Plaintiff, the holder of a tenant in common interest in property in Brooklyn, claimed that her signature on a deed to the property recorded in 1986 was forged. She sought an Order declaring the deed null and void. The Defendants claimed that the Action was barred by the statute of limitations. Under Civil Practice Law and Rules Section 213(8) ("Actions to be commenced within six years"), "the time within which [an action based on fraud] must be commenced shall be the greater of six years from the date the cause of action accrued or two years from the time the plaintiff...discovered the fraud, or could with reasonable diligence have discovered it." The Defendants argued that the Plaintiff could have discovered the alleged fraud by examining the records of recorded deeds, and therefore the two year limitations period, in addition to the six year period, had expired. The Supreme Court, Kings County, held that the Action was brought within the two year statute of limitations and denied the Defendants' motion for summary judgment. The Defendants "presented no evidence that [the Plaintiff] was aware of any suspicious activity that would have alerted her to the occurrence of any possible fraud until 2008," and "the mere recording of a deed...[is] insufficient to alert a reasonably diligent person of a possible fraudulent transfer."
The Court noted that New York City implemented a program in 2011 enabling a property owner to be notified when a document is recorded against his or her property. According to the Court, "[i]f the allegedly fraudulent deed had been recorded after this new system had been established, this Court would be more willing to hold that recording a deed is enough to put a reasonably diligent person on notice that a fraudulent transfer has occurred." Budhu v. Budhu, decided August 23, 2011, is reported at 2011 WL 375910.