Bulletin: SLS2010009

Dear Associates:

A recent decision of the U.S. Bankruptcy Court for the District of Nebraska (BowlNebraska, LLC v. Omaha State Bank, Case No. BK 09-83998 - TJM; A10-8005 - TJM) underscores the importance of being knowledgeable of state law requirements for valid notarial acknowledgements.

In this case, the Notary Public took the acknowledgements of two corporate officers on a deed of trust securing a loan in excess of $1,000,000.00. The Notary was a brother-in-law of one of the corporate officers.

Under Nebraska law, a notary public is not qualified to perform a notarial act if the notary is a spouse, ancestor, descendant, or sibling of the principal, including in-law, step or half relatives [Neb. Rev. Stat. §64-105.01]. Accordingly, the Bankruptcy Court ruled that, since the notary was disqualified, the acknowledgement was void, and the deed of trust was therefore void.

Agents are reminded to be aware of the requirements of state law governing the validity of notarial acts, and to be alert for situations that could result in an invalid acknowledgement.

If you have questions related to this bulletin, please contact Stewart Legal Services or your local underwriting personnel.

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