Fears v. Virginia State Bar

51 Va. Cir. 367, 2000 Va. Cir. LEXIS 50
CourtRichmond County Circuit Court
DecidedMarch 1, 2000
DocketCase No. LE-1283-3
StatusPublished
Cited by2 cases

This text of 51 Va. Cir. 367 (Fears v. Virginia State Bar) is published on Counsel Stack Legal Research, covering Richmond County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fears v. Virginia State Bar, 51 Va. Cir. 367, 2000 Va. Cir. LEXIS 50 (Va. Super. Ct. 2000).

Opinion

By Judge T. J. Markow

The parties appeared on Complainant William E. Fears Amended Petition for Declaratory Judgment and Co-complainant Virginia Real Estate Attorneys League’s (VAREAL) Motion for Summary Judgment and the Commonwealth of Virginia’s Demurrer, Plea of Sovereign Immunity, and Motion to Strike or in the Alternative, Motion for Summary Judgment, and memoranda were received and argument was heard. Additionally, the court considers a memorandum filed in support of the Commonwealth’s position by the Coalition for Choice in Real Estate Closings as amicus curiae. Notwithstanding a long history of opposing nonlawyer involvement in real estate closings, the Defendant Virginia State Bar announced that it stood neutral to the cause and failed to participate.

The case originally came as a declaratory judgment action brought by Co-complainant Fears, an active member of the Virginia State Bar in Accomac, Virginia, whose legal business regularly includes real estate practice. After a hearing, the court entered an order permitting intervention by Virginia Real Estate Attorneys League, known as VAREAL, a party plaintiff. Upon hearing that VAREAL would offer no further evidence, the court accepted the organization’s brief. Complainants seek a judgment declaring Va. Code [368]*368§§ 6.1-2.19 through 6.1-2.29, known as the Consumer Real Estate Settlement Protection Act or CRESPA, unconstitutional.

The Challenge to RESARA

As an initial point of contention, VAREAL assumes in a footnote that CRESPA was amended by the Real Estate Settlement Agent Registration Act, Va. Code §§ 6.1-2.30 et seq., aptly referred to as RESARA. Thus, VAREAL asserts that a challenge to RESARA is also properly before the court.

The Attorney General objects to the characterization noting that RESARA is contained not only in separate sections of the Code from CRESPA, but also in a separate chapter. The argument continues that RESARA is separate and distinct in the Virginia Code from CRESPA. Thus, RESARA is not properly before the court because it is not specifically challenged by Complainants pleadings.

The court notes that the Amended Petition for Declaratory Judgment seeks a ruling solely on CRESPA as amended. Therefore, if RESARA were an amendment to CRESPA, the issue of that Act’s constitutionality would properly be before the court. However, RESARA, appearing in a separate chapter with a separate heading, is not an amendment to CRESPA and is, therefore, not properly at issue in this case. That CRESPA and RESARA appear under the same title does not show the latter to be an amendment as the title includes over twenty other chapters, regulating a variety of financial issues.

Description of CRESPA

CRESPA permits nonlawyers to conduct real estate closings. It regulates the licensing and oversight of real estate settlement agents, including lawyers, to allow them to perform escrow, closing, or settlement services as expressly defined under the Act. See Va. Code Ann. §§ 6.1-2.19 to 6.1-2.29 (1950).

Without repeating all that is covered in the multiple sections of the Act, the court notes that the Act requires such agents to carry malpractice insurance, post fidelity and surety bonds, and maintain escrow accounts in accordance with the statute’s instructions and with general fiduciary concerns. See Va. Code §§ 6.1-2.21, 6.1-2.23 (1950). The statute also obliges those who act as agents to maintain records of each settlement for a minimum of five years after each settlement is completed and to submit requested information to the Virginia State Bar. See Va. Code §§ 6.1-2.24, 6.1-2.26(A) (1950). The State Bar, in consultation with the Virginia State Corporation Commission and [369]*369the Virginia Real Estate Commission, is designated to establish, adjudicate, and enforce further regulations for settlement agents. See Va. Code §§ 6.1-2.26(B), (C), (D) (1950). Penalties for non-compliance with the statute are defined. See Va. Code § 6.1-2.27 (1950). Finally, the Act commands all settlement agents operating in the Commonwealth before the Act’s promulgation to comply with its licensing and account management requirements. See Va. Code § 6.1-2.29 (1950).

Complainant Fears incorporated into the Amended Petition for Declaratory Judgment a brief written by Roger G. Hopper, a member of the Virginia State Bar. The brief was originally filed in an earlier action brought in the Supreme Court of Virginia.

First, the court deals briefly with Complainants’ claims raised in the Amended Petition for Declaratoiy Judgment and in Mr. Hopper’s brief, which argues that CRESPA violates the Special Legislation clause of the Virginia Constitution. Next, it will address Complainant Fears’ arguments that CRESPA violates his rights under the Due Process clause of the U.S. Constitution found in the Fifth Amendment as applied to the states via the Due Process clause of the Fourteenth Amendment, and the Equal Protection clause of the Fourteenth Amendment to the U.S. Constitution. The court continues with an analysis of Complainants’ claims that CRESPA violates the Separation of Powers Doctrine grounded in the Virginia Constitution. Finally, the court recognizes the impact of Unauthorized Practice of Law Opinion No. 183, which was approved by the Supreme Court with a postponed effective date.

The Challenge That CRESPA is Special Legislation

First, Complainant argues that CRESPA is special legislation and invalid under Section 14 of Article IV of the Constitution of Virginia, and more specifically, under paragraphs 3 and 18 of that section. The clause and relevant paragraphs state:

The General Assembly shall not enact any local, special, or private law in the following cases ....
(3) Regulating the practice in, or the jurisdiction of, or changing the rules of evidence in any judicial proceedings or inquiry before the courts or other tribunals, or providing or changing the methods of collecting debts or enforcing judgments or prescribing the effect of judicial sales of real estate ....
[370]*370(18) Granting to any private corporation, association, or individual any special or exclusive right, privilege, or immunity.

That section is meant to prevent inequality, discrimination, and favoritism in the laws. See Benderson Devel. Co. v. Sciortino, 236 Va. 136 (1988). The clause does not prevent the General Assembly from regulating professions completely. See generally King v. Neurological Injury Comp. Prog., 242 Va. 404 (1991).

CRESPA applies equally to all persons and jurisdictions within the Commonwealth and does not define the practice or rules of any single or special group. The statute also does not give any one person or entity or any special group of persons or entities a privilege that is not available to all who are similarly situated. The Special Legislation clause is not implicated here.

The Challenge That CRESPA Violates the Due Process Clause of the Fifth Amendment to the United States Constitution

Similarly, Complainant Fears argues that CRESPA deprives him of a property right to practice law by imposing upon him added costs of an additional license to act as an agent in areal estate closing.

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Cite This Page — Counsel Stack

Bluebook (online)
51 Va. Cir. 367, 2000 Va. Cir. LEXIS 50, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fears-v-virginia-state-bar-vaccrichmondcty-2000.