Travelers Casualty & Surety Co. v. Bowman

In Travelers Casualty & Surety Co. v. Bowman, 229 Ill. 2d 461, 893 N.E.2d 583, 323 Ill. Dec. 311 (2008), Travelers sued A.G. Carlson, a metalworking firm, to recover $ 510,904.52 it incurred in losses, costs and expenses on claims against performance bonds issued to Carlson after Carlson breached underlying contracts to perform work at a county jail, a federal prison and a college building. Travelers also sued James Bowman, Carlson's president, and Barbara Bowman, its sole shareholder, for breach of the indemnity agreements they had signed. Carlson was subsequently dismissed with prejudice, and the Bowmans moved to dismiss pursuant to section 2-619(a)(5) of the Illinois Code of Civil Procedure (735 ILCS 5/2-619(a)(5) (West 2006)), arguing that Travelers' claim was barred by the four-year statute of limitations in section 13-214(a) of the Code (735 ILCS 5/13-214(a) (West 2006)), applicable to construction improvements to real property. Travelers, however, contended that the 10-year statute of limitations in section 13-206 (735 ILCS 5/13-206(a) (West 2006)), applicable to written contracts, should apply. Our supreme court ruled in favor of Travelers, stating that the nature of the plaintiff's injury rather than the nature of the facts from which the claim arises determines what limitations period applies. Travelers, 229 Ill. 2d at 466-67, citing Armstrong v. Guigler, 174 Ill. 2d 281, 286, 673 N.E.2d 290, 220 Ill. Dec. 378 (1996). Because Travelers' complaint alleged that the Bowmans failed to perform their obligation under the written indemnification agreement, the court found that the 10-year statute of limitations for breach of contract applied. Travelers, 229 Ill. 2d at 467. The court further stated, "a cause of action to enforce the indemnity agreement, therefore, was required to be commenced within 10 years after the Bowmans failed or refused to tender payment upon Travelers' demand." Travelers, 229 Ill. 2d at 477.