NY Court: No Statute of Limitations for a Forged Deed

New York’s Highest Court Recently Held that the Six-Year Statute of Limitations Governing Fraud Claims does not Apply to a Forged Deed

New York’s highest court recently held that the six-year statute of limitations governing fraud claims does not apply to forged deeds. The New York Court of Appeals’ decision in Faison v. Lewis held there is no time limit for such allegations.

The Facts of the Case

Plaintiff Dorothy M. Faison (Faison) is the daughter and administrator of the estate for her father, Percy Lee Gogins, Jr. (Gogins). When their mother died, Gogins and his sister, defendant Dorothy Lewis (Lewis), inherited a three-family house in Brooklyn. Several years later, Lewis conveyed 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, purported to also convey Gogins’s half-interest in the real property to Tonya. Gogins passed away in March 2001.

In September 2002, Faison filed an action on behalf of Gogins’s estate against Lewis and Tonya, claiming the corrected deed was, in fact, a forged deed since her father’s signature was a forgery.  However, the Brooklyn Supreme Court dismissed the complaint, finding that Faison lacked capacity to sue because she was not the estate’s administrator.

Several years later, Tonya obtained a $269,332.00 mortgage from defendant Bank of America (BOA). Shortly thereafter, Faison was named administrator of her father’s estate and filed suit against Tonya, Lewis and BOA. The suit alleged that the deed and mortgage were null and void based on the alleged forgery that took place in 2000. The Brooklyn Supreme Court also dismissed the second complaint, holding that the six-year statute of limitations governing fraud claims had expired. The Appellate Division, Second Department affirmed the dismissal with respect to the forgery claim against BOA.

The Court’s Decision

The appeals court reversed, holding that a claim against a forged deed is not subject to a statute of limitations defense. Citing prior New York case law, the court noted that a forged deed is void at its inception, thereby making any encumbrance upon real property based on a forged deed also null and void.

“[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,” the Court explained.

The panel further reasoned that it would “not impose statutes of limitations on forged deeds because the resulting prejudice to the ‘rights of the true owner of real estate’ only ‘open[s] the door for the destruction of all titles, and make[s] it much easier for the criminal to purloin real than personal property.’”