                                     2014 IL App (1st) 122292

                           Nos. 1-12-2292 and 1-12-2301, Consolidated

                                    Opinion filed June 26, 2014

                                                             FOURTH DIVISION
______________________________________________________________________________

                                              IN THE

                               APPELLATE COURT OF ILLINOIS

                                FIRST DISTRICT
______________________________________________________________________________

15TH PLACE CONDOMINIUM ASSOCIATION, )                          Appeal from the
                                    )                          Circuit Court of
           Plaintiff-Appellant,     )                          Cook County.
                                    )
      v.                            )
                                    )
SOUTH CAMPUS DEVELOPMENT TEAM,      )
LLC,                                )
                                    )
           Defendant and            )
           Third-Party Plaintiff-   )
           Appellant                )
                                    )                          No. 08 L 9839
                                    )
(FITZGERALD ASSOCIATES              )
ARCHITECTS P.C., and                )
LINN-MATHES, INC.,                  )
                                    )                          Honorable
           Third-Party Defendants-  )                          Raymond W. Mitchell,
           Appellees).              )                          Judge Presiding.

       PRESIDING JUSTICE HOWSE delivered the judgment of the court, with opinion.
       Justices McBride and Palmer concurred in the judgment and opinion.

                                             OPINION

¶1     In this case, third-party plaintiff-appellant South Campus Development Team (SCDT)

appeals the trial court's order that dismissed with prejudice its third-party claims against third-
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party defendants Fitzgerald Associates Architects P.C. (Fitzgerald) and Linn-Mathes, Inc. (Linn-

Mathes), on the grounds that the claims are time-barred. The third-party complaint contains

claims of breach of contract, breach of the implied warranty of good workmanship, implied

indemnity and express indemnity. The implied warranty of good workmanship and the express

indemnity claims are only applicable to Linn-Mathes. In order to make a ruling in this appeal,

we must determine three issues: (1) whether a cause of action accrual provision is enforceable to

bar a third-party complaint against one of the contracting parties; (2) whether the trial court

improperly resolved a disputed issue of fact when it ruled on a motion to dismiss; and (3)

whether the 4-year limitations period applicable to construction-related activities (735 ILCS

5/13-214(a) (West 2008)) or the 10-year statute of limitations period applicable to written

contracts (735 ILCS 5/13-206 (West 2008)) applies to a general contractor's written promise to

indemnify an owner against claims of defects in construction.

¶2     For the reasons that follow, we affirm that part of the trial court's order enforcing the

accrual agreements and dismissing the breach of contract and implied indemnity claims as time-

barred. We reverse the trial court's judgment dismissing the express indemnity claim against

Linn-Mathes and remand this case for further proceedings on that claim because we find the 10-

year limitations period for written contracts is applicable.

¶3                                     I. BACKGROUND

¶4                             A. The Underlying Cause of Action

¶5     SCDT was the developer of two adjacent condominium towers located at 811 and 833

West 15th Place in Chicago, Illinois (the project). SCDT contracted with Fitzgerald for


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architectural services and with Linn-Mathes to be the general contractor for the project. Both

contracts contain a cause of action accrual provision which states that all causes of action against

Fitzgerald and Linn-Mathes are to accrue when substantial completion of the project is achieved.

The terms of both contracts state how the date of substantial completion is determined.

¶6     The SCDT/Fitzgerald contract provides that Fitzgerald as the architect is to have the sole

and exclusive responsibility to determine the date of substantial completion. Section 2.6.12 of

the SCDT/Fitzgerald contract states:

                       "The Architect shall make site visits to determine the date

               or dates of Substantial Completion and the date of final

               completion, and may issue a final Certificate for Payment upon

               compliance with the requirements of the Contract Documents."

¶7     Similarly, section 4.2.9 of the SCDT/Linn-Mathes contract contains the following

provisions relating to dates of substantial completion:

                      "The Architect will conduct inspections to determine the

              date or dates of Substantial completion and the date of final

              completion, will receive and forward to the Owner, for the Owner's

              review and records, written warranties and related documents

              require [sic] by the Contract and assembled by the Contractor, and

              will issue a final Certificate for Payment upon compliance with the

              requirements of the Contract Documents."




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Further, section 9.8.4 the SCDT/Linn-Mathes contract states: "When the Work or designated

portion thereof is substantially complete, the Architect will prepare a Certificate of Substantial

completion which shall establish the date of Substantial completion[]***." The SCDT/Linn-

Mathes contract defines substantial completion in section 9.8.1 as follows:

                       "Substantial Completion is the stage in the progress of the

               Work when the Work or designated portion thereof is sufficiently

               complete in accordance with the Contract Documents so that the

               Owner can occupy or Utilize the Work for its intended use."

