Suit Against Surety of Notary Public - Statute of Limitations
Fidelity National Title Insurance Co. v. Western Surety Co., [Ms. 2170767, Nov. 30, 2018] __ So. 3d __ (Ala. Civ. App. 2018). This unanimous decision by Judge Pittman affirms the Limestone Circuit Court's summary judgment dismissing as time-barred a complaint by Fidelity National Title Insurance Company against Western Surety Company, the surety on a notary bond.
The notary had attested to a materialman's execution of a waiver-of-lien form that had not been in fact signed by the materialman or its authorized representative. As a consequence, the title insurer paid $16,500 to the materialman in order to settle a civil action and cause the lien to be discharged. Ms. *3.
When the title insurer sued the surety on the notary bond, the surety pled the two-year general statute of limitations set out in § 6-2-38(l), Ala. Code 1975. The title insurer alleged that the governing statute of limitations was § 6-2-34(7), which provides a six-year statute for "actions against the sureties of any sheriff, coroner, constable, or any public officer; for any nonfeasance, misfeasance, or malfeasance, whatsoever, of their principal...." Ms. *4.
The court applied the Supreme Court's decision in Ex parte Floyd, 796 So. 2d 303 (Ala. 2001), and held that § 6-2-38(l) is the applicable statutory period to a claim against a surety, notary bond.
In addition to holding that Ex parte Floyd was controlling, the court noted that "Alabama law has long recognized the proposition that '[t]he liability of the surety follows that of the principal, and the surety can make any defense, not personal to the principal, that the principal can.' " Ms. *13, quoting United States Fid. & Guar. Co. v. Town of Dothan, 174 Ala. 480, 487, 56 So. 953, 955 (1911). Applying this principle, the court observed that "had the title insurer, as a private party, also named the notary (i.e., the primary obligor) as a defendant in this case, she would clearly have been entitled, under Ala. Code 1975, § 6-2-38(l) and Ex parte Floyd, to dismissal of the action against her. Ergo, the title insurer's delay in bringing an action against the surety in this case has resulted in the discharge of any duties that the surety would have owed to the title insurer in this case." Ms. *15.