Opinion
14875-10.
Decided March 8, 2011.
Steven J. Baum, PC, Attys. For Plaintiff, Amherst, NY.
DOUGLAS R. ROTHKOPF, ESQ., Atty. For Def. Bette Kalpakis, Garden City, NY.
DONALD PEARCE, ESQ., Atty. For L. Rousseas, B. M., Kalpakis, New York, NY.
Upon the following papers numbered 1 to 12 read on this motion by non-parties for leave to intervene; Notice of Motion/Order to Show Cause and supporting papers 1 — 4; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 5-6; Replying Affidavits and supporting papers 7-8; Other 9-10 (memorandum); 11-12 (memorandum);; (and after hearing counsel in support and opposed to the motion) it is,
ORDERED that this motion (#003) by three proposed intervenors, Lythia A. Rousseas, Barbara M. Kalpakis and Mark G. Kalpakis, for leave to intervene in this foreclosure action is considered under CPLR 1012 and 1013 and is granted; and it is further
ORDERED that a preliminary conference is scheduled for May 3, 2011, at 9:30 a.m. in Part 33, at the courthouse located at 1 Court Street — Annex, Riverhead, New York.
The plaintiff commenced this action to foreclose a mortgage given by defendant, Bette Kalpakis, to the plaintiff/predecessor-in-interest on November 14, 2007 on premises located in Huntington, New York. The mortgagor/defendant, Bette Kalpakis, claimed title to the subject premises under a deed dated March 12, 2003 from one, George Kalpakis, the father of the three movants, seeking leave to intervene. The movants have adduced documentary proof that George Kalpakis, the purported grantor under deed dated March 12, 2003, was deceased at the time of the purported conveyance and was so for nearly eight years, as he died on July 2, 1995.
The movants further claim that George Kalpakis died intestate and that they, together with their other sibling, James Kalpakis, were vested with title to the subject premises by operation of law on July 2, 1995, when their father, George Kalpakis, passed away. Additionally, the movants claim that the defendant/mortgagor, Bette Kalpakis, was, at the time of both the conveyance and the subsequent mortgage loan, the wife of their sibling, James, and that he forged the signature of George Kalpakis to the March 12, 2003 deed, by which the premises were purportedly conveyed to defendant, Bette Kalpakis. The movants further allege, that rather than fulfil his promises to the movants to settle the intestate estate of their father, their brother James, then an attorney-at-law, engaged in various acts of fraud and deception, by which the assets of the estate of George Kalpakis became titled in the name of James and/or his wife, Bette. Several parcels of real property were later encumbered by mortgages given by James and/or Bette, the proceeds of which, were delivered to and used solely by James and his wife, defendant, Bette Kalpakis.
By this motion, the movants, Lythia A. Rousseas, Barbara M. Kalpakis and Mark G. Kalpakis, seek leave to intervene in the mortgage foreclosure action. Upon the granting of such leave and the filing of a formal answer to the complaint served, which is inexplicably not available from either the court's file or from plaintiff's counsel, the movants intend to oppose the plaintiff's demands for relief by the assertion of purportedly bona fide defenses. The movants further intend to establish, as of record, their paramount title to and ownership interests in the subject premises by their assertion of counterclaims to quiet the title pursuant to RPAPL § 1501 et seq.
The plaintiff opposes the instant motion. Its opposition rests singularly upon claims that the statute of limitations applicable to fraud claims set forth in CPLR 213(8) has run. According to the plaintiff, this time bar precludes the movants' prosecution of their proposed affirmative defenses and their counterclaims for a judgment quieting their title. For the reasons set forth below, the court rejects these contentions and grants the instant motion for leave to intervene.
It is well settled law that if a document purportedly conveying or encumbering property is void, the conveyance or encumbrance is a nullity and neither the grantee nor those subsequent in the chain of title or encumbrances, including bona fide purchasers or encumbrancers for value within the contemplation of RPL § 291 or § 266, gain anything of value from the void transaction ( see Marden v Dorothy , 160 NY 39; First Natl. Bank of Nevada v Williams , 74 AD3d 740 [2d Dept 2010]; Johnson v Melnikoff , 65 AD3d 519 [2d Dept 2009]; GMAC Mtge. Corp. v Chan , 56 AD3d 521 [2d Dept 2008]; Public Admin. of Kings County v Samerson , 298 AD2d 512 [2d Dept 2002]). It is equally well settled that deeds and encumbrances that are forged or executed under false pretenses are the result of fraud in the factum (a/k/a fraud in the execution) and are void ab initio ( see Marden v Dorothy , 160 NY 39, supra; GMAC Mtge. Corp. v Chan , 56 AD3d 521, supra; Cruz v Cruz , 37 AD3d 754 [2d Dept 2007]). Persons claiming superior title to premises may possess viable defenses to a mortgage foreclosure action instituted against a mortgagor whose title to the mortgaged premises was derived from a forged deed or otherwise void transaction ( see Wargo v Jean , 77 AD3d 919 [2d Dept 2010]; GMAC Mtge. Corp. v Chan , 56 AD3d 521, supra).
In contrast, fraudulently induced deeds and other documents are voidable, not void ( see Marden v Dorothy , 160 NY 39, supra; Dalessio v Kressler , 6 AD3d 57 [2d Dept 2004]; Yin Wu v Wu , 288 AD2d 104 [2d Dept 2001]). Claims resting on the voidability of fraudulently induced deeds are dependent upon the establishment of the elements of claims for fraud in the inducement and the specialized pleading requirements that attach thereto ( see CPLR 3016; Cash v Tital Fin. Serv., Inc. 58 AD3d 785 [2d Dept 2009]; Dalessio v Kressler , 6 AD3d 57, supra; Mix v Neff , 99 AD3d 180 [3d Dept 1984]). As in the case of void deeds, persons claiming superior title to premises that were mortgaged by one whose title was derived from a fraudulently induced deed, may possess viable defenses to an action by the mortgagee to foreclose the mortgage ( see Wargo v Jean , 77 AD3d 919, supra).