¶8     In April 2005, after a number of condominium units were sold, SCDT turned over control

of the condominiums to its owners and the 15th Place Condominium Association (the

Association). Following the turnover, the board of directors of the Association discovered

numerous design and workmanship defects related to the balconies, masonry, and garage. The

Association hired an engineering company that confirmed the presence of design and

workmanship defects, and the Association filed a lawsuit against SCDT on September 4, 2008.

The complaint included claims of breach of the implied warranty of fitness and habitability,

breach of fiduciary duty, and negligence. The complaint alleged that SCDT knew or should have

known that the defects existed; SCDT failed to have any of the defects fixed; and SCDT failed to

disclose the defects to buyers.

¶9                                    B. Third-Party Action




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¶ 10   On March 9, 2009, SCDT entered into a written tolling agreement with Fitzgerald and

Linn-Mathes that tolled "any and all claims or causes of action" between the parties that "had not

expired as of the date of this [tolling] Agreement."

¶ 11   On June 21, 2011, SCDT filed a third-party complaint against Fitzgerald and Linn-

Mathes. The third-party complaint alleged claims for breach of contract and, alternatively,

implied indemnity against Fitzgerald, and claims for breach of contract, breach of implied

warranty of good workmanship, express indemnity and, alternatively, implied indemnity against

Linn-Mathes.

¶ 12                                  C. Motions to Dismiss

¶ 13   On July 27, 2011, Fitzgerald filed a motion to dismiss the third-party complaint pursuant

to section 2-619.1 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-619.1 (West 2008)).

In its motion, Fitzgerald argued that SCDT's third-party complaint was time-barred or, in the

alternative, SCDT's implied indemnity claim had to be dismissed for failing to state a cause of

action pursuant to section 2-615 of the Code. 735 ILCS 5/2-615 (West 2008). Fitzgerald argued

in the motion that all causes of action SCDT had against it accrued on the date of substantial

completion, which occurred on May 16, 2003 for the first tower and on October 11, 2004 for the

second tower. Applying those accrual dates to the four-year statute of limitations applicable to

construction-related activity (735 ILCS 5/13-214(a) (West 2008)), Fitzgerald argued that SCDT's

claims against it were time-barred because Fitzgerald and SCDT did not enter into the tolling

agreement until March 9, 2009, which was more than four years following the latest possible

date on which substantial completion could have occurred, October 11, 2004. Fitzgerald


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attached to its motion to dismiss an affidavit of Michael DeRouin, president of Fitzgerald and

project manager of Fitzgerald at the time of the development project, stating that substantial

completion had occurred on May 16, 2003 and October 11, 2004. The affidavit incorporated a

letter and a certificate of substantial completion, which indicated the same dates of substantial

completion, May 16, 2003 and October 11, 2004, respectively.

¶ 14   On December 5, 2011, Linn-Mathes also filed a motion to dismiss pursuant to section 2-

619(a)(5) of the Code (735 ILCS 5/2-619(a)(5) (West 2008)), or in the alternative, to dismiss

pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2008)). Linn-Mathes also

argued that under the provisions of the cause of action accrual agreement any claims SCDT had

against it accrued on the date of substantial completion which occurred in May 2003 and October

2004. As such, Linn-Mathes argued: (1) the claims against it were barred by the four-year

statute of limitations applicable to construction matters (735 ILCS 5/13-214(a) (West 2008)) and,

as a result, all claims were time-barred when it entered into the cause of action tolling agreement

in 2009; (2) SCDT failed to verify the third-party complaint; and (3) the claims alleged against

Linn-Mathes failed to state a cause of action. Linn-Mathes also attached to its motion the

affidavit of Michael DeRouin, which was identical to the affidavit attached to Fitzgerald's

motion to dismiss.

¶ 15   On December 27, 2011, SCDT filed its response. SCDT disputed the date of substantial

completion and argued that the date of substantial completion occurred in 2006. SCDT attached

the affidavit of Vincent Forgione to its response. In the affidavit, Forgione testifies that he "has

not been able to locate certificates of substantial completion for Phase I and Phase II of the


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Project," but that based on his "experience" and "SCDT's schedule of contractor draw payments,"

"[b]ecause substantial completion typically occurs after the general contractor has completed the

majority of the work, based on the contractor draw schedule, substantial completion most likely

occurred in early 2006." SCDT also argued that it was unreasonable to interpret the contract to

apply the contract accrual agreement to the implied indemnity claims because the limitation

period applicable to the implied indemnity claims could expire before SCDT even knew it had a

claim for implied indemnity. SCDT also argued that the express indemnity claim against Linn-

Mathes was subject to the 10-year statute of limitations applicable to written contracts.

