13.3 Statute of Limitations

• Jurisdiction: Arizona

13.3 Statute of Limitations. In Arizona, the statute of limitation for common law fraud claims is 3 years.⁷ A.R.S. § 12-543(3) states in part:

There shall be commenced and prosecuted within three years after the cause of action accrues, and not afterwards, the following actions:

. . .

3. For relief on the ground of fraud or mistake, which cause of action shall not be deemed to have accrued until the discovery by the aggrieved party of the facts constituting the fraud or mistake.

Arizona courts have explained the limitations period by stating that it begins to run “when the defrauded party discovers or with reasonable diligence could have discovered the fraud.”⁸ Stated another way, the statute begins to run when a party “has knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry.”⁹ Thus, the statute “may begin to run before a person has actual knowledge of the fraud or even all the underlying details of the alleged fraud.”¹⁰

Parties wishing to assert such a claim must be cognizant of when they first suspected the fraud, as the courts have specifically pointed out that a party “does not have to know every fact about their fraud claim before the statute begins to run.”¹¹ Additionally, a party that plans to argue that the statute has been tolled by the defendant’s conduct must be able to show an affirmative act concealing the facts that give rise to the claim, not just the underlying fraudulent conduct.¹² The Arizona Supreme Court has emphasized, “[m]ere silence by the person allegedly committing the fraud will not avoid the running of the statute. There must be positive acts of concealment done to prevent detection. There must be some trick or contrivance intended to exclude...