As I have explained in prior posts (“Void or Voidable” in Fraud, Visited Again; More on the Void/Voidable Dichotomy in Fraud and First Department Explains Distinction Between Void and Voidable Documents and Corresponding Fraud), there are different categories of “fraud” that have different consequences as applied to challenged deeds and other legal documents. Concisely stated, a document existing by virtue of a forged signature doesn’t exist at all (“void”); a document signed under false pretenses (i.e., being advised and thinking that it was something else), also is deemed not to exist; and a document known to be what it says it is but signed as a result of false representations, can still exist and be enforceable if not properly and timely challenged (“voidable”).
A new decision of the Appellate Division, Third Department (DiCenzo v Mone, 2025 NY Slip Op 02383 (Decided April 24, 2025)) thoroughly and precisely laid out these concepts in analytically applying them to the facts presented. It is an informative and well-crafted decision worthy of reading.
DiCenzo Factual Foundation
While there were two underlying lawsuits relevant to the appeal in DiCenzo, what the Third Department described as “action No. 2” is the one pertinent to this discussion. Plaintiffs claimed to have an interest in an entity (Allen Drive Realty Inc. (hereinafter “Allen Drive”)) that owned real property. Plaintiffs sought to challenge the transfer of the real property to another entity by virtue of a deed that plaintiffs claimed was the result of a “forgery.” The “forgery,” however, was not as straightforward as plaintiffs posited. That is, what actually happened was that the deed was signed by an individual as president of a company named “Allen Drive Apartments, Inc.,” which plaintiffs alleged was a fictitious company and lacked authority for the conveyance. Accordingly, plaintiffs asserted that the deed was “forged,” and therefore the deed and mortgage on the property were null and void.
The case actually turned not on whether there was actionable fraud involved in the transaction but whether plaintiffs brought the claims in a timely manner under the applicable statute of limitations. The type of fraud that was allegedly involved was critical to the ultimate disposition of the case because forged signatures on deeds result in the deed being void, i.e., as though it never existed, and therefore, there is no statute of limitation over actions to challenge such deeds. But claims of fraudulent inducement are subject to the six-years-from-the-fraud or two years from discovery periods contained in CPLR 213(8).
Thus, the Third Department focused on precisely what type of fraud was alleged and the consequences of each type of species of fraud.
Void, Voidable and the Statute of Limitations
The Third Department started its analysis by nicely framing the issue, as follows:
This aspect of plaintiffs’ appeal turns upon whether plaintiffs have properly alleged a claim for forgery, which implicates whether or not the cause of action is subject to a statute of limitations. “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 the title holder’s actual signature reflects ‘the assent of the will to the use of the paper or the transfer,’ although it is assent ‘induced by fraud, mistake or misplaced confidence’ ” (Faison v Lewis, 25 NY3d 220, 224-225 [2015], quoting Marden v Dorthy, 160 NY 39, 50 [1899]). The import of the distinction is particularly relevant, as a deed “where the signature and authority for conveyance are acquired by fraudulent means” is merely voidable (Faison v Lewis, 25 NY3d at 224; see Weiss v Phillips, 157 AD3d 1, 11 [1st Dept 2017]), as opposed to a forged deed or a deed obtained by false pretenses, which is void ab initio and, in turn, “is not subject to a statutory time bar” (Faison v Lewis, 25 NY3d at 230; see Rockwell v Despart, 212 AD3d 27, 34 [3d Dept 2022], lv dismissed 40 NY3d 974 [2023]; Mazo v Mazo, 132 AD3d 1112, 1114 [3d Dept 2015]).
The Third Department then dove into what the plaintiffs were actually claiming to be the fraud—assessing what type of fraud was at issue. The Court did a really good job of pinpointing the different concepts, starting first with explaining the difference between forgeries and simply alleged lack of authority:
Plaintiffs’ complaint clearly does not allege that Michael Mone signed a name other than his own on the 2003 deed. To that end, it is well established that “one who signs his own name to a document . . . and holds himself out as that person . . . does not commit forgery” (LaSalle Bank Natl. Assn. v Ally, 39 AD3d 597, 600 [2d Dept 2007]; see Faison v Lewis, 25 NY3d at 225). Plaintiffs instead support their claims of fraud and forgery based upon the allegation that Michael Mone utilized a fictitious entity, “Allen Drive Apartments, Inc.,” which misrepresented the authenticity of the owner of the Allen Drive property. Accordingly, plaintiffs contend that Michael Mone’s lack of authority [*5]to convey the Allen Drive property establishes that the deed was obtained under false pretenses. On the assertion that the deed was a forgery, we note that “authority and authenticity are not the same thing” and one does not “commit forgery merely by exceeding the scope of authority” that he or she may have possessed (People v Cunningham, 2 NY3d 593, 599 [2004]). Whether or not Michael Mone had the authority to convey the property does not establish that he forged the deed; rather, the question distills to whether Michael Mone was the ostensible maker of the document; if so, he cannot have forged the deed (see People v Zeller, 122 AD3d 1081, 1082 [3d Dept 2014]). To that end, when an individual signs a name to an instrument and acknowledges it as his or her own, that person is the ostensible maker (see People v Briggins, 50 NY2d 302, 307 [1980]; see also Richard Greenberg, New York Criminal Law § 16:3 [4th ed, 6 West’s NY Prac Series, Nov. 2024 update]). Further, although Michael Mone is identified as the president of “Allen Drive Apartments, Inc.” in the deed, the parties to the transaction are Allen Drive and Kirby Road. To that end, as confirmed in plaintiffs’ complaint, Allen Drive held title to the Allen Drive property. Thus, the reference to “Allen Drive Apartments, Inc.” is relevant only to Michael Mone’s authority, not to the authenticity of the document (see Rockwell v Despart, 212 AD3d at 34; Ehlenfield v Kingsbury, 206 AD3d 1671, 1675 [4th Dept 2022]; Matter of Shau Chung Hu v Lowbet Realty Corp., 161 AD3d 986, 988 [2d Dept 2018]; see also People v Levitan, 49 NY2d 87, 91 [1980]; compare Watson v Lampkin, 214 AD3d 427, 427 [1st Dept 2023]; Selene Fin., L.P. v Jones, 203 AD3d 1191, 1194 [2d Dept 2022]).
The Third Department then explained why the allegations did not amount to “false pretenses” fraud. As an aside, the term “false pretenses” is an unfortunate descriptor because it could easily be confused with fraudulent inducement but it has very distinct elements and consequences, as explained by the Third Department:
Similarly, the allegations in plaintiffs’ pleading do not properly allege that the deed was procured under false pretenses, which encompasses the procurement of a genuine signature “by some trick or device to a piece of blank paper,” such as “a deed or other instrument subsequently written over it without [the signer’s] knowledge” (Marden v Dorthy, 160 NY at 49). In such a case, although the signature on the document is genuine, it lacks “assent of the will” (id.). Accordingly, false pretenses may be established, and an “instrument will be deemed void[,] because the signer was unaware of the nature of the instrument he or she was signing, such as where the signer is illiterate, or blind, or ignorant of the alien language of the writing, and the contents thereof are misread or misrepresented to him by the other party, or even by a stranger” (Cash v Titan Fin. Servs., Inc., 58 AD3d 785, 788 [2d Dept 2009] [internal quotation marks and citation omitted]; see Weiss v Phillips, 157 AD3d at 11). That scenario is not implicated by plaintiffs’ pleading. Rather, accepting the facts as alleged and in the light most favorable to plaintiffs, the complaint clearly asserts, and the face of the deed clearly establishes, that Michael Mone signed his own [*6]name to the deed fully aware of the implication of doing so (see Mix v Neff, 99 AD2d 180, 182-183 [3d Dept 1984]; compare Reid v Wells Fargo, N.A., 195 AD3d 647, 649 [2d Dept 2021]; Crispino v Greenpoint Mtge. Corp., 304 AD2d 608, 609 [2d Dept 2003]; Filowick v Long, 201 AD2d 893, 893 [4th Dept 1994]; see generally Robert L. Haig, Commercial Litigation in New York State Courts § 100:70 [5th ed, 4D West’s NY Prac Series, Oct. 2024 update]). Plaintiffs are further mistaken in suggesting that the deed was falsely made, as it is evident from the face of the deed that Michael Mone is both the ostensible maker and the actual maker (see People v Morehouse, 109 AD3d 1022, 1023 [3d Dept 2013]; People v Asai, 66 AD3d 1138, 1139 [3d Dept 2009]; see also Penal Law § 170.00 [4]). Thus, “[a]lthough the deed[ ] may have contained false information, [it was] not falsely made” (People v Levitan, 49 NY2d at 92; see People v Cunningham, 2 NY3d at 596). Ultimately, the crux of plaintiffs’ pleading is that Michael Mone executed the deed and conveyed the property without the proper authority, an assertion that “does not render the deed void ab initio, but, at most, voidable” (Gerlitz v Biddle, 202 AD3d 762, 764 [2d Dept 2022]; see Ehlenfield v Kingsbury, 206 AD3d at 1675; Matter of Shau Chung Hu v Lowbet Realty Corp., 161 AD3d at 988; LaSalle Bank Natl. Assn. v Ally, 39 AD3d at 600).
Based on the foregoing, the species of fraud understood as a forgery or false pretenses is not implicated and, thus, the CPLR 213 (8) six-year statute of limitations was applicable to the cause of action (see Rockwell v Despart, 212 AD3d at 36). As we have previously determined that [plaintiff] DiCenzo was aware, or should have been aware, of the transaction well outside the six-year period from when the proceeding was commenced (see 200 AD3d at 1165-1166), we find that the action was properly dismissed as time-barred.
Commentary
While the term “fraud” is often bandied about in lawsuits, as I chronicle and explain in this Blog, there are many different categories of fraud that have very different and critical legal consequences. As an example, the statute of limitations for “actual” fraud is different than the limitation for negligent misrepresentation or constructive fraud. See Courts’ Confusion Over Statute of Limitations For Negligent Misrepresentation Claims; Different Statutes of Limitations for Actual and Constructive Fraud. And as explained by the Third Department in DiCenzo, whether fraud is accomplished through a forgery, false pretenses, or from fraudulent inducement makes a big difference and could impact the time to sue and ability to bring the claim.