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ARIZONA STATE SENATE
Fifty-Fifth Legislature, Second Regular Session
AMENDED
false filings; UCC; penalty
Purpose
Increases, from a class 1 misdemeanor to a class 3 felony, the penalty for a person who causes an unauthorized uniform commercial code secured transaction record (record) to be filed and who knows that the record is unauthorized or contains a material misstatement or false claim. Increases, from $25 to $1,000, the civil penalty for a notary public who fails to notify the Secretary of State (SOS) of the loss, theft or compromise of an official journal or stamping device.
Background
A person who files a record and who knows that the record is unauthorized or contains a material misstatement or false claim is liable to the affected party for: 1) the sum of at least $500 or for treble the actual damages caused by the record, whichever is more; and 2) reasonable attorney fees and costs of the action, if the person refuses to terminate or correct the record within 20 days after a written request from the affected party. Any affected party of an unauthorized record or record that contains a material misstatement or false claim may bring an action in the superior court for any temporary or permanent relief necessary to clear or correct the records. The party affected by the record may bring a separate special action to clear or otherwise correct the records of a filing office of the record or join the special action with an action for damages. An unauthorized person filing a record who knows the record is unauthorized or contains a material misstatement or false claim is guilty of a class 1 misdemeanor (A.R.S. § 47-9527).
Within 10 days after the loss, theft or compromise of an official journal or stamping device, a notary public must deliver to the SOS, by certified mail or other means providing a receipt, a signed notice of the loss, theft or compromise. In the case of theft, the notary must inform the appropriate law enforcement agency. The SOS may impose a civil penalty of $25 against a notary who has failed to fully and faithfully discharge the duties of a notary public (A.R.S. § 41-323).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Increases, from a class 1 misdemeanor to a class 3 felony, the penalty for a person who is statutorily not entitled to file a record, who causes a record to be filed in the records of a filing office and who knows or has reason to know that the record is unauthorized or contains a material misstatement or false claim.
2. Increases, from $25 to $1,000, the civil penalty for a notary public who fails to notify the SOS of the loss, theft or compromise of an official journal or stamping device.
3. Requires a presumption to be given to the validity of the identity of any party who signed a public notary's instrument in a judicial proceeding where:
a) the identity of a party to a notarized instrument is in question;
b) the official journal of the notary public is lost, stolen, compromised; and
c) the notary public complied with change of address notification requirements.
4. Prohibits the identity of a signer of a notarized document to be presumed valid if it is determined that the official journal never existed or the notary public failed to comply with outlined notification requirements.
5. Allows the Attorney General (AG) or a county attorney for the county in which an alleged violation regarding a lost, stolen or compromised journal or seal occurred to prosecute a violation.
6. Allows the failure of payment by a notary public to be referred to the AG for collection.
7. Requires the court, in an action in which the validity of a notarized document is at issue and it is determined that the notary public did not comply with outlined requirements, to provide notice of such finding to the SOS and the appropriate county attorney.
8. Makes technical changes.
9. Becomes effective on the general effective date.
Amendment Adopted by Committee
1. States that no presumption of the validity of the identity of any party who signed a public notary's instrument may be given in a judicial proceeding where:
a) the identity of a party to a notarized instrument is in question; and
b) the official journal of the notary public is lost, stolen, compromised or never existed, unless the notary public has complied with outlined requirements for the loss, theft or compromise of an official journal or stamping device.
2. Establishes a rebuttable presumption that a lost, stolen or compromised journal contained record of the identity of the signing party if a party seeking to enforce the validity of a notarized instrument produces evidence that the notary public complied with outlined requirements for the loss, theft or compromise of an official journal or stamping device.
3. Allows the AG or a county attorney for the county in which an alleged violation regarding a lost, stolen or compromised journal or seal occurred to prosecute a violation.
Amendment Adopted by Committee of the Whole
1. Increases, from $25 to $1,000, the civil penalty for a notary public who fails to notify the SOS of the loss, theft or compromise of an official journal or stamping device.
2. Allows the failure of payment by a notary public to be referred to the AG for collection.
3. Requires the court, in an action in which the validity of a notarized document is at issue and it is determined that the notary public did not comply with outlined requirements, to provide notice of such finding to the SOS and the appropriate county attorney.
4. Modifies criteria for determining when a presumption must or must not be given to the validity of the identity of a party who signed a notarized instrument, if the official journal of a notary public has been lost, stolen compromised or never existed.
House Action Senate Action
JUD 2/16/22 DP 6-4-0-0 JUD 3/24/22 DPA 7-0-1
3rd Read 2/23/22 32-27-1
Prepared by Senate Research
April 13, 2022
ZD/HW/sr