Lessons Learned from Notary Lawsuits

In the United States, anyone over the age of 18 can file a civil lawsuit against another individual or business for any reason. Of course, the court might throw the case out for various reasons, but even people who have done nothing wrong can find themselves at the defendant’s table. There’s nothing you can do to stop someone from suing you, but there are some things that notaries can do to minimize their financial losses when faced with a lawsuit.

Innocent Notaries Can Be Sued

Unlike criminal cases, the plaintiffs of civil lawsuits don’t have to gather any evidence before filing their claims with a court. Notaries who never make a mistake are at risk of being sued.

Protect yourself from lawsuits by: 

1. Purchasing E&O insurance 
2. Knowing your state laws 
3. Maintaining meticulous journal records

Here are some real-life lawsuits that demonstrate how notaries can get caught in the crosshairs of a court case and how they can protect themselves. 

If a case is dropped, there are still legal fees

Legal fees and court costs can add up even if a case doesn’t reach a final ruling in favor of a plaintiff. Retaining a lawyer costs money, and even the innocent should seek proper counsel when embroiled in a lawsuit. 

Windy City Rehab Star sues notary 

One Chicago public notary faced accusations of forging the signature of a popular HGTV host. Alison Victoria Gramenos, best known for flipping homes on Windy City Rehab, filed a lawsuit and restraining order against public notary Adriana Rodriguez back in 2020. During an audit, Gramenos claims to have discovered loan documents, operating agreements, and lien waivers affixed with a signature that wasn’t hers. 

Ultimately, Gramenos dropped the civil fraud lawsuit several months later, and an amicable resolution was reached between the two. No liability was found. 

Lesson learned: Purchase E&O Insurance

Even if a lawsuit is dropped, the accused notary is likely to rack up some legal fees. The average business attorney charges hundreds of dollars or more per hour. An errors and omissions (E&O) insurance policy covers legal fees when a notary makes a mistake or if wrongdoing is alleged, but it doesn’t cover malicious or intentional acts. If a notary is found liable during a case, this type of insurance won’t pay out. 

Even the most meticulous and ethical notaries benefit from having an E&O policy. If you want to run a successful notary business, ensure you have the proper protection against financial loss. Before purchasing a policy, carefully read what is covered and consider what kind of work you do when selecting the policy amount. While your state may require you to carry none or a low amount, notaries everywhere should protect themselves with a policy. Executing complex transactions like loan signings increases the financial risks of unintentional mistakes or baseless allegations of impropriety. If you’re involved in a lot of loan signings, it’s worth considering upping your coverage. The Signing Professionals Workgroup suggests a minimum of $25,000 for notary signing agents, but some contracting companies you work with may require you to carry more coverage.

Misintrepation of unclear state laws

One case brought against a Massachusetts UPS Store accused the business of overcharging for notarizations. After the state supreme court reviewed the case, it determined that the plaintiff and his attorney misunderstood the statute referenced in their lawsuit.

Lawsuit over notary fees

For the most part, every state has a fee schedule with an explicit maximum fee that a notary may charge for their services. Kevin Richardson II and his wife were charged $10 per document in notary fees but believed it was too much. Richardson argued it should have been $1.25, according to Mass. General Law 262, Sect. 41.  

Richardson became the lead plaintiff in a $5.9 million class-action lawsuit against the UPS store to right this supposed wrong. However, during the motion for class certification, the judge requested the Supreme Judicial Court to determine if the fee was, in fact, set at $1.25. The state’s highest court ruled no. 

Unfortunately for Richarson, his lawsuit hinged on the misinterpretation of a law written in 1836 describing a particular type of notarial act. Beyond that, the state of Massachusetts has no maximum fee set for notarial acts. 

Lesson Learned: Know Your State Notary Laws

Sometimes the client and the attorney bringing the case misinterpret the law. Whether a plaintiff is right or wrong in interpreting the law doesn’t matter, a lawsuit can still be filed. While a company like the UPS store has the resources to defend itself in court, notaries working independently or for an employer can also be sued in a case like this. 

The National Notary Association lists every state’s notary fees, so you can ensure you are charging the correct amount. Alaska, Arkansas, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Tennessee, and Vermont have no fee schedule for traditional general notarial acts like acknowledgments, jurats, and oaths. 

Unfortunately, many states don’t require ongoing education for notaries, but it’s crucial to invest time and money in it nonetheless. There are many ways that notaries can get into trouble, and many notaries open themselves up to unintentional liability by neglecting to develop their understanding of notary laws and best practices.   

You can be sued for others’ fraudulent actions

In a civil lawsuit, the injured party often names every potential wrongdoer. Even if notaries aren’t active participants in misconduct, they can be a target of a lawsuit should their seals be reproduced without their knowledge.

Notary sued over a forged seal

A notary in California by the name of Tony was sued over a notarization he didn’t perform. He received a letter accusing him of notarizing a forged document. When looking up the lawsuit, he and several other parties were named in the case. Upon examining the documents in question, it was clear that someone had forged his signature and used a fake seal. 

He contacted his E&O policy provider, and they arranged for an attorney to represent him. A police report was filed, and the Secretary of State was alerted to the forgery. As the trial unfolded, new evidence and Tony’s notary journal cleared him of any wrongdoing. He was dismissed without prejudice from the lawsuit. Without the insurance coverage, the stress of finding proper representation and covering legal fees intensifies. In a case like Tony’s, his attorney estimates that costs can run between $10,000 and $15,000. 

Lesson learned: Keep Good Records

Even the most diligent and ethical notaries need E&O insurance to protect them from lawsuits. Additionally, Tony’s journal provided some important details that helped to exonerate him from civil and criminal prosecution. Precise journal entries are an important part of being a notary. Detailed and organized records will not only help notaries in cases of stolen identity, but your clients will also appreciate it should they ever need to reference a past notarization during an audit. 

It’s scary to think that you can be sued even when you do your job correctly. While it’s rare, it helps to arm yourself with the proper education on notary laws, get adequate insurance to protect your financial interests, and keep good records. These precautions won’t stop someone from filing a lawsuit, but they should help fight frivolous and false claims.   

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