Lead Opinion
OPINION OF THE COURT
The legal question raised in this appeal is whether plaintiff Dorothy Faison is time-barred under CPLR 213 (8) from seeking to set aside and cancel, as null and void, defendant Bank of America’s mortgage interest in real property conveyed on the authority of a forged deed. Under our prior case law it is well-settled that a forged deed is void ab initio, meaning a legal nullity at its inception. As such, any encumbrance upon real property based on a forged deed is null and void. Therefore, the statute of limitations set forth in CPLR 213 (8) does not foreclose plaintiffs claim against defendant. As the Appellate Division affirmed the dismissal of plaintiffs claims as time-barred, we now reverse.
Plaintiff is the daughter and administrator of the estate of her father, Percy Lee Gogins, Jr. Gogins and his sister, defendant Dorothy Lewis (Lewis), inherited from their mother, as tenants in common, a three-family house in Brooklyn. A few years after the mother’s death, in May 2000, Lewis conveyed by quitclaim deed her half-interest in the property to her daughter Tonya Lewis (Tonya). In February 2001, Tonya recorded a deed claiming to correct the prior deed from Lewis. This corrected deed, dated December 14, 2000, allegedly conveyed Gogins’s half-interest in the real property to Tonya. Thus, if the corrected deed were valid, it would convey to Tonya a fee interest in the property. Gogins passed away in March 2001.
In September 2002, plaintiff filed an action on behalf of Gog-ins’s estate against Lewis and Tonya, claiming the corrected deed was void because her father’s signature was a forgery. In April 2003, Supreme Court dismissed the complaint on the ground that plaintiff lacked capacity to sue because she was not the estate’s administrator. At the time, Gogins’s widow was the administrator.
In December 2009, Tonya borrowed $269,332 from defendant Bank of America (BOA), which she secured with the mortgage, granted in favor of defendant Mortgage Electronic Registration Systems, Inc. (MERS). Several months later, in July 2010, Surrogate’s Court appointed plaintiff administrator of Gogins’s estate. In her supporting affidavit explaining her delay in seeking appointment, plaintiff asserted that her mother’s lawyer led her to believe that he had secured a judgment in favor of the estate, when in fact the lawyer, now disbarred, had failed to take action on her mother’s behalf.
The month following her appointment, in August 2010, plaintiff filed the underlying action against Lewis, Tonya, BOA and MERS to declare the deed and mortgage null and void based on the alleged forgery. Thereafter, BOA moved to dismiss the complaint under CPLR 3211 (a) (5) as untimely under CPLR 213 (8), and plaintiff cross-moved to dismiss the statute of limitations affirmative defense asserted in the BOA and MERS joint answer. Supreme Court granted the motion to dismiss the complaint in its entirety as time-barred, and denied plaintiffs cross motion as moot.
The Appellate Division modified the order, denying the motion to dismiss as against the individual defendants and MERS,
IL
As a preliminary matter, because this is an appeal from a dismissal under CPLR 3211 (a) (5), “[w]e accept the facts as alleged in the complaint as true, accord plaintiff! ] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Leon v Martinez,
Plaintiff contends that a forged deed has long been treated as void ab initio, entirely without effect from inception. Therefore, the CPLR 213 (8) statute of limitations does not apply to her claims to vacate and declare the deed and defendant BOA’s mortgage-based interest in the property a legal nullity. We agree.
In Marden v Dorthy, this Court held that a forged deed was void at its inception, finding it to be a “spurious or fabricated paper” (
A forged deed that contains a fraudulent signature is distinguished from a deed where the signature and authority for conveyance are acquired by fraudulent means. In such latter cases, the deed is voidable. The difference in the nature of the two justifies this different legal status. A deed containing
A forged deed, however, cannot convey good title, and “[i]t is legally impossible for any one [sic] to become a bona fide purchaser of real estate, or a purchaser at all, from one who never had any title, and that is this case” (id. at 56 [emphasis omitted]; see also Yin Wu v Wu,
It is similarly true that no property shall be encumbered, including by a mortgagee, in reliance on a forged deed (see
Moreover, New York’s recording statute (Real Property Law § 291) does not apply to a forged deed (see Albany County Sav. Bank v McCarty,
Given the clarity of our law that a forged deed is void ab initio, and that it is a document without legal capacity to have any effect on ownership rights, the question remains whether a claim challenging a conveyance or encumbrance of real property based on such deed is subject to a time bar. Our case law permits only one answer: a claim against a forged deed is not subject to a statute of limitations defense.
