TOM OLESKER'S FASHION v. DUN & BRADSTREET, INC. No. 46554.
61 Ill.2d 129 (1975)
334 N.E.2d 160
TOM OLESKER'S EXCITING WORLD OF FASHION, INC., Appellant, v. DUN & BRADSTREET, INC., Appellee.
Supreme Court of Illinois.
Modified on denial of rehearing September 24, 1975.
Foos and Sexner, Ltd., of Chicago (William L. Meyers, of counsel), for appellant.
Kirkland & Ellis, of Chicago (Don H. Reuben, Lawrence Gunnels, and James C. Munson, of counsel), for appellee.
Aff'd in pt. & rev. in pt. & rem.
MR. JUSTICE WARD delivered the opinion of the court:
The plaintiff, Tom Olesker's Exciting World of Fashion, Inc., a clothing retailer, on March 3, 1970, filed a complaint in the circuit court of Cook County against the defendant, Dun & Bradstreet, Inc., a national credit reporting agency. The complaint charged that the defendant on January 22, 1969, published a business information sheet, or credit report, which falsely reported the financial state of the plaintiff's business, causing injury to its general and business reputation. The first count of the complaint alleged a malicious publication of the allegedly libelous
The defendant filed a motion to dismiss the complaint on a number of grounds, including the ground that any cause of action alleged was barred by the one-year statute of limitations for defamation. (Ill. Rev. Stat. 1971, ch. 83, par. 14.) The circuit court allowed the motion. The appellate court affirmed the trial court's dismissal of counts I and II of the complaint, holding that the cause of action for libel accrued, if at all, at the time the defendant's credit report was received by its subscribers. Since the complaint itself alleged that date to have been more than one year prior to the filing of the complaint, the appellate court stated that prosecution was barred by the one-year statute of limitations for libel. The appellate court reversed the trial court's holding as to count III on the ground that the count was a civil action with a five-year statute of limitations. (Ill. Rev. Stat. 1969, ch. 83, par. 16.) The court remanded to the circuit court and stated that on remand the plaintiff should be allowed leave to amend as to that count. (16 Ill.App.3d 709.) We granted the plaintiff's petition for leave to appeal from the appellate court's judgment as to counts I and II. The defendant then, under Rule 318(a), asked us to reverse the appellate court's judgment as to count III of the complaint.
Our statute of limitations which relates to suits for defamation provides: "Actions for slander, libel or for publication of matter violating the right of privacy, shall be commenced within one year next after the cause of action accrued." Ill. Rev. Stat. 1971, ch. 83, par. 14.
It has been generally held that in defamation cases the cause of action accrues and the statute of limitation begins
The primary purpose of limitation periods is to require the prosecution of a right of action within a reasonable time to prevent the loss or impairment of available evidence and to discourage delay in the bringing of claims. Order of Railroad Telegraphers v. Railway Express Agency, Inc., 321 U.S. 342, 349; 88 L.Ed. 788, 792, 64 S.Ct. 85; Davis v. Munie, 235 Ill. 620, 621; Horn v. City of Chicago, 403 Ill. 549, 560; see Note, Developments in the Law — Statutes of Limitations, 63 Harv. L. Rev. 1177, 1185 (1950).
The discovery rule was applied by this court in Rozny v. Marnul, 43 Ill.2d 54. The defendant was a surveyor who had made an inaccurate survey for the land developer, from whom the plaintiffs had purchased the real property concerned. The defendant contended that the statute of limitations ran from the time the plat was delivered to the land developer, or at least from the time that the plaintiff relied on the guaranty that had been given the developer
In deciding whether to apply the discovery rule, this court, in Rozny, stated what considerations should determine whether the rule would be followed:
See also Prosser, Handbook of the Law of Torts sec. 30 (4th ed. 1971); 21 De Paul L. Rev. 234 (1971); Petersen, The Undiscovered Cause of Action and the Statute of Limitations: A Right Without a Remedy in Illinois, 58 Ill. B.J. 644 (1970).
