I’ve been a practicing Massachusetts real estate attorney for nearly twenty years, representing home sellers, buyers, and lenders throughout the state. Over the past ten years, my interests have shifted to how we use technology to improve the process, making it more efficient and creating a better experience to the end user, the consumer. Everything from electronic document signing to electronic land recording, I’m a fan of, using the technology in my own title company and law firm. Despite my general interest in the disruption of our title and mortgage industries by changing the way we play the game, I now feel compelled to address a subject which has begun gaining momentum: remote notarization. Since the passage of the remote notarization law in Virginia, a few tech companies have entered the notarization business, taking a legal position that you can notarize a document anywhere in the world and that the notarization of the document will be valid and enforceable under Full Faith and Credit of the United States Constitution. I’ve sat idle for a few months regarding this topic, but I recognize the possible implications to the title and mortgage industries and feel the need to write a legal position paper answering the question of whether Full Faith and Credit of the Constitution provides the authority for these companies to operate under their current business models.
In preparing to discuss the topic of remote notarization, I did what most lawyers do by starting with legal research on the topic. Before I began, I had some flashbacks to my days in law school, particularly, constitutional law and attempting to remember the cases dealing with Full Faith and Credit. I needed to start my research by examining the seminal cases which define what Full Faith and Credit actually means from a decisional point of view. One quick side note, as some readers may already know, lawmakers write the laws, but courts actually interpret what the written law means. As an attorney, it is incumbent upon the legal practitioner to not only look at the written law, but to also examine the decisional law on the same subject. For starters, Article IV, Section 1 of the United States Constitution, known as Full Faith and Credit Clause, “requires each state to recognize the laws, judicial decisions and public records, and judicial proceeding of every other state. And the Congress may by general laws prescribe the manner which such acts, records and proceedings shall be proved, and the effect thereof.” See U.S. Const. art. IV, section 1.
For the start of my legal examination on Full Faith and Credit, I began by reading and reviewing the old decisions, attempting to gain an earlier sense of the basic framework of the article. Reading the earlier opinions on Full Faith and Credit, my focus was on two main components: the recognition of conflicting states’ laws and the enforceability of out of state judgments. Although not really-relevant to our discussion on remote notarization, the earlier decisions on out of state judgments and their enforceability held that sovereign states should recognize and enforce upon the principal of comity, which is the legal recognition of a law or judicial act from a foreign jurisdiction. Under these principles of comity, a few software companies have emerged maintaining the idea that they can use a Virginia notary to notarize documents anywhere within the United States or perhaps anywhere in the world. Moreover, their claim is that this notarization is valid and enforceable.
To determine whether the aforementioned-claims are valid, I looked to the law for guidance. First, I reviewed the Virginia remote notarization law. In my initial examination of the statute, I do agree that the law provides the basic framework for this remote process of notarizing documents in jurisdictions outside of Virginia. However, on the jurisdictional question of the law in Virginia, I don’t believe that the state of Virginia can thrust its laws into other states as Virginia cannot maintain the minimum standard of a substantial nexus or minimum contacts with the sovereign state. What does that mean? The state of Virginia cannot enforce its law into Massachusetts simply because they have a law that says that they can with a notary public in the state of Virginia. This standard of minimum connection with a foreign state must be established.
For the sake of argument, let’s assume that Virginia can establish jurisdiction with a sister state. However, let’s also assume that the sister state has a conflicting law that makes remote notarization illegal. Are we to assume that Virginia law would prevail in this scenario? Using the principal of comity, one could assume that Virginia law could be enforced if the notarization was ever called into question. However, with this comity principal, the courts have narrowly limited the enforcement if there has been a compelling state interest. In this scenario, the sister state does have a reason: they enacted a law that says that it is illegal to remotely notarize documents. Inferred intention between legislative action and the enactment of a law is certainly a compelling reason for a court not to honor this principal of comity. Moreover, preservation of land records would fit the test also of a compelling state interest. Our decisional law on notarization has been a state by state situation.
Finally, my primary concern with this model of using Virginia notaries to remotely notarize documents is that we don’t know how each state will honor the principals of the Constitution. Will a state recognize a Virginia notarization on this comity principal? Notarization laws have been specifically reserved to the states and until decisional law has been established in each state on this matter, I believe that it is improper and legally incorrect for companies attempting to provide remote notarization services to move forward using this business model.
Hugh Fitzpatrick, attorney, is CEO of New England Title & Escrow Services, P.C., Fall River, Mass.