From the beginning of time, the law in New York provided that all affidavits executed by an out-of-state affiant had to be done in accordance with the New York State laws on formalities and such. In particular, the procedural rules referenced the Real Property Law, which described the notary public requirements. About a gozillion years ago, the New York State Legislature passed a law that a real property deed executed and transferred by a foreign affiant had to be accompanied by a “Certificate of Conformity”; a kind of attorney-executed-flag to authenticate the notary. Presumably, this would help ensure that something as important as the transfer of a house, wasn’t done by a any kind of fraudulent document.
About five years ago, one of the debtor-friendly Judges in New York latched onto this law, and started to apply it, in an effort to increase consumer protection and chill purchased debt creditors. It naturally spread like wildfire, because an out-of-state creditor could not simply sign an affidavit, and have a notary on staff take the signature. Now, the out-of-state creditor had to have someone notarize the signature, and then retain an attorney to certify that the notary was taken properly. Arguably, this was designed to ensure that affidavits in support of judgments against consumers were properly executed, and wasn’t being executed flippantly.
However, the application of this law did not accomplish any real consumer protection. Large banks, insurance companies, debt purchasers, and pretty much any large corporation either has general counsel to execute the certification, or had a nationwide network of attorneys to execute the appropriate certificate.
Now, small businesses and creditors in other states became hampered and harmed because they could now no longer go to their local post office, bank, or private notary, and execute an affidavit by paying a few bucks. The small business creditor has to retain local counsel to do the certificate, as well as New York counsel to pursue the debtor, effectively making it much more difficult to do business. And try explaining to the small business owner how this law works.
What happened was an unintended consequence. The application of this law extended to all affidavits executed out-of-state, regardless of the nature of the action. And when I mean “all”, I mean “ALL.”
We represent a client in New York, let’s call him Jim. And let’s say Jim’s business is to bake and sell pies. Customers from all over the area come to Jim and buy his wares. Sometimes, customers come to him, sample the goods, place an order, and pickup the goods at a later time. Sometimes Jim is so honest, he sends people his goodies without them paying.
In this case, the debtor, Stifler Corporation, ordered a bunch of apple pies. Their President came to Jim to place the order, and signed the agreement in Jim’s house. Jim then filled the order, and sent the goods to Stifler, which is located out-of-state, in Great Falls County. Of course, Stifler stiffed Jim, and never paid. Jim retained us to sue. We quickly ascertained that Stifler Corporation wasn’t really a corporation. So, we filed for an Index Number, and retained the Great Falls County Sheriff to serve process on Stifler personally. The Sheriff found him at a local pool hall, and served him personally, and sent us an affidavit of service, notarized by the Deputy Sheriff.
We filed the Affidavit of Service with the New York Court, and of course, Stifler never responded. As such, we submitted a default judgment. However, the Clerk of the Court rejected the judgment because astoundingly, the Sheriff’s Affidavit of Service was not accompanied by a certificate of conformity.
I brought a motion to the Court to enter a judgment on the grounds that a Sheriff’s affidavit was not the affidavit of a party, did not actually transfer any property rights, did not adversely affect the debtor, and that it was stupid to apply the law to a Sheriff’s affidavit of service.
The case went before Judge Slothful. The Judge disagreed with my statement, and denied the motion, in a single sentence order, stating “Plaintiff’s motion is denied as all affidavits require the certificate of conformity.”
I brought a motion to reargue Judge Slothful’s decision, on the basis that the Judge was wrong. First, the decision was inherently incorrect. Clearly, the law applies only to out-of-state affidavits, and as such, not “All” affidavits require the certificate. Second, I made the argument that application of the law to apply to affidavits of service was an unintended consequence.
Judge Slothful denied the motion with the one line “Plaintiff’s motion to re-argue is denied. Re-argument is not granted.”
Apparently, Judge Slothful did not want to rule on the issue at all.
So, I hired an independent process server to serve Stifler. Process was served, and this time, I got an Affidavit of Service with a certificate of conformity.
I then renewed my motion to enter judgment.
It was returnable to Judge Disinclination. Judge Disinclination actually declined to rule on the motion, and referred it to Judge Slothful. We then got a decision back from Judge Slothful stating, “Plaintiff’s Motion is denied as the Defendant’s name in paragraph 8 of the attorney affirmation is misspelled as STIFLRE.”
I then brought a fourth motion on the case to reargue, on the basis that the typographical error was a de minimis error.
It was returnable to Judge Indolent. Judge Indolent denied the motion because so much time has passed from the execution of the affidavit, it was “stale”.
We then prepared for our fifth motion, and Jim contacted us and told us that all the time wasted doing this motion practice bought Stifler enough time to file a petition in bankruptcy. Another unintended consequence.
Timothy Wan is a partner in the firm Smith Carroad Levy & Wan, in Commack, New York, and can be reached at email@example.com. The names, locations, and types of business were changed to protect the innocent… and to prevent the Judges from finding out that I write national publications about how lazy they are.
(Originally published in Commercial Law World Magazine, March 2012)