This court also has applied the discovery rule to a products liability case. In Williams v. Brown Manufacturing Co., 45 Ill.2d 418, an action was brought against a manufacturer alleging injuries from an "unreasonably dangerous" design in a trenching machine. The opinion followed this court's earlier holdings that "an action to
There have been other holdings in Illinois applying the rule of discovery. In Kohler v. Woollen, Brown & Hawkins, 15 Ill.App.3d 455, 460, the court, relying on Rozny and Lipsey, held that "a cause of action for legal malpractice does not accrue until the client discovers, or should discover, the facts establishing the elements of his cause of action." Wiggington v. Reichold Chemicals, Inc., 133 Ill.App.2d 776, 779, and McDonald v. Reichold Chemicals, Inc., 133 Ill.App.2d 780, 782, were cases involving sales of defective and harmful products to the employer of the plaintiffs. The court rejected the defendant's contention that the plaintiffs were barred by the two-year statute of limitations for personal injury and held that where there was no trauma, the cause of action accrued and the statute of limitations began to run at the time the plaintiff discovered or should have discovered he was injured by the defendant's conduct.
Courts have utilized the rule in a wide range of cases. This court noted in Rozny and Lipsey its widespread adoption in medical malpractice cases. Other situations in which the rule of time of discivery has been applied include: action for damages for water pollution (Polzin v. National Cooperative Refinery Association (1954),
The rule has been applied in actions brought under the Federal Tort Claims Act, 28 U.S.C. sec. 2401(b) (1970) (Quinton v. United States (5th Cir.1962), 304 F.2d 234); the Federal Employers' Liability Act, 45 U.S.C. sec. 51 et seq. (Urie v. Thompson, 337 U.S. 163, 93 L.Ed. 1282, 69 S.Ct. 1018); and under Federal and Illinois securities laws (Parrent v. Midwest Rug Mills, Inc. (7th Cir.1972), 455 F.2d 123).
Using the standard prescribed in Rozny for the application of the discovery rule, we have no hesitation in saying that the ends of justice in this case will be served by holding that the plaintiff's cause of action accrued at the time it knew or should have known of the existence of the allegedly defamatory report. To hold here that the plaintiff's cause of action accrued, if at all, at the time the
The defendant is, as the appellate court described, a "nationwide credit reporting service corporation." One of its important activities is the preparation of reports of the character involved here, which the defendant distributes for a charge to its subscribers. In recent years there has been an increasing awareness of the importance and sensitivity of credit reporting from the standpoint of the persons investigated. There has been an increased recognition of the manifest injustice of permitting persons investigated to be silently wronged through inaccurate reporting. This was described in Hood v. Dun & Bradstreet, Inc. (5th Cir.1973), 486 F.2d 25, 32: "A second reason for our decision is that in recent years there has been an apparent shift in emphasis from the protection of the credit reporting agency to the protection of the individual or business enterprise being investigated." Legislation has been enacted to protect individuals from abuses in this type of reporting and to make information assembled subject to disclosure to the person investigated. The Fair Credit Reporting Act, 15 U.S.C. sec. 1681 et seq., for example, gives, inter alia, the consumer the right to correct and explain information appearing in the report.
We would note that cases involving claimed defamations by credit reporting agencies can be readily distinguished from those involving alleged defamations through so-called mass-media publication. In claimed libels involving, for example, magazines, books, newspapers, and radio
The defendant has called to our attention holdings in agreement with the appellate court's conclusion. However, each involves a simply mechanical application by a Federal court of an earlier holding by a State court. In Wilson v. Retail Credit Co. (5th Cir.1971), 438 F.2d 1043, the court in one paragraph adopted the district court opinion involved. That opinion simply stated that the limitations question under Mississippi law had been decided in a State decision which was handed down in 1900. The court in Atwell v. Retail Credit Co. (4th Cir.1970), 431 F.2d 1008, followed a State court holding under the Maryland statute, but it did note that the plaintiff did have knowledge of the report involved.
The order entered by the trial court dismissed the complaint on the ground that its prosecution was barred by the statute of limitations. The order made no reference to the individual counts of the complaint. The defendant's motion to dismiss set out other grounds in addition to the limitations contentions, but the trial court's recollection (per affidavit filed with the pleadings) was that the argument related principally to the limitations question. We consider the trial court erroneously dismissed the complaint and that the cause should be remanded to it for proceedings not inconsistent with this opinion. We reverse the judgment of the appellate court as to counts I and II, and without considering and approving or disapproving the reasons given by the appellate court as to count III we affirm its reversal of the trial court's action as to that count.
Affirmed in part and reversed in part and remanded.
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