ROZNY v. MARNULNo. 40714.
43 Ill.2d 54 (1969)
250 N.E.2d 656
RAYMOND A. ROZNY, JR., et al., Appellants,
JOHN MARNUL, d/b/a Jens K. Doe Survey Service, Appellee.
JOHN MARNUL, d/b/a Jens K. Doe Survey Service, Appellee.
Supreme Court of Illinois.
Opinion filed May 26, 1969.
Rehearing denied September 23, 1969.
WESTBROOK, JACOBSON AND BRANDVIK, of Chicago, (LOWELL H. JACOBSON and JAMES A. BRANDVIK, of counsel,) for appellants.
TOM L. YATES, of Chicago, (LEIF J. LOCKE and CARL E. ABRAHAMSON, of counsel,) for appellee.
Appellate Court reversed; circuit court affirmed.
Mr. JUSTICE UNDERWOOD delivered the opinion of the court:
Plaintiffs Raymond A. Rozny, Jr. and Catherine M. Rozny, husband and wife, purchased a house and lot which was described in a plat of an admittedly inaccurate survey prepared by defendant for S. & S. Builders, apparently a firm engaged in real-estate development. Plaintiffs brought this action for damages in the circuit court of Cook County
Defendant made the original, inaccurate "spot" survey of this vacant lot on August 27, 1953. Subsequently, a house was erected on this lot, and on August 21, 1955, defendant issued a written location "plat of survey" for the same property, this time apparently simply showing on the original plat the location of the building. Defendant did not know the person for whom he did this survey but believed it was for a builder, one Harold Nash, who had apparently purchased the property from S. & S. Builders subsequent to the original survey.
The city of Park Ridge issued a building permit to Nash on June 27, 1955. The Park Ridge Federal Savings and Loan Association made a loan commitment of $14,000, upon his application accompanied by a Torrens title certificate and the inaccurate survey of August 21, 1955. This is the only survey the association had in connection with the property, and without a survey, showing the house properly located, the association would not have financed the purchase. The mortgage covering the property in question was recorded August 25. Defendant testified that he discovered the August 21 survey was inaccurate and issued a corrected survey on August 27. He first stated it was regular procedure to send the corrected blueprints to whomever ordered the originals, and then testified he had no record of sending them and actually had no recollection of what occurred. The association never received the so-called corrected survey nor was it ever informed of its existence, nor is there in this record any showing that Nash or anyone else ever received a copy of the corrected survey.
Plaintiffs first saw the property in January, 1956, when the builder, Nash, showed it to them. They agreed to purchase the property and went to the association where one
In September, 1956, the existing driveway leading to the back of the house was extended and plaintiffs constructed a garage on the rear of the lot, relying upon an iron pipe in the backyard fence and a mark on the front sidewalk shown by the plat as the indicia of their boundary limits. That plat shows an iron pipe at each of the back corners of the lot and a mark on the sidewalk two feet north of each of the front corners. Had these markers been correctly located, adequate space would have existed for the driveway. In fact, these markers had been placed in accordance with the inaccurate survey, and, as a result, portions of the existing driveway and the new driveway extended over the west lot line, and the west edge of the garage encroaches on the adjacent lot from 2" to 1' 2". Plaintiffs testified that the first time their attention was called to any possible encroachment or survey errors was about two years before the trial, which occurred in September, 1964.
The August 21 survey was signed by defendant and had his Illinois surveyor's seal affixed thereto. (He was a registered Illinois land surveyor. (Ill. Rev. Stat. 1955, ch. 133, pars. 34 through 54.)) Printed on the survey plat was the following:
At the trial, Olaf Nilsen, a housemoving and shoring contractor, testified that the estimated cost of moving the house 2 feet and garage 6 feet and rehabilitating both would be $13,030.
The jury returned a verdict against defendant in the sum of $14,000, which was later reduced by a voluntary remittitur to $13,350, and judgment entered in that amount. The appellate court reversal was predicated on its opinion that the action was one of "contract", the plaintiff was not in privity with the defendant and therefore could not maintain the action.
Plaintiffs contend that under what is or should be the law of this jurisdiction there are numerous theories of recovery available to a party not in privity of contract with the defendant, including (1) strict liability in tort, (2) implied warranty free of the privity requirement, (3) third-party beneficiary doctrine, (4) express warranty free of the privity requirement, and (5) tortious misrepresentation.
