Malone v. Bankhead Enterprises, Inc.

• Decision Date: 09 September 1997
• Docket Number: No. 96-4020,96-4020
• Citation: 125 F.3d 535
• Parties: Ira MALONE and Charlotte Malone, Plaintiffs-Appellants, v. BANKHEAD ENTERPRISES, INCORPORATED, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 535

125 F.3d 535

Ira MALONE and Charlotte Malone, Plaintiffs-Appellants, v. BANKHEAD ENTERPRISES, INCORPORATED, Defendant-Appellee.

No. 96-4020.

United States Court of Appeals, Seventh Circuit.

Argued May 19, 1997.

Decided Sept. 9, 1997.

Jon G. Carlson, Carlson & Associates, Brian Wendler (argued), Eric J. Carlson, Carlson & Wendler, Edwardsville, IL, for Plaintiffs-Appellants.

Thomas J. Plunkert, Kathleen M. Blair (argued), Leritz, Plunkert & Bruning, St. Louis, MO, for Defendant-Appellee.

Before RIPPLE, KANNE, and DIANE P. WOOD, Circuit Judges.

KANNE, Circuit Judge.

This diversity case requires us to determine whether the Illinois savings statute, 735 Ill. Comp. Stat. 5/13-217, ¹ permits a plaintiff to refile a tort action in Illinois within one year after the plaintiff timely filed and voluntarily dismissed the action in Missouri. We find that the Illinois savings statute does allow a plaintiff to refile such an action, but only when the plaintiff timely filed the original action under the Illinois statute of limitations. We therefore affirm in part and reverse in part.

I. HISTORY

Ira Malone worked as a truck driver for Cassens Transport, and his job required him to load cars onto an automobile transport trailer and then move those cars from car manufacturers to car dealers. On October 18, 1991, ² Malone was injured on the job in Odessa, Missouri while trying to release a ratchet mechanism used to tie down the cars on the transport trailer. On June 18, 1992, Malone again sustained injuries--this time in Belleville, Illinois--resulting from his use of the rachet system on the trailer.

Ira Malone also sustained injuries in a car accident in Fenton, Missouri on October 31, 1991. This time one of Malone's co-workers, James Crow, drove a truck into a vehicle in which Malone was a passenger.

On March 30, 1994, Ira Malone and his wife Charlotte filed suit against Bankhead and Crow in Scott County, Missouri, where Crow resides. Together the Malones alleged that Bankhead--the manufacturer and designer of the automobile transport trailer that incorporated the allegedly faulty ratchet mechanism--defectively designed the trailer that caused Ira Malone's injuries on October 18, 1991 and June 18, 1992. Ira Malone brought causes of action against Bankhead for negligence, breach of warranty, strict liability, and willful and wanton conduct; he also claimed that Crow's negligence caused his injuries on October 31, 1991. Charlotte Malone alleged loss of consortium with respect to the injuries on all three dates. The actions were subsequently transferred to Mississippi County, Missouri.

The Malones voluntarily dismissed their claims against Bankhead and Crow on July 12, 1994, and then they refiled the same causes of action in St. Clair County, Illinois less than one month later on August 9, 1994. The refiled complaint, however, substituted Cassens Transport as a defendant in the place of Crow. Bankhead promptly removed this action to the U.S. District Court for the Southern District of Illinois. Bankhead also complained that Cassens Transport, an Illinois corporation, was fraudulently joined by the Malones in order to destroy diversity. The district court agreed with Bankhead and dismissed Cassens Transport. ³

On September 12, 1996, the district court, sua sponte, granted summary judgment for Bankhead on the breach of warranty claims and dismissed the Malones' negligence, strict liability, and willful and wanton conduct claims, finding that these claims were barred by the statute of limitations. In doing so, the court noted that even though the Malones filed their action within one year of their voluntary dismissal in Missouri, the Illinois savings statute did not preserve these actions because the statute applies "only to causes of action originally filed in Illinois courts, voluntarily dismissed, and then refiled in Illinois courts." The district court subsequently denied the Malones' emergency motion to reconsider its ruling. On appeal, the Malones do not challenge the grant of summary judgment on their breach of warranty claims and contest only the dismissal of their negligence, strict liability, and willful and wanton conduct claims.

II. ANALYSIS

"When its jurisdiction is based on diversity of citizenship, a federal court is obliged to apply the statute of limitations of the state in which it sits." Reinke v. Boden, 45 F.3d 166, 170 (7th Cir.), cert. denied, 516 U.S. 817, 116 S.Ct. 74, 133 L.Ed.2d 34 (1995). In Illinois, a plaintiff must bring a personal injury lawsuit within two years of the injury. See 735 Ill. Comp. Stat. 5/13-202 (personal injury); see also 735 Ill. Comp. Stat. 5/13-213(d) (strict product liability). In this case, the two injuries allegedly caused by Bankhead occurred on October 18, 1991 and June 18, 1992. The Malones, however, did not file their claims in Illinois until August 12, 1994--after the two-year statute of limitations had run.

