Illinois Supreme Court Applies Five-Year Statute of Limitations to Fraud-Based Construction Claim

By April 11, 2014 News No Comments

In 1998, Gillespie Community Unit School District No. 7 contracted with Wight & Company for architectural services, including a “site mine investigation” of an area under consideration for the construction of a new elementary school. The purpose of the site mine investigation was to provide an “analysis of the proposed building site for suitability of construction and implications on proposed structural systems.” Wight hired Hanson Engineers Inc. to conduct a study of the property. Hanson sent a letter to Wight indicating that there were numerous recorded subsidence events in the area. However, the final report did not include information contained in this letter and the district decided, based on the report and without knowledge of the letter, to build the elementary school at the site selected. The district retained Wight as the architect and Wight completed construction in the Fall of 2002.

Unfortunately, in March 2009 a coal mine subsided beneath the new building. This resulted in significant structural damage to the school building. The district sued Wight alleging professional negligence, breach of implied warranty and fraudulent misrepresentation by concealment of material fact. The district argued that Wight withheld information that there as a relatively high risk of subsidence in the area and had the district known this, it would not have built the school at that location.

Both the circuit court and appellate court granted summary judgment in favor of Wight because the district’s claims were barred by applicable statutes of limitations. The district only appealed the ruling by the appellate court that the fraudulent misrepresentation claim was barred by a five-year statute of limitations. The district argued that no statute of limitations applies to its claim for fraudulent misrepresentation; however, the Illinois Supreme Court held that the default statute of limitations of five years does apply.

As an aside, the Supreme Court noted that the district abandoned an argument in the early stages of litigation regarding a provision in its written agreement with Wight, wherein the district agreed to replace the date of discovery of a cause of action with the date of substantial completion of the work as the statutes’ trigger. The Court provided that there may be an issue with the enforceability of this provision, however, the Court affirmed the grant of summary judgment in favor of Wight because the only issue before it is whether the appellate court erred in applying the five-year statute of limitations to a fraud-based construction claim.

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