STATE OF NORTH CAROLINA



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF CUMBERLAND 08 SOS 1200

|Sarah D Larson |) | |

|Petitioner |)) | |

| |))))| |

|vs. | |DECISION |

| | | |

|N. C. Department of the Secretary of State | | |

|Respondent | | |

This contested case came on for hearing before the Honorable Donald W. Overby, Administrative Law Judge, on February 12, 2009, in Courtroom 3 of the Old Cumberland County Courthouse, 130 Gillespie Street, in Fayetteville, North Carolina.

APPEARANCES

Petitioner: F. Hill Allen

Tharrington Smith, LLP

Post Office Box 1151

209 Fayetteville Street

Raleigh, North Carolina 27602

Respondent: North Carolina Department of Justice, by

Melissa H. Taylor, Esq.

Assistant Attorney General

9001 Mail Service Center

Raleigh, NC 27699-9001

ISSUE

Whether Respondent properly revoked Petitioner’s North Carolina Notary Public Commission?

Based upon the testimony of the witnesses, exhibits submitted by the parties, argument of counsel and upon a preponderance of the admissible evidence the undersigned makes the following:

FINDINGS OF FACT

1. Petitioner is a citizen and resident of Cumberland County. Respondent is an agency and Department of the State of North Carolina.

2. Respondent is the State agency in North Carolina responsible for enforcing the rules and regulations that govern individuals holding a Notary Public Commission in North Carolina.

3. Respondent issued Petitioner a Notary Public Commission on October 24, 2005.

4. The purposes of the Notary Public Act, N.C. Gen. Stat. § 10B-2, among others, are to promote, serve, and protect the public interests and to prevent fraud and forgery.

5. N.C. Gen. Stat. § 10B-60(a) provides that the Respondent may revoke a notarial commission on any ground for which an application for a commission may be denied under N.C. Gen. Stat. §10B-5(d). N.C. Gen. Stat. § 10B-5(d)(5) provides that Respondent may deny an application for a commission if the applicant has engaged in "official misconduct" within the meaning of N.C. Gen. Stat. § 10B-3(15).

6. N.C. Gen. Stat. § 10B-3(15)(a) and (b) defines "official misconduct" as "[a] notary's performance of a prohibited act or failure to perform a mandated act set forth in this Chapter or any other law in connection with notarization" or "[a] notary's performance of a notarial act in a manner found by the Secretary to be negligent or against the public interest."

7. On January 7, 2008, Respondent received a complaint regarding an affidavit of George Miller notarized by Petitioner on September 27, 2006.

8. On February 6, 2008, Respondent sent Petitioner a letter asking her to explain the complaint.

9. On March 10, 2008, William O. Richardson, an attorney and Petitioner’s employer sent Respondent a letter on Petitioner’s behalf explaining the notarized affidavit.

10. In his letter, Mr. Richardson stated that on September 27, 2006, he took the affidavit to Mr. Miller’s residence between Kinston and Pollocksville, North Carolina, approximately two hours from Mr. Richardson’s office. Mr. Miller knew that he would be signing an affidavit. Mr. Miller had told Mr. Richardson that a notary was available in Mr. Miller’s community who would be able to notarize Mr. Miller’s execution of the affidavit. The notary was not available on that date so Mr. Miller signed the affidavit in Mr. Richardson’s presence, and Mr. Richardson took it back to his office in Fayetteville for Petitioner to notarize.

11. It is stipulated by the parties that Petitioner was not physically present when George Miller signed his original Affidavit dated September 27, 2006.

12. It is uncontested that George Miller in fact signed his original Affidavit, as reflected by his subsequent Affidavit dated October 5, 2008 admitted into evidence, the testimony of William O. Richardson, the Supplemental Affidavit of George Miller, the audiovisual recording of George Miller reading and affirming the accuracy of the statements in his original Affidavit, the affirmations of George Miller that it was his signature to Joel Morris and all of the other evidence before the Court.

13. Prior to September 27, 2006, Petitioner had met and talked with Mr. Miller and was familiar with Mr. Miller and his voice.

