Court Opinion

ID: 9709302
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:44:26.076792+00
Date Added: 2024-06-11T18:22:47.549099
License: Public Domain

JUSTICE HOLDRIDGE, dissenting: I must respectfully dissent from the majority’s opinion. I believe that the five-year statute of limitations provided for in section 13— 205 of the Code (735 ILCS 5/13 — 205 (West 1992)) applies to actions for breach of fiduciary duty, regardless of whether the fiduciary duty arises from a written contract or not. I would therefore affirm the order of the trial court dismissing plaintiff’s complaint as barred by the statute of limitations. Courts interpreting Illinois laws on this issue have consistently held that actions brought for breach of duties implied in law, even where the relationship of the parties arises from a written document, are nonetheless subject to the five-year statute of limitations. Cooper v. United Development Co. (1984), 122 Ill. App. 3d 850; Luminall Paints, Inc. v. La Salle National Bank (1991), 220 Ill. App. 3d 796, 803; Havoco of America, Ltd. v. Sumitomo Corp. of America (7th Cir. 1992), 971 F.2d 1332, 1337. In Cooper the court squarely held on this issue: "As long ago as 1892, it was judicially determined that an action on an implied undertaking, arising by virtue of a written agreement, constitutes an action on an unwritten contract and, consequently, must be brought within the five-year limitation period. (Knight v. St. Louis, Iron Mountain & Southern Ry. Co. (1892), 141 Ill. 110, 115, 30 N.E. 543.)” Cooper, 122 Ill. App. 3d at 858. I believe that Havoco is more instructive on this issue than Economy Fuse & Manufacturing Co. v. Raymond Concrete Pile Co. (7th Cir. 1940), Ill F.2d 875, cited by the majority. In Havoco the parties entered into a written sales agency agreement whereby Havoco designated Sumitomo as its agent for the sale of coal. The court found that the written contract created an agency relationship between the parties and that "[ujnder Illinois law, Sumitomo, as Havoco’s agent, owed Havoco a fiduciary duty as a matter of law. [Citations].” (Havoco, 971 F.2d at 1336.) The district court granted summary judgment for Sumitomo, holding that Havoco’s claim for breach of fiduciary duty was time barred by the Illinois five-year statute of limitations. (Ill. Rev. Stat. 1991, ch. 110, par. 13 — 205 (now 735 ILCS 5/13 — 205 (West 1992)).) In affirming the district court, the court stated: "[A] plain reading of [sections 13 — 205 and 13 — 206] demonstrates that the district court correctly applied the five-year limitations period. The ten-year limitations period in section 13 — 206 applies only to actions on written contracts or other written evidence of indebtedness; a breach of fiduciary duty claim is not such an action. Section 13 — 205 applies to all torts, actions on oral contracts, and 'all civil actions not otherwise provided for.’ A breach of fiduciary duty claim is an action 'not otherwise provided for’ in the Illinois statutes of limitations.” Havoco, 971 F.2d at 1337. Unlike Economy, which dealt with implied warranties of fitness and workmanship in a construction contract, Havoco concerns the same type of contract and implied duty as in the matter sub judice, i.e., a fiduciary duty implied in law and arising from a written agency agreement. I believe the court’s reasoning in Havoco is sound and, although not controlling, nonetheless persuasive. I also note that the plaintiffs in this action seek punitive damages for willful and wanton breach of fiduciary duty. As a general rule, punitive damages are not recoverable for breach of contract. (Kelsay v. Motorola, Inc. (1978), 74 Ill. 2d 172, 187; Hayes v. Moynihan (1869), 52 Ill. 423, 426; Bank of Lincolnwood v. Comdisco, Inc. (1982), 111 Ill. App. 3d 822, 829.) The sole purpose of contract damages is to compensate the nonbreaching party, and punitive damages are not available even for a "willful” breach of contract. Morrow v. L.A. Goldschmidt Associates, Inc. (1986), 112 Ill. 2d 87, 94. An exception to the general rule that punitive damages are not coverable for breach of contract is when the conduct causing the breach is also a tort for which punitive damages are recoverable. (McIntosh v. Magna Systems, Inc. (N.D. Ill. 1982), 539 F. Supp. 1185 (applying Illinois law); St. Ann’s Home For The Aged v. Daniels (1981), 95 Ill. App. 3d 576, 580.) Punitive damages are recoverable "where the breach amounts to an independent tort and there are proper allegations of malice, wantonness or oppression.” Bank of Lincolnwood v. Comdisco, Inc. (1982), 111 Ill. App. 3d 822, 829. Thus it would appear that the plaintiffs are attempting to pick and choose among causes of action, remedies and statutes of limitations to suit their needs. When it comes to damages, the complaint seeks a remedy only available in tort, not in an action for a breach of contract. But, when the plaintiffs need to avoid the five-year statute of limitations for actions sounding in tort, their cause now becomes an action for breach of contract. The trial court saw beyond the smoke and mirror logic of the plaintiffs and I would affirm the court’s ruling. Accordingly, I respectfully dissent.