Medrano v. Production Engineering Co.

Case Date: 06/28/2002
Court: 1st District Appellate
Docket No: 1-01-0302 Rel

SECOND DIVISION

June 28, 2002





No. 1-01-0302

 

MANUEL MEDRANO, ) Appeal from the
) Circuit Court of
         Plaintiff,  ) Cook County.
)
v. )
)
PRODUCTION ENGINEERING COMPANY, et al.,  )
)
        Defendants. ) No. 95 L 3806-H
 
)
PRODUCTION ENGINEERING COMPANY,  )
)
        Defendant/Third-Party Plaintiff/Appellant, )
)
v. )
)
CAM FRAN TOOL COMPANY, ) The Honorable
) Paddy McNamara,
        Third-Party Defendant/Appellee. ) Judge Presiding.


JUSTICE GORDON delivered the opinion of the court:

Production Engineering Company (Production) appeals from the denial of its motion forsummary judgment and the grant of summary judgment in favor of Cam Fran Tool Company(Cam Fran). Production contends that the trial court erred in its determination of the triggeringdate of the limitations period involved in this indemnity action and in its determination that CamFran had not waived the limitations defense. Production asks that we reverse the trial court'sentry of summary judgment for Cam Fran and denial of Production's motion, enter summaryjudgment for Production and deny Cam Fran's motion, and remand the cause to address damages. For the following reasons, we affirm.

BACKGROUND

In 1979, Production and Cam Fran entered into a contract in which Production would sell,and Cam Fran would buy, a punch press machine. Part of this contract included Form PE-77,which stated Cam Fran was to indemnify Production for "any claims, damages, losses, costs andexpenses *** including but not limited to attorney's fees, [and] court costs *** arising out of orresulting from" work performed under the contract. Form PE-77 also made clear that "any legalaction taken to enforce any of the provisions of this contract must be commenced within one (1)year after such cause of action arises."

In 1994, Manuel Medrano (Medrano), an employee of Cam Fran, was injured whileoperating the punch press machine. In February 1995, Medrano filed a complaint namingProduction as a party defendant. On July 10, 1995, Production was served with Medrano'scomplaint. Soon after, in October 1995, Production filed its answer and appearance in the cause.

On April 15, 1997, Production filed a third-party complaint against Cam Fran seeking indemnification for all costs it expended in relation to Medrano's underlying action. Cam Frananswered, denying all liability but failing to include the affirmative defense of the one-yearlimitations period found in Form PE-77 of the sales contract.

Production filed a motion for summary judgment against Medrano, which was granted inMay 2000. However, that order was not final and appealable. Production then filed a motion forsummary judgment against Cam Fran. Cam Fran responded by filing a cross-motion forsummary judgment, arguing that because the contract set a one-year limitations period forindemnification purposes, and because that period began to run no later than October 1995 whenProduction answered Medrano's complaint, Production's April 15, 1997, claim against Cam Franfor indemnification was time-barred. Production responded that Cam Fran had waived thelimitations defense because it had not raised it in its August 1999 answer to Production'scomplaint but instead waited until its cross-motion to argue it. Production also insisted that evenif this defense was not waived, Production's indemnification claim arose not in October 1995, butin May 2000, when it received summary judgment against Medrano. Cam Fran presentedarguments to refute these contentions and asked the trial court for leave to file an amendedanswer which would include the limitations defense. Cam Fran submitted this proposedamended answer to the trial court in the form of a footnote in its reply in support of its cross-motion for summary judgment.

Meanwhile, the underlying cause of action was settled on October 5, 2000. The trialcourt allowed Production and Cam Fran to file briefs on the indemnity issue and held a hearingon their motions. On December 20, 2000, the trial court issued a written order. In it, the courtfound that Form PE-77 of the sales contract established a one-year limitations period forProduction's indemnification claim. Then, relying on Guzman v. Epperson Construction, Inc.,196 Ill. 2d 391 (2001), the court found that this claim arose on July 10, 1995, the date Productionwas served with Medrano's complaint in the underlying action. Because Production waited untilApril 15, 1997, to file its indemnity claim against Cam Fran, that claim was time-barred. Therefore, the court denied Production's motion for summary judgment and instead grantedsummary judgment for Cam Fran on its cross-motion.

