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Bergantzel v. Mlynarik11/16/2000
legal advisors]" (quoting In re Baker, 85 A.2d 505, 514 (N.J. 1951))). We think it is not subject to debate that the public policy underlying the regulation of the practice of law is strong. The importance of the licensing requirement is further evidenced by the fact that a person who assumes to be an attorney and acts as such without authority may be held in contempt of court and fined up to one thousand dollars or imprisoned in the county jail for up to six months, or both. See Iowa Code §§ 665.3, .4.
As for the second factor against enforcement, we think that a refusal to enforce the contract will further the public policy evidenced by the attorney licensure provisions. As we noted in Mincks, "taking the economic benefit out of contracts that violate [public policy] by holding them unenforceable 'very definitely would promote the public policy.'" 611 N.W.2d at 280 (quoting Springlake Corp. v. Symmarron Ltd. P'ship, 569 A.2d 715, 722 (Md. Ct. Spec. App. 1990)).
Turning to the third factor, we find nothing in the record to suggest that Bergantzel knew her actions were unauthorized, yet deliberately proceeded. Nonetheless, it cannot be questioned that the unauthorized practice of law is a very serious matter. Both lawyers and non-lawyers are subject to severe sanctions for such conduct. See Iowa Code of Prof'l Responsibility DR 3-101 & EC 3—1 to 3—9 (providing that a lawyer "should assist in preventing the unauthorized practice of law" and providing for the imposition of sanctions for acts that aid in such conduct); Iowa Code §§ 665.3, .4 (providing for fines and imprisonment for acting as an attorney without authority).
The fourth and final factor concerns the nexus between the lack of license and the contract at issue. In the present case, there is an undeniably direct connection. The performance for which Bergantzel seeks compensation is the unauthorized practice of law, conduct that she was prohibited by law from performing. In other words, the unlicensed conduct is not a collateral matter.
Weighing all the factors, we conclude that the interest in refusing to enforce the contract must prevail. The fact that Bergantzel has already performed and, in that sense, Mlynarik will receive a windfall, simply does not outweigh the strong public policy against the unauthorized practice of law. See Meunier, 170 So. at 578 (holding that adjuster, who had fully performed, could not recover his contractual contingent fee due to the strong public policy against the practice of law by laypersons). Accordingly, we conclude that the contract is unenforceable.
VII. Summary and Disposition.
We hold that Bergantzel's negotiation of a settlement of Mlynarik's UIM claim constituted the unauthorized practice of law. The public policy underlying the attorney licensure requirement dictates that the contract obligating Bergantzel to perform the unauthorized acts is unenforceable. The trial court erred in ruling to the contrary, as did the district court on appeal. Therefore, we reverse the judgment in favor of Bergantzel and remand this case for dismissal of Bergantzel's claim.
REVERSED AND REMANDED.
McGiverin, S.J.*, participates in place of Snell, J., who takes no part. *Senior judge assigned by order pursuant to Iowa Code section 602.9206 (1999).
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