Strom Intern., Ltd. v. Spar Warehouse and Distributors, Inc.

• Decision Date: 09 March 1979
• Docket Number: No. 78-819,78-819
• Citation: 69 Ill.App.3d 696,26 Ill.Dec. 484,388 N.E.2d 108
• Parties: , 26 Ill.Dec. 484, 27 UCC Rep.Serv. 233 STROM INTERNATIONAL, LTD., Plaintiff-Appellant, v. SPAR WAREHOUSE AND DISTRIBUTORS, INC., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 108

388 N.E.2d 108

69 Ill.App.3d 696, 26 Ill.Dec. 484,

27 UCC Rep.Serv. 233

STROM INTERNATIONAL, LTD., Plaintiff-Appellant, v. SPAR WAREHOUSE AND DISTRIBUTORS, INC., Defendant-Appellee.

No. 78-819.

Appellate Court of Illinois, First District, Fifth Division.

March 9, 1979.

[26 Ill.Dec. 485] Faber & Cunniff, Ltd., Chicago, for plaintiff-appellant

Berger, Newmark & Fenchel, Chicago (Harry D. Lavery, Christopher J. Horvay, Chicago, of counsel), for defendant-appellee.

WILSON, Justice:

Plaintiff filed a complaint against defendant-warehouseman claiming damaged and lost goods as a result of defendant's negligence. The trial court granted defendant's motion for a summary judgment. The sole issue on appeal is whether the trial court ruled correctly in granting the summary judgment. We affirm.

The record in this case includes the pleadings, exhibits, motions and attached affidavits. The record indicates that plaintiff stored certain goods, including liquor and furniture, with defendant-warehouseman. Defendant issued various warehouse receipts establishing the storage agreements between the parties. The receipts contained a provision in the lower right hand corner of the front page stating that:

"This is to certify that we have received the goods listed hereon in apparent good order, except as noted hereon * * * subject to all terms and conditions herein This provision was in print smaller than the print on the rest of the front page. The reverse side of the receipts contained a provision under the heading LIMITATION OF DAMAGES AND CLAIMS that:

[26 Ill.Dec. 486] And on the reverse hereof." (Emphasis added.)

"(b) Claims by the depositor must be presented in writing within a reasonable time, and in no event longer than 60 days after delivery of the goods. No action may be maintained by the depositor against the warehouseman for loss or damage to goods covered hereunder Unless commenced within nine months next after date of delivery by the warehouseman." (Emphasis added.)

Sometime during the bailment, plaintiff discovered that goods which it stored with defendant were damaged. On approximately February 1, 1974, plaintiff's president, David Strom, complained to defendant about the damages. Upon receiving no satisfaction from defendant, he informally contacted the Illinois Department of Agriculture's Bureau of Warehouses (Department of Agriculture) to report the damages and to request an inspection. Lawrence Kaplan, of the Department of Agriculture, arranged for a meeting with Strom and defendant to inspect the stored goods. After the inspection, Kaplan reported the damaged goods to both parties.

On January 31, 1975, defendant delivered the last of the goods to plaintiff. Since he had not received any satisfaction up to this point, Strom filed a formal complaint with the Department of Agriculture on February 10, 1975. The complaint stated that goods were both damaged and lost.

Plaintiff then filed a complaint in the Circuit Court of Cook County on May 6, 1977. It claimed that its goods had been either lost or damaged through defendant's negligence and requested damages.

A supplemental record was filed four months before oral arguments in the present appeal. The record includes two letters which were apparently written by plaintiff's attorney, Irving Faber. One of the letters dated October 21, 1975 and addressed to Strom, stated that Faber had contacted defendant's agent, Phil Schiffman, but that he did not receive any satisfaction from him. The letter was unsigned, although Faber's name was typed at the bottom. The other letter, dated June 2, 1976 and addressed to Schiffman, stated that as was discussed in a previous meeting between the parties, plaintiff intended to proceed through the Secretary of State's office or to have defendant buy certain of the goods and resell them to available markets. This letter was also unsigned, although Faber's name again was typed at the bottom of the letter. These letters became part of the record in this case.

OPINION

A trial court should grant a motion for summary judgment if the pleadings, depositions, admissions and affidavits "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Ill.Rev.Stat.1975, ch. 110, par. 57. See Manahan v. Daily News-Tribune (1977), 50 Ill.App.3d 9, 8 Ill.Dec. 659, 365 N.E.2d 1045.) In reviewing the trial court's determination, we must consider all grounds urged and all facts presented in the trial court. Marshall v. City of Chicago Heights (1978), 59 Ill.App.3d 986, 17 Ill.Dec. 511, 376 N.E.2d 657.

