Did Clearpoint Cross the Line Into Unauthorized Practice of Law in an Arizona Foreclosure Case?

A January 2026 court order from the United States District Court for the District of Arizona raises serious concerns about a non-lawyer document preparation company, Clearpoint, and its role in a homeowner’s failed attempt to stop foreclosure. The filing details how a vulnerable plaintiff relied on Clearpoint for litigation documents that were allegedly drafted using undisclosed artificial intelligence and contained nonexistent legal authorities. The Court stopped short of making findings against Clearpoint but formally referred the matter to Arizona regulators for possible investigation. For injured consumers and plaintiff-side attorneys alike, the order provides a rare and detailed look at how AI-generated filings and non-lawyer “litigation teams” can derail a case and drain critical resources.

What Triggered the Court’s Scrutiny of Clearpoint?

The case arose after Pearl Gardner, a homeowner facing foreclosure following her husband’s death, filed suit against her mortgage servicer, Nationstar Mortgage LLC. According to the court record, a recognized title company referred Gardner to Clearpoint, which she then hired to prepare legal documents intended to halt foreclosure proceedings. Gardner told the Court she was fearful of losing her home and did not understand the legal filings that were submitted on her behalf.

Gardner explained that her contacts at Clearpoint referred to themselves as a “Litigation Team,” and she followed their instructions throughout both state and federal proceedings. Clearpoint allegedly prepared a wide range of pleadings, including a verified complaint, motions for a temporary restraining order and preliminary injunction, affidavits, and procedural motions. Gardner filed each of these documents under her own name, believing Clearpoint was qualified to assist her.

Problems surfaced quickly after the case was removed to federal court. Nationstar’s counsel identified more than sixty instances of inapplicable law, nonexistent cases, or misconstrued legal principles in Gardner’s filings. The Court then issued an Order to Show Cause questioning why Gardner’s motion for a preliminary injunction should not be denied due to what appeared to be “hallucinated” legal authorities. That order ultimately led Gardner to consult an attorney friend, who explained that many of the cited cases and statutes were not real or were misrepresented.

Key facts highlighted by the Court include:

• Gardner relied entirely on Clearpoint for legal guidance and document preparation.

• Clearpoint’s filings allegedly contained nonexistent or misapplied legal authority.

• The Court’s concerns emerged only after defense counsel and judicial review flagged the errors.

• Gardner stated she did not understand the filings she submitted to the Court.

Why Did the Court Raise Unauthorized Practice of Law Concerns?

In its discussion, the Court emphasized that Arizona strictly regulates who may provide legal services or hold themselves out as authorized to practice law. While Arizona does not prohibit the use of AI in document preparation, it does prohibit unlicensed individuals or entities from performing legal services or using titles likely to mislead consumers into believing they are attorneys.

The order explains that preparing documents for filing in court — even selecting and completing forms — has long been considered the practice of law under Arizona Supreme Court precedent. According to Gardner’s sworn statements, Clearpoint prepared motions and pleadings specifically for her litigation, which she then filed. The Court noted that such activity, if performed by non-lawyers, could constitute unauthorized practice of law under Arizona rules.

The Court further observed that Gardner’s primary contacts at Clearpoint were individuals named Juan Rodriguez and Paul Vierra. Based on the Court’s review of the Arizona State Bar’s membership directory, neither individual appeared to be licensed to practice law in Arizona. The use of the term “Litigation Team,” the Court suggested, could reasonably induce a consumer to believe Clearpoint was authorized to provide legal representation.

Important points noted by the Court include:

• Drafting and filing court documents is considered legal practice in Arizona.

• Clearpoint allegedly prepared filings without attorney licensure or oversight.

• The “Litigation Team” label may have misled Gardner about Clearpoint’s authority.

• The Court referred the issue to the State Bar of Arizona for possible investigation.

How Did Undisclosed AI Use Factor Into the Court’s Order?

A central concern in the order is Clearpoint’s apparent use of artificial intelligence to draft legal filings without disclosing that fact to Gardner. The Court stated that the complaint and motions filed in the case bore multiple “hallmarks of AI,” including unusual structure, fabricated citations, and misinterpretations of existing law. These deficiencies, the Court noted, were not minor errors but fundamental flaws that undermined the filings’ legal basis.

Gardner told the Court she was unaware that AI had been used in preparing her pleadings and only learned of it after the Order to Show Cause was issued. Until then, she believed Clearpoint was qualified to assist her and relied on its guidance. The Court expressed concern that the undisclosed use of AI may have misrepresented the nature and quality of the services Clearpoint was selling.

The order also highlights the practical consequences of AI-generated filings gone wrong. According to the Court, Clearpoint’s documents forced both the defendant and the judiciary to expend significant resources researching fabricated cases and responding to legally baseless arguments. More importantly, the Court emphasized the personal cost to Gardner, who paid Clearpoint $1,000 per month from April 2024 through September 2025 while facing the imminent loss of her home.

The Court underscored several AI-related issues:

• Clearpoint allegedly used AI without informing or obtaining consent from the client.

• Filings included hallucinated cases and statutes.

• AI-generated errors contributed to denial of injunctive relief.

• Gardner’s limited financial resources were diverted away from loan reinstatement.

What Consumer Protection Issues Did the Court Identify?

Beyond unauthorized practice of law, the Court raised concerns under Arizona’s consumer protection statutes, which prohibit deceptive or misleading practices in the sale of services. The order explains that misrepresenting or omitting material facts — including how services are performed — can violate state law if consumers rely on those misrepresentations.

The Court expressed concern that Clearpoint’s undisclosed use of AI, coupled with its apparent positioning as a litigation-capable service, may have induced Gardner to pursue unnecessary litigation. Gardner stated that her true goal was to reinstate her mortgage loan, not to engage in prolonged court proceedings. The filings prepared by Clearpoint, however, pushed the case in a direction that Gardner later acknowledged was against her interests.

Perhaps most troubling to the Court was the timing and context of Clearpoint’s services. Gardner was in a vulnerable position, grieving the loss of her spouse and facing foreclosure. During that period, she paid substantial monthly fees for document preparation that the Court found legally deficient. The order suggests that these expenditures may have worsened her financial situation and reduced her ability to cure the mortgage default.

The Court ultimately referred the matter to the Arizona Attorney General’s Office for potential investigation, while emphasizing that it was not making findings of liability. The referral reflects the Court’s view that the issues raised extend beyond a single case and implicate broader consumer protection concerns.

Key consumer protection takeaways include:

• Undisclosed AI use may constitute a material omission.

• Litigation services were sold to a consumer seeking loan reinstatement.

• Monthly fees may have exacerbated financial harm.

• The Attorney General was asked to review Clearpoint’s conduct.

Conclusion

The Arizona federal court’s order does not resolve whether Clearpoint violated the law, but it clearly signals judicial alarm. By detailing how AI-generated filings, non-lawyer document preparation, and misleading labels intersected in a foreclosure case, the Court laid out a roadmap for regulatory scrutiny. For homeowners in crisis, the case underscores the risks of relying on non-attorney “litigation” services when so much is at stake.

For plaintiff-side attorneys, the filing is a cautionary tale and a call to attention. As AI tools become more common, courts are scrutinizing not just accuracy, but transparency, authorization, and consumer harm. This order suggests that when those safeguards fail, regulators — and not just opposing counsel — may step in.