By JODI SOKOLOWSKI
Buffalo Law Journal

A Clarence-based business that was found to have conducted real estate closings without a law license has reached a settlement with the state attorney general's office and has closed permanently. The Closing Advantage Inc., at 8616 Main St., closed at the end of July.

The principals are prohibited from engaging in similar endeavors and must pay a $6,000 fine and $2,000 in statutory fees.

State Supreme Court Justice Hon. Kevin Dillon granted the consent judgment and order in State of New York v. The Closing Advantage Inc. and Sara Shoemaker Sept. 9.

The Bar Association of Erie County, which initiated a two-year investigation, filed a complaint in 2006 with the AG's office alleging that principals and employees of The Closing Advantage were unlawfully preparing deeds, mortgages and other real estate instruments in violation of state judiciary law section 484 and practicing law in violation of section 495(3).

Shoemaker, owner of the business, said she admitted "no wrongdoing" and believes the company was not violating any laws because it "performed administrative services at the direction of the institutional lenders."

Shoemaker said her employees, four at the time of the company's closing, were not practicing law but simply acting as intermediaries for lenders at real estate closings. She said they did not represent borrowers or purchasers.

"We were a title-insurance agency and a settlement company and closed real estate transactions on behalf of lenders," she said.

Buffalo attorney Nancy Langer, who initiated the investigation in her capacity as chair of the Bar Association's Unlawful Practice Committee, said state law specifies that only a lawyer, licensed and registered to practice in New York state, can prepare a deed.

Only a person, not a corporation, she said, can practice law; when a paralegal attends a closing, an attorney must be available at all times.

The Bar Association began to look at title companies in 2002. "More than one complaint on more than one company came out at the same time," Langer said.

The Unlawful Practice and Real Estate committees jointly wrote a report to the association's board of directors in 2003, then sent letters to title and settlement closing companies alerting them that the bar was concerned they might be unlawfully practicing law, Langer explained.

After an article was published in the Bar Bulletin about the matter, a number of lawyers reported that "the Closing Advantage was involved in real estate closings going beyond the title business," Langer said.

The AG's office directed the association to compile information that was ultimately used in settlement negotiations.

There are roughly eight issues that the Unlawful Practice Committee might investigate, Langer said. Besides allegations of unlawful law practice, they include Medicaid-related offenses and selling and filling out legal forms.

"Usually it turns out there's an explanation or somebody says, ‘We don't usually do it that way and we won't do it that way anymore,' or they weren't aware" they were violating the law, Langer said.

Shoemaker, for example, said she had consulted an attorney who "advised (us that) we were providing services that did not require a law degree." She later retained attorney Michael Flaherty Jr. of Flaherty & Shea when the company was being investigated by the Attorney General's office.

She claims that her eight-year-old company was singled out by local real estate attorneys who were competing for the same customers.

"We provided services more economically and efficiently. The lenders preferred our services because of that. It was an economic battle," she said.

Langer has been tapped to head up a special committee on unlawful practice established by the New York State Bar Association that will focus on issues involving bankruptcy, immigration and residential real estate practices. Buffalo lawyer and former Bar Association president Richard Blewett has also been appointed to the committee.