Court Opinion

ID: 3135476
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:37:51.690225+00
Date Added: 2024-06-11T11:54:10.503154
License: Public Domain

Docket No. 103759.

                              IN THE
                      SUPREME COURT
                                 OF
                THE STATE OF ILLINOIS

TRAVELERS CASUALTY & SURETY COMPANY, Appellee, v.
        JAMES A. BOWMAN et al., Appellants.

                    Opinion filed July 24, 2008.

    JUSTICE KILBRIDE delivered the judgment of the court, with
opinion.
    Chief Justice Thomas and Justices Freeman, Fitzgerald, and Burke
concurred in the judgment and opinion.
    Justice Garman specially concurred, with opinion, joined by
Justice Karmeier.

                             OPINION

    Plaintiff, Travelers Casualty & Surety Company, filed suit against
defendants, James A. and Barbara B. Bowman, for breach of a written
indemnity agreement relating to performance bonds. The circuit court
of Kane County granted the Bowmans’ motion to dismiss, finding the
cause of action time-barred by the four-year statute of limitations in
section 13–214(a) of the Code of Civil Procedure (Code) (735 ILCS
5/13–214(a) (West 2004)), for construction improvements to real
property. The appellate court reversed the circuit court’s judgment,
holding that Travelers’ action is subject to the 10-year statute of
limitations generally applicable to written contracts in section 13–206
(735 ILCS 5/13–206 (West 2004)). 368 Ill. App. 3d 519. We allowed
defendants’ petition for leave to appeal. 210 Ill. 2d R. 315. We affirm
in part and vacate in part the judgment of the appellate court and
remand the cause to the circuit court.

                          I. BACKGROUND
    On October 5, 2004, plaintiff, Travelers Casualty & Surety
Company, filed suit against A.G. Carlson, Inc., a metalworking firm,
and defendants, James A. and Barbara B. Bowman, in the circuit court
of Kane County. James Bowman was Carlson’s president and Barbara
Bowman was its sole shareholder. Carlson was subsequently dismissed
with prejudice from the suit.
    Travelers’ complaint alleged that Reliance Insurance Companies
and United Pacific Insurance Companies issued performance bonds to
Carlson. According to the complaint, Travelers was the successor in
interest to the rights of Reliance and United Pacific.
    The first performance bond applied to metalwork for expansion of
the Du Page County jail. The second performance bond covered
metalwork at a federal correctional facility in Pekin, Illinois. The third
performance bond applied to metalwork on an addition to a building
at Northern Illinois University. In consideration of the issuance of the
performance bonds, the Bowmans signed a general indemnity
agreement.
    Travelers’ complaint alleged that it incurred $510,904.52 in losses,
costs, and expenses on claims against the performance bonds in 1994
and 1996, when Carlson breached the underlying construction
contracts. Travelers alleged that the Bowmans breached the indemnity
agreement.
    The Bowmans moved to dismiss Travelers’ complaint pursuant to
section 2–619(a)(5) of the Code (735 ILCS 5/2–619(a)(5) (West
2004)) on statute of limitations grounds. The Bowmans argued
Travelers’ claims were barred by the four-year statute of limitations
in section 13–214(a) of the Code, for construction improvements to
real property.
    Travelers argued in a written response in opposition to the
Bowmans’ motion to dismiss that its action on the written indemnity
agreement could only be subject to the 10-year statute of limitations

                                   -2-
generally applicable to written contracts in section 13–206. Travelers
asserted that the plain and unambiguous language of the indemnity
agreement imposed an absolute contractual obligation on the
Bowmans to indemnify and that Travelers’ action is based upon the
express contractual terms of the indemnity agreement.
    The circuit court granted the Bowmans’ motion to dismiss based
on the four-year statute of limitations in section 13–214. The circuit
court reasoned that Travelers’ complaint was time-barred because
more than four years had elapsed since the claims against the
performance bonds.
    Travelers appealed, arguing that the trial court erred by not
applying the 10-year statute of limitations in section 13–206. The
Bowmans countered that the trial court correctly applied the four-year
statute of limitations in section 13–214. In the alternative, the
Bowmans asserted, for the first time on appeal, that the two-year
statute of limitations in section 13–204 for contribution and indemnity
actions applies to Travelers’ cause of action. The appellate court
reversed the circuit court’s dismissal of Travelers’ complaint, holding
applicable the 10-year statute of limitations in section 13–206. 368 Ill.
App. 3d 519. We granted the Bowmans’ petition for leave to appeal.
210 Ill. 2d R. 315.

