FINAL EXAM - Case Examples with complete solutions

In Re First Escrow (p. 460) First Escrow Inc. does real estate closing services for banking institutions, title insurance companies, and others. It completes preprinted forms of documents, including deeds, notes, affidavits, settelement statements, IRS 1099 forms, and property inspection certificates. All forms are prepared or approved by a licensed attorney. It does NOT make any changes to the forms without an attorney's approval. It does fill in the blanks on the forms based on the information from the real estate contract, attorneys, title insurers, lenders, and the buyer and the seller involved in the transaction. First, escrow charges a flat fee whether documents are prepared or not. A question arose as to whether this constituted the practice of law in violation of the prohibition to do so without a license. correct answersThe Supreme court of Missouri ruled that under the relevant statute in Missouri, it did NOT constitute the unauthorized practice of law where the closing agent completes simple, standardized forms of documents, which do not require the exercise of judgement or discretion, under rthe supervision of and as agents for a real estate broker, a mortgage lender, or a title insurer who has a direct financial interest in the transaction or a licensed attorney who represents one of the parties in the transaction. Lone Star Development Corp. v. Miller (p. 467) slide 20 •Lone Star entered into a contract with Miller to sell certain realty in Pueblo County, Colorado, for $588,000. •One thousand dollars was paid at the time of the agreement, and the remaining amount was to be paid at the closing on September 16, at which time Lone Star was to deliver a warranty deed and furnish a marketable title. •There was an unpaid lien on the property in the amount of $479,756.71, of which all parties were aware. •Lone Star intended to satisfy the lien out of the proceeds of the purchase price. •Miller refused to tender the purchase price, maintaining that the unsatisfied lien rendered the title to the property unmarketable. •Lone Star sued Miller for damages for breach of contract. •How would the court rule? correct answersSeller is trying to back out of a deal - Court ruled in favor of Lone Star A lien should NOT be considered a failure of marketable title