Aetna Life & Cas. Co. v. Sal E. Lobianco & Son Co., Inc.

• Decision Date: 15 November 1976
• Docket Number: No. 74--347,74--347
• Citation: 357 N.E.2d 621,43 Ill.App.3d 765,2 Ill.Dec. 454
• Court: United States Appellate Court of Illinois
• Parties: , 2 Ill.Dec. 454 AETNA LIFE & CASUALTY COMPANY, Plaintiff-Appellant, v. SAL E. LOBIANCO & SON CO., INC., a corporation, and James Patterman,Defendant-Appellee.

Page 621

357 N.E.2d 621

43 Ill.App.3d 765, 2 Ill.Dec. 454

AETNA LIFE & CASUALTY COMPANY, Plaintiff-Appellant, v. SAL E. LOBIANCO & SON CO., INC., a corporation, and James Patterman,Defendant-Appellee.

No. 74--347.

Appellate Court of Illinois, Second District, First Division.

Nov. 15, 1976.

Hinshaw, Culbertson, Moelmann, Hoban & Fuller, D. Kenneth Griffith & Richard W. Sandrok, Chicago, for plaintiff-appellant.

Gates W. Clancy, James S. Mills, Geneva, for defendant-appellee.

SEIDENFELD, Justice.

The plaintiff, Aetna Life & Casualty Company, paid its insureds, William P. and Mary W. Snellbaker, for the fire loss of their home and its contents. As subrogee of the homeowners, Aetna sued the general contractor ¹ and the masonry contractor alleging that the fire resulted from their negligent construction of the home. The trial judge granted the masonry contractor's motion to dismiss upon his plea of the bar of the five-year statute of limitations (Ill.Rev.Stat.1973, ch. 83, par. 16). Plaintiff Aetna appeals from the dismissal order made final and appealable pursuant to Supreme Court Rule 304(a) (Ill.Rev.Stat.1973, ch. 110A, par. 304(a)).

The complaint alleges that the dwelling was constructed 'prior to January 4, 1972' by the defendant, Sal E. Lobianco & Son Co., Inc., as general contractor and James Patterman as the masonry subcontractor. It appears from the affidavit of Patterman that his work was performed 'in 1966 and 1967.' His work included the masonry work on the fireplace. The Snellbakers purchased the home on an unspecified date in 1971. On January 4, 1972, the plaintiff alleges that the insured homeowners started a fire in the fireplace and that after a short time the walls behind the fireplace broke into flames which spread and caused extensive damage to the home and personal property of the homeowners. The original complaint was filed on January 28, 1974.

The motion to dismiss pleaded the bar of secion 15 of the Limitations Act which relates to damages 'for an injury done to property, real or personal,' and requires suit to be commenced 'within 5 years next after the cause of action accrued.' (Ill.Rev.Stat.1973, ch. 83, par. 16).

Plaintiff Aetna contends that the cause of action accrued in 1971 when the Snellbakers first acquired property rights in the home and thus that the complaint filed in 1974 was not barred by the five-year limitation statute. It further contends that in the event we find that the cause of action accrued at the time the masonry work was completed in 1967, the 'discovery rule' should be applied to mark the beginning of the limitations period at a time when the homeowners allegedly first knew or should have known of the negligence of the defendant, i.e., when the fire broke out in 1972.

Defendant contends that any cause of action for property damage due to negligent construction accrued at the time of construction in 1967 and was thus barred in 1974. He argues that policy considerations do not favor applying the discovery rule against the masonry contractor.

To determine when plaintiff's cause of action 'accrued', we must first determine the nature and elements of the action.

[1,2] Stated generally, a cause of action accrues so as to mark the beginning of the limitation period 'when facts exist which authorize one party to maintain an action against another.' (Davis v. Munie, 235 Ill. 620, 622, 85 N.E. 943, 944 (1908).) Otherwise stated, '(A) cause of action must have existence before it can be barred.' (Schweickhardt v. Jokers, 250 Ill.App. 77, 81 (1928).) Since '(t)he purpose of the statute of limitations is certainly not to shield a wrongdoer; rather it is to discourage the presentation of stale claims and to encourage diligence in the bringing of actions * * *' (Tom Olesker's Fashion v. Dun & Bradstreet, 61 Ill.2d 129, 137, 334 N.E.2d 160, 164 (1975)), it follows that a statute of limitations '* * * does not commence to run until the party to be barred has a right to invoke the aid of the court to enforce his remedy.' Maxwell v. Nieft, 313 Ill.App. 354, 356, 40 N.E.2d 554, 555 (1942).

The cause of action which the plaintiff pleads in this case is, of course, that of the homeowner subrogors, who had no contractual relationship with the contractors. The masonry contractor is charged with a breach of duty to use reasonable care in the construction of the fireplace allegedly resulting in the fire which damaged the home and its contents. The action fairly may be characterized as an action purely in tort, not based on contract, which alleges negligence resulting in property damage.

