On January 21, the Virginia Secretary of the Commonwealth released the Virginia Electronic Notarization Assurance Standard. Citing challenges faced by notaries to “preserve and strengthen the role of the notary in the rapidly emerging digital economy and to ensure reliability and cross-border recognition of notarized electronic documents in a global economy,” the standards are intended to support transition of notaries in Virginia to performing electronic notarizations that have the same legal effect as traditional notarizations. They set forth registration and performance requirements, electronic signature and seal requirements, online notarization procedures, and notarized electronic document requirements. According to the Secretary, the Virginia standards (i) reflect the National Association of Secretaries of State Electronic Notarization Standard for Document Security; (ii) incorporate aspects of standards previously adopted by seven other states; and (iii) are consistent with the federal ESIGN Act, the UETA, and the Uniform Real Property Electronic Recording Act.
Minnesota Appellate Court Holds Email Signature Not Necessarily Evidence Of Intent To Sign Attachments
On June 2, the Minnesota Court of Appeals held that under the Uniform Electronic Transaction Act (UETA), an electronic signature in an email message does not necessarily evidence intent to electronically sign an attached document, and that whether the sender has electronically signed the attachment is dependent on certain facts and circumstances. SN4, LLC v. Anchor Bank, No. A13-1566, 2014 WL 2441343 (Minn. Ct. App., Jun. 2, 2014). A multifamily real estate purchaser sued a bank after negotiations between the parties over the sale of two properties held by the bank fell through. The purchaser claimed that the bank breached its contract by refusing to sell at a price the purchaser claims was established through a series of emails between the parties. The trial court rejected the buyers’ argument that the bank electronically subscribed to the agreement under the UETA and held that the purported agreement did not satisfy the statute of frauds because only the buyers subscribed to it. The appeals court affirmed, holding that under UETA each transaction must be examined to determine whether the parties agreed to conduct the transaction by electronic means. Here, the court held, there was no express or implied agreement between the parties that the bank would electronically sign the agreement. Further, the court held that even assuming the parties agreed to conduct the transaction electronically, the bank did not electronically sign the agreement. The court explained that “whether a sender has electronically signed an attached document depends on the circumstances, including whether the attached document itself contains the sender’s electronic signature and whether the attached document is intended to be a draft or final version.” In this case, the purported agreement the buyers sought to enforce was attached to an electronically signed email, but the signature lines in the attached agreement lacked the bank’s handwritten or electronic signature. The court added that the subject email and subsequent emails indicated that neither party considered the agreement to be final.
Recently, the Michigan Court of Appeals affirmed summary judgment in favor of a defendant insurance company seeking to dispose of a challenge to an electronic signature executed by a policyholder. Zulkiewski v. Am. Gen. Life Ins. Co., No. 299025, 2012 WL 2126068 (Mich. Ct. App. Jun. 12, 2012). In this case, shortly before a life insurance policy holder died, the beneficiary information on his policy was changed through the insurance company’s online account management service. The former beneficiaries challenged the new beneficiary designation, arguing that although the Uniform Electronic Transactions Act (UETA) permits an electronic signature, to validate the authenticity of such a signature the insurance company must prove the efficacy of its security procedures. On appeal, the court held that the trial court did not err when it relied on evidence provided by the insurance company showing the extent of the personal information required to change the beneficiary, combined with an affidavit that the new beneficiary did not change the beneficiary designation. The court further explained that the appellants misread the relevant portions of the UETA when they argued that the lower court improperly accepted the insurance company’s assertions that its security procedures were “adequate to prevent deception by an imposter.” The court explained that the insurance company need not prove the efficacy of its online security procedures to authenticate a customer’s signature since under the UETA doing so is merely one method by which to show attribution.