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In re Estate of Heck

Court of Appeals of Illinois, First District, Fifth Division

December 6, 2019

In re ESTATE OF THOMAS JOHN HECK JR., Deceased,
v.
Robert B. Heck, Executor, Respondent-Appellee. Paul D. Heck, Claimant-Appellant,

          Appeal from the Circuit Court of Cook County No. 2017 P 003934 Honorable Karen L. O'Malley, Judge, Presiding.

          Attorneys for Appellant: Le Roy E. Stevens Jr., of Stevens and Stevens, of Chicago, for appellant.

          Attorneys for Appellee: Lawrence M. Karlin, of Karlin Associates LLC, of Chicago, for appellee.

          PRESIDING JUSTICE HOFFMAN delivered the judgment of the court, with opinion. Justices Rochford and Delort concurred in the judgment and opinion.

          OPINION

          HOFFMAN PRESIDING JUSTICE

         ¶ 1 The claimant, Paul D. Heck, appeals from an order of the circuit court of Cook County which dismissed, as time-barred, the claim he filed against the Estate of Thomas John Heck Jr., deceased (estate), based upon a promissory note executed by the decedent. For the reasons that follow, we affirm.

         ¶ 2 On June 14, 1988, Thomas John Heck Jr. executed a note promising to pay the claimant $51, 000 at 7% interest compounded annually (note). The note contains the following payment terms: "Perpetual 90 day note[.] Borrower shall make a single payment on demand within 90 days of demand letter. If payment is not demanded or paid by borrower[, ] this note will renew automatically in full force of the terms until said note is paid."

         ¶ 3 On November 7, 2016, Thomas John Heck Jr. died. During his life, the decedent never made a payment on the note and the claimant never made a demand for payment. On December 8, 2017, the claimant made a written demand upon the estate for payment of the note.

         ¶ 4 The estate did not pay the note, and on January 3, 2018, the claimant filed a claim against the estate for $362, 886.62 due on the note, plus interest, attorney fees, and costs. On May 14, 2018, Robert B. Heck, as executor of the estate (respondent), filed a motion pursuant to section 2-619(a)(5) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(5) (West 2016)) to dismiss the claim as time-barred. On October 15, 2018, the circuit court found that the note is a demand note and, relying upon the 10-year limitations period contained in section 13-206 of the Code (735 ILCS 5/13-206 (West 2016)), granted the motion and dismissed the claim as time-barred. This appeal followed, invoking our jurisdiction under Illinois Supreme Court Rule 304(b)(1) (eff. Mar. 8, 2016).

         ¶ 5 In urging reversal, the claimant argues that the circuit court erred when it determined that the note is a demand note and that his claim is barred by a 10-year statute of limitations. He maintains that the note renewed in perpetuity and is not subject to a 10-year statute of limitations. We disagree.

         ¶ 6 Since the trial court dismissed the claimant's claim in response to a motion pursuant to section 2-619 of the Code, our review is de novo. Lawler v. University of Chicago Medical Center, 2017 IL 120745, ¶ 11. In resolving this appeal, we are required to construe the note and determine the applicable limitations period; both of which are issues of law subject to de novo review. People v. Jackson, 2013 IL 113986, ¶ 15 (purely legal questions are reviewed de novo); Northern Illinois Medical Center v. Home State Bank of Crystal Lake, 136 Ill.App.3d 129, 142 (1985) (construction and legal effect of an instrument raises a question of law); Travelers Casualty & Surety Co. v. Bowman, 229 Ill.2d 461, 466 (2008) (the applicability of a statute of limitations to a cause of action presents a question of law).

         ¶ 7 A note is a demand note if it states that it is payable on demand, otherwise indicates that it is payable at the will of the holder, or does not state a definite time for payment. 810 ILCS 5/3-108 (West 2016) (formerly Ill. Rev. Stat. 1987, ch. 26, ¶ 3-108); see also Theodosakis v. Austin Bank of Chicago, 93 Ill.App.3d 634, 637 (1981). The note, which is the subject of this litigation, is not payable on a certain date; rather, it is payable "on demand within 90 days of a demand letter." The due date is indefinite, and the obligation to pay is triggered by a demand. We find, therefore, that the note is a demand note. We are not persuaded by the claimant's argument that the language describing the note as a perpetual 90-day note that renews automatically until the note is paid is evidence that the note is not a demand note or that the maker intended that it not be subject to a 10-year statute of limitations. In fact, this language of the note supports its characterization as a demand note because a perpetual 90-day note that continues to renew has an unlimited or indefinite due date. A note with an indefinite due date is a demand note. Theodosakis, 93 Ill.App.3d at 637.

         ¶ 8 The respondent based his motion to dismiss on the assertion that enforcement of the note was barred by the passage of the 10-year statute of limitations contained in section 13-206 of the Code in effect at the time that his motion was filed. From a reading of the transcript of proceedings, it is apparent that the circuit court also relied upon the current version of the statute in granting that motion. The current version of section 13-206 of the Code provides, in relevant part:

"[A]ctions on *** promissory notes *** shall be commenced within 10 years next after the cause of action accrued ***. With respect to a demand promissory note dated on or after the effective date of this amendatory Act of 1997, if a demand for payment is made to the maker of the demand promissory note, an action to enforce the obligation of a party to pay the demand promissory note must be commenced within 10 years after the demand. An action to enforce a demand promissory note is barred if neither principal nor interest on the demand promissory note has been paid for a ...

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