## Facts

- The Bowers sold investment real property for $45,000 to Quantum Construction, Inc., with $10,000 down and the balance to be paid by a promissory note.
- The parties selected Transamerica Title Insurance Company to act as escrow agent and closing document preparer.
- Transamerica’s escrow closer (a nonlawyer) prepared the promissory note and closing documents.
- Transamerica asked the buyer whether the note would be secured; the buyer directed that it be unsecured, and Transamerica prepared an unsecured note without advising the Bowers about the legal risk or to obtain independent counsel.
- Quantum later defaulted; its principals departed and the company entered bankruptcy, leaving the Bowers without a security interest and with substantial losses.
- The Bowers sued Transamerica for negligence, unauthorized practice of law, and violation of Washington’s Consumer Protection Act (CPA), seeking damages and attorney’s fees.
- The trial court granted summary judgment for the Bowers on liability, treated the conduct as a CPA violation, and awarded damages and $42,805 in attorney’s fees.
- Transamerica appealed on duty, CPA liability, damages measure, and attorney-fee calculation.

## Issues

1. Whether a nonlawyer escrow agent that engages in law-related closing activities is liable for failing to advise a vendor to obtain independent legal counsel about the risks of an unsecured real estate sale.
2. Whether an escrow agent’s unauthorized practice of law constitutes an unfair or deceptive act under Washington’s CPA, RCW 19.86.
3. Whether damages for loss of a security interest may be measured by the reasonable value of the property when the security interest was lost.
4. Whether the trial court abused its discretion in calculating attorney’s fees under RCW 19.86.090.

## Decision

- The court affirmed summary judgment imposing liability on Transamerica for negligence based on its failure to meet the standard of care applicable to legal services it undertook to provide.
- The court held that Transamerica’s unauthorized practice of law constituted an unfair or deceptive act in trade or commerce under the CPA.
- The court approved using the reasonable value of the property at the time the security interest was lost as the measure of damages for the loss of security.
- The court vacated the attorney-fee award and remanded for recalculation because the trial court improperly computed the lodestar and applied multipliers without proper justification.

## Legal Principles

- When a nonlawyer escrow agent drafts legal instruments and performs functions constituting the practice of law, it must satisfy the standard of care required of an attorney for those services.
- An escrow agent performing such law-related services must, at minimum, advise an unrepresented party to obtain independent legal counsel when significant legal risks are apparent; failure may support negligence liability.
- Unauthorized practice of law by a commercial actor can qualify as an unfair or deceptive act under Washington’s CPA, supporting CPA remedies including attorney’s fees.
- For negligence causing loss of a security interest in real property, damages may be measured by the reasonable value of the property when the security position was lost.
- CPA attorney’s fees should be calculated using a lodestar approach (reasonable hours × reasonable rate), and any adjustment requires specific, supported reasons.

## Conclusion

The Washington Supreme Court held that an escrow agent that prepared closing documents as a nonlawyer assumed attorney-level duties, was negligent for not advising the sellers to seek counsel about an unsecured note, and committed a CPA violation; it affirmed liability and the damages measure but remanded for proper calculation of attorney’s fees.


Bowers v. Transamerica Title Ins. Co., 675 P.2d 193 (Wash. 1983)