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Axia, Inc. v. I.c. Harbour Const. Co.





Appeal from the Circuit Court of Du Page County; the Hon. William E. Black, Judge, presiding.


Plaintiff, AXIA, Inc., a Delaware corporation, formerly known as Bliss & Laughin Industries, Inc., filed a complaint seeking damages from defendants, I.C. Harbour Construction Company (Harbour) and Shaw and Associates, Inc. (Shaw), alleging that Harbour, as the contractor, and Shaw, as the architect, breached a written contract to construct an office building for plaintiff. Each defendant filed a motion to dismiss pursuant to section 2-619(a)(5) of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2-619(a)(5)) asserting that the action was not brought within the two-year time limitation as then set forth in section 13-214(a) of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 13-214(a)), now amended to a four-year term limitation not applicable hereto (Ill. Rev. Stat. 1985, ch. 110, par. 13-214(a)). The trial court dismissed the complaint as being time barred. This court originally reversed the trial court's decision in an order pursuant to Supreme Court Rule 23 (87 Ill.2d R. 23) based upon the holding in People ex rel. Skinner v. Hellmuth, Obata & Kassabaum, Inc. (1985), 135 Ill. App.3d 765, 482 N.E.2d 155, that the statute of limitations relied upon was unconstitutional. After our supreme court upheld the constitutionality of section 13-214(a) (Ill. Rev. Stat. 1983, ch. 110, par. 13-214(a)) (People ex rel. Skinner v. Hellmuth, Obata & Kassabaum, Inc. (1986), 114 Ill.2d 252), the defendants' motions for rehearing were granted, and the order was withdrawn. We now address the merits of the appeal.

The issue raised by plaintiff is whether the trial court erred in dismissing plaintiff's complaint as being barred by the statute of limitations.

According to the complaint, plaintiff entered into a written contract with Harbour on June 10, 1977, for the construction of a new three-story office building. The written agreement contained a provision stating that the contractor warranted that all work would be of good quality, free from faults and defects, and in conformance with the contract documents. It also contained a provision requiring the contractor to correct any defect in the building appearing within one year upon written notification by the owner. Plaintiff also entered into a written contract on June 24, 1977, with Shaw to design the office building. Under the terms of this contract, Shaw was required to prepare the drawings and specifications for the building and to periodically examine the construction to determine if the quality of work was in accordance with the contracts. The building was completed in the fall of 1978, and plaintiff and its tenants took possession of the building.

Shortly after completion, the building began to leak extensively after rain. Additionally, a white powdery deposit, described in the complaint as efflorescence, began covering the outside of the building as well as appearing on some inside walls. Within one year of completion of the building, plaintiff notified both Harbour and Shaw of the water-leakage problems and requested that they correct these conditions. Plaintiff alleged in the complaint that Harbour attempted to correct the water-leakage problems by caulking mortar joints and applying water-resistant sealer. The remedial measures were unsuccessful.

Plaintiff employed a consulting firm in July 1983 to investigate and determine the cause of the water-leakage problem. The consulting firm issued its report in September 1983 concerning the apparent causes of the conditions and its recommendations for correcting the conditions. Plaintiff sent copies of the report to Harbour and Shaw. The report indicated both design and construction deficiencies. The parties then met, and plaintiff stated the corrective work suggested in the report should be done. Harbour obtained other bids for the work and sent a letter to plaintiff requesting instructions. Thereafter, on November 11, 1983, plaintiff notified Harbour that if Harbour failed to commence and complete the corrective work, plaintiff would complete the work and hold Harbour responsible for the cost of the work under the contract. Harbour took no action, and plaintiff hired another contractor to perform the repair work. Ten months later, on September 17, 1984, plaintiff filed the complaint in this action.

Harbour and Shaw each moved to dismiss the complaint alleging that the action was barred by the applicable two-year statute of limitations set forth in section 13-214(a) (Ill. Rev. Stat. 1983, ch. 110, par. 13-214(a)). In particular, each defendant asserted that the water-leakage problem manifested itself shortly after the completion of the building in 1978, yet the complaint was not filed in this action until September 17, 1984.

Plaintiff filed an "Amended Answer to Motion to Dismiss" to each motion arguing that Harbour and Shaw are estopped from asserting the statute of limitations because their conduct led plaintiff to believe that the situation would be remedied. In support of its opposition to the motions to dismiss, plaintiff also submitted the affidavit of Donald R. Pacey, one of plaintiff's managers. Pacey generally reaffirmed the allegations contained in the complaint. Specifically, he stated that in 1979, 1980, and 1981, as well as on January 27 and 31, May 2, and September 13, 1983, he sent letters to Harbour either requesting it to perform corrective work or inquiring about the status of the corrective work. Only the 1983 letters, however, were attached to the affidavit. Pacey also stated that he sent similar letters to Shaw in 1979, 1980, 1981, and on January 31, 1983. Only the 1983 letter was attached. In addition, Pacey stated that from time to time from 1979 to 1983, Harbour inspected the building and performed tests to determine the cause of the problems. Harbour also performed work on the structure which included a sealant to some of the bricks in 1979, washing down the exterior of the building and coating it with sealant in 1980, caulking a structural crack in 1982, and applying a sealant to the penthouse wall in 1983.