We have previously referred to the similarity between strict liability in tort and the various implied warranties in the products liability area. (Suvada v. White Motor Co.,
While plaintiffs also invite us to treat this as a third-party beneficiary action and thus permit plaintiffs to sue as the beneficiaries of an express written warranty contract between defendant and the builder, Nash, it is clear that that contract was not made for the direct benefit of the plaintiffs as "direct benefit" has been traditionally interpreted in connection with third-party beneficiary actions. (Cherry v. Aetna Casualty & Surety Co., 372 Ill. 534; Carson Pirie Scott & Co. v. Parrett, 346 Ill. 252, 257-58.) Although we are aware of cases, (e.g. Rhodes Pharmacal Co. v. Continental Can Co.,
Plaintiffs also urge that recovery could be granted under
Section 402B and a parallel rule relating to pecuniary loss were adopted by the Tennessee Supreme Court in the recent case of Ford Motor Co. v. Lonon, 217 Tenn. 400,
This process of adhering to or eliminating the privity requirement has proved to be an unsatisfactory method of establishing the scope of tort liability to third persons. Because of the difficulties in applying the rule, courts created exceptions deemed necessary to achieve desirable results which were not always completely reconcilable. (See Spence v. Three Rivers Builders & Masonry Supply, Inc.,
Having discarded any remnants of the privity concept, we now concern ourselves with the scope of defendant's liability using traditional tortious misrepresentation standards.
The principle that performance of a private contract can give rise to duties in tort seems to have been first articulated in the 19th century (see Thomas v. Winchester, 6 N.Y. 397; 116 U. Pa. L. Rev. 500.) While attempts to recover by third parties injured by negligent performance of contractual duties had generally failed because of a lack of privity (Winterbottom v. Wright, 152 Eng. Rep. 402; National
It is apparent that many of the courts which have considered analogous situations have thought the potential liability of one who negligently supplies inaccurate information to be such as to militate against imposing liability when the person ultimately damaged was one whose reliance on the information might have been called "foreseeable", (National Iron and Steel Co. v. Hunt, 312 Ill. 245; Albin v.
An excellent article by Dean Prosser, Misrepresentation and Third Persons (1966), 19 Vand. L. Rev. 231, discusses a number of the factors which have affected the decisions in third-party misrepresentation cases. In the class of cases where "plaintiff is an unidentified member of a group or class [and] defendant has special reason to expect that any member of it may be reached and influenced" by his representation, the liability for negligent misrepresentation resulting in pecuniary loss has been mixed. (19 Vand. L. Rev. at 246.) The article discusses the Ultramares case and notes that other decisions concerning accountants are in accord. It is then stated: "But what if the defendant is informed that his representation is to be passed on to some more limited group, as a basis for action on the part of one or more of them? In M. Miller Co. v. Central Contra Costa Sanitary District, [
It should be pointed out that Texas Tunneling was decided prior to the Tennessee Supreme Court's decision of Ford Motor Co. v. Lonon, 217 Tenn. 400,
We agree that the unknown and unlimited liability factor, as so ably stated by Mr. Justice Cardozo in the Ultramares case, is not to be lightly discounted. But we deal here with a defendant who has included on his inaccurate plat an "absolute guarantee for accuracy." As might reasonably have been foreseen by defendant who admitted he knew the plats were customarily used by lending agencies and others, that plat was subsequently relied on to his damage by a third party in connection with the financing and purchase of the surveyed property. Under these circumstances it seems to us the fortuitous circumstance that the ultimate loss resulting from the faulty survey fell upon one other than the person for whom the survey was made should not absolve defendant from responding in damages. The situation is not one fraught with such an overwhelming potential liability as to dictate a contrary result, for the class of persons who might foreseeably use this plat is rather narrowly limited, if not exclusively so, to those who deal with the surveyed property as purchasers or lenders. Injury will ordinarily occur only once and to the one person then owning the lot.
Moreover, we believe the proposed revision of the Restatement (Second) of Torts, § 552, (Tent. Draft No. 12, 1966), is apposite in this situation. While the draft has not yet been adopted, it apparently recognizes liability to a
And, even in the accounting field where the potential liability argument is much more persuasive than here, two recent cases have held liability could exist to third parties whose reliance was foreseeable by the negligent accountant. (Rusch Factors, Inc. v. Levin (D.R.I., 1968),
As is apparent from the foregoing discussion, the factors we consider relevant to our holding are:
(1) The express, unrestricted and wholly voluntary "absolute guarantee for accuracy" appearing on the face of the inaccurate plat;
(2) Defendant's knowledge that this plat would be used and relied on by others than the person ordering it, including plaintiffs;
(3) The fact that potential liability in this case is restricted to a comparatively small group, and that, ordinarily, only one member of that group will suffer loss;
(4) The absence of proof that copies of the corrected plat were delivered to anyone;
(5) The undesirability of requiring an innocent reliant
(6) That recovery here by a reliant user whose ultimate use was foreseeable will promote cautionary techniques among surveyors.
