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Burbach Aquatics, Inc. v. City of Elgin

July 7, 2009


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Plaintiff, Burbach Aquatics, Inc. ("Burbach"), filed a complaint [1] against Defendant, the City of Elgin ("Elgin" or "the City"), alleging that the City breached a contract between the parties. This matter is before the Court on Defendant' s motion to dismiss [22] based on statute of limitations grounds. For the reasons stated below, Defendant' s motion is respectfully denied.

I. Background*fn1

Burbach is a Wisconsin corporation engaged in business as an architectural and engineering firm specializing in the design of aquatic facilities. (Compl. ¶ 1.) Elgin is a municipal corporation organized and existing under the laws of the State of Illinois and located in Kane County, Illinois. (Id. ¶ 2.) On or about March 8, 1995, Burbach' s predecessor in interest, David F. Burbach, d/b/a Burbach Municipal and Civil Engineers, entered into a written contract, pursuant to which Burbach agreed to renovate and replace certain municipal pools and bathhouses in the City. (Id. ¶ 5.) The City agreed to pay Burbach in exchange for providing these engineering services. (Id.) Burbach provided all of the services required by the contract and performed all conditions precedent to receive payment under the contract (id. ¶ 6); however, the City has failed and refused to pay for the services rendered. (Id. ¶ 7.)

On July 17, 2008, Burbach filed this breach of contract action against the City seeking a judgment for $135,559.72 plus interest at the rate of 18% per annum. (Id. at 2.) The City seeks dismissal of Burbach's complaint on the grounds that Burbach's claim is time barred by two separate statutes of limitations: 735 ILCS 5/13-206, a ten-year statute of limitations for claims based on written contracts, and 735 ILCS 5/13-214(a), a four-year statute of limitations for claims based on acts or omissions involving the design, management, and supervision of construction projects.

II. Legal Standard on a Motion to Dismiss

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the sufficiency of the complaint and not the merits of the case. See Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). To survive a Rule 12(b)(6) motion to dismiss, the complaint first must comply with Rule 8(a) by providing "a short and plain statement of the claim showing that the pleader is entitled to relief" (Fed R. Civ. P. 8(a) (2)), such that the defendant is given "fair notice of what the * * * claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Second, the factual allegations in the complaint must be sufficient to raise the possibility of relief above the "speculative level," assuming that all of the allegations in the complaint are true. E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (quoting Twombly, 550 U.S. at 555). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 563. The Court accepts as true all of the well-pleaded facts alleged by the plaintiff and all reasonable inferences that can be drawn therefrom. See Barnes v. Briley, 420 F.3d 673, 677 (7th Cir. 2005).

III. Analysis

A. Appropriateness of Dismissal Based on Statute of Limitations Grounds

As a threshold matter, the Court must address Burbach' s claim that the motion to dismiss should be denied because it is based on statute of limitations grounds, an affirmative defense. Because complaints are not required to anticipate affirmative defenses, dismissal under Rule 12(b)(6) on statute of limitations grounds is considered "irregular." United States v. Northern Trust Co., 372 F.3d 886, 888 (7th Cir. 2004). However, dismissal is appropriate where a plaintiff pleads itself out of court by establishing that a defendant is entitled to a statute of limitations defense. United States v. Lewis, 411 F.3d 838, 842 (7th Cir. 2005) (motion to dismiss appropriate where "complaint plainly reveals that an action is untimely under the governing statute of limitations"); U.S. Gypsum Co. v. Ind. Gas Co., Inc., 350 F.3d 623, 626 (7th Cir. 2003) ("a litigant may plead itself out of court by alleging (and thus admitting) the ingredients of a defense").

Whether Burbach has pled itself out of court on statute of limitations grounds turns on (1) the facts that Burbach has pled and (2) which statute of limitations applies. The City argues that two statutes of limitations govern Burbach's claim.*fn2 The first is Section 13-206, which provides, in pertinent part, as follows:

Except as provided in Section 2-725 of the "Uniform Commercial Code", actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing * * * shall be commenced within 10 years next after the cause of action accrued. 735 ILCS 5/13-206. "Under Illinois law, an action for a breach of a written agreement accrues when the breach of contractual duty occurs." ABF Capital Corp. v. McLauchlan, 167 F. Supp. 2d 1011, 1014 (N.D. Ill. 2001) (citing Ind. Ins. Co. v. Machon & Machon, Inc., 753 N.E.2d 442, 445 (Ill. App. Ct. 1st Dist. 2001)). Therefore, to the extent that Section 13-206 governs Plaintiff's claim, the ten-year limitations period began running when Elgin failed to pay. Id. And if Section 13-206 governs and Burbach's complaint establishes that Elgin failed to pay more than 10 years ago, then Burbach has pled itself out of court and dismissal is appropriate.

Elgin argues that Burbach' s claim also is barred by Section 13-214(a), which provides, in pertinent part, that:

Actions based upon tort, contract or otherwise against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property shall be commenced within 4 years from the time the person brining an action, or his or her privity, knew or should reasonably have known of such act or omission. 735 ILCS 5/13-214(a). If Section 13-214(a) governs and Burbach's complaint establishes that Burbach knew or should have ...

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