30-Nov-2012, Guy W. Bluff, Esq.[1]
Effective 21-Nov-2012, the Arizona Supreme Court issued an Emergency Order changing Arizona’s Administrative Code with regard to the execution of legal documents by CLDP’s (Certified Legal Document Preparers). Arizonahas a long history of regulating what it considers to be the “Unauthorized Practice of Law” and this latest Supreme Court Order continues that policy of protecting the public from such practices.
The Supreme Court’s Administrative Order specifically provides that effective 21-Nov-2012, CLDP’s may continue to file, record, and arrange for service of legal forms, but that they are not authorized to sign documents for their customers as they have in the past as an “authorized representative” or “legal agent.” ACJA §7-201(F)(1)(e) provides
e. File, record, and arrange for service of legal forms and documents for a person or entity in a legal matter when that person or entity is not represented by an attorney. A certified legal document preparer may not sign any document on behalf of or as an agent or authorized representative of a person or entity.[2]
As of 21-Nov-2012, CLDPs are no longer authorized to sign 20 Day Preliminary Notices[3], Mechanic Liens[4], or other legal documents on their customers’ behalf as they have done in the past. ALL 20 Day Preliminary Notices mailed out after the effective date of 21-Nov-2012 and ALL Mechanic’s Liens recorded after such date must now be signed by an owner, officer, member or other individual actually employed by the company OR AN ATTORNEY, in order to be legally effective.
This change has a serious and immediate impact upon contractors, subcontractors, materials suppliers, design professionals and others who use lien service companies operated by CLDPs to prepare their 20 Day Preliminary Notices, Mechanic’s Liens and other documents. Presently, there are more than 50 different lien service companies operating inArizona. Of those, less than 5 are owned and operated by licensedArizonaattorneys. All 20 Day Preliminary Notices or Mechanic’s Liens prepared and signed by the non-attorney companies after 21-Nov-2012 are legally defective while those signed by licensed Arizona attorneys (or by an individual employed by the company itself) remain valid.
In order to protect your company from the likely situation of having the 20 Day Preliminary Notice determined to be defective and thus invalidating any subsequently recorded Mechanic’s Lien or Payment Bond claim, it is critical that the company either change their lien service company to one owned and operated by a licensed Arizona attorney, or otherwise change their internal procedures to have all such documents signed by an authorized representative of the company prior to mailing or recording.
To the extent that any 20 Day Preliminary Notices have been mailed out from and after 21-Nov-2012 which were only signed by a CLDP, they need to be amended and re-mailed out. Any Mechanic’s Lien claims which were only signed by a CLDP and then recorded, need to be re-signed (by a company representative with personal knowledge of the lien claim, see ARS §33-993(A)) and then re-recorded immediately.
Practice Pointer for Attorneys:
For attorneys, it will be important to carefully review the 20 Day Preliminary Notices which may be attached to any recorded Mechanic’s Lien or Bond Claim filed after 21-Nov-2012. While it is anticipated that most lien service companies will eventually make changes to their forms to include the direct signature of their clients, there will likely be a substantial gap in time before all such companies are in compliance. A sampling of Mechanic’s Liens recorded just in MaricopaCountyafter the effective date of the order demonstrates that they are still being signed by the lien service companies and not the actual lien claimant.[5] Clearly such liens will be determined to be defective – potentially subjecting the client to sanctions as provided by ARS §33-420 (A) and (C).
[1] Guy W. Bluff, Esq. is a trial and business attorney licensed in Arizona, California, and Colorado. Mr. Bluff is a frequent contributor and author of articles and books relating to Mechanic’s Liens, Preliminary Notices and Bond Claims procedures. He is the author of the practice manual – Construction Lien Law in Arizona (©, 2005, 2009, 2012).
[2] The full text of Arizona Supreme Court Administrative Order 2012-85 can be found at: http://www.azcourts.gov/Portals/22/admorder/orders12/2012-85.pdf
[3] See, ARS §33-992.01(D) which provides that the mandatory form language include the signature and title of the company representative.
[4] See, ARS §33-993(A), which provides that in order to perfect a Mechanic’s Lien “The notice and claim of lien shall be made under oath by the claimant or someone with knowledge of the facts”.
[5] See e.g., http://156.42.40.50/UnOfficialDocs/pdf/20121067133.pdf ; http://156.42.40.50/UnOfficialDocs/pdf/20121059147.pdf