Appeal from the an Illinois Not-For-Profit Circuit Court of Corporation, Cook County. No. 05 L 011613 The Honorable Dennis J. Burke, Judge Presiding.
The opinion of the court was delivered by: Justice Garcia
This is a permissive interlocutory appeal brought pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308). The two certified questions before us are:
(1) Whether a series of conversions of negotiable instruments over time can constitute a continuing violation within the meaning of the Illinois Supreme Court's decision in Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill. 2d 325, 770 N.E.2d 177 (2002), for the purpose of determining when the statute of limitations runs; see also Rodrigue v. Olin Employees Credit Union, 406 F.3d 434 (7th Cir. 2005); and (2) Whether the "discovery rule" applies to a series of conversions of negotiable instruments over time for the purpose of determining when the statute of limitations runs.
For the reasons that follow, we answer both questions in the negative.
In October 2005, the plaintiff, Kidney Cancer Association, sued the defendant, North Shore Community Bank & Trust Company, for negligence and conversion. The verified complaint alleged that in July 1997, the Bank permitted Carl F. Dixon, the executive director of the Kidney Cancer Association, to open a savings account in the Association's name. The plaintiff asserted that Dixon lacked authority to open such an account. Between July 1997 and December 2002, Dixon deposited more than $330,000 worth of donation checks made payable to the Association into that account. During that time, Dixon withdrew, for cash, all of the deposited donations less 54 cents. Dixon purportedly made the withdraws in his name, not in the name of the Association, using nonnegotiable savings account withdrawal slips.
The plaintiff asserted that the Bank acted in a commercially unreasonable manner in permitting Dixon to open the account and withdraw the funds because the Bank: (1) failed to ensure the Association had authorized Dixon to open the account; (2) failed to verify the accuracy of the documents Dixon supplied to the Bank when he opened the account; (3) sent the account statements to Dixon's personal post office box rather than to the Association; and (4) permitted Dixon to withdraw the deposited funds for cash. Because the Bank did not verify Dixon's authority to open the account and because Dixon lacked that authority, the Bank's control and possession of the checks made payable to the Association and deposited in that account were unauthorized and wrongful. Specifically, the plaintiff alleged, "The Bank wrongfully and in an unauthorized manner controlled and possessed the Association's funds because it allowed donation checks made payable to the Association to be deposited into the Savings Account without its consent."
The Bank moved to dismiss the complaint pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2004)). In March 2006, the trial court granted the Bank's motion. The court dismissed the negligence count without prejudice, finding that the defendant failed to state a cause of action under the Moorman doctrine (Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443 (1982)). As to the conversion count, the court dismissed it with prejudice, finding that the action was time-barred in that it was filed after the three-year statute of limitations for conversion had run. The court cited Belleville Toyota and Rodrigue to support its finding that the conversion was not a single, continuing violation but that each withdrawal supported a separate cause of action.
The plaintiff filed a motion, asking the trial court to certify its holding for immediate appeal under Supreme Court Rule 308 (155 Ill. 2d R. 308). In June 2006, the court entered an order certifying the questions set out above. In July 2006, this court granted this interlocutory appeal.
"An instrument is *** converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment." 810 ILCS 5/3-420(a) (West 2004).
Section 3-118 of the Illinois Uniform Commercial Code (UCC) provides that an action for conversion must be commenced within three years after the cause of action accrues. 810 ILCS 5/3-118(g) (West 2004). Although the plaintiff contends that the three-year statute of limitations does not apply to its "common-law conversion claim," the plaintiff did not raise that argument in its Rule 308 motion and it was not certified by the trial court. That issue, therefore, is not properly before this court. See Chicago Hospital Risk Pooling Program v. Illinois State Medical Inter-Insurance Exchange, 325 Ill. App. 3d 970, 977, 758 N.E.2d 353 (2001) ("The scope of our review pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308) is strictly limited to the questions certified by the trial court"). Nevertheless, we are aware of only one case that holds that the statute of limitations period for conversion of a negotiable instrument is other than three years as set forth in section 3-118 of the UCC. That case is Field v. First National Bank of Harrisburg, 249 Ill. App. 3d 822, 619 N.E.2d 1296 (1993), upon which the plaintiff relies for its continuing violation theory and which we decline to follow as explained below.
"Generally, a limitations period begins to run when facts exist that authorize one party to maintain an action against another. [Citations.] However, under the 'continuing tort' or 'continuing violation' rule, 'where a tort involves a continuing or repeated injury, the limitations period does not begin to run until the date of the last injury or the date the tortious ...