, 2014, substituted “Department of Public Safety” for “Department of Justice” in the sixth and seventh paragraphs.

Session Laws 2015-264, s. 47, effective October 1, 2015, rewrote the proviso at the end of the eighth undesignated paragraph.

Legal Periodicals.

For note on “Admission to the Bar — ‘Good Moral Character’ — Constitutional Protections,” see 45 N.C.L. Rev. 1008 (1967).

For article on administrative evidence rules, see 49 N.C.L. Rev. 635 (1971).

For survey of 1979 administrative law, see 58 N.C.L. Rev. 1185 (1980).

For comment, “You Can’t Always Get What You Want: A Look at North Carolina’s Public Records Law,” see 72 N.C.L. Rev. 1527 (1994).

For article, “Improving the Fitness Inquiry of the North Carolina Bar Application,” see 81 N.C.L. Rev. 2179 (2003).

For comment, “More Than Just a DREAM: The Legal and Practical Implications of a North Carolina DREAM Act,” see 36 Campbell L. Rev. 359 (2014).

For article, “Moral Character and Fitness Means More Than Just a Passing Score to the Board of Law Examiners,” see 7 Charlotte L. Rev. 157 (2016).

CASE NOTES

Constitutionality. —

The “character and general fitness” requirement of this section and the “good moral character” requirement of the Rules Governing Admission to the Practice of Law are constitutionally permissible standards. In re Willis, 288 N.C. 1 , 215 S.E.2d 771, 1975 N.C. LEXIS 877 (1975).

While a state cannot exclude a person from the practice of law for reasons that contravene the Due Process or Equal Protection Clauses of U.S. Const., Amend. XIV, a state can require high standards for admission to the bar, including good moral character and proficiency in its laws, so long as the qualifying standards have a rational connection with the applicant’s fitness or capacity to practice law. In re Willis, 288 N.C. 1 , 215 S.E.2d 771, 1975 N.C. LEXIS 877 (1975).

The term “good moral character,” although broad, has been so extensively used as a standard that its long usage and the case law surrounding that usage have given the term well-defined contours which make it a constitutionally appropriate standard. In re Willis, 288 N.C. 1 , 215 S.E.2d 771, 1975 N.C. LEXIS 877 (1975).

This section does not unconstitutionally delegate legislative power by authorizing the Board of Law Examiners to make rules governing admission to the bar to “promote the welfare of the State and the profession.” Bring v. North Carolina State Bar, 348 N.C. 655 , 501 S.E.2d 907, 1998 N.C. LEXIS 365 (1998).

The constitutional power to establish the qualifications for admission to the bar rests in the legislature, which may delegate a limited portion of its power as to some specific subject matter if it prescribes the standards under which the agency is to exercise the delegated authority. Bowens v. Board of Law Exmrs., 57 N.C. App. 78, 291 S.E.2d 170, 1982 N.C. App. LEXIS 2589 (1982).

Board Able to Establish Guidelines. —

The requirement for a legal education would be of no importance if the Board were unable to establish guidelines to review whether a law school’s curriculum satisfies the threshold requirement. Bring v. North Carolina State Bar, 126 N.C. App. 655, 486 S.E.2d 236, 1997 N.C. App. LEXIS 598 (1997), aff'd, 348 N.C. 655 , 501 S.E.2d 907, 1998 N.C. LEXIS 365 (1998).

The Board of Law Examiners is an “administrative agency,” with both judicial and delegated legislative powers. Keenan v. Board of Law Exmrs., 317 F. Supp. 1350, 1970 U.S. Dist. LEXIS 10007 (E.D.N.C. 1970).

This section establishes the Board of Law Examiners as an administrative agency of the State, and its findings of fact are conclusive on appeal if properly supported by the evidence. In re Willis, 288 N.C. 1 , 215 S.E.2d 771, 1975 N.C. LEXIS 877 (1975).

