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Denault v. Cote

March 15, 2001

JOHN DENAULT AND MEGAN DENAULT, PLAINTIFFS-APPELLANTS,
v.
EUGENE COTE AND FRANCIS COTE, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court for the 21st Judicial Circuit, Kankakee County, Illinois No. 99--LM--1048 Honorable Duane J. O'Connor Judge, Presiding

The opinion of the court was delivered by: Justice Breslin

Plaintiffs John and Megan Denault filed an action against defendants Eugene and Francis Cote, claiming they violated the Illinois Residential Real Property Disclosure Act (Disclosure Act) (765 ILCS 77/1 et seq. (West 1998)). The trial court dismissed the action as untimely. When the plaintiffs filed a second action based on fraud in the same real estate transaction as the first case, the court dismissed the Denaults' second action on the basis of res judicata. We affirm this decision and hold that the limitations period encompassed within section 60 of the Disclosure Act is not a limitations period that is jurisdictional, such that a trial court does not lack jurisdiction simply because an action is not timely filed under the Disclosure Act. Accordingly, the trial court's dismissal of the Denaults' first complaint was an adjudication upon the merits, and the court properly dismissed the Denaults' second complaint for fraud on the basis of res judicata.

FACTS

The Cotes were the owners of a home located at 3116 Old Waldron Road, Kankakee, Illinois. On November 14, 1997, the Cotes and the Denaults entered into a real estate purchase contract. Included with the contract was a residential real property disclosure report signed by the parties. The report indicated that the Cotes were not aware of any defects in the home's foundation. The Denaults purchased the home one month later.

In July of 1998, the Denaults discovered large cracks in the home's foundation and noticed that the basement wall bulged inward approximately eight inches. Water also accumulated in the basement, destroying various personal belongings. The cost of repair was estimated at $15,775.

In February of 1999, the Denaults filed an action against the Cotes claiming that they violated the Disclosure Act. The Cotes filed a motion to dismiss based on the Denaults' failure to file their action within the one year provided by the Disclosure Act. The motion was uncontested and granted by the court.

Ten months later, the Denaults filed this action for fraud, claiming the Cotes concealed the damage to the structure and misrepresented the condition of the premises. The trial court granted the Cotes' motion to dismiss pursuant to section 2-619 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619 (1998)), determining that the Denaults' second action was the same as their first and thus was barred by the doctrine of res judicata. The Denaults appealed.

ANALYSIS

On appeal, the Denaults claim that the trial court did not have subject matter jurisdiction when it dismissed the first action because jurisdiction existed only during the prescribed period set forth under the Disclosure Act. As their first action was filed after the prescribed period, the court's dismissal was, in essence, a dismissal for lack of jurisdiction. Because Supreme Court Rule 273 (134 Ill. 2d R. 273 (1990)) specifically provides that an involuntary dismissal for lack of jurisdiction is not an adjudication on the merits, the first action was not dismissed on the merits and the trial court erred when it applied res judicata to preclude the second action.

This court reviews the granting of a section 2-619 motion de novo. See Petty v. Crowell, 306 Ill. App. 3d 774, 715 N.E.2d 317 (1999).

In addressing the Denaults' theory, we must determine whether the limitations period found in the Disclosure Act conferred subject matter jurisdiction upon the trial court.

In Fredman Brothers Furniture Co. v. Department of Revenue, 109 Ill. 2d 202, 486 N.E.2d 893 (1985), our supreme court addressed the difference between statutes of limitations and statutes that both confer jurisdiction on a court and fix the time within which such jurisdiction may be exercised. It determined that statutes of limitations are procedural in nature, are not designed to alter substantive rights, and only fix the time within which a remedy may be obtained. Fredman Brothers, 109 Ill. 2d at 209, 486 N.E.2d at 895 (1985). Conversely, limitations periods can be jurisdictional if time is an inherent element of the rights created and the statutes create substantive rights unknown to the common law. Fredman Brothers, 109 Ill.2d at 209, 486 N.E.2d at 895 (1985). For limitations periods that are jurisdictional, time is a condition precedent to the plaintiff's right to seek a remedy, and time is a condition of the liability itself, not the remedy alone. Fredman Brothers, 109 Ill. 2d at 209, 486 N.E.2d at 895 (1985).

Section 60 of the Disclosure Act states that "[n]o action for violation of this Act may be commenced later than one year from the earlier of the date of possession, date of occupancy, or date of recording of an instrument of conveyance of the residential real property." 765 ILCS 77/60 (West 1998).

Upon review of the precise language of section 60, we determine that this provision has more in common with statutes of limitations than statutes that confer jurisdiction. As written, this provision fixes the time within which claimants may obtain relief under the Disclosure Act. Nowhere, however, does the provision make time a condition precedent to the Denaults' right to seek a remedy or a condition of the Cotes' liability. Nor does the language provide that if relief is not sought within the time and in the manner provided, the Denaults are completely deprived of their right to seek a remedy. See People v. Wright, 189 Ill. 2d 1, 723 N.E.2d 230 (1999) (determining ...


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