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06/22/87 Dolph Leffler, Jr., As v. Engler

June 22, 1987

DOLPH LEFFLER, JR., AS TRUSTEE, PLAINTIFF-APPELLANT

v.

ENGLER, ZOGHLIN & MANN, LTD., ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION

510 N.E.2d 1018, 157 Ill. App. 3d 718, 109 Ill. Dec. 950 1987.IL.862

Appeal from the Circuit Court of Cook County; the Hon. Joseph R. Schwaba, Judge, presiding.

APPELLATE Judges:

JUSTICE O'CONNOR delivered the opinion of the court. QUINLAN, P.J., and BUCKLEY, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE O'CONNOR

Plaintiff, Dolph Leffler, Jr., appeals from the order of the circuit court of Cook County granting defendants', Engler, Zoghlin & Mann, Ltd., and Ronald H. Engler's, motion to dismiss plaintiff's complaint with prejudice. On appeal, plaintiff's main contention is that because defendants fraudulently concealed plaintiff's cause of action, the statute of limitations within which he may have brought suit was extended for five years from the date he discovered the fraud. For the reasons that follow, we reverse and remand for further proceedings.

The pleadings reveal the following facts: Plaintiff was a trustee and participant of the "Suburban Tire Company Pension Plan and Trust." Defendant, Ronald H. Engler, was an employee and agent of defendant Engler, Zoghlin & Mann, Ltd., and was an enrolled actuary.

In about March of 1979, plaintiff, on behalf of Suburban Tire Company (Suburban), and through his agent, Nicholas B. Burke, entered into an agreement with defendants whereby defendants were to prepare a pension plan for Suburban's employees. Plaintiff was to pay defendants a fee of up to 15% of Suburban's deposits in the pension plan. Defendants represented to plaintiff that the plan complied with the Employee Retirement Income Security Act of 1974 (29 U.S.C. secs. 1001 through 1461 (1982)); that deposited funds would be invested in an annuity contract secured by defendants; that the annuity contract was an appropriate, safe and productive investment; and that defendants would provide "competent, honest and reasonably priced services as fiduciaries of such pension plan." Defendants made the above representations in order to induce plaintiff to enter the agreement with defendants. Plaintiff relied on those representations in deciding to enter such an agreement and to deposit $15,000 with defendants for the purchase of an annuity insurance policy.

In October of 1982, plaintiff first learned that defendants had collected a 68% commission, or $10,200, on the plaintiff's purchase of the annuity, instead of the agreed 15%, or $2,250.

In December of 1984, plaintiff filed suit against defendants in the United States Court for the Northern District of Illinois based on ERISA. On May 21, 1985, the district court dismissed the Federal suit because the pension plan, which gave rise to the cause of action, was outside the scope and coverage of Title I of ERISA.

Four months later, on September 17, 1985, plaintiff filed suit against defendants in the circuit court of Cook County for the same actions on which the Federal suit was based. The complaint alleges breach of contract (count I); fraud (count II); deceptive trade practices (count III); and unjust enrichment (count IV).

On October 21, 1985, defendants moved to dismiss the complaint on the ground that it was time barred under the applicable five-year statute of limitations for an unwritten agreement. (Ill. Rev. Stat. 1985, ch. 110, par. 13-205.) Although no motion to strike defendants' motion to dismiss appears in the record, on January 17, 1986, the court denied such a motion. Thereafter, on January 31, 1986, the court granted defendants' motion to dismiss with prejudice.

The parties agree as to the following: The applicable statute of limitations is the five-year statute for unwritten agreements. (Ill. Rev. Stat. 1985, ch. 110, par. 13 -- 205.) The alleged cause of action accrued in March of 1979; therefore, plaintiff had until March of 1984 to file suit against defendants. Plaintiff first discovered the alleged fraud which defendants allegedly had been perpetrating against him since March of 1979 in October of 1982, which left him 17 months to file his cause of action during the five-year limitation period.

Plaintiff contends that because defendants fraudulently concealed plaintiff's cause of action, the statute of limitations is extended pursuant to section 13-215 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 13-205), which provides that if a cause of action is fraudulently concealed, the party entitled to bring suit may do so at any time within five years from the date the party discovers he or she has a cause of action. (Ill. Rev. Stat. 1985, ch. 110, par. 13-215.) Plaintiff further argues that because defendants were ...


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