As for Cam Fran's motion for leave to file its amended complaint, the trial court did notaddress it in the written order. Cam Fran pointed this out to the court. Production objected, butdid so only on the ground that Cam Fran had not raised the limitations defense before. Inresponse, the court held that Cam Fran's amended answer "should be a part of the record."

ANALYSIS

Production appeals from the trial court's denial of its motion for summary judgment. "The purpose of summary judgment is to determine whether a question of fact exists." West v.Northeastern Illinois Railroad Corp., 180 Ill. App. 3d 307, 311 (1989); see also Addison v.Whittenberg, 124 Ill. 2d 287, 294 (1988). Therefore, summary judgment is proper only when thepleadings, depositions and admissions on record, together with any affidavits, show that there isno genuine issue as to any material fact and the moving party is entitled to judgment as a matterof law. See Purtill v. Hess, 111 Ill. 2d 229, 240-44 (1986). Accordingly, appellate review of atrial court's grant of summary judgment is de novo (see In re Estate of Rennick, 181 Ill. 2d 395,401 (1998); Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992)),and reversal will occur only if we find that a genuine issue of material fact exists (see Addison,124 Ill. 2d at 294).

A. The Triggering Date of the Limitations Period

Production's first contention on appeal is that the trial court erred in finding that thelimitations period on its indemnity claim against Cam Fran began to run on July 10, 1995, thedate Production was served with Medrano's complaint.(1) Instead, Production, relying heavily onKerschner v. Weiss & Co., 282 Ill. App. 3d 497 (1996), claims that the statute of limitations wasnot triggered until May 10, 2000 (when Production received summary judgment in the underlyingaction), or perhaps October 5, 2000 (when the underlying action was settled and dismissed). Wedisagree.

It is undisputed that Production and Cam Fran entered into a valid contract for the sale ofthe punch press machine, a contract which included an indemnity provision and a one-yearlimitations period. That is, both parties agreed in Form PE-77 that Production would have oneyear from the date a legal cause of action arose to institute an indemnity claim against Cam Fran. The parties chose to shorten the general statute of limitations applicable to these cases, whichwould have allowed for a longer period. See 735 ILCS 5/13-214 (West 2000). Even wereProduction to now challenge this change, it is well-established that parties to a contract mayagree upon a shortened contractual limitations period to replace a statute of limitations, as long asit is reasonable. See Florsheim v. Travelers Indemnity Co. of Illinois, 75 Ill. App. 3d 298, 303(1979). Neither party here contests the reasonableness of Form PE-77.

Nor does either party contest that Production was served with Medrano's complaint, theunderlying action, on July 10, 1995. Therefore, the question at issue is when exactly was thetrigger date for the contractual one-year limitations period.

Production cites Kerschner for the proposition that its indemnity claim did not arise untilthe underlying action was decided, i.e., on either May 10, 2000, or October 5, 2000. Thus, itsApril 15, 1997, claim for indemnity was not time-barred by the contract's one-year limitationsperiod.

In Kerschner, several partners in an accounting firm retained an attorney to provideprofessional advice and services to help them leave their firm and create a new one. In theunderlying action, the partners sued their former firm, demanding that the firm surrender certainclient files. The former firm then filed a separate action against the partners. The partnersbrought a third-party complaint against the attorney for negligence in relation to his professionaladvice. The trial court awarded summary judgment to the attorney.

On appeal, the main issue was whether the partners could maintain this third-party actionagainst the attorney for implied indemnity. See Kerschner, 282 Ill. App. 3d at 501-02. Afterreview of third-party actions and the elements necessary to allege a claim for implied indemnity,the court found that these claims do not accrue until a settlement or judgment is entered in theunderlying action. See Kerschner, 282 Ill. App. 3d at 506. Therefore, concluded the court, oneentitled to bring an implied indemnity claim may file it either as part of the original action or as aseparate cause once the underlying action is resolved. See Kerschner, 282 Ill. App. 3d at 506.

