The Trusted Adviser September 2009 | Volume 2 - Number 7

ATTORNEYS | Practice Notes




Vancura v Katris, 907 NE2d 814 (1st D 2008).

Facts:Randall Boatwright and a business partner had Richard Vancura's signature on an assignment of mortgage improperly notarized by notary Gustavo Albear, an employee of Kinko's, Inc. (Kinko's). The trial court did not determine exactly how Albear failed to properly notarize the mortgage assignment; it was ultimately found, however, that Albear either did not require and/or utilize photo identification during the notarization or that Albear misplaced his notary's seal and Boatwright affixed it to the assignment himself. In either case, the trial court concluded, Vancua had never appeared at Kinko's and never signed the document and the notarization was, therefore, not properly conducted by Albear. As a result, Vancura, the rightful owner of the mortgage, filed a claim against, amongst others, the notary and Kinko's.

The trial court found Kinko's liable for the resulting damages. As a result of the fraudulent mortgage assignment, Vancura had lost his mortgage on the property; his damages were approximately $120,000. Kinko's appealed on two grounds. In the first place, Kinko's contended that the trial court erred in finding the company liable for negligent training and supervision of employees under the common law. Secondly, Kinko's argued that the court further erred in finding Kinko's liable for the official misconduct of its notary through the Illinois statutes.

Holding:Affirmed in respect to the common law claim, vacated as to the statutory claim.

In regards to the common law claim, the appellate court found that Kinko's had waived the claim through an improper brief. The court explained that this issue would have been affirmed nonetheless due to Kinko's failure to properly train and supervise its employees. The court found that the training of notaries only to follow only the base requirement of the statutes did not protect an employer against negligent training claims when industry practice required a greater standard of care.

Kinko's was found to have trained its employees only to compare signatures between a single piece of identification and the document to be notarized. The industry practice in Illinois, as presented to the trial court by an expert witness, was to require two pieces of identification, including one with signature, physical description, and photograph. The expert further explained to the court that notary statutes across the country often did not include stringent requirements beyond simply asking that the signer have identification but that, in all those jurisdictions, those familiar with notary practices adhered to stricter standards. The court determined that Albear's practice, which he testified he was taught at the Kinko's training session, of only comparing signatures was negligent because, despite following the strict letter of the law, it did not meet any industry standard of care presented before the court.

Furthermore, though the law does not require a logbook, the expert testified that it is common industry practice to keep a proper logbook. It was argued that Albear, as trained by Kinko's, did not keep a sufficient logbook. In the first place, Albear's logbook was in spiral bound notebooks or three-ring binders, which allowed for pages to be removed without notice. Secondly, Albear did not collect essential information such as the name and address of the client. The expert also testified to the trial court that Albear's training had been insufficient regarding proper care of his notary seal. Again, the expert did not claim that Albear violated Illinois law, but that he did not meet the minimum industry standard of care. In light of these facts and of the fact that the notary trainer for Kinko's had no experience or knowledge of industry practice, and that Kinko's never made any effort to review Albear's work, the court concluded that Kinko's was negligent in its training and supervision at common law.

A dissenting justice voices the opinion that the appellate court's reliance on this expert, and the expert's own reliance on the Model Notary Act, are improper and therefore not supportive of a finding of negligence.

As to the statutory claim, the court found that Vancura had not shown the minimum requirements per the statute: (a) that the notary was within the scope of his job functions, and (b) that the employer provided consent to the official misconduct. 5 ILCS 312/7-102.

Vancura failed to show that Kinko's had consented under either theory of consent: active consent, where the employer actively requests or encourages the misconduct, or implied consent, where the employer knowingly disregards previous misconduct. In this case, Kinko's had not actively requested the misconduct. The court further found that, through its lax supervision, Kinko's had never been aware of misconduct and therefore could not have knowingly disregarded said misconduct. As a result, the court vacated the ruling as to the statutory liability due to lack of consent on the part of Kinko's. On a motion for rehearing, the court reaffirmed that the lack of a statutory duty to train employees did not preclude a common law negligent training and supervision claim.






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[Last update: 8-31-09]