Knox v. North American Car Corp.

Mr. JUSTICE SIMON, specially concurring:

I agree with Judge McNamara’s conclusion that the plaintiffs’ cause of action was properly dismissed. To explain the result I reach, however, it is necessary to emphasize a point which my fellow justices have not discussed.

The plaintiffs’ theory of the case is that the defendant breached an implied warranty of fitness for a particular purpose. The complaint alleges that Hershey was relying on defendant’s skill and judgment to furnish boxcars suitable for the loading, transportation and handling of Hershey’s commodities. Plaintiffs’ theory is that the defendant breached its implied warranty by delivering to Hershey a boxcar which was constructed in such a way that a hole appeared in the boxcar floor and that such a boxcar was not fit for Hershey’s purpose. Although plaintiffs refer in their complaint to a covenant to repair, their suit is not based upon a breach of that covenant.

I do not believe it is necessary to reach the question of whether the warranty of fitness runs in favor of Johnny Knox. Even if it does, his action, in my opinion, is barred by the 4-year limitations provision of the U.C.C. (Ill. Rev. Stat. 1977, ch. 26, par. 2-725):

“(1) An action for breach of any contract for sale must be commenced within 4 years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.

(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.”

Defendant leased the boxcar on March 1, 1966, and tendered delivery to Hershey a short time later. The cause of action thus accrued in 1966. The fact that the boxcar circulated on various railroad lines and was rerouted for use by other shippers from time to time before it was returned to Hershey does not mean that Hershey received tender of delivery within the meaning of section 2 — 725 each time it regained use of the boxcar. Nor does the fact that defendant may have had, even for purposes of repair, possession of the boxcar after it was first delivered to Hershey but before the redelivery to Hershey preceding Knox’s injury mean that the redelivery constituted a new tender of delivery under section 2 — 725. The crux of the plaintiffs’ claim is that the boxcar was unfit upon initial delivery in 1966. The breach occurred then. The warranty was not renewed each time the boxcar was rerouted to Hershey. Nor was it renewed by the covenant to repair or by any repairs that were made or needed.

The covenant to repair was not an explicit guarantee of future performance. (Wilson v. Massey-Ferguson, Inc. (1974), 21 Ill. App. 3d 867, 870 , 315 N.E.2d 580, 584 ; see Binkley Co. v. Teledyne Mid-America Corp. (E.D. Mo. 1971), 333 F. Supp. 1183 ; Tomes v. Chrysler Corp. (1978), 60 Ill. App. 3d 707, 709 , 377 N.E.2d 224, 227 .) Because the complaint fails to allege any explicit guarantee of future performance, the limited discovery exception provided for by section 2 — 725(2) does not apply here. (Beckmire v. Ristokrat Clay Products Co. (1976), 36 Ill. App. 3d 411, 413 , 343 N.E.2d 530, 532 .) I find no justification for adding still another discovery exemption not even mentioned in the statute. By explicitly stating that a cause of action accrues when the breach occurs, “regardless of the aggrieved party’s lack of knowledge of the breach,” the legislature chose not to apply a discovery doctrine to actions based upon the commercial code except as explicitly set forth in section 2 — 725(2). Berry v. G. D. Searle & Co. (1974), 56 Ill. 2d 548 , 309 N.E.2d 550 , did not extend the discovery rule to implied warranty of fitness actions, for in that case the action was filed within the 4 years from the delivery of the pills that caused the injury.

