Committing Fraud - Statute of Limitations, California Civil Jury Instructions

In California, the legal system imposes time limitations on filing lawsuits, known as statutes of limitations. These limitations vary depending on the type of claim or offense involved, ensuring that lawsuits are initiated within a reasonable period after the alleged incident. This article delves into the statute of limitations for fraud in California, shedding light on the delayed discovery rule.

Statute of Limitations Period for Fraud in California

The statute of limitations for fraud in California is outlined in the California Code of Civil Procedure Section 338(d) and is set at three years. This means that a plaintiff must file a fraud lawsuit within three years from the date they discovered or should have discovered the actual fraud or within three years from the date the fraud should have been discovered. However, there are certain important considerations and exceptions to be aware of:

The Delayed Discovery Rule

In some cases, victims of fraud may not immediately discover the fraudulent act or its consequences. In order to account for such situations, California recognizes the delayed discovery or delayed accrual rule. According to this rule, the statute of limitations begins to run when a reasonably prudent person either knew or should have known about the facts that would have led a reasonable person to suspect fraud.

The delayed discovery rule allows victims to initiate legal action within a reasonable period after the fraud is discovered rather than being restricted by a rigid timeframe, and it can be used in nearly all confidential or fiduciary relationships.

However, it's important to note that proving delayed discovery isn't always as straightforward as it might seem and is subject to court interpretation of the facts constituting each case.

Reasonable Diligence

This concept plays a vital role in determining when the statute of limitations begins and whether it can be used as an affirmative defense or not. California courts assess whether the plaintiff exercised reasonable diligence in uncovering the fraud. If the plaintiff had sufficient information available to prompt further investigation, the statute of limitations may start even if the plaintiff did not have actual knowledge of the fraud.

Exceptions

Although the general statute of limitations for fraud is three years, some exceptions can impact the time limit for this civil procedure. Notable exceptions include:

False Claims Act

Under the California False Claims Act, which addresses fraud against the government, the statute of limitations is 6 years from the date of the violation, or 3 years from the date the responsible government official discovered or should have discovered the violation, whichever is later. In no case can the lawsuit be filed more than 10 years after the violation (Government Code 12654). This allows the government more time to uncover and pursue cases involving fraud against public funds.

Tolling of the Statute of Limitations

In certain situations, the statute of limitations could be tolled or paused, effectively extending the time limit. Examples of circumstances that can lead to tolling include the defendant's absence from the state, the plaintiff's mental incapacity, or the plaintiff being a minor when the fraud occurred. Tolling provisions are intended to ensure fairness and prevent defendants from escaping liability due to circumstances beyond the plaintiff's control.

Final Thoughts

Understanding the statute of limitations for fraud is essential for individuals seeking legal recourse in California. Goss Law also has more information on property damage statute of limitations California.

Goss Law is a criminal defense practice and does not handle civil fraud lawsuits. If you are under investigation for or charged with a fraud crime, a criminal defense lawyer in Sacramento like attorney Blair Goss can help you understand the charge and your options.