DeMarco v. Ecklund

Case Date: 06/27/2003
Court: 2nd District Appellate
Docket No: 2-02-0218 Rel

No. 2--02--0218


IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT


ANTHONY DEMARCO and PIERA ) Appeal from the Circuit Court
DEMARCO, ) of Winnebago County.
)
            Plaintiffs-Appellants, )
)
v. ) No. 01--L--101
)
GARY ECKLUND and SCHLUETER, )
ECKLUND, OLSON, BARRETT, )
MAYFIELD AND DAVITT, ) Honorable
) Janet Clark Holmgren,
            Defendants-Appellees. ) Judge, Presiding.

PRESIDING JUSTICE HUTCHINSON delivered the opinion of thecourt:

Plaintiffs, Anthony and Piera DeMarco, brought a legalmalpractice action against defendants, attorney Gary Ecklund andhis law firm, Schlueter, Ecklund, Olson, Barrett, Mayfield &Davitt, for failing to file a breach of contract lawsuit before itbecame time barred. In the contract at issue, plaintiffs sold realestate to a buyer, Bruce Swanson, with a provision requiringSwanson to construct a water detention area on the property bySeptember 1, 1990. Swanson never built the detention pond, andplaintiffs retained defendants as counsel in March or April 2000. In response to the malpractice action, defendants argued thatplaintiffs did not suffer damages because, when they retaineddefendants, the action was already time barred under section 13--214(a) of the Code of Civil Procedure (the Code), the four-yearstatute of limitations for construction of improvements to realproperty (735 ILCS 5/13--214(a) (West 2000)). Plaintiffs respondedthat the trial court should apply section 13--206 of the Code, the10-year statute of limitations for written contracts (735 ILCS5/13--206 (West 2000)). The trial court granted defendants' motionfor summary judgment, and plaintiffs timely appeal. We affirm.

The contract at issue provided for the sale of real estate toSwanson. Incorporated into the contract were the "additionalcontingencies, warranties, and representations" of attached"Exhibit B." Paragraph five of the exhibit stated:

"The buyer shall build, construct and erect at his soleexpense, a Detention area located to the West of said premiseslocated in DeMarco property, which shall be used for surfacerunoff from buyer's property, all of the DeMarco property, aswell as that property sold by DeMarco to Sutherland Lumber Co. The construction of the Detention area shall be in accordancewith Drawings and Specifications prepared by Willett, Hofmann& Associates, Inc. and the City of Rockford authorities. These covenants shall be binding upon the heirs, successorsand assigns of the parties. Said construction shall becompleted on or before September 1, 1990. The buyer shall notbe responsible for maintenance of said Detention area."

On appeal, plaintiffs assert that the trial court erred whenit granted summary judgment in favor of defendants because (1) thecontract statute of limitations should govern the complete non-performance of a contractual obligation, and (2) the constructionstatute of limitations requires actual engagement in its enumeratedactivities to apply. Summary judgment is appropriate when thepleadings, depositions, and affidavits show that no genuine issueas to any material fact exists and that the moving party isentitled to judgment as a matter of law. 735 ILCS 5/2--1005(c)(West 2000). We review a grant of summary judgment de novo. County of Lake v. Board of Education of Lake Bluff School DistrictNo. 65, 325 Ill. App. 3d 694, 698 (2001).

We disagree with plaintiffs' contention that the contractstatute of limitations automatically governs the complete non-performance of a contractual obligation. We decline plaintiffs'proposal to use a "predominant purpose of the contract" test, whichwould result in the application of section 13--206, because such atest is primarily applied to contracts involving the sale of goods. See Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc.,199 Ill. 2d 325, 352 (2002) ("predominant purpose" test used todetermine whether contract providing for both the sale of goods andrendition of services fell within article 2 of the UniformCommercial Code). When two limitations periods apply to an action,the more specific statute is generally effective. Tosado v.Miller, 188 Ill. 2d 186, 191 (1999). Section 13--206 provides a10-year limitations period for "actions on bonds, promissory notes,bills of exchange, written leases, written contracts, or otherevidences of indebtedness in writing." 735 ILCS 5/13--206 (West2000). Section 13--214 provides a four-year limitations period for"[a]ctions based upon tort, contract or otherwise against anyperson for an act or omission of such person in the design,planning, supervision, observation or management of construction,or construction of an improvement to real property." 735 ILCS5/13--214 (West 2000). This case centers on Swanson's obligationto build a detention pond rather than the real estate purchase asa whole, so we find section 13--214 more specific.

