alternative to his claim for breach of contract. Defendants SRI and Silver have moved to dismiss Count II, alleging that the claim is barred by the appropriate statute of limitations.
All parties agree that plaintiff's claim is subject to the five year limitations period set forth in 735 ILCS 5/13-205. The issue in the case is at what point in time plaintiff's claim accrued. Generally, a claim accrues when a party has a right to invoke the aid of the court to enforce its remedy. Berg & Associates, Inc. v. Nelsen Steel and Wire Co., 221 Ill. App. 3d 526, 162 Ill. Dec. 779, 580 N.E.2d 1198 (1st Dist. 1991). Defendants argue that for purposes of the statute of limitations, when services are allegedly performed and no time period has been specified for payment, the law presumes that the services were to be paid for at the end of the year in which they were rendered. Schmidt v. Pfau, 114 Ill. 494, 2 N.E. 522 (1985); Rohter v. Passarella, 246 Ill. App. 3d 860, 870, 186 Ill. Dec. 807, 617 N.E.2d 46 (1st Dist. 1993). Thus, defendants argue that any claim for services rendered by plaintiff prior to January 1, 1991, (i.e., for the years 1986 through 1990) is barred by the statute of limitations, plaintiff having filed his complaint in November 1996.
In response, plaintiff asserts that "a cause of action on an oral contract or a quantum meruit theory accrues when the services are completed." P-K Tool & Mfg. Co. v. General Elec. Co., 612 F. Supp. 276 (N.D. Ill. 1981). Plaintiff alleges that he performed services continuously, without interruption, from the date of his appointment through the transfer of the railroad in January 1995. Thus, plaintiff asserts that his cause of action did not accrue until January 1995, when payment became due.
The court rejects this argument for two reasons. First, in P-K Tool, the court held that the plaintiff's claim for quantum meruit was barred by the statute of limitations. The plaintiff had performed services in 1977 and 1978. The complaint was filed in 1985. The plaintiff argued that the services were part of the continuous contract. The court rejected the continuous contract argument, holding both that the services were completed in the years rendered, and also that because the plaintiff performed pursuant to an existing contract, quantum meruit relief was unavailable. Id. at 278. Thus, P-K Tool lends no support to plaintiff. Nor can plaintiff rely on Schmidt v. Desser, 81 Ill. App. 3d 940, 37 Ill. Dec. 206, 401 N.E.2d 1299 (1st Dist. 1980), because, as defendant points out, it did not involve a claim for services rendered over a period of years. Under Illinois law, plaintiff could have sued at the end of each year to collect the reasonable value of his services rendered during that year. Pfau, 114 Ill. 494, 2 N.E. 522.
Second, the letters attached to plaintiff's complaint indicate that he was to be paid based on the railroad's yearly profit, thus indicating yearly payment. Plaintiff argues that defendant failed to perform the necessary accounting, leaving plaintiff unable to determine the amount due him in any one year. This argument illustrates a misunderstanding as to the quantum meruit claim, which is for the reasonable values of services rendered where no contract exists. Rohtar, 246 Ill. App. 3d at 866. Thus, while plaintiff may not have been able to determine the amount due under the alleged contract, he could have demonstrated the reasonable value of his services at any time, without the accounting necessary under the contract. Accordingly, the court concludes that plaintiff's claim is barred by the statute of limitations. Thus, Count II is dismissed for any claim for services rendered prior to January 1, 1991.
III. Foster's Motion to Dismiss
In Count III, plaintiff has alleged a violation of the Illinois Fraudulent Transfer Act ("FTA"), 740 ILCS 160/1, et seq. against Silver, Foster, and Sierra Pacific. Specifically, plaintiff alleges that Foster, as president of Silver, caused SRI to transfer Sierra to Silver. Silver then transferred Sierra to Sierra Pacific, which assumed certain liabilities of Silver in an amount not to exceed $ 275,000.00, and gave Silver a promissory note for $ 250,000.00 at 7% interest, and 375,000 shares of Sierra Pacific preferred stock. As part of the transfer, plaintiff alleges that Sierra Pacific assumed an obligation to obtain a release of Foster's personal guarantee of a loan made by Mid City Bank to Silver. Plaintiff alleges that Silver was either insolvent before the transfer to Sierra Pacific or became insolvent as a result of the transfer. Accordingly, plaintiff alleges that transfer violated the FTA.
Section 6(a) of the FTA, 740 ILCS 160/6(a) provides:
A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation without receiving a reasonable equivalent value in exchange for the transfer or obligation and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.
The FTA defines transfer as meaning "every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes the payment of money, release, lease, and creation of a lien or other encumbrance." 740 ILCS 160/2(1).
Plaintiff's claim against Foster is based on the allegation that as part of the transfer to Sierra Pacific, Sierra Pacific agreed to assume the obligation to obtain a release by Mid City Bank of Foster's personal guarantee. Plaintiff argues that this constitutes an indirect transfer of Silver's assets to Foster through Sierra Pacific.
The court disagrees. While plaintiff is certainly correct that an asset can be transferred indirectly, Foster's personal guarantee did not constitute an "asset" of the debtor as defined by the FDA. Under the Act, asset means "property of a debtor." 740 ILCS 160/2(b). Foster's personal guarantee was never property of Silver or SRI. The personal guarantee was an asset of Mid City Bank, which had the only right to enforce or release it. Because it was not property of the debtor, the release of the personal guarantee is not a transfer of the debtor's asset under 160/2(1). Accordingly, Foster's motion to dismiss Count III as to him is granted.
For the reasons set forth above, defendant MFC Properties' and Cohn's motions to dismiss are denied. SRI's and Silver Foot, Inc.'s motion to dismiss Count II is granted in part, and Foster's motion to dismiss Count III is granted.
ENTER: June 17, 1997
Robert W. Gettleman
United States District Judge
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