The statute of limitations for fraud in New York is generally six years from the date a plaintiff is harmed by fraudulent conduct, or two years from the time he discovered or should have discovered the fraud. There are some exceptions to these limits.
Statute of Limitations Defined
In civil law suits, a statute of limitations is the period of time during which a plaintiff must bring suit to assert his legal claim or lose it.
If the plaintiff fails to bring suit within the prescribed time period, then the defendant can assert the statute of limitations as a defense.
The defendant typically moves to dismiss the case by filing a motion showing that the time allowed by law to bring a suit has passed. Once the judge dismisses the case, the plaintiff's legal claim is lost.
Determining the Statute of Limitations for Fraud in New York
The statute of limitations for fraud starts to run on the date the plaintiff is harmed by the fraudulent conduct. This is called the accrual date. The plaintiff must file suit within six years of the accrual date or within two years from the time the plaintiff discovered or should have discovered the fraud.
For example, suppose the plaintiff gave the defendant a check on May 1, 2001, to purchase a property that the defendant fraudulently claimed to own. The defendant took the money and gave the plaintiff a fraudulent deed and left town. On June 30, 2006, the plaintiff found out the property is owned by someone else and that the deed is a fraud.
In this case, the plaintiff was first harmed on May 1, 2001 when he wrote the check relying on the defendant's claim of ownership. However, he discovered the fraud on June 30, 2006.
If the plaintiff files suit before May 1, 2007, (six years from the accrual date) or June 30, 2008, (two years from the discovery), the suit will be timely.
When it is unclear whether a plaintiff knew of facts that would lead a reasonable person to discover a fraud, a New York court will not dismiss the suit on a defendant's motion. Instead, the judge or jury must decide at trial whether the statute of limitations has expired.
Pausing the Statute of Limitations: The New York Tolling Statute
In New York, the statute of limitations tolls, or pauses, under various scenarios described by the tolling statute in the New York Civil Practice Law and Rules or decided by precedent. Three common scenarios are infancy, insanity and military service.
Under the infancy toll, when a person under 18 is harmed by fraud, the statute of limitations does not start to run until he reaches his 18th birthday. Once he turns 18, he will have three years to bring suit. However, the rule is meant to protect minors. If its application shortens the total time the minor has to bring suit, the rule will not apply and the minor will have six years from the accrual date of the fraud.
The statute also tolls when the plaintiff does not have the mental capacity to protect his rights, under the insanity provision. If and when the plaintiff regains mental capacity, he has three years to file suit. The toll for insanity is subject to an overall 10 year maximum from the accrual date of the fraud.
The statute of limitations is also tolled whenever a party to the suit is engaged in active military service.
Other tolls involve the service of process, the effect of dismissal, the defendant's absence from the state and the death of a potential plaintiff or defendant.
When Fraud Occurs in Another State, but Suit Is Filed in New York
When a non-resident files suit in New York for a claim that accrued outside of the state of New York, the suit must be timely under both the New York statute of limitations and the statue of limitations of the state in which the conduct occurred.
When a resident files suit in New York for a claim that accrued outside of the state of New York, the statute of limitations is measured by New York law only.
This article should not be considered individualized legal advice. If you have legal questions about fraud in New York, it is recommended that you consult a New York licensed attorney.