Rule-Making Power Delegated. —

The North Carolina General Assembly, in this section, has delegated its rule-making power to the Board of Law Examiners and has determined that the Board shall also apply its own rules “to the particular case.” Keenan v. Board of Law Exmrs., 317 F. Supp. 1350, 1970 U.S. Dist. LEXIS 10007 (E.D.N.C. 1970).

In licensing those who desire to engage in professions or occupations such as may be proper subjects of such regulation, the legislature may confer upon executive officers or bodies the power of granting or refusing to license persons to enter such trades or professions only when it has prescribed a sufficient standard for their guidance. In re Willis, 288 N.C. 1 , 215 S.E.2d 771, 1975 N.C. LEXIS 877 (1975).

The Legislature is not equipped to investigate law schools with graduates applying for admission to the bar to determine whether the schools meet the minimum requirement; thus, this ministerial task has properly been delegated to the Board of Law Examiners. Bring v. North Carolina State Bar, 126 N.C. App. 655, 486 S.E.2d 236, 1997 N.C. App. LEXIS 598 (1997), aff'd, 348 N.C. 655 , 501 S.E.2d 907, 1998 N.C. LEXIS 365 (1998).

A person does not have a natural or constitutional right to practice law; it is a privilege or franchise to be earned by hard study and compliance with the qualifications for admission to practice law prescribed by law. By virtue of its police power a state is authorized to establish qualifications for admission to practice law in its jurisdiction. Baker v. Varser, 240 N.C. 260 , 82 S.E.2d 90, 1954 N.C. LEXIS 428 (1954).

The determination of proficiency is a ministerial function, not a matter of managing public affairs. The Board of Law Examiners is, therefore, not required to make important policy choices which might just as easily be made by the elected representatives in the legislature, but merely to compile and administer examinations. Form, grading and logistics only are left to the board, which does no violence to constitutional principle. Bowens v. Board of Law Exmrs., 57 N.C. App. 78, 291 S.E.2d 170, 1982 N.C. App. LEXIS 2589 (1982).

Purpose of Board. —

The Board of Law Examiners was created for the purpose of examining applicants and providing rules and regulations for admission to the bar. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

It is not arbitrary to limit permission to take the bar examination to a certain group of persons if the limitation is reasonably related to a legitimate objective, such as fitness to practice law. Bring v. North Carolina State Bar, 126 N.C. App. 655, 486 S.E.2d 236, 1997 N.C. App. LEXIS 598 (1997), aff'd, 348 N.C. 655 , 501 S.E.2d 907, 1998 N.C. LEXIS 365 (1998).

Investigation of Individual Schools’ Qualifications Unreasonable. —

Requiring the Board of Law Examiners to investigate the individual qualifications of every nonaccredited law school each time a graduate from a nonaccredited law school applies for admission to the state’s bar would place an unreasonable burden on the Board. Bring v. North Carolina State Bar, 126 N.C. App. 655, 486 S.E.2d 236, 1997 N.C. App. LEXIS 598 (1997), aff'd, 348 N.C. 655 , 501 S.E.2d 907, 1998 N.C. LEXIS 365 (1998).

The policy requiring that applicants for admission to the North Carolina bar graduate from an ABA approved law school is a reasonable means of assuring that applicants have a competent legal education and facilitates the legislative goal of protection of the public interest by the maintenance of a competent Bar. Bring v. North Carolina State Bar, 126 N.C. App. 655, 486 S.E.2d 236, 1997 N.C. App. LEXIS 598 (1997), aff'd, 348 N.C. 655 , 501 S.E.2d 907, 1998 N.C. LEXIS 365 (1998).

