Opinion ID: 796613
Heading Depth: 2
Heading Rank: 2

Heading: The Tolling Agreement

Text: 10 Turning to the substance of this appeal, Citizens Bank argues that the district court erred in granting the accounting firm's motion for summary judgment on the basis of its finding that the cross-claim was untimely. Citizens Bank contends that the unambiguous language of the tolling agreement established that while the tolling agreement was in effect, the running of the limitations period was tolled. As a result, Citizens Bank argues, the district court should have treated the day after the tolling agreement expired, January 1, 2006, as though it were the day after the effective date of the tolling agreement, May 2, 2003, which would result in a timely-filed cross-claim. Under Illinois law, which the parties agree governs, contracts are interpreted according to the 11 [474 F.3d 993] 12 four corners rule: [a]n agreement, when reduced to writing, must be presumed to speak the intention of the parties who signed it. It speaks for itself, and the intention with which it was executed must be determined by the language used. It is not to be changed by extrinsic evidence. Davis v. G.N. Mortgage Corp., 396 F.3d 869, 878 (7th Cir.2005) (citations and internal quotations omitted). In applying this rule, we first look to the language of the contract alone. Air Safety, Inc. v. Teachers Realty Corp., 185 Ill.2d 457, 462, 236 Ill.Dec. 8, 706 N.E.2d 882, 884 (Ill.1999) ( citing Rakowski v. Lucente, 104 Ill.2d 317, 323, 84 Ill.Dec. 654, 472 N.E.2d 791, 794 (Ill.1984)). If the language of the contract is clear and unambiguous, we interpret the contract without the use of parol evidence, id., and contract terms are interpreted according to their plain meaning unless otherwise defined. Utility Audit, Inc. v. Horace Mann Serv. Corp., 383 F.3d 683, 687 (7th Cir.2004) ( citing Trade Center v. Dominick's Finer Foods, 304 Ill. App.3d 931, 934, 238 Ill.Dec. 230, 711 N.E.2d 333, 335 (1999)). An ambiguity exists, however, if the contract's language is susceptible to more than one interpretation. Air Safety, Inc., 185 Ill.2d at 462-63, 236 Ill.Dec. 8, 706 N.E.2d at 884. Only then is parol evidence admissible to explain and determine the intent of the parties. Id. 13 As the district court correctly determined, the terms of the tolling agreement are unambiguous. The relevant portion of the tolling agreement states: 14 The Parties agree that all statute of limitations defenses and other defenses relating to the time that claims are asserted are tolled from the Effective Date through the date of termination of this Tolling Agreement. Nothing contained herein will be deemed to renew, revive, resurrect or reinstate any claim that, on the Effective Date, was already time barred. 15 Both parties agree that toll means to suspend or stop temporarily; they disagree, however, as to what the agreement tolled. Citizens Bank asserts that the statute of limitations was tolled by the agreement, while the accounting firm argues that only the statute of limitations defenses and other defenses were tolled. The clear, unequivocal language of the tolling agreement resolves this dispute: only the statute of limitations defenses and other defenses were tolled. To find to the contrary would require us to either eliminate the parties' specific use of defenses within the agreement or otherwise augment the unambiguous agreement by including a provision that specifically tolls the running of the statute of limitations, neither of which we are permitted to do. 16 Citizens Bank argues, however, that this interpretation of the tolling agreement produces an absurd result that is contrary to our obligation to construe contract terms as is fair, customary, and such as prudent persons would naturally execute. Utility Audit, Inc., 383 F.3d at 687 ( citing Foxfield Realty, Inc. v. Kubala, 287 Ill. App.3d 519, 524, 223 Ill.Dec. 52, 678 N.E.2d 1060, 1063 (1997)). Citizen Bank contends that the parties had no need to enter into the tolling agreement to toll the statute of limitations defenses because as of the effective date of the tolling agreement, the statute of limitations had just begun to run. Because the accounting firm would not be able to raise the statute of limitations as a defense for nearly two years, Citizens Banks posits that the more reasonable interpretation is that the parties agreed to toll the statute of limitations. As recognized by the district court, however, the tolling agreement provided Citizens Bank with an eight-month extension from the statutory expiration of the 17 [474 F.3d 994] 18 statute of limitations. Since Citizens Bank received a benefit by entering into the tolling agreement, our interpretation of the tolling agreement does not produce an absurd or irrational result. 19 Additionally, our interpretation of the tolling agreement is consistent with its recitals. These recitals state the desire of the parties to postpone or forego the costs and expenses of litigation while determining whether the claims can be resolved without litigation[,] as well as Citizen Bank's desire to avoid the assertion of defenses associated with delay in commencing litigation, whether by way of statute of limitations, laches, estoppel, or other defenses. The tolling agreement prevented the accounting firm from asserting such defenses until the expiration of the agreement. That the parties were ultimately unsuccessful in their negotiations did not eliminate the benefit of the eight additional months that Citizens Bank received to file its claim. 20 Citizens Bank also invites us to consider the April 30, 2003 letter sent by counsel for Citizens Bank to the accounting firm to assist us in our interpretation of the tolling agreement and the parties' intent. We decline this invitation, however, because the language of the tolling agreement is subject to only one interpretation, and we cannot add to or vary the terms of this unambiguous agreement by reference to such extrinsic evidence. See Davis, 396 F.3d at 878 ( citing Sunstream Jet Express, Inc. v. Int'l Air Serv. Co., Ltd., 734 F.2d 1258, 1265 (7th Cir.1984)). 21 We agree with the district court's conclusion that the unambiguous language of the tolling agreement tolled only the statute of limitations defenses and other defenses. Because Citizens Bank failed to timely file its cross-claim against the accounting firm, summary judgment against Citizens Bank on its cross-claim was appropriate.