Pitfalls That Trigger Lawsuits: A Notary Defense Attorney s Inside Look. Workshop Format. Presentation Goals

Transcription

1 Pitfalls That Trigger Lawsuits: A Notary Defense Attorney s Inside Look Richard Busch, Esq. Law Offices of Richard S. Busch Workshop Format 1. Workshop Presentation 3. Q & A Session 2. Speaker Introduction 4. Workshop Evaluation Presentation Goals Claims Cases resulting in claims; what Notaries did or did not do wrong Response What Notaries should & should not do if they are involved in a claim Protection What Notaries can do to protect themselves against claims 1

2 Liability The responsibility to pay for financial harm resulting from one s activities Official Misconduct Doing what is prohibited Failing to do what is required Neglecting to carry out duties with care Implications Misconduct may lead to: Loss of commission Fines Imprisonment Compensation for damages 2

3 Cases Resulting in Claims Real Estate Fraud Loan Modification & Home Rescue Fraud ID Theft Elder Abuse Cases Powers of Attorney Anatomy of Typical Claim Forged signature on deed No personal appearance Fake ID or no ID No journal record Property loan or title transfer Notary seal has been copied Anatomy of Claim (cont.) Lender forecloses when payments aren t made Victim isn t aware of forged deed or loan Victim files lawsuit to quiet title Lender goes after Notary 3

4 Notary Actions Claims Failure to obtain proper ID Failure to properly record act in journal Failure to safeguard seal Notarizing under suspicious circumstances Results in forgery Failure to obtain signature & thumbprint Results in someone fraudulently using seal Signer shows lack of capacity to sign ID Theft Copy of Notary s seal Copy transferred to deed Notary s signature forged Loan obtained or title transferred How Case Unfolds Surety/E&O insurer served a lawsuit Notary served, contacts surety/insurer Cases involving forged deed & loan Cases involving forged deed, no loan Cases involving ID theft/theft of seal 4

5 Why Worry? What, me worry? Notary Errors Failing to require personal appearance Insist on personal appearance of all signers Failing to require identification Require satisfactory identification of all signers & witnesses Notary Errors (cont.) Failing to scrutinize identification Carefully examine all identification Failing to safeguard Notary seal & journal Store Notary seal & journal in locked place 5

6 Notary Errors (cont.) Failing to notify authorities of loss Promptly notify state officials in writing Failing to record transaction Keep journal record of all transactions Notary Errors (cont.) Notarizing pre-signed jurat Don t make false statements Relying on third party for signature authenticity Don t rely on third parties unless authorized by law to do so Notary Errors (cont.) Performing notarization in questionable circumstances Screen signers carefully for awareness & willingness Don t notarize if document contains blanks 6

7 Term of Liability Must Begin within 6 Yrs. 1 Year from Discovery 3 Years from Date of Act CA Code of Civil Procedure 338(f) Damages All Damages Resulting from Misconduct Punitive Damages for Intentional Misconduct Damages (cont.) Actual Losses For example, entire amount of fraudulent loan Legal Fees For example, attorneys fees & costs (quiet title, etc.) 7

8 Damages (cont.) Bond Sometimes bond is hit as well E&O Goal = Settle for policy amount $100,000+ Real estate fraud with loan If Claim Is Filed What to Do & Not Do Immediately contact NNA Insurance Alternatively, contact bond/insurance company Do not contact or meet with opposing counsel Never divulge to opposing counsel that you have insurance Protection Against Claims Follow all laws Keep a journal Safeguard the seal Don t rush; refuse if necessary Never accept additional fees 8

9 Protection (cont.) Why E&O Insurance Is So Important Provision of qualified attorney No expensive retainer fees No self-representation Liability coverage up to policy limit Value of Journal Why a Journal Is So Important Helps get claim dismissed Shows Notary takes his or her job seriously Enhances Notary s credibility Signature & thumbprint can disprove forgery Shows Notary complied with laws Thank You! Questions? Presenter contact info: Richard Busch richard@buschlawfirm.com (805)