¶ 16   Fitzgerald filed a motion to strike the affidavit of Vincent Forgione, and Linn-Mathes

joined in Fitzgerald's motion. The motion argued that Forgione was not qualified to give the

opinions in the affidavit, that his use of the term "substantial completion" was improper because

his definition differed from the definition of "substantial completion" specifically contained

within the contracts, and that his opinions within the affidavit were irrelevant and immaterial to

the matters at issue.

¶ 17                                   D. Trial Court's Ruling

¶ 18   On March 8, 2012, the trial court initially denied Linn-Mathes' motion to dismiss, finding

that the private contract limitations period that the parties had agreed upon in their respective

contracts did not apply in this case because this was a third-party action. The court made a

similar ruling with respect to Fitzgerald's motion to dismiss and denied Fitzgerald's motion to

strike the affidavit of Vincent Forgione.




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¶ 19   On April 12, 2012, Fitzgerald filed a motion seeking interlocutory appeal pursuant to

Illinois Supreme Court Rule 308 (eff. Feb. 26, 2010) regarding the trial court's denial of the

motions to dismiss. On April 24, 2012, at the hearing for Fitzgerald's motion seeking

interlocutory appeal, the trial court sua sponte decided to consider Fitzgerald's motion as a

motion to reconsider and provided SCDT an opportunity to file a supplemental brief.

¶ 20   On June 20, 2012, the trial court entered a written order reconsidering its March 8, 2012

order, and made a finding that the private statute of limitations accrual period in the parties’

contracts applied to the third-party action. Therefore, because the court applied the four-year

statute of limitations applicable to construction-related matters to the third-party claims, and

determined that the date of substantial completion occurred on October 11, 2004 at the latest,

thus triggering the running of the statute of limitations, SCDT's third-party claims against Linn-

Mathes and Fitzgerald had to be dismissed with prejudice because they were time-barred.

Specifically, the court stated:

               "After reconsideration, the Court finds that Guzman is inapposite.

               Guzman addresses when the cause of action accrues for a claim of

               indemnity. The contract at issue in this case expressly addresses

               accrual. It states that causes of action between the parties accrue

               upon the substantial completion of the work. The contractual

               provision at issue contains no limiting language as to what causes

               of action might be encompassed. This language is sufficiently

               broad to include a claim for indemnity. In Guzman, the court was


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               dealing with section 13-214 and interpreting how the discovery

               rule applied as to third party indemnity claims. It found that the

               discovery rule tolled the statute of limitation for indemnity action

               because the third party claim could not be determined before

               liability was established [on] the underlying claim. The

               contractual provision at issue here expressly eliminates the effect

               of the discovery rule. Instead of accruing at the point of discovery

               as most causes of action in Illinois do, the parties in this case

               pegged accrual of causes of action to the point of substantial

               completion."

¶ 21   On July 9, 2012, the trial court modified its June 20, 2012 order to state that "there was

no just reason for delaying the appeal of this order pursuant to Illinois Supreme Court Rule

304(a)," and SCDT timely filed a notice of appeal.

¶ 22                                   II. ANALYSIS

¶ 23   In this appeal, we consider whether the trial court erred in dismissing SCDT's third-party

complaint against Linn-Mathes and Fitzgerald. Accordingly, we must determine: (1) whether the

trial court erred when it determined the accrual agreements in the SCDT/Linn-Mathes and

SCDT/Fitzgerald contracts are enforceable on third-party claims; (2) whether in ruling on the

motion to dismiss the trial court improperly resolved a disputed issue of fact when it determined

the dates of substantial completion; and (3) whether the 4-year limitations period applicable to




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construction-related activity or the 10-year limitations period applicable to written contracts

applies to an express indemnity agreement contained within a construction contract.

¶ 24   Our review of a section 2-619 motion to dismiss (735 ILCS 5/2-619 (West 2008)) is de

novo. Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343, 352 (2008).