As this Court held in Marden, a forged deed is void, not merely voidable. That legal status cannot be changed, regardless of how long it may take for the forgery to be uncovered. As this Court made clear in Riverside Syndicate, Inc v Munroe, a statute of limitations “does not make an agreement that was void at its inception valid by the mere passage of time” (
Indeed, this is the prevailing approach in other jurisdictions (see e.g. Moore v Smith-Snagg, 793 So 2d 1000, 1001 [Fla Dist Ct App, 5th Dist 2001] [“(o)f course, there is no statute of limitations in respect to the challenge of a forged deed, which is void ab initio” (emphasis omitted)]; see also Wright v Blocker, 144 Fla 428, 432-436, 198 So 88, 90-91 [1940]). The high court of West Virginia, for example, has observed that “there is no statute of limitations regarding void deeds” (MZRP, LLC v Huntington Realty Corp.,
III.
Defendant BOA contends that plaintiffs claim is time-barred because forgery is a category of fraud, and, like any other claim based on fraud, an action challenging a forged deed is subject to the limitations period of CPLR 213 (8). That conclusion cannot be squared with our decisions in Marden and Riverside Syndicate, nor with general principles of real property law. Nor is it supported by compelling policy reasons. On the contrary, our long-standing commitment to the protection of ownership interests and the integrity of our real property system favors the continued treatment of challenges to forged deeds as distinct from other claims, and exempt from a statute of limitations defense.
Most notably, defendant wholly fails to address Marden and the well-established authority distinguishing forged deeds as void ab initio from instruments that are merely voidable. Instead, defendant, and our dissenting colleagues, seek to
First, Riverside relied on “the nature of a statute of limitations” (
Second, Riverside cited Pacchiana, a case that exempted a void document from the application of the statute of limitations, and in doing so distinguished between void and voidable documents, highlighting the significance of that legal distinction. In Pacchiana, the Appellate Division held that where a prenuptial agreement fails to comply with real property rules regarding the proper recording of a conveyance, the agreement is void at its inception and cannot be subject to the statute of limitations (Pacchiana,
The defendant notes that the agreement in Riverside violated the Rent Stabilization Code, and because of its illegal nature violated public policy. However, defendant ignores the significant public policies underlying our real property system, which have animated the previously discussed real property rules that treat forged deeds as a legal nullity. The public policy concerns that underlie prohibitions on enforcement of illegal contracts are surely no more consequential than those appli
Having failed to persuade based on our case law, the defendant argues that a statute of limitations is necessary to protect the sanctity of real property titles. However, section 213 (8) contains a two-year discovery rule, which potentially extends the life of a claim years beyond the six-year statutory term. As a consequence, land titles already are subject to challenge, based on a forged deed, far into the future.
Moreover, in a line of cases including Ford v Clendenin (
“an owner in possession has a right to invoke the aid of a court of equity at any time while he is so the owner and in possession, to have an apparent, though in fact not a real incumbrance discharged from the record and such a right is never barred by the Statute of Limitations. It is a continuing right which exists as long as there is an occasion for its exercise” (215 NY at 16 ; see also Orange & Rock-land Util.,52 NY2d at 261 , citing Ford).
Similarly, this Court held in Cameron Estates, Inc. v Peering that the statute of limitations did not bar plaintiffs action
Our dissenting colleagues argue that a statute of limitations is necessary in order to avoid litigation over claims which are difficult to defend because of the mere passage of time (see dissenting op at 234). As we have stated, the discovery provision in the statute allows for this possibility (see CPLR 213 [8]). In any case, the stale claims alluded to are just as likely to be difficult to prove, reducing the number of claims that will be filed when evidence has been destroyed and memories have faded.
IV
For over a century, since this Court’s decision in Marden, a forged deed has been treated in New York as void ab initio. As the Court recognized in Riverside, a statute of limitations cannot validate what is void at its inception. Therefore, a void deed is not subject to a statutory time bar. The defendant’s arguments are in contravention of Marden and Riverside, and would subject a claim of deed forgery to a six-year statute of
To adopt defendant’s position is to permit a forged deed to accomplish, by the mere passage of time, what has always been forbidden — the encumbrance and transfer of title. Neither law nor public policy nor common sense dictates such outcome. Defendant fails to present a compelling reason to overturn or ignore our prior case law in the area of real property because as we have recognized, “parties in business transactions depend on the certainty of settled rules, fin real property more than any other area of the law, where established precedents are not lightly to be set aside’ ” (172 Van Duzer Realty Corp. v Globe Alumni Student Assistance Assn., Inc.,
Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed and defendant Bank of America, N.A.’s motion to dismiss the complaint against it pursuant to CPLR 3211 (a) (5) denied.
