Marvel Engineering Co. v. Matson, Driscoll & D'Amico

• Decision Date: 08 December 1986
• Docket Number: No. 2-85-0780,2-85-0780
• Citation: 150 Ill.App.3d 787,501 N.E.2d 948
• Parties: , 103 Ill.Dec. 631 MARVEL ENGINEERING COMPANY, Plaintiff-Appellant, v. MATSON, DRISCOLL & D'AMICO, Norman Matson and Johnson Atwater & Company, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 948

501 N.E.2d 948

150 Ill.App.3d 787, 103 Ill.Dec. 631

MARVEL ENGINEERING COMPANY, Plaintiff-Appellant, v. MATSON, DRISCOLL & D'AMICO, Norman Matson and Johnson Atwater & Company, Defendants-Appellees.

No. 2-85-0780.

Appellate Court of Illinois,

Second District.

Dec. 8, 1986.

Seyfarth Shaw Fairweather & Geraldson, Christopher A. Hansen, Robert Meyer, Chicago, for plaintiff-appellant.

Karon Morrison & Savikas, Steven H. Mora, David L. Liebman III, Chicago, for defendants-appellees.

Presiding Justice NASH delivered the opinion of the court:

Plaintiff, Marvel Engineering Company, appeals from an order of the circuit court dismissing its complaint against the defendants, Matson, Driscoll & D'Amico; Norman Matson; and Johnson Atwater & Company, as barred by the statute of limitations. Plaintiff contends that: (1) amendment of the original complaint nullified the motion to dismiss and order of dismissal; (2) defendants' motion to dismiss under section 2-619 of the Code of Civil Procedure (Ill.Rev.Stat.1983, ch. 110, par. 2-619) was improper because the limitations bar is not apparent from the face of the complaint; (3) plaintiff's suit was timely filed; and (4) the circuit court erred in weighing the evidence in ruling on the motion to dismiss.

Plaintiff manufactures, assembles, and sells hydraulic filter systems and on December 11, 1974, a fire completely destroyed plaintiff's Skokie plant. At the time of the fire, plaintiff was insured by Commercial Union Insurance Company for $4.3 million by a policy covering building, inventory, machinery, equipment, and business interruption losses. Commercial Union retained the accounting firm of Johnson, Atwater & Company (JACO) to verify plaintiff's claims and during 1975 and 1976, JACO audited plaintiff's books and records. At some point in time, the firm of Matson, Driscoll and D'Amico acquired JACO's accounting practice and assumed the audit under the direction of defendant Norman Matson.

Plaintiff filed claims with Commercial Union for building, machinery, inventory, and business interruption losses, of which Commercial Union paid only part of the claimed inventory loss, and refused to pay any of the claimed business interruption loss. Commercial Union notified plaintiff of its claim denials by letter dated October 7, 1976, and in November 1976, plaintiff filed a complaint for breach of contract against the insurance company. As a defense, Commercial Union alleged that the insurance policy was void because plaintiff had fraudulently misstated the amount of loss and had deliberately underestimated the value of its inventory so as to avoid the co-insurance clause which would have resulted in a reduction of coverage. In January 1982, after a jury trial, judgment was entered in favor of plaintiff and against Commercial Union in the amount of $2,124,623.79. On appeal, this court affirmed the judgment. Marvel Engineering Co. v. Commercial Union Insurance Co. (1983) 118 Ill.App.3d 844, 74 Ill.Dec. 272, 455 N.E.2d 545.

In January 1984, Marvel filed a six-count complaint against the present defendants, sounding in tort and contract, alleging essentially that defendants did not properly exercise their duties in the performance of accounting services in connection with their review of plaintiff's claim. On June 21, 1984, defendants filed motions to dismiss the complaint pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure. (Ill.Rev.Stat.1983, ch. 110, pars. 2-615, 2-619.) Defendants' section 2-619 motion alleged that the action was barred by the statute of limitations. In December 1984, the circuit court granted the section 2-615 motion as to counts II, IV, V, and VI and on January 18, 1985, Plaintiff filed an amended six-count complaint. On May 30, 1985, the circuit court granted defendants' section 2-619 motion to dismiss as to all the counts on the statute of limitations ground.

First we address plaintiff's contention that the order of dismissal is void because defendants' section 2-619 motion was directed to plaintiff's original complaint, which was subsequently amended. This argument rests on the principle that an amended pleading which neither refers to nor adopts the prior pleading ordinarily supersedes it (Bowman v. County of Lake, (1963), 29 Ill.2d 268, 272, 193 N.E.2d 833; Field Surgical Associates, Ltd. v. Shadab (1978), 59 Ill.App.3d 991, 994, 17 Ill.Dec. 514, 376 N.E.2d 660), so that subsequent proceedings in the case are regarded as based upon the amended pleading. (Claude Southern Corp. v. Henry's Drive-In, Inc. (1964), 51 Ill.App.2d 289, 296, 201 N.E.2d 127, appeal denied; Wright v. Risser (1937), 290 Ill.App. 576, 581, 8 N.E.2d 966.) Plaintiff concludes that its amended complaint was thus not subject to the motion to dismiss directed to its original complaint and could not be dismissed on the grounds there urged.

