Here we go again … A new decision of the New York, Appellate Division, Second Department, covers an old theme, and, unsurprisingly, with familiar results (Dodobayeva v Rubinoff, 2025 NY Slip Op 05219 (2d Dep’t Decided Oct. 1, 2025). As I have explained in detail in many of my commentaries, courts are just not going to give much slack to those trying to avoid the consequences of legal documents that they admittedly signed, but neither read nor would have understood if read. It is frankly remarkable that these situations still find themselves in court, and at the appellate court stage at that.
The Basic Legal Principles of “Fraud in the Factum”
There are various ways to challenge the legal effect of transactional documents, and there are consequences that flow from these varying contexts. In certain situations, depending on the nature of the fraud asserted, the documents could be deemed by the courts never to have existed (“void”) or deemed ineffective or rescinded when appropriately challenged (“voidable”).
As I have explained in “Void or Voidable” in Fraud, Visited Again:
Forgeries Equal Void Transactions
As it relates to fraud, a document that contains a forged signature of the party who appears to have signed the document is simply not valid at all from the inception (the courts use the Latin phase “void ab initio”). In law, such a document is deemed never to have existed legally since the person who is claimed to have signed it and agreed to whatever is stated in it did not actually sign it and never intended to do so. That is the nature of the forgery. The legal consequence of the forgery is the utter non-existence of the thing forged. As the cases show, this actually happens rather frequently, unfortunately, with respect to deeds to real property. Someone forges the signature of the owner of the real property on a deed purporting to convey the real property to another. If the true owner did not sign that deed, the signature was forged by another, and the owner was unaware and did not consent or give authority to sign that deed, then the deed is simply deemed never to have existed. Anything that happens thereafter based upon that forged deed (such as imposing mortgages on the real property after the void conveyance) is not legally valid. That is the context of a “void” document or transaction.
Fraudulent Inducement
On the other hand, if the person whose signature is on the document really did sign it, the legal analysis is different. If that person was induced to sign that document by relying on false representations of a material nature (but did actually know he or she was signing the document), that is generally known as “fraudulent inducement.” That is a traditional fraud claim. Under those circumstances, the document in question is deemed “voidable.” It is not considered to be non-existent for all purposes and from the outset. The courts in those circumstances consider a host of factors whether to invalidate the document or transaction.
Fraud in the Factum
There is a nuance on this aspect of the “void” concept where the signature on the document is not actually forged and the person really did sign the document. There is a a doctrine known as “fraud in the factum.” That refers to situations where the signer did actually sign the document, but based upon some sort of false information conveyed, the signer thought he or she was signing something different. If that is truly proved, then the document would be “void” as well. However, as I explained in my post, this doctrine should have little support in the modern era since it is universally-recognized that those who sign documents are deemed to have read and understood the contents, and they cannot later claim they did not know what was in the document they signed (as they have a duty to read it or at least seek adequate assistance to know what they are signing). I have written about this duty to read what one signs as it relates to attempted claims of fraud.
As I further observed in Fraud Claims Barred by Signed Contracts Even if Not Read or Even Understood:
The courts do not have much patience for parties who enter into contracts and then claim that they should not be bound by the agreement they admittedly signed but allegedly did not read or understand. If you sign the contract, you are bound by it, because you have a duty to read and understand the contract before you sign it. This is essential to preserve the integrity of agreements and the law of contracts.
Second Department Reinforces the Courts’ Disdain
In the Dodobayeva case, as explained below, there were really two recognized barriers to the attempted claims of fraud: One, the underlying factual basis of the claim of fraud in the factum was foundationally flawed. Two, the statute of limitations had expired. Result: the plaintiff was stopped in her tracks from avoiding the deed she signed.
The plaintiff in Dodobayeva signed documents in 2013—including a quitclaim deed—that transferred her one-half interest in real property to her daughter-in-law, Rubinoff. Plaintiff claimed she believed she was simply helping her son become an owner of the home, not realizing that the paperwork made Rubinoff the sole owner.
Plaintiff claimed that she only learned for the first time in January 2020 that Rubinoff had become the sole owner of the property, and brought suit in February 2020 (after her son and his wife were getting divorced) to rescind the conveyance. Plaintiff alleged, among other things, that she was fraudulently induced into effectuating the conveyance of the premises. Plaintiff, a native of Uzbekistan, claimed that her limited English skills prevented her from understanding the documents she signed. She asserted that she relied on Rubinoff’s representations and did not read or inquire about the contents of the paperwork at the time.
Rubinoff moved to dismiss the fraud claim, arguing that it was barred by the statute of limitations and failed to state a valid cause of action.
Significantly, plaintiff submitted an affidavit that actually explicitly admitted: “I did not read the documents presented to me but did in fact sign them. I would not have understood the documents even if I had tried to read them. I simply trusted that my daughter-law, with whom I had a good relationship, was being truthful and acting in an honest manner.” She also acknowledged that she had not discussed the transaction with her son until 2020.
The Supreme Court granted Rubinoff’s motion, dismissing the fraud claim as time-barred. On appeal, Second Department affirmed the dismissal.
While the Second Department ultimately ruled that the fraud claims were barred by the statute of limitations, it first flatly rejected the entire premise of the attempt to establish fraudulent inducement based upon the above-described disdain the courts have for such claims in these circumstances:
Here, the gravamen of the complaint is fraud in the factum, that the plaintiff was induced to sign documents without being advised of their contents (see First Natl. Bank of Odessa v Fazzari, 10 NY2d 394, 397; Countrywide Home Loans, Inc. v Gibson, 157 AD3d 853, 856). “However, a party who signs a document without any valid excuse for not having read it is conclusively bound by its terms” (Cannariato v Cannariato, 136 AD3d at 628 [alteration and internal quotation marks omitted]). “Moreover, a plaintiff is expected to exercise ordinary diligence and may not claim to have reasonably relied on a defendant’s representations or silence where he or she has means available to him or her of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation” (Lapin v Verner, 238 AD3d 1128, 1129-1130 [alterations and internal quotation marks omitted]; see Benjamin v Yeroushalmi, 178 AD3d 650, 654).
Here, the plaintiff admitted that she neither read nor inquired about the contents of the documents upon which she relies to establish the fraud before she signed them. Yet, she failed to proffer any valid excuse for her failure to do so. Under these circumstances, the plaintiff conclusively was presumed to have agreed to the terms of the documents and, accordingly, cannot establish that she lacked knowledge from which she could have discovered the alleged fraud with reasonable diligence (see Cannariato v Cannariato, 136 AD3d at 628).
Reinforcing this conclusion, the Second Department then ruled that in any event, the statute of limitations barred the claims:
“A cause of action based upon fraud must be commenced within six years from the time of the fraud, or within two years from the time the fraud was discovered, or with reasonable diligence could have been discovered, whichever is longer” (York v York, 235 AD3d 1032, 1033 [internal quotation marks omitted]; see CPLR 203[g]; 213[8]; Sargiss v Magarelli, 12 NY3d 527, 532). “‘Where[, as here,] a plaintiff relies upon the two-year discovery exception to the six-year limitations period, the burden of establishing that the fraud could not have been discovered prior to the two-year period before the commencement of the action rests on the plaintiff who seeks the benefit of the exception'” (York v York, 235 AD3d at 1033, quoting Cannariato v Cannariato, 136 AD3d 627, 627). Although, “‘[o]rdinarily, an inquiry into when a plaintiff should have discovered an alleged fraud presents a mixed question of law and fact'” (Gormley v Marist Bros. of the Schs., Province of the United States of Am., 236 AD3d 868, 870, quoting Vilsack v Meyer, 96 AD3d at 828; see Trepuk v Frank, 44 NY2d 723, 724-725), “summary dismissal is appropriate where it conclusively appears that the plaintiff has knowledge of facts which should have caused [him or] her to inquire and discover the alleged fraud” (Cannariato v Cannariato, 136 AD3d at 628 [internal quotation marks omitted]). “Thus, although ‘mere suspicion’ will not substitute for knowledge of the fraudulent act” (id., quoting Erbe v Lincoln Rochester Trust Co., 3 NY2d 321, 326), a plaintiff may not “shut his [or her] eyes to facts which call for investigation” (Saphir Intl., SA v UBS PaineWebber Inc., 25 AD3d 315, 316, quoting Schmidt v McKay, 555 F2d 30, 37 [2d Cir]; see Shannon v Gordon, 249 AD2d 291, 292).
The Second Department then concluded:
Since Rubinoff met her prima facie burden of demonstrating that the cause of action alleging fraud accrued no later than the date of the execution of the quitclaim deed in February 2013, rendering that cause of action, which was asserted more than six years later, time-barred, the plaintiff was required to establish that the fraud could not have been discovered before the two-year period prior to the commencement of this action, and she did not do so. Accordingly, the Supreme Court properly granted dismissal of the cause of action alleging fraud insofar as asserted against Rubinoff as time-barred.
Commentary
As I have often observed, courts will rarely entertain the “fraud in the factum” theory of fraud when the challenged legal document was executed without even reading it or making any true attempt to learn the content and/or effect of the document. If legal documents could be disregarded under these circumstances, it would truly turn the legal effect of serious transactions on its head. This could apply to situations not only where the signer claims to have inadequate understanding of the language of the document, but also where there is simply no effort to read or understand the document being signed. This often happens in complex transactions, but in those circumstances, care must be taken to get proper legal advice as to the nature of the transactional documents being signed.