Class Claims LegalZoom Is Unfair & Misleading
6/1/2010 4:32:00 AM,
(CN) - A class action accuses LegalZoom, an online legal document preparation service, of unfair and deceptive business practices. One of the business' founders, Robert Shapiro, was O.J. Simpson's criminal defense attorney, according to the complaint in Los Angeles Superior Court. Among other complaints, the lead plaintiff says that LegalZoom claims to "customize" its documents, but the customization is limited to customers' names and identifying personal information.
Katherine Webster sued as executor of the estate of Anthony Ferrantino and trustee of the Anthony J. Ferrantino Living Trust.
Webster claims that LegalZoom's website and advertising are premised on the misleading claim that "virtually anyone" can create a valid legal document through the site, and that the "customized" documents made by nonlawyers would be reviewed for "accuracy and reliability," imbuing customers with a false sense of security.
"Nowhere in the manual do defendants explain that using LegalZoom is not the same as using an attorney and that its documents are only 'customized' to the extent that the LegalZoom computer program inputs your name and identifying information, but not tailored to your specific circumstances," the complaint states.
Plaintiffs say they bought a living trust through LegalZoom, which was to include a revocable living trust, a will and a durable power of attorney. But Webster says the documents were flawed as a result of LegalZoom's failures, and Ferrantino's estate had to hire an attorney to correct the problems.
Webster claims Shapiro and co-founders/co-defendants Brian Lee and Charles Rampenthal made misrepresentations to advance their business, buried disclaimers in LegalZoom's website, and omitted relevant facts.
She claims the business capitalizes on Shapiro's fame by using him in its TV commercials, in which Shapiro says, "I'm Robert Shapiro and I created LegalZoom."
Webster claims LegalZoom misleads customers about the availability and helpfulness of its customer service personnel, the extent of its 100 percent satisfaction guarantee, the degree to which documents are customized, and the quality of LegalZoom's documents compared to those prepared by an attorney.
Webster said almost all of LegalZoom's other claims are contradicted by disclaimers that are accessible only by following links to secondary pages of the website, and in much smaller type than that displayed on the website's main pages.
For instance, Webster said that while the company claims that "virtually anyone" can use its product, the disclaimer states that "the law is a personal matter and no general information or legal tool like the kind LegalZoom provides can fit every circumstance."
Webster also faults Shapiro and the other defendants for failing to explain what types of problems might be "too complex to be addressed by LegalZoom."
Webster claims that LegalZoom advertises by claiming: "'Remember: Your order comes with unlimited customer support.'" But in reality, "There is absolutely zero attorney support," the class claims, adding that "the customer service representatives are not lawyers and cannot by law provide legal advice."
Webster claims the defendants failed to comply with laws and regulations governing practice of law in California, led customers to practice law without a license, assisted in unauthorized practice of law, and used fraudulent business practices. She seeks disgorgement and punitive damages for negligence, elder financial abuse, consumer law violations and illegal and unfair business practices.
Webster's lead counsel is Kathryn Stebner with Stebner and Associates of San Francisco.