                           II. ANALYSIS
    On appeal, the Bowmans contend that the appellate court erred in
applying the 10-year statute of limitations pursuant to section 13–206
of the Code (735 ILCS 5/13–206 (West 2004)). In its objection to the
Bowmans’ motion to dismiss pursuant to the 4-year statute of
limitations in section 13–214, Travelers maintained that the 10-year
statute of limitations in section 13–206 applied to their cause of
action. The basis of Travelers’ appeal was that the circuit court
erroneously applied the 4-year statute of limitations in section 13–214,
rather than the 10-year statute of limitations pursuant to section
13–206.
    The appellate court determined that the 10-year statute of
limitations in section 13–206 applied to Travelers’ cause of action
because its complaint stated a cause of action for breach of contract.
Section 13–206 provides, in relevant part:

                                  -3-
             “[A]ctions on bonds, promissory notes, bills of exchange,
        written leases, written contracts, or other evidences of
        indebtedness in writing, shall be commenced within 10 years
        next after the cause of action accrued ***.” 735 ILCS
        5/13–206 (West 2004).
    The applicability of a statute of limitations to a cause of action
presents a legal question we review de novo. Belleville Toyota, Inc.
v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 345 (2002). In
Armstrong v. Guigler, 174 Ill. 2d 281 (1996), this court considered
whether the 10-year statute of limitations in section 13–206 for
actions on a written contract or the 5-year statute of limitations in
section 13–205 for “all civil actions not otherwise provided for”
applied to a cause of action alleging breach of an implied duty. In
Armstrong, this court began its analysis by noting that “[t]he
determination of the applicable statute of limitations is governed by
the type of injury at issue, irrespective of the pleader’s designation of
the nature of the action.” Armstrong, 174 Ill. 2d at 286. In identifying
the applicable limitations period, Armstrong recognized, “[w]e have
long held that ‘it is the nature of the plaintiff’s injury rather than the
nature of the facts from which the claim arises which should determine
what limitations period should apply.’ ” Armstrong, 174 Ill. 2d at 286-
87 (quoting Mitchell v. White Motor Co., 58 Ill. 2d 159, 162 (1974),
and citing Handtoffski v. Chicago Consolidated Traction Co., 274 Ill.
282 (1916)). To determine the true character of a plaintiff’s cause of
action, Armstrong emphasized that “[t]he focus of the inquiry is on the
nature of the liability and not on the nature of the relief sought.”
Armstrong, 174 Ill. 2d at 291, citing Mitchell, 58 Ill. 2d at 162.
Armstrong observed that “[t]he essence of any contractual action is
found in the agreement’s promissory language.” Armstrong, 174 Ill.
2d at 291. This court concluded in Armstrong that a cause of action
constitutes “an action on a written contract” within the meaning of
section 13–206 only when liability emanates from the breach of a
contractual obligation. Armstrong, 174 Ill. 2d at 291. This court
explained in Armstrong:
        “It is irrelevant whether the aggrieved party seeks monetary
        damages, specific performance, rescission or restitution. As
        long as the gravamen of the complaint rests on the

                                   -4-
        nonperformance of a contractual obligation, section 13–206
        applies.” Armstrong, 174 Ill. 2d at 291.
    Armstrong found that the plaintiff’s claim for breach of fiduciary
duty did not result from the nonperformance of contractual obligations
and, consequently, the claim was not an action on a written contract,
but was collateral to the contract. Armstrong, 174 Ill. 2d at 293.
Accordingly, the court held that the 5-year statute of limitations in
section 13–205, rather than the 10-year statute of limitations in
section 13–206, applied to plaintiff’s claim for breach of fiduciary
duty. Armstrong, 174 Ill. 2d at 296.
    Applying Armstrong to the allegations of Travelers’ complaint
reveals that Travelers seeks damages for the Bowmans’ failure to
perform their contractual duties in the written indemnification
agreement. Travelers’ complaint alleges that the Bowmans breached
the indemnity agreement based on the second paragraph of the
indemnity agreement. In the second paragraph of the indemnity
agreement, the Bowmans agreed:
        “To indemnify, and keep indemnified, and hold and save
        harmless the Surety against all demands, claims, loss, costs,
        damages, expenses, and attorney fees whatever, and any and
        all liability therefore, sustained or incurred by the Surety by
        reason of executing or procuring the execution of any said
        Bond or Bonds, or any other Bonds, which may be already or
        hereafter executed on behalf of the Contractor, or renewal or
        continuation thereof, or sustained or incurred by reason of
        making any investigation on account thereof, prosecuting or
        defending any action brought in connection therewith,
        obtaining a release therefrom, recovering or attempting to
        recover any salvage in connection therewith or enforcing by
        litigation or otherwise any of the agreements herein contained.
        Payments of amounts due Surety hereunder together with
        legal interest shall be payable on demand.”
Travelers’ complaint further alleges that the Bowmans refused
Travelers’ demand for indemnification, thus breaching the written
indemnification agreement.
    It is clear that Travelers seeks recovery for damages from the
Bowmans’ nonperformance of express contractual obligations. The

