United Airlines v. City of Chicago , 2011 IL App (1st) 102299 ( 2011 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
United Airlines, Inc. v. City of Chicago, 2011 IL App (1st) 102299Appellate Court UNITED AIRLINES, INC., Plaintiff-Appellee, v. THE CITY OF
Caption CHICAGO, Defendant-Appellant.
District & No. First District, First Division
Docket No. 1–10–2299
Filed June 13, 2011
Held In response to a certified question pursuant to Supreme Court Rule 308,
(Note: This syllabus as to whether the 1-year limitations period of the Tort Immunity Act
constitutes no part of the barred plaintiff's claim arising out of a single event seeking recovery for
opinion of the court but property damage and other related losses against defendant city when
has been prepared by the plaintiff was also a party to a contract with the city and filed a complaint
Reporter of Decisions for alleging a breach of contract claim seeking recovery of property damage
the convenience of the and other related losses within the 10-year limitation period for actions
reader.) on written contracts, the appellate court answered that the facts pleaded
in plaintiff's complaint based on a collision between plaintiff's airplane
and defendant's truck during takeoff alleged that the city's liability
emanated from a breach of its contractual obligations to keep the
airfield area free of foreign matter, to comply with federal regulations,
to yield the right-of-way to the airplane and to provide insurance
proceeds to cover plaintiff's loss, and therefore plaintiff's action
constituted an action on a written contract such that the 10-year
limitations period set forth in section 13–206 of the Code of Civil
Procedure applied and the 1-year limitations period in section 8–101 of
the Tort Immunity Act did not bar plaintiff's claim.
Decision Under Appeal from the Circuit Court of Cook County, No. 10–CH–04169; the
Review Hon. Mary Anne Mason, Judge, presiding.
Judgment Certified question answered; cause remanded.
Counsel on SmithAmundsen, LLC, of Chicago (Brandt R. Madsen, of counsel), for
Appeal appellant.
Baker & Daniels, LLP, of Chicago (Ernest Summers III and Trina K.
Taylor, of counsel), for appellee.
Panel JUSTICE ROCHFORD delivered the judgment of the court, with
opinion.
Presiding Justice Hall and Justice Hoffman concur with the judgment.
OPINION
¶1 The issue before us on this Rule 308 (Ill. S. Ct. R. 308 (eff. Feb. 26, 2010)) appeal is
whether the one-year limitations period for civil actions against government entities set forth
in section 8–101 of the Local Governmental and Governmental Employees Tort Immunity
Act (the Tort Immunity Act) (745 ILCS 10/8–101 (West 2010)) applies to United Airlines,
Inc.’s (United) breach of contract action against the city of Chicago (City). United’s contract
action arose out of a collision between a United plane and a City truck that resulted in
property damage and loss of use of the plane. For the reasons that follow, we hold that the
10-year limitations period for actions on written contracts set forth in section 13–206 of the
Code of Civil Procedure (the Code) (735 ILCS 5/13–206 (West 2010)), and not the 1-year
limitations period of section 8–101 of the Tort Immunity Act, applies here.
¶2 United filed a two-count complaint for declaratory judgment and breach of contract
against the City. The City filed a motion to dismiss pursuant to section 2–619.1 of the Code
(735 ILCS 5/2–619.1 (West 2010)), arguing that: (1) both counts of the complaint failed to
state a cause of action and should be dismissed pursuant to section 2–615 of the Code (735
ILCS 5/2–615 (West 2010)); and (2) both counts should be dismissed pursuant to section
2–619(a)(5) of the Code (735 ILCS 5/2–619(a)(5) (West 2010)) as they were thinly veiled
tort actions that are barred by the one-year statute of limitations of section 8–101 of the Tort
Immunity Act (745 ILCS 10/8–101 (West 2010)). The circuit court dismissed the declaratory
judgment count for reasons unrelated to this appeal and that count is not before us. As to the
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breach of contract count, the circuit court found that it stated a cause of action in all respects
except for its failure to allege that United had complied with the contract. Accordingly, the
court granted the City’s section 2–615 motion to dismiss, but granted United leave to
replead. Meanwhile, the court denied the City’s section 2–619(a)(5) motion to dismiss the
breach of contract count, finding that it was timely filed within the 10-year limitations period
for actions on written contracts. See 735 ILCS 5/13–206 (West 2010).