A cause of action based on negligence is ordinarily said to accrue when all the elements of the legal duty, breach and resulting injury are present. (Coumoulas v. Service Gas, Inc., 10 Ill.App.3d 273, 274, 293 N.E.2d 187 (1973).) As noted in Schmidt v. Merchants Despatch Transp. Co., 270 N.Y. 287, 200 N.E. 824, 827 (1936), a leading New York Court of Appeals decision, 'There can be no doubt that a cause of action accrues only when the forces wrongfully put in motion produce injury. Otherwise, in extreme cases, a cause of action might be barred before liability arose.'

' "A plaintiff's cause of action in tort ordinarily accrues at the time his interest is invaded,--where the defendant's alleged breach of duty causes the plaintiff to suffer pain the invasion of his interest is manifest as soon as it occurs and he has a ripe cause of action then,--and the mere fact the extent of his damage is not immediately manifest does not postpone the accrual of the cause of action." (Reat v. Illinois Cent. R. Co., 47 Ill.App.2d 267, 272, 197 N.E.2d 860 (1964).) Thus, the rule was early established in Illinois that where the negligent act results in personal injury, the action accrues on the day of the injury. Leroy v. City of Springfield, 81 Ill. 114, 115--16 (1876).

However, a different rule evolved for actions in tort which arose from contractual obligations. In torts arising from contract the statute of limitations has been held to begin to run at the time of the breach of duty constituting the tort and not when damages ensue. (See Pennsylvania Co. v. Chi., Mil. & St. P. Ry. Co., 144 Ill. 197, 202 33 N.E. 415 (1893).) ² The rule that an action for tort arising out of a contract accrues at the time of the breach of duty is an essential one for several reasons. First, the breach itself is actionable and it encourages the party to act within five years of an actionable breach rather than to delay until damages increase. The rule also recognizes that plaintiff has chosen to deal with the defendant and that a contract may be stated in terms to minimize losses from defective performance. (See Gates Rubber Company v. U.S.M. Corporation, 508 F.2d 603, 613 (7th Cir., 1975).) However, where the plaintiff has no contractual relationship with the defendant and no control over his actions and must succeed in a cause of action grounded on negligence, it does not seem logical to say that his cause of action accrued at a time when he not only had not been injured by the defendant's conduct but also at a time when he had no legal rights which had been invaded by the defendant.

As applied to this case, it would obviously be unjust to hold that the cause of action in tort for property damage accrued and started the limitations statute running at the time of the masonry contractor's alleged negligent performance of his contract with the original builder so as to deprive the homeowner who did not participate in the building contract of an action against the alleged tortfeasor.

A number of cases in other jurisdictions involving property damages resulting from alleged negligent construction of buildings have reached the result that a limitatios statute does not start running against a third party who did not participate in the building contract until he acquired a right to bring an action. In Hunt v. Star Photo Finishing Company, 115 Ga.App. 1, 153 S.E.2d 602, 605 (1967), the cause of action to recover for damages alleged to have resulted from the negligent design and construction of a roof which collapsed did not accrue as to the plaintiff Hunt, who did not acquire any interest in the premises until six years after the building was constructed, until the roof fell and Hunt thereby suffered property damage. The prior collapse of a similar roof had led to the decision in Wellston Company v. Sam N. Hodges, Jr., & Company, 114 Ga.App. 424, 151 S.E.2d 481 (1966) holding that the cause of action had accrued at the time of the negligent design and construction of the building. In Hunt, however, the court distinguished Wellston by noting that in the Wellston case the suit was by a party to the building agreement who was entitled to file a suit for the breach of the contract without regard to whether any actual damage had in fact resulted. The rule of Hunt holding that the cause of action accrued on the date of the roof collapse was subsequently followed in Welding Products of Georgia v. S. D. Mullins Co., Inc., 127 Ga.App. 474, 193 S.E.2d 881, 884 (1972). See also related cases of Caroline Realty Investment, Inc. v. Kuniansky, 127 Ga.App. 478, 194 S.E.2d 291 (1972) and Welding Products of Georgia v. Kuniansky, 125 Ga.App. 537, 188 S.E.2d 278 (1972).

In American States Ins. Co. v. Taubman Company, Inc., 352 F.Supp. 197, 201 (E.D.Mich.1972), the district court applied Michigan law to reach the conclusion that the cause of action for property damages accrues 'at the point in time when the wrong has occurred and some damage has resulted.' The case involved claims brought by the insurers of the owners and the tenants of a shopping center after a fire had allegedly resulted from a defective lighting fixture. The cause of action of the owners, who were parties to the construction contract was held to be barred but the cause of action of the tenants, who were not not parties to the contract, was held not to be barred. Cf...