Opinion
4001/A - 2013
04-22-2015
In the Matter of Victoria Rattiner as Administrator of the Estate of Nympha Kentouris, a/k/a Nympha B. Kentouris, a/k/a Nympha Beckos, Deceased, For Removal of Restrictions Regarding the Sale of Real Property.
For Petitioner: Peter Gray, Esq., Peter G. Gray, P.C. For Respondent: Alexander M. Dudelson, Esq.
For Petitioner:
Peter Gray, Esq., Peter G. Gray, P.C.
For Respondent:
Alexander M. Dudelson, Esq.
Diana A. Johnson, J.
This is a proceeding to vacate a deed. The question before the Court is the validity and effect of the deed.
The facts in the case are not in dispute. Nympha Kentouris ("Nympha") died intestate on June 14, 2006, survived by two children: Victoria Rattiner (the "petitioner") and Gregory Beckos. At her death, Nympha owned real property located at 1938 East 19th Street, Brooklyn, New York, as tenant-in-common with her mother, Beatrice Ruggiero.
Beatrice Ruggiero died on November 30, 2007, survived by her husband, John Ruggiero, and Gregory Beckos and petitioner, the issue of Beatrice Ruggiero's predeceased daughter, Nympha. Beatrice Ruggiero executed a will which left John Ruggiero a life estate in her undivided one-half interest in the property, with remainder to Gregory Beckos. The will has been filed with the Court but there is no proceeding pending in this Court to probate her will.
On June 18, 2008, Gregory Beckos, purporting to be Nympha's sole surviving heir, and John Ruggiero, purporting to be Beatrice Ruggiero's sole surviving heir, executed a deed conveying title to the property to Gregory Beckos, subject to John Ruggiero's life estate (the "2008 Deed"). The 2008 Deed reads, in pertinent part,
Gregory Beckos, as sole surviving heir of Nympha Beckos, residing at 1938 East 19th Street, Brooklyn, New York 11229 and John Ruggiero, as sole surviving heir of Beatrice Ruggiero, residing at 1938 East 19th Street, Brooklyn, New York, party of the first part, and Gregory Beckos, residing at 1938 East 19th Street, Brooklyn, New York, party of the second part, . . . . does hereby grant and release unto the party of the second part, . . . . premises commonly known as 1938 East 19th Street, Brooklyn, New York 11229 . . . subject to a life estate reserved by John Ruggiero.
The deed was recorded with the City Register on July 11, 2008. On January 8, 2013, Gregory Beckos obtained a home equity line of credit secured by a mortgage on the property. The mortgage was recorded by the City Register on February 26, 2013. John Ruggiero has since died.
On October 16, 2013, petitioner petitioned for letters of administration. Limited letters of administration were issued to her on December 11, 2013. She then brought the instant proceeding to void the 2008 Deed. She alleged that she and her brother are not only distributees of their mother Nympha, but also of their grandmother, Beatrice Ruggiero, and her husband, John Ruggiero, that the representations in the 2008 Deed that Gregory Beckos and John Ruggiero were the sole surviving heirs of Nympha and her mother Beatrice Ruggiero, respectively, were fraudulent, and that the deed is void ab initio. Petitioner further alleged that since the deed is void, so is the subsequent mortgage.
Gregory Beckos filed an answer admitting that he and his sister are distributees of their mother Nympha but denying that the 2008 Deed was fraudulent or void ab initio. He further denied that he and his sister are the sole distributees of Beatrice and John Ruggiero and alleged that, pursuant to her will, he is the sole owner of Beatrice Ruggiero's interest in the real property after John Ruggiero's death.
The parties agree that the 2008 Deed misstates Gregory Becko's status as sole "heir" of his mother, Nympha. They disagree as to the legal effect of this misstatement. Petitioner argues that the misrepresentation makes the deed void ab initio. Gregory Beckos maintains that even though the 2008 Deed cannot affect petitioner's 25% interest in the property, the 2008 Deed is effective in conveying his and John Ruggiero's interest in the property.
Discussion
The issue raised by these facts is whether the 2008 Deed is void ab initio. The effect of the invalidity of a deed depends on whether the particular defect invalidating the deed renders it absolutely null and void or merely voidable (43A NYJur2d "Deeds" §218). If a deed is void, then neither the grantee nor any subsequent grantees can acquire good title, even if bona fide purchasers (LaSalle Bank Nat. Assn. v Ally, 39 AD3d 597 [2d Dept 2007]; Karen v Hoskins, 22 AD3d 638 [2d Dept 2005]). If, on the other hand, the deed is voidable, it validly transfers the grantor's interest until set aside (Marden v Dorthy, 160 NY 39 [1899]).
