Hon. Philip P. Simon, District Judge for the Northern 

District of Indiana, sitting by designation.

In the

United States Court of Appeals

For the Seventh Circuit

No. 08-3600

IN RE:

MARCHFIRST INCORPORATED,

Debtor.

APPEAL OF:

CIT COMMUNICATIONS FINANCE

CORPORATION, formerly known as

NEWCOURT COMMUNICATIONS

FINANCE CORPORATION.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 08-cv-00121—David H. Coar, Judge.

ARGUED OCTOBER 26, 2009—DECIDED DECEMBER 21, 2009

Before BAUER and SYKES, Circuit Judges, and SIMON,

District Judge.

2 No. 08-3600

BAUER, Circuit Judge. CIT Communications Finance

Corporation leased phone equipment to marchFIRST, Inc.

When marchFIRST filed for bankruptcy protection and

failed to return the equipment, CIT eventually sought

damages from Andrew Maxwell, the trustee in bankruptcy, for breach of fiduciary duty. The bankruptcy

court dismissed the claims as barred by the statute of

limitations. The district court affirmed. Finding that the

five-year statute of limitations bars CIT’s claims, we affirm.

I. BACKGROUND

CIT began leasing telephone equipment to marchFIRST

in 2000. On April 12, 2001, marchFIRST filed for bankruptcy in Delaware and CIT appeared as an interested

party. The court-appointed trustee rejected all of

marchFIRST’s leases with CIT and received court permission to retain an auctioneer to assist in liquidating

property held by marchFIRST. On July 10, the Delaware

court transferred the case to the Bankruptcy Court for the

Northern District of Illinois, which court appointed

Andrew Maxwell as the successor trustee.

After Maxwell’s appointment, CIT began seeking the

return of its equipment. On July 20, CIT’s attorney wrote

Maxwell requesting the return of the equipment. According to CIT, Maxwell and his agents responded to the

letter and the related attempts to recover the equipment

by advising CIT to contact “different individuals,” each

of whom “stonewalled” CIT. Maxwell also missed an

August 12, 2001 deadline for filing an inventory of CIT’s

property in the debtor’s possession as required by Fed. R.

Bankr. P. 2015(a)(1) and 11 U.S.C. § 704(a)(2).
No. 08-3600 3

On November 2, 2001, Maxwell filed a Statement of

Financial Affairs in the bankruptcy court denying that

marchFIRST held or controlled any of CIT’s property.

Nearly three months later, on January 31, 2002, the bankruptcy court gave Maxwell permission to re-employ the

auctioneer in order to continue liquidating equipment

marchFIRST held at various locations. Nearly a year

later, on December 12, 2002, CIT filed an amended administrative expense claim seeking the full value of its equipment. The claim asserted that Maxwell had breached

his fiduciary duty but that CIT had not discovered the

breach until sometime after October 11, 2001, the deadline for filing such claims in the bankruptcy court.

CIT filed its complaint in this case on May 7, 2007, fourand-a-half years after filing its amended administrative

expense claim, and five years and nine months after it

first wrote to Maxwell seeking the return of its equipment. CIT’s complaint charged Maxwell with, among

other things, breaching his fiduciary duty to CIT by

ignoring requests to return the equipment, failing to

safeguard the equipment, and improperly disposing of

the equipment—all of which CIT claims were done outside the scope of his duties as trustee. The bankruptcy

court dismissed the claims as barred by Illinois’ five-year

statute of limitations. CIT appealed the decision to the

district court, which affirmed. CIT timely appealed.

II. DISCUSSION

CIT argues that the statute of limitations should not bar

it from pursuing its claim for breach of fiduciary duty,
4 No. 08-3600

even though it filed the claim nearly six years after it

was first “stonewalled” by Maxwell and four-and-a-half

years after it filed its amended administrative expense

claim. Both parties agree that CIT’s claims to recover

personal property are governed by Illinois five-year

statute of limitations, as interpreted by the Illinois

Supreme Court. 735 Ill. Comp. Stat. 5/13-205. See Commonwealth Ins. Co. v. Stone Container Corp., 323 F.3d 507, 509

(7th Cir. 2003). Because CIT filed its complaint on May 7,

2007, the claims for which it seeks relief must have

accrued no earlier than May 7, 2002. We review de novo

the district court’s dismissal of CIT’s claims as barred by

the statute of limitations. Dominguez v. Hendley, 545 F.3d

585, 588 (7th Cir. 2008).

The disputed issue is when CIT’s claims against Maxwell

accrued and triggered the running of the limitations

period. Illinois follows the general rule that tort claims

arising from a contract accrue when the contract is

breached, whereas most tort claims accrue when the

plaintiff sustains an injury. Hermitage Corp. v. Contractor’s

Adjustment Co., 651 N.E.2d 1132, 1135 (Ill. 1995). But

courts also have a discovery rule to protect those who

are unaware of their right to sue, “to encourage the trial

of cases on their merits and avoid premature summary

dismissals.” Superior Bank FSB v. Golding, 605 N.E.2d 514,

518 (Ill. 1992). The discovery rule delays the accrual of

claims until the plaintiff reasonably should know that he

has been injured and that the injury was wrongfully

caused. Id. A plaintiff’s knowledge that his injury was

wrongfully caused does not necessarily mean knowledge

of actionable conduct. Knox Coll. v. Celotex Corp., 430
No. 08-3600 5

N.E.2d 976, 980-81 (Ill. 1981). The cause of action accrues

and the limitations period begins to run when “the

injured person becomes possessed of sufficient information concerning his injury and its cause to put a reasonable person on inquiry to determine whether

actionable conduct is involved.” Id. In addition, in Illinois,

the party seeking to utilize the discovery rule bears the

burden of proving the date of discovery. Hermitage, 651

N.E.2d at 1138.

