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Illinois Appellate Court Holds Express Indemnity Claim Based on a Construction Contract is Governed By 10-year Statute of Limitations
The Illinois Appellate Court recently held that a developer’s express indemnity claim against a third-party defendant contractor was governed by the ten (10) year statute of limitations generally applicable to written contracts and not by the four (4) year statute of limitations for construction-related claims even though the underlying lawsuit against the developer included claims for workmanship defects. In 15th Place Condominium Association v. South Campus Development Team, LLC and Fitzgerald Associates Architects P.C. and Linn-Mathes, Inc., 2014 IL App (1st) 122292, South Campus Development Team (“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 Associates Architects P.C. (“Fitzgerald”) for architectural services and with Linn-Mathes, Inc. (“Linn-Mathes”) to be the general contractor for the Project. In April 2005, after a number of condominium units were sold, SCDT turned over control of the Project to 15th Place Condominium Association (the “Association”).
In 2008, following the turnover, the Association discovered many design and workmanship defects and filed a lawsuit against SCDT which included claims of breach of implied warranty of fitness and habitability, breach of fiduciary duty, and negligence. In June 2011, SCDT filed a third-party complaint against Fitzgerald and Linn-Mathes alleging claims for breach of contract, breach of implied warranty of good workmanship, express indemnity, and alternatively, implied indemnity against both Fitzgerald and Linn-Mathes. Among other things, the trial court dismissed the express indemnity claim against Linn-Mathes as being barred by the four (4) year statute of limitations set forth at 735 ILCS 5/13-214.
The appellate court reversed basing its decision upon the Illinois 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 four (4) year statute of limitations applicable to construction matters (i.e. the design, planning, supervision, observation or management of construction), and was instead subject to the ten (10) year statute of limitations applicable to written contracts. 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. As such, Linn-Mathes’ action or inaction as an indemnitor was not protected under 735 ILCS 12-214(a), and therefore the ten (10) year statute of limitations applicable to written contracts applied to SCDT’s express indemnity claim against Linn-Mathes.
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