Presentation TitleSubtitle if applicableSession Number 000

Three Court Cases Every Notary Should Know

Mike Phillips, Esq., Senior Director of Patient Advocacy and Housing Services

DisclaimerThe materials available in this presentation are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.

Objectives:• Review court cases to examine mistakes made and

damages that occurred.

• Understand the importance of following standards of professional care for every notarization.

• Learn tips to avoid liability from notarizations and protect yourself in case of lawsuits.

Bessenyei v. Vermillion• 2012 Case.• Delaware.• Notary notarized the signature of a party (3 different

times) when the signer was traveling the globe, thousands of miles away.

• Brief discussion of the facts of the case.

• The Plaintiffs alleged that the Individual Defendants breached their fiduciary duties by eliminating the Board seat. The Plaintiffs further requested declaratory and injunctive relief that would require Vermillion to allow its shareholders to elect two directors at the upcoming annual stockholder meeting.

• The regular processing of this action was derailed because the Defendants learned that the signatures of one of the Plaintiffs had been improperly notarized.

Rule• Court of Chancery Rule 3(aa) requires that all

complaints and related pleadings be accompanied by a notarized verification from a qualified individual for each named plaintiff, one which attests to the correctness and truthfulness of the filing.

• The Defendants alleged that although each of the three May 25, June 1, and June 26 verifications were purportedly signed by Bessenyei, they were improperly notarized by Bennett “the Notary” and therefore were invalid as verifications.

• They claimed that Goggin, a Pennsylvania attorney, caused Bennett, a legal assistant in his Pennsylvania law office, to notarize these verifications even though Bennett did not personally witness Bessenyei sign the documents before her.

Role and Purpose of the NotaryThe purpose of Rule 3(aa) is at least twofold: first, the matter set forth in any pleading must be verified by someone attesting to its correctness and truthfulness; and second, such a person must sign the pleading and have her signature notarized in order to confirm the authenticity of the signature.

Personal Appearance• In Bokey's Estate, the Supreme Court of Pennsylvania held

that the personal appearance of a signer is fundamental to the purpose of notarization: "[t]he essence of the notarial certificate is that the document has been executed, and that the notary knows that he is confronted by the signer, and that the signer is asserting the fact of his execution.”

• In Frey, the Superior Court of Pennsylvania held that "[w]hen a notary public does certify a document, he attests that the document has been executed or is about to be executed, that the notary knows that he is confronted by the signer, and that the signer is asserting the fact of his execution."

Why Good Notary Practice Is ImportantThe Downing court further stated that "while it is all too common a practice for notaries public to affix their seals to documents not signed in their presence, such a practice, however, is clearly unlawful, and should not be condoned, for the evils of such an unlawful practice are readily apparent…”

Harsh Results

To underscore the importance that Pennsylvania law attaches to the validity of notarizations, Pennsylvania courts regard a failure "to sign the affidavit before the notary" as "a defect that cannot be characterized as merely `technical,`" and considers dismissal of an improperly-notarized complaint as an appropriate remedy.

The Court’s AnalysisBessenyei's signature was notarized in Pennsylvania even though he was not in the United States. Under Pennsylvania law, Bessenyei's failure to appear before Bennett at the time the notarizations took place renders the notarizations invalid. Bessenyei'sverifications are therefore also invalid for the purposes of Court of Chancery Rule 3(aa).

At Issue

Defendants' effort to obtain dismissal of this action turns on whether the collective conduct of Bessenyei, Bennett, Goggin, and Plaintiff's Delaware counsel relating to the invalid notarizations rises to the level of a deliberate violation of the Rules of this Court that would warrant an involuntary dismissal with prejudice under Parfi.

The Signer’s Conduct• His signature appears on each of the 3 documents.• Other signing options had been available.• Yet he chose to have the Notary notarize without his

presence.• He consulted a Pennsylvania attorney to see if the

latter could notarize, because signer “was down in the islands and didn’t know where he could get anything notarized.”

The Notary’s Conduct• Her seal appears on each notarization.• She was acting as a legal assistant to an attorney.• She notarized each document, even though she was

obviously aware that the signer was not present.• Steps she took to make sure she could not notarize

were not reasonable.

Steps Taken by Notary• Did not review the state’s Notary booklet.• Did not use the telephone number of the

governmental agency that oversees Notaries.• Did not consult the National Notary Association.• Did rely on Google (could not remember any

details).• Did use a “credible witness.”

Fate of the NotaryAlthough Bennett “the Notary” acted contrary to her responsibilities as a Pennsylvania Notary Public in notarizing the three documents at issue without Bessenyei's presence, and although Bennett ought to have taken steps beyond a simple Google search to determine whether she could do so, any disciplinary action is a matter for the Pennsylvania authorities. For present purposes, it is worth emphasizing that Bennett is employed by Goggin, a Pennsylvania attorney, and she has testified that she notarized the documents because Goggin directed her to do so.

