Opinion ID: 777498
Heading Depth: 2
Heading Rank: 1

Heading: Timeliness of the Breach of Contract Claim

Text: 19 Horbach contends that the district court erred in applying the four-year limitations period to his claim for breach of contract rather than the longer five-year period that the Illinois legislature has specified for cases in which the defendant has fraudulently concealed a cause of action from the person to whom that cause belongs. See 735 ILCS 5/13-215. As we noted above, the district court applied the four-year period based on the Illinois Supreme Court's opinion in Anderson, 79 Ill.2d 295, 37 Ill.Dec. 558, 402 N.E.2d 560. Anderson construed the fraudulent concealment statute to apply only when the defendant's concealment has deprived the plaintiff of a reasonable amount of time in which to bring suit under the statute of limitations that would ordinarily apply. Id. at 573. In this case, when Horbach discovered in February 1991 that the pyrolysis system was not complete as Shred Pax had represented, Horbach still had three years in which to bring suit before the four-year limitations period specified for contractual claims expired. The district court thought that three years was more than enough time in which to bring suit and so, pursuant to Anderson and its progeny, declined to apply the longer limitations period for cases of fraudulent concealment. See, e.g., id. at 573 (seven to sixteen months following discovery of fraudulent concealment is a reasonable amount of time in which to bring suit). Horbach does not suggest that the district court misinterpreted Anderson but argues instead that Anderson 's holding is inconsistent with the language of the fraudulent concealment statute. Horbach Br. 12. Horbach believes that given the opportunity, the Illinois Supreme Court would reconsider and overrule its holding in Anderson, and on that basis he contends that this court should not consider itself bound by this precedent. See West v. American Tel. & Tel. Co., 311 U.S. 223, 236, 61 S.Ct. 179, 183, 85 L.Ed. 139 (1940) (When [state's highest court] has spoken, its pronouncement is to be accepted by federal courts as defining state law unless it has later given clear and persuasive indication that its pronouncement will be modified, limited or restricted.) (emphasis supplied). 20 We discern no basis for ignoring the Illinois Supreme Court's opinion in Anderson, however. Sitting in diversity, this court must look to state law on matters of substance, Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), including the relevant statute of limitations, e.g., Doe v. Roe No. 1, 52 F.3d 151, 154 (7th Cir.1995). The parties agree that in this case, the law of Illinois governs. Anderson embodies the Illinois Supreme Court's interpretation of the fraudulent concealment statute and leaves no doubt that the statute does not apply where, as here, the plaintiff discovers his injury in plenty of time to file suit within the limitations period that would otherwise apply. 21 Horbach suggests that the Illinois Supreme Court's subsequent opinion in Hermitage Corp. v. Contractors Adjustment Co., supra, 166 Ill.2d 72, 209 Ill.Dec. 684, 651 N.E.2d 1132, signals a retreat from Anderson, but we disagree. In Hermitage, the court was concerned with the discovery rule, which, as we noted earlier, delays the commencement of the statute of limitations in certain cases until such time as the plaintiff knew or should have known that he had been injured. See id. at 1135. The defendant urged the Illinois Supreme Court to hold, as some lower courts had done, that the discovery rule would not postpone the start of the limitations period past the date of injury so long as the plaintiff still had a reasonable amount of time to bring suit once he became aware (or should have become aware) that he had been injured. The defendant cited the court's holding in Anderson in support of this argument. But the court noted that it had already covered this ground in Sharpe v. Jackson Park Hosp., 92 Ill.2d 232, 65 Ill.Dec. 510, 441 N.E.2d 645 (1982), where it had rejected the notion that Anderson 's construction of the fraudulent concealment statute created any exception to or limitation upon the discovery rule. Id. at 646-47; see Hermitage, 209 Ill.Dec. 684, 651 N.E.2d at 1137-38. The discovery rule, the court re-emphasized in Hermitage, delays the start of the limitations period, whereas the fraudulent concealment statute extends the limitations period. Id. at 1137. Anderson 's reasonable time rule applies only in the latter situation. See id. [B]ecause this case does not involve a fraudulent concealment issue that might extend the statute of limitations, Hermitage concluded, we do not address Anderson.  Id. at 1138. 22 In short, Hermitage does not signal a retreat from Anderson. The court merely recognized that the discovery rule and the fraudulent concealment statute operate in two different ways, and that consequently it would be inappropriate to engraft Anderson 's reasonable time limitation onto the discovery rule. See also Highsmith v. Chrysler Credit Corp., 18 F.3d 434, 442 n. 7 (7th Cir.1994). Any notion that the court is on the verge of abandoning Anderson is put to rest by the court's decision just last year in Morris v. Margulis, supra, in which it applied the reasonable time rule without reservation. 754 N.E.2d at 319-20.