If a deed conveying real property is truly forged, the law provides the owner of the property whose signature was forged with robust remedies that can withstand virtually any legal (or equitable) defense. I have described the definitive consequences of a forged deed in several posts, most recently in “‘Void or Voidable’ in Fraud, Visited Again.”
A recent decision of the Appellate Division, Second Department, reviews the applicable legal principles and rejects every attempt by the defendant to dismiss the complaint: Simmons v Bell, 2023 NY Slip Op 04963 (2d Dep’t Decided Oct. 4, 2023).
Deeds Conveying Real Property
Because a deed is a powerful legal document that effectuates the relinquishment and transfer of all rights and interests in real property, the law imposes formal requirements on the process of signing the deed in an effort to assure its authenticity. New York Real Property Law Section 309-a(1) provides the legal requirements for an instrument intending to convey real property:
1. The certificate of an acknowledgment, within this state, of a conveyance or other instrument in respect to real property situate in this state, by a person, must conform substantially with the following form, the blanks being properly filled:
State of New York }
ss.:)
County of ․․․․․․․․}
On the ․․․․․․ day of ․․․․․․ in the year ․․․ before me, the undersigned, personally appeared ․․․․․․, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.
(Signature and office of individual taking acknowledgement.)
Further, New York CPLR 4538 creates a presumption of authenticity of the deed when it is executed with the foregoing acknowledgment:
Certification of the acknowledgment or proof of a writing, except a will, in the manner prescribed by law for taking and certifying the acknowledgment or proof of a conveyance of real property within the state is prima facie evidence that it was executed by the person who purported to do so.
Notwithstanding these legal requirements addressing ways to ensure the integrity of executed deeds, if the signature on a deed is nevertheless forged, the law provides the means for establishing the forgery and, if substantiated, powerful legal consequences. This is the backdrop to the Simmons decision.
Simmons
In Simmons, Bessie Rogers, the plaintiff’s decedent, acquired title to real property in 1987. In 1998, a deed was recorded that contained what purported to be Rogers’ signature. Plaintiff subsequently commenced an action under New York Real Property Actions and Proceedings Article 15 to “quiet title” to the property and for a judgment declaring that the deed allegedly executed in 1998 by Rogers, which gave the defendants an interest in the property, was forged and therefore void. Plaintiff also sought to recover the proceeds of a subsequent sale of the property in 2007.
Defendants moved to dismiss the complaint, the court below denied the motion, and defendants appealed to the Second Department.
Statute of Limitations
The first ground for dismissal addressed by the Second Department was the statute of limitations. This was relatively easy to decide. The New York Court of Appeals has explained the sweeping effect of the forgery of a deed. As concisely explained in Faison v Lewis, 2015 NY Slip Op 04026 [25 NY3d 220] (2015):
A forged deed … 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, 288 AD2d 104, 105 [1st Dept 2001] [“A forged deed is void and conveys no title”]; 2-15 Warren’s Weed, New York Real Property § 15.01 [“A purchaser who takes title through a forged deed cannot be a bona fide purchaser, even if the purchaser did not have knowledge of the forgery”]). New York’s rule reflects a general well-established principle of real property law (see e.g. Harding v Ja Laur Corp., 20 Md App 209, 214, 315 A2d 132, 135 [1974] [“A forged deed . . . is void ab initio”]; Scott D. Erler, D.D.S. Profit Sharing Plan v Creative Fin. & Invs., L.L.C., 349 Mont 207, 214, 203 P3d 744, 750 [2009] [“forged conveyances are void ab initio and do not transfer title” (emphasis omitted)]; Brock v Yale Mtge. Corp., 287 Ga 849, 852, 700 SE2d 583, 586 [2010] [“we have also long recognized that a forged deed is a nullity and vests no title in a grantee”]; Akins v Vermast, 150 Or App 236, 241 n 7, 945 P2d 640, 643 n 7 [1997] [“If fraud is ‘in factum,’ such as a forged deed or a situation analogous to forgery, the deed is void ab initio and will not support subsequent title in any person” (emphasis omitted)]; First Natl. Bank in Albuquerque v Enriquez, 96 NM 714, 716, 634 P2d 1266, 1268 [1981] [“a forged deed is a void deed and transfers no interest”]; Williams v Warren, 214 Ark 506, 511, 216 SW2d 879, 881 [1949] [“No one can claim that an estate in land should be divested by forgery”]).
As a result, there is no limitation upon which to bring an action to void a forged deed because it is deemed never to have existed in the first place. As the Court in Faison went on to hold: no statute of limitations applies to an action to challenge a void deed because “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. … [A] statute of limitations ‘does not make an agreement that was void at its inception valid by the mere passage of time’.”
