Court Blocks Non-Attorney From Preparing Mechanic's Lien

In a case that could spell doom for non-attorney consultants who prepare mechanic’s liens on their clients’ behalf, a Hennepin County court recently held that such practice is illegal.

In a December 29, 2015, decision, Judge Karen A. Janisch held that by drafting, signing and recording a mechanic’s lien statement, Cash Flow Management, Inc., (“CFM”) and its principal, Daniel Kantos, unlawfully engaged in the practice of law. Judge Janish enjoined CFM and Kantos from “preparing, signing, filing and releasing mechanic’s liens on behalf of others, for a fee or otherwise.”

After it was allegedly not paid for its work, Rockstar Design, LLC, hired CFM to prepare, record and serve a mechanic’s lien, which was signed by Kantos. After obtaining a release of the lien, the owner’s agent, Dering Pierson Group, LLC, (“DPG”) sued and sought, among other relief, a court order barring CFM and Kantos from preparing mechanic’s liens for anyone.

In weighing DPG’s summary judgment motion, the court noted that Minnesota’s unauthorized practice of law statutes renders it “unlawful for any person . . . to prepare legal documents” on behalf of others. Minn. Stat. § 481.02. The court concluded, moreover, that a mechanic’s lien statement is a “legal document” under the statute. The court noted that Ohio, Texas, Arkansas, Florida and North Carolina have reached similar conclusions.

Distinguishing cases involving real estate brokers who merely draft documents, the court noted that neither CFM nor Kantos was a mere “scrivener” but that they “prepared the lien statement and related documents for their own signature and approval, . . . attested to . . personal knowledge of the facts alleged . . ., then filed the lien statement, and then later released that lien.”

The above-discussed case is Dering Pierson Group, LLC v. Rockstar Design, LLC, et al, Hennepin County Case No. 27-CV-1142.