                                 -5-
Bowmans allegedly failed to pay under the express terms of the
indemnity agreement. The nature of the Bowmans’ liability is a breach
of the written indemnity agreement. Consequently, Travelers’ claim is
an action on a written contract for payment of money, not for
nonperformance of Carlson’s construction work. We conclude the
appellate court correctly determined that the 10-year statute of
limitations in section 13–206 of the Code, for breach of written
contract, applies to Travelers’ cause of action against the Bowmans
for breach of their contractual obligations under the written indemnity
agreement.
    The Bowmans contend, however, that the four-year statute of
limitations in section 13–214, for construction improvements to real
property, applies to Travelers’ cause of action. Section 13–214(a)
applies to causes of action involving construction-related activities and
provides, in relevant part:
             “Actions based upon tort, contract or otherwise against
         any person 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 shall be commenced within 4 years from the time the
         person bringing an action, or his or her privity, knew or should
         reasonably have known of such act or omission.
         Notwithstanding any other provision of law, contract actions
         against a surety on a payment or performance bond shall be
         commenced, if at all, within the same time limitation applicable
         to the bond principal.” 735 ILCS 5/13–214(a) (West 2004).
    According to the Bowmans, under the terms of the indemnity
agreement, they were responsible for performing the same acts of
construction as Carlson. Therefore, the Bowmans contend, they were
involved “in the design, planning, supervision, observation or
management of construction or construction of an improvement to
real property,” under section 13–214(a).
    We reiterate that in determining the applicable statute of
limitations, the focus of our inquiry is on the nature of the liability.
Armstrong, 174 Ill. 2d at 291. To constitute an action for “an act or
omission *** in the design, planning, supervision, observation or
management of construction, or construction of an improvement to

                                  -6-
real property” within the meaning of section 13–214, liability must rest
on construction-related activity.
    Here, the liability at issue emanates not from construction-related
activity but, rather, from the breach of a contractual obligation to
indemnify. See People ex rel. Skinner v. Hellmuth, Obata &
Kassabaum, Inc., 114 Ill. 2d 252, 263 (1986) (“Issuance of a
performance bond cannot be deemed to be engaging in the ‘design,
planning, supervision, observation or management of construction, or
construction’ ”). Obligations arising out of indemnification agreements
require proof of a breach of contract and, therefore, parties to an
indemnity agreement regarding performance bond sureties are not
included in section 13–214. See Skinner, 114 Ill. 2d at 264.
    Carlson’s breach of construction contracts resulted in payment of
claims under the performance bonds. The payment of claims under the
performance bonds then triggered the Bowmans’ obligation to
perform under the indemnity agreement. The Bowmans’ liability to
Travelers does not, however, emanate from Carlson’s breach of the
construction contracts. Rather, the Bowmans’ liability emanates from
the refusal to perform their obligation of indemnification under the
written indemnification agreement after claims were made against the
underlying performance bonds. We hold, therefore, that section
13–214 is inapplicable to Travelers’ cause of action.
    Alternatively, the Bowmans contended, for the first time on
appeal, that the two-year statute of limitations in section 13–204 of
the Code (735 ILCS 5/13–204 (West 2004)), for contribution and
indemnity actions, applies to Travelers’ cause of action. The
Bowmans cite United General Title Insurance Co. v. AmeriTitle, Inc.,
365 Ill. App. 3d 142 (2006), in support of their argument that section
13–204 applies. The appellate court declined to follow United
General, agreeing with Travelers that United General did not
adequately address the limitations of section 13–204.
    We note that defendants did not raise this argument in the trial
court. Defendants raised the statute of limitations in section 13–204
for the first time in the appellate court. In Shaw v. Lorenz, 42 Ill. 2d
246, 248 (1969), this court noted the general rule that although a
defense not raised in the trial court may not be raised for the first time
on appeal by an appellant, “the appellee may urge any point in support
of the judgment on appeal, even though not directly ruled on by the

