Illinois Amends Construction Statute of Repose To Exclude Asbestos Claims

Illinois Amends Construction Statute of Repose To Exclude Asbestos Claims, But Amendment Not Retroactive In Certain Cases

Amendment Excludes Asbestos Claims

In December, 2014, former Governor Pat Quinn signed Public Act 98-1131, § 5, into law, adding Subsection (f) to Illinois’ Construction Statute of Repose (735 ILCS 5/13-214) to exclude claims based on personal injury, disability, disease, or death resulting from the “discharge into the environment of asbestos.”  All other language of the statute remains unchanged.  The relevant text of the statute, as amended, reads as follows:

 13-214. Construction–Design management and supervision. As used in this Section “person” means any individual, any business or legal entity, or any body politic.

 (a) Actions based upon tort, contract or otherwise against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property shall be commenced within 4 years from the time the person bringing an action, or his or her privity, knew or should reasonably have known of such act or omission. Notwithstanding any other provision of law, contract actions against a surety on a payment or performance bond shall be commenced, if at all, within the same time limitation applicable to the bond principal.

(b) No action based upon tort, contract or otherwise may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or omission. However, any person who discovers such act or omission prior to expiration of 10 years from the time of such act or omission shall in no event have less than 4 years to bring an action as provided in subsection (a) of this Section. Notwithstanding any other provision of law, contract actions against a surety on a payment or performance bond shall be commenced, if at all, within the same time limitation applicable to the bond principal.

(c) If a person otherwise entitled to bring an action could not have brought such action within the limitation periods herein solely because such person was under the age of 18 years, or a person with a developmental disability or a person with mental illness, then the limitation periods herein shall not begin to run until the person attains the age of 18 years, or the disability is removed.

(d) Subsection (b) shall not prohibit any action against a defendant who has expressly warranted or promised the improvement to real property for a longer period from being brought within that period.

(e) The limitations of this Section shall not apply to causes of action arising out of fraudulent misrepresentations or to fraudulent concealment of causes of action.

(f) Subsection (b) does not apply to an action that is based on personal injury, disability, disease, or death resulting from the discharge into the environment of asbestos.

See PA 98-1131 (emphasis added).

In its pre-amendment form, the Construction Statute of Repose applied to certain asbestos personal injury claims where the purported exposure arose from activities occurring during construction.  See Boldini v. Owens Corning, Ill. App. 3d 1167 (4th Dist. 2001).  Now, the amendment, which is effective June 15, 2015, appears on its face to remove a design professional’s and/or contractor’s ability to assert some claims are time-barred under Section 13-214.  The exclusion of asbestos claims, however, does not provide a blanket bar to all claims existing at the time the amended statute takes effect because of Illinois’ case authority on retroactive application of laws.

Retroactivity Law in Illinois

Illinois has adopted a retroactivity test that was developed by the Supreme Court of the United States inLandgraf v. USI Film Products, 511 U.S.244, 280 (1994).  Under Landgraf, the first step in undertaking the retroactivity analysis is to determine whether the legislature has clearly indicated the temporal reach of an amended statute. Commonwealth Edison Co. v. Will County Collector, 196 Ill. 2d 27, 38 (2001). If so, then, absent a constitutional prohibition, that expression of legislative intent must be given effect. Commonwealth Edison, 196 Ill. 2d at 38. If not, the court must next determine whether applying the statute would have a retroactive effect, i.e., whether it would impair rights that a party possessed when he acted, increase a party’s liability for past conduct, or impose new duties with respect to transactions already completed.Commonwealth Edison, 196 Ill. 2d at 38. If the statute would have a retroactive impact, then the court must presume that the legislature did not intend that it be so applied. Commonwealth Edison, 196 Ill. 2d at 38.

