Legal Question in Real Estate Law in California

Dee, your answer has two parts:

First, statutes of limitations generally bar initiation of lawsuits after periods of time measured in years. For breach of contract cases, the limitations period is two years from date of breach if the contract were oral, and four years if it were in writing. For many, but not all, matters based upon a tort, the period is three years from the date of injury. The statute of limitations is a defense, and must be asserted by the defendant, otherwise it is waived. There are many technicalities in the interpretation and application of statutes of limitations.

Second, and more important, I'm pretty sure that a "statute of limitations" defense is not going to be a consideration in the possible success of a lawsuit contesting a lender's foreclosure while a short sale is in the works. I assume what happened to you happened in the lat few days, weeks or months. The lender's defense would not be based on any statute of limitations. It would be based upon the lender's inherent right to foreclose while the loan is in default.

I know "there oughta be a law" requiring lenders to CEASE all foreclosure-related activity while a short sale or similar relief is in active progress, or even in negotiation. I believe such legislation has been introduced in the California legislature. I do not know its status, or whether it will be tested in the courts for constitutionality. States cannot pass laws abridging the rights of a party under a contract, and a "mortgage" (note and deed of trust) is a contract.

The statute of limitations is going to depend on what underlying legal theory you use to attack the trustee's deed upon sale. Many lawyers are using quiet title, while the proper remedy in some cases may actually be cancellation of a written instrument.

Case law is all over the place with respect to the statute of limitations on suit to cancel a void instrument. Early case law in the 20th century held that there was not statute of limitations to cancel a void instrument (as opposed to a voidable instrument.) More modern case law, however, holds that Code of Civil Procedure section 343 bars such an action after four (4) years. A good discussion of the problem is in the 2001 case Robertson v. Superior Court (1st Dist. 2001) 90 Cal.App.4th 1319 You can read the text of that opinion here: http://www.leagle.com/xmlResult.aspx?xmldoc=2001759109CalRptr2d650_1699.xml&docbase=CSLWAR2-1986-2006

I don't know the full details of the foreclosure, but you may have a claim that the foreclosure violated existing law governing the handling of the trustee's sale. I suggest you speak to a competent real estate attorney familiar with this area of law as soon as possible.