Pacey further stated that in February 1983, plaintiff met with both Harbour and Shaw concerning additional corrective work. He states that Harbour proposed to further investigate the use of a particular sealant, and that Shaw indicated that it would explore the problems and have a waterproof expert submit an estimate. The parties also met on September 26, 1983, after plaintiff's consultant had submitted its report. Harbour indicated it would obtain bids for the work recommended in the report. After Harbour sent the bids to plaintiff and requested further instructions, plaintiff notified Harbour to commence the repair work and informed Harbour that failure to do so would result in plaintiff having the work done by another contractor and holding Harbour responsible for the cost. The trial court dismissed the complaint because it was barred by the statute of limitations (see Ill. Rev. Stat. 1983, ch. 110, par. 13-214(a)), particularly noting that the doctrine of estoppel did not apply to the defendants' actions. The court also found that even if the doctrine of estoppel was applicable, plaintiff's 10-month delay from the time of its last demand for satisfaction and the filing of the lawsuit barred it from proceeding against Shaw and Harbour under the equitable doctrine of laches.

• 1 Plaintiff initially contends that the court improperly dismissed the complaint as time barred by the statute of limitations because the actionable breach of the contracts underlying the complaint asserted against both Harbour and Shaw was Harbour's refusal to perform the recommended repair work which occurred in November 1983, and its subsequent refusal to pay for the costs of having the repair work completed. Our review of the record reveals that this issue was never presented to the trial court. The complaint asserted a breach of contract action based upon the improper design and construction of the office building and was not predicated on the failure to comply with a specific provision of the contract concerning a responsibility to pay for repair costs. In addition, plaintiff's response to the motions to dismiss failed to assert this claim in opposition to the statute of limitations defense. As it is axiomatic that questions not raised in the trial cannot be raised for the first time on appeal and are deemed waived (George W. Kennedy Construction Co. v. City of Chicago (1986), 112 Ill.2d 70, 77, 491 N.E.2d 1160; Western Casualty & Surety Co. v. Brochu (1985), 105 Ill.2d 486, 500, 475 N.E.2d 872), we conclude that plaintiff has waived review of this contention.

• 2, 3 Plaintiff also argues in its reply brief that because it had no knowledge of the real cause of the problem until the September 1983 report was issued, the action did not accrue until September 1983. It also argues that Shaw's obligation was to supervise Harbour and that Shaw's breach flowed from Harbour's breach. Arguments not raised in the initial brief, however, are also deemed waived for purposes of review. (Murdy v. Edgar (1984), 103 Ill.2d 384, 393, 469 N.E.2d 1085; Resudek v. Sberna (1985), 132 Ill. App.3d 783, 791, 477 N.E.2d 789.) Even if we were to ignore the waiver doctrine, plaintiff's arguments are without merit. First, the statute of limitations begins to run when a party becomes possessed with sufficient information concerning its injury and the causes of the injury to put a reasonable person on inquiry to determine whether actionable conduct is involved. (County of Du Page v. Graham, Anderson, Probst & White, Inc. (1985), 109 Ill.2d 143, 153-54, 485 N.E.2d 1076; Knox College v. Celotex Corp. (1981), 88 Ill.2d 407, 415, 430 N.E.2d 976.) Plaintiff's alleged notification of Harbour of the water-leakage problem within one year of the 1978 completion indicates that it possessed the requisite amount of information necessary to further inquire whether the problem was actionable. Second, Shaw had no obligation to repair. While it did have an obligation to guard against defects, the breach occasioned by the failure to supervise Harbour's work occurred when the defects manifested themselves within one year of the 1978 completion of the building.

Plaintiff next contends that even if the cause of action for breach of contract accrued when it discovered the water-leakage problem, the trial court still improperly dismissed the complaint as barred by the statute of limitations because any delay in the filing of the lawsuit was caused by the defendants' conduct. Plaintiff presents three separate arguments in support of this contention.

• 4 First, plaintiff argues that both Harbour and Shaw undertook remedial actions to correct the problems constituting acknowledgements of liability which tolled the running of the applicable two-year statute of limitations. The defendants both respond that this issue is also waived as plaintiff did not raise this issue below. Plaintiff, however, did present this argument to the trial court in its answers to the defendants' motions to dismiss. Although plaintiff preserved this issue for our review, it has failed to cite in its brief any authority to support its contention that the acts of the defendants operated to "toll" the running of the statute of limitations period. The statute itself does not provide for any exception which would toll, or delay, the running of the statute, as it is an established rule regarding the statute of limitations that no exceptions which toll the statute or enlarge the scope will be implied (Hamil v. Vidal (1985), 140 Ill. App.3d 201, 204, 488 N.E.2d 1024; Severe v. Miller (1983), 120 Ill. App.3d 550, 555, 458 N.E.2d 173), we choose not to add an exception to section 13-214(a) (Ill. Rev. Stat. 1983, ch. 110, par. 13-214(a)).

• 5 Second, plaintiff argues that the circumstances here are analogous to situations involving a second, or new, promise to pay a past-due debt. (See Hurtt v. Steven (1947), 333 Ill. App. 181, 185, 77 N.E.2d 204.) We find such an analogy inappropriate. A new promise to pay a past-due debt which removes a case from the running of the statute of limitations is unlike a normal bargain in that it creates a new debt without creating new reciprocal rights. (See Schmidt v. Desser (1980), 81 Ill. App.3d 940, 942-44, 401 N.E.2d 1299.) Essentially, it revives an old debt conclusively presumed paid after the statute of limitations has expired, and this revival can be accomplished only by an explicit agreement. (81 Ill. App.3d 940, 943, 401 N.E.2d 1299.) Here, the allegations in the complaint and the affidavit indicate only an attempt by Harbour to alleviate existing problems with its construction of the building, not an attempt to create a new bargain. Additionally, some of the alleged repair work relied upon by plaintiff was performed prior to the running of the two-year period for the statute of limitations, and, ...

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