Judge Joseph Yannotti (Photo by Carmen Natale)

A paralegal service committed fraud when it claimed to offer the expertise of an attorney at a lower price, a New Jersey appeals court ruled Friday.

Despite upholding a lower court ruling, the panel still cut the judgment against Karmin Paralegal Services from $12,000 to $3,000 because punitive damages were not specifically pleaded in the complaint.

Karmin Paralegal Services, owned by Alan Karmin, charged $3,000 to prepare court documents for John Baron in connection with a child support dispute. Karmin said "he had the expertise of an attorney, but he did not charge attorney fees," according to the Appellate Division ruling. Karmin also said the claim by Baron's ex-wife was "frivolous" because she could not assert jurisdiction over him in New Jersey when the divorce decree was entered in North Carolina.

Baron then represented himself in the case, but the Family Court judge ruled in favor of his ex-wife. An attorney that Baron consulted advised him Karmin performed "shoddy legal work."

Baron demanded a full refund, but Karmin refused. Karmin filed a police report against Baron for sending him harassing emails, and Baron reported Karmin to the Committee on the Unauthorized Practice of Law, which referred the matter to the Union County Prosecutor's Office. Charges were filed against Karmin, who entered a pretrial intervention program conditioned on payment of restitution.

Baron, again representing himself, also filed a lawsuit against Karmin Paralegal Services, which denied engaging in the unauthorized practice of law. After a bench trial, Superior Court Judge Robert Wilson in Bergen County ruled in September 2018 that Karmin Paralegal Service was engaging in the unauthorized practice of law by using the "euphemism of the document preparation agreement" and then "trying to hide behind the plaintiff, by making the plaintiff look like he's proceeding pro se."

Wilson ruled that Karmin Paralegal Services committed fraud by practicing law without a license. He awarded $3,000 in compensatory damages and $9,000 in punitive damages and also referred the case to the Union County Prosecutor's Office.

Karmin Paralegal Services appealed, disputing the determination that its services constituted fraud. Appellate Division judges Joseph Yannotti, Heidi Currier and Lisa Firko said the drafting of pleadings and other legal documents is clearly regarded as the practice of law. Karmin engaged in the practice of law without the benefit of a supervising attorney, and misrepresented to Baron that he had "the expertise of an attorney," the panel said. The judge below properly found that Karmin intended for Baron to rely on his advice, and sustained damages as a result, the panel said.

The panel also rejected Karmin's claim that the litigation was frivolous because Baron was "well aware that defendant is not an attorney." Baron made clear his intent was only to get his money back, and he only filed suit when Karmin refused to give him a full refund, the panel said.

But the panel sided with Karmin on his claim that the $12,000 judgment was excessive. Punitive damages can be awarded only if the plaintiff makes a showing that the defendant's acts or omissions were "actuated by actual malice or accompanied by a wanton and willful disregard of persons who might be harmed by those acts and omissions," the panel said.

Baron could not be reached for comment.

Karmin, who represented himself, said he was pleased the punitive damages were vacated. But Karmin was critical of the appeals court's finding that Baron was a credible witness.

"The court got mad because they don't want someone taking business away from attorneys," Karmin said.

Karmin Paralegal Services is no longer in operation and Karmin said he now works for "a number of lawyers," but he declined to name any.