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06/27/89 Wayne T. Lofthouse, v. Suburban Trust and Savings

June 27, 1989

HENDRICKSON, DECEASED, PLAINTIFF-APPELLANT

v.

SUBURBAN TRUST AND SAVINGS BANK OF OAK PARK ET AL., DEFENDANTS-APPELLEES

SECTION 4-207(4) (ILL. RE

v.

STAT. 1985, CH. 26, PAR. 4-207(4)) PROVIDES AS FOLLOWS:



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SECOND DIVISION

WAYNE T. LOFTHOUSE, Special Adm'r of the Estate of Nancy M.

542 N.E.2d 36, 185 Ill. App. 3d 889, 134 Ill. Dec. 36 1989.IL.1000

Appeal from the Circuit Court of Cook County; the Hon. Angelo D. Mistretta, Judge, presiding.

APPELLATE Judges:

JUSTICE SCARIANO delivered the opinion of the court. BILANDIC, P.J., and DiVITO, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE SCARIANO

Plaintiff presents the following issue for review: whether the trial court erred in dismissing plaintiff's complaint pursuant to section 2-619 of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2-619), where it was not shown that his action was barred by a statute of limitations because: (a) the pleading attacked did not affirmatively show that the action was barred by the appropriate statute of limitations; (b) whether there was a loss to defendants due to plaintiff's delay is a question of fact that the court below improperly disposed of in granting defendants' section 2-619 motion to dismiss; or (c) laches was improperly considered by the court in defendants' section 2-619 motion to dismiss.

On January 12, 1983, a draft in the amount of $6,939.59 representing the proceeds from the sale of certain stock held by the subject estate was issued by Langill & Co., designating William W. Hall, executor of the estate of Nancy M. Hendrickson, as payee; defendant Northern Trust was the drawer bank. On January 15, 1983, defendant Suburban Trust accepted the check for deposit into the personal account of one Joseph Collins. The check was endorsed as follows: "Paid to the order of Joseph A. Collins -- William W. Hall, Executor of the Estate of Nancy Hendrickson." Hall's signature was a forgery.

On September 12, 1986, plaintiff Wayne T. Lofthouse was appointed special administrator of the estate of Nancy M. Hendrickson. On August 10, 1987, plaintiff filed a complaint seeking to recover from defendants $6,939.59, representing the proceeds from the forged instrument, plus interest and costs, asserting that the signature of William W. Hall was a forgery.

Both defendants filed motions to dismiss based on sections 2-615 and 2-619 of the Code of Civil Procedure. (Ill. Rev. Stat. 1987, ch. 110, pars. 2-615, 2-619.) The motions to dismiss pursuant to section 2-619 relied on two separate grounds: (1) that plaintiff failed to commence his action within the requisite period of the statute of limitations found in section 4-207(4) of the Uniform Commercial Code (Ill. Rev. Stat. 1985, ch. 26, par. 4-207(4)), and (2) that the action was barred by the doctrine of laches. Plaintiff did not provide a written response to defendants' motions. After hearing argument on June 29, 1988, the trial court, without the benefit of the services of a court reporter, granted defendants' section 2-619 motions to dismiss; however, the order fails to state the reasons the Judge relied upon in granting the motions.

On appeal, plaintiff first asserts that since the pleading attacked did not affirmatively show that the action was barred by the appropriate statute of limitations, defendants' motions should have been denied by the trial court. (Rowan v. Novotny (1987), 157 Ill. App. 3d 691, 510 N.E.2d 1111.) In Rowan, the court held that the limitations period does not begin to run until after the plaintiff has knowledge or should have knowledge of defendant's wrongful acts (Rowan, 157 Ill. App. 3d 691, citing Knox College v. Celotex Corp. (1981), 88 Ill. 2d 407, 430 N.E.2d 976), and that whether plaintiff knew or had reasonable grounds to know of the libelous nature of defendant's letter was a question of fact; accordingly, the statute of limitations defense was improperly entertained in a section 2 -- 619 motion to dismiss. Rowan, 157 Ill. App. 3d at 694.

Plaintiff argues that similarly, in the present case, it is also a question of fact as to when the statute of limitations began to run because, although the forged instrument was negotiated nearly four years and eight months before the filing of the present suit, plaintiff was not named special administrator of the estate of Nancy M. Hendrickson until September 12, 1986, less than a year prior to the filing of this lawsuit. Thus, plaintiff contends, questions of fact are raised as to when the "reasonable time" set forth in section 4 -- 207(4) of chapter 26 began to run, what constitutes a "reasonable time," and when he knew or should have known of the injury to the estate.

"Unless a claim for breach of warranty under this Section is made within a reasonable time after the person claiming learns of the breach, the person liable is discharged to the extent of any loss caused by the delay in making the claim.", Plaintiff cites a Seventh Circuit United States Court of Appeals case for its definition of what constitutes a "reasonable time":

"What notification would be deemed 'reasonable' in a specific case depends, of course, upon the activities reviewed and the surrounding circumstances [citations]. In some cases, quite lengthy delays in reporting forgeries will not defeat the warranty claim if no damages resulted from the delays. E.g. Michigan National Bank v. American Nat. B. & T. Co., 34 Ill. App. 3d 30, 339 ...


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