Does Nature of a Person's Injury Rather Than the Facts from Which the Claim Arises Determine What Limitation Period Governs ?
In Travelers Casualty & Surety Co. v. Bowman, 229 Ill. 2d 461, 893 N.E.2d 583, 323 Ill. Dec. 311 (2008), an insurer issued several performance bonds to a metalworking company.
After the company breached its underlying construction contracts and the payment of claims under the performance bonds resulted, the insurer filed suit against the company for indemnification based on a written indemnity agreement the company had signed when the bonds were issued.
The company moved to dismiss the suit, arguing that the insurer's claims were barred by the four-year statute of limitations in section 13-214(a) of the Code (735 ILCS 5/13-214(a) (West 2002)), applicable to construction improvements to real property.
The insurer, however, asserted that the 10-year statute of limitations for written contracts in section 13-206 of the Code (735 ILCS 5/13-206 (West 2002)) should apply.
The Illinois Supreme Court ruled in favor of the insurer, noting that it had long held that the nature of the plaintiff's injury rather than the facts from which the claim arises determines what limitations period governs. Travelers, 229 Ill. 2d at 466, citing Armstrong v. Guigler, 174 Ill. 2d 281, 286-87, 673 N.E.2d 290, 220 Ill. Dec. 378 (1996).
Applying this analysis, the supreme court determined that the company's liability did not emanate from a construction-related activity but from the breach of the written indemnity agreement, and, therefore, the four-year statute of limitations in section 13-214(a) was inapplicable. Travelers, 229 Ill. 2d at 469-70.
Instead, the Travelers court concluded that the insurer's suit was governed by the 10-year statute of limitations for written contracts set forth in section 13-206. Travelers, 229 Ill. 2d at 478.