"A deed based on forgery or obtained by false pretenses is void ab initio" (Cruz v. Cruz, 37 AD3d 754, 754 [2nd Dept. 2007]; see also Marden v Dorthy, 160 NY 39 [1899]; Jiles v Archer, 116 AD3d 664 (2d Dept 2014]).
In the instant case, the signatures of Gregory Beckos and John Ruggiero are not forgeries. Petitioner argues that the misrepresentation that Gregory Beckos was the sole heir of Nympha establishes that the deed was "obtained by false pretenses" and void, citing Marden v Dorthy, 160 NY 39 [1899]; Jiles v Archer, 116 AD3d 664 [2d Dept 2014]; GMAC Mtge. Corp. v Chan, 56 AD3d 521 [2d Dept 2008]; Euba v Euba, 40 AD3d 689 [2d Dept 2007]; and Karan v Hopkins, 22 AD3d 638 [2d Dept 2005]).
Gregory Beckos argues that such a result contradicts Real Property Law §245 and settled case law that a deed purporting to grant a greater interest in real property than the grantor had was still effective in transferring the interest that he did have, citing Real Property Law §245 and Thompson v Simpson (128 NY 270 [1891]). Real Property Law §245 provides, in pertinent part,
A greater estate or interest does not pass by any grant or conveyance, than the grantor possessed or could lawfully convey, at the time of the delivery of the deed, except that every grant is conclusive against the grantor and his heirs claiming from him by descent, and compared with a subsequent purchaser or incumbrance from such grantors, or from such heirs claiming as such, other than a subsequent purchaser or incumbrance in good faith and for a valuable consideration, who acquires a superior title by a conveyance that has been first duly recorded (emphasis added).
In Thompson v Simpson (128 NY 270 [1891]), title to real estate in New York City vested in Mary Evelina Thompson upon the death of her mother and, upon her death, in her their five children, subject to a life estate of her husband, Ambrose Thompson. After Mary Evelina Thompson died, her husband married Mary Ewing. Taking advantage of the coincidence that his second wife had the same first name and initial as his first, he and his second wife executed a deed transferring the property to the Glovers.
The children sued to recover possession of the property. On a motion for a directed verdict, the trial court held that the children had accepted a substitute piece of real property in lieu of their mother's. On appeal, the Court of Appeals affirmed on the ground that the evidence was insufficient to overturn the ruling. Nonetheless, the Court of Appeals held that the deed was valid to pass the father's life estate to the Glovers (id. at 284).
[T]he Glovers acquired under the deed from Ambrose W. Thompson and his second wife only the life estate of Ambrose W. Thompson in the lot in question, and that the title in fee of his children, subject only to the life estate of the father, was unaffected by the fraud committed on his grantees. No conveyance made by the father could impair their title. (id. at 277-278).
"The title and estate which passes under a grant or conveyance, is commensurate only with that existing in the grantor, although he may undertake to convey, and the deed purports to convey a larger estate. His conveyance cannot affect interests in remainder and divest no estate except his own." (id. at 285, citing the predecessor of RPL §245).
In Lee v Wiegend (28 AD2d 560 [2d Dept 1967]), the Appellate Division, Second Department, affirmed a ruling by the Supreme Court dismissing a complaint for failure to state a cause of action. The plaintiffs alleged that they were assignees of the widow and two children of the deceased. They brought suit against defendant, a third child of the deceased, who purported to convey the fee to a third party. In affirming, the Court held that plaintiffs' had no cause of action against defendant because of the conveyance. "Although defendant, who was a tenant in common of the property, having a 1/4 interest therein, purported to convey title in fee by means of said conveyance, the deed actually conveyed only his 1/4 interest and did not divest plaintiffs' assignors of their rights in the property thereto" ( id at 561, citing RPL §245; see also Staine v Summit Place, Inc., 40 AD3d 330 [1st Dept 2007]).
Gregory Beckos' position would seem compelling if it were not for the recent decision of the Appellate Division, Second Department, in Cruz v Cruz ( 37 AD3d 754 [2d Dept 2007]), a case squarely on point. In Cruz, the decedent died intestate, survived by six children. Included in his estate was a piece of real property. One of the children executed a deed conveying the entire interest in the property to himself as the sole heir. He then obtained a loan secured by a mortgage and subsequently died.
The other children brought an action to rescind the deed and mortgage, which was granted. On appeal, Appellate Division, Second Department affirmed the trial court's rescission of the deed and mortgage, stating that the Supreme Court "correctly cancelled the deed and mortgage which were obtained under false pretenses. Under these circumstances, [the mortgagee's] only recourse is to file a claim against the estate of [the deceased child]." (id. At 754, citations omitted).
