All civil claims which arise in small claims court will be subject to some statute of limitations. A statute of limitations is a law that dictates the number of years in which a claim must be brought for liability to attach to a defendant. If a plaintiff waits beyond the expiration of the statute of limitations to bring his claim, the claim is lost forever.
Consider also that statutes of limitation will differ from claim to claim. For example, in California, an action for personal injury must be brought within two years of the incident, while an action for damage to personal property must be brought within three years of the incident. If you are involved in a car accident case that is two and a half years old, the plaintiff in the case cannot sue for personal injury damages, only for damages to property. Similarly, in California actions on contracts must be brought within two years for oral contracts, and four years for written contracts.
Also, statutes of limitation will differ by state. In New York State, actions on contracts must be brought within six years. Most states have a shorter statute of limitations on contracts. If your claim (or a claim against you) is a few years old, you may wish to employ some strategic maneuvers to ensure that your case is heard in a particular state.
Example: The Effects of the Statute of Limitations on a Multi-State Claim
John York of New York State enters a contract with Julie California of California for the immediate sale of valuable baseball cards. The contract is oral, and is entered on January 1, 2005. Julie immediately pays John, but John never delivers the baseball cards. Julie puts the matter off until February 1, 2007. The statute of limitations on oral contracts is two years in California, and six years in New York. Because two years have passed since the breach of contract, Julie can no longer bring her claim in California, she must bring her claim in New York. Now John enjoys the geographical advantage because Julie will have to travel to pursue the case. Also, John can now argue in New York court that the case should have been brought in California.
When Does the Statute of Limitations Begin to Run?
Generally speaking, the statute of limitations for a particular claim will begin from the time the plaintiff learned of the claim. A plaintiff must file his claim with the court before the expiration of the statute. In negligence and personal injury actions, the statute begins to run from the plaintiff learned of the injury. Imagine for a moment the mythical case of the doctor that leaves a sponge inside a patient following an operation. The patient may not know the sponge is there for years after the operation. Would it be fair to the patient to have her medical malpractice claims expire before she even knew that a claim existed? Of course not, and that is why the plaintiff must know of the claim before the statute of limitations can begin to run. In contract actions, that means from the time the contract is breached, not from the time the contract is signed. As you might imagine, claims that fall very close to the expiration of the statute of limitations can wind up being argued solely on the fact of when the statute began to run.
The statute of limitations “clock” can sometime be frozen temporarily to protect worthy plaintiffs. This principle is called a “tolling” of the statute of limitations. Tolling statutes, like most laws, differ from state to state. Some general rules have emerged, though. Statutes of limitations will generally be tolled when a plaintiff is serving in the military, is a minor, is declared incompetent, is the subject of a bankruptcy proceeding, etc. When the circumstances that caused the tolling of the statute no longer exist, the statute of limitations starts to run again.
The statute of limitations is a powerful and effective weapon in the defendant’s toolbox. As a defendant, you want to scour the facts of your case to determine if you can knock out any of the plaintiff’s claims under the statute of limitations.
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Michael Spadaccini is the author of 8 books on self-help legal matters such as, Ultimate LLC Compliance Guide: Covers All 50 States (Ultimate Series), Ultimate Book of Forming Corps, LLCs, Partnerships & Sole Proprietorships, and Ultimate Guide to Forming an LLC in Any State, Second Edition (Ultimate Series).
You can view his Amazon Author Profile Here.