Thus, the Second Department in Simmons rejected the statute of limitations argument:
The Supreme Court properly determined that the complaint was not subject to dismissal pursuant to CPLR 3211(a)(5) as time-barred. The defendants failed to meet their initial burden of establishing, prima facie, that the time in which to bring this action expired (see JP Morgan Chase Bank, N.A. v Mbanefo, 166 AD3d 742). The substance of a cause of action, not its form, is the controlling consideration in determining the applicable statute of limitations (see Faiella v Tysens Park Apts., LLC, 110 AD3d 1028). Thus, the six-year statute of limitations for fraud (see CPLR 213[8]) does not apply to the causes of action which seek a declaration that the deed allegedly executed in 1998 is a nullity on the ground that is it forged. A forged deed, as opposed to a deed obtained by fraud, is void ab initio and does not convey title (see Faison v Lewis, 25 NY3d 220, 224-225; Matter of Shau Chung Hu v Lowbet Realty Corp., 161 AD3d 986). A statute of limitations “does not make an agreement that was void at its inception valid by the mere passage of time” (Riverside Syndicate, Inc. v Munroe, 10 NY3d 18, 24).
Estoppel and Laches
Similarly, the Second Department rejected the defense of laches and estoppel. These doctrines are very rarely effective in displacing any actual limitations period, especially when there is no time limitation, as applied to forged deeds. The Court found the defendants could not satisfy the elements of these doctrines (at least not as a matter of law at the pleadings stage of the case):
The Supreme Court properly determined that the complaint was not subject to dismissal on the grounds of laches and equitable estoppel. Laches operates as a bar in a court of equity when there has been considerable delay in bringing a claim, resulting in prejudice to the opposing party (see Matter of Schulz v State of New York, 81 NY2d 336, 348). Laches requires “(1) conduct by an offending party giving rise to the situation complained of, (2) delay by the complainant in asserting his or her claim for relief despite the opportunity to do so, (3) lack of knowledge or notice on the part of the offending party that the complainant would assert his or her claim for relief, and (4) injury or prejudice to the offending party in the event that relief is accorded the complainant” (Stein v Doukas, 98 AD3d 1026, 1028 [internal quotation marks omitted]). Laches does not apply unless the facts establish equitable estoppel, which applies when a property owner inexcusably delays in asserting a claim to the property, knowing that the opposing party has changed their position to their irreversible detriment (see Bank of Am., N.A. v 414 Midland Ave. Assoc., LLC, 78 AD3d 746, 750).
Here, the defendants failed to show that the plaintiff inexcusably delayed in asserting the allegation that the deed was forged. The allegation was, in fact, raised in a prior action commenced in 2008 and transferred to the Civil Court, which did not have jurisdiction over the cause of action pursuant to RPAPL article 15 (see NY City Civ Ct Act § 203[h], [i]). The defendants also failed to establish that they changed their position to their irreversible detriment simply by defending themselves in the action in Civil Court (cf. Wilds v Heckstall, 93 AD3d 661).
Furthermore, in alleging that the defendants forged the 1998 deed and improperly retained the 2007 sale proceeds, the plaintiff has alleged that the defendants have unclean hands. The equitable defense of laches is not available to a party with unclean hands (see Karan v Hoskins, 22 AD3d 638).
Certification by Notary
Next, the Second Department pointed out that the acknowledgment of the signature on the deed by a notary and the CPLR 4538 presumption did not bar the complaint as a matter of law; it merely gave rise to a rebuttable presumption that did not irrefutably negate the cause of action, as required to dismiss a complaint based upon documentary evidence:
The Supreme Court also properly determined that the complaint was not subject to dismissal pursuant to CPLR 3211(a)(1). A cause of action may be dismissed pursuant to CPLR 3211(a)(1) only if documentary evidence utterly refutes the underlying allegations and conclusively establishes a defense as a matter of law (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Shah v Mitra, 171 AD3d 971). While the defendants correctly contend that the 1998 deed qualifies as documentary evidence (see JPMorgan Chase Bank, N.A. v Klein, 178 AD3d 788), the 1998 deed does not utterly refute the plaintiff’s allegations and conclusively dispose of the plaintiff’s causes of action as a matter of law. Although the 1998 deed contains a notary’s acknowledgment and CPLR 4538 provides that “[c]ertification of the acknowledgment . . . in the manner prescribed by law for taking and certifying the acknowledgment or proof of a conveyance of real property within the state is prima facie evidence that it was executed by the person who purported to do so,” the notary’s acknowledgment alone does not utterly refute the allegation that the 1998 deed was forged. Rather, it merely raises a presumption of due execution (see Osborne v Zornberg, 16 AD3d 643).
Commentary
Unlike a claim of fraudulent inducement, where a party does actually sign a deed, but does so by being tricked into it, where the signature on the deed is actually forged, far-reaching legal consequences result. In the case of an actual forgery, the deed is deemed never to have existed at all. As a result, there is no time limitation or statute of limitation to bringing a lawsuit to void the deed. Also, anyone who acquires any interests in the real property, whether title owners or mortgagees, cannot claim rights as bona fide purchasers or lenders, as they never in fact secured those interests. In the Simmons case, both the lower court and Second Department rejected a host of attempted defenses to dispense with the lawsuit at the pleadings stage, thereby allowing the plaintiff to establish his case of forgery.