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Galloway v. Cinello: The Price Of Conflict Of Interest

Gavel2-resized.jpg(Originally published in the November 2019 issue of The National Notary magazine.)

A Notary’s conflict of interest may seem harmless, but it can have messy legal consequences later. West Virginia attorney William Galloway learned that the hard way after his own conflict nearly cost a client $19,000.

In 1990, Galloway prepared a deed of trust for a sale of property owned by Rose Ann Cinello. Galloway then notarized the signatures of Cinello and the buyers. Months later, the buyers declared bankruptcy.

The bankruptcy court ruled that the deed of trust was invalid because Galloway notarized the signatures while being named as a trustee for the property, creating a conflict of interest under state law. Consequently, Cinello could not collect $19,000 she was owed from the property sale.

In an interview with the National Notary Association, Galloway said he notarized the signatures because his office Notary was unavailable when Cinello and the buyers arrived to sign them. “Looking back, I wish I hadn’t done it.”

On appeal, the Supreme Court of Appeals of West Virginia [Galloway v. Cinello, 423 S.E.2d 875 (W. Va. 1992)] stated that the bankruptcy court’s decision would be “unduly harsh” and that Galloway’s conflict should not invalidate the deed because there was no “claim of wrongdoing, bad faith, or other improper conduct.” A federal court later ruled the deed of trust valid despite the problem notarization.

The episode taught Galloway a valuable lesson. “I try to avoid notarizing my own work, and I don’t notarize if I am named in the document.”

David Thun is an Associate Editor at the National Notary Association.