¶ 25                           A. Contract Accrual Agreements

¶ 26    We will first consider whether the contract accrual provisions apply to third-party claims

between the contracting parties. SCDT’s contracts with both Linn-Mathes and Fitzgerald

contain a cause of action accrual agreement that provides that all causes of action accrue on the

date of substantial completion of the project. The accrual agreement appears in both the

SCDT/Fitzgerald contract and the SCDT/Linn Mathes contract, with minor differences. SCDT

argues that the accrual provisions do not apply to third-party claims and that its third-party

claims against Linn-Mathes and Fitzgerald did not accrue until it was served with summons by

the plaintiff in the underlying case. See Guzman v. C.R. Epperson Construction, Inc., 196 Ill. 2d

391, 401 (2001). SCDT further argues it was unreasonable for the trial court to enforce the

accrual agreement contained in the contracts because enforcing the accrual agreement clauses

contained in the contracts at issue could result in a situation where the limitations period

applicable to implied indemnity claims would expire before an actual case of implied indemnity

had arisen. For the reasons that follow, we disagree with this argument and find that the trial

court properly enforced the contract accrual agreement provisions at issue here.

¶ 27   The relevant language in the SCDT/Fitzgerald contract states:




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                       "8.3 Causes of actions between the parties to this

               Agreement pertaining to acts or failures to act shall be deemed to

               have accrued and the applicable statutes of limitations shall

               commence to run not later than either the date of Substantial

               Completion for acts or failures to act occurring prior to Substantial

               Completion, or the date of issuance of the final Certificate for

               Payment for acts or failures to act occurring after Substantial

               Completion."

The relevant language in the SCDT/Linn-Mathes contract states:

                       "As to acts or failures to act occurring prior to the relevant

               date of substantial completion, any applicable statute of limitations

               shall commence to run and any alleged cause of action shall be

               deemed to have accrued in any and all events not later than such

               date of Substantial Completion."

¶ 28   "It is well settled that a contractual limitation requiring suit to be brought within a

specific period of time is valid if reasonable even though the period provided by general statute

of limitations *** is longer." Florsheim v. Travelers Indemnity Co. of Illinois, 75 Ill. App. 3d

298, 303 (1979). A limitation period is enforceable even where it may bar a meritorious claim.

See id. at 304. Further, "'parties to a contract may agree upon a shortened contractual limitations

period to replace a statute of limitations, so long as it is reasonable.'" Federal Insurance Co. v.

Konstant Architecture Planning, Inc., 388 Ill. App. 3d 122, 126 (2009) (quoting Medrano v.


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Production Engineering Co., 332 Ill. App. 3d 562, 566 (2002)). Illinois public policy strongly

favors the freedom to contract. Stevens v. Rooks Pitts & Poust, 289 Ill. App. 3d 991, 998 (1997).

¶ 29    In Konstant Architecture Planning, Inc., the court upheld a contract clause regarding an

accrual time for all statutes of limitations that is nearly identical to the one at issue here. In

Konstant Architecture Planning, Inc., the accrual clause agreed upon by the parties stated:

                "'Causes of action between the parties to this Agreement pertaining

                to acts or failures to act shall be deemed to have accrued and the

                applicable statute of limitations shall commence to run not later

                than either the date of Substantial Completion, or the date of

                issuance of the final Certificate for Payment for acts or failures to

                act occurring after Substantial Completion.'" Konstant

                Architecture Planning, Inc., 388 Ill. App. 3d at 124.

In construing these contract terms, the Konstant Architecture Planning, Inc. court noted that the

court's "primary objective is to give effect to the intent possessed by the parties at the time they

entered the agreement." Id. at 128. Accordingly, the Konstant Architecture Planning, Inc. court

found the above accrual clause to be clear and unambiguous in that the parties contracted to

create a date of accrual for all statutes of limitations that effectively eliminated the discovery

rule. Id.

¶ 30    Here, like in Konstant Architecture Planning, Inc., we find that the terms of accrual

agreement contained within both contracts were clear and unambiguous. Where there is no

ambiguity in the contract terms, the parties' intent must be drawn from the language of the


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written instrument itself. Quake Construction, Inc. v. American Airlines, Inc., 141 Ill. 2d 281,

288 (1990). SCDT, Linn-Mathes and Fitzgerald, who were sophisticated parties entering into

contracts involving more than $34 million in construction work, clearly intended to create an

accrual date for all statutes of limitations in an effort to limit liability and eliminate the effect of

the discovery rule. Had the parties intended to limit this clause in any way, they could have done

so. However, as plainly written, the clause applies to any and all claims. Thus, the plain

language of the clause in each contract makes it clear that the parties intended to limit potentially

unlimited liability and eliminate the discovery rule by creating a fixed accrual limitations date for

any and all causes of action, which began to run on the date of substantial completion.

