MEMORANDUM OPINION AND ORDER
This is an action for damages resulting from the crash of a
helicopter manufactured by the defendant and purchased by the
plaintiff. Jurisdiction is based on diversity of citizenship.
28 U.S.C. § 1332. Plaintiff is a British Columbian citizen
with its principal place of business in Canada. Defendant is a
Maryland corporation with its principal place of business in
Maryland. The helicopter in question was manufactured by
defendant in California and sold to plaintiff on either October
7, 1964 or December 18, 1964. This contract was executed and the
aircraft delivered in California. On September 17, 1967, the
helicopter crashed in the Canadian province of British Columbia.
This action was filed on December 17, 1970. Plaintiff has also
filed an identical action against the defendant in the Superior
Court of the State of Washington for King County.
Defendant has filed an answer to the complaint with an
affirmative defense and a motion to dismiss. Defendant moves for
dismissal on several grounds. First, he alleges that this action
is barred by the appropriate statutes of limitations. Secondly,
he alleges that
the complaint is defective, as plaintiff has failed to allege
freedom from contributory negligence. Finally, defendant alleges
that this action should be dismissed on the doctrine of forum non
conveniens or, alternatively, transferred to the United States
District Court in Seattle, Washington. We will deal with the
defendant's contentions in that order.
A federal district court sitting in a diversity action should
apply the forum state's conflict of laws rules. Klaxon Co. v.
Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020,
85 L.Ed. 1477 (1941). This means we should reach the same result
regarding conflicts of laws as an Illinois state court would if
it were hearing this action. Plaintiff's amended complaint
contains six counts. Two of the counts allege negligence by the
defendant. Two counts assert a claim based on product liability.
One count alleges that defendant breached a continuing contract
to supply certain information relating to servicing the aircraft.
A final count alleges breaches of both express and implied
warranties. For statute of limitations purposes, the product
liability counts will be treated with the negligence counts, as
both clearly sound in tort. Williams v. Brown Manufacturing Co.,
45 Ill.2d 418, 261 N.E.2d 305 (1970). The basic Illinois statute
of limitations for actions of this sort relating to property
damage may be found in Illinois Revised Statutes, Chapter 83
Section 16 (Smith-Hurd 1966). This section states that an action
for damage to property shall be commenced within five years after
the cause of action accrued. In negligence actions, a cause of
action accrues when the last act occurred to create liability.
Gray v. American Radiator and Standard Sanitary Corp., 22 Ill.2d 432,
176 N.E.2d 761 (1961). In the instant action, this occurred
when the aircraft crashed. As the crash took place in September,
1967, and this action was filed in December, 1970, plaintiff is
well within the Illinois statute of limitations. The Illinois
courts have also held this last event rule applicable to product
liability actions. Williams v. Brown Manufacturing Co., supra.
Therefore, the product liability counts were also timely filed.
The contract counts, both as to breach of contract and those
based on warranties, present different problems. The basic
applicable statute of limitations may be found in Illinois
Revised Statutes, Chapter 26, Section 2-725 (Smith-Hurd 1963).
This section provides that an action for breach of any contract
for sale must be commenced within four years after the cause of
action has accrued. Subsection two goes on to state:
(2) A cause of action accrues when the breach occurs,
regardless of the aggrieved party's lack of knowledge
of the breach. A breach of warranty occurs when
tender of delivery is made, except that where a
warranty explicitly extends to future performance of
the goods and discovery of the breach must await the
time of such performance the cause of action accrues
when the breach is or should have been discovered.
Ch. 26, § 2-725(2).
The exception contained in this subsection saves Count II of the
complaint relating to a contract to provide information regarding
servicing the aircraft as this contract called for a continuing
duty to provide this information.
This exception also seems applicable to plaintiff's Count III.
Plaintiff alleges that defendant breached both express and
implied warranties. These warranties relate to the
merchantability of the aircraft. It seems reasonable to expect a
warranty of this nature to continue beyond the tender of delivery
and extend for the life of the product. For this reason, the
alleged warranties extended to future performance within the
meaning of Section 2-725(2). The four year period began to run
from the date of discovery of the alleged breach — 1967.
Therefore, the plaintiff's Count III is not barred by the
Illinois statute of limitations.
This result leads to the next problem in the analysis of the
statute of limitations issue. Simply because an action is timely
and properly brought under the forum's local statute of
limitations does not necessarily mean that it may still not run
afoul of other applicable statutes of limitations. The reason for
this is the presence of the Illinois borrowing statute. Illinois
Revised Statutes, Chapter 83, Section 21 (Smith-Hurd 1966). The
Illinois borrowing statute states:
When a cause of action has arisen in a state or
territory out of this state, or in a foreign country,
and, by the laws thereof, an action thereon cannot be
maintained by reason of the lapse of time, an action
thereon shall not be maintained in this state. Ch.
83 § 21.
As Illinois' only connection with this action is the presence
of this suit in our courts, it seems quite clear that the "cause
of action" has arisen elsewhere. The problem, therefore, is to
determine where the cause of action arose; what that forum's
statute of limitations is; and whether the action would be barred
there. Again, for the purpose of analysis, the tort and contract
counts will be dealt with separately.