                                   -7-
trial court, so long as the factual basis for such point was before the
trial court.” Here, defendants were the appellees, urging the appellate
court to affirm the circuit court’s decision. Defendants argued section
13–204 as an alternate basis for affirming the circuit court’s dismissal
of plaintiff’s cause of action as untimely.
     If applicable, section 13–204 would support the circuit court’s
dismissal of plaintiff’s cause of action. While the trial court in this case
did not rule on the applicability of section 13–204, the issue was fully
briefed, argued, and decided in the appellate court and also briefed
and argued before this court. The Bowmans raised a statute of
limitations defense and the complaint filing date is in the record. The
Bowmans contend that it was not filed within two years of when
Travelers’ cause of action accrued. Thus, all the facts necessary for a
legal determination of whether section 13–204 is the proper statute of
limitations applicable to this cause of action are present in the record.
     We now consider the applicability of section 13–204 to Traveler’s
cause of action by looking to the plain language of the statute. Section
13–204 provides:
             “(a) In instances where no underlying action seeking
         recovery for injury to or death of a person or injury or damage
         to property has been filed by a claimant, no action for
         contribution or indemnity may be commenced with respect to
         any payment made to that claimant more than 2 years after the
         party seeking contribution or indemnity has made the payment
         in discharge of his or her liability to the claimant.
             (b) In instances where an underlying action has been filed
         by a claimant, no action for contribution or indemnity may be
         commenced more than 2 years after the party seeking
         contribution or indemnity has been served with process in the
         underlying action or more than 2 years from the time the
         party, or his or her privy, knew or should reasonably have
         known of an act or omission giving rise to the action for
         contribution or indemnity, whichever period expires later.
             (c) The applicable limitations period contained in
         subsection (a) or (b) shall apply to all actions for contribution
         or indemnity and shall preempt, as to contribution and
         indemnity actions only, all other statutes of limitation or

                                    -8-
         repose, but only to the extent that the claimant in an
         underlying action could have timely sued the party from whom
         contribution or indemnity is sought at the time such claimant
         filed the underlying action, or in instances where no underlying
         action has been filed, the payment in discharge of the
         obligation of the party seeking contribution or indemnity is
         made before any such underlying action would have been
         barred by lapse of time.
              (d) The provisions of this Section, as amended by Public
         Act 88–538, shall be applied retroactively when substantively
         applicable, including all pending actions without regard to
         when the cause of action accrued; provided, however, that this
         amendatory Act of 1994 shall not operate to affect statutory
         limitations or repose rights of any party which have fully
         vested prior to its effective date.
              (e) The provisions of this Section shall not apply to any
         action for damages in which contribution or indemnification is
         sought from a party who is alleged to have been negligent and
         whose negligence has been alleged to have resulted in injuries
         or death by reason of medical or other healing art
         malpractice.” 735 ILCS 5/13–204 (West 2004).
     Notably, under the plain language of the statute, section 13–204
states that its limitation periods “shall apply to all actions for
contribution or indemnity” (735 ILCS 5/13–204(c) (West 2004)). In
general, the right to indemnity may be based upon an express contract
or implied in law. See generally 21 Ill. L. & Prac. Indemnity §13
(2007). The right to common law implied indemnity is available to “a
tortfeasor whose liability is vicariously imposed by policy of law rather
than culpability of conduct.” Allison v. Shell Oil Co., 113 Ill. 2d 26,
35 (1986). For example, if “an injured party could hold an employer
or property owner vicariously liable for the negligence of an employee
or other person, a right of indemnity would be implied in favor of the
party liable in law who had not contributed to the injury.” Allison, 113
Ill. 2d at 29. See also American National Bank & Trust Co. v.
Columbus-Cuneo-Cabrini Medical Center, 154 Ill. 2d 347 (1992)
(recognizing the continued viability of common law implied
indemnity).

