You really need to see a lawyer on this one. You have done some homework, but it appears you are in over your head. The statute of limitations for written contracts in California appears to be 4 years from the date the cause of action took place. That means that you still may be within the statute at this point.
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If you have already been sued, you need an attorney to review the specific allegations of each cause of action in the complaint. Most likely, there are defects in the complaint (including the 3 year fraud and 4 year breach of contract statute of limitations, lack of standing to sue, lack of license), all of which might be proper to bring up in a Demurrer to the Complaint.
The plaintiff can amend the complaint once as a matter of right before any defendant files an Answer to the Complaint (per Code of Civil Procedure section 472).
Frank W. Chen has been licensed to practice law in California since 1988. The information presented here is general in nature and is not intended, nor should be construed, as legal advice for a particular case. This Avvo.com posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult with your own attorney.
You should consult or retain a local real estate atty. You dont indicate if you were sued in small claims court or not, or how much they are suing for. I would not tip off the pltf to the possible licensing problem yet. If your atty does the research and determines that suing as an individual when it should be as the corporation, does not allow an amendment retroactively if the statute of limitations has expired in the meantime, you want to hopefully wait until the statute clearly has expired before raising the issue. Proper discovery can be done to enable you to determine the latest date the statute would expire, and allows you to find other info to help you if the pltf tries various arguments around the statute. For example he might claim that he is the proper party because his corp assigned the debt to him personally. Hopefully without being obvious, you would want to do some broad based discovery that would call for him to disclose that to answer, and he likely wouldnt disclose it since he doesnt know he is going to need that argument later when you hit him with the lack of standing argument. This strategy needs to be artfully done in a way that wont tip him off, will box him in, and will arguably result in some info that yo can then claim tipped you off to the lack of standing issue, and then you could amend your answer, or make a motion for summary judgment. the research must be done first to be sure he cant amend to add a different pltf after the sol has expired.
A contractor can sue for breach of contract and related claims, all of which have a four year statute of limitations. If he is claiming some type of fraud, the usually has a three year statute of limitations. If he says that he did not discover the fraud until 2009, then any lawsuit on that claim would have to be filed in 2012.
If you have been served with a lawsuit, you need to talk to a local construction attorney.