14. Prior to executing his original Affidavit, George Miller spoke with Petitioner on the phone for purposes of having her understand that he was, in fact, signing his Affidavit.

15. Prior to the execution of the original Affidavit of George Miller, attorney William O. Richardson spoke with Petitioner on the phone to confirm that George Miller was signing his original Affidavit in the presence of Mr. Richardson. Attorney William O. Richardson was in fact present when George Miller signed his original Affidavit. Mr. Richardson is not a notary public and did not give Mr. Miller an oath. Petitioner did not give Mr. Miller an oath on September 27, 2006, prior to Mr. Miller signing the affidavit in question.

16. On Mr. Richardson’s return to his law office, Petitioner made Mr. Richardson swear and subscribe that the signature of George Miller was true and correct at the time of notarizing the original Affidavit. The affidavit of George Miller was notarized by Petitioner with the acknowledgment “Sworn to and subscribed before me, this 27th day of September, 2006.” Petitioner signed the acknowledgment and affixed her seal indicating that her commission expired in 2010.

17. When Mr. Richardson swore and affirmed to Petitioner that George Miller signed his original Affidavit in Mr. Richardson’s physical presence, as a subscribing witness, Petitioner did not remember that a different attestation needed to be attached for an “acknowledgment” as provided by N.C. Gen. Stat. §10B-41.

18. Attorney Richardson erroneously but in good faith believed it was permitted for Petitioner to notarize the Affidavit of George Miller in the manner and based on the circumstances in which Petitioner did so and directed her to notarize the original Affidavit.

19. The law of the Sate of North Carolina provides other instances when the person administering oaths do not have to be in the physical presence of the person being sworn. N.C. Gen. Stat. § 1A-1, Rule 28(b) and Rule 30(f). The North Carolina and Federal Rules of Civil Procedure are not as specific as N.C. Gen Stat. §10B-1 et. seq. in that they require depositions be taken “before a person authorized to administer oaths.” Courts interpreting those rules have consistently upheld the ability of notaries public and court reporters to not be physically present when administering oaths, and one has allowed a subsequent deposition for the sole purpose of asking if all the information given in the questioned deposition was true and accurate. See Aquino v. Automotive Serv. Indus. Ass’n, 93 F. Supp 2d 922 (N.D. Ill. 2000); Rodriguez-Carias v. Nelson’s Auto Salvage and Towing Service, 189 N.C. App. 404 (2008).

20. As reflected in a memorandum from Respondent dated September 9, 2008 posted on Respondent’s website within the last year, , and confirmed by the testimony of Ms. Gayle Holder, Respondent’s Director for Certification & Filing, there was uncertainty in the notary public and legal community concerning the appropriateness of giving oaths via the telephone, with some part of that community believing it appropriate to do so, at least prior to the publication of the “opinion” on Respondent’s website within the last year. At the time of George Miller’s original Affidavit on September 27, 2006, that “opinion” had not been issued or posted on Respondent’s website.

21. In September 2007, Mr. Richardson had been practicing law for over twenty five years with an excellent reputation as an attorney. His integrity is not challenged. Petitioner acted at the direction of her employer, attorney William O. Richardson, relied in good faith on his guidance as an experienced attorney for whom she worked, and believed her actions to be permitted based on the circumstances.

22. There was no fraud or forgery with respect to the signature of George Miller on his original Affidavit or the manner in which it was notarized. The “public interests” were not compromised nor placed in jeopardy in any regard. The Affidavit was in fact not used or published in any regard until well after all curative actions had taken place.

23. Petitioner had taken the North Carolina Notary Public Educational Course prior to her receiving her Notary Public Commission in October 2005. Further, she had a copy of the most current North Carolina Notary Public Manual, but did not consult the manual.

24. On September 27, 2006, the date Petitioner notarized Mr. Miller’s affidavit, N.C. Gen. Stat. § 10B-20(a) provided that a Notary may perform notarial acts of acknowledgments, oaths and affirmations, execute jurats, verifications and proofs. The statute was amended effective October 1, 2006, four days after the affidavit at issue.