Based upon a consideration of these factors as presented by this record we hold plaintiffs may recover. (Rusch Factors; Hedley Byrne & Co., Ltd. v. Heller Partners, Ltd.; Du Rite Laundry, Inc.; M. Miller Co. v. Central Contra Costa Sanitary District; Texas Tunneling Co. v. City of Chattanooga (E.D. Tenn. 1962),
Disposition of the liability question leaves unresolved the issues as to the statute of limitations and the allegedly excessive damages.
Defendant contends that plaintiffs' action is ex contractu and therefore barred by the statutory limitations governing oral contracts or alternatively by the limitations governing injury to real property. The plaintiffs contend that because the guarantee of accuracy is in writing the applicable statute is section 16 of the Limitations Act (Ill. Rev. Stat. 1961, ch. 83, par. 17.) which reads as follows: "Except as provided in Section 2-725 of the `Uniform Commercial Code', enacted by the Seventy-second General Assembly, actions on bonds, promissory notes, bills of exchange, written leases, written contracts, or other evidences of indebtedness in writing, shall be commenced within 10
A reading of section 16 makes clear, however, that it was not intended to cover the type of action involved here. Furthermore, to hold the written contract statute of limitations applicable to this action, would be incompatible with our emphasis upon the fact that the basis of the liability affirmed herein is not contractual in nature.
The limitation provision that is applicable to this action is section 15 of the Limitations Act (Ill. Rev. Stat. 1961, ch. 83, par. 16) which reads as follows: "Except as provided in Section 2-725 of the `Uniform Commercial Code', enacted by the Seventy-second General Assembly, actions on unwritten contracts, expressed or implied, or on awards of arbitration, or to recover damages for an injury done to property, real or personal, or to recover the possession of personal property or damages for the detention or conversion thereof, and all civil actions not otherwise provided for, shall be commenced within 5 years next after the cause of action accrued."
The all-inclusive phrase "all civil actions not otherwise provided for", has been construed to cover actions for fraud and deceit (Keithley v. Mutual Life Ins. Co., 271 Ill. 584, 592; Bates v. Bates Machine Co., 230 Ill. 619, 621), and we now hold that it also encompasses actions for tortious misrepresentation; thus, the limitation period is 5 years. The more difficult question is as to when "the cause of action accrued", thereby triggering the statute. As earlier noted, plaintiffs purchased the property in February, 1956, and first became aware of any discrepancies in the location of the lot, driveway and garage about two years before the
The basic problem is one of balancing the increase in difficulty of proof which accompanies the passage of time against the hardship to the plaintiff who neither knows nor should have known of the existence of his right to sue. There are some actions in which the passage of time, from the instant when the facts giving rise to liability occurred, so greatly increases the problems of proof that it has been deemed necessary to bar plaintiffs who had not become aware of their rights of action within the statutory period as measured from the time such facts occurred. (See Skinner v. Anderson,
In New Market Poultry Farm v. Fellows,
We are not limited, however, to the opinion of the New Market Poultry case as authority for a discovery rule. After the appellate court first announced its opinion in this case on October 10, 1966, granting judgment for defendant on the basis that plaintiffs' claim was barred by the five-year statute of limitations (an opinion which was later withdrawn) legislation was introduced to provide a specific limitation period for surveyors. Senate Bill No. 676 as originally introduced on March 22, 1967, provided "* * * no action may be brought * * * more than 4 years after the completion of a survey." As finally approved on July 26, 1967, it provides for a discovery rule: "No action may be brought against a Registered Land Surveyor to recover damages for negligence, errors or omissions in the making of any survey nor for contribution or indemnity related to such negligence, errors or omissions more than 4 years after the person claiming such damages actually knows or should have known of such negligence, errors or omissions. This Section applies to surveys completed after the effective date of this amendatory Act of 1967." Ill. Rev. Stat. 1967, ch. 83, par. 24g.
We accordingly hold, in keeping with the more recent authorities and the legislative policy manifested by our General Assembly, that the statute of limitations does not bar plaintiffs' recovery, because their cause of action "accrued" when they knew or should have known of the defendant's
Defendant's final contention is that the amount of damages are excessive; that plaintiffs had a duty to mitigate damages and that the cost of moving the garage could not be considered because plaintiffs built that themselves after the lot was purchased.
Plaintiffs' proof of damages consisted of evidence as to the extent of encroachment of the driveway and garage; testimony that as presently located the house was so close to the west boundary that a nonencroaching driveway would be impassable, and testimony of a house moving contractor regarding the cost of moving the house and the garage.
The law is clear that failure to mitigate damages is an affirmative defense and must be pleaded and proved by the defendant. (New York, Chicago and St. Louis Railroad Co. v. American Transit Lines, Inc.,
The judgment of the circuit court of Cook County is accordingly affirmed and that of the appellate court is reversed.
Appellate Court reversed; circuit court affirmed.
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