Recent Statute of Limitations Decision Highlights Plaintiffs' Duties to Investigate and Timely File Their Claims
A recent statute of limitations decision out of the Southern District of Illinois highlights the duties that plaintiffs have to investigate their causes of action and bring them in a timely manner.
In Wetherell v. ClimateMaster, Inc., 2009 WL 4043539 (S.D. Ill. Nov. 20, 2009), the plaintiffs had bought a geothermal heating and cooling unit for their home in June of 1999. They did not sue the manufacturer in a putative class action, however, until over 8 years later, in September 2007. The defendant, understandably, challenged the timeliness of suit under the statute of limitations. Plaintiffs responded, asserting the discovery rule and charging that the defendant had fraudulently concealed plaintiffs' causes of action. The court granted the defendants' motion to dismiss, holding that plaintiffs' claims were untimely filed and that the fraudulent concealment doctrine did not apply.
Notably, the only causes of action remaining at the time the defendant moved for summary judgment were violation of the Illinois Consumer Fraud Act and unjust of enrichment -- both of which triggered the running of the statute of limitations on the "accrual" of a cause of action under the discovery rule, i.e., when the plaintiff knew or reasonably should have known of his injury and that it was wrongfully caused. (We do not know from the opinion whether plaintiffs previously had pled breach of warranty causes of action, but their absence is not surprising, since the statute of limitations for warranty claims runs from the date of sale, not the date of "accrual" under a discovery rule.) The statute of limitations on the ICFA claim is 3 years from accrual; for unjust enrichment, it is 5 years from accrual.
In determining when the causes of action reasonably accrued, the court looked to plaintiffs' deposition testimony. Within 2 years they had begun experiencing problems with the unit. In September 2001, the installer had to return and add three pounds of refrigerant. Then, on March 15, 2002, the installer discovered a leak in the unit's air coil and replaced the coil with another. The unit continued to have problems, and in February 2005, the installer added another pound of refrigerant, and in late 2005 it once again replaced a leaky air coil and added refrigerant.
Apparently ClimateMaster's air coils were not coated with enamel and, as a result, had a tendency to corrode in the Illinois climate. ClimateMaster knew this fact, and its employees had recommended coating its coils with enamel to remedy the problem. Slip op. at *2. The court found that "ClimateMaster never disclosed the fact that they knew its air coils tended to leak to any Illinois consumers, nor did it issue a standard communication to those consumers or dealers about the problems with the air coils." Id.
So when did plaintiffs' causes of action accrue? If it was late 2005, then plaintiffs' claims would be timely. If, however, it was when the first coil was replaced in 2002, they would not.
Plaintiffs' testimony was the key. Mrs. Wetherell testified that she knew in March 2002 that the reason for the problems she had experienced was a failed air coil, and she suspected that ClimateMaster -- and no one else -- was responsible for the unit's failure. Id. Mr. Wetherell testified that he knew in March 2002 that he could take legal action against someone, but later in his deposition he seemed to recant this position. Id. at 4. Nevertheless, the court concluded, his failure to further investigate the cause of injury in 2002 was constructive knowledge that the injury was wrongfully caused. Id. As the court explained, "the need to discourage delay and encourage diligence" means that the statute is triggered once plaintiff knows that he is wrongfully injured, not when he recognizes the full extent or cause of his injuries. Id. at *3.
Plaintiffs sought to avoid summary judgment by arguing that the repeated failure of the unit was a "continuing violation" so that triggering of the statute of limitations should be held in abeyance until the last injury occurred. The court flatly rejected this argument, noting that this was not a continuing violation" because plaintiffs did not continue to purchase heating and cooling units; rather, they serially attempted to remedy the "'continual ill effects from an initial violation,' which is not a continuing tort." Id. at *5. Moreover, the "continuing violation" theory has not been applied to ICFA causes of action in Illinois. Id.
Plaintiffs also sought to forestall the effect of the statute of limitations by arguing that ClimateMaster fraudulently concealed the causes of action plaintiffs had against it. The court quickly rejected this argument. Fraudulent concealment, it noted, involves "'efforts by the defendant, above and beyond the wrongdoing upon which plaintiff's claims is founded to prevent, by fraud or deception, the plaintiff from suing in time.'" Id. at *6 (citation omitted). But the only evidence plaintiffs provided was that ClimateMaster failed to disclose the defects in its coils when it sold and serviced the unit. Remaining silent, however, is not fraudulent concealment unless the defendant has a fiduciary or other confidential relationship with the plaintiff placing upon the defendant a legal duty to speak. And ClimateMaster, as a product seller, has no confidential relationship with the buyer and thus has no legal duty to speak; therefore, its mere silence about the alleged defect cannot be fraudulent concealment. Id. at *7. Accordingly, the ordinary statute of limitations applies, and plaintiffs' decision to wait to file suit more than 5 years from when they first understood that they had experienced a wrongful injury bars their claim.