¶ 31    SCDT argues that enforcing the accrual limitations clause in each of the contracts in this

case will violate public policy as it had been found to do so in "cases dealing with automobile

insurance policies that set the accrual date for uninsured or underinsured motorist claims at the

time the accident occurred" and "cases involving employee benefit plans that set the accrual date

at the date the claim for benefits was filed." While courts will not enforce an agreement that is

contrary to public policy, a contract should not be deemed illegal unless it is expressly contrary

to the law or public policy. American Country Insurance Co. v. Cline, 309 Ill. App. 3d 501, 506

(1999). The laws and public policy of the State of Illinois permit freedom of contracting

between competent parties. Id. In addition, construction of a contact that renders the agreement

enforceable rather than void is preferred. Id. at 507. As a result, the issue as to whether a

contract is contrary to public policy depends on the facts and circumstances of the case. Id.




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¶ 32    We do not find the public policy concerns recognized in uninsured/underinsured

automobile policy claims and employee benefits claims have any bearing in this case where

sophisticated parties contracted to and agreed to terms that trigger the running of all statutes of

limitations on the date of substantial completion.1 The cases cited by SCDT all involve contracts

between sophisticated and unsophisticated parties. Further, the terms of the contract at issue in

each of the cases cited by SCDT were not negotiated and agreed upon by both parties, rather they

were offered to the unsophisticated party in a take it or leave it manner. Here, as stated above,

the contract terms regarding the accrual date for all claims were bargained for and agreed upon

by sophisticated parties engaged in a multi-million dollar construction project. Accordingly, we

find no good reason to disturb these contract provisions that were bargained for by sophisticated

parties, and affirm the trial court's finding enforcing the contractual accrual date in both the

SCDT/Fitzgerald and SCDT/Linn-Mathes contracts.2

 ¶ 33                          B. Date of Substantial Completion




        1
         Of note, none of the cases cited by SCDT state, or even suggest, that it is against public
policy for two sophisticated parties to agree to contract terms that eliminate the effect of the
discovery rule. In fact, as stated above, our courts have specifically found that this is permitted.
See Konstant Architecture Planning, Inc., 388 Ill. App. 3d at 126.
        2
         We also find that SCDT's reliance on Guzman in this argument misplaced, as the facts
of Guzman dealt with the application of the default statute of limitations, which incorporated the
discovery rule, and not a modified statute of limitations that sets a trigger date for all claims, like
the one we are presented with here.

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¶ 34   SCDT argues that the trial court erred in determining that substantial completion, the

contract trigger date for the running of any statute of limitations, occurred on May 16, 2003 and

October 11, 2004. SCDT argues that it submitted a rebuttal affidavit in its response to the

motion to dismiss and offered testimony that suggests that substantial completion occurred

sometime in early 2006, thereby creating a genuine issue of material fact as to the date of

substantial completion, i.e., the contract accrual date. If the cause of action accrued in 2006,

SCDT had viable breach of contract claims against Linn-Mathes and Fitzgerald at the time the

tolling agreement was signed in March 2009. As such, SCDT argues the trial court improperly

decided a material question of fact when it determined the date of substantial completion of the

two towers to be May 16, 2003 and October 11, 2004 respectively.

¶ 35   The purpose of a motion to dismiss under section 2-619 of the Code is to dispose of

issues of law and easily proved issues of fact at the outset of a case. Zedella v. Gibson, 165 Ill.

2d 181, 185 (1995); 735 ILCS 5/2-619(c) (West 2008). When ruling on a section 2-619 motion,

the court admits as true all well-pleaded facts and the legal sufficiency of the complaint. King v.

City of Chicago, 324 Ill. App. 3d 856, 859 (2001). If grounds for dismissal do not appear on the

face of the pleading attacked, the motion shall be supported by affidavit, and the nonmoving

party has the opportunity to file a counteraffidavit. 735 ILCS 5/2-619(c) (West 2008). The

relevant question is whether there exists a genuine issue of material fact precluding dismissal, or

absent an issue of material fact, whether dismissal is proper as a matter of law. Fuller Family

Holdings, LLC v. Northern Trust Co., 371 Ill. App. 3d 605, 613 (2007).




