Medrano v. Production Engineering Co.

774 N.E.2d 371, 332 Ill. App. 3d 562, 266 Ill. Dec. 265, 2002 Ill. App. LEXIS 566
Appellate Court of Illinois·Decided June 28, 2002·No. 1-01-0302·Published·Cited by 30 cases

Opinion

JUSTICE GORDON

delivered the opinion of the court:

Production Engineering Company (Production) appeals from the denial of its motion for summary judgment and the grant of summary judgment in favor of Cam Fran Tool Company (Cam Fran). Production contends that the trial court erred in its determination of the triggering date of the limitations period involved in this indemnity action and in its determination that Cam Fran had not waived the limitations defense. Production asks that we reverse the trial court’s entry of summary judgment for Cam Fran and denial of Production’s motion, enter summary judgment for Production and deny Cam Fran’s motion, and remand the cause to address damages. For the following reasons, we affirm.

BACKGROUND

In 1979, Production and Cam Fran entered into a contract in which Production would sell, and Cam Fran would buy, a punch press machine. Part of this contract included Form PE-77, which stated Cam Fran was to indemnify Production for “any claims, damages, losses, costs and expenses *** including but not limited to attorney’s fees [and] court costs *** arising out of or resulting from” work performed under the contract. Form PE-77 also made clear that “any legal action taken to enforce any of the provisions of this contract must be commenced within one (1) year after such cause of action arises.”

In 1994, Manuel Medrano (Medrano), an employee of Cam Fran, was injured while operating the punch press machine. In February 1995, Medrano filed a complaint naming Production as a party defendant. On July 10, 1995, Production was served with Medrano’s complaint. Soon after, in October 1995, Production filed its answer and appearance in the cause.

On April 15, 1997, Production filed a third-party complaint against Cam Fran seeking indemnification for all costs it expended in relation to Medrano’s underlying action. Cam Fran answered, denying all liability but failing to include the affirmative defense of the one-year limitations period found in Form PE-77 of the sales contract.

Production filed a motion for summary judgment against Medrano, which was granted in May 2000. However, that order was not final and appealable. Production then filed a motion for summary judgment against Cam Fran. Cam Fran responded by filing a cross-motion for summary judgment, arguing that because the contract set a one-year limitations period for indemnification purposes, and because that period began to run no later than October 1995 when Production answered Medrano’s complaint, Production’s April 15, 1997, claim against Cam Fran for indemnification was time-barred. Production responded that Cam Fran had waived the limitations defense because it had not raised it in its August 1999 answer to Production’s complaint but instead waited until its cross-motion to argue it. Production also insisted that even if this defense was not waived, Production’s indemnification claim arose not in October 1995, but in May 2000, when it received summary judgment against Medrano. Cam Fran presented arguments to refute these contentions and asked the trial court for leave to file an amended answer which would include the limitations defense. Cam Fran submitted this proposed amended answer to the trial court in the form of a footnote in its reply in support of its cross-motion for summary judgment.

Meanwhile, the underlying cause of action was settled on October 5, 2000. The trial court allowed Production and Cam Fran to file briefs on the indemnity issue and held a hearing on their motions. On December 20, 2000, the trial court issued a written order. In it, the court found that Form PE-77 of the sales contract established a one-year limitations period for Production’s indemnification claim. Then, relying on Guzman v. C.R. Epperson Construction, Inc., 309 Ill. App. 3d 655 (2000), the court found that this claim arose on July 10, 1995, the date Production was served with Medrano’s complaint in the underlying action. Because Production waited until April 15, 1997, to file its indemnity claim against Cam Fran, that claim was time-barred. Therefore, the court denied Production’s motion for summary judgment and instead granted summary judgment for Cam Fran on its cross-motion.

As for Cam Fran’s motion for leave to file its amended complaint, the trial court did not address it in the written order. Cam Fran pointed this out to the court. Production objected, but did so only on the ground that Cam Fran had not raised the limitations defense before. In response, the court held that Cam Fran’s amended answer “should be a part of the record.”

ANALYSIS

Production appeals from the trial court’s denial of its motion for summary judgment. “The purpose of summary judgment is to determine whether a question of fact exists ***.” West v. Northeastern Illinois R.R. Corp., 180 Ill. App. 3d 307, 311 (1989); see also Addison v. Whittenberg, 124 Ill. 2d 287, 294 (1988). Therefore, summary judgment is proper only when the pleadings, depositions and admissions on record, together with any affidavits, show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Purtill v. Hess, 111 Ill. 2d 229, 240-44 (1986). Accordingly, appellate review of a trial court’s grant of summary judgment is de novo (see In re Estate of Rennick, 181 Ill. 2d 395, 401 (1998); Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992)), and reversal will occur only if we find that a genuine issue of material fact exists (see Addison, 124 Ill. 2d at 294).

A. The Triggering Date of the Limitations Period

Production’s first contention on appeal is that the trial court erred in finding that the limitations period on its indemnity claim against Cam Fran began to run on July 10, 1995, the date Production was served with Medrano’s complaint. 1 Instead, Production, relying heavily on Kerschner v. Weiss & Co., 282 Ill. App. 3d 497 (1996), claims that the statute of limitations was not triggered until May 10, 2000 (when Production received summary judgment in the underlying action), or perhaps October 5, 2000 (when the underlying action was settled and dismissed). We disagree.

It is undisputed that Production and Cam Fran entered into a valid contract for the sale of the punch press machine, a contract which included an indemnity provision and a one-year limitations period. That is, both parties agreed in Form PE-77 that Production would have one year from the date a legal cause of action arose to institute an indemnity claim against Cam Fran. The parties chose to shorten the general statute of limitations applicable to these cases, which would have allowed for a longer period. See 735 ILCS 5/13 — 214 (West 2000). Even were Production to now challenge this change, it is well established that parties to a contract may agree upon a shortened contractual limitations period to replace a statute of limitations, as long as it is reasonable. See Florsheim v. Travelers Indemnity Co. of Illinois, 75 Ill. App. 3d 298, 303 (1979). Neither party here contests the reasonableness of Form PE-77.

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Medrano v. Production Engineering Co., 774 N.E.2d 371, 332 Ill. App. 3d 562, 266 Ill. Dec. 265, 2002 Ill. App. LEXIS 566 (Ill. Ct. App. 2002).

774 N.E.2d 371 (Medrano v. Production Engineering Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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