The “statute of limitations” refers to a law that gives you a time limit on how soon you must sue. There’s a clock ticking, and you always have to ask, “When will my time to sue run out?” After it stops, a court will say, “Too late! You should have sued earlier!” However, an equally important question to ask is, “When does the clock start ticking in the first place?”
In Salazar v. Thomas, the Salazars, Mexican immigrants who spoke fractured English, bought commercial property. Their son forged their signatures on a deed of trust securing a $350,000.00 loan. When the owners found out, they started to pay the loan just to avoid losing the property. Eventually, however, they decided to hire an attorney and sue. The lender claimed that the statute of limitations had run because it had been seven years since the Salazars had received their first notice of default on the loan, and the trial court agreed. The Court of Appeals reversed, stating that the statute of limitations isn’t triggered by the notice of default, but instead by recording of a “trustee’s deed ” officially transferring the property from the Salazars to the lender upon completion of a foreclosure . Foreclosure hadn’t even started yet, so the statute of limitations clock hadn’t started ticking.
Of course, this was in California. As I discussed yesterday, each of the United States maintains a degree of sovereignty, which is why state laws can vary wildly on so many different topics. Still, it’s sometimes helpful to look to other jurisdictions to see what they’re doing. Just make sure you look to your own state’s laws before making any decisions.
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Rob Bodine is a Virginia attorney focusing his practice on real estate and intellectual property law. He’s currently Virginia counsel with First Class Title, Inc., a Maryland title insurance and settlement company. Rob is also a licensed title insurance agent in Florida, Maryland, Pennsylvania, and Virginia.