Affirmative claims for relief, such as those for damages or recision of contracts or conveyances that sound in fraud, are generally governed by the six year or two years from discovery statute of limitations prescribed by CPLR 203(g) and 213 (8). Under these statutes, the limitations period starts to run when the claimant possesses knowledge of the fraud or of facts from which the fraud could have been discovered with reasonable diligence ( see Oggioni v Oggioni , 46 AD3d 646 [2d Dept 2007]; Town of Poughkeepsie v Espie , 41 AD3d 701 [2d Dept 2007]).
In contrast, the statute of limitations governing claims to quiet title to real property that are premised upon fraudulent conveyances, are governed by a different period of limitations, or none at all, depending upon the status of the claimant. An action to quiet title by a person claiming title to real property, but not in possession thereof, must be commenced within the ten year statute of limitations prescribed by CPLR 212(a). Persons seeking to quiet the title of property, of which they are in possession, may bring their quiet title claims at any time ( see Welsch v Prevost Landowners, Inc. , 202 AD2d 803, 804-805 [3d Dept 1994]; see also Beckles v George , 2008 WL 926578 [EDNY 2008]).
Upon the death of an intestate person, title to his or her realty vests automatically, by operation of law, in his or her distributees ( see Kracker v Roll , 100 AD2d 424 [2d Dept 1984]). Such vesting occurs irrespective of any failure to appoint an administrator or to file new deeds ( Id. at 429). When George Kalpakis died intestate in July of 1995, title to the subject premises vested in his four children, the movants and their brother, James, who took such title as tenants-in-common ( see Pravoto v MEF Blders., Inc. , 217 AD2d 654 [2d Dept 1995]). Possession by any one or more of them constituted possession for the benefit of all of them under the presumption afforded to tenants-in-common under RPAPL § 541. This statutory presumption of co-possession continues until a claim of adverse possession ripens upon the expiration of ten years of exclusive occupancy by one co-tenant or when the tenant in possession ousts, by overt, and unequivocal acts, the other co-tenants ( see RPAPL § 541; Bank of America, NA v 414 Midland Ave. Assoc., LLC , 78 AD3d 746 [2d Dept 2010]). Claims to recover possession of real property, title to which devolved upon the claimant under the laws of intestacy, accrue not upon the death of the ancestor, but rather, upon acts of ouster by a co-tenant in possession ( see Pravoto v MEF Blders., Inc. , 217 AD2d 654, supra). The mere recording of a deed without any change in possession or notice to allegedly ousted co-tenants, does not constitute an ouster for claim accrual purposes ( see Bank of America, NA v 414 Midland Ave. Assoc., LLC , 78 AD3d 746 , supra; cf., Lackey v Romano , 283 AD2d 463 [2d Dept 2001]).
Contrary to the contentions of the plaintiff, the proposed defenses and counterclaims of the movants are not barred by any applicable statute of limitations. The plaintiff's reliance upon the six year/two year discovery rules set forth in CPLR 203(g) and 213(8) is misplaced. The movants seek to quiet their purported superior title to the subject premises pursuant to RPAPL § 1501. Such claims are governed by the ten year statute of limitations set forth in CPLR 212(a). They accrued, not upon the death of George Kalpakis, but at the earliest, upon the conveyance set forth in the March 12, 2003 deed to defendant Bette Kalpakis or thereafter, upon overt and unequivocal acts of ouster by James Kalpakis, who took possession within the contemplation of RPL § 541, actually or constructively by his assurances that he would "settle" the estate of George Kalpakis on behalf of himself and his siblings. If the movants succeed in establishing that the March 12, 2003 deed was forged, then the plaintiff's mortgage may be set aside as void and the movants may defeat the plaintiff's claims for foreclosure and sale ( see Wargo v Jean , 77 AD3d 919, supra; Johnson v Melnikoff , 65 AD3d 519, supra; GMAC Mtge. Corp. v Chan , 56 AD3d 521, supra;; Cruz v Cruz , 37 AD3d 754, supra). The plaintiff's claims that the leave sought by the movants on this motion to intervene should be denied because the movants' claims are time barred are thus rejected as unmeritorious.
The statutes governing intervention are set forth in CPLR Article 10. CPLR 1012 (a) (3) provides that upon a timely motion, a person is permitted to intervene as of right in an action involving title to or the disposition of property, where it is demonstrated that such person may be adversely affected by the judgment ( see Wells Fargo Bank, Natl. Assn. v McLean , 70 AD3d 676 [2d Dept 2010]; Velazquez v Decaudin , 49 AD3d 712 [2d Dept 2008]). Here, the movants demonstrated their possession of real and substantial interests in the outcome of this litigation ( see US Bank Natl. Assn. v Gestetner , 74 AD3d 1538 [2d Dept 2010]; Wells Fargo Bank, Natl. Assn. v McLean , 70 AD3d 676, supra; Greenpoint Sav. Bank v McMann Enter., Inc. , 214 AD2d 647 [2d Dept 1995]). Their motion for leave to intervene is thus granted pursuant to CPLR 1012 (a) (3).
The plaintiff is directed to forthwith supply the movants' counsel with copies of the complaint, the note and subject mortgage. The movants shall serve and file their proposed answer, counterclaims and cross claims, if any, within thirty days of receipt of the complaint.