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04/24/89 Marshall Tate, A/K/A v. Beverly Chrysler Plymouth

April 24, 1989

MARSHALL TATE, A/K/A ROBERT TATE, ET AL., PLAINTIFFS-APPELLANTS

v.

BEVERLY CHRYSLER PLYMOUTH ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIRST DIVISION

538 N.E.2d 663, 182 Ill. App. 3d 830, 131 Ill. Dec. 288 1989.IL.588

Appeal from the Circuit Court of Cook County; the Hon. Thomas P. Quinn, Judge, presiding.

APPELLATE Judges:

JUSTICE QUINLAN* delivered the opinion of the court. BUCKLEY and CAMPBELL, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE QUINLAN

The plaintiffs, Marshall and Marsha Tate, filed a complaint in the circuit court of Cook County for personal injuries arising out of an accident they had while driving their automobile, a 1979 Audi 5000. Initially, plaintiffs filed suit against Beverly Chrysler Plymouth (Beverly), the car dealer that had sold them the automobile, based upon theories of negligence and strict products liability. Later, the plaintiffs added the manufacturer of the car, Volkswagen of America (VWoA), as a defendant under a theory of strict products liability. VWoA moved to dismiss the cause of action because plaintiffs had added VWoA as a defendant after the statutory limitations period had expired, and the trial court dismissed the plaintiff's complaint against VWoA. Subsequently, the plaintiffs amended their complaint to include allegations of fraudulent concealment of the cause of action by VWoA, but the trial court, again on VWoA's motion, dismissed the complaint, ruling that the pleadings of fraudulent concealment were insufficient. Plaintiffs amended their complaint a third time, and the trial court once again dismissed plaintiffs' complaint on defendant VWoA's motion because it found the pleadings of fraudulent concealment were insufficient but, this time, the court dismissed plaintiffs' claim against VWoA with prejudice. Plaintiffs have now appealed the trial court's dismissal of their claim against VWoA.

On December 24, 1984, plaintiffs were driving their 1979 Audi 5000 automobile when it allegedly skidded out of control and hit another vehicle. On November 26, 1986, plaintiffs filed their original complaint sounding in negligence and strict products liability against Beverly, the car dealer that had sold them the car, asserting that the Audi 5000 had been sold to them with defective, mismatched tires. However, on May 20, 1987, plaintiffs filed their amended complaint to include VWoA as a defendant under a theory of strict products liability, because, plaintiffs alleged, there had been a defect in the transmission of their Audi. On July 1, 1987, VWoA moved to dismiss plaintiffs' allegations against it, pursuant to section 2-619(a)(5) of the Illinois Code of Civil Procedure, and argued that plaintiffs' cause of action was time barred under sections 13-202 and 13-213 of the Code of Civil Procedure. (See Ill. Rev. Stat. 1987, ch. 110, pars. 2-619(a)(5), 13-202, 13-213.) The trial court, as noted above, granted defendant VWoA's motion and found that the claim was time barred, but granted plaintiffs leave to amend their complaint to include allegations of fraudulent concealment.

On December 1, 1987, plaintiffs filed their second amended complaint. Although the plaintiffs admitted in their complaint that they had discovered their possible cause of action on or about March 24, 1986, they claimed that VWoA had actually prevented them from filing their claim within the statutory period by its false assertions concerning the defects in the Audi 5000 automobiles. VWoA again moved to dismiss, and on April 29, 1988, the court granted VWoA's motion, finding plaintiffs' allegations of fraudulent concealment to be insufficient, but granting plaintiffs leave to file a third amended complaint.

