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Allstate Insurance Company v. Menards

December 05, 2002

ALLSTATE INSURANCE COMPANY, AS SUBROGEE OF SAMLAKHIA, APPELLANT,
v.
MENARDS, INC., APPELLEE.



The opinion of the court was delivered by: Justice Kilbride

Docket No. 93620-Agenda 36-September 2002.

This case is before us on a question of Illinois law certified by the United States Court of Appeals for the Seventh Circuit. 145 Ill. 2d R. 20. The certified question is:

"What is the applicable statute of limitations in Illinois for an action for damages to property based on the doctrine of strict liability in tort when that action is brought within the applicable statute of repose?"

For the reasons that follow, the answer to the certified question is five years.

I. BACKGROUND

We take the following facts from the Seventh Circuit's opinion in Allstate Insurance Co. v. Menards, Inc., 285 F.3d 630 (7th Cir. 2002).

"Prior to December 18, 1994, Sam Lakhia or a member of his family purchased a torchiere halogen lamp in a Menards store in Hillsdale, Illinois. The lamp was placed in the family home in Bellwood, Illinois and situated along the south wall near the basement stairs for the purposes of providing ambient light. On December 18, there was a fire in the Lakhia home that resulted in a claim by Mr. Lakhia for $144,799.05 for property damage and related living expenses incurred as a result of the fire. Allstate, Lakhia's insurer and subrogee, paid the claim and then brought this action against Menards on March 10, 1999. The jurisdiction of the district court was based on the diverse citizenship of the parties. Menards filed a motion to dismiss on the ground that the action was barred by the applicable statute of limitations.

In a hearing before the district court, the parties disagreed with respect to the applicable statute of limitations period for a products liability action. In Allstate's view, the applicable statute of limitations was five years. It relied upon the decision of the Second District in American Family Insurance Co. v. Village Pontiac-GMC, Inc., 182 Ill. App. 3d 385, 131 Ill. Dec. 484, 538 N.E.2d 859 (1989). Menards, on the other hand, submitted that the applicable statute of limitations was two years. It relied on the decisions of the First District in McLeish v. Sony Corp. of America, 152 Ill. App. 3d 628, 105 Ill. Dec. 648, 504 N.E.2d 933 (1987) and Calumet Country Club v. Roberts Environmental Control Corp., 136 Ill. App. 3d 610, 91 Ill. Dec. 267, 483 N.E.2d 613 (1985).

In discharging their responsibility to ascertain the content of state law in diversity cases, the sitting judges of the Northern District of Illinois have developed two conflicting approaches when confronted with no controlling decision of the Supreme Court of Illinois and with conflicting decisions of the Illinois Appellate Court. Some judges have followed the standard practice for a district court sitting in diversity and have attempted to predict how the Supreme Court of Illinois would resolve the question. Others have deemed themselves bound by the prevailing rule of the state appellate district in which the suit would have been brought in state court, reasoning that this approach would prevent forum shopping. The district court in this case had followed the latter approach in earlier cases and decided that, in the absence of explicit guidance from this court, it would not alter its course. Accordingly, it followed the decisions of the First District and held that the applicable statute of limitations was two years and dismissed the action." Allstate, 285 F.3d at 631-33.

On appeal, the Seventh Circuit noted that statutes of limitations reflect important policy choices by the state and have severe consequences for the administration of justice within the state. Allstate, 285 F.3d at 639. In addition, the Seventh Circuit mentioned that this court is "far more familiar with the policy choices that have been made, and [has] far more direct responsibility for the administration of justice within the state than do the members of [the Seventh Circuit Court of Appeals]." Allstate, 285 F.3d at 639. The Seventh Circuit further acknowledged that the districts of our appellate court are in disagreement about the applicable statute of limitations for strict liability property damage actions and that this court has not had the opportunity to address the question squarely. Allstate, 285 F.3d at 639. Thus, the Seventh Circuit concluded that the intrusion of "unguided federal precedent" into the situation would only further destabilize this state's jurisprudence on the issue and make it more difficult for the members of the Illinois bar to counsel their clients accurately. Allstate, 285 F.3d at 639. According to the Seventh Circuit, the issue at hand is, moreover, likely to arise with significant frequency both in state and federal forums. Allstate, 285 F.3d at 639. As a result, the Seventh Circuit certified the question to this court pursuant to Supreme Court Rule 20 (145 Ill. 2d R. 20). For these same reasons, we accepted the certified question on April 17, 2002.

II. ANALYSIS

The dispute between our appellate districts, acknowledged by the federal courts, arises from differing interpretations of section 13-213 of the Code of Civil Procedure (Code) (735 ILCS 5/13-213 (West 2000)). The relevant text of section 13-213 reads as follows:

"§13-213. Product liability.

(b) Subject to the provisions of subsections (c) and (d) no product liability action based on any theory of doctrine shall be commenced except within the applicable limitations period and, in any event, within 12 years from the date of first sale, lease or delivery of possession by a seller or 10 years from the date of first sale, lease or delivery of possession to its initial user, consumer, or other non-seller, whichever period expires earlier, of any product unit that is claimed to have injured or damaged the plaintiff, ...


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