Although the Appellate Division in Cruz v Cruz did not discuss the effect of RPL §245, the facts of that case are the same as in the instant case. Trial courts such as the Surrogate's Court, within the Second Department must follow an Appellate Division precedent in its own Department (2 NY Jur 2d, Courts and Judges §213; see Matter of Winbaum, 51 Misc 2d 538, 539 [Sur Ct, Nassau County 1966]). Moreover, the holding of the court in Cruz v Cruz, has been cited with approval in more than two dozen cases since its decision. While most of the cases involved forged deeds, the Appellate Division, Second Department, recently applied its holding in Cruz v Cruz in Matter of Deans (68 AD3d 767 [2d Dept 2009], lv to appeal denied 14 NY3d 704 [2010]).
In Deans, the court was faced with a deed to real property that was owned by three parties, the decedent Livingston Deans, his father and his future wife. Livingston Deans, his father Byron and Sharon Stephenson had purchased commercial property in Queens as tenants-in-common in 1991. Livingston Deans subsequently married Sharon and died in 2001, survived by Sharon, an adult child and a minor child of a prior marriage. Letters of administration were issued to Sharon and her attorney. Sharon executed a deed in 2003 in which she forged the signature of the adult daughter, purportedly as "all the heirs at law and next of kin of Livingston M. Deans, deceased" (id at 768). She then obtained two loans, secured by mortgages, using a fraudulent document she executed with someone she represented as Byron Deans.
The Surrogate revoked her letters of administration and directed she file an accounting. She filed her accounting to which objections were filed. The objectants asked the court to rescind the deed and mortgages as the product of a fraudulent conveyance. The mortgagees appeared and defended the validity of the mortgage. After a trial, the Surrogate voided the deed and mortgages as fraudulent as based upon false pretenses and directed the County Registrar to cancel the registration of the deed and mortgage. The mortgagees appealed.
The mortgagee of one mortgage, and the title company insuring the second mortgage, appealed. In companion decisions, the Appellate Division, Second Department, affirmed that part of the holding voiding the transfer the decedent's interest, and the two mortgages insofar as it affected the estate's interest (Matter of Deans (68 AD3d 767 [2d Dept 2009], lv to appeal denied 14 NY3d 704 [2010]; Matter of Deans (68 AD3d 768 [2d Dept 2009], lv to appeal denied 14 NY3d 704 [2010]).
The Appellate Division reversed that part of the holding that rescinded the purported conveyance of Byron and Sharon's interest in the property (and the mortgages affecting those interests), on the ground that the Surrogate's Court lack of subject matter jurisdiction "to determine that the mortgage should be cancelled in its entirety where living persons owned the remaining interests in the property pursuant to the 1991 deed." (Matter of Deans, 68 AD3d 767, supra, at 768). The Court modified the decree to void the deed and mortgages to the extent of any interest held by the Deans estate (Matter of Deans, 68 AD3d 767, supra; Matter of Deans, 68 AD3d 768, supra).
In the instant case, title to the real property, as in Matter of Deans, was held by two parties. However, unlike Matter of Deans, both co-tenants have died and their estates are subject to the jurisdiction of the Surrogate's Court. As a result, the petitioner's motion to rescind the deed and mortgage does not involve a deed where living persons own interests in the real property, so that the Court has subject matter jurisdiction to determine the validity of the entire conveyance and mortgage.
As noted above, Gregory Beckos' misrepresentation that he was the sole heir of Nympha made his conveyance of his interest by the 2008 Deed(and subsequent mortgage) void (Cruz v Cruz, 37 AD3d 754, 754, supra; Matter of Deans, 68 AD3d 767, supra).
For the same reason, John Ruggiero's misrepresentation that he was the "sole surviving heir of Beatrice Ruggiero", made his conveyance of his interest by the 2008 Deed (and subsequent mortgage) void. The record shows that Beatrice Ruggiero executed a will which leaves her interest in the property to Gregory Beckos, subject to John Ruggiero's life estate. Title to real property vests in the devisee by virtue of the instrument itself, unaided by its probate (Waxson Realty Corp. v Rothschild, 255 NY 332 [1931]; Corley v McElmeel, 149 NY 228 [1896]).
Even though the will has not yet been offered for probate, it establishes, per se, that John Ruggiero was not Beatrice Ruggiero's sole surviving heir, but rather a devisee, and not even the sole devisee. Even if the will were to be denied probate, John Ruggiero would not be Beatrice Ruggiero's sole surviving heir, since petitioner and Gregory Beckos, as children of Beatrice Ruggiero's predeceased daughter Nympha, would also be Beatrice Ruggiero's heirs at law. Accordingly, John Ruggiero's purported conveyance of his interest in the real property as Beatrice Ruggiero's sole heir is void ab initio, voiding the mortgage as well.
Based on the above, the petition to rescind the deed dated June 8, 2008, and recorded on July 11, 2008, and the mortgage dated January 8, 2013, and recorded on February 26, 2013, is granted.
Settle decree.
/s/
HON. DIANA A. JOHNSON
Surrogate
Dated: April 22, 2015