On July 7, 1988, plaintiffs filed their third amended complaint. In that complaint, the allegations of fraudulent concealment specifically alleged that VWoA was aware, prior to the time of plaintiffs' accident, that there was a sudden acceleration defect in the cars, but that VWoA failed to warn plaintiffs, as well as the general public, of the defect; that VWoA's recall of the Audi 5000 automobiles was an attempt to avoid an investigation by the National Highway Traffic Safety Administration and thus prevented car owners from learning the true nature of the defect; that VWoA concealed the alleged defect by claiming the problems with the cars were due to improper driver usage or driver error; that VWoA concealed the defect by claiming that installation of a shift-lock device would prevent driver error; and that VWoA also denied that any alleged defect existed despite VWoA's knowledge to the contrary. The defendant VWoA filed a motion to dismiss plaintiffs' third amended complaint also, and after the trial court held a hearing on defendant VWoA's motion to dismiss the plaintiffs' third amended complaint, the court granted VWoA's motion, ruling that the complaint did not set forth sufficient allegations to establish that VWoA fraudulently concealed the cause of action. In so ruling, the trial court noted that plaintiffs had been obligated to investigate potential causes of action from the time of the accident and that the plaintiffs here should have been acutely aware of their potential claim against VWoA by at least March 1986, when an investigation into the sudden

On appeal, the plaintiffs argue that the trial court erred when it dismissed their claim against VWoA with prejudice and found that their claim was time barred. The plaintiffs assert that their complaint set forth sufficient factual allegations to establish that VWoA fraudulently concealed their cause of action. Plaintiffs specifically contend that their allegations that VWoA recalled the Audi 5000 as merely a diversionary measure to avoid an investigation by the NHTSA, that VWoA continually denied that there was a manufacturing defect in the Audi 5000, and that VWoA blamed any alleged problems on driver error were sufficient to establish VWoA's fraudulent intent to conceal its activities and plaintiffs' cause of action.

Although the plaintiffs admit that they became aware of the publicized problem with the Audi 5000 on or about March 24, 1986, nine months before the statutory period expired, they contend that this nine-month period was not enough time to conduct a reasonable inquiry, as required by section 2-611 of the Code of Civil Procedure. (See Ill. Rev. Stat. 1987, ch. 110, par. 2-611.) Moreover, the plaintiffs argue that the question of whether nine months was a reasonable time within which to file their claim against VWoA was a fact question. Because this fact determination was critical to their claim, the plaintiffs submit that the trial court should have held a hearing to examine all of the relevant facts to determine whether the remaining nine months was a reasonable amount of time for them to have filed suit.

In any event, the plaintiffs assert that, regardless of whether there was fraudulent concealment, the discovery rule should have been applied to the facts here. Under the discovery rule, their cause of action did not accrue until they knew or had reason to know of the cause of their injury, and, here, they contend that they did not know or discover their cause of action against VWoA until March 1986. Thus, the plaintiffs argue that the statute of limitations did not begin to run until that time.

The discovery rule, which plaintiffs admit does not generally apply to cases in which there is a sudden, traumatic event, such as here, should nevertheless be applied here, because, they argue, the only information upon which the plaintiffs could base their claim concerning the defect in the Audi 5000 was in the control of VWoA. In such cases where the information concerning the cause of action was solely within the defendant's control, they assert that our court has applied the discovery rule. Thus, the plaintiffs conclude that the discovery rule should also have been applied here.

Conversely, VWoA argues that plaintiffs' complaint was properly dismissed as being time barred because the applicable statute of limitations expired two years after the date of the accident and VWoA was added as a defendant subsequent to this time. VWoA asserts that there was no fraudulent concealment here and that, in any event, the plaintiffs' own allegations clearly established that plaintiffs knew of their cause of action in sufficient time before the statute ran to have timely filed suit. Thus, VWoA claims, even if the court found that there was evidence of fraudulent concealment, the plaintiffs admitted in their complaint that they discovered their cause of action against VWoA nine months before the original two-year limitations period had expired. The law in Illinois is clear, VWoA asserts, that where a defendant's fraudulent concealment of a cause of action is discovered by the plaintiff before the statutory period expires and there is a reasonable amount of time remaining to file a lawsuit, in such a situation, the plaintiff is bound by the original statutory period. Here, VWoA asserts that the plaintiffs' discovery of their cause of action nine months prior to the expiration of the original two-year statutory period allowed plaintiffs a reasonable time to ...


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