Employers’ Liability For The Misconduct Of Their Notary Public Employees

Many business owners are unaware of their exposure to liability for the misconduct of their notary-employees.  This legal principle recently cost one Illinois employer $233,000 in damages, and likely a comparable amount in legal fees.

In Vancura v. Katris, the Illinois Appellate Court held that a Kinkos copy shop was liable for the damages resulting from its employee’s notarization of a forged mortgage assignment.  While the facts of the Vancura case make for an interesting read, the court’s explanation of how an employer may be held liable for an employee-notary’s misconduct is particularly instructive for business owners.

In Illinois, employers may be liable for the misconduct of an employee-notary either under (i) the Notary Public Act or (ii) common law.  A notary-employee’s “misconduct” generally includes the wrongful or unlawful exercise of the notary’s power to notarize documents, e.g., notarizing a document where it has not been executed before the notary. 

Liability Under the Notary Public Act
Under the Notary Public Act, employers are liable for a notary-employee’s misconduct where:

• the notary-employee is acting within the scope of his employment when the official misconduct occurred; and
• the employer consented to the notary-employee’s official misconduct.

While the above conditions seem simple enough, the dispositive issue in the Vancura case was whether the employer “consented” to its notary-employees misconduct.  The court identified two forms of consent: “active consent” and “implied consent.”  Active consent may be satisfied where the employer directs, encourages, or tolerates the notary-employee’s misconduct.  Meanwhile, implied consent exists where the employer knows of prior infractions but fails to address them.  Although the Vancura court held Kinkos not liable under the Notary Public Act due to its lack of “consent,” employers will be liable where the requirements of the statute are satisfied.

Liability Under the Common Law
Likewise, an employer may be liable for its notary-employee’s misconduct under the common law theories of negligent training and supervision.  Negligence is generally defined as the failure to do something which a reasonably careful person would do under the circumstances.  An employer may be liable under the theories of negligent training and supervision where it knew or should have known that its employee behaved in an incompetent or dangerous manner, and where despite this knowledge the employer failed to supervise the employee or implement preventative measures.

In Vancura, the court held that the Kinkos owed a duty to the general public to train, supervise, and control its notary-employees.  In affirming the trial court’s $233,000 judgment against Kinkos, the appellate court held that the evidence supported a finding that Kinkos failed to properly train and supervise its notary-employees.

Lessons
The lesson of the Vancura case should be painfully clear to business owners – you should have an internal policy that trains, supervises, and monitors the conduct of your notary-employees, or otherwise face potential liability under the Notary Public Act or common law.  If you have any questions regarding your company’s liability exposure for its notary-employees’ conduct, please call one of our experienced attorneys at Acumen Law Group.

Authored by Bardia Fard, Esq.