While Production correctly cites Kerschner, more on point, both factually and legally, isthe recent Illinois Supreme Court case of Guzman, relied upon by the trial court in the instantcase and cited by Cam Fran. In Guzman, homeowners brought a breach of contract claim in1992 against C.R. Epperson Construction, Inc. (Epperson), the general contractor who built theirhome. The homeowners voluntarily dismissed their action, but refiled a new cause in 1996. Epperson, in turn, filed third-party claims in 1996 against several subcontractors and amendedthese claims in 1997 to include express and implied indemnity. The subcontractors, however,moved for summary judgment based on letters Epperson had sent to each of them, detailing howEpperson had known about the defects alleged by the homeowners since 1990. Because theapplicable statute of limitations for such actions was four years,(2) the subcontractors noted thatEpperson's indemnity claims had expired in 1994 and were time-barred when Epperson filedthem in 1996. Epperson countered that the statute of limitations had not begun to run until 1996,when the homeowners refiled suit against it, or at the earliest 1992, when the homeowners hadoriginally filed suit before the voluntary dismissal. This, Epperson claimed, was when it firstsuffered an injury meriting indemnity from the subcontractors.

The trial court granted summary judgment for the subcontractors, holding that the lettersshowed that Epperson knew about the allegations in 1990, that the four-year statute of limitationsbegan to run at that time, and that, because Epperson did not file its third-party indemnity actionsuntil 1996, they were time-barred. See Guzman, 196 Ill. 2d at 395-96. However, the appellatecourt reversed, finding section 13-214's four-year statutory period inapplicable and insteadfollowing 735 ILCS 5/13-204 (West 1996), which allows a party to file an indemnity action twoyears after service of the underlying action or two years from the time it knew/should haveknown of the act giving rise to the indemnity, whichever is later. See Guzman, 196 Ill. 2d at396-97.

Our supreme court then analyzed this case, vacating the decision of the appellate courtand reversing the decision of the trial court. See Guzman, 196 Ill. 2d at 403. First, the supremecourt concluded, contrary to the appellate court, that section 13-214's four-year statute oflimitations did apply. See Guzman, 196 Ill. 2d at 397. Therefore, the main issue then becamewhen the four-year period had been triggered: when the third-party plaintiff becomes aware ofpotential liability (the date of filing or service of the underlying complaint-1992) as Eppersonclaimed, or when the third-party plaintiff knows of the defects in the construction (1990) as thesubcontractors claimed. See Guzman, 196 Ill. 2d at 398-99. Tracking the debate among lowercourts on this issue, the supreme court firmly declared that "the better reasoning *** [is] that thestatute of limitations in such cases begins to run on the date the third-party plaintiff is servedwith the underlying action." Guzman, 196 Ill. 2d at 400-01.

From all this, it is clear that Guzman is more similar to the instant case than Kerschnerand should be followed. While Guzman has not explicitly overruled Kerschner, we note thatGuzman comes from our state supreme court, some six years after our district decided Kerschner. Moreover, the issue in Kerschner was quite different than that in the instant case. Kerschnergenerally asked whether a third-party implied indemnity action may be maintained in thatparticular fact situation. Guzman, meanwhile, presented the supreme court with the samespecific issue the instant case does: on what date is the limitations period for a third-partyindemnity action triggered? Also, Production's arguments regarding the proper time for filingmatch Epperson's, which the supreme court found unpersuasive-much as Epperson claimed thatits indemnity action did not arise until it suffered an injury when the homeowners filed theircomplaint or voluntarily dismissed it, Production insists it could not have sued Cam Fran untilProduction paid attorney fees and/or Medrano's underlying claim was resolved. Furthermore, theinstant case deals with a claim of express indemnity, originating from a specific contractualprovision between Production and Cam Fran. Kerschner concerned only the special situation ofimplied indemnity, while Guzman involved claims for both express and implied indemnity. Thesupreme court noted that its decision-i.e., that a limitations period for a third-party action beginsto run on the date of service of the underlying complaint-applied to all third-party actions,including ones based on express indemnity.