Although defendants' motion to dismiss was followed by an amendment of the complaint, it is apparent that the court treated the motion as directed to plaintiff's amended complaint. First, we note that the statute of limitations defense was based on the fact that the insurance claim was denied in 1976 and suit was not filed until 1984, and the amended complaint did not differ from the original in this respect. Second, the fact that the complaint had been amended was not raised until plaintiff moved for reconsideration of the order of dismissal. Implicit in the trial court's denial of the motion to reconsider is the conclusion that the motion to dismiss was considered to be addressed to the amended complaint, and we conclude the order of dismissal is not void.

Plaintiff next contends that the limitations defense was raised improperly by way of a section 2-619 motion because the limitations bar was not apparent on the face of the complaint. The statute of limitations is an affirmative defense which cannot be raised by a section 2-619 motion unless it affirmatively appears from the pleading attacked that the cause of action is barred as untimely. Burnett v. West Madison State Bank (1940), 375 Ill. 402, 408, 31 N.E.2d 776; Pumala v. Sipos (1985), 131 Ill.App.3d 845, 847, 87 Ill.Dec. 1, 476 N.E.2d 462.

Plaintiff's amended complaint, which sounds in tort and unwritten contract, is governed by the five-year statute of limitations. (Ill.Rev.Stat.1983, ch. 110, par 13-205.) Commencing at paragraph 14 of the amended complaint, plaintiff alleges that defendant accountants reviewed plaintiff's books and records in 1975 and 1976 and reported evidence of fraud to Commercial Union; that the report resulted in the denial of plaintiff's claims; and that thereafter plaintiff was required to file suit against Commercial Union in a case numbered 76 L 1019. Although the complaint does not allege the precise dates, it may be reasonably inferred that plaintiff's claims were denied in 1976 and its action against the insurer filed sometime in 1976, as indicated by the case number. Since defendants' conduct in recommending denial of the claims occurred no later than 1976, and the present suit was commenced in 1984, the limitations bar was apparent from the face of the complaint and was properly raised in a section 2-619 motion.

In granting the motion to dismiss, the circuit court found that the alleged injury to the plaintiff occurred on or about October 7, 1976, the date plaintiff's claims were denied by Commercial Union, and that the statute of limitations began to run on that date or on November 8, 1976, the date plaintiff filed its suit against the insurer. Plaintiff advances several arguments why its suit against the defendants was not barred by the statute of limitations.

In the present action, plaintiff seeks damages against defendants for attorney fees and costs it incurred in bringing the suit against Commercial Union. It argues that the cause of action against the defendants did not arise until the conclusion of its suit against Commercial Union, which would be either when the judgment was entered or was affirmed on appeal.

Where the wrongful acts of a defendant involve the plaintiff in litigation with third parties, plaintiff may recover damages against the wrongdoer, measured by the reasonable expenses of such litigation, including attorney fees. (Ritter v. Ritter (1943), 381 Ill. 549, 554, 46 N.E.2d 41; Philpot v. Taylor (1874), 75 Ill. 309, 311; Nalivaika v. Murphy (1983), 120 Ill.App.3d 773, 776, 76 Ill.Dec. 341, 458 N.E.2d 995.) Plaintiff asserts that the prior and present actions could not have been brought jointly as plaintiff's success in the prior action was determinative of its rights against the present defendants. Plaintiff relies on the case of Kelly v. Chicago Park District (1951), 409 Ill. 91, 98 N.E.2d 738, in which city employees brought consecutive actions for reinstatement and back pay. On appeal, the court held:

"Where a party's success in one action is a prerequisite to his right to maintain a new action, the Statute of Limitations does not run as to the new action until the determination of the pending suit, which decides whether the new right exists."

409 Ill. 91, 95-96, 98 N.E.2d 738.

We do not consider that the rule stated in Kelly applies to the facts of the present case. It is permissible to join an action against a third party for the expenses of suit with the main action as was done in the cases of National Wrecking Co. v. Coleman (1985), 139 Ill.App.3d 979, 94 Ill.Dec. 287, 487 N.E.2d 1164; Bartsch v. Gordon N. Plumb, Inc. (1985), 138 Ill.App.3d 188, 92 Ill.Dec. 862, 485 N.E.2d 1105, appeal denied; and Nalivaika v. Murphy (1983), 120 Ill.App.3d 773, 76 Ill.Dec. 341, 458 N.E.2d 995. Plaintiff's argument that its cause of action for fees could not have been commenced until after he prevailed in his action against the insurance company is not persuasive.

Plaintiff also contends that defendants continued to render Commercial Union accounting advice relating to plaintiff's claim throughout the...