Fraudulent Deed Transfers

With the proliferation of cases involving fraudulent Deed transfers in the news these days, we wanted to bring your attention to a 2nd Department case where a defrauded Plaintiff was successful in having such a Deed set aside by Court Order. The relevant facts and a link to the case are set forth below but, from a strategic standpoint, it is important to note that the Plaintiff’s Complaint included a Cause of Action to Quiet Title which is governed by a ten (10) year Statute of Limitations as opposed to just a fraud claim which would have been subject to a six (6) year Statute of Limitations.

In 2011, an attorney (since suspended from the practice of law and indicted for defrauding homeowners in financial distress who signed over their properties to him) paid the Defendant $8,000 to induce him to convey his home to the Defendant. The Plaintiff was told that the funds would be applied to assist the Plaintiff and his family in relocating and to relieve the Plaintiff of the indebtedness secured by mortgage being foreclosed. The Plaintiff, an immigrant who claimed he had little understanding of English, and his family were then evicted by the Defendant and the mortgages were not satisfied. The Plaintiff, claiming unjust enrichment, sought to quiet title under RPAPL Article 15, to obtain a declaratory judgment that the deed transfer was void.

The Supreme Court, Kings County, granted the Plaintiff’s motion for summary judgment as to the causes of action for a declaratory judgment and to quiet title. The Court held that the deed was null and void and held that the Plaintiff was the rightful owner of the property. The City Register’s office, on service on it of the Court’s Order and Judgment with notice of entry was directed to cancel the deed and note the Judgment on the real estate records. An action to quiet title, the Court noted, is governed by a ten-year statute of limitations under CPLR Section 212(a) (“Actions to be commenced within ten years”). Guliyev v. Shore Parkway Investors Corp. 2021 NY Slip Op 32124, decided October 29, 2021, is posted at https://www.nycourts.gov/reporter/pdfs/2021/2021_32124.pdf

This case is a reminder of the need for you and your clients to be vigilant and guard against schemes being perpetrated on vulnerable individuals who are faced with increasing mortgage debt on their properties. You may also be able to use some of the Pleadings in this matter as a guideline to litigating a case if you happen to represent a client in a similar situation.