Equitable Tolling not Applied to Toll the Statute of Limitations
In American Family Insurance Company v. Plunkett, McGrath was the owner of a single-family home in Chicago that was designed and built by Patrick Plunkett Architectural Design, Ltd. (“Plunkett”). The home was insured by an insurance policy issued by American Family Insurance Company (“American Family”). While the policy was in force, McGrath made an insurance claim for water damage caused by alleged faulty design and construction of the home. American Family denied the claim, and McGrath filed suit in federal court. McGrath and American Family settled the federal court case and executed a settlement agreement. The terms of the settlement agreement did not contain an assignment to American Family of McGrath’s rights of recovery against any negligent party. A month after the settlement agreement, American Family requested an assignment of their rights of recovery from McGrath. McGrath did not respond. American Family proceeded to file a complaint against Plunkett in its capacity as a subrogee of McGrath. American Family alleged breach of contract in the defective design of McGrath’s home and negligence in the construction of the home. The trial court denied American Family’s motion to reconsider, finding that American Family’s right to subrogation was limited to contractual subrogation, not equitable or common-law subrogation, due to the existence of a subrogation clause in the insurance policy between American Family and McGrath. On January 14, 2010, American Family filed a notice of appeal. On October 10, 2012, American Family filed a complaint against defendants in its capacity as the contractual subrogee of McGrath, after McGrath tendered an executed assignment.
The court reviewed whether the trial court properly determined that equitable tolling applied to toll the statute of limitations.
While American Family did file suit as McGrath’s equitable subrogee in May 2008, well within the statute of limitations, that suit was dismissed. American Family then filed the complaint in the case at bar in October 2012, as McGrath’s contractual subrogee. However, American Family argues that the instant suit is not time-barred because the doctrine of equitable tolling applied to toll the statute of limitations from December 22, 2009 (when American Family’s motion to reconsider the dismissal of the equitable subrogation case was denied) until June 2012 (when McGrath finally tendered the executed assignment to American Family), permitting it to file the instant lawsuit in its capacity as McGrath’s contractual subrogee.
Under Illinois law, equitable tolling is recognized however it is rarely applied. The Illinois Supreme Court has applied it once, in a case in which it applied federal law. In that case, the plaintiff was prevented from asserting her rights in an extraordinary way and the statute of limitations period was equitably tolled. Ralda-Sanden v. Sanden, 2013 IL App (1st) 121117, ¶ 26.
In the case at bar, American Family argues that equitable tolling should apply to toll the statute of limitations in its case because “American Family was extraordinarily prevented from bringing its claim for contractual subrogation against the Plunkett Defendants because it did not have such a claim until it received the Assignment.” The court states that it should have come as no surprise that American Family needed an assignment in order for it to be able to file suit in its capacity as McGrath’s subrogee. The court did not find it persuasive that American Family could not have known that the assignment would be required for it to be able to file suit against the defendants. Since American Family’s inability to file a complaint in its capacity as McGrath’s contractual subrogee was based entirely on its failure to obtain an executed assignment at the time it paid McGrath under the insurance policy, there are no extraordinary circumstances that prevented American Family from filing suit and, accordingly, equitable tolling did not apply to toll the statute of limitations. Therefore, we answer the question certified by the trial court in the negative.
Am. Family Mut. Ins. Co. v. Plunkett, 2014 IL App (1st) 131631.