We also disagree with plaintiffs' argument that section 13--214 does not apply because one must engage in designing, planning,supervising, observing, or managing construction before an act oromission arises out of the activity. Plaintiffs believe that,because Swanson failed to do anything about the detention pond, henever engaged in a construction-related activity and thereforecannot have an omission arising out of that activity. In LombardCo. v. Chicago Housing Authority, 221 Ill. App. 3d 730 (1991), thereviewing court stated that it must determine "whether theparticular activities the landowner has purportedly engaged in orfailed to engage in, as the case may be, fall within the purview ofthe statute." (Emphasis added.) Lombard Co., 221 Ill. App. 3d at735. The reviewing court further stated:

"Accordingly, we hold that although one of the mainpurposes of section 13--214 is to prevent liability inperpetuity against persons involved in the design andconstruction of buildings, such as architects, contractors andengineers (see 80th Ill. Gen. Assem., House Proceedings, May25, 1979, at 11), it also governs a landowner in a breach ofcontract action who is being sued for an act or omission ofone of the specified construction-related activities or foractual construction." Lombard, 221 Ill. App. 3d at 735.

Furthermore, the primary rule of statutory construction requiresthat the intention of the legislature should be determined andgiven effect. County of Du Page v. Graham, Anderson, Probst &White, Inc., 109 Ill. 2d 143, 151 (1985). Courts should first lookto the language of the statute as the best indication of thelegislature's intent. County of Du Page, 109 Ill. 2d at 151. Ifthe language is unambiguous, courts must follow the plain meaningof the statute. County of Du Page, 109 Ill. 2d at 151-52. Theplain meaning of section 13--214 includes a person's "act oromission" in the construction of an improvement to real property,which brings Swanson's failure to construct the detention pond intoits purview.

Contrary to plaintiffs' assertion, holding that section 13--214 applies does not create a differentiation based upon a person'sstatus rather than a person's activities. Rather, the court mustlook to the activity involved and determine whether it is aconstruction-related activity falling within section 13--214. SeePeople ex rel. Skinner v. Hellmuth, Obata & Kassabaum, Inc., 114Ill. 2d 252, 261 (1986); Blinderman Construction Co. v.Metropolitan Water Reclamation District of Greater Chicago, 325Ill. App. 3d 362, 369 (2001); Adcock v. Montgomery Elevator Co.,274 Ill. App. 3d 519, 524 (1995). Accordingly, the trial courtproperly granted summary judgment in favor of defendants.

For the foregoing reasons, the judgment of the circuit courtof Winnebago County is affirmed.

Affirmed.

GILLERAN JOHNSON, J., concurs.

JUSTICE BOWMAN, dissenting:

I respectfully dissent. I believe that the 10-year statute oflimitations for written contracts (735 ILCS 5/13--206 (West 2000))rather than the 4-year statute of limitations for construction ofimprovements to real property (735 ILCS 5/13--214(a) (West 2000))should apply in this case.

The majority takes the position that section 13--214 does notrequire one to engage in any construction-related activity as longas the subject matter of the contract centers upon an improvementto real property. However, this interpretation seems to circumventthe intention of the legislature. As the majority recognizes, oneof the main purposes of section 13--214 is to prevent liability inperpetuity against persons involved in the design and constructionof buildings, such as architects, contractors, and engineers. Lombard Co. v. Chicago Housing Authority, 221 Ill. App. 3d 730, 735(1991). Our supreme court has clearly stated that this statute"protects, on its face, anyone who engages in the enumeratedactivities." (Emphasis in original.) People v. Hellmuth, Obata &Kassabaum, 114 Ill. 2d 252, 261 (1986). Particular deference isgiven legislative classifications when those classifications arebased upon activities rather than status. Hellmuth, 114 Ill. 2d at261.

Here, it is undisputed that Swanson engaged in none of theactivities enumerated in section 13--214. Nevertheless, themajority finds Swanson to fall within the purview of the statute. While I agree that the plain meaning of the statute includes aperson's "act or omission" in the construction of an improvement toreal property, I do not agree that the term "omission" encompassesa complete lack of performance on a construction-relatedobligation. Therefore, I do not believe Swanson's complete failureto take any action with respect to the detention pond constitutesan "omission" within the language of the statute. In other words,because Swanson never engaged in a construction-related activity,there can be no omission arising out of that activity.

The case law is clear that one must have engaged in theenumerated activities to be protected under section 13--214. Thus,the appropriate focus in determining whether this statute appliesis whether the activity engaged in constitutes the "design,planning, supervision, observation or management of construction." 735 ILCS 5/13-214(a) (West 2000). Indeed, the majority states thatthe court must first look to the activity involved and determinewhether it is a construction-related activity falling withinsection 13--214. However, as stated previously, there was noconstruction-related activity in this case. Hence, section 13--214does not apply.

In short, the fact that this real estate contract involved animprovement to real property does not automatically subject it tothe four-year statute of limitations. Rather, the four-yearstatute of limitations should apply only when one has actuallyengaged "in the design, planning, supervision, observation ormanagement of construction." 735 ILCS 5/13-214(a) (West 2000). Otherwise, it is the subject matter of the contract, rather thanthe "activity" actually engaged in, which controls.

While this is a case of first impression, I believe a morecommonsense approach would be to interpret Swanson's total lack ofperformance as triggering the 10-year statute of limitations forwritten contracts. Therefore, I would reverse the judgment of thecircuit court granting defendants' motion for summary judgment.