A statute of limitations is the time limit you have to file a lawsuit, and it varies depending on the type of case. Each state has its own laws governing statutes of limitations. Generally, the statute of limitations on fraud in New York is six years from the date the plaintiff is harmed by the fraudulent conduct. However, there are some exceptions to this limit.
Definition of Fraud
Fraud has a wide legal definition and covers many types of conduct. Generally, fraud is an intentional misrepresentation of fact made by one person, who is aware of its falsity, to another person. The misrepresentation of fact is made with the intent of encouraging the other person to act in a particular way, and results in damage or injury. Fraud may also occur by an omission or deliberate failure to state material facts.
Some examples of fraud are insurance fraud, business fraud, credit card fraud, internet fraud and identity theft. For example, if a person tells you that you will make a lot of money if you invest in her company, then takes your money and disappears, this is a fraudulent act. Intercepting incoming funds before they can be recorded in a company's accounting records ("skimming") and falsifying financial statements in order to get a bank loan are examples of corporate fraud.
Statute of Limitations in NY
In New York, the statute of limitations on fraud begins to run on the date the plaintiff (the party bringing the lawsuit) is harmed by the fraudulent conduct. This is known as the accrual date. Under CPLR 213, the plaintiff must file the lawsuit within six years of the accrual date. Alternatively, the plaintiff may file the lawsuit within two years from the time he discovered, or should have discovered, the fraud.
Actual Versus Constructive Fraud
While statutory law sets out a fairly clear picture of New York's statute of limitations on fraud, case law provides another interpretation. Cases involving constructive fraud or negligent misrepresentation do not require an actual intent to defraud, and therefore the extension of two years from the actual or reasonably expected discovery of the fraud does not apply. In other words, these cases do not require actual intent to defraud.
Pausing the Statute of Limitations
Under New York law, the statute of limitations pauses under certain circumstances. For example, when a person under the age of 18 is harmed by fraud, the statute of limitations does not begin to run until he turns 18. When he turns 18, he has three years to file a lawsuit. However, if applying this law reduces the total time the minor has to file a lawsuit, the rule does not apply and the statute of limitations is six years from the accrual date.
The statute of limitations also pauses when the plaintiff lacks the mental capacity to protect his rights. When the plaintiff regains mental capacity, he has three years from that date to file a lawsuit. This is subject to a maximum of 10 years from the accrual date of the fraud.
Other NY Statutes of Limitations
The statute of limitations in New York varies greatly depending on the act or the crime. The statute of limitations on assault is one year from the act of assault in civil cases, and two or five years from the act in criminal cases, depending on the circumstances. The statute of limitations on enforcing court judgments is 20 years. All Class A felonies in New York have no statute of limitations. This includes arson in the first degree, operating as a major trafficker, kidnapping, rape and first-degree and second-degree murder.
- NYCourts.gov: Statute of Limitations
- The New York State Senate: The Laws Of New York Consolidated Laws Civil Practice Law & Rules Article 2: Limitations Of Time Section 213
- The New York State Senate: The Laws Of New York Consolidated Laws Civil Practice Law & Rules Article 2: Limitations Of Time Section 208
- Meyer Suozzi: Different Statutes of Limitations for Actual and Constructive Fraud
- USLegal: Fraud Law and Legal Definition
- FBI: Common Fraud Schemes
- The Court of Appeals for the state of New York in Albany image by Ritu Jethani from Fotolia.com