¶3 United subsequently filed its amended verified complaint, in which it repleaded count
I (for declaratory judgment) solely for the purpose of preserving the circuit court’s dismissal
for review. United repleaded count II for breach of contract and included therein the
additional language that it had complied with the contract. Count II is the only count before
us.
¶4 Pursuant to Supreme Court Rule 308 (Ill. S. Ct. R. 308 (eff. Feb. 26, 2010)), the court
certified the following question for our review:
“Does the one-year limitation period in [section 8–101 of the Tort Immunity Act]
also bar a claim arising out of a single event seeking recovery for resultant property
damage and other related losses against a governmental entity when the plaintiff is
also a party to a contract with the governmental entity and has filed within the 10-
year limitation period for actions on written contracts a breach of contract claim
seeking recovery of property damage and related other losses?”
¶5 We allowed the City’s petition for interlocutory appeal and accepted the certified
question for immediate appellate review. Review is de novo. Barbara’s Sales, Inc. v. Intel
Corp., 227 Ill. 2d 45, 57-58 (2007); Travelers Casualty & Surety Co. v. Bowman, 229 Ill. 2d
461, 466 (2008).
¶6 Generally, where both a tort and a contract cause of action arise out of the same fact
pattern, plaintiff may proceed with the theory of his choice. Board of Education of
Community Consolidated School District No. 54 v. Del Bianco & Associates, Inc., 57 Ill.
App. 3d 302, 306 (1978). United argues that it proceeded under a contract action, which is
subject to the 10-year limitations for actions on written contracts set forth in section 13–206
of the Code. Section 13–206 states in pertinent part: “[A]ctions on *** written contracts ***
shall be commenced within 10 years next after the cause of action accrued.” 735 ILCS
5/13–206 (West 2010).
¶7 The City responds that although United titled its action as one for “breach of contract,”
it is in actuality a negligence claim that is subject to the one-year limitations period set forth
in section 8–101 of the Tort Immunity Act. Section 8–101 states in pertinent part:
“(a) No civil action *** may be commenced in any court against a local entity or
any of its employees for any injury unless it is commenced within one year from the
date that the injury was received or the cause of action accrued.
***
(c) For purposes of this Article, the term ‘civil action’ includes any action,
whether based upon the common law or statutes or Constitution of this State.” 745
ILCS 10/8–101(a), (c) (West 2010).
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¶8 Initially, we note that, on its face, section 8–101 applies to “any” civil action such that
its one-year statute of limitations seemingly would apply to either a tort action or a breach
of contract action against the City. However, we recently have held that section 2–101 of the
Tort Immunity Act (745 ILCS 10/2–101 (West 2010)) operates to exclude certain
enumerated exceptions listed therein from the one-year limitations period set forth in section
8–101. Harvest Church of Our Lord v. City of East St. Louis, 407 Ill. App. 3d 649 (2011).
An action based on a contract is one such exception listed in section 2–101 that is excluded
from the one-year limitations period of section 8–101. See 745 ILCS 10/2–101(a) (West
2010). Accordingly, while a tort action against the City is subject to the 1-year limitations
period of section 8–101 of the Tort Immunity Act, an action against the City for breach of
a written contract remains subject to the 10-year limitations period set forth in section
13–206 of the Code.
¶9 To determine which limitations period applies here, we evaluate the complaint to
ascertain the true character of United’s cause of action. Madigan ex rel. Department of
Healthcare & Family Services v. Yballe, 397 Ill. App. 3d 481, 488 (2009). “ ‘[T]he
determination of the applicable statute of limitations is governed by the type of injury at
issue, irrespective of the pleader’s designation of the nature of the action.’ ” Bowman, 229
Ill. 2d at 466 (quoting Armstrong v. Guigler, 174 Ill. 2d 281, 286 (1996)). The title a plaintiff
employs to describe his cause of action is not dispositive as to the true nature of that action
or to the limitations period that applies thereto. Yballe, 397 Ill. App. 3d at 488. “A party
simply may not circumvent a shorter period of limitations, or attempt to breathe new life into
a stale claim, merely by means of artful pleading.” Armstrong, 174 Ill. 2d at 287.
¶ 10 The essence of a contractual action is found in the contract’s promissory language.
Bowman, 229 Ill. 2d at 467; Armstrong, 174 Ill. 2d at 291. A cause of action constitutes an
action on a written contract within the meaning of the 10-year limitations period set forth in
section 13–206 of the Code only when “liability emanates from the breach of a contractual
obligation.” Bowman, 229 Ill. 2d at 467; Armstrong, 174 Ill. 2d at 291. “ ‘As long as the
gravamen of the complaint rests on the nonperformance of a contractual obligation, section
13–206 applies.’ ” Bowman, 229 Ill. 2d at 467 (quoting Armstrong, 174 Ill. 2d at 291).