The parties here expressly agreed in Form PE-77 that Cam Fran would indemnifyProduction for costs Production would incur from the work done, as long as Productioncommenced this legal action within one year from when the cause of action for indemnity arose. Pursuant to our supreme court's holding in Guzman, the trigger date for this limitations periodwas July 10, 1995, the day when Production was served with Medrano's complaint. At thatmoment, Production knew that specific allegations were being brought against it arising from thepunch press machine it had sold to Cam Fran. Production, then, was required to file itsindemnity claim against Cam Fran within one year-July 10, 1996. However, Production chose towait some 21 months, and instead filed the claim on April 15, 1997. This is unacceptable underGuzman. Therefore, because we find no genuine issue of material fact as to when Productionwas required to file its indemnity claim, we conclude that the trial court properly grantedsummary judgment in favor of Cam Fran, since Production's claim was time-barred.

B. Waiver of the Limitations Defense

Production next contends on appeal that the trial court erred in finding that Cam Fran didnot waive its one-year limitations period defense by first raising it in its cross-motion forsummary judgment. Production argues that Cam Fran, in order to successfully argue thisaffirmative defense, needed to raise it in its answer to Production's third-party indemnitycomplaint. Production also asserts that while it may have been acceptable for Cam Fran to waituntil its summary judgment motion, Cam Fran failed to present the defense in a properprocedural manner. Even were we to bypass our conclusion above that already resolves this case(that Production's indemnity claim against Cam Fran was time-barred), and instead choose toaddress the merits of the present argument, we disagree with Production.

As noted, Production filed its indemnity claim against Cam Fran in April 1997. Cam Franfiled its answer in August 1999. In this answer, Cam Fran denied liability, but failed to assert theone-year limitations period found in its contract with Production as an affirmative defense. Thecase progressed and Production moved for summary judgment. Cam Fran responded with itsown cross-motion for summary judgment in October 2000. At this time, it first asserted thelimitations period as an affirmative defense and asked the trial court for leave to file an amendedanswer, a proposal of which it included in a footnote in its reply in support of its cross-motion forsummary judgment. After the trial court granted Cam Fran's motion for summary judgment,Cam Fran pointed out that the court failed to address its motion for leave to amend. The courtheld that Cam Fran's amended answer "should be a part of the record."

We acknowledge Production's argument that defenses such as the statute of limitations, oras in this case a contractual limitations period, are to be set out completely and plainly in a party'sanswer to a complaint. See 735 ILCS 5/2-613(d) (West 1998); Rognant v. Palacios, 224 Ill. App.3d 418, 422 (1991). However, Illinois law has made clear that the failure to do this will notautomatically result in waiver of that affirmative defense. See Rognant, 224 Ill. App. 3d at 422;see also Horwitz v. Bankers Life & Casualty Co., 319 Ill. App. 3d 390, 399 (2001) (citingRognant for this same proposition).

In fact, several cases have addressed the same situation now presented to us, in which aparty first asserts a limitations period defense in its motion for summary judgment instead of inits answer. Those cases have found that the requirement that this affirmative defense be set forthin an answer "does not place a restriction on motions for summary judgment." Salazar v. StateFarm Mutual Automobile Insurance Co., 191 Ill. App. 3d 871, 876 (1989). Instead, because aparty may file a motion for summary judgment at any time, even before filing an answer, theparty may well assert a limitations period defense in its summary judgment motion even thoughit did not raise it first in an answer. See Florsheim, 75 Ill. App. 3d at 308-09; Horwitz, 319 Ill.App. 3d at 399 (a defendant's assertion of affirmative defenses in motion for summary judgment,after failure to include them in answer, does not result in waiver); Ciers v. O.L. Schmidt BargeLines, Inc., 285 Ill. App. 3d 1046, 1051 (1996) (affirmative defense of limitations period may beraised even on eve of trial, without waiver concerns); Salazar, 191 Ill. App. 3d at 876(affirmative defense raised in summary judgment motion is timely and applicable to case, even ifnot raised at all in answer).

Therefore, although Cam Fran first raised the one-year limitations period as anaffirmative defense in it cross-motion for summary judgment rather than in its August 1999answer to Production's indemnity complaint, Cam Fran did not waive this defense. Rather, basedon the authority cited above, we find that the trial court properly considered this defense.

Production asserts that even if Cam Fran did not waive this defense by failing to includeit in its answer, the trial court erred in considering it because Cam Fran never filed an amendedanswer, has yet to do so, and presented this defense in an inappropriate manner-in a footnote inits reply in support of its cross-motion for summary judgment. We disagree. First, we note thatProduction has waived this argument. When Production objected to Cam Fran's insistence thatthe trial court address the amendment, it did so only on substantive grounds, never on the groundthat the proposed amendment was procedurally improper (was not a separate document, had noaffidavits attached, etc.) See People ex rel. Foreman v. Village of Round Lake Park, 171 Ill.App. 3d 443, 449 (1988).