Character Evaluation and Examination Are Separate and Distinct Requirements. —

In an action to obtain admission to the North Carolina Bar, it was found that the Board of Law Examiners properly advised the applicant for admission to the practice of law that he would be permitted to take the bar examination but that the result would be sealed until the board has concluded its character evaluation, and the board was not required subsequently to divulge applicant’s examination result, since the result was irrelevant to the matter of applicant’s character evaluation, and even if applicant failed the examination, this appeal would not be moot since it concerned applicant’s character, a separate and distinct matter. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

Applicant Has Burden of Showing Compliance with Residence Requirement. —

The burden of showing that he has the qualifications to comply with requirements of Rule Five of the Rules Governing Admission to Practice of Law in North Carolina, adopted under authority of this Article, and specifying the resident requirement, rests upon the applicant, and if the proof offered by him fails to satisfy the Board of Law Examiners that he has the qualifications required by the rule, it is their duty to deny his application to take the examination for admission. Baker v. Varser, 240 N.C. 260 , 82 S.E.2d 90, 1954 N.C. LEXIS 428 (1954).

The findings of fact made by the Board of Law Examiners supported by the evidence are conclusive upon a reviewing court, and are not within the scope of reviewing powers. Baker v. Varser, 240 N.C. 260 , 82 S.E.2d 90, 1954 N.C. LEXIS 428 (1954).

As long as there is evidence in the record which rationally justifies a finding that the applicant has failed to establish his moral fitness to practice law, this court cannot substitute its judgment for that of the Board of Law Examiners. In re Willis, 288 N.C. 1 , 215 S.E.2d 771, 1975 N.C. LEXIS 877 (1975).

Board’s Duty to Resolve Factual Disputes. —

When a decision of the Board of Law Examiners rests on a specific fact or facts the existence of which is contested, the board’s duty to resolve the factual dispute by specific findings is no less than that of other administrative agencies. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

Under this section the board is the primary investigatory and fact-finding agency in the bar admissions process. When factual disputes are fairly brought before it, it must resolve them. No other agency exists to make such resolutions. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

In determining an applicant’s fitness to practice law, the Board of Law Examiners should not conduct a hearing to consider applicant’s alleged commission of specific acts of misconduct and, without a finding that he committed the prior acts, use his denial that he committed them as substantive evidence of his lack of moral character; rather, the board should first determine whether in fact the applicant committed the prior acts of misconduct and, if it determines that he did, it must then say whether these acts so reflect on the applicant’s character that they are sufficient to rebut his prima facie showing of good character. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

Because the board is free “to make or cause to be made such examinations and investigations as may be deemed necessary,” it was not improper for the board to question the witness before the 1987 hearing in the course of its investigation without first notifying applicant, and furthermore, the witness’s adverse testimony at the hearing regarding the events surrounding the loan did not constitute a protest. In re Legg, 337 N.C. 628 , 447 S.E.2d 353, 1994 N.C. LEXIS 494 (1994).

Detailing of Facts on Which Conclusion Is Based. —

In cases in which all the essential facts either appear on the face of the application or are otherwise indisputably established, the board need only weigh the evidence and determine whether the applicant has shown his good moral character. However, even in such cases, while it might be permissible for the board not to make specific findings of fact, a detailing of the facts on which it bases its conclusions would facilitate judicial review. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

Where the only facts which could support a conclusion that the applicant did not show good moral character are in sharp dispute, the board must necessarily serve as the adjudicator of the facts in dispute and must ultimately find with regard to them what it believes the truth to be. Mere recitation of the testimony heard by the board will not suffice. Administrative agencies must find facts when factual issues are presented. They cannot fulfill this duty by merely summarizing the evidence. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

Burden of Proving Specific Acts of Misconduct. —

When an applicant makes a prima facie showing of his good moral character and, to rebut the showing, the board relies on specific acts of misconduct the commission of which is denied by the applicant, the board must assume the burden of proving the specific acts by the greater weight of the evidence. The rule that applicant has the overall burden to prove his good moral character does not relieve the board from having to prove such specific acts of misconduct. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

To place the burden on the applicant to disprove acts of misconduct would be a distortion of the intended effect of the rule requiring the applicant to prove, overall, his good character. In order to avoid this distortion it is necessary to distinguish between applicant’s overall burden of showing good moral character and the board’s burden of proving particular instances of misconduct. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

