New Jersey State Bar Ass'n v. New Jersey Ass'n of Realtor Boards

461 A.2d 1112, 93 N.J. 470, 1983 N.J. LEXIS 2720
CourtSupreme Court of New Jersey
DecidedJune 28, 1983
StatusPublished
Cited by52 cases

This text of 461 A.2d 1112 (New Jersey State Bar Ass'n v. New Jersey Ass'n of Realtor Boards) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
New Jersey State Bar Ass'n v. New Jersey Ass'n of Realtor Boards, 461 A.2d 1112, 93 N.J. 470, 1983 N.J. LEXIS 2720 (N.J. 1983).

Opinions

[471]*471DECISION AND ORDER

Modifying and Approving Consent Judgment

These proceedings are before the Court upon the joint application of the parties, New Jersey State Bar Association and New Jersey Association of Realtor Boards, who seek approval of the Final Consent Judgment entered in the Superior Court, Chancery Division, by Justice Mark A. Sullivan, retired and serving [472]*472by temporary assignment. The consent judgment was entered on May 5,1982, pursuant to a decision issued by Justice Sullivan on April 30,1982. 186 N.J.Super. 391. We consider this application under our constitutional powers governing the practice of law. N.J. Const. (1947) Art. VI, § II, par. 3; see R. 1:21 (regulation of practice of law).

The consent judgment under review, included as an appendix hereto, provides generally that licensed real estate brokers and salespersons shall be permitted to prepare certain types of residential sales and lease agreements if these agreements contain specified provisions. Further, the consent judgment contains prohibitions against such real estate brokers or salespersons engaging in the drafting, preparation or completion of any other types of residential real estate sales or lease agreements. Additional provisions of the consent judgment protect the right of a party to such authorized real estate contracts or leases to obtain attorney review of the proposed agreement and prohibit any waiver, disclaimer, relinquishment or abridgement of that right. The parties have agreed by this consent judgment that its terms and conditions shall become effective only upon the approval of this Court.

The Final Consent Judgment that we are asked to approve is the result of prolonged and difficult proceedings. The background and history are recapitulated in Justice Sullivan’s opinion. 186 N.J.Super. at 392-94. This lawsuit followed upon the decision of this Court in State v. Bander, 56 N.J. 196 (1970), which left unresolved the question of whether the particular actions of a real estate broker constituted the unauthorized practice of law contrary to N.J.S.A. 2A:170-78. In this action the plaintiff initially sought a judicial order declaring that various activities of the licensed real estate brokers and salespersons constituted the unauthorized practice of law. Following joinder of issues and the commencement of trial, the parties embarked upon extensive and constructive negotiations that led [473]*473to an adjustment of their dispute. Since consensual resolution of the controversy would necessarily implicate the question of whether particular conduct would be considered by this Court to constitute the unauthorized practice of law, it was clear that Court approval would be required. Recognizing this fact, Justice Sullivan discontinued the trial and scheduled public hearings on the proposed settlement with notice to class members pursuant to R. 4:32-4, and to the bar and general public. The public hearings combined with the trial testimony and evidence served to develop an adequate record for purposes of the discharge of this Court’s regulatory responsibility over the practice of law and its rule-making authority pursuant to the Constitution. It is this responsibility and authority that are invoked by the application to approve the consent judgment.

The record below supports the conclusion reached by Justice Sullivan that the settlement, as modified herein, will protect the public interest and can be approved by this Court. Justice Sullivan observed in his opinion that

[t]he basic question is how is the public interest best served. In the sale or lease of residential real property the functions of realtors and attorneys overlap. Many non-lawyers, in connection with their business activities, give advice and do things which have legal consequences. However, this does not necessarily mean that they are engaged in the unlawful practice of law. In the instant case defendants assert without contradiction that “[n]o State in the Country has prohibited Brokers from completing form contracts in connection with residential property sales.” Justice Jacobs, in N.J. Bar Ass’n v. North N.J. Mtg. Assocs., 32 N.J. 430 (1960), noted that:
It is, of course, clear that the practice of law is not confined to litigation but extends to legal activities in many non-litigious fields which entail specialized knowledge and ability. [Citing cases]. Oftentimes the line between such activities and permissible business and professional activities by non-lawyers is indistinct. See Auerbacher v. Wood, 139 N.J.Eq. 599 (Ch.1947), affirmed 142 N.J.Eq. 484 (E. & A.1948). In the Auerbacher case Justice Heher noted that what constitutes the practice of law does not lend itself “to precise and all-inclusive definition” and that some fields may “in some areas” properly overlap the law. [at 437]
A realtor’s function in selling (or leasing) residential real property falls into this area. The evidence at trial showed that, in New Jersey, most contracts for [474]*474the sale of residential property are originally prepared by the realtors who negotiated the sales. The proofs also showed a widespread practice among realtors of including an attorney review option clause in such contracts. The proposed settlement accommodates the interests of realtors and attorneys by allowing the realtor to consummate the contract phase of the transaction, with attorneys handling the actual transfer of title. Most importantly, however, it serves to protect the public interest by making the contract subject to prompt attorney review if either buyer or seller so desires. [186 N.J.Super. at 396].

We conclude that approval of this settlement is appropriate. The activities to be undertaken by realtors pursuant to the settlement agreement will not transgress unduly upon the practice of law. To the extent that there is an inevitable or unavoidable overlap between the realty and legal professions, the public’s interest is safeguarded through the settlement’s attorney review provisions and the Court’s continuing supervisory control. We find significance in the fact that the settlement implicates and addresses concerns that go beyond the direct and immediate interests of the primary professional associations, who are parties to the litigation and have consented to the judgment of settlement. In addition to all interested members of the class having been advised of the proposed settlement, others have been permitted to participate in its adoption. Both the Attorney General and the Public Advocate, whose sole concerns in this matter are the protection of the public, have recognized that the public welfare can be reasonably accommodated and safeguarded through an agreement settling the matters in dispute (although each would have preferred certain additional modifications or changes). We are satisfied that questions of the interpretation, application, and general adherence to or enforcement of the settlement approved by this judgment that may arise and affect the public interest will be dealt with by the courts in the most appropriate manner under the given circumstances. This includes, of course, the further possible modification of the present accord pursuant to the exercise of the Court’s constitutional rule-making authority over ■ the practice of law.

[475]*475One additional aspect of the settlement requires our attention.

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Bluebook (online)
461 A.2d 1112, 93 N.J. 470, 1983 N.J. LEXIS 2720, Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-jersey-state-bar-assn-v-new-jersey-assn-of-realtor-boards-nj-1983.