Despite waiver, the record does indicate that Cam Fran, upon asking the trial court forleave to amend its answer, presented the court with the limitations period defense not as aseparate document, but rather as a footnote to its written reply. Also, at oral argument in thiscase, Cam Fran admitted that it has yet to officially file an affirmative defense to include thelimitations period. However, contrary to Production's contentions, this is not fatal to Cam Fran.

A trial court may allow a party to amend its answer and add new defenses at any timebefore final judgment is entered in the cause. See 735 ILCS 5/2-616(a) (West 1998); Ocasek v.City of Chicago, 275 Ill. App. 3d 628, 637 (1995). Our courts have come to construe thisliberally, and though they may disapprove of late amendments, especially when the pleader knewearly on about a matter or failed to provide a reason for the delay, they generally allow foramendment even in situations of doubt, as long as the opposing party is not prejudiced orsurprised. See Foreman, 171 Ill. App. 3d at 447-48. Ultimately, the decision of whether to allowan amendment, as well as the key determination of whether prejudice will be suffered, lies withthe trial court and will not be reversed upon review absent abuse of discretion. See Ocasek, 275Ill. App. 3d at 637.

Here, it can easily be said that Cam Fran knew of the one-year contractual limitationsperiod and that it would come into play the moment Production filed the indemnity claim againstit. The record indicates that Cam Fran neglected to include the period as a defense in its answer,and upon realizing this, sought leave to amend. However, the record also shows that Productionsuffered little, if any prejudice. First, Production certainly could not claim surprise at Cam Fran'sraising of the limitations defense; Production wrote the contract for sale between the parties,including Form PE-77 which contained the limitations provision. It knew, just as Cam Fran did,that any cause of action for indemnity would focus on this contract and, more likely than not, onthe contents of Form PE-77. In conjunction with this, Production could not contend that it didnot have time to respond to this "new" defense. See Horwitz, 319 Ill. App. 3d at 399 (ample timeto respond to amended affirmative defense helps to negate any prejudice); Rognant, 224 Ill. App.3d at 422 (though party seeking to amend answer to include affirmative defense of statute oflimitations waited almost three years after suit filed, opposing party did not suffer prejudicebecause had adequate time to respond to this defense). In fact, once Cam Fran raised the defense,Production addressed it in its reply in support of its motion for summary judgment. Even werethis not so, several other factors exist to indicate a lack of prejudice. The trial in the indemnityaction had not yet begun here. See Ocasek, 275 Ill. App. 3d at 637 (amendment to includeaffirmative defense of statute of repose allowed, even though pleader was aware of it at time offiling and did not provide excuse for omission, since opposing party suffered little prejudice astrial had not started); Behr v. Club Med, Inc., 190 Ill. App. 3d 396, 407 (1989) (right to amend toinclude affirmative defense of statute of limitations upheld, in part because trial had yet tobegin); Foreman, 171 Ill. App. 3d at 448 (trial court's allowance of amendment to include statuteof limitations defense did not prejudice opposing party because, though motion for summaryjudgment was pending, trial had not begun). Moreover, since the dates at issue here (July 10,1995, as the date Production was served with the underlying action; and April 15, 1997, as thedate Production sued Cam Fran for indemnity), as well as the existence of the one-yearlimitations period, all remain uncontested, Production did not need to conduct any additionalinvestigation to counter this defense. See Behr, 190 Ill. App. 3d at 407 (lack of requirement offurther investigation in relation to amendment eases any resulting prejudice); Foreman, 171 Ill.App. 3d at 448 (because relevant dates remained uncontested, and thus, newly-amended statuteof limitations defense did not require either party to conduct further investigation, opposing partydid not suffer prejudice). Furthermore, Production fails to show how it would have disputedCam Fran's affirmative defense even if Cam Fran had asserted it earlier in its answer; the factssimply remain the same. See Carr v. Cook County Hospital, 323 Ill. App. 3d 184, 188-89(amendment to add affirmative defenses does not result in prejudice when "[f]urther discoverywould not change the operative facts" of the cause at hand). And while Cam Fran has yet to filethe amendment, it is not as if Production is uncertain of what the amendment is and the languageit contains, especially since the trial court made it part of the record. See Pinkerton v. Oak ParkBank, 16 Ill. App. 2d 91, 106 (1958).