Notes
. We note that the Appellate Division order is final only as to defendant BOA.
. In their answer, Lewis and Tonya assert that the deed is valid because “Percy Lee Gogins . . . authorize [d] and consented to the transfer and conveyance of his ownership interest in the Premises to Tonya Lewis.”
. Our dissenting colleagues contend that innocent purchasers who rely on the chain of title will be adversely affected if no statute of limitations applies to forged deed claims (see dissenting op at 236). However, many individuals rely on the validity of the recording system. The dissenters fail to recognize the great harm done if forged deeds may be permitted to obtain legal effect simply through the passage of time. Moreover, even under the dissenters’ approach, a forged deed claim may still be timely after six years, if filed pursuant to the discovery rule of CPLR 213 (8).
. Our dissenting colleagues find the discovery rule advantageous because it allows a victim of fraud to pursue a claim beyond the six-year statute of limitations prescribed by the CPLR (see dissenting op at 234). That possibility of filing a claim years, if not decades, after the deed is forged is the very reason why the defendant and dissenters’ arguments for a statute of limitations are underwhelming.
. In her reply brief, plaintiff concedes, and indeed affirmatively asserts, that forged deed claims are subject to a laches defense. This is generally the case in states that consider forged deeds void and thus apply no statute of limitations to bar actions to invalidate such deeds (see e.g. Robinson v Estate of Harris, 391 SC 114, 131,
. Our dissenting colleagues argue that the loss of property suffered by a plaintiff whose forged deed claim is time-barred is no more offensive than the loss experienced by any other plaintiff whose claim is foreclosed as untimely (see dissenting op at 236). This is no point at all because it ignores the fact that forged deeds not only harm the true owner, but also undermine the integrity of our real property system. It is a harm so substantial that we have determined to avoid the effects of a forged deed by denying it any legal significance. It is, in the words of Marden, “no thing[ ]” (Marden,
Dissenting Opinion
(dissenting). I believe that plaintiffs action against defendant Bank of America, seeking to invalidate the Bank’s mortgage interest in real property conveyed by an allegedly forged deed, is subject to the six-year statute of limitations under CPLR 213 (8). Because plaintiff did not commence this action within either the applicable six-year limitation period, or two-year discovery window provided by the statute, I would find that the claim is time-barred. In 1996, defendant Dorothy Lewis and her brother, Percy Lee Gogins, Jr.,
Plaintiff Dorothy Faison, Percy Gogins’ daughter, commenced a pro se action in Supreme Court in September 2002, alleging that the Lewis defendants had engaged in a scheme to defraud by forging and filing a false deed. The complaint was dismissed under CPLR 3211 (a) because plaintiff lacked capacity to maintain it, as she had not been appointed the administrator of her father’s estate, and for failure to state a cause of action upon which relief could be granted.
Years passed, during which plaintiff took no further action. In December 2009, defendant Tonya Lewis obtained a mortgage on the property from defendant Bank of America in the amount of $269,332. Soon thereafter, plaintiff petitioned Surrogate’s Court for a decree appointing her the administrator of Percy Gogins’ estate. In connection with that proceeding, plaintiff submitted an affidavit of delay, in which she represented that she had discovered the existence of the forged deed “[a]t some time in or around 2003.” Plaintiff was appointed the administrator of her father’s estate in July 2010.
The following month, plaintiff commenced this action, in her capacity as administrator of Gogins’ estate, against the Lewis defendants, Bank of America and defendant Mortgage Electronic Registration Systems, Inc. (as nominee for Bank of America). According to the complaint, plaintiff is a resident of the State of Georgia. Plaintiff alleged that Gogins had never authorized the transfer of his ownership interest in the property and that the December 2000 correction deed was a forgery. She sought a judgment declaring the deed null and void, directing defendant Tonya Lewis to disgorge half of all rents and profits generated by the premises, and setting aside and canceling the mortgage. The courts below granted Bank of America’s motion to dismiss the action under CPLR 3211 (a) (5) on statute of limitations grounds.