Fate of the Attorney/Plaintiff• Attorney claims he relied on the Notary.• “As a Pennsylvania attorney, Goggin ought to have

known better.”• Court quotes newsletter: "[a]n attorney who directs

or encourages an employee-notary to notarize documents not signed in the notary's presence commits serious misconduct and could face discipline."

Fate of the Delaware Counsel• Delaware lawyers are ultimately responsible for the

documents they file with the Court.• Specter of notarization problems.• Signer was in a different country each time counsel

spoke with him.• Counsel should have conducted further inquires.

The Plaintiffs achieved short-term tactical benefits by avoiding compliance with the Notary laws. With some thought and some patience, the entire problem addressed in this memorandum opinion could have been circumvented. Dishonesty in the course of litigation is a tempting marker of bad faith.

Conclusion and Holding

For the foregoing reasons, this action must be dismissed.

Practice Tips• Always insist on personal appearance.• Educate yourself.• Do not be pressured by your supervisor.• Call the NNA® Hotline for support.• Obtain a healthy amount of Errors and Omissions

insurance.

Vancura v. Katris• 2008 Case.• Illinois.• Personal appearance, a forged signature, Notary

training, and employer liability.• Vancura sought justice after a document not signed

by him exposed him to multiple damages.• Brief discussion of the facts of the case.

Rules6-102. Notarial Acts. * * ** * *(c) In witnessing or attesting a signature, the notary public must determine, either from personal knowledge or from satisfactory evidence, that the signature is that of the person appearing before the notary and named therein.

Rules7-102. Liability of Employer of Notary. The employer of a notary public is also liable to the persons involved for all damages caused by the notary's official misconduct, if:(a) the notary public was acting within the scope of the notary's employment at the time the notary engaged in the official misconduct;  and(b) the employer consented to the notary public's official misconduct.

Purpose of Notarization

The purpose of notarization is to prevent fraud and forgery. The Notary acts as an official and unbiased witness to the identity of the person who comes before the Notary for specific purposes. This places a great deal of responsibility upon the Notary.

Fate of the Notary

Albear “the Notary” was named as a defendant in these proceedings, but settled with Vancura for $30,000 prior to trial and then testified about the authenticity of the notarizations.

Did the Notary Insist on a Photo ID?A. Well, that is not my job. My job is to verify your signature based on what I have in front of me.

Remember, I always ask people to please affirm or swear that they were who they said.

That is how I was trained to do it.

Kinko’s Notary Training• Training was provided by Kinko’s employee.• Trainer was not a Notary.• Training consisted of lectures over 2-3 days.• Debriefing was held after training.• No testing was performed.• Trainer relied on his own reading of the statutes.• Did not consult a Notary or attorney on his materials.

Kinko’s Notary Trainer’s ConcernsAfter compiling the workbook, Yamnitz “sent a copy of the finished program off to Kinko's corporate office, and never heard anything back from them at all.” He asked Kinko's regional operations manager, Bill Benson, for permission to attend a Notary training program in order to “see if there was something else that “Yamnitz” was missing,” but the training cost $300 or $400 and Benson denied the request. Yamnitz was not familiar with the Model Notary Act and had never heard of it. He did not check to see whether his students “filled in the blanks” in their workbooks, did not collect or grade their answers, did not test their knowledge, and had no idea whether Albear subsequently adhered to his training.

Notary Training in Illinois• Not legally required.• Notary statute does not mandate any particular

training.• Only requires a Notary to read and be familiar with

the statutes.

Notary Responsibility and Liability• “The manager” was not interested in becoming a

Notary himself at the time because the management position required him to be “putting out fires most of the day” and because he was not willing to take on the personal liability of a Notary Public.

• He never reviewed and was never asked to approve any notarizations that were performed at his store.

Notary Expert Is ConsultedClosen testified that Kinko's training and supervision of Albear concerning the identification of document signers was insufficient. Furthermore, the person who gave Albear his Notary training was unqualified and unfamiliar with sound Notary practices.

Model Notary Act to Fill in Gaps• The Model Notary Act is a comprehensive statute

prototype designed to assist lawmakers and Notary program administrators in modernizing and strengthening the Notary Public statutes in their state.

• However, the Model Act is not the law; it is little more than a series of suggestions that some people would like the law to be. The majority comment that it has never been “formally incorporated into Illinois law.”

Lower Court’s Findings• “The Court finds that while there is no statutory mandate

requiring supervision and training of its notaries, the common law requires that Kinko's, as a provider of notary services to the public, must adhere to a standard of reasonableness regarding its notary employees... so as to prevent harm to the public.”