In this case, CIT’s claims accrued before May 7, 2002, and

thus are barred by the statute of limitations. CIT maintains

that, as trustee of the bankrupt marchFIRST estate,

Maxwell breached the fiduciary duty he owed to

marchFIRST’s creditors. Maxwell accomplished this,

according to CIT, by failing to inventory, return, and

safeguard, (and eventually disposing of) CIT’s equipment.

However, all activity the complaint describes relating to

CIT’s efforts to recover its equipment and Maxwell’s

lack of response occurred during the summer and fall

of 2001, over five years and six months prior to the date

CIT filed its complaint. CIT first appeared in the bankruptcy proceeding as an interested party on April 23,

2001. In July 2001, CIT first asked for its phone system

back in a letter to Maxwell. According to CIT, Maxwell

responded to this and other such requests with “stonewalling.” He also failed to file an inventory of the

debtor’s possessions as required by the Bankruptcy

Code. Then, according to CIT, Maxwell “deliberately”

filed a Statement of Financial Affairs in November 2001,

“falsely represent[ing] that Debtors did not hold any

property owned by” CIT. Hence, by November 2001, CIT
6 No. 08-3600

had appeared as a party to the bankruptcy and knew it

was entitled to recover its equipment, but Maxwell

refused to turn it over and even publicly denied

possessing it. CIT reasonably should have known at

that point that Maxwell had wrongfully disposed of

its equipment or at least refused to cooperate in its

return—either of which put CIT on notice of an injury

and potential claims against Maxwell.

Even if, as CIT claims on appeal, Maxwell’s conduct

in breach of his duty continued after the May 7, 2002

trigger date, CIT’s claims accrued and the limitations

period commenced in November 2001, when it first was

reasonably aware of its injury and its wrongful cause.

Unlike tort claims involving an ongoing or continuing

series of acts in which the limitations period does not

run until the date when tortious acts cease, Feltmeier v.

Feltmeier, 798 N.E.2d 75, 85 (Ill. 2003), where the tort

claims arise out of contract, the limitations period begins

at the time of the breach or when the plaintiff reasonably

should be aware of its injury and its wrongful cause.

Hermitage, 651 N.E.2d at 1135. As discussed above, CIT

knew of Maxwell’s wrongful conduct in relation to its

phone equipment during the summer and fall of 2001

and the statute of limitations commenced on that date.

CIT further argues that it was inappropriate to

dismiss its claim on a Rule 12(b)(6) motion because

the statute of limitations is an affirmative defense that

should not be adjudicated on the pleadings. In ruling on

Rule 12(b)(6) motions, the court must treat all wellpleaded allegations as true and draw all inferences in
No. 08-3600 7

favor of the non-moving party. See Tamayo v. Blagojevich,

526 F.3d 1074, 1081 (7th Cir. 2008). Under this standard,

CIT says it is entitled to an inference that its claims did not

accrue until December 2002, when it filed its amended

administrative expense claim for the full cost of the

equipment in bankruptcy court. This is the date when CIT

says it became clear that it had a cause of action. But

the true test under Illinois law is when CIT reasonably

should have known it was injured by Maxwell’s wrongful

conduct. See Knox Coll., 430 N.E.2d at 980 (citing Nolan v.

Johns-Manville Asbestos, 421 N.E.2d 864 (Ill. 1981)). CIT’s

argument then, is that despite its repeated attempts to

recover its equipment in the summer and fall of 2001 and

Maxwell’s refusal to cooperate, CIT was unaware of its

injury and its cause until sometime after the May 7, 2002

triggering date for the statute of limitations, but before

it amended its expense claim in the bankruptcy proceeding on December 12, 2002. This is where CIT pleads

itself out of court. After Bell Atlantic v. Twombly, 550 U.S.

544 (2007), it is no longer sufficient for a complaint “to

avoid foreclosing possible bases for relief.” E.E.O.C. v.

Concentra Health Svcs., Inc., 496 F.3d 773, 776-77 (7th Cir.

2007) (citing Bell Atl., 550 U.S. at 560-63). The plaintiff must plead some facts that suggest a right to relief

that is beyond the “speculative level.” Id. By including

in the complaint no triggering facts that occurred

during this window of time, CIT’s complaint establishes

an impenetrable defense to its claims that would have

to be contradicted for CIT to prevail on the merits. See id.

It would be mere speculation to infer from the complaint that CIT discovered its claims between May 7, 2002
8 No. 08-3600

and December 12, 2002; the complaint is completely

silent as to anything that happened during that period.

Rather, the complaint alleges that Maxwell failed to inventory the equipment and publicly declared in the

Statement of Financial Affairs that marchFIRST did not

possess the equipment before that period. These events

should have put CIT on notice that it had been injured—that Maxwell had either wrongfully disposed

of the equipment or was less than truthful about its

whereabouts. And as a sophisticated party appearing in

the bankruptcy proceedings, CIT should have known

that its injury was wrongfully caused. All of this

occurred, at the very least, on or before November 8,

2001, more than five years and five months before CIT

filed its complaint.

III. CONCLUSION

CIT’s claims accrued more than five years before it

filed its complaint and its claims are barred by the fiveyear statute of limitations. We AFFIRM.

12-21-09