When an applicant makes a prima facie showing of good moral character and the board, to rebut the showing, relies on specific acts of misconduct the commission of which are denied by the applicant, the board must prove the specific acts by the greater weight of the evidence. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

In an action to obtain admission to the North Carolina Bar, it was found that a finding of fact by the Board of Law Examiners that applicant “made false statements under oath on matters material to his fitness of character” inadequately resolved the factual issue which it addressed and was too vague to permit appropriate judicial review because the board did not indicate which statements it considered to be untruthful; consequently, neither a reviewing court nor the applicant could be certain as to the content or materiality of the false statements referred to, and the board could not meet its burden of proving specific acts of misconduct without setting out with specificity what they were and that they had been proved by the greater weight of the evidence. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

Applicant’s Showing of Good Moral Character. —

An applicant for admission to the bar has the burden of showing his good moral character. At the outset, he must come forward with sufficient evidence to make out a prima facie case. The board, or any other person wishing to contest an application, may then offer rebuttal evidence. If there are material factual disputes, the board must resolve them by making findings of fact. If the disputes arise out of charges initially made before the board, the board must determine whether the charges have been proved by a preponderance of the evidence before it can rely on them in concluding that an applicant has not shown his good moral character. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

Good moral character is something more than the absence of bad character. It is the good name which the applicant has acquired, or should have acquired, through association with his fellows. It means that he must have conducted himself as a man of upright character ordinarily would, should or does. Such character expresses itself, not in negatives nor in following the line of least resistance, but quite often in the will to do the unpleasant thing, if it is right, and the resolve not to do the pleasant thing, if it is wrong. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

Character encompasses both a person’s past behavior and the opinion of members of his community arising from it. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

Whether a person is of good moral character is seldom subject to proof by reference to one or two incidents. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

An application for admission to the bar may not be denied on the basis of suspicions or accusations alone. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

Sufficiency of Findings. —

Where an applicant for admission to the practice of law had been convicted of assault and murder, finding by the Board of Law Examiners that applicant did not disclose that he had been convicted of assault and battery on a female failed adequately to resolve the factual issue to which it was addressed where the factual issue before the board was whether the omission was a mere inadvertence caused by applicant’s initial failure to recall the conviction as an incident separate from the murder or was instead a purposeful omission designed to mislead the board, the later correction of which was prompted only by notice of the hearing. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

In an action to obtain admission to the North Carolina Bar, the court on appeal could not conclude that as a matter of law the Board of Law Examiners’ evidence was insufficient to support findings of fact which could rebut a prima facie showing of good moral character by an applicant for admission to the bar where it was undisputed that applicant had committed and been convicted of murder and assault; the question before the board was whether these acts occurring 14 years ago continued to constitute evidence that applicant was presently morally unfit to practice law; and only the board through proper findings of fact and conclusions of law based thereon could answer the question as to whether events subsequent to the murder and assault demonstrated to the board that applicant had been fully rehabilitated so that the evidentiary force of the 14 year old offenses was spent or whether they led to a contrary conclusion. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

Findings Not Prejudicial. —

An applicant for admission to practice law was not prejudiced where the Board of Law Examiners found that applicant was paroled after serving a portion of his prison term but the board failed to find that applicant was completely discharged from parole, since the reviewing court would take into account, under a whole record review, undisputed facts which favored applicant’s position including the fact of discharge from parole which applicant argued was unfairly omitted from the board’s findings. In re Moore, 301 N.C. 634 , 272 S.E.2d 826, 1981 N.C. LEXIS 1007 (1981).

The “whole record” test is the proper scope of judicial review of findings of the Board of Law Examiners. In re Rogers, 297 N.C. 48 , 253 S.E.2d 912, 1979 N.C. LEXIS 1131 (1979).

