By: John M. Spesia
So, you think that your client might have a claim that could be brought in court, now where do you start? Given that the law places time limitations on your client’s claim, one of the first questions that must be asked is “is the claim timely?” Answering this question will involve analyzing the applicable “statute of limitations” and the date on which the claim “accrued” – i.e. the date when the clock began to run.
The Illinois legislature has enacted a number of statutes of limitation in an effort to “prevent recovery on stale [claims].” General statutes of limitation for claims relating to both real property, personal property and personal injury can be found in found in the Code of Civil Procedure, Article XIII, 735 ILCS 5/13-101 et seq. The general statutes include a 10-year period for “actions on . . . written contracts” (735 ILCS 5/13-206), and 5-year period “for damages for an injury done to property, real or personal” (735 ILCS 5/13-205). In addition, the legislature created specific statutes of limitations to govern certain causes of action, including: The Wrongful Death Act – 740 ILCS 180/2 (2-year limitation); the Uniform Commercial Code – 810 ILCS 5/2-725 (4-year limitation) or 810 ILCS 5/4-111 (3-year limitation); and the Local Governmental and Governmental Employees Tort Immunity Act – 745 ILCS 10/8 101 (1-year limitation). It should also be noted that “all civil actions not otherwise provided for” fall within the 5-year limitation period contained in 735 ILCS 5/13-205.
How does an attorney determine what statute of limitations applies?
The applicable statute of limitations will vary depending upon the type of claim your client has. The Illinois Supreme Court has held that, it is “the nature of the liability and not [] the nature of the relief sought” that determines the applicable limitations period. Armstrong v. Guigler, 174 Ill. 2d 281, 291 (1996) (court held that that the 5-year statute controlled as opposed to the 10-year statute because the nature of liability was based on a breach of an implied fiduciary duty rather than the failure to perform a contractual duty). Therefore, a practitioner must beware that “[a] party simply may not circumvent a shorter period of limitations, or attempt to breathe new life into a stale claim, merely by means of artful pleading.” Id. at 287. For example, “where liability emanates from a breach of a [written] contractual obligation,” the 10-year statute of limitations contained in 735 ILCS 5/13-206 will apply. Id. However, if the breach of duty arises by operation of the law, liability is no longer contractual in nature and a different statute of limitations likely applies. See Id. Such is the case in an action for personal injury, which involves tort liability. These claims generally fall within 735 ILCS 5/13-202, which provides that “[a]ctions for damages for an injury to the person . . . shall be commenced within 2 years next after the cause of action accrued,” unless the defendant is a government actor, in which case the 1-year statute in 745 ILCS 10/8-101 likely applies. As a final note in determining the applicable statute of limitations, practitioners must understand that where there are “two statutory provisions, one general and the other specific, the particular provision prevails.” Zimmer v. Willowbrook, 242 Ill. App. 3d 437, 442 (1993).
When does a cause of action “accrue”?
The date on which the clock begins to run for a particular claim is known as the “accrual” date. As with determining the applicable statute, the date of accrual depends upon the nature of the cause of action – i.e. it depends upon “when facts exist which authorize one party to maintain an action against another” (Mazur v. Stein, 314 Ill. App. 529, 534 (1st Dist. 1942)). For causes of action sounding in tort, “the cause of action usually accrues when the plaintiff suffers injury.” Am. Family Mut. Ins. Co. v. Krop, 2018 IL 122556 ¶17 quoting Hermitage Corp. v. Contractors Adjustment Co., 166 Ill. 2d 72, 77 (1995). On the other hand, “[f]or contract actions and torts arising out of contractual relationships … the cause of action ordinarily accrues at the time of the breach of contract, not when a party sustains damages.” Id. Thus, the accrual date can be vastly different depending upon the nature of the cause of action. For example, in a 2018 decision the Illinois Supreme Court held that the breach of contract that gave rise to the plaintiffs’ claims – an alleged failure to provide the proper insurance coverage – occurred at the time the contract (the insurance policy) was breached, which was when the policy was issued (more than two years before the plaintiffs realized that their coverage was inadequate). Am. Family Mut. Ins. Co. v. Krop, 2018 IL 122556. The Court concluded that the date of the breach – which was the date the insurance agent “delivered the allegedly nonconforming policy” – triggered the clock on the statute of limitations rather than the date the plaintiffs’ were injured.
The answer to whether your client’s potential claim is timely requires practitioners to first analyze the applicable statute of limitations. It must be remembered that it is the nature of liability rather than the relief sought that determines the applicable statute of limitations. After the applicable statute of limitations is determined, the date of the cause of action accrued must be determined. The framework of the Illinois Supreme Court’s recent decision in Am. Family Mut. Ins. Co. v. Krop, 2018 IL 122556 serves as a helpful guide in answering this question. Practitioners who file claims without taking each of the aforementioned steps into consideration, leave their clients’ cases vulnerable to dismissal.
