Simmons v. Bell (2023) - And The Growing Deed Theft Problem

Ethan J. Cohen

Simmons v. Bell

On October 4, 2023, the New York Supreme Court, Appellate Division, in the Second Judicial Department, affirmed the decision of the Queens County Supreme Court in the case of Simmons v. Bell, denying the defendants’ motion to dismiss the complaint pursuant to CPLR 3211(a).^[1]

In this case, Bessie Rogers, the plaintiff’s decedent, acquired title to certain real property located in Queens in 1987. The plaintiff commenced this action, inter alia, pursuant to RPAPL Article 15 to quiet title to the aforementioned property and for a judgment declaring that a deed allegedly executed by Rogers in 1998, which gave the defendants an interest in the property, was forged and is, therefore, void.^[2]

The plaintiff also sought to recover the proceeds of a subsequent sale of the property in 2007, which the defendants allegedly took possession of and were not entitled to on account of the forged deed.^[3] However, the defendants moved pursuant to CPLR 3211(a) to dismiss the complaint on grounds that the statute of limitations to bring this type of action has expired.^[4] Yet, in an order entered June 1, 2020, the Supreme Court, among other things, denied the motion. The defendants appeal.^[5]

On appeal, the Appellate Court further denied the defendants’ motion to dismiss pursuant to CPLR 3211(a)(5) as the defendants had not met their initial burden of establishing, prima facie, that the plaintiff’s action was, in fact, time-barred.^[6] The Appellate Court came to this conclusion on the basis that the generally applicable six-year statute of limitations for fraud (see CPLR 213[8]) did not apply to this plaintiff’s cause of action because the deed was forged.^[7]

Under the substantive law, forged deeds are void at their inception and remain so thereafter.^[8] A forged deed can never convey good title, and no valid encumbrance can be made in reliance upon such a forged deed.^[9] Therefore, it is widely held that no statute of limitations can preclude a defrauded owner from suing to declare a forged deed’s invalidity.^[10]Moreover, insofar as the plaintiff sought to quiet title and recover possession of the property, the statute of limitation is 10 years from possession (see CPLR 212[a]; WPA Acquisition Corp. v. Lynch, 82 A.D.3d 1215, 920 N.Y.S.2d 223).

Here, Rogers was in possession of the property within 10 years of the commencement of this action. Accordingly, the Supreme Court properly determined that this action was not barred by the statute of limitations and rendered judgment in favor of the plaintiff and her decedent.”^[11]

The Issue of Deed Theft

In Simmons v. Bell, Bessie Rogers was a victim of deed theft.

Deed theft occurs when a wrongdoer takes the title to someone’s home without the homeowner’s knowledge or approval.^[12] Two of the most common ways scammers steal deeds are by means of (1) forgery and (2) fraud.^[13]

Forgery occurs when the scammer “fakes” the homeowner’s signature on a deed and files the deed with the county clerk.^[14] This type of deed theft is also referred to as “fraud in the factum.” Forged deeds are always void and the subsequent bona fide purchaser is never protected.

Fraud occurs when the homeowner signs the deed over to the scammer without realizing what document they are truly signing.^[15] This type of deed theft is categorized as “fraud in the inducement.”  In these situations, the homeowner often signs away the deed to the scammer under false pretenses, such as believing that the deed is actually a loan agreement.Under these circumstances, a subsequent bona fide purchaser will be protected.

Deed theft is a growing industry with tens of thousands of claims nationwide each year.^[16] However, deed theft is difficult to discover because the problem only affects a small subset of people, some of whom are not in actual possession of the property and/or are ill-equipped to investigate and/or respond to such matters. Targets are typically owners with equity in their homes (second homes, vacation homes, etc.) and owners who constantly miss important communications (tax bills, foreclosure/past-due notices, etc.) concerning their property.

As such, the groups of people most vulnerable to deed theft schemes are those who are low-income, elderly, and/or are of racial and ethnic minorities. In most instances, homeowners have the legal right to quiet title, but not without significant time and expense, resources which vulnerable community members often lack; hence the importance of deterring the issue from arising in the first place. 

Protections

If you or a loved one are concerned about becoming a victim of a deed theft ploy, there are ways to proactively protect yourselves against such attacks.

For example, you can apply for Title Insurance. Title Insurance protects the owner of the property and the mortgage lender against future claims for any unknown defects in the title of the property at the time of sale. When choosing a title insurance plan, there are two choices of policies: a lender’s policy and an owner’s policy.

A lender’s policy protects the lender’s interest, and the policy amount is typically identical to that of the loan amount. As the loan amount decreases, such as when you make mortgage payments, the amount of coverage also decreases. On the other hand, an owner’s policy protects the owner up to the full original sales price. Unlike a lender’s policy, the amount of coverage does not decline over time and remains consistent throughout ownership of the property.

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^[1] See, Simmons v. Bell, 220 A.D.3d 647, 650 (2d Dept. 2023).

^[2] Id. at 648

^[3] Id.

^[4] Id.

^[5] Id.

^[6] Id.

^[7] See, Simmons v. Bell, 220 A.D.3d 647, 650 (2d Dept. 2023).

^[8] Id.

^[9] N.Y. Civ. Prac. L. & Rules. § 213 (2022) or Alexander, Declaratory Judgment, McKinney’s Cons Laws of NY, Book 7B, N.Y. C.P.L.R. § 213. (McKinney 2022). (explaining the implications of a void deed.)

^[10] Id.

^[11] Id. at 649

^[12] Deed theft Protect Your Home, Office of the New York State Attorney General, https://ag.ny.gov/publications/deed-theft Apr. 28, 2024).

^[13] Id.

^[14] Id.

^[15] Id.

^[16] Deed fraud is on the rise — here’s how to protect your home, New York Post, https://nypost.com/2024/04/01/real-estate/deed-fraud-is-on-the-rise-heres-how-to-protect-your-home/ (Apr. 28, 2024). (discussing FBI’s 2023 Internet Crime Report showed 9,521 complaints of cyber-related real estate and rental fraud last year.)