You don’t often see the appeal happen before the trial.

Debtors tried to get out of a student loan by filing Chapter 7 and not telling the bankruptcy court that the debt was a student loan. Creditor got notice of the bankruptcy but did not respond. It then sued Debtors on the debt, lost in compulsory arbitration, and appealed.

The trial court then did something that even the Court of Appeals doesn’t understand. When the time came for trial it didn’t hold one. It took no evidence and had no motions before it. It seems instead to have talked to the lawyers, as a result of which it ruled that the bankruptcy discharge was binding because Creditor had notice of it. The court gave judgment for Debtors. Perhaps that sort of thing goes on in Family Court but, as the opinion points out, “there is no evidentiary basis for any (emphasis in original) of the trial court’s findings or conclusions.” “Because the record is devoid of competent evidence supporting the judgment, we conclude the trial court erred in finding in favor of the Smocks.”

That could dispose of the appeal but the court goes on to answer the substantive question presented since it “will undoubtedly arise again.”  The trial court relied on a U.S. Supreme Court case (Espinoza 2010). But that case involved a Chapter 13, so the “notice” it referred to was the reorganization plan. Under Chapter 7 the “notice” Creditor got included the advice not to file a Notice of Claim. Therefore Espinoza doesn’t apply and “without [an] adversary proceeding and finding of undue hardship [both required by statute to discharge a student loan, neither of which happened here], the debt was not discharged.”

Remanded to “first take evidence to establish whether the debt is in fact a student loan.” If not, its “judgment was proper”; if so, “the judgment was not proper and this case may proceed.” The court evidently thinks detailed instructions necessary in light of the “proceedings” below. But it also adds that if Debtors “believe the debt was discharged, they may enforce the discharge by filing an action in Bankruptcy Court.” The court says this twice during the opinion. Giving a party legal advice is itself unusual but may reflect some felt need to pay obeisance to the Bankruptcy Court, which can be prickly about its jurisdiction.

(Opinion: National Collegiate Student Loan Trust v. Smock)

Raising the question of when a seal is not a seal – or, rather, of when a not-seal is a seal.

Husband, using Wife’s power of attorney, transferred their property to Son. Husband then died and Wife sued Husband’s estate and Son because of that transaction seeking, among other things, to quiet title. On that count her argument was that the deed to Son was no good because it wasn’t properly notarized. The trial court agreed and granted partial summary judgment.

The Court of Appeals reverses. 33-401 requires that a deed be notarized. The problem was that the notary used her embossing stamp (the metal crimping tool) rather than her official seal (the ink stamp). 44-321 says the former isn’t official and can’t be used without the latter. The court makes an end-run on the argument using the Uniform Recognition of Acknowledgments Act (33-501ff). These statutes exist to allow Arizona to recognize notarization and similar acts performed in other states; for the most part that’s what they speak to. But 33-506 adopts “short forms of acknowledgement” that “are sufficient for their respective purposes under any law of this state.” Those forms don’t require any seal at all, just the notary’s signature, title, and serial number. 33-507 says that ”this article provides an additional method of proving notarial acts.” Because this notary used one of the short forms the court holds her acknowledgment valid.

So 33-506 means that seals are optional if certain information – a subset of that required by the notary-public statutes – appears. And those statutes now mean that notaries must use the official seal except when they needn’t (same for “my commission expires”) and that the embosser can’t be used without the official seal except when it can. It would have been nice to see the opinion address the relationship between these statutes rather than to decide that 33-506 trumps the others because . . . well, just because. (Its possible, at least on paper, to reconcile them; whether that’s what the legislature had in mind is another matter.)

It appears that reliance on the Uniform Act may have been the court’s idea, that the defendants argued something else. That may be why the analysis isn’t more developed and for that matter why the opinion feels free to cite to secondary sources – the A.L.R. (do people still use that?), for example, and a form book.

This notary’s confusion is not excusable (the statutes used to be pretty clear and the Secretary of State’s office tries to help) but is perhaps understandable. The big, heavy, ornate embossers seem like they should be the official seals. And once upon a time they were, when used to emboss colored stick-on discs, stars, etc. But then copy machines became ubiquitous, leading to the problem that indentations in paper don’t always reproduce well. So the lowly ink stamp became the only official seal.

(Link to opinion: Larmer v. Estate of Larmer)