The Malones argue, however, that the Illinois savings statute, 735 Ill. Comp. Stat. 5/13-217, preserves their causes of action. That statute provides that if an "action is voluntarily dismissed by the plaintiff ... then, whether or not the time limitation for bringing such action expires during the pendency of such action, the plaintiff ... may commence a new action within one year or within the remaining period of limitation, whichever is greater, ... after the action is voluntarily dismissed by the plaintiff." 735 Ill. Comp. Stat. 5/13-217. The district court found that this provision could not save the Malones' claims because it does not apply to claims originally filed in another state, voluntarily dismissed in that state, and then refiled in Illinois. We will consider the application of this provision to the causes of action arising out of the two separate accidents.

A. The 1991 Odessa, Missouri Injuries

The Malones assert that section 5/13-217 saves their claims arising out of the 1991 Odessa, Missouri injuries because those actions were timely filed within Missouri's five-year statute of limitations, see Mo.Rev.Stat. § 516.120, they were voluntarily dismissed, and they were refiled within one year in Illinois. The viability of this argument rests upon which state's statute of limitations applies to the originally-filed action. If Missouri's five-year statute of limitations applies, then the Malones filed their original claims in a timely manner and therefore kept those claims within the ambit of the Illinois savings statute. The Malones maintain that Missouri's five-year statute of limitations should apply because the 1991 injuries occurred in Missouri. If Illinois' two-year statute applies, however, then the Malones' original claims were not timely filed and they therefore fall outside the reach of the savings statute.

We must apply Illinois' two-year statute of limitations because the Malones refiled their claims in Illinois, and a federal district court sitting in diversity must apply the statute of limitations laws of the state in which it sits. See Reinke, 45 F.3d at 170. Moreover, the Illinois borrowing act, 735 Ill. Comp. Stat. 5/13-210, does not help the Malones because a court applying Illinois law can borrow another state's statute of limitations only when that state's limitations period is shorter than that in Illinois. See Pucci v. Litwin, 828 F.Supp. 1285, 1299 (N.D.Ill.1993); In re VMS Ltd. Partnership Sec. Litig., 803 F.Supp. 179, 197 (N.D.Ill.1992). In this case, Missouri's five-year limitations period is plainly longer than the two-year period in Illinois, and therefore Illinois' two-year statute of limitations must apply.

Once we apply Illinois' two-year statute of limitations, the savings statute cannot help the Malones because their original lawsuit--i.e., the one filed in Missouri on March 30, 1994--was filed more than two years after the injury occurred. In other words, the Malones' causes of action based on the 1991 Odessa injuries were time-barred under Illinois law in October of 1993, long before they were ever filed in Missouri. The Malones' claims were never timely filed under Illinois law, and therefore they are out of the reach of the one-year Illinois savings provision.

As the district court noted, there is "no Illinois authority for preserving a suit that, under Illinois law, was not timely filed in a foreign jurisdiction." Malone v. Bankhead Enters., Inc., No. 94-CV-680, at 3 (S.D.Ill. Nov. 8, 1996). We will therefore not allow the Malones to bootstrap their way into the Illinois courts by originally filing their suit after the Illinois statute of limitations had lapsed but within Missouri's longer limitations period, voluntarily dismissing that suit, and then refiling their claims in Illinois by taking advantage of Illinois' one-year savings provision. ⁴ See, e.g., Stare v. Pearcy, 617 F.2d 43, 45 (4th Cir.1980) (noting that "there would be a problem if the statute of limitations in the state of first filing was longer than that of the state of second filing and the period of the latter statute had run when the foreign action was first filed, but that is a problem which should be capable of resolution under principles of conflict of laws, or, more likely, by construing the savings statute as applying only when the first action was commenced within the period limited by the statute of the forum state"). Like the district court, we are not convinced that the Illinois legislature intended to artificially extend its statute of limitations, or that the Illinois courts would interpret its savings statute, in such an expansive manner.

B. The 1992 Belleville, Illinois Injuries

Unlike the above situation, the Malones filed their claims based on the June 18, 1992 Belleville injuries within the two-year Illinois statute of limitations. ⁵ However they filed these claims in Missouri, not Illinois. The Malones did not refile their claims in Illinois until August 9, 1994, which obviously falls beyond...