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¶ 36   Here, Fitzgerald and Linn-Mathes attached to their motions to dismiss the affidavit of

Michael DeRouin, the president of Fitzgerald and the project manager of Fitzgerald during the

development project. In his affidavit, DeRouin testifies that he was "directly responsible for the

architectural services provided" during the development project. Further, he testifies in his

affidavit that the first tower was substantially completed on May 16, 2003 and the second tower

was substantially completed on October 11, 2004. In support of these two dates, DeRouin

attaches a letter that was written to SCDT on May 16, 2003 indicating that substantial

completion had occurred with respect to the first tower, and a certificate of substantial

completion that is signed by him and dated October 11, 2004 with respect to the second tower.

¶ 37   In SCDT's response to the motions to dismiss, it attached a counteraffidavit of Vincent

Forgione. Forgione is an employee of Frontier Management Corporation, which is an affiliate of

SCDT. Forgione states in his affidavit that he "has not been able to locate certificates of

substantial completion for Phase I and Phase II of the Project," but that based on his "experience"

and "SCDT's schedule of contractor draw payments," "[b]ecause substantial completion typically

occurs after the general contractor has completed the majority of the work, based on the

contractor draw schedule, substantial completion most likely occurred in early 2006." Thus,

Forgione uses the date of the final contractor draw payment, December 2006, to predict when

"the majority of the work" was completed to then estimate that substantial completion occurred

in early 2006.

¶ 38   Here, all parties entered into contracts stating that the date of substantial completion

would be determined by the architect (Fitzgerald) and would be reflected in a certificate of


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substantial completion. DeRouin's affidavit states that Fitzgerald determined that the first tower

was substantially completed on May 16, 2003, and the second tower was substantially completed

on October 11, 2004. In support of these two dates, DeRouin also attached a letter that was

written to SCDT on May 16, 2003 indicating that substantial completion had occurred with

respect to the first tower, and a certificate of substantial completion that is signed by him and

dated October 11, 2004 with respect to the second tower. As a result, Forgione's affidavit, which

estimates when substantial completion occurred based upon draw payments and when the final

draw payment was made, does not contradict the testimony of DeRouin who testifies that

substantial completion, pursuant to the contracts signed by the parties, was achieved on May 16,

2003 and October 11, 2004. Safeco Insurance Co. v. Jelen, 381 Ill. App. 3d 576, 583 (2008)

(where facts asserted in an affidavit are not refuted by counteraffidavit, the court will take those

facts as true notwithstanding any contrary unsupported allegations in the plaintiff's pleadings).

Further, any evidence regarding when substantial completion may have occurred that does not

comport with the terms that were contracted to by the parties is not material and cannot create a

material issue of fact. Therefore, because we find that the Forgione affidavit did not contradict

the evidence stated in the DeRouin affidavit and did not raise a genuine issue of material fact, it

follows that there is no genuine issue of material fact and the trial court properly concluded the

dates of substantial completion occurred on May 16, 2003 and October 11, 2004. See

Bloomingdale State Bank v. Woodland Sales Co., 186 Ill. App. 3d 227, 232 (1989) (where there

are no genuine issues of material fact, the court may grant a section 2-619 motion to dismiss).

¶ 39                       C. Statute of Limitations on SCDT's Claims


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¶ 40       Since we have concluded that the trial court properly enforced the cause of action

accrual agreement and also properly determined the date of substantial completion of the project

to be May 16, 2003 and October 11, 2004, we can now determine whether the statute of

limitations expired on SCDT's claims against Linn-Mathes and Fitzgerald.

¶ 41              a. Implied Indemnity Claims and Breach of Contract Claims

¶ 42      With respect to the implied indemnity claims, the applicable statute of limitations states

that a party has two years from being served with process in the underlying action or two years

from the date the party knew or reasonably should have known of an act or omission giving rise

to the action for indemnity, whichever period expires later. 735 ILCS 5/13-204(b) (West 2008).

However, in this case, because of the existence of the cause of action accrual agreement, the two-

year period began to run on the date of substantial completion. Because substantial completion

occurred at the latest on October 11, 2004, the limitation period on SCDT's claims for implied

indemnity against the third-party defendants expired on October 11, 2006, well in advance of the

March 9, 2009 tolling agreement, and are therefore time-barred. With respect to the breach of

contract claims, which the parties agreed were governed by the four-year statute of limitations

period applicable to construction-related activity, those claims are also time-barred as the statute

of limitation on those claims expired on October 11, 2008, which again was prior to the March 9,

2009 tolling agreement. Accordingly, we affirm the judgment of the trial court dismissing the

breach of contract and implied indemnity claims against the third-party defendants as being time-

barred.

