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Forge a Certificate of Insurance--Guilty of Crime: Certificate of Insurance Has Legal Efficacy.

* Although issued by insurance agents with alacrity, Certificates of Insurance (COA) are important documents relied upon by those who receive them to provide comfort that the person they are dealing with is appropriately insured. When someone fails to obtain an accurate COA or alters a legitimate COA and forges the document to make it state the coverages falsely that person is subject to criminal prosecution.

In State of Washington v. Stacy Ann Bradshaw, No. 75853-5-I, Court of Appeals of the State of Washington Division One (April 9, 2018) the Court of Appeals was asked to determine if there was sufficient evidence to support a charge under the current forgery statute. To support the charge the State needed to prove that the allegedly altered written instrument had "legal efficacy." Stacy Ann Bradshaw (Bradshaw), an escrow agent was convicted of forgery for altering a certificate of insurance to make it appear she had enough liability insurance to cover a transaction she had been hired to handle.


In 2014, Bradshaw was a licensed escrow agent and the owner of North Sound Escrow. By law, an escrow agent must maintain several types of liability insurance. Bradshaw had coverage for crime as well as for errors and omissions through the insurance firm USI Kibble & Prentice. The limits were $1 million per claim.

In February 2014, Bradshaw was retained as the escrow agent for the sale of commercial property for the price of approximately $1.4 million. Umpqua Bank was the lender for one of the parties. Umpqua asked Bradshaw for a copy of her insurance information. Bradshaw obtained a "Certificate of Liability Insurance" from Kibble & Prentice showing her limits of $1 million. She gave Umpqua a copy of the certificate that was altered to represent that Bradshaw had coverage limits of $2 million. Umpqua noticed the alterations and contacted both Kibble & Prentice and the Department of Financial Institutions, the agency that regulates escrow agents. This led to the prosecution of Bradshaw on one count of forgery who was convicted and sentenced her to 40 hours of community service, $3,600 in financial restitution, and six months of community supervision.

Bradshaw appealed.


Evidence is sufficient to support a conviction if, viewed in the light most favorable to the prosecution, it permits a rational trier of fact to find the essential elements of the crime beyond a reasonable doubt. At common law, forgery was the act of falsely making or materially altering, with intent to defraud, a writing which, if genuine, might apparently be of efficacy or the foundation of legal liability.

Legislation revising the forgery statute in 1975 removed the particularized list of categories of items susceptible to forgery. The current forgery statute simply prohibits the forgery of a "written instrument."

At Bradshaw's trial, the only issue was whether the certificate of insurance was a "written instrument." A written instrument is broadly defined in the current statute as (a) Any paper, document, or other instrument containing written or printed matter or its equivalent; or (b) any access device, token, stamp, seal, badge, trademark, or other evidence or symbol of value, right, privilege, or identification. [RCW 9A.60.010 (7).] This definition was intended to continue the common law requirement that the instrument be something which, if genuine, may have legal effect.


The certificate holder named on Bradshaw's certificate of liability insurance is the Washington State Department of Financial Institutions. The certificate was filed with the department as evidence that Bradshaw was in compliance with coverage requirements. The trial court had no problem determining that the certificate has legal efficacy as a public record.

The former statute explicitly recognized that any "paper on file in any public office" is a writing susceptible to forgery. [Former RCW 9.44.020 (1909).] Bradshaw claimed, however, that to meet the requirement of legal efficacy as a public record, the written instrument must be issued by a government agency.

Forgery covers virtually every kind of instrument which has an effect on private or public rights.

This is not a case where an altered document found its way into an agency file accidentally. The certificate had material significance to the department. As part of the licensing process, an escrow agent must submit proof of financial responsibility to the department, including a fidelity bond providing coverage in the aggregate amount of one million dollars. To demonstrate compliance with the requirement for a fidelity bond, the applicant is required by regulation to provide the department with a certificate of insurance that includes the aggregate amount of coverage. Maintaining such insurance is a condition precedent to the escrow agent's authority to transact escrow business in this state.

In short, the record shows that Bradshaw's certificate of insurance was a type of document required by law to be filed and necessary or convenient to the discharge of the duties of the department. In view of the regulatory scheme, the trial court reasonably found that a certificate of insurance coverage for an escrow agent is a written instrument, the alteration of which supports a forgery charge because it is a public record with legal efficacy.

Bradshaw's certificate of insurance, before alteration, was genuine. It was a representation of the limits of her coverage. The trial court correctly reasoned that if Umpqua had suffered damages as a result of the alteration and had sued Bradshaw for fraudulent misrepresentation, the original unaltered document would be a foundational piece of evidence of Bradshaw's liability. And this is true even though the certificate states on its face that it "is issued as a matter of information only and confers no rights upon the certificate holder." The court heard testimony that insurance certificates are typically used by insureds as evidence of their current policies and limits and that Bradshaw's certificate provided such evidence to the department.

The Court of Appeals concluded that sufficient evidence supported the trial court's determination that Bradshaw's certificate of insurance had legal efficacy as a foundation for legal liability.


Finally, Bradshaw invokes the rule of lenity to argue for reversal of her conviction. The rule of lenity operates to resolve statutory ambiguities in favor of a criminal defendant. The forgery statute provides a fair warning that it applies to Bradshaw's conduct. She falsely altered a written instrument with intent to injure or defraud.

The requirement that the written instrument have legal efficacy is a limitation on the statutory definition of forgery, not an expansion of it. Because Bradshaw's conduct is clearly covered by the statute, the rule of lenity is not applicable.


Bradshaw, to save some premium by increasing her limits of liability, became a felon and destroyed her ability to practice as an escrow officer. Although the criminal punishment is minimal with no jail time the effect on Brandshaw's career explains why she tried to change the conviction on appeal. The COA is an important document and insurance professionals should be ready to report anyone who tries to modify it for purposes outside the true reason for the COA.

Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. Look to National Underwriter Company for the new Zalma Insurance Claims Library, at The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide. The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma's book "The Insurance Fraud Deskbook" available at, or 800-285-2221 which is presently available.

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Title Annotation:[ON MY RADAR]
Author:Zalma, Barry
Publication:Insurance Advocate
Date:Oct 29, 2018
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