Finally, "[i]t has been said that a test for whether a trial court's discretion has beenproperly exercised is whether the amendment furthers the ends of justice." Foreman, 171 Ill.App. 3d at 449; see also Ocasek, 275 Ill. App. 3d at 637 (court should look to whether thedefense sought to be included would dispense with need for trial); Behr, 190 Ill. App. 3d at 407(prejudice, if any, is lessened when defense sought to be added, if upheld, "would eliminate thenecessity and expense of a trial"). Although the trial court in the instant case failed to address, inits written order, Cam Fran's motion for leave to amend its answer to include the limitationsperiod as an affirmative defense, it did so only because it had already decided to grant summaryjudgment to Cam Fran on other grounds (see Part A above). As discussed, having grantedsummary judgment to Cam Fran, this eliminated the need for Cam Fran to file an amendedanswer at all. See Florsheim, 75 Ill. App. 3d at 308-09 (summary judgment may be grantedbefore answer even filed). Furthermore, when Cam Fran pointed out the omission for the record,the trial court did not hesitate to include Cam Fran's proposed amended answer as "part of therecord," even though that answer took the form of a footnote in its reply in support of summaryjudgment and had never been officially filed. Thus, had the court chosen to focus on groundsother than those it did, Cam Fran's amendment clearly would have eliminated the need andexpense of a trial.

From all this, then, it is obvious that Production was not prejudiced by what occurredhere. And from the court's desire to include Cam Fran's amendment as "part of the record," it isclear that remanding this case to demand that Cam Fran follow certain procedural aspects ofamending its answer is simply an unnecessary exercise. Accordingly, we find no abuse ofdiscretion on the part of the trial court below in including as part of the record, and considering,Cam Fran's proposed amended answer to add the contractual one-year limitations period as anaffirmative defense in this case.

C. 735 ILCS 5/13-204

Production's final contention on appeal is that the trial court erred in relying on 735 ILCS5/13-204(b) (West 2000) to decide this cause. In its appellate brief, Production asserts section204(c) makes clear that section 204(b) did not apply to this case, and thus, Guzman and the trialcourt's reliance on it is wholly inapplicable to the instant case. Moreover, Production argues thatif we hold section 204 does apply, that section then extends the statute of limitations in this caseto two years from any trigger date fashioned by the court. Cam Fran, in its brief, agrees thatsection 204 does not apply, but for other reasons; that is, the parties formed a contractuallimitations period, and whereas section 204 deals with limitations periods created by statutewhen no contract exists, it has no relevance here. Production then counters in its reply brief thatCam Fran's concession to the inapplicability of section 204 means that we are left with no triggerdate imposed by statute and thus Kerschner, requiring that judgment or settlement be enteredbefore an indemnity claim may be filed, defines when the statute of limitations begins to run. While we agree that section 204 does not apply to the instant case, we disagree with Production'sproposed result.

Section 204 provides the statute of limitations our legislature has devised forindemnification claims. Subsection (b) states what the statute of limitations is in instances wherean underlying action has been filed (2 years), and describes the trigger date (when a party isserved with the underlying action or when it knows/should have known of the act or omissiongiving rise to the indemnity claim, whichever is later). Subsection (c) then clarifies thatsubsection (b)

"shall preempt, as to contribution and indemnity actions only, all other statutes of limitation or repose, but only to the extent that the claimant in an underlyingaction could have timely sued the party from whom contribution or indemnity is soughtat the time such claimant filed the underlying action." 735 ILCS 5/13-204(c) (West 2000).

From this, Production reasons that because Medrano was an employee of Cam Fran whenhe filed his underlying complaint and could not "timely sue" Cam Fran, subsection (b), under theconditions of subsection (c), does not apply here. Production extends this argument to concludethat because of this, the trial court's "reliance on" subsection (b) in writing its order, as well as onGuzman which too cites subsection (b), was erroneous. However, Production mischaracterizesseveral aspects of what occurred.

