The opinion of the court was delivered by: Richard Mills, District Judge:
This cause is before the Court on Grace's motion for summary
judgment pursuant to Fed.R.Civ.P. 56(c). Because the
overwhelming majority of court decisions favor the position of
the State Farm, the Court denies this motion except as to
Count III of State Farm's complaint (breach of express
State Farm filed its original complaint on January 30, 1989.
Pursuant to Grace's motion to dismiss and State Farm's
withdrawal of certain claims, State Farm filed an amended
complaint on December 12, 1991. In the amended complaint,
State Farm relies on five different theories of recovery,
including strict liability, negligence, breach of express
warranties, fraud and misrepresentation, and willful and
wanton misconduct. All claims seek compensation for property
damage allegedly caused by the incorporation of
asbestos-containing fireproofing in State Farm's corporate
headquarters in Bloomington, Illinois, and its regional office
buildings in Austin, Texas, and Tempe, Arizona. [hereinafter
I. Standard for Summary Judgment
Under Fed.R.Civ.P. 56(c), summary judgment shall be granted
if the record shows that "there is no genuine issue as to any
material fact and that the moving party is entitled to a
judgment as a matter of law." Black v. Henry Pratt Co.,
778 F.2d 1278, 1281 (7th Cir. 1985). The moving party has the
burden of providing proper documentary evidence to show the
absence of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A
genuine issue of material fact exists when "there is sufficient
evidence favoring the nonmoving party for a jury to return a
verdict for that party." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986).
Unquestionably, in determining whether a genuine issue of
material fact exists, the evidence is to be taken in the light
most favorable to the non-moving party. Adickes v. S.H. Kress &
Co., 398 U.S. 144, 90 S.Ct. 1598 (1970). Once the moving party
has met its burden, the opposing party must come forward with
specific evidence, not mere allegations or denials of the
pleadings, which demonstrates that there is a genuine issue for
trial. Howland v. Kilquist, 833 F.2d 639 (7th Cir. 1987).
Grace argues that State Farm's claim is time barred because
of various Illinois statutes of limitation.
(a). Personal Injury Statute of Limitation
Grace has asserted correctly that Illinois statute of
limitations apply to State Farms' claims. A federal court
sitting in diversity follows the choice of law rules of the
forum state. Klaxon v. Stentor, 313 U.S. 487, 61 S.Ct. 1020, 85
L.Ed. 1477 (1941). Grace first argues that Ill.Rev.Stat., ch.
110, ¶ 13-205 (1989), establishes a five year limit on actions
"to recover damages for an injury done to property, real or
personal. . . ." This period began to run as soon as the
alleged asbestos product was installed in the buildings in
1970-73. Because State Farm did not file this action until
1989, Grace argues that the five year statute of limitation
precludes this action.
Defendant also argues that this limitation period should not
be tolled because of any "fraudulent concealment." A statute
of limitation may be tolled pursuant to Ill.Rev.Stat., ch.
110, ¶ 13-215 (1989), if a person liable for the action
fraudulently conceals the cause of the action. However, in this
case, the architect of the buildings knew the composition of
the fireproofing material that was installed in the buildings
as early as 1971. Because the architect was an agent of State
Farm, and because an agent's knowledge is imputed to its
principal, Defendant argues that there is no fraudulent
concealment because State Farm had knowledge through its
architect of the alleged asbestos materials.
Grace's argument has not withstood judicial scrutiny. First,
as State Farm points out, the mere presence or knowledge of
asbestos is insufficient to trigger the personal injury
statute of limitation. Rather, the statute of limitation did
not begin to run until State Farm had sufficient knowledge of
asbestos contamination. AFM Insurance Co. v. Board of
Education, No. 90 C 6040, Slip op. at 37, 39, 1992 WL 409442
(N.D.Ill., October 5, 1992); Heider v. W.R. Grace & Co., No. 89
C 9067, 1992 WL 189254 (N.D.Ill., July 15, 1992); In re: School
Asbestos Litigation, No. 83-0268, Pre-trial Order No. 268
(E.D.Pa, April 12, 1990); Plaza 600 Corporation v. W.R. Grace &
Co., No. C89-1562D
(W.D.Wa. June 19, 1991); County of San Diego v. W.R. Grace &
Co., No. 208188 (Cal.Super.Ct., Riverside Cty., Jan. 31, 1992);
Board of Education v. AC & S, Inc., 131 Ill.2d 428, 137
Ill.Dec. 635, 546 N.E.2d 580 (1989). Therefore, the relevant
factual inquiry for this Court is not whether State Farm had
knowledge that asbestos was being used, but whether State Farm
had knowledge that asbestos was being released from the
fireproofing material and that it presented a hazard.
Drawing all reasonable inferences from the evidence
presented by State Farm, as this Court must in this summary
judgment proceeding, the Court finds that State Farm has met
the requisite showing of a material fact to preclude summary
judgment. The statute of limitation statute begins to run
"when a party knows or reasonably should know that an injury
has occurred and that it was wrongfully caused." Nolan v.
Johns-Manville Asbestos, 85 Ill.2d 161, 52 Ill.Dec. 1, 5,
421 N.E.2d 864, 868 (1981). State Farm's evidence indicates that it
was not until June of 1986 that State Farm was aware of the
presence of asbestos in the buildings. (Pl's exhibit 14, Strong
Aff., at ¶¶ 5-8) (Pl's exhibit 15, Aldridge Aff., at ¶¶ 2-8).
It was not until December of 1988 that dust sample analysis
test results were available which indicated that the buildings
were contaminated with an asbestos. (Pl's Exhibit 16).
Therefore, the Court finds there is sufficient evidence for a
jury to find that State Farm acted reasonably in filing its
claim within the statute of limitations period.
The Court makes this finding despite Grace's evidence that
there was some awareness on the part of State Farm, prior to
1986, of the presence of asbestos in the buildings.
Nevertheless, Defendant failed to show that State Farm was
aware of an asbestos contamination problem. For example, even
if Defendant's architect was aware of the usage of asbestos in
the building (a fact disputed by State Farm), and if the
architect was an agent of State Farm (disputed by State Farm
and the holding of Blue Cross & Blue Shield v. W.R. Grace &
Co., 781 F. Supp. 420, 423-24 (D.S.C. 1991)), and an agent's
knowledge of the asbestos could be imputed to State Farm (again
disputed by State Farm and the holding of Cheshire Medical
Center v. W.R. Grace & Co., No. 85-516D, 1992 WL 544949
(D.N.H., Feb. 18, 1992)), this knowledge still does not prove
that State Farm was aware of any asbestos contamination problem
Second, the Court finds that State Farm submitted sufficient
evidence to toll the five year statute of limitations
provision pursuant to Ill.Rev.Stat. ch. 110, ¶ 13-215 (1989).
For a plaintiff to avail itself of ¶ 13-215, it must show that
"defendant . . . made representations or performed acts which
were known by it to be false, with the intent to deceive the
plaintiff, and upon which plaintiff detrimentally relied."
Harvey v. Harris Trust & Savings Bank, 73 Ill. App.3d 280, 287,
29 Ill.Dec. 198, 391 N.E.2d 461 (1979). ...