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Sabath v. Morris Handler Co.

NOVEMBER 14, 1968.




Appeal from the Circuit Court of Cook County; the Hon. ALBERT E. HALLETT, Judge, presiding. Reversed and remanded.


Rehearing denied January 15, 1969.

The plaintiffs, Raymond L. Sabath and Century Provision Co., (Century), brought this suit against the defendants, Morris Handler Co. (Handler), and certain officers and directors thereof, to recover for damages alleged to have been sustained by reason of Handler's failure to obtain a driveway permit, as required by a construction contract. The complaint consisted of three counts: Count I alleged a breach of the written contract; Count II charged negligent and wilful and wanton conduct in the defendants' failure to obtain the permit and to advise the plaintiffs thereof; and Count III charged the defendants with fraud or deceit in this respect. The defendants moved to strike Counts I and III of the complaint and to dismiss Count II. The trial court struck all three counts, as barred by the applicable Statute of Limitations, and dismissed the suit at plaintiffs' costs, without reaching other defects alleged in the defendants' motion, which could be corrected by amendments to the complaint.

The relevant facts, for the purposes of this appeal, are that Handler, in 1953, contracted to do certain construction and remodeling work for Century. The contract provided that the work was to be done pursuant to certain plans and specifications, which included the construction of a certain loading dock and driveway on the premises in question; that Handler obtain and pay for all permits required by the work, and that it notify the owner of any conflict with existing laws and regulations.

The work was completed in May of 1954, and Handler was paid at that time. Included among the additional charges submitted by Handler, was ". . . the sum of $500.00, which was paid for driveway permits." (Emphasis ours.) The plaintiffs continued to use the driveway, without interruption, until about July of 1961, at which time they learned — for the first time — that Handler had not in fact obtained the driveway permit as required by its contract and as it suggested had been done by its additional charge.

In either August or September of 1961, the plaintiffs notified Handler of their discovery in this respect, and Handler immediately took steps to obtain the necessary permit. These steps included an attempt to obtain the permit from the City of Chicago; the filing of a lawsuit against the City upon its refusal to issue such permit, and the obtaining of an order in such proceeding which permitted the continued use of the driveway during the pendency of that lawsuit; the successful prosecution of the suit in the trial court wherein an order was entered directing that a permit issue; the defense of the case on appeal to the Appellate Court by the City of Chicago; and the attempt to have the matter heard by the Supreme Court upon the reversal of the trial court by the Appellate Court (56 Ill. App.2d 307, 206 N.E.2d 286).

It was not until October 13, 1965, that the Supreme Court denied Handler's petition for leave to appeal, and the plaintiffs were finally denied the use of the driveway. The case at bar was then commenced on June 13, 1967.

The defendants assert in their motion that Count I is barred by the 10-year Statute of Limitations (Ill Rev Stats 1967, c 83, par 17), and Counts II and III are both barred by the 5-year Statute (Ill Rev Stats 1967, c 83, par 16).

In Count I of the complaint, the plaintiffs contend, among other things, that the defendants, by their actions in pursuing the legal remedies seeking to obtain the driveway permit, either waived their right to assert the Statute of Limitations or should be estopped to assert such defense.

In our opinion, Handler's alleged breach of the contract occurred in 1954 when it purported to have completed the contract for the plaintiffs and received payment therefor. Thus, in 1961, when the plaintiffs discovered the breach, there still was ample time, under the applicable Statute of Limitations, to bring the breach of contract action asserted in Count I. But, during this time the defendants responded to the plaintiffs' demand to remedy their default and, at their own expenses, took the administrative and legal steps necessary in connection with obtaining the driveway permit, and the plaintiffs, at the defendants' request, halted the steps they had taken with the city to obtain the permit.

The defendants' acts, in response to the plaintiffs' discovery of the absence of a driveway permit, certainly manifested a recognition of their failure or default in the duty owed to the plaintiffs under the construction contract. This action also indicated to the plaintiffs that the defendants intended to correct the wrong they had imposed upon them.

The defendants diligently pursued the course necessary toward obtaining the driveway permit. They obtained a temporary order permitting the use of the driveway, and they were successful in the trial court — at a time still within the Statute of Limitations period — in obtaining a final judgment that the driveway permit should issue. It was not until after the applicable limitation period had passed that the Appellate Court reversed that judgment, which reversal subsequently became final by a denial of the petitions for rehearing and for leave to appeal.

It does not seem reasonable, as a matter of law, that the plaintiffs, in order to avoid the bar of the Statute of Limitations, should have been compelled to file suit against the defendants during this period of time in which the defendants, by their conduct, recognized their duty and obligation to the plaintiffs and were doing the very things which the plaintiffs desired and requested. At the very least, the conduct to which we have referred would present a question of fact as to whether or not the defendants are estopped to assert the defense of the Statute of Limitations.

[1-4] One may by his conduct be estopped from raising the defense of the Statute of Limitations. Kinsey v. Thompson, 44 Ill. App.2d 304, 307, 194 N.E.2d 565 (1963); 34 Am Jur, Limitations of Actions, § 411; 53 CJS, Limitations of Actions, § 25. Estoppel may be raised as a bar to the Statute of Limitations the same as to other matters. It exists independent of those things set forth in the statute itself as causing its suspension. If a party's conduct has reasonably induced another to follow a course of action that otherwise would not have been followed, and which would be to the latter's detriment if he could not later repudiate such course of action, an estoppel will arise to prevent injustice or fraud. Dill v. ...

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