¶ 11 In the present case, review of count II of United’s amended verified complaint reveals
that its cause of action constitutes an action on a written contract within the meaning of
section 13–206. Specifically, United alleged that on January 1, 1985, it entered into an
amended and restated airport use agreement and terminal facilities lease (the contract) with
the City. The contract, which United attached to its complaint, sets forth the respective rights
and obligations of both parties with respect to the use of Chicago O’Hare International
Airport (the Airport). Among other things, the contract allows United to “conduct any
operations or activities *** reasonably related to the landing, taking-off, flying, moving,
loading, unloading or ramp servicing of aircraft or the movement of passengers.” The
contract allows the City to collect certain fees from United.
¶ 12 The contract requires United to maintain and repair the premises to which the contract
gives it exclusive use, and to keep its designated aircraft parking areas clear of debris. The
City is required to “maintain and keep in good repair *** all of the areas and facilities of the
Airport” and to operate and maintain the airport “in a reasonably prudent manner and in
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accordance with the rules, regulations and orders of any federal or state agency having
jurisdiction with respect thereto.” The contract also requires the City to “use its best efforts
to keep the Airport open and in operation for landings and take-offs of aircraft” and “take all
actions necessary to keep the Terminal Area, the Airfield Area and the Terminal Support
Area clear of snow, ice, debris, vegetation and other foreign matter.” The contract defines
“Airfield Area” to include “taxiways and taxilanes at the Airport for the ground movement
of aircraft to, from and between the Runways, Aircraft Parking Areas, and other portions of
the Airport.” The contract further requires the City to purchase comprehensive general public
liability insurance.
¶ 13 United alleged that on February 2, 2005, United flight 881 was cleared to depart the
Airport via taxiway-A to runway 32L. Ground control informed United flight 881 that further
instructions would be given as the flight approached taxiway A-12 and that the crew should
expect an immediate takeoff. United flight 881’s captain and first officer confirmed that the
airplane was centered on taxiway-A and proceeded as instructed by ground control. However,
there was a City truck in the grass to the right side of taxiway-A between A11 and A12
which the City had failed to disclose to ground control. The undisclosed City truck
obstructed the path of United flight 881, resulting in a collision between the truck and the
airplane’s number four engine. The collision caused damages to the airplane requiring
$1,434,182.98 in repairs, and the plane was out of service during the months in which it was
repaired, which caused further damages to United.
¶ 14 United alleged that the City was contractually obligated to keep the airfield area clear of
foreign matter and that the City breached this portion of the contract when it drove its truck
onto the grass on the right side of taxiway-A between A11 and A12 without disclosing its
presence to ground control. United further alleged that the City breached the contract by
failing to conspicuously mark the truck or provide the requisite notification of its presence
as required by certain federal airport regulations (FARs), which are incorporated by reference
into the contract. United also alleged that the City breached the contract by failing to yield
the right-of-way on taxiway-A to the United airplane and by failing to provide insurance
proceeds to cover its loss. United requested damages sufficient to reimburse it for the
expenditures made to repair the airplane and to compensate it for the loss of use of the
airplane.
¶ 15 Our foregoing evaluation of count II of United’s amended verified complaint reveals that
the City’s claimed liability emanates from the alleged breach of contractual obligations and
that the gravamen of said complaint rests on the alleged nonperformance of contractual
obligations; accordingly, the cause of action constitutes an action on a written contract such
that the 10-year limitations period set forth in section 13–206 applies.
¶ 16 The City argues, though, that United’s claim arises from a single event (the collision
between the City’s truck and United’s airplane) resulting in property damage and, as such,
that United’s claim sounds in tort rather than contract. See Mars, Inc. v. Heritage Builders
of Effingham, Inc., 327 Ill. App. 3d 346, 351 (2002) (holding that “tort law affords a remedy
for losses occasioned by personal injuries or damage to one’s property, but contract law ***
[citation] offer[s] the appropriate remedy for economic losses occasioned by diminished
commercial expectations not coupled with injury to person or property”); Board of Education
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of City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 441 (1989) (holding that, generally, “the
defect in a tort claim results in either personal injury or property damage” and that
“[t]ypically, the manner in which a tort damage occurs is an accident involving some
violence or collision with external objects”).