First, and most significantly, Production fails to acknowledge a vital concept here: section204 deals with the statute of limitations for indemnity actions-in essence, the law that governswhen the parties involved make no other provision for when such an action will accrue, i.e., adefault plan. It is true that section 204 will "preempt" other statutes of limitation, but it does notapply here. However, this is not because Medrano could not timely sue Cam Fran. Rather,section 204 is inapplicable because the parties in the instant case formed and agreed upon acontractual limitations period, which, as long as it is reasonable, does not allow them to fall backupon the default-statute of limitations. See Florsheim, 75 Ill. App. 3d at 303 ("contractuallimitation requiring suit to be brought within a specific period of time is valid if reasonable eventhough the period provided by general statute of limitations as to suits on written contract islonger"). Production and Cam Fran, in Form PE-77, both agreed that Production could institutean indemnity action within only one year from when it arose, rather than the two-year periodprovided under section 204. Production does not, nor ever has, presented an argument that thischange shortening the statute of limitations was unreasonable. Because the contract rules,section 204 does not apply.

Though we understand Production's claim of error, it is clear upon review of the trialcourt's written order that, contrary to Production's assertions, the court did not "rely on"subsection (b) in arriving at its decision that the limitations period in this case was one year. Thecourt did mention section 204(b), and in fact cited its language. However, Production takes thisout of context. The court was reviewing Form PE-77 and found that its "plain terms" indicatedthat Production was required to commence the indemnity claim within one year of the underlyingcause of action in order for it to be timely. Then, in an attempt to legally support the conclusionthat this period began to run when Production was served with Medrano's complaint, the courthighlighted section 204(b)'s language, in bold letters, that no indemnity action may becommenced more than two years after the party "has been served with process in the underlingaction." 735 ILCS 5/13-204(b) (West 2000). The court did this to point out that our legislature,in fashioning the default-statute of limitations provision, declared that the trigger date is the dateof service and that this should not change in the instant case simply because a contract isinvolved. There is no indication, as Production seems to indicate, that the trial court was usingthe actual statutory two-year period in making its decision. To the contrary, the court, at varioustimes, declared that the contract between Production and Cam Fran governed and its one-yearlimitations period was determinative.

As for Production's contention that Guzman too was inapplicable, that fails on similargrounds. Again, from the context of the trial court's order, it is clear that the court referred toGuzman because it was a very recent state supreme court case that analyzed trigger dates in third-party indemnity actions. The Guzman court had to rely upon section 204's two-year statutoryperiod because the parties in that case, unlike those here, never contracted to change it. In otherwords, the statutory default came into play. The trial court did not use Guzman for theproposition that section 204(b)'s two-year period governed Production and Cam Fran's situation. Again, the main issue here was to find when the one-year contractual limitations period started,not whether the statutory two-year period preempted this contractual one. The court referred toGuzman, just as it had referred to section 204(b), to emphasize that a limitations period in anindemnity action, whatever it may be, begins to run when the underlying cause is filed and theparty is served. Guzman, thus, was quite on point with the instant case.

Therefore, we conclude that the trial court did not err in mentioning section 204 orGuzman in its written order. It relied on these for their legal analysis, not their factual outcomes,and merely applied their analysis to the operative facts in the instant case. We find no abuse ofdiscretion.

CONCLUSION

For the foregoing reasons we affirm the holding of the trial court.

Affirmed.

BURKE, P.J. and CAHILL, J., concur.

1. We note for the record that Production cites February 28, 1995 (the initial filing ofMedrano's complaint), and October 11, 1995 (the filing of Production's answer to Medrano'scomplaint) in its appellate brief, and asserts that the trial court designated them, without any legalauthority, as "alternative dates" on which the limitations period began to run. However, it isclear from the trial court's written order that this is incorrect. The court firmly designated onlyone date, July 10, 1995-the day Production was served with Medrano's complaint-as the datetriggering the limitations period on the indemnity action.

2. Unlike in the instant case, the parties in Guzman had not contracted for a shorter, ordifferent, limitations period. Therefore, the four-year statute of limitations set forth in 735 ILCS5/13-214 (West 2000) governing construction and design controlled.