¶ 43                             b. Express Indemnity Claim


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¶ 44   SCDT argues that its express indemnity claim against Linn-Mathes was improperly

dismissed by the trial court because it was governed by the 10-year statute limitations applicable

to written contracts rather than the 4-year statute limitations applicable to construction matters.

Section 13-206 of the Code states:

               "Except as provided in Section 2-725 of the 'Uniform Commercial

               Code', actions on bonds, promissory notes, bills of exchange,

               written leases, written contracts, or other evidences of indebtedness

               in writing and actions brought under the Illinois Wage Payment

               and Collection Act shall be commenced within 10 years next after

               the cause of action accrued***." 735 ILCS 5/13-206 (West 2008).

¶ 45   Linn-Mathes argues that the trial court properly determined that its express promise to

indemnify SCDT for breaches related to the construction work is governed by the four-year

statute of limitations applicable to construction-related activity, and that the trial court properly

dismissed SCDT's claim as time-barred under that statute. 735 ILCS 5/13-214(a) (West 2008).

Section 13-214(a) of the Code states:

               "Actions based upon tort, contract or otherwise against any person

               for an act or omission of such person in the design, planning,

               supervision, observation or management of construction, or

               construction of an improvement to real property shall be

               commenced within 4 years from the time the person bringing an

               action, or his or her privity, knew or should reasonably have


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                known of such act or omission. Notwithstanding any other

                provision of law, contract actions against a surety on a payment or

                performance bond shall be commenced, if at all, within the same

                time limitation applicable to the bond principal." 735 ILCS 5/13-

                214(a) (West 2008).

¶ 46    We agree with SCDT that the 10-year statute of limitations applies to its express

indemnity claim. Our decision is based upon our supreme court's ruling in Travelers Casualty &

Surety Co. v. Bowman, 229 Ill. 2d 461 (2008), which found that a written agreement to

indemnify was not one of the activities protected under the 4-year statute of limitations

applicable to construction matters and was instead subject to the 10-year statute of limitations

applicable to written contracts. See 735 ILCS 5/13-206 (West 2008).

¶ 47    In Travelers, Travelers Casualty & Surety Company (Travelers) filed suit against James

A. Bowman and Barbara B. Bowman, the president and sole shareholder, respectively, of a metal

working firm, Carlson, for breach of a written indemnity agreement relating to performance

bonds. Travelers, 229 Ill. 2d at 464. The Bowmans became liable to Travelers under the

indemnity agreement when Carlson failed to perform certain construction work. Id. Our

supreme court found that the 4-year statute of limitations did not apply to Travelers' claim and

that the 10-year statute of limitations applied instead. Id. at 465. In coming to this conclusion,

the Court stated that "'[t]he determination of the applicable statute of limitations is governed by

the type of injury at issue, irrespective of the pleader's designation of the nature of the action.'"

Travelers, 229 Ill. 2d at 466 (quoting Armstrong v. Guigler, 174 Ill. 2d 281, 286 (1996)). The


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court further stated that the "essence of any contractual action is found in the agreement's

promissory language" and "[a]s long as the gravamen of the complaint rests on the

nonperformance of a contractual obligation, section 13-206 applies." (Internal quotation marks

omitted.) Id. at 467 (quoting Armstrong, 174 Ill. 2d at 291). In finding that the type of injury at

issue in Travelers was contract related rather than construction related, the court stated:

                       "Here, the liability at issue emanates not from construction-

               related activity but, rather, from the breach of a contractual

               obligation to indemnify. ***

                       *** The Bowmans' liability to Travelers does not, however,

               emanate from Carlson's breach of the construction contracts.

               Rather, the Bowmans' liability emanates from the refusal to

               perform their obligation of indemnification under the written

               indemnification agreement after claims were made against the

               underlying performance bonds." Travelers, 229 Ill. 2d at 469.

Further, in Armstrong, which was relied upon in Travelers, the court stated:

               "The essence of any contractual action is found in the agreement's

               promissory language. Thus, it is only where liability emanates

               from a breach of a contractual obligation that the action may be

               fairly characterized as 'an action on a written contract.' The focus

               of the inquiry is on the nature of the liability and not on the nature

               of the relief sought." Armstrong, 174 Ill. 2d at 291.


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In sum, the Travelers court concluded that "[b]ecause the claim at issue is based on a breach of

express indemnification provisions in a written agreement, it is subject to the 10-year limitations

period in section 13-206." Travelers, 229 Ill. 2d at 476.

