HI Notary Errors and Omissions and Notary Liability 2 — Questions and Answers
Question 1: A Hawaii notary commits an error in a notarial certificate (writes the wrong county). The signer later sues because a recording office rejected the document. Is the notary likely to be liable?
- Yes — any error, however minor, creates strict liability
- Possibly — if the error was caused by failing to exercise reasonable care, and the error caused actual harm (Correct answer)
- No — minor clerical errors are not actionable
- Only if the notary charged a fee for the notarization
Correct answer: Possibly — if the error was caused by failing to exercise reasonable care, and the error caused actual harm
Liability requires both a failure of reasonable care and actual harm. A minor error that causes the signer to spend money to re-notarize could be the basis for a claim if the notary was careless.
To establish notarial negligence, a claimant must show: (1) the notary had a duty of care; (2) the notary breached that duty; (3) the breach caused harm; and (4) actual damages resulted. A simple clerical error (wrong county) might or might not constitute a breach of reasonable care, depending on circumstances. If it caused actual damages (time and money to re-notarize and re-record), a claim is possible. However, courts also consider whether the signer reviewed the certificate for accuracy before relying on it. E&O insurance would typically cover such an unintentional error.
Question 2: Can a Hawaii notary be held liable for the legal effect or enforceability of a document they notarized?
- Yes — notarization guarantees legal validity
- No — the notary's duty is to certify the notarial act, not to ensure the document is legally valid or enforceable (Correct answer)
- Yes, if the document causes financial harm to any party
- Only if the notary also drafted the document
Correct answer: No — the notary's duty is to certify the notarial act, not to ensure the document is legally valid or enforceable
A notary certifies that the notarial act was properly performed — not that the document is legally valid, binding, or enforceable.
The scope of a notary's duty and liability is limited to the proper performance of the notarial act (identity verification, witnessing signature, administering oath). The notary does not certify, and is not responsible for, the legal validity, accuracy, completeness, or enforceability of the document itself. Whether the contract terms are enforceable, whether the deed properly conveys property, or whether the affidavit's facts are true — these are beyond the notary's role. Parties who believe a document is unenforceable must pursue legal remedies against the parties to the document, not the notary.
Question 3: What is the statute of limitations concern for a Hawaii notary regarding E&O insurance?
- Claims must be filed within 1 year — E&O insurance is not needed after that
- Notarial acts can be challenged long after they are performed, so E&O coverage should span the period when claims could arise (Correct answer)
- The statute of limitations for notarial claims is exactly 3 years in all cases
- There is no statute of limitations for notarial misconduct claims
Correct answer: Notarial acts can be challenged long after they are performed, so E&O coverage should span the period when claims could arise
Claims against notaries can arise years after the notarial act. E&O insurance that covers the relevant time period is important for long-term protection.
Hawaii's general statute of limitations for tort claims (including negligence) is typically 2 years, but claims involving fraud may have longer periods, and discovery rules can extend the period. Importantly, a notarized document may be used (or the fraud discovered) years after the notarial act. This means a claim against a notary may be filed well after the notarial act and potentially after the notary's commission has expired. E&O insurance coverage, including 'tail coverage' (extended reporting period after the policy ends), is important for ensuring protection across the period when claims could realistically arise.
Question 4: A Hawaii notary is sued personally after a fraudulent notarization scheme involving their stolen seal. What is their best defense?
- Prove they have E&O insurance — this automatically defeats the claim
- Demonstrate that they promptly reported the theft, their journal has no entry for the fraudulent act, and they exercised reasonable care with seal security (Correct answer)
- File a counter-suit against the thief before responding to the lawsuit
- Argue that the plaintiff should have detected the fraud independently
Correct answer: Demonstrate that they promptly reported the theft, their journal has no entry for the fraudulent act, and they exercised reasonable care with seal security
The notary's best defense is evidence of responsible practices: timely theft report, clean journal records, and demonstrated seal security precautions.
When a notary faces liability for a fraudulent notarization made with their stolen seal, the primary defense is evidence that the notary was not negligent: (1) the seal theft was promptly reported to authorities (creating an official record predating the fraudulent use); (2) the notary's journal has no entry for the fraudulent act (demonstrating it was not performed by the notary); and (3) evidence of proper seal security practices (e.g., keeping the seal locked) showing the theft was not due to negligence. Having E&O insurance helps pay for the defense and any damages, but it does not automatically defeat the claim — the notary must demonstrate reasonable care.
Question 5: An employer tells a Hawaii notary that any mistakes they make while notarizing for the company are the company's responsibility, not the notary's. Is this true?
- Yes — the employer bears all risk for notarizations performed within the scope of employment
- No — while employers may share liability, the notary personally retains liability for their own notarial acts (Correct answer)
- Yes — the notary is shielded by the doctrine of respondeat superior
- Only for notarizations done during working hours
Correct answer: No — while employers may share liability, the notary personally retains liability for their own notarial acts
The notary personally bears liability for their notarial acts. An employer may also share liability, but this does not eliminate the notary's personal responsibility.
Under the doctrine of respondeat superior, an employer may be vicariously liable for the negligent acts of an employee performed within the scope of employment. However, this employer liability does not extinguish the employee notary's personal liability — both may be liable. An employer's promise to cover mistakes is only a contractual indemnification arrangement that does not affect the notary's legal liability to third parties. If the employer becomes insolvent or disputes whether the act was within the scope of employment, the notary remains personally exposed. Notaries should carry their own E&O insurance regardless of employer assurances.
Question 6: A Hawaii notary makes an error in a notarization that causes a real estate transaction to be delayed. The buyers lose their locked interest rate as a result. Who may the buyers sue?
- Only the title company — notaries are immune from real estate liability
- The notary, if the error was caused by the notary's failure to exercise reasonable care (Correct answer)
- Only the real estate agent who selected the notary
- The state of Hawaii, which is responsible for notary errors
Correct answer: The notary, if the error was caused by the notary's failure to exercise reasonable care
If the notary's careless error caused the delay and resulting financial harm, the notary may be named in a civil suit.
In Hawaii, notaries are not immune from civil liability for negligence. If a notary's careless error (such as using the wrong certificate type, forgetting to affix the seal, or entering the wrong date) caused a real estate transaction to be delayed and the buyers suffered actual financial harm (lost interest rate, additional costs), the buyers may have a valid negligence claim against the notary. The buyers would need to establish that the notary failed to exercise reasonable care and that this failure was the proximate cause of their financial loss. This is why E&O insurance is important even for notaries who perform seemingly routine acts.
HI Notary Errors and Omissions and Notary Liability 2
A Hawaii notary commits an error in a notarial certificate (writes the wrong county).
The signer later sues because a recording office rejected the document.
Is the notary likely to be liable?