In the Matter of Naderi
426 S.C. 476, 827 S.E.2d 582 (2019)
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Rule of Law:
An attorney not licensed in a jurisdiction is subject to that jurisdiction's disciplinary authority if the attorney provides or offers to provide legal services there. Engaging in the unauthorized practice of law, combined with other ethical violations, can result in severe sanctions, including debarment.
Facts:
- Respondent, a licensed California attorney, operated the Pacific National Law Center (PNLC) but was never admitted to practice law in South Carolina.
- In December 2013, J.H., a South Carolina resident and homeowner, hired Respondent's firm to negotiate a modification of his home loan.
- J.H. signed a retainer agreement for "legal services" and paid PNLC a non-refundable fee of $2,995.
- The retainer agreement limited J.H.'s ability to seek a refund and required all disputes to be arbitrated in California under California bar rules.
- After J.H. made his final payment in March 2014, PNLC became unresponsive and failed to obtain a loan modification or provide any other solutions.
- When J.H. received a foreclosure hearing notice, he was unable to contact anyone at PNLC.
- J.H. had to appear alone at the foreclosure hearing and ultimately hired another attorney and filed for bankruptcy to save his home.
Procedural Posture:
- South Carolina's Office of Disciplinary Counsel (ODC) initiated an investigation into Respondent's conduct.
- The ODC filed formal charges against Respondent with the Commission on Lawyer Conduct.
- Respondent failed to answer the formal charges and was subsequently found to be in default, which served as an admission of the factual allegations.
- The Hearing Panel of the Commission on Lawyer Conduct held an evidentiary hearing, which Respondent did not attend.
- The Hearing Panel issued a report recommending that the Supreme Court of South Carolina debar Respondent, order him to pay restitution, and assess costs.
- Neither party sought review of the Panel's report, and the matter was submitted to the Supreme Court of South Carolina for a final decision.
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Issue:
Does a California-licensed attorney engage in the unauthorized practice of law and violate other professional conduct rules, thereby subjecting himself to disciplinary action in South Carolina, by providing loan modification services to a South Carolina resident without being admitted to the South Carolina bar?
Opinions:
Majority - Per Curiam
Yes. A lawyer providing legal services in a jurisdiction where they are not admitted is subject to that jurisdiction's disciplinary authority and engages in the unauthorized practice of law if their activities do not fall within a recognized exception. Respondent's conduct constituted the unauthorized practice of law in South Carolina because he provided legal services to a South Carolina resident for a South Carolina legal issue without being admitted in the state and without meeting any of the exceptions for temporary practice under Rule 5.5(c). The Court has jurisdiction over Respondent under Rule 8.5(a) because he offered and provided legal services in the state. Furthermore, Respondent committed numerous other violations, including charging an unreasonable fee (Rule 1.5), failing to provide competent and diligent representation (Rules 1.1, 1.3), failing to communicate with his client (Rule 1.4), and failing to cooperate with the disciplinary investigation (Rule 8.1(b)). These actions, which are prejudicial to the administration of justice and reflect adversely on his honesty and fitness, warrant the sanction of debarment.
Analysis:
This case strongly affirms a state's disciplinary authority over out-of-state attorneys who render legal services to its residents, reinforcing the principle that a law license is geographically limited. The ruling serves as a clear warning against the unauthorized practice of law across state lines, particularly in consumer-facing areas like loan modification where clients are vulnerable. By imposing the severe sanction of debarment, the court signals a low tolerance for such misconduct, especially when compounded by a failure to cooperate with disciplinary proceedings. The decision underscores that ignoring a disciplinary investigation is treated as an admission of guilt and will lead to a default judgment with significant consequences.
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