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Beware! Incomplete Notary’s Certificate of Acknowledgement Invalidates Agreement

The New York Court of Appeals held earlier this month that an agreement was void because of a defect in a notary’s certificate of acknowledgment, which failed to recite that the notary either knew the person who signed the agreement, or had ascertained who he was. Galetta v. Galetta, 2013 NY Slip Op 03871 (May 30, 2013). Although Galetta arose in the context of prenuptial agreement, its ramifications may extend to almost any document that the law requires to be acknowledged by a notary, most especially in real estate.

Background

A week before Michelle Galetta and Gary Galetta married in July 1997, they entered into a prenuptial agreement. They both signed the document, as did notaries who acknowledged their signatures. Years later, when the parties were divorcing, Michelle’s counsel sought to nullify the agreement because the certificate of acknowledgment of Gary’s signature did not comply with the relevant New York statutes, which require prenuptial agreements to be acknowledged by a notary who certifies that he either knows the person signing the document, or has satisfactory evidence that the person signing is the one named in the document.

Michelle moved for summary judgment to invalidate the prenuptial agreement. Gary asserted that the agreement should not be invalidated because the notary’s certificate of acknowledgment substantially complied with the statutory requirements. Gary also argued that even if the certificate was defective, it could be cured by an affidavit from the notary who signed the certificate, which Gary submitted, stating that it was his custom and practice to confirm the identity of the signer and to assure that the signer was the person named in the document. Both the motion court and the Appellate Division declined to invalidate the agreement. The Court of Appeals reversed.

The Court of Appeals Decision

The Court of Appeals held that the certification of Gary’s signature by the notary was deficient because it did not establish that the notary either knew Mr. Galetta, or had ascertained through some proof that he was the person described in the document, and that “substantial compliance” was inadequate. According to the Court, this technical requirement serves important purposes: “to prove the identity of the person whose name appears on an instrument and to authenticate the signature of such person”; and, to impose on the signer “a measure of deliberation in the act of executing the document.”

The Court then considered Gary’s attempt to cure the defect with an affidavit from the notary attesting to his custom and practice when acknowledging signatures. While recognizing Gary’s “strong case” for “permitting evidence to be submitted after the fact to cure a defect in the certificate of acknowledgment,” the Court held that Gary’s particular attempt to cure did not work because the notary’s assertion about a non-specific custom and practice was too conclusory to provide the necessary evidence to satisfy the statutes or the purpose behind them. The Court ultimately declined to hold whether any cure would be possible, leaving that issue for another case.

Lessons Learned

Although the issues in Galetta arose in the seemingly narrow confines of a prenuptial agreement, the ramifications may extend much more broadly to any document that must be signed and acknowledged in the same manner as a deed to real property. This more expansive scope includes, of course, documents affecting real property, as well as documents designating an agent for the service of process, and many documents arising in trusts and estates. A defect in the certificate of acknowledgment of such a document may be fatal, and indeed, may be impossible to cure.

Lawyers and clients thus need to be vigilant that the forms of acknowledgment are proper.

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Business Litigation Bulletin is a newsletter of Tannenbaum Helpern Syracuse & Hirschtritt LLP’s Litigation and Dispute Resolution practice. It provides strategic perspectives on legal cases that impact the business community.

06.11.2013  |  PUBLICATION: Business Litigation Bulletin  |  TOPICS: Estate Planning, Litigation, Real Estate, Construction, and Environmental

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