¶ 48    Here, like in Travelers, the express indemnity claim against Linn-Mathes arose from

Linn-Mathes' refusal to perform its obligation to indemnify SCDT pursuant to an express

promise to indemnify SCDT contained in the contract between the parties. Because the nature of

the claim was Linn-Mathes' refusal to indemnify, any potential liability arises out of Linn-

Mathes' failure to indemnify SCDT rather than any acts or omissions relating to construction-

related activity.

¶ 49    Further, our supreme court has held that the four-year statute of limitations relating to

construction matters protects only certain enumerated activities, specifically, "the design,

planning, supervision, observation or management of construction." (Internal quotation marks

omitted.) People ex rel. Skinner v. Hellmuth, Obata & Kassabaum, Inc., 114 Ill. 2d 252, 261

(1986); see 735 ILCS 5/13-214(a) (West 2008); see also Konstant Architecture Planning, Inc.,

388 Ill. App. 3d at 125-26 (the four-year statute of limitations applicable in construction-related

activities, "applies only if the defendant is being sued for its act or omission of one of the

enumerated construction-related activities"). Indemnification is not one of those enumerated

activities protected under the four-year statute of limitations. As such, section 13-214(a) does

not protect Linn-Mathes' actions or inactions as an indemnitor. Therefore, the 10-year statute of

limitations applicable to written contracts applies to SCDT's express indemnity claim against

Linn-Mathes.


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¶ 50   Linn-Mathes argues that the four-year statute of limitations governing construction

activity should apply here because the express indemnity clause at issue is contained within the

construction contract and is not its own separate contract. However, we see no requirement that

express indemnity clauses must be contained in a separate written document in order to apply the

10-year statute of limitations for written contracts. To the contrary, as made clear in Travelers,

"it is the nature of the plaintiff's injury rather than the nature of the facts from which the claim

arises which should determine which limitations period should apply." (Internal quotation marks

omitted.) Travelers, 229 Ill. 2d at 466 (quoting Armstrong, 174 Ill. 2d at 286-87). The nature of

SCDT's claim against Linn-Mathes is indemnification, regardless of the fact that the

indemnification clause is contained within the overall construction contract.

¶ 51   Further, while Linn-Mathes also argues that the holding in Guzman requires the four-year

construction statute of limitations to be applied to the express indemnity claim at issue here, we

cannot see how the holding in Guzman is applicable. Guzman only dealt with implied indemnity

claims and not an express indemnity claim like the one at issue in this case. See Guzman, 196

Ill. 2d 391. As pointed out in Travelers, the Guzman court "was not presented with the issue of

whether section 13-204 applied to an express indemnity agreement and it did not, therefore,

examine that issue." Travelers, 229 Ill. 2d at 476. Further, the Guzman court ultimately found

that section 13-204 applied to the implied indemnity claims in that case, and our courts have held

that "[s]ections 13-204(a) and 13-204(b) are not applicable when the basis for indemnity rests on

a written indemnity agreement." Travelers, 229 Ill. 2d at 473. Thus, because this appeal deals

with an express indemnity claim, which was not addressed in Guzman and which is an entirely


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different animal than the implied indemnity claims that were addressed in Guzman, Guzman is

inapplicable here.

¶ 52   Accordingly, we find that SCDT's express indemnity claim against Linn-Mathes must be

governed by the 10-year statute of limitations applicable to written contracts because the nature

of that claim is for the failure to indemnify rather than any act or omission relating to

construction activity. We therefore reverse the trial court's finding that the four-year statute of

limitations applies to SCDT's express indemnity claim against Linn-Mathes and the dismissal of

that claim. Since less than 10 years elapsed between the dates of substantial completion (May

2003 and October 2004) and the time the statute of limitations tolling agreement was signed in

2009 and the third-party complaint was filed in 2011, we reverse the dismissal of the express

indemnity claim as time-barred and remand this case to the trial court for further proceedings on

SCDT's express indemnity claim against Linn-Mathes.

¶ 53                                   III. CONCLUSION

¶ 54   For the above reasons, we affirm the trial court's enforcement of the contractual accrual

agreement and the dismissal of the implied indemnity and breach of contract claims against the

third-party defendants because they are time-barred; we reverse trial court's dismissal of the

express indemnity claim against Linn-Mathes and this case is remanded for further proceedings

on that claim only.

¶ 55   Affirmed in part and reversed in part; cause remanded.




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