No Waiver Of Statute Of Limitations Defense That Wasn’t Raised In Trial Court In Illinois Second District Appellate Indemnity Dispute.

A contractor obtained performance bonds for three construction projects. The surety company required the president and the owner to sign indemnity agreements to obtain the bonds. When the contractor defaulted on the construction contracts, the surety company became liable on the performance bonds. Using the indemnity agreements, the surety then sued the president and the owner to get the money back.

In the trial court, the president and the owner successfully argued for dismissal based on a four-year statute of limitations. The surety company argued that a 10-year statute applied.

Another option, a two-year limitations statute was not raised by the president or the owner in the trial court. But when the case went up on appeal, they claimed that the two-year statute applied. The surety argued waiver. But the court rejected the waiver argument because “the applicable limitations period was before the trial court,” albeit not the two-year statute. The appellate court indicated that waiver could be avoided as long as the factual basis for the argument — but not necessarily the argument itself — was before the trial court.

You can see the whole opinion in Travelers Casualty and Indemnity v. A.G. Carlson, Inc., No. 2-05-1041 (10/30/06), by clicking here.