CASE NOTES

Analysis

• I. General Consideration
• II. Sanctions
• III. Appeals

CASE NOTES

Jurisdiction. —

Proceedings before the North Carolina State Bar Disciplinary Hearing Commission to discipline a sitting judge were dismissed because only the North Carolina Supreme Court or the North Carolina Judicial Standards Commission had jurisdiction to discipline sitting judges for conduct in office. N.C. State Bar v. Tillett, 369 N.C. 264 , 794 S.E.2d 743, 2016 N.C. LEXIS 1115 (2016).

Public Duty Doctrine Applied to Claim Against Disciplinary Hearing Commission. —

Disbarred attorney’s claim against the Disciplinary Hearing Commission for negligent infliction of emotional distress in the performance of its duties came under the public duty doctrine, since the Commission was acting within its statutory authority under this section when it held plaintiff in criminal contempt. Frazier v. Murray, 135 N.C. App. 43, 519 S.E.2d 525, 1999 N.C. App. LEXIS 911 (1999).

The Disciplinary Hearing Commission had contempt power over a plaintiff who has already been disbarred and the right to lawfully exercise that contempt power. Disciplinary Hearing Comm'n v. Frazier, 141 N.C. App. 514, 540 S.E.2d 758, 2000 N.C. App. LEXIS 1393 (2000), rev'd, 354 N.C. 555 , 556 S.E.2d 262, 2001 N.C. LEXIS 1242 (2001), writ denied, 355 N.C. 491 , 563 S.E.2d 566, 2002 N.C. LEXIS 481 (2002).

State Bar Disciplinary Hearing Commission did not have authority to discipline previously disbarred attorney or find him in criminal contempt for unauthorized practice of law because its authority was extinguished following disbarment; the process of seeking criminal sanctions for the unlawful practice of law was under the exclusive control of district attorneys. Disciplinary Hearing Comm'n of the N.C. State Bar v. Frazier, 354 N.C. 555 , 556 S.E.2d 262, 2001 N.C. LEXIS 1242 (2001).

Procedure. —

Disciplinary Hearing Commission (DHC) properly denied an attorney’s motion for separate hearings on charges that he made false statements and committed other acts of misconduct while representing a client in one case, and while he was involved in a dispute with his neighbors in a separate case, and the DHC did not err when it considered evidence that the attorney had two misdemeanor convictions and had previously received a letter of warning from the State Bar when it determined an appropriate sanction. N.C. State Bar v. Rogers, 164 N.C. App. 648, 596 S.E.2d 337, 2004 N.C. App. LEXIS 965 (2004).

CASE NOTES

Construction with Fifth Amendment Rights. —

This section did not cause the defendant to be compelled in violation of his constitutional rights by the State bar to provide information which would later be used against him in a perjury case where he, acting of his own volition, made statements to the bar investigator. The record does not indicate that these statements were extracted under the power of a subpoena; and the defendant was not in custody at the time these statements were made. The defendant could have asserted his Fifth Amendment privilege during the bar proceedings although the protection would not have extended to any records that he was required by law to maintain. State v. Linney, 2000 N.C. App. LEXIS 538 (N.C. Ct. App. May 16, 2000), op. withdrawn, sub. op., 138 N.C. App. 169, 531 S.E.2d 245, 2000 N.C. App. LEXIS 614 (2000).

CASE NOTES

Deprivation of Right to Practice Is Judicial Act Requiring Due Process. —

The granting of a license to engage in business or practice a profession is a right conferred by administrative act, but the deprivation of the right is a judicial act requiring due process. In re Burton, 257 N.C. 534 , 126 S.E.2d 581, 1962 N.C. LEXIS 386 (1962); In re Palmer, 32 N.C. App. 449, 232 S.E.2d 497, 1977 N.C. App. LEXIS 1969 (1977).

CASE NOTES

Constitutionality. —

This section, giving the State Bar Council the discretion to reinstate the license to practice law of a disbarred attorney is not an unconstitutional delegation of legislative power. In re Garrison, 44 N.C. App. 158, 260 S.E.2d 445, 1979 N.C. App. LEXIS 3190 (1979).