                                  -9-
    In sections 13–204(a) and 13–204(b), the term “indemnity” is used
in the disjunctive with the term “contribution.” 735 ILCS
5/13–204(a), (b) (West 2004). Sections 13–204(a) and 13–204(b) are
plainly addressing cases involving the allocation of damages in
connection with an underlying tort claim for injury to person or
property. Sections 13–204(a) and 13–204(b) are not applicable when
the basis for indemnity rests on a written indemnity agreement.
    This conclusion is also underscored by the language of subsection
(a) of section 13–204, referring to predicate actions “seeking recovery
for injury to or death of a person or injury or damage to property”
(735 ILCS 5/13–204(a) (West 2004)). Further, section 13–204(a) has
long been applied to actions among joint tortfeasors. See Barragan v.
Casco Design Corp., 216 Ill. 2d 435, 449-50 (2005).
    To reiterate, looking to the plain language of the statute, section
13–204(a) allows for an action for contribution or indemnity within
two years of a payment to a claimant only when “no underlying action
seeking recovery for injury to or death of a person or injury or damage
to property has been filed by a claimant.” 735 ILCS 5/13–204(a)
(West 2004). Nonetheless, United General, 365 Ill. App. 3d 142, held
that when the allegations of a complaint establish indemnification, the
two-year statute of limitations in section 13–204(a) applies, even
though the basis for the underlying claim arises from a written
agreement. United General erroneously assumed that section
13–204(a) applies to all actions seeking indemnification, regardless of
whether the basis of the indemnification is expressed in contract or
implied in tort. This is incorrect. Therefore, we overrule United
General to the extent that it can be read to hold that section
13–204(a) applies to any action seeking indemnification. Rather, both
sections 13–204(a) and 13–204(b) apply only when the action
involves allocation of damages for implied indemnification. Section
13–204(a) applies “[i]n instances where no underlying action *** has
been filed by a claimant.” Thus, subsection (a) determines the starting
of the limitations period when no underlying action has been filed.
Section 13–204(b) applies “[i]n instances where an underlying action
has been filed by a claimant.” 735 ILCS 5/13–204(a), (b) (West
2004). Subsection (b), therefore, determines the starting of the
limitations period when an underlying action has been filed.

                                 -10-
     Additionally, section 13–204(c) provides that subsection (b) only
applies “to the extent that the claimant in an underlying action could
have timely sued the party from whom contribution or indemnity is
sought at the time such claimant filed the underlying action.” 735
ILCS 5/13–204(c) (West 2004). Here, A.G. Carlson, the company
owned by the Bowmans, contracted with three underlying project
plaintiffs to perform certain metalworking. Travelers’ predecessors
issued performance bonds to cover those projects. When A.G. Carlson
did not perform the metalworking, the underlying project plaintiffs
filed suit against A.G. Carlson and Travelers’ predecessors in 1994
and 1996. Because the claimants in the underlying action (the project
plaintiffs) could not have sued the Bowmans directly, as required by
section 13–204(c), section 13–204(b) would therefore not apply.
Accordingly, looking to the plain language of the statute, we find that
the two-year statute of limitations of section 13–204 is inapplicable
under the facts of this case.
     Justice Garman concurs with this result but disagrees with our
finding that section 13–204 cannot apply when an action is asserted
for indemnity based upon a written contract. Slip op. at 15 (Garman,
J., specially concurring, joined by Karmeier, J.). According to Justice
Garman, section 13–204(b) “contains no language limiting its
application to actions seeking recovery for injury to or death from a
person or injury or damage to property.” Slip op. at 16 (Garman, J.,
specially concurring, joined by Karmeier, J.). In support of her
argument, Justice Garman cites to Medrano v. Production
Engineering Co., 332 Ill. App. 3d 562 (2002), and Guzman v. C.R.
Epperson Construction, Inc., 196 Ill. 2d 391 (2001). Slip op. at 17
(Garman, J., specially concurring, joined by Karmeier, J.). Justice
Garman claims these cases “suggest[ ] that section 13–204 can apply,
even where the indemnity sought arises from a written contract.” Slip
op. at 16 (Garman, J., specially concurring, joined by Karmeier, J.).
We disagree because neither Medrano nor Guzman directly addressed
the issue squarely before this court.
     In Medrano, the underlying tort claim involved a worker injured
by a punch press. The contract in Medrano was between the
manufacturer of the punch press and the worker’s employer. The
appellate court in Medrano found section 13–204 inapplicable because
the indemnity action was governed by the limitations period in the