25. On September 27, 2006, when petitioner notarized the affidavit, N.C. Gen. Stat. § 10B-3(14) defined “Oath” as being “legally equivalent to an affirmation” and required the person to personally appear before the notary, be satisfactorily identified and swear to its truthfulness. The statute was amended effective October 1, 2006, four days after the affidavit at issue.

26. On September 27, 2006, when petitioner notarized the affidavit, N. C. Gen. Stat. § 10B-3(8) defined “Jurat” as including requirements that the person signing the affidavit or deposition did so in the notary’s presence, the signer appeared before the notary on the date indicated, the notary administered an oath or affirmation to the signer, who swore to or affirmed the contents of the document. The statute was amended effective October 1, 2006, four days after the affidavit at issue.

27. The definitions of “oath”, “affirmation” and “jurat” require the signer of the document to be in the presence of the notary when the oath is given and when the document is signed. An “acknowledgment” does not require that the notary actually see the signator execute the document. These requirements remained the same in both pre- and post October 1, 2006 amendments.

28. Mr. Miller was video recorded by Mr. Joel Morris between Thanksgiving and Christmas 2006, reading the September 27, 2006 affidavit. Mr. Morris is employed by Mr. Richardson as an investigator and is a notary as well. The recording does not show Mr. Miller being administered an oath. In Mr. Miller’s reading of his original affidavit, he affirms the original affidavit and its contents which were given two to three months earlier in the original affidavit at issue.

29. On March 22, 2006, George Miller executed a Supplemental Affidavit, which was properly notarized, and incorporated and affirmed the accuracy of the statements in the original Affidavit of George Miller, and was intended to correct any issue as to the original Affidavit.

30. Mr. Richardson executed an acknowledgment on February 25, 2008, before notary Joel Morris regarding his witnessing Mr. Miller sign the September 27, 2006, affidavit. That acknowledgment was completed after Respondent notified Petitioner that she was being investigated and did not indicate that Mr. Richardson gave Mr. Miller an oath.

31. Corrective action was taken to cure or remedy any deficiencies in the notarization of the original Affidavit of George Miller.

32. In a proceeding in Superior Court on the civil case wherein the testimony of Mr. Miller was of importance, Superior Court Judge Craig Ellis considered the original Affidavit and the Supplemental Affidavit of George Miller and ruled that the Supplemental Affidavit was properly executed and affirmed and thereby corrected the original Affidavit of George Miller.

33. Respondent’s position as articulated by Ms. Gayle P. Holder, Director, Certification and Filing Division, NC Department of the Secretary of State, is that “personal appearance” is the main purpose of the North Carolina Notary Public Act and is required in order to prevent fraud and forgery. “Personal appearance”, although of paramount importance in the scheme of the statute, is not listed as a “purpose” in N.C. Gen. Stat. §10B-2. Indeed, §10B-3 defines “acknowledgment” and establishes a process for notarizing a document when the signature was not affixed in the notaries presence. Personal appearance is a method utilized to help prevent fraud and forgery.

34. A specific purpose of the Notary Public Act is to prevent fraud and forgery by establishing the guidelines and procedures therein. There was no fraud or forgery, nor attempt or intent to defraud or forge, with respect to the signature of George Miller on his original Affidavit or the manner in which it was notarized.

35. In making its determination, according to Ms. Holder, Respondent considered only the fact that George Miller was not in the physical presence of Petitioner when he signed his original Affidavit, and no other factor.

36. In making its determination, Respondent did not consider that at the time of notarizing the original Affidavit, Petitioner made Mr. Richardson swear that the signature of George Miller was true and correct.

37. In making its determination, Respondent did not consider the fact that there was no fraud or forgery with respect to the signature of George Miller on his original Affidavit or the manner in which it was notarized.

38. In making its determination, Respondent did not consider Petitioner’s good faith belief that she was permitted to notarize the original Affidavit of George Miller under the circumstances.