The council did not err in the denial of petitioner’s application for reinstatement of his license to practice law where there was evidence that petitioner had compromised four of the six civil judgments rendered against him but had failed to make restitution for two outstanding judgments against him in excess of $30,000, which he had been unable to compromise, and that petitioner also renounced funds which would have enabled him to help satisfy the judgments against him. Petitioner’s willingness to satisfy only the judgments that could be compromised, while failing to satisfy those not the subject of compromise, is evidence of the lack of proper reformation required by the statute. In re Garrison, 44 N.C. App. 158, 260 S.E.2d 445, 1979 N.C. App. LEXIS 3190 (1979).

CASE NOTES

Authority to Order Payment of Administrative Costs. —

Lawyer’s sanction for professional misconduct properly included payment of administrative costs for disciplinary proceedings because such a sanction was statutorily authorized. N.C. State Bar v. Livingston, 257 N.C. App. 121, 809 S.E.2d 183, 2017 N.C. App. LEXIS 1046 (2017), cert. denied, 371 N.C. 112 , 812 S.E.2d 853, 2018 N.C. LEXIS 380 (2018).

CASE NOTES

In North Carolina there are two methods by which disciplinary action or disbarment may be imposed upon attorneys — statutory and judicial. In re Northwestern Bonding Co., 16 N.C. App. 272, 192 S.E.2d 33, 1972 N.C. App. LEXIS 1687 (1972).

Concurrent Power of Supreme Court and Bar to Regulate Conduct of Attorneys. —

While questions of propriety and ethics are ordinarily for the consideration of the bar, because that organization was expressly created by the legislature to deal with such questions, nevertheless the power to regulate the conduct of attorneys is held concurrently by the Bar and the Supreme Court. Therefore, in a proper case, the Court may rule on questions concerning the conduct of attorneys. Gardner v. North Carolina State Bar, 316 N.C. 285 , 341 S.E.2d 517, 1986 N.C. LEXIS 2088 (1986).

Powers of Court Distinguished from Powers Granted to State Bar. —

This inherent power is co-equal and co-extensive with the statutory grant of powers to the North Carolina State Bar, and, while the interests of the two entities having disciplinary jurisdiction may, and often do, overlap, they are not always identical and as the interests sought to be protected by the court’s inherent power are distinct from those of the North Carolina State Bar, the action of a court in disciplining or disqualifying an attorney practicing before it is not in derogation or to the exclusion of similar action by the Bar. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

The power of the court to regulate and discipline attorneys is an inherent one because it is an essential one for the court to possess in order for it to protect itself from fraud and impropriety and to serve the ends of the administration of justice which are, fundamentally, the raison d’etre for the existence and operation of the courts. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

The court’s inherent power is not limited or bound by the technical precepts contained in the Code of Professional Responsibility as administered by the Bar. Swenson v. Thibaut, 39 N.C. App. 77, 250 S.E.2d 279, 1978 N.C. App. LEXIS 2346 (1978).

Suspension of Attorney as Sanction. —

Trial judge had the authority, recognized in G.S. 84-36 , to sanction an attorney, and the sanction of a one-year suspension imposed by the judge was not an abuse of discretion; the attorney willfully abandoned a client at the client’s probation hearing, refused to represent the client when confronted with his ethical and legal obligations by the trial judge, made comments questioning the authority of the judge, made an obscene reference to the judge, and behaved rudely towards the courtroom clerk. In re Key, 182 N.C. App. 714, 643 S.E.2d 452, 2007 N.C. App. LEXIS 799 (2007).

General Assembly Cannot Abridge Inherent Power. —

The existence of inherent judicial power is not dependent upon legislative action; however, the General Assembly has recognized the existence of the inherent power of the court and the General Assembly cannot abridge that power. Beard v. North Carolina State Bar, 320 N.C. 126 , 357 S.E.2d 694, 1987 N.C. LEXIS 2157 (1987).