• “The Court finds that the evidence supports a finding that Kinko's failed to meet the necessary standard of care, and is therefore liable for negligent training and supervision of its notary employees.”

Lower Court’s FindingsIn addition, as a direct and proximate result of Kinko's negligent training and supervision, Vancura's note and mortgage no longer appeared enforceable and Vancura had been unable to collect the monies he was contractually entitled to, resulting in damages in the amount of $110,000, as well as interest, court costs and attorney fees. Kinko's negligence also harmed Brown and Katris, when in reliance on an improperly notarized document, they became partners on the real property and were sued.

On Appeal• Thus, the manifest weight of the evidence indicates

Kinko's had no regard for whether Albearunderstood his responsibilities and adhered to them. This is negligence.

• We do not believe the impropriety at issue would have occurred on December 20, 1995, if Kinko's had provided either adequate training in June 1995 or adequate supervision between June and December 1995.

Dissent• Duty to Train and Duty to Supervise.• Model Notary Act is not the law.• Kinko’s trained the Notary correctly, but the Notary

misapprehended the instruction or colluded in fraud.• Factors regarding sloppy Notary were irrelevant to

what happened here.• Government as supervisor theory.

DissentIn my view, affirmance of the trial court here leaves an entity that had virtually nothing to do with the injury potentially liable for the whole verdict, and the real perpetrators of the fraud possibly off the hook. This result is unjust, in my view.

Practice Tips• Always insist on personal appearance.• Educate yourself.• Supplement and refresh your basic training.• Do not be pressured by third parties.• Do not leave your supplies unguarded.• Call the NNA® Hotline for support.• Obtain a healthy amount of Errors and Omissions

insurance.

Galetta v. Galetta• 2013 Case.• New York.• Proper wording on the notarial certificate,

identification of signer.• Wife sought to invalidate prenuptial agreement.• Brief discussion of the facts of the case.

Cause of Action• In this matrimonial action, plaintiff Michelle Galetta

sought a determination that a prenuptial agreement she and defendant Gary Galetta signed was invalid due to a defective acknowledgment.

• It is undisputed that the signatures on the document are authentic and there is no claim that the agreement was procured through fraud or duress.

RulePrenuptial agreements are addressed in Domestic Relations Law § 236B(3), which provides: "An agreement by the parties, made before or during the marriage, shall be valid and enforceable in a matrimonial action if such agreement is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded."

Analysis

We observed that the statute recognizes no exceptionto the requirement that a nuptial agreement be executed in the same manner as a recorded deed and "that the requisite formality explicitly specified in DRL 236B(3) is essential" (id. at 132).

Analysis• In the certificate of acknowledgment relating to the

husband's signature, the "to me known and known to me" phrase was inexplicably omitted….

• Absent the omitted language, the certificate does not indicate either that the Notary Public knew the husband or had ascertained through some form of proof that he was the person described in the prenuptial agreement. New York courts have long held that an acknowledgment that fails to include a certification to this effect is defective.

Analysis• Error cannot be “cured” by an affidavit from the

Notary, after the fact.• Notary may have done everything correctly, but the

certificate does not indicate such in writing.• “…it seems likely that the omission resulted from a

typographical error.”

Notary’s RecollectionAs for the procedures followed, the Notary had no independent recollection but maintained that it was his custom and practice "to ask and confirm that the person signing the document was the same person named in the document" and he was "confident" he had done so when witnessing the husband's signature.

Conclusion and HoldingThe prenuptial agreement is invalid.

Practice Tips• Always ensure that your loose notarial certificates

are correct and up to date.• Keep, maintain, and safeguard a journal of notarial

events.• Call the NNA® Hotline for support.• Obtain a healthy amount of Errors and Omissions

insurance.

Slide Number 1Slide Number 2DisclaimerObjectives:Bessenyei v. VermillionSlide Number 6RuleSlide Number 8Role and Purpose of the NotaryPersonal AppearanceWhy Good Notary Practice Is ImportantHarsh ResultsThe Court’s AnalysisAt IssueThe Signer’s ConductThe Notary’s ConductSteps Taken by NotaryFate of the NotaryFate of the Attorney/PlaintiffFate of the Delaware CounselSlide Number 21Conclusion and HoldingPractice TipsVancura v. KatrisRulesRulesPurpose of NotarizationFate of the NotaryDid the Notary Insist on a Photo ID?Kinko’s Notary TrainingKinko’s Notary Trainer’s ConcernsNotary Training in IllinoisNotary Responsibility and LiabilityNotary Expert Is ConsultedModel Notary Act to Fill in GapsLower Court’s FindingsLower Court’s FindingsOn AppealDissentDissentPractice TipsGaletta v. GalettaCause of ActionRuleAnalysisAnalysisAnalysisNotary’s RecollectionConclusion and HoldingPractice Tips