The first issue which requires resolution is the locus of the
tort cause of action. The rule is that a tort cause of action has
arisen "where the last act occurred to create liability." Manos
v. Trans World Airlines, Inc., 295 F. Supp. 1170, 1175 (N.D.Ill.
1969). That decision by Chief Judge Robson of this Court involved
an airplane crash in Italy. The plane had been manufactured and
sold in Washington. Questions arose as to the applicable statute
of limitations for both tort and warranty questions. This court
held that under the Gray v. American Radiator and Standard
Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961) case, the
tort occurred when the actual accident took place — the plane
crash. While this court is quite aware that the Manos case was
decided prior to the Illinois Supreme Court's decision in
Ingersoll v. Klein, 46 Ill.2d 42, 262 N.E.2d 593 (1970), we feel
that the court's reasoning in Manos is still valid. In Ingersoll,
Illinois adopted the "most significant relationship" test of the
Second Restatement of Conflicts to determine what substantive law
should be applied to a tort action. Ingersoll does not speak to
the issues of where and when a cause of action arises, but rather
goes to the question of what substantive law shall govern it.
However, even if we were to apply Ingersoll to determine what
statute of limitations to apply, the result would be the same.
Under the Gray-Manos approach, the crash in British Columbia is
determinative. Under the Ingersoll-Second Restatement approach,
it is necessary to determine what state had the most significant
relationship with the action to justify application of its laws.
As stated in Ingersoll, the forum should consider:
(a) The place where the injury occurred. (b) The
place where the conduct occurred. (c) The domicile,
nationality, place of incorporation and place of
business of the parties. (d) The place where the
relationship of the parties is centered. 46 Ill.2d at
48, 49, 262 N.E.2d at 596.
The injury involved occurred in British Columbia. The conduct
occurred in California and British Columbia. The plaintiff is
domiciled and has its principal place of business in British
Columbia. The defendant is domiciled and has his principal place
of business in Maryland. The relationship of the parties was
originally centered in California, but in 1965 defendant moved
its California manufacturing operation to Maryland and totally
extinguished all of its California connections. As a result, the
center of the relationship moved to British Columbia where the
aircraft was used and where the defendant knew the aircraft was
to be used. With these contacts in mind, it seems obvious that
British Columbia has the most significant relationship with the
action. Therefore, were we to apply the Gray-Manos "last event"
test or the Ingersoll
"most significant relationship" test, the result under the
borrowing statute is the same. The tort cause of action arose in
British Columbia. The British Columbian statute of limitations
for tort actions is six years. Revised Statutes of British
Columbia, Chapter 370, Section 3 (1960). Therefore, as the
Illinois borrowing statute only applies if the action would be
barred in that other jurisdiction, i.e., where the cause of
action arose, and as it was clearly brought within the six year
period, the Illinois borrowing statute has no application to the
count's sounding in tort.
The rules relating to where a contractual cause of action arose
are somewhat different. The basic rule is that a contractual
cause of action arises when the contract is executed and where
the article is sold. Hardman v. Helene Curtis Industries, Inc.,
48 Ill. App.2d 42, 198 N.E.2d 681 (1st Dist. 1964); and Harris v.
American Surety Co., 372 Ill. 361, 24 N.E.2d 42 (1939). The
contract involved in the instant action was executed in
California, and the aircraft was delivered to plaintiff in
California. Therefore, the cause of action arose in California
for purposes of the Illinois borrowing statute.
The issues, then, are which California statute of limitations
is applicable and when does it begin to run. Count II alleges a
contract to supply plaintiff with service information.
Unfortunately, plaintiff has not elected to advise this court
whether he is alleging the breach of a written or oral contract.
As plaintiff drafted the complaint and failed to state whether
the contract is oral or written and, if the latter, has failed to
include a copy as an exhibit, we must assume the contract alleged
in Count II of the complaint to be oral. Actions on oral
contracts are governed by Section 339 of the California Code of
Civil Procedure. It requires that an action must be filed within
two years or be barred. This presents the problem of when the
statute begins to run. The rule has been stated in Howe v.
Pioneer Manufacturing Company, 262 Cal.App.2d 330, 68 Cal.Rptr. 617,
623 (1st Dist. 1968):
It is the general rule that the applicable statute of
limitations begins to run even though the plaintiff
is ignorant of his cause of action or of the identity
of the wrongdoer.
However, a judicially created exception exists which is quite
similar to the Illinois discovery rule. Aced v. Hobbs-Sesack
Plumbing Co., 55 Cal.2d 573, 12 Cal.Rptr. 257, 360 P.2d 897
(1961). This exception applies to plaintiff's Count II, which
alleges a contract with the continuing duty to supply plaintiff
with the necessary information to properly service the aircraft.
The surest method of alerting someone to the possibility that an
aircraft was not properly serviced is to have it crash. Thus, the
statute runs from September 17, 1967, and any action based upon
an oral contract filed after September 17, 1969 is barred. This
action was originally filed on December 17, 1970. Therefore,
Count II is barred.