The Judicial Method Is Not Dependent upon Statutory Authority. —

It arises because of a court’s inherent authority to take disciplinary action against attorneys licensed before it; an authority which extends even to matters which are not pending in the particular court exercising the authority. In re Northwestern Bonding Co., 16 N.C. App. 272, 192 S.E.2d 33, cert. denied, 282 N.C. 426 , 192 S.E.2d 837 (1972). In accord with the main volume. See In re Paul, 84 N.C. App. 491, 353 S.E.2d 254, 1987 N.C. App. LEXIS 2530 (1987), cert. denied, 319 N.C. 673 , 356 S.E.2d 779, 1987 N.C. LEXIS 2118 (1987), cert. denied, 484 U.S. 1004, 108 S. Ct. 694, 98 L. Ed. 2d 646, 1988 U.S. LEXIS 228 (1988).

Basis of Court’s Power. —

A court’s power is based upon the relationship of the attorney to the court and the authority which the court has over its own officers to prevent them from, or punish them for, acts of dishonesty or impro- priety calculated to bring contempt upon the administration of justice. In re Northwestern Bonding Co., 16 N.C. App. 272, 192 S.E.2d 33, 1972 N.C. App. LEXIS 1687 (1972).

Form of Disciplinary Action. —

Judicial disciplinary action may take the form of an order of disbarment or suspension of the attorney’s privilege to practice law. In re Paul, 84 N.C. App. 491, 353 S.E.2d 254, 1987 N.C. App. LEXIS 2530 (1987), cert. denied, 319 N.C. 673 , 356 S.E.2d 779, 1987 N.C. LEXIS 2118 (1987), cert. denied, 484 U.S. 1004, 108 S. Ct. 694, 98 L. Ed. 2d 646, 1988 U.S. LEXIS 228 (1988).

Statutory Method of Disbarment Not Exclusive. —

C.S., §§ 204 and 205, restricting the power of courts to disbar attorneys, were repealed by Laws 1933, c. 210, s. 20, and the statutory method of disbarment provided by the act of 1933 is not exclusive, but on the contrary the act recognizes the inherent power of the courts, and the courts have jurisdiction to order the disbarment of an attorney upon his conviction of an infamous misdemeanor, converted to a felony by G.S. 14-1 and 14-3. State v. Spivey, 213 N.C. 45 , 195 S.E. 1, 1938 N.C. LEXIS 9 (1938). See also State ex rel. McLean v. Johnson, 174 N.C. 345 , 93 S.E. 847, 1917 N.C. LEXIS 89 (1917).

Due Process Required. —

While it is incontrovertible that the courts have inherent authority to take disciplinary action against attorneys practicing therein, even in relation to matters not pending in the particular court exercising that authority, it is not after the manner of the courts, however, to deprive a lawyer, any more than anyone else, of his constitutional guaranties or to revoke his license without due process of law. In re Burton, 257 N.C. 534 , 126 S.E.2d 581, 1962 N.C. LEXIS 386 (1962).

No statute provides for a jury trial when the judicial method is employed to seek disciplinary action against an attorney practicing in this State. In re Northwestern Bonding Co., 16 N.C. App. 272, 192 S.E.2d 33, 1972 N.C. App. LEXIS 1687 (1972).

This State has never had a statute which expressly conferred upon an attorney the right to a trial by jury in a judicial disciplining or disbarment proceeding. Since no such right existed at common law, or by statute at the time our Constitution was adopted, and is not now provided for by statute, appellant’s motion for a trial by jury was properly denied. In re Northwestern Bonding Co., 16 N.C. App. 272, 192 S.E.2d 33, 1972 N.C. App. LEXIS 1687 (1972).

