Knox College v. Celotex Corp., s. 53842

• Citation: 58 Ill. Dec. 725,430 N.E.2d 976,88 Ill.2d 407
• Decision Date: 13 November 1981
• Docket Number: Nos. 53842,53846 and 53894,s. 53842
• Parties: , 58 Ill.Dec. 725 KNOX COLLEGE, Appellee, v. CELOTEX CORPORATION et al., Appellants.
• Court: Supreme Court of Illinois

Page 976

430 N.E.2d 976

88 Ill.2d 407, 58 Ill.Dec. 725

KNOX COLLEGE, Appellee, v. CELOTEX CORPORATION et al., Appellants.

Nos. 53842, 53846 and 53894.

Supreme Court of Illinois.

Nov. 13, 1981.

Rehearing Denied Jan. 29, 1982.

Charles G. Roth and Phillip B. Lenzini, Peoria (Kavanagh, Scully, Sudow, White & Frederick, Peoria, of counsel), for appellant Perkins & Will.

Davis & Morgan, Peoria (Clifford E. Schneider and Brian W. Ruddell, Peoria, of counsel), for appellants C. Iber & Sons, Inc. and The Travelers Indemn. Co.

Clausen, Miller, Gorman, Caffrey & Witous, P. C., Chicago (James T. Ferrini, David B. McAffee, and Robert H. Mittelman, Chicago, of counsel), for appellant The Celotex Corp.

George V. Bobrinskoy, Jr., Michele Odorizzi, and Stanley J. Parzen, of Mayer, Brown & Platt, Chicago, and Douglas D. Mustain, of West, Neagle & Williamson, Galesburg, for appellee Knox College.

RYAN, Justice:

Knox College, plaintiff, filed suit in the circuit court of Knox County against the defendants, Celotex Corporation (supplier of materials), Perkins and Will (architects), C. Iber and Sons (general contractor), and the Travelers Indemnity Company (surety on the performance bond of Iber). Motions were filed by all defendants to dismiss the various counts of the second amended complaint. The court allowed the motion as to Celotex on the ground that the allegations against that defendant reflected that the statute of limitations had run. The motions filed by the other defendants contended that the contents of those counts violated the provisions of the Civil Practice Act as to pleading. The court allowed the motions to dismiss, and the plaintiff elected to stand on its pleadings as to each count and did not ask leave or attempt to amend. On appeal, the appellate court reversed the dismissal as to all defendants. As to Celotex, the appellate court held that according to its construction of the discovery rule, the statute of limitations had not run on the plaintiff's cause of action against that defendant. As to the other defendants, the appellate court held that by construing the provisions of the Civil Practice Act liberally, the counts against the other defendants were not defective and should not have been dismissed. (85 Ill.App.3d 714, 40 Ill.Dec. 945, 407 N.E.2d 176.) We granted leave to appeal.

In 1964, Knox College entered into a contract with the architectural firm of Perkins and Will to design and supervise the construction of a math-science building on the college's Galesburg campus. The general contractor for this project was C. Iber and Sons, which provided a performance bond with the Travelers Indemnity Company as surety. C. Iber and Sons subsequently subcontracted the roofing work to White's Roofing and Insulation, Inc. Perkins and Will's original roofing specifications called for a built-up, bituminous membrane roofing of 4-ply, 20-year bondable organic felt and bitumen system. The specifications were later changed, with the knowledge of Knox College, to 2-ply roofing. It was argued that this change was authorized as a result of representations by the Celotex Corporation that the 2-ply system was the functional equivalent of the 4-ply system. Pursuant to the specifications change, White installed Celotex's 2-ply roofing in September 1970.

Soon after the roof was installed, it began to leak. From September 1970 until October 1973, White repaired the roof at its own expense, under the terms of its 5-year guarantee. In October of 1973, at White's request, the college began to share the expenses of roof repair with White. The roof continued to require occasional care. As of May 1976 the college had expended approximately $13,000 for roofing repairs.

In July 1976, the college was informed that the entire roofing membrane and insulation would have to be replaced. However, it was not until November of that year that the college was informed by an independent roofing consultant that the roofing problems might have been caused by deficiencies in the Celotex 2-ply roofing system. In the fall of 1977 and the spring of 1978, the entire roof was replaced at a cost to Knox College of $135,000. On June 9, 1978, Knox College filed suit against the defendants for $175,000 in compensatory damages, plus punitive damages.