At first glance, one might argue that PA 98-1131 does not specify retroactive application and, therefore, courts must assess whether applying the statute with retroactive effect would “impair the rights” of the defendant, but that is not the case.  In Doe v. Diocese of Dallas, et al., 234 Ill.2d 393 (Ill. 2009), the Illinois Supreme Court noted Section 4 of Illinois’ Statute on Statutes (5 ILCS 70/4) addresses retroactivity when a Public Act fails to.  Section 4 states:

No new law shall be construed to repeal a former law, whether such former law is expressly repealed or not, as to any offense committed against the former law, or as to any act done, any penalty, forfeiture or punishment incurred, or any right accrued, or claim arising under the former law, or in any way whatever to affect any such offense or act so committed or done, or any penalty, forfeiture or punishment so incurred, or any right accrued, or claim arising before the new law takes effect, save only that the proceedings thereafter shall conform, so far as practicable, to the laws in force at the time of such proceeding. If any penalty, forfeiture or punishment be mitigated by any provisions of a new law, such provision may, by the consent of the party affected, be applied to any judgment pronounced after the new law takes effect. This section shall extend to all repeals, either by express words or by implication, whether the repeal is in the act making any new provision upon the same subject or in any other act. 5 ILCS 70/4 (West 2012).

The Illinois Supreme Court noted it had held that Section 4 is “a clear legislative directive as to the temporal reach of statutory amendments and repeals when none is otherwise specified: those that are procedural may be applied retroactively, while those that are substantive may not.”  Doe, 234 Ill.2d at 406.  This principle applies to civil as well as criminal enactments. Id.  The Court also states that, in light of Section 4, Illinois courts need never go beyond the threshold step of the Landgraf test, because the legislature will always have clearly indicated the temporal reach of an amended statute, either expressly in the new legislative enactment or by default in Section 4 of the Statute on Statutes.  Id.  The Court went on to address the specific issues in the case.

In Doe, the Court ultimately held a legislative amendment that increased the statute of repose period in childhood sexual abuse cases did not apply retroactively to the plaintiff’s action at bar.  Id.  The reasoning of the Court was that the repose period under the old law had expired before the effective date of the amendment, such that the action was already time-barred under when the plaintiff filed suit.  Thus the defendants had a vested right to invoke the bar of the old limitations period as a defense to the action, which could not be taken away by the legislature without offending due process protections of the Illinois Constitution.  Id. at 405-11.  This ruling was made based on the Court’s reliance on Section 4 of the Statute on Statutes and applies with equal force to retroactive application of Illinois new exclusion of asbestos claims from the Construction Statute of Repose.

As the Doe Court noted, “once a statute of limitations has expired, the defendant has a vested right to invoke the bar of the limitations period as a defense to a cause of action. That right cannot be taken away by the legislature without offending the due process protections of our state’s constitution.” Id. at 409 (citingM.E.H. v. L.H., 177 Ill.2d 207 (Ill. 1997). To boil the issue down to a single sentence: “[i]f the claims were time-barred under the old law, they remained time-barred even after the repose period was abolished by the legislature.” Id. at 409.

Retroactivity of Amendment and Conclusions

Thus, based on the opinions in Commonwealth Edison and Doe, it appears the newly amended Construction Statute of Repose does not apply retroactively to claims that are already time-barred as of June 15, 2015.  In that light, the oldest a claim can be that might still be “live” under the Construction Statute of Repose would be those arising from projects that were “completed” on or after June 14, 2001.  This assumes the plaintiff first learned of his or her claim before June 14, 2011 as described in 13-214(b).

While one can anticipate plaintiffs contending Illinois Construction Statute of Repose no longer applies to asbestos exposure cases, Illinois’ case authority on retroactivity seem to indicate otherwise.

Disclaimer: This article was drafted before Section 13-214 takes effect.  To ensure accuracy of the statements of law made herein, you should always speak to a qualified attorney who can research the state of the law as it exists at the time of your inquiry.  Please see the remaining disclaimers relevant this this blog for further information.

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