Title Insurer Can Sue Notary
The Second Department has clarified that a title insurer can be subrogated to an insured’s claim of notarial misconduct without having to demonstrate detrimental reliance. Chicago Title Insurance Company v. LaPierre, 2013 NY Slip Op 01523 (2nd Dept., March 13, 2013).
“Executive Law § 135 provides, in relevant part, that "[f]or any misconduct by a notary public in the performance of any of his powers such notary public shall be liable to the parties injured for all damages sustained by them. Thus, the plain language of the statute does not require a showing of detrimental reliance.”
Even though the Supreme Court determined that notarial misconduct had occurred, it relied upon the Second Department decision in Rastelli v. Gassman, 231 AD2d 507 (2nd Dept. 1996) to dismiss a cause of action for damages. Rastelli involved a peculiar set of facts wherein the plaintiff alleged fraud directly caused by notarial misconduct. The LaPierre panel made clear that the Rastelli rule “should be confined to cases with analogous facts.” Unlike Rastelli, the notarial misconduct in the instant case “facilitated actions by third parties which resulted in damages to the subrogors.”