In the second amended complaint counts I through III alleged tortious misrepresentation and fraud on the part of Celotex in the promotion of the 2-ply roofing system and in the sale of "Celo-therm" insulation to plaintiff. Specifically, it was alleged that Celotex knew that its product was not suitable for the climate in locales similar to that of Knox College. Despite this knowledge, Celotex did not inform Knox of the situation or withdraw its product from the market. Count IV alleged that Perkins and Will, the architectural firm, breached certain duties it owed, which we will discuss in greater detail later. Counts V and VI alleged, respectively, breach of contract and breach of written guarantee by C. Iber and Sons. Finally, in counts VII and VIII, the plaintiff sought recovery against Travelers' Indemnity as surety on C. Iber's performance bond. The circuit court of Knox County, in granting the defendants' motions to dismiss the second amended complaint found that counts I through III (against Celotex) were barred by the statute of limitations, count IV (against Perkins and Will) was to be stricken "as sounding both in tort and in contract, and possibly indemnity, the cause of action not being set out as required by Chapter 110, Section 33(2), Illinois Revised Statutes, 1977" (section 33(2) of the Civil Practice Act), and counts V through VIII were "insufficient within themselves to sustain a cause of action."

The appellate court, in reversing the decision as to counts I through III, concluded that Knox could not have been expected to know of the right to sue until November of 1976, when an independent expert informed Knox that the failure was or might have been caused by the deficiencies in the 2-ply roofing system. The appellate court further held that the statute of limitations on the cause of action was 5 years and that the complaint was timely filed. The court continued that count IV was not defective because the allegations were sufficiently definite to inform the defendant of the claim which he had to meet. Likewise, counts V through VIII were not defective because they reasonably apprised the parties of the claim.

These same issues are now raised in this court. We will first consider counts I through III against Celotex, which involve solely the question of the statute of limitations. The limitations period applicable to fraud and tortious misrepresentation alleged in counts I through III is 5 years, as provided in section 15 of the Limitations Act (Ill.Rev.Stat.1977, ch. 83, par. 16).

The discovery rule relating to the statute of limitations has been applied across a broad spectrum of litigation to alleviate what has been viewed as harsh results resulting from the literal application of the statute. The effect of the discovery rule is to postpone the starting of the period of limitations until the injured party knows or should have known of his injury. (See Scott, For Whom The Time Tolls-Time of Discovery and the Statute of Limitations, 64 Ill.B.J. 326 (1976); Notes and Comments, The Evolution of Illinois Tort Statutes of Limitation: Where Are We Going And Why ?, 53 Chi.-Kent L.Rev. 673 (1977).) The difficulty in applying the discovery rule has been in giving meaning to the term commonly used stating the rule, "knows or should have known of his injury." If this phrase is construed to mean knows of one's physical injury, the period commences to run at an earlier time than if it is construed to mean knows that one has a cause of action against a particular person. There has been much uncertainty in this area. We need not detail the history of the development of the discovery rule in this State or discuss the various cases that have given different interpretations to the meaning of the word "injury" used in stating the rule. This court has recently considered the discovery rule in depth in two cases, and has adopted a construction of the rule which can be termed neither narrow nor expansive. That is, we have held that the event which triggers the running of the statutory period is not the first knowledge the injured person has of his injury, and, at the other extreme, we have also held that it is not the acquisition of knowledge that one has a cause of action against another for an injury he has suffered. Rather, we have held in Witherell v. Weimer (1981), 85 Ill.2d 146, 156, 52 Ill.Dec. 6, 421 N.E.2d 869 and Nolan v. Johns-Manville Asbestos (1981), 85 Ill.2d 161, 171, 52 Ill.Dec. 1, 421 N.E.2d 864, that the statute starts to run when a person knows or reasonably should know of his injury and also knows or reasonably should know that it was wrongfully caused. In those cases it was made clear that the term "wrongfully caused" does not mean that the plaintiff must have knowledge of the defendant's negligent conduct before the statute is triggered. In Nolan we stated:

"We wish to emphasize that the rule we announce is not the same as a rule which states that a cause of action accrues when a person knows or should know of both the injury and the defendants' negligent conduct. Not only is such a standard beyond the comprehension of the ordinary lay person to recognize, but it assumes a conclusion which must properly await legal determination. (United States v. Kubrick (1979), 444 U.S. 111, 124, 100 S.Ct. 352, 360-61, 62 L.Ed.2d 259, 271.) Moreover, if knowledge of negligent conduct were the standard, a party could wait to bring an action far beyond a reasonable time when sufficient notice has been received of a possible invasion of one's legally protected interests." (Nolan v. Johns-Manville Asbestos (1981), 85 Ill.2d 161, 170-71, 52 Ill.Dec. 1, 421 N.E.2d 864.)

Also, it was...