                                 -11-
contract. The nature of the defendant’s liability was established by its
express contractual obligations. Consequently, in absence of a specific
limitations period provided in the contract, the 10-year statute of
limitations in section 13–206 for “actions on written contracts” would
be applicable. Medrano, 332 Ill. App. 3d at 575.
    In Guzman, the underlying action was for breach of a construction
contract. The defendant’s initial third-party indemnification claim was
based on breach of subcontracts. The defendant’s third-party
complaint was later amended to include express and implied indemnity
claims. Guzman, 196 Ill. 2d at 394. In Guzman, the four-year statute
of limitation in section 13–214(a) applied to the third-party claim
because it was an action regarding “ ‘an act or omission *** in the
design, planning, supervision, observation or management of
construction, or construction of an improvement to real property
***.’ 735 ILCS 5/13–214(a) (West 1992).” Guzman, 196 Ill. 2d at
398. Although this court acknowledged that section 13–204 would
apply to the third-party claim, it did not consider whether section
13–204 would apply to all three claims: breach of contract, express
indemnity, and implied indemnity. Rather, this court merely used
section 13–204 to support its holding that the statute of limitations
began to run on the date the third-party plaintiff was served with the
underlying action. Thus, the Guzman court was not presented with the
issue of whether section 13–204 applied to an express indemnity
agreement and it did not, therefore, examine that issue. Accordingly,
we find unpersuasive Justice Garman’s argument that Guzman
“suggest[s]” that section 13–204 can apply to express indemnity
claims based on written contracts.
    In sum, section 13–204 is applicable to claims for implied
indemnity involving allocation of damages in connection with an
underlying tort claim for injury to person or property, regardless of
whether subsection (a) or (b) is at issue. Section 13–204 is not
applicable to claims for express indemnification based on a written
contract. Because the claim at issue is based on a breach of express
indemnification provisions in a written agreement, it is subject to the
10-year limitations period in section 13–206.
    Having determined that neither the four-year statute of limitations
in section 13–214(a) nor the two-year statute of limitations of section
13–204 applies in this case, we conclude that the appellate court

                                 -12-
correctly determined that the 10-year statute of limitations in section
13–206 of the Code applies to Travelers’ cause of action for breach
of the written indemnity agreement. We determine, however, that the
appellate court prematurely considered whether Travelers’ cause of
action was timely under section 13–206. Since the trial court did not
rule on section 13–206, the appellate court should have simply
reversed and remanded the cause for the trial court to determine
whether Travelers’ cause of action is timely under section 13–206.
Further, in analyzing this issue, the appellate court erroneously
focused on when the surety incurred loss or liability.
    Section 13–206 provides that a cause of action for breach of
contract “shall be commenced within 10 years next after the cause of
action accrued.” (Emphasis added.) 735 ILCS 5/13–206 (West 2004).
Travelers’ cause of action for breach of contract could not accrue
until the Bowmans breached the indemnity agreement. Paragraph two
of the indemnity agreement provided: “Payments of amounts due
Surety hereunder together with legal interest shall be payable upon
demand.” (Emphasis added.) Under the terms of the indemnity
agreement, Travelers’ cause of action could not accrue until the
Bowmans failed or refused to pay upon Travelers’ demand for
payment. A cause of action to enforce the indemnity agreement,
therefore, was required to be commenced within 10 years after the
Bowmans failed or refused to tender payment upon Travelers’
demand. Without the date of the Bowmans’ failure or refusal to tender
payment in the record, the appellate court could not properly analyze
whether the cause of action was timely under section 13–206.
    We therefore vacate that part of the judgment of the appellate
court as it relates to a determination of when the limitations period
began to run in this case. We remand the cause to the circuit court for
a determination of whether Travelers filed its cause of action within
the applicable 10-year limitations period of section 13–206.

                          III. CONCLUSION
    We hold that the 10-year statute of limitations of section 13–206
of the Code of Civil Procedure applies to this cause of action for
breach of written indemnity agreement. We therefore affirm in part
and vacate in part the judgment of the appellate court and remand the

                                 -13-
cause to the circuit court for further proceedings consistent with this
opinion.

                                 Affirmed in part and vacated in part;
                                                     cause remanded.