While a deed proved to have been a forgery cannot operate to affect ownership rights, this does not compel the result that the opportunity to challenge such conveyance is without limit. “Statutes of Limitation are essentially arbitrary time limitations barring the commencement of an action, and they reflect the legislative judgment that individuals should be protected from stale claims” (McCarthy v Volkswagen of Am.,
“In examining the policies underlying Statutes of Limitation, this Court has emphasized both a defendant’s interest in repose and ‘in defending a claim before [the] ability to do so has deteriorated through passage of time.’ We have also taken note of considerations of judicial economy and possible plaintiff fraud where excessive factual inquiries would be necessary. Balanced against these considerations is the injured person’s interest in having a reasonable opportunity to assert a claim” (Blanco v American Tel. & Tel. Co.,90 NY2d 757 , 773-774 [1997] [citations omitted]).
I would conclude that an action to invalidate a forged deed is subject to a statute of limitations defense. Forgery is closely related to and essentially a type of fraud. We have previously observed that forgery was “defined by the common law to be the fraudulent making of a writing to the prejudice of
A contrary rule under which plaintiff would prevail entails no statute of limitations applicable to an action alleging forgery. We have never so held. To the contrary, the CPLR imposes a six-year limitations period for “action [s] for which no limitation is specifically prescribed by law” (CPLR 213 [1]). And, despite the majority’s repeated invocation of the well-settled principle that a forged deed is a void instrument, not one of the cases it cites addresses the timeliness of this type of action. Rather, New York courts that have considered the issue have consistently applied a six-year statute of limitations to situations like this one (see Vilsack v Meyer,
Indeed, the absence of any limitations period could result in the commencement of actions that the passage of time makes exceedingly difficult, or impossible, to defend; a plaintiff could, for instance, bring the claim long after the relevant events, but just after the death of the crucial defense witness. Notably, although the majority observes that Florida technically imposes no statute of limitations in this context, that state has the “Marketable Record Title Act,” which, with certain exceptions, essentially deems properly recorded deeds to be valid after a 30-year period (see Fla Stat § 712.02; H & F Land, Inc. v Panama City-Bay County Airport & Indus. Dist., 736 So 2d 1167, 1172 [Fla 1999] [“a root of title based upon a forged deed would
In analogous circumstances to those presented here, we have required individuals to abide by applicable limitations periods (see e.g. Ford v Clendenin,
Plaintiff asserts that the decision below conflicts with our holding in Riverside Syndicate, Inc. v Munroe (
Riverside is unlike the situation presented here. It is well settled that “illegal contracts, or those contrary to public policy, are unenforceable and that the courts will not recognize rights arising from them” (Szerdahelyi v Harris,
Plaintiff also relies upon Cameron Estates, Inc. v Deering (
“When void tax deeds are attempted to be made prima facie evidence of the regularity of the proceedings, equity will interfere to permit removal as a cloud on title which right may be invoked by the owner in possession at any time as ‘such a right is never barred by the Statute of Limitations’ ” (Cameron Estates,308 NY at 31 [citations omitted]).
Plaintiff does not claim to be in possession of the property and it is therefore unnecessary to address the consequences of what would flow from such fact.
The stability of the State’s real property system is plainly important and the idea of losing one’s property because of a forged deed is, of course, offensive. But it is no more so than the plight of any innocent plaintiff being barred from attempting to obtain relief from an injury by failing to commence an action within the time limits set by the legislature. Indeed, it is the prospect of no repose, particularly where the property may have changed hands since the allegedly forged deed, that would appear to endanger the stability of real property transactions. The majority’s rule permits a person who discovers a
Here, the deed was allegedly forged in December 2000. In addition, according to her Surrogate’s Court submission, plaintiff had been aware of the deed no later than 2003 (indeed, a prior action was commenced in Sept. 2002). Since, in this circumstance, the two years afforded by the discovery rule would not have extended the six-year statute of limitations, I would find that this action as against the Bank, which was not commenced until August 2010, was untimely and was properly dismissed by the courts below.
Order, insofar as appealed from, reversed, with costs, and defendant Bank of America, N.A.’s motion to dismiss the complaint against it pursuant to CPLR 3211 (a) (5) denied.
The majority’s reliance on Riverside’s reference to Pacchiana v Pacchiana (