New York Law Review

Faison v. Lewis, No. 46 (N.Y. 2015): Statute of Limitations Inapplicable to Challenges to Forged Deeds

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The New York Law Review

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Faison v. Lewis, No. 46 (N.Y. May 12, 2015)

A claim to vacate a deed based on forgery is not subject to a statute of limitations defense because a forged deed is void ab initio, meaning it has no legal effect from its inception.

Summary

In this case, the New York Court of Appeals addressed whether a claim to set aside a mortgage and a deed based on a forged deed is subject to a statute of limitations. The court held that because a forged deed is considered void ab initio, it is a legal nullity from the start. Therefore, a claim challenging a conveyance or encumbrance based on a forged deed is not time-barred, and the statute of limitations does not apply. The court reasoned that a forged deed cannot convey good title, and any subsequent mortgage based on the forged deed is also invalid. This decision reaffirms the long-standing principle in New York that challenges to forged deeds are exempt from statutes of limitations, protecting the integrity of real property ownership.

Facts

Percy Lee Gogins, Jr. and his sister inherited a property. His sister conveyed her half-interest to her daughter, Tonya Lewis. Subsequently, a corrected deed was recorded, allegedly conveying Gogins’s half-interest to Tonya, though the plaintiff claimed the correction deed was a forgery. Gogins passed away. The plaintiff, Gogins’s daughter, filed an action on behalf of Gogins’s estate against Lewis and Tonya, claiming the corrected deed was void because her father’s signature was a forgery. Tonya later obtained a mortgage from Bank of America (BOA), secured by the property. The plaintiff, having been appointed administrator of Gogins’s estate, filed an action against Lewis, Tonya, BOA, and MERS (Mortgage Electronic Registration Systems, Inc.) to declare the deed and mortgage void due to the alleged forgery. BOA moved to dismiss the complaint as time-barred under CPLR 213(8).

Procedural History

The trial court granted BOA’s motion to dismiss, finding the plaintiff’s claim time-barred. The Appellate Division modified the order, denying the motion to dismiss against individual defendants and MERS, but affirming the dismissal against BOA based on the statute of limitations. The Court of Appeals granted the plaintiff leave to appeal against BOA.

Issue(s)

Whether a claim to invalidate a mortgage based on a forged deed is subject to the six-year statute of limitations for fraud claims under CPLR 213(8).

Holding

No, because a forged deed is void ab initio, a claim to invalidate a mortgage based on a forged deed is not subject to a statute of limitations defense.

Court’s Reasoning

The court relied on the precedent set by Marden v. Dorthy, which established that a forged deed is void from the beginning because it is a “spurious or fabricated paper.” A forged deed lacks the required voluntariness of conveyance. The court distinguished forged deeds from voidable deeds, where the grantor’s signature is genuine but obtained through fraud. A forged deed is a nullity, and a statute of limitations cannot validate a void document. The court referenced Riverside Syndicate, Inc. v. Munroe, emphasizing that a statute of limitations cannot give legal significance to a document that is already considered void under the law. The court also rejected the argument that the statute of limitations protects the sanctity of real property titles, noting the existence of a discovery rule that could extend the life of a claim beyond the six-year statutory term, and cited Ford v. Clendenin and Orange and Rockland Util., Inc. v. Philwold Estates, Inc., finding that certain property interests are exempt from any time limit. The court rejected arguments that a statute of limitations is necessary to avoid litigation over stale claims.

Practical Implications

The decision in Faison v. Lewis has significant implications for real estate law and practice in New York. It means:

  • Challenges to forged deeds are not time-barred, regardless of when the forgery is discovered.
  • Lenders and purchasers must be aware that a mortgage or transfer based on a forged deed is always vulnerable to challenge.
  • Attorneys dealing with property disputes involving potential forgery should advise their clients that there is no statute of limitations defense to a claim to invalidate the transfer or mortgage.
  • The decision emphasizes the importance of thorough due diligence in real estate transactions to verify the authenticity of signatures and documents.
  • Lenders and purchasers could face significant losses if they rely on a chain of title that includes a forged deed.

This ruling strengthens the protection of property rights and the integrity of New York’s real property recording system, although it also introduces the risk that claims based on a forged deed can arise many years after the deed was recorded.

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