     JUSTICE GARMAN, specially concurring:
     I agree with the majority that the 10-year statute of limitations in
section 13–206 of the Code applies to Travelers’ cause of action in
this case. 735 ILCS 5/13–206 (West 2004). Moreover, I agree that
the statute of limitations in section 13–204 of the Code is not
applicable. 735 ILCS 5/13–204 (West 2004). I do not fully agree with
the majority’s analysis of section 13–204, however, and thus I
specially concur.
     After discussing the plain language of section 13–204, the majority
notes that the section states that its limitation periods “ ‘shall apply to
all actions for contribution or indemnity.’ ” Slip op. at 9, quoting 735
ILCS 5/13–204(c) (West 2004). Further, the majority points out that,
in general, the right to indemnity may be based upon an express
contract or implied in law. Slip op. at 9.
     Notwithstanding the above, the majority concludes that section
13–204 is never applicable when the basis for indemnity rests on a
written indemnity agreement. Slip op. at 10. The majority asserts that
“both sections 13–204(a) and 13–204(b) apply only when an action
involves allocation of damages for implied indemnification.” Slip op.
at 10. Moreover, the majority states that “section 13–204 is applicable
to claims for implied indemnity involving allocation of damages in
connection with an underlying tort claim for injury to person or
property, regardless of whether subsection (a) or (b) is at issue.
Section 13–204 is not applicable to claims for express indemnification
based on a written contract.” Slip op. at 12.
     Supporting its position, the majority points out that the term
“indemnity” is used in the disjunctive with the term “contribution” in
both sections 13–204(a) and 13–204(b). Slip op. at 10. Moreover, the
majority notes that section 13–204(a) refers to predicate actions
“ ‘seeking recovery for injury to or death of a person or injury or

                                   -14-
damage to property.’ ” Slip op. at 10, quoting 735 ILCS 5/13–204(a)
(West 2004).
    Considering the above, the majority addresses United General
Title Insurance Co. v. AmeriTitle, Inc., 365 Ill. App. 3d 142 (2006),
which the Bowmans cite in support of their position that section
13–204 applies to Travelers’ cause of action in this case. Slip op. at
7. The majority notes that United General held that section 13–204(a)
applied, even though the basis for the underlying claim in the case
arose from a written agreement. The majority states that “United
General erroneously assumed that section 13–204(a) applies to all
actions seeking indemnification, regardless of whether the basis of the
indemnification is expressed in contract or implied in tort.” Slip op. at
10.
    I agree with the majority inasmuch as it holds that section
13–204(a) cannot apply in a situation where the predicate action does
not seek recovery for injury to or death of a person or injury or
damage to property. However, that is not the issue in this case.
Indeed, section 13–204(a) does not apply at all in this case, as it
expressly applies only “[i]n instances where no underlying action ***
has been filed by a claimant.” 735 ILCS 5/13–204(a) (West 2004).
    In this case, an underlying action was filed and thus section
13–204(b) would apply, barring the exceptions described in section
13–204(c), as it expressly states that it is applicable in “instances
where an underlying action has been filed by a claimant.” 735 ILCS
5/13–204(b) (West 2004). Section 13–204(c), however, provides that
subsection (b) only applies “to the extent that the claimant in an
underlying action could have timely sued the party from whom
contribution or indemnity is sought at the time such claimant filed the
underlying action.” 735 ILCS 5/13–204(c) (West 2004). Because the
claimants in the underlying action in this case could not have sued
defendants directly, then, section 13–204(b) would not apply by its
own terms. Slip op. at 11.
    While the majority’s analysis correctly recognizes that the plain
language of section 13–204 makes clear that the statute does not
apply in this case, it also goes further, finding that section 13–204
cannot apply in any situation where an action is asserted for indemnity
based upon a written contract. I think this goes too far. While United
General may have incorrectly interpreted section 13–204(a) in a