¶ 17 However, although tort law provides the usual remedy for losses occasioned by property
damage resulting from a collision, it is not the only remedy when such losses also resulted
from a contractual breach. Our supreme court has held that a party can recover damages in
a breach of contract action where the damages naturally and generally result from the breach
or where the damages were the consequence of special or unusual circumstances and were
foreseeable and within the reasonable contemplation of the parties at the time the contract
was entered into. See Midland Hotel Corp. v. Reuben H. Donnelly Corp., 118 Ill. 2d 306, 318
(1987). In the present case, United has pleaded damages resulting from the special or unusual
circumstance of a collision between its plane and a City truck that was present in the grass
to the right side of taxiway-A in violation of their contract. If these allegations are proved,
a trier of fact could find that United’s damages were recoverable in the breach of contract
action because they were foreseeable and within the reasonable contemplation of the parties
at the time they entered into the contract for the City to keep the airfield area clear of foreign
matter. The City argues that its truck did not constitute foreign matter within the meaning of
the contract; however, that is a question for the trier of fact to determine.
¶ 18 We also note that in addition to the allegation of property damage to its plane, United
alleges loss of use of the plane while it was repaired. Damages for loss of use are recoverable
in a breach of contract action where the breach deprives a plaintiff of the use of personal
property. Wilson v. DiCosola, 352 Ill. App. 3d 223, 225 (2004).
¶ 19 The City argues that the contract lacks consideration because the City’s obligations under
the contract were based on preexisting duties. This issue is beyond the scope of the certified
question and is not properly raised here. See Barbara’s Sales, 227 Ill. 2d at 57-58 (“We are
limited to the question certified by the trial court ***.”).
¶ 20 The City argues that United’s claim for breach of contract relies heavily on FARs outside
the contract and, as such, the contract must be deemed oral such that the five-year statute of
limitations for oral contracts applies. See 735 ILCS 5/13–205 (West 2010). The City argues
that this issue is relevant to the certified question because a finding that the contract was oral
instead of written would prevent us from finding that the 10-year limitations period for
written contracts is properly applied here. The purpose of the City’s argument is unclear,
because United’s complaint was filed within five years of the occurrence and therefore its
cause of action would not be barred by the statute of limitations for oral contracts.
Regardless, we disagree with the City’s argument that the contract here was oral and not
written. A contract is considered written for statute of limitations purposes where all the
essential terms are reduced to writing and ascertainable from the instrument itself.
Armstrong, 174 Ill. 2d at 288. Here, United attached the 93-page contract to the amended
verified complaint; review thereof indicates that the contract provides for the respective
parties’ rights and obligations with respect to the use of the Airport. The contract
incorporates therein, and makes part of the contract, all rules, regulations and orders of any
federal or state agency having jurisdiction with respect thereto. The incorporation of the
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rules, regulations, and orders (including the FARs at issue) into the written contract satisfies
the writing requirement. The contract here is a written one subject to the 10-year limitations
period set forth in section 13–206.
¶ 21 The City cites several cases in which the reviewing court found that the 10-year
limitations period of section 13–206 (or the predecessor thereto) did not apply because an
evaluation of the complaint revealed that the alleged liability at issue did not emanate from
breach of contract. See Yballe, 397 Ill. App. 3d at 487-91; Armstrong, 174 Ill. 2d at 292-94;
Schreiber v. Eastern Airlines, Inc., 38 Ill. App. 3d 556 (1976). The City also cites
Handtoffski v. Chicago Consolidated Traction Co., 274 Ill. 282 (1916), in which the supreme
court held that the five-year limitations period for an action in assumpsit for a tortious breach
of an implied contract did not apply to a cause of action seeking damages for injury to the
person. Each of the cited cases turns on the facts pleaded in its particular complaint. Here,
the facts pleaded in United’s complaint reveal that the City’s claimed liability emanates from
its alleged breach of contractual obligations to keep the airfield area free of foreign matter,
to comply with pertinent federal regulations, to yield the right-of-way to the airplane, and to
provide insurance proceeds to cover the loss. The cause of action here constitutes an action
on a written contract such that the 10-year limitations period set forth in section 13–206
applies.
¶ 22 Therefore, in answer to the question certified by the circuit court, the one-year limitation
period set forth in section 8–101 of the Tort Immunity Act does not bar United’s claim here
against the City for breach of contract.
¶ 23 Certified question answered; cause remanded.
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