Keeping Current—Property offers a look at selected recent cases, literature, and legislation. The editors of Probate & Property welcome suggestions and contributions from readers.
DEEDS: Action to set aside forged deed is not subject to statute of limitations. In a 2002 sale of real property, Hancock (seller) and Kulana Partners (buyer) agreed to create an easement for the benefit of Hancock’s neighbors, but the recorded deed did not include any easement. In 2007 the neighbors successfully sued Hancock. In 2013, Hancock sued Kulana Partners and the escrow company who handled the sale in federal court, alleging that the escrow company removed the easement language from the deed after he had signed it. Hancock further alleged that he did not learn of this change until 2013. The district court dismissed Hancock’s action based on the six-year statute of limitations. Haw. Rev. Stat. §657-1(4). On appeal, the Ninth Circuit Court of Appeals vacated the judgment and ordered the district court to certify questions of law to the state supreme court. The supreme court answered three questions. First, it declared that a deed that is falsely altered with the intent to defraud is void ab initio and not subject to the statute of limitations. Second, a claim based on fraud in the inducement or constructive fraud is subject to the six-year statute of limitations. Third, a claim based on fraud in the inducement accrues when the claimant discovers or should have reasonably discovered the existence of the claim or the person liable for the claim. On the issue of whether the grantor should have discovered the claim based on the recordation of the deed, the court explained that recordation of a deed imparts notice only on those “who are bound to search the record” and that grantors are not ordinarily bound to search the public records after recordation of their deed of conveyance. Hancock v. Kulana Partners, LLC, 452 P.3d 371 (Haw. 2019).