                                  -15-
situation involving a written contract, that does not necessarily mean
that section 13–204(b) cannot apply where the indemnity sought arises
from a written contract.
    Section 13–204(b) is the relevant section here and unlike section
13–204(a) it contains no language limiting its application to actions
seeking recovery for injury to or death of a person or injury or damage
to property. Additionally, while the majority focuses on United
General, it is not the only case to have suggested that section 13–204
can apply, even where the indemnity sought arises from a written
contract.
    In Medrano v. Production Engineering Co., 332 Ill. App. 3d 562
(2002), the appellate court considered a situation where an underlying
plaintiff (Medrano) was injured while working with a punch press
machine. The manufacturer of that machine, Production Engineering
Company (Production), had a contract with Medrano’s employer,
Cam Fran Tool Company (Cam Fran), which provided that Cam Fran
was to indemnify Production for any claims arising out of work
performed under the contract. Medrano, 332 Ill. App. 3d at 564. This
contract further made clear that any action taken to enforce the
contract must be commenced within one year after the cause of action
arises. Medrano, 332 Ill. App. 3d at 564.
    After Medrano filed suit against Production, Production filed a
third-party complaint against Cam Fran seeking indemnification for all
costs it expended in relation to Medrano’s underlying action.
Medrano, 332 Ill. App. 3d at 564. Eventually, an issue arose as to
whether or not Production timely filed its third-party complaint
against Cam Fran. In considering this issue, the appellate court held
that while section 13–204 provides the default statute of limitations
for indemnity actions, it did not apply in that particular case because
the parties involved had contracted for a different limitations period.
Medrano, 332 Ill. App. 3d at 574-75 (“It is true that section 13–204
will ‘preempt’ other statutes of limitation, but it does not apply here.
However, this is not because Medrano could not timely sue Cam Fran.
Rather, section 13–204 is inapplicable because the parties in the
instant case formed and agreed upon a contractual limitations period,
which, as long as it is reasonable, does not allow them to fall back
upon the default-statute of limitations” (emphasis in original)).

                                 -16-
    Similarly, in Guzman v. C.R. Epperson Construction, Inc., 196 Ill.
2d 391 (2001), this court considered the applicability of section
13–204. In Guzman, the plaintiffs in the underlying action (the
Guzmans) filed suit against C.R. Epperson Construction, Inc.
(Epperson). Guzman, 196 Ill. 2d at 393. The Guzmans had a contract
with Epperson for the construction of a home and they alleged
Epperson breached that contract by constructing a home that
contained numerous design and construction defects. Guzman, 196 Ill.
2d at 393. Faced with this suit, Epperson filed a third-party complaint
against various subcontractors. Guzman, 196 Ill. 2d at 394. This
complaint, which sounded in breach of contract, was amended to
include both express and implied indemnity claims against each third-
party defendant. Guzman, 196 Ill. 2d at 394. While Guzman does not
specifically discuss what contractual language Epperson relied upon
in filing its indemnity claims, the fact that the opinion notes that
Epperson’s complaint contained “express” indemnity claims indicates
that at least some of them were contractual. In considering the effect
of section 13–204, this court noted that while the section previously
only applied to claims for contribution, it was amended “to include
indemnity claims within its purview.” Guzman, 196 Ill. 2d at 401.
Further, this court found that “the General Assembly amended section
13–204 to include indemnity actions such as that involved here.”
Guzman, 196 Ill. 2d at 402.
    Both Medrano and Guzman suggest, then, that section 13–204
can apply in situations involving third-party indemnity claims premised
on written contracts. Moreover, nothing in section 13–204 itself
suggests the contrary. In fact, section 13–204(c) suggests that the
statute broadly applies, as it states that “[t]he applicable limitations
period contained in subsection (a) or (b) shall apply to all actions for
contribution or indemnity and shall preempt, as to contribution and
indemnity actions only, all other statutes of limitation or repose.” 735
ILCS 5/13–204(c) (West 2004). This indicates that section 13–204
anticipates that one or more statutes of limitations could arguably
apply in certain situations. It further indicates that when faced with
such a situation, section 13–204 should be considered first, as long as
certain exceptions also found in section 13–204(c) do not operate to
negate the applicability of the statute.

                                 -17-
     In sum, I believe that the plain language of section 13–204 itself
makes clear that the statute does not apply in this case. Accordingly,
I agree that the 10-year statute of limitations in section 13–206 of the
Code applies here. Unlike my colleagues, however, I think that it is
unwise to completely foreclose the possibility that section 13–204 can
apply to an indemnity claim based upon a written contract. Because
the plain language of section 13–204 fully supports the resolution in
this particular case, it is altogether unnecessary to declare, as the
majority does, that “both sections 13–204(a) and 13–204(b) apply
only when the action involves allocation of damages for implied
indemnification.” Slip op. at 10. This is particularly so where the
language of the statute indicates no such result and this court has
suggested just the opposite. See Guzman, 196 Ill. 2d at 391; see also
Medrano, 332 Ill. App. 3d at 574-75.

   JUSTICE KARMEIER joins in this special concurrence.

                                 -18-