If you call someone a fraud, you usually mean he's representing himself to be something he isn't, usually to weasel something of value from you. When you sue someone for civil fraud, it's not so different: You are asking the court for damages from someone who used deceit to deprive you of money, property or a legal right. If you want to sue someone for fraud in California, you have only three years to file suit. If the state wants to prosecute criminal fraud, it has four years to act. Both time limits start to run from the time of the discovery of the fraud.
Fraud in California
Fraud in California means deceit or intentional misrepresentation. The person must have told a deliberate falsehood in order to persuade you to act in a certain way or to refrain from doing something. If you were persuaded by the deceit and lost money, property or legal rights because of it, it is fraud.
In California, fraud is both a civil wrong and a criminal offense. That means that the victim of a fraud can sue for money damages to compensate for resulting losses, and the district attorney can prosecute the person and send them to jail. But look out for the statute of limitations.
Read More: California Law: Insurance Fraud
Statute of Limitations in California for Civil Fraud
The right to sue someone is not open-ended in California. Like every other state, California has a set of comprehensive laws setting out the timeframe during which you can sue for different types of cases. For example, if you want to sue someone for destroying your car in a vehicle accident, you have to file a complaint in court within three years from the day of the accident. That three-year period is the statute of limitations for property loss.
The statute of limitations in California for civil fraud is also three years. That means you have three years to sue to recover your damages. The same statute of limitations applies to all of the different kinds of civil fraud. There is no separate statute of limitations for insurance fraud in California, for example. All civil actions brought for fraud must be brought within three years.
Delayed Discovery in Fraud Cases
But there is a special element to fraud that makes a limitations period a little tricky: What if you learn about it late? In the car accident example, there is no ambiguity. You are aware of the car accident the moment it happens, so it's not hard to figure out immediately when the statute of limitations will run.
With fraud, things are not as clear. Fraud involves an intentional misrepresentation that you believe to be true. And you may not learn that the statements were false on that day or even three years later. How can you sue to recover your damages even before you discover the fraud?
You can't, is the short answer. That's why the three-year statute for fraud doesn't start to run from the time of the misrepresentation itself, but from when you actually discover that the statements were false or, with reasonable diligence, should have discovered that they were false. Once you discover a fraud, it's time to talk to an attorney.
Criminal Fraud Statute of Limitations
In California, there are numerous criminal offenses in which intent to defraud is an element, such as insurance fraud, check fraud, embezzlement and forgery. Under California's Penal Code Section 803(c), the statute of limitations for any of these crimes is four years from the date of discovery by the victim or law enforcement.
There is no separate statute of limitations in California for insurance fraud, welfare fraud or any of the fraud offenses. All can be prosecuted up until four years from the time the deceit was discovered.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.