In its briefs, plaintiff argues that the trial court erred in granting the motion for summary judgment because the following material issues of fact existed: (1) Whether the nine month claim limitation was reasonable; (2) whether the nine month claim limitation was part of the agreement between plaintiff and defendant; and (3) whether defendant was estopped from asserting the nine month limitation. This argument was not raised before the trial court and under the waiver rules we need not consider it. (Witek v. Leisure Technology Midwest, Inc. (1976), 39 Ill.App.3d 637, 350 N.E.2d 242.) Nevertheless, we will comment on this argument after considering plaintiff's argument that the filing of the complaint with the Department of Agriculture tolled the operation of the nine month limitation clause.

The sole argument which plaintiff urged before the trial court and also urges here on appeal is that its filing of a complaint with the Department of Agriculture tolled the operation of the nine month limitation clause. According to the limitation clause, an action against defendant for loss or damage to goods covered by the storage agreement must be commenced within nine months after the date of delivery by the warehouseman. Defendant delivered the last of plaintiff's goods on January 31, 1975. On February 10, plaintiff filed its complaint with the Department of Agriculture. Plaintiff contends that by filing this complaint it was exhausting its administrative remedies.

The doctrine of exhaustion of administrative remedies applies to situations in which a party has been aggrieved by an administrative action. (Walker v. State Bd. of Elections (1976), 65 Ill.2d 543, 3 Ill.Dec. 703, 359 N.E.2d 113; Illinois Bell Tel. Co. v. Allphin (1975), 60 Ill.2d 350, 326 N.E.2d 737.) It requires both that plaintiff has been aggrieved by some administrative action and that there is an effective administrative remedy which would resolve plaintiff's problem. (Northwestern Univ. v. City of Evanston (1978), 74 Ill.2d 80, 23 Ill.Dec. 93, 383 N.E.2d 964.) In the present case, there are no facts which would indicate that: (1) plaintiff has been aggrieved by an administrative agency; (2) plaintiff was required to seek relief through the administrative agency before proceeding to court; and (3) there was an effective administrative remedy.

Plaintiff was aggrieved by defendant's failure to reimburse it for damaged and lost goods. An action was voluntarily filed by plaintiff with the Department of Agriculture and an inspection was conducted. Although the agency reported the damages it found to both parties, plaintiff has not stated any facts indicating that it was aggrieved by this administrative action.

Plaintiff was not required either by statute or by the terms of the limitation clause to pursue administrative remedies before proceeding to court. However, even if required to pursue administrative remedies, there are no facts indicating that the Department of Agriculture was authorized to provide the remedy which plaintiff seeks. The statutory provision cited by plaintiff, Ill.Rev.Stat.1975, ch. 127, par. 40.23, did not go into effect until October 1, 1975, which was more than seven months after plaintiff filed its complaint with the Department of Agriculture. At the time of filing, the Department of Agriculture was not authorized by statute to provide the remedy which plaintiff sought. Absent such authority, the Department of Agriculture could not provide the remedy sought. Illinois Dep't of Public Aid v. Brazziel (1978), 61 Ill.App.3d 168, 18 Ill.Dec. 483, 377 N.E.2d 1119.

Furthermore, even assuming that somehow plaintiff's filing of a complaint with the Department of Agriculture tolled the limitation clause, we note that plaintiff did not file the present suit until eighteen months after the nine month limitation had run out. We think that it would be unfair to allow plaintiff to proceed after such a lack of diligence. Therefore, for the reasons stated we reject plaintiff's sole argument.

We next consider the argument which plaintiff waived by failing to raise it at the trial level.

Although plaintiff recognizes the provision of the Uniform Commercial Code (UCC) (Ill.Rev.Stat.1975, ch. 26, par. 1-101 Et seq.) which permits parties to a storage agreement to include reasonable time limitations for bringing suit in the warehouse receipts, (par. 7-204(3)) it contends that the question of "reasonableness" is always a question of fact. As support for that contention, plaintiff refers us to section 1-204(2) of the UCC (par. 1-204(2)) which provides:

"(2) What is a reasonable time for taking any action depends on the nature, purpose and circumstances of such action."

If, as plaintiff contends, the question of reasonableness is always a question of fact, then the trial court erred in granting the motion for a summary judgment because a genuine issue of a material fact existed.

Although no Illinois decision deals with the precise argument raised here, other jurisdictions have decided questions involving a determination of whether "reasonableness" is always a question of fact. In Lish v. Compton (1976), Utah, 547 P.2d 223, the Supreme Court of Utah had to determine whether the meaning of "reasonable time" was a question of law in order to decide whether a contract existed for the sale of...