Faced with a question of first impression, the Illinois Appellate Court recently determined that the Local Government Tort Immunity Act's one-year statute of limitations does not trump the 10-year limitations period for an action based on a breach of contract arising from a single event resulting in property damage.

In United Airlines, Inc. v. City of Chicago, No. 1–10–2299 (1st Dist. 2011), United filed suit against the City in the wake of a collision between a taxiing airplane and a City repair vehicle. United alleged that the City breached the airport lease by, among other things, failing to notify air traffic control of the truck's presence in the grass near the taxiway and failing to keep the area free from obstructions. The circuit court determined that United had stated a claim for breach of contract and the one-year statute of limitations in the Tort Immunity Act did not apply. The ruling was consistent with cases in other contexts which have generally held that where both a tort and a contract cause of action arise out of the same fact pattern, the plaintiff may proceed with the theory of its choice. See Bd. of Ed. of Cmty. Consol. Sch. Dist. No. 54 v. Del Bianco Assoc., Inc., 57 Ill. App. 3d 302, 306 (1st Dist. 1978). However, no prior Illinois cases had addressed the statute of limitations issue in the context of a governmental tort immunity statute. The court certified for immediate appeal the question of whether the one-year limitation period of the Tort Immunity Act also applies to bar a claim for breach of contract arising from the same event, and the Appellate Court allowed the certified question.

The Appellate Court ruled that the 10-year statute of limitations for breach of a written contract governed the breach of contract claim even in the context of a tort immunity statute. The Appellate Court rejected the City's argument that United's claim was "tort-like" because it arose from a single event resulting in property damage. Instead, the Court looked to United's claim to ascertain the "true nature" of the claim, noting that while "tort law provides the usual remedy for losses occasioned by property damage resulting from a collision, it is not the only remedy when such losses also resulted from a contractual breach." The Court found that United's claim emanated from the City's alleged breaches of contract; thus, the 10-year statute of limitations applied to the claim. United is represented by Baker & Daniels.

Any business involved in a dispute with a governmental entity in Illinois may want to consider whether the 10-year contractual statute of limitations applies to a potential claim.