Hassebrock v. CEJA Corporation
29 N.E.3d 412
Ill. App. Ct.2015Background
- In 1999 Hassebrock (plaintiff), Deep Rock, and Ceja (defendant) entered a letter agreement: Ceja would perform seismic work on Omega leases for a 25% working interest and, if drilling followed, submit an operating agreement within 120 days; no operating agreement was ever executed.
- Deep Rock later acquired and developed nearby Forbes leases without Hassebrock; in May 2002 Hassebrock filed a Notice of Claim of Interest asserting a joint-venture/venture agreement that included the Forbes leases and naming Deep Rock and Ceja.
- Deep Rock sued to remove the notice; Hassebrock and Deep Rock settled in December 2004: Hassebrock received $2.5 million, a 1% carried interest assignment, and executed releases and an assignment disclaiming and assigning all rights in the Forbes leases and related claims.
- Hassebrock later sued Deep Rock (breach of settlement) and Ceja (breach of alleged oral venture agreement). Claims against Ceja were repeatedly severed and repeatedly amended; Ceja moved to dismiss under section 2-619 asserting statute of limitations and that the settlement/assignment/releases barred the claims.
- The trial court granted Ceja’s 2-619 motions and dismissed Hassebrock’s claims with prejudice; on appeal the Fifth District affirmed, holding Hassebrock’s claims time-barred as unwritten agreements and, alternatively, barred by the release/assignment obtained in the 2004 settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hassebrock's claims are time‑barred | 10‑year written‑contract statute applies (letter agreement); alternatively continuing injury tolls limitations | Cause stems from unwritten venture/oral agreement; 5‑year limitations applies and claim accrued by May 2002 | Affirmed: 5‑year statute applies; claims accrued in 2002 and are time‑barred |
| Whether continuing‑violation or continuing‑duty tolls limