Timing Is Everything: What Is the Period of Limitations for Elder Financial Abuse Actions?

• Publication year: 2006
• Author: Steven Riess

TIMING IS EVERYTHING: WHAT IS THE PERIOD OF LIMITATIONS FOR ELDER FINANCIAL ABUSE ACTIONS?

Steven Riess^*

I. INTRODUCTION

What is the statute of limitations for elder financial abuse actions? The Elder Abuse and Dependent Adult Civil Protection Act ("EADACPA", Welf. & Inst. Code § 15600 et seq.) does not specify a period of limitations for elder financial abuse actions. However, since an action for elder financial abuse is an action upon a statute, either the one year period of Code of Civil Procedure Section 340(a) or the three year period of Code of Civil Procedure Section § 338(a) applies. The one-year statute applies to actions which seek civil penalties while the three year statute applies to actions which seek remedies other than civil penalties. Punitive damages may sometimes be recovered in elder financial abuse actions. While punitive damages and civil penalties share similar characteristics, they are distinct legal concepts. Furthermore, even where it is clear that an action seeks civil penalties, the one year statute of limitations does not apply where the award of such penalties is discretionary rather than mandatory. Because punitive damages are distinct from civil penalties and because they are always discretionary, the three year statute of limitations should apply. However, no appellate decision has yet resolved which period of limitations applies.

II. AN ACTION FOR ELDER FINANCIAL ABUSE IS AN ACTION UPON A STATUTE, AND THEREFORE EITHER THE ONE YEAR PERIOD OF C.C.P. § 340(a) OR THE THREE YEAR PERIOD OF C.C.P. § 338(a) APPLIES

It is not uncommon for victims of elder financial abuse to conceal their victimization from family and friends. Often they are intimidated by their vulnerability, embarrassed by their loss, and fear that the victimization will be viewed as evidence of their inability to properly care for themselves. Accordingly, there is often substantial delay before others learn of the loss and before an attorney may be retained. Thus, it is not uncommon for the period of limitations to be of concern in elder financial abuse cases.

Periods of limitation reflect legislative policies regarding an individual's privilege to litigate.¹ Their primary purpose is to prevent the assertion of stale claims by plaintiffs who have failed to file their actions until evidence is no longer fresh and witnesses are no longer available so that it becomes difficult or impossible to defend against.² Thus, at some point, the defendant's right to be free of a stale claim outweighs the plaintiff's right to a remedy. That point, of course, is a matter of public policy and is established by the Legislature through the specific periods of limitations.

Some statutory schemes which confer the right to seek civil damages specify applicable periods of limitations within the statutes creating the right.³ For other causes of action, the applicable periods of limitation must be found among the more categorical listing of limitations found in the Code of Civil Procedure.⁴ Within these more general statutes, the periods of limitation are defined principally by the nature of the claimed right. For example, an action for assault, battery, or injury to an individual caused by the wrongful act or neglect of another must be commenced within two years;⁵ similarly, an action upon an oral contract must be commenced within two years.⁶ The Code of Civil Procedure also provides a four year period of limitations for causes of action not otherwise addressed.⁷ Two additional sections provide periods of limitation which are not based upon the nature of the right claimed, but rather upon the nature of the remedy sought. Section 338 provides:

Within three years:
"(a) An action upon a liability created by statute, other than a penalty or forfeiture."

And Section 340 provides:

Within one year:
"(a) An action upon a statute for a penalty or forfeiture, if the action is given to an individual, or to an individual and the state, except if the statute imposing it prescribes a different limitations."

Both Sections 338 and 340 are applicable to actions "upon a statute." A right, and its corresponding obligation, is created by statute if it is fixed by the statute itself or if it exists only because of the statute.⁸ However, a statute which merely codifies an existing common law right does not create a cause of "action upon a statute" for limitation purposes.⁹ Thus, the elder abuse statutes must create the right pursued for Sections 338 or 340 to apply. While conduct giving rise to elder financial abuse claims often supports similar and more traditional claims for fraud, conversion, and the like, clearly the intent of the Legislature and the text of EADACPA create rights not previously recognized at common law. First and foremost, elder financial abuse pursuant to W & I § 15610.30 differs from fraud in that it does not require the misrepresentation of a material fact nor a showing that the victim justifiably relied thereon. The ability to recover damages from a wrongdoer with some lower level of intent and culpability than specific intent would of course be an even more radical addition to victims' rights. Also, attorney's fees are available in elder financial abuse actions but not in traditional non-contract actions. In dictum, several recent decisions¹⁰ recognize that EADACPA creates new causes of action. Accordingly, it seems likely that an action for elder financial abuse is an action upon a statute.

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III. THE ONE YEAR PERIOD OF LIMITATIONS OF C.C.P. § 340(a) APPLIES TO ACTIONS WHICH SEEK CIVIL PENALTIES WHILE THE THREE YEAR PERIOD OF LIMITATIONS OF C.C.P. § 338(a) APPLIES TO ACTIONS WHICH SEEK REMEDIES OTHER THAN CIVIL PENALTIES

What distinguishes the application of the one year period of Section 340 from the three year period of Section 338 is the remedy sought. Presumably, the shorter period of limitations of Section 338 reflects the public policy assessment that the risk of a penalty being imposed both increases the stakes for a defendant while reducing the interest of a plaintiff. In other words, a penalty subjects a defendant to a greater and more arbitrary risk of loss while a plaintiff's right to recover a penalty is less compelling than his right to recover compensatory damages; thus, a shorter period of limitations may be justified in balancing the defendant's right to be free of a stale claim with the plaintiff's right to a remedy.

EADACPA does not specify a particular period of limitations for financial abuse. Accordingly, whether such an action must be commenced within one year (C.C.P. § 340(a)) or within three years (C.C.P. § 338(a)) depends upon whether elder financial abuse is characterized as an action "for a penalty or forfeiture."

IV. NONE OF THE REMEDIES AVAILABLE UNDER EADACPA FOR ELDER FINANCIALABUSE CONSTITUTES A FORFEITURE

A forfeiture is generally regarded as the loss of a person's property or legal rights as a result of some error, fault, offense, or crime and is in the nature of a confiscation.¹¹ Forfeitures are directed to claims of a penal nature.¹² Thus, a forfeiture is the...