The dissenting opinion argues that despite the express words of section 2 — 725 to the contrary the statute of limitations does not begin to run until the injured party discovers the breach and is able to bring suit. The case the dissent relies on to support this proposition conflicts with Illinois law. In Morton v. Texas Welding & Manufacturing Co. (S.D. Tex. 1976), 408 F. Supp. 7 , the court judicially grafted a discovery rule onto the U.C.C.’s absolute 4-year bar as enacted in Texas. The court felt that the Texas legislature had enacted section 2 — 725 long after the Texas courts had generally adopted the discovery rule, and that therefore the legislative intention had been to include a general discovery rule in the Texas Commercial Code. In Illinois, however, the legal evolution was the opposite. The U.C.C. was adopted in Illinois long before the courts first adopted the equitable discovery rule. (See Rozny v. Marnul (1969), 43 Ill. 2d 54 , 250 N.E.2d 656 ; Lipsey v. Michael Reese Hospital (1970), 46 Ill. 2d 32 , 262 N.E.2d 450 .) Thus, it is not correct to assume, simply from the existence of a discovery rule which has been applied to some of the Illinois limitations statutes, that the legislature intended a broad discovery rule to apply in cases arising from breaches of implied warranties where there were no explicit guarantees of future performance.

Even if the plain wording of section 2 — 725 did not preclude the application of the discovery rule to this case, the interests of equity do not favor the application of the discovery rule to breaches of implied warranties. In determining whether to apply the discovery doctrine to a statute of limitation, competing interests must be balanced: the increased difficulties of proof which accompany the passage of time against the hardship to the injured plaintiff who neither knows nor should have known of the right to sue. (Rozny v. Marnul (1969), 43 Ill. 2d 54 , 250 N.E.2d 656 .) Because we are dealing with the Uniform Commercial Code, we should also consider the important interests of uniformity of result and commercial certainty. Ill. Ann. Stat., ch. 26, par. 2 — 725, Uniform Commercial Code Comment, at 614 (Smith-Hurd 1963).

I note first that the interests of uniformity and certainty themselves outweigh the concern for the increased difficulties of proof. (Ill. Ann. Stat., ch. 26, par. 2 — 725, Illinois Code Comment, at 613 (Smith-Hurd 1963).) Thus, even where there is no hardship to the defendant because all the facts necessary to prove its case are in its hands, as is typically the case in a suit such as this, there is no discovery rule. (Gates Rubber Co. v. USM Corp. (7th Cir. 1975), 508 F.2d 603, 613 .) In addition, the hardships to the plaintiffs in a section 2 — 315 suit caused by an absolute 4-year statute of limitations are minimal. Since the heart of the cause of action is a defect in the product which makes it unreasonably dangerous, many section 2 — 315 plaintiffs would have at least a strict liability and perhaps a negligence suit as well. A suit brought under these overlapping legal theories would have the benefit of a discovery rule. (See, e.g., Chicago & Southern Airlines, Inc. (1977), 54 Ill. App. 3d 609 , 370 N.E.2d 54 .) A plaintiff like Knox might be barred by an absolute 4-year statute of limitations under section 2— 725, but he would still be able to obtain relief by instituting a tort suit in Illinois within 2 years of the date of reasonable discovery. The absolute bar in the commercial code works little hardship to an injured plaintiff, and for that reason it is unnecessary to apply a discovery rule to suits brought under section 2 — 315. Accord, Tomes v. Chrysler Corp. (1978), 60 Ill. App. 3d 707 , 377 N.E.2d 224 .

Uniformity and commercial certainty require that the 4-year absolute bar of section 2 — 725 remain as written, with no softening effect of a judicially applied discovery doctrine. The results of the bar are not absurd. True, a suit by Knox relying on the U.C.C. was barred even before the injury occurred. But Knox is here trying to distort his personal injury so as to fit it into a breach of warranty theory only because he slept on his rights by not bringing his suit within 2 years after the date of reasonable discovery as provided by the Illinois statute applicable to recovery for personal injuries. Action within that period would have made this suit, with its difficult questions under the commercial code, unnecessary. We should not bend the clear statement of the law to fit this plaintiff under its protection.

I agree with Judge McNamara that Irene Knox cannot recover for loss of her husband’s consortium if her husband cannot himself recover for his injuries, whether because the warranty does not extend to him or because his suit is timebarred (Kolar v. City of Chicago (1973), 12 Ill. App. 3d 887 , 299 N.E.2d 479 ).