A Florida law group that hired several Indiana attorneys to represent clients in foreclosures and bankruptcies must face a civil lawsuit, the Indiana Supreme Court ruled Tuesday.
Justices affirmed the trial court’s denial of summary judgment in Consumer Attorney Services, P.A., The McCann Law Group LLP, and Brenda L. McCann, Individually and as Owner and/or Officer of Consumer Attorney Services, P.A., et al. v. State of Indiana, 49S05-1703-PL-161. Amid mounting consumer complaints, the Indiana Attorney General’s Office brought a civil suit against CAS alleging violations of four statutes: the Credit Services Organizations Act, the Mortgage Rescue Protection Fraud Act, the Home Loan Practices Act; and the Deceptive Consumer Sales Act. The firm’s owner, Brenda McCann, has been effectively disbarred in Florida, the opinion notes.
CAS and McCann claimed they were expressly or impliedly exempt from liability under each of those statutes, and the Court of Appeals agreed in part, holding the firms were only potentially liable under the DCSA, but that McCann personally was not exempt from any of the statutes.
“Finding that none of the Defendants properly fit within these statutory exemptions, we affirm,” Justice Mark Massa wrote for the court, which held that none of the statutes provides an exemption for law firms. As case law provides that consumer protections should be liberally construed with regard to the DCSA, Massa held a similar reading was warranted for the CSOA, which likewise “is designed to serve the humane purpose of protecting vulnerable Hoosiers from further financial depletion by predators, and its specific protections exceed those contained in our common law.”
The court also held that the Mortgage Rescue Protection Fraud Act exempts attorneys as individuals, but not the law firms from which they are affiliated. Because the court found no available law firm exemption under the CSOA of MRPFA, McCann cannot extend them to her claims of exemption from the HLPA or the DCSA.