North Carolina Business Court Rules Lien Filing Service Unauthorized Practice of Law

Judge James Gale, Special Superior Court Judge for Complex Business Cases, ruled on 4 April 2014 that the preparation and filing of mechanics’ liens in the State of North Carolina by an unlicensed attorney was the unauthorized practice of law and prohibited by statute.  The case involved a declaratory judgment action in which the North Carolina State Bar sued Lienguard, Inc., a company that maintains a commercial lien filing service through its website.  Lienguard operates a website in which it offers to prepare and file mechanics’ liens, demand letters, bond notices, liens’ on funds among other legal documents and claims.  The information is supplied to Lienguard, Inc. through a web portal and once the intake form is completed, a representative of Lienguard prepares, signs and sends the lien on for recording with the relevant county where the property is located.  In the case before the North Carolina Business Court, the representative for Lienguard signing and filing the liens was not an attorney licensed to practice law in North Carolina.    Under these facts, Judge Gales found the preparation of claims of liens without being licensed to do so the unauthorized practice of law.  For a copy of the opinion click lienguard case 2014.

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