Due Process Procedures Under Judicial Method. —

Under the judicial method, the procedure, to meet the test of due process, must be initiated by a sworn written complaint, and the court should issue a rule or order advising the attorney of the specific charges, directing him to show cause why disciplinary action should not be taken, and granting a reasonable time for answering and preparation of defense, and attorney should be given full opportunity to be heard and permitted to have counsel for his defense; where issues of fact are raised the court may appoint a committee to investigate and make report. In re Northwestern Bonding Co., 16 N.C. App. 272, 192 S.E.2d 33, 1972 N.C. App. LEXIS 1687 (1972).

Disbarment Order Supported by Contempt Conviction. —

The trial court’s findings of fact supported order disbarring respondent attorney, where respondent was convicted of contempt for soliciting someone to disrupt a criminal trial in which he, respondent, represented the defendant. In re Paul, 84 N.C. App. 491, 353 S.E.2d 254, 1987 N.C. App. LEXIS 2530 (1987), cert. denied, 319 N.C. 673 , 356 S.E.2d 779, 1987 N.C. LEXIS 2118 (1987), cert. denied, 484 U.S. 1004, 108 S. Ct. 694, 98 L. Ed. 2d 646, 1988 U.S. LEXIS 228 (1988).

Error in Dismissing Grievance Filed with State Bar. —

North Carolina State Bar and the trial courts of this State share concurrent jurisdiction over matters of attorney discipline; therefore, where individual filed a civil claim against attorney for alleged impropriety in handling an estate, and also filed a grievance with the State Bar alleging that the attorney’s actions violated the Rules of Professional Conduct, the trial court erred in naming the State Bar as a party and dismissing the grievance proceeding against the defendant. North Carolina State Bar v. Randolph, 325 N.C. 699 , 386 S.E.2d 185, 1989 N.C. LEXIS 595 (1989).

Client Security Fund Constitutional. —

The order of the North Carolina Supreme Court establishing the Client Security Fund and requiring annual payments by attorneys to the Fund is an essential corollary to the court’s function, was required for the proper administration of justice, and did not violate the North Carolina Constitution. Beard v. North Carolina State Bar, 320 N.C. 126 , 357 S.E.2d 694, 1987 N.C. LEXIS 2157 (1987).

Fee Dispute Resolution Did Not Abridge Authority of Courts. —

Trial court did not err by dismissing an attorney’s claim against his client for fees for lack of subject matter jurisdiction under G.S. 1A-1 , Rule 12(b)(1), because jurisdiction over the fee dispute was vested with the North Carolina State Bar under N.C. R. Prof. Conduct 1.5(f) and 27 N.C. Admin. Code 01D.0702, depriving the trial court of jurisdiction to the claims until the fee dispute resolution process had concluded. This conclusion did not impermissibly disable or abridge the courts’ inherent authority over attorney conduct in violation of G.S. 84-36 . Cunningham v. Selman, 201 N.C. App. 270, 689 S.E.2d 517, 2009 N.C. App. LEXIS 2253 (2009).

CASE NOTES

Constitutionality. —

State prosecutors were properly granted summary judgment in action to enjoin enforcement of North Carolina’s unauthorized practice of law statutes because statutes did not unconstitutionally restrict trade association’s associational rights, statutes survived intermediate scrutiny and did not unlawfully burden association’s freedom of speech as state had established reasonable fit between statutes and substantial government interest in regulating legal profession to protect clients, statutes did not deny association due process as there was rational basis to restrict corporate ownership of professional businesses to protect consumers, statutes were not vague, and statutes did not violate state constitution’s Monopoly Clause. Capital Associated Indus. v. Stein, 922 F.3d 198, 2019 U.S. App. LEXIS 11447 (4th Cir.), cert. denied, 140 S. Ct. 666, 205 L. Ed. 2d 438, 2019 U.S. LEXIS 7540 (2019).

CASE NOTES

No Civil Cause of Action. —

Legislative codification of the common law offense of barratry in G.S. 84-38 does not provide a civil cause of action for the offense. DaimlerChrysler Corp. v. Kirkhart, 148 N.C. App. 572, 561 S.E.2d 276, 2002 N.C. App. LEXIS 60 (2002).