39. In making its determination, Respondent did not consider the effort to remedy or cure any deficiencies in the original Affidavit with the Supplemental Affidavit of George Miller, nor did Respondent consider the Supplemental Affidavit in any way at all.

40. According to Respondent through argument of counsel and its witness, revocation of the notary license is automatic based solely on the nonappearance of the witness. There is absolutely nothing that could have been done to correct the error of non-appearance. Any corrective effort is not considered in arriving at the decision to revoke the notary’s commission.

41. The North Carolina Notary Public Act does not provide a specific remedy to correct an improperly completed notarization such as the instant case; however, N. C. Gen. Stat. § 10B-99 establishes a presumption of regularity for the courts to uphold notarial acts when there is no evidence of fraud or evidence of knowing and deliberate violation of the statutes. Further, that statute recognizes the continuing observance of the common law doctrine of substantial compliance which was obviously recognized at the time of the questioned document at issue herein. This statute and the doctrine of substantial compliance evince the notion that indeed notaries public might make mistakes and that such mistakes are not necessarily fatal.

42. To hold that there is no way to correct any defective notarial act would of necessity potentially lead to a host of absurd situations for notaries to face for very innocent mistakes. To hold such an opinion flies in the face of common sense. The Respondent’s contention that the only method to correct would be for the attorney to destroy the document and completely start over is absurd as well. Such an act might be a viable option in some instances but certainly not all and especially as in this case where the attorney would be destroying evidence in a civil case where a sizeable amount of money is at stake. Such an act by an attorney would subject that attorney to possible punishment by the court of jurisdiction as well as the State Bar.

43. Respondent’s position that an improper notarization when the subscriber is not present is in the nature of “strict liability”, is not curable, and results in a revocation in every instance is not in accord with N. C. Gen. Stat. §10B-60 (a) which clearly gives the Secretary discretion by saying that the Secretary may issue a warning to a notary or restrict, suspend or revoke the notary’s commission for violation of the Notary Public Act. (Emphasis added)

BASED UPON the foregoing Findings of Fact, the undersigned makes the following:

CONCLUSIONS OF LAW

1. The Office of Administrative Hearings has jurisdiction of the subject matter and the parties herein pursuant to Article 3 of Chapter 150B and Chapter10B of the North Carolina General Statutes.

2. Petitioner notarized an affidavit of George Miller on September 27, 2006, without first giving him an oath and without him personally appearing before her as required by the North Carolina Notary Public Act. Such action on the part of Petitioner, nothing else showing, would constitute a prima facie showing of “official misconduct” as that term is defined in N.C. Gen. Stat. §10B-3(15)(a) and (b) and used in N.C. Gen. Stat. §10B-5(d)(5); however, Petitioner relied on the directions of an experienced attorney who was her employer. She administered an oath to the attorney to verify the signature on the document, and she attempted to comply with, although erroneously, the requirements of an “acknowledgment” and/or subscribing witness, also using the incorrect certification form.

3. Attorney Richardson has accepted blame, and admitted his error and that he directed the Petitioner erroneously but in good faith to notarize the Affidavit of George Miller in the manner and based on the circumstances in which Petitioner did so and directed her to notarize the original Affidavit.

4. The law of the Sate of North Carolina provides other instances when the person administering oaths do not have to be in the physical presence of the person being sworn. N.C. Gen. Stat. § 1A-1, Rule 28(b) and Rule 30(f). Rodriguez-Carias v. Nelson’s Auto Salvage and Towing Service, 189 N.C. App. 404 (2008).

5. There has been sufficient confusion among notaries public and court reporters to prompt an official opinion by Respondent concerning the administration of oaths or affirmations via telephone when the person is not in the physical presence of the notary. The opinion was issued almost two years after the affidavit at issue herein.

6. N.C. Gen. Stat. §§10B-60(c), 10B-20, 10B-3(8) and 10B-3(14) require the personal appearance and oath of the principal signing a jurat or a sworn statement. N. C. Gen.Stat. § 10B-3 (1) and (26) establishes a process for acknowledging a signature when the signator is not in the physical presence of the notary.

7. Respondent’s revocation of Petitioner’s notary license under the circumstances before the Court was arbitrary and capricious.

8. Respondent’s revocation of Petitioner’s notary license under the circumstances before the Court was erroneous.

9. Respondent failed to use proper procedure in automatically revoking Petitioner’s notary license under the circumstances before the Court.

10. Respondent’s automatic revocation of Petitioner’s notary license under the circumstances otherwise substantially prejudiced Petitioner’s rights.

11. Respondent’s contention that any deficiency in the notarization of the original Affidavit of George Miller is not correctable or that the only possible corrective action would have been to destroy the document and completely redo the document is arbitrary and capricious, unsupported by law, and in conflict with the obligations of the attorney who possessed the signed Affidavit to not destroy evidence. Neither N.C. Gen. Stat. § 10B-1 et seq. nor any other authority requires that the only available corrective action under these circumstances would have been to destroy the Affidavit and completely redo it.

12. Respondent’s failure in making its determination to consider any factor other than whether Petitioner was in the physical presence of George Miller at the time she notarized the Affidavit was arbitrary and capricious, was erroneous, constituted improper procedure and otherwise substantially prejudiced Petitioner’s rights.

13. Respondent’s failure in making its determination to consider the corrective action taken with respect to the original Affidavit was arbitrary and capricious, was erroneous, constituted improper procedure and otherwise substantially prejudiced Petitioner’s rights.

14. Respondent’s failure in making its determination to consider Petitioner’s good faith belief that she was permitted to notarize the original Affidavit of George Miller under the circumstances was arbitrary and capricious, was erroneous, constituted improper procedure and otherwise substantially prejudiced Petitioner’s rights.

15. Respondent’s failure in making its determination to consider the fact that there was neither fraud or forgery nor any jeopardy to the public interests with respect to the signature of George Miller on his original Affidavit or the manner in which it was notarized was arbitrary and capricious, was erroneous, constituted improper procedure and otherwise substantially prejudiced Petitioner’s rights.

16. Respondent’s failure in making its determination to consider Petitioner’s lack of any prior violation was arbitrary and capricious, was erroneous, constituted improper procedure and otherwise substantially prejudiced Petitioner’s rights.

17. Pursuant to N.C. Gen. Stat. §§ 10B-60(a) and 10B-5(d)(5), Respondent may revoke Petitioner’s North Carolina Notary Public Commission for acts of official misconduct.

18. N.C. Gen. Stat. §10B-1 et seq. does not mandate the automatic revocation of a notary’s license for notarizing the signature of a witness when not in the physical presence of a witness. There are a range of other less severe disciplinary options available to Respondent, including issuing a warning.

19. Based on the findings of fact in this specific case, a suspension of Respondent’s license for a period of sixty (60) days would not be an arbitrary or capricious determination by Respondent and is a sanction available to Respondent as discipline for Petitioner’s conduct under the facts and circumstances.

BASED UPON the foregoing Findings of Fact and Conclusions of Law, the undersigned makes the following:

DECISION

IT IS HEREBY ORDERED that Petitioner's North Carolina Notary Public Commission shall be revoked for a period of sixty days.

ORDER AND NOTICE

The North Carolina Department of the Secretary of State will make the Final Decision in this contested case. N.C. Gen. Stat. § 150B-36(b), (b1), (b2), and (b3) enumerate the standard of review and procedures the agency must follow in making its Final Decision, and adopting and/or not adopting the Findings of Fact and Decision of the Administrative Law Judge.

Pursuant to N.C. Gen. Stat. § 150B-36(a), before the agency makes a Final Decision in this case, it is required to give each party an opportunity to file exceptions to this decision, and to present written arguments to those in the agency who will make the Final Decision. N.C. Gen. Stat. 150B-36(b)(3) requires the agency to serve a copy of its Final Decision on each party, and furnish a copy of its Final Decision to each party’s attorney of record and to the Office of Administrative Hearings, 6714 Mail Service Center, Raleigh, NC 27699-6714.

This is the 4th day of June, 2009.

_________________________________

Donald W. Overby

Administrative Law Judge

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