Dorothy M. Faison v. Tonya Lewis
10 N.Y.S.3d 185, 32 N.E.3d 400, 25 N.Y.3d 220 (2015)
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Rule of Law:
An action to set aside a transfer of real property based on a forged deed is not subject to a statute of limitations defense because a forged deed is void ab initio, a legal nullity at its inception, which cannot be validated by the passage of time.
Facts:
- Percy Lee Gogins, Jr. and his sister, Dorothy Lewis, inherited a three-family house in Brooklyn as tenants in common.
- In May 2000, Lewis conveyed her half-interest in the property to her daughter, Tonya Lewis.
- In February 2001, Tonya Lewis recorded a 'corrected deed' dated December 14, 2000, which purported to also convey Gogins's half-interest to her, making her the sole owner.
- Plaintiff Dorothy Faison, Gogins's daughter, alleges that her father's signature on this corrected deed was a forgery.
- Percy Lee Gogins, Jr. died in March 2001.
- In December 2009, Tonya Lewis obtained a loan for $269,332 from defendant Bank of America (BOA), securing it with a mortgage on the property.
Procedural Posture:
- In September 2002, Dorothy Faison sued Lewis and Tonya in Supreme Court (trial court), but the complaint was dismissed in 2003 because Faison lacked capacity to sue.
- In July 2010, the Surrogate's Court appointed Faison as the administrator of her father's estate.
- In August 2010, Faison, as administrator, commenced the current action in Supreme Court against Lewis, Tonya, Bank of America (BOA), and MERS.
- BOA filed a motion to dismiss the complaint against it as time-barred under the six-year statute of limitations for fraud, CPLR 213(8).
- The Supreme Court granted BOA's motion and dismissed the complaint against it as time-barred.
- Faison (appellant) appealed to the Appellate Division (intermediate appellate court), which affirmed the Supreme Court's dismissal of the claim against BOA (appellee).
- The Court of Appeals (highest court) granted Faison leave to appeal the Appellate Division's order regarding BOA.
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Issue:
Does the six-year statute of limitations for fraud claims under CPLR 213(8) bar an action to set aside and cancel a deed and a subsequent mortgage based on the allegation that the deed was forged?
Opinions:
Majority - Rivera, J.
No, the six-year statute of limitations for fraud does not bar an action to set aside a forged deed and a subsequent mortgage. A claim challenging a conveyance based on a forged deed is not subject to a statute of limitations defense because a forged deed is void ab initio, a legal nullity from its inception. The court reasoned that there is a fundamental distinction between a forged deed, which is void, and a deed obtained through fraudulent inducement, which is merely voidable. A void deed can never convey title, and no one can become a bona fide purchaser by relying on it. Citing its precedent in Riverside Syndicate, Inc. v. Munroe, the court affirmed the principle that a statute of limitations 'does not make an agreement that was void at its inception valid by the mere passage of time.' Therefore, allowing a statute of limitations to validate a forged deed would undermine the stability of the real property system and contradict over a century of established law.
Dissenting - Lippman, Ch. J.
Yes, the action should be barred by the six-year statute of limitations for fraud. Forgery is a type of fraud, and it is logical to apply the fraud statute of limitations (CPLR 213(8)), which includes a two-year discovery window, providing a reasonable opportunity for plaintiffs to assert claims. The majority's rule, which creates no time limit whatsoever, endangers the stability of real property transactions by allowing a deed to be challenged indefinitely, harming innocent purchasers and lenders who rely on the chain of title. The precedents cited by the majority are distinguishable, as Marden was not a statute of limitations case and Riverside involved an illegal contract with different public policy implications. The dissent argues that statutes of limitation are essential for providing repose and protecting defendants from stale claims where evidence may have deteriorated, and there is no compelling reason to exempt forgery claims from this principle.
Analysis:
This decision solidifies a critical distinction in New York property law between void and voidable deeds, establishing a bright-line rule that a claim to nullify a forged deed is entirely exempt from any statute of limitations. The ruling prioritizes the rights of the true property owner over the finality and repose typically afforded by limitation periods, even at the expense of subsequent bona fide purchasers or encumbrancers like mortgage lenders. This creates a significant, potentially perpetual risk for lenders and title insurers, as title can be invalidated decades later if a forgery is discovered. The case reinforces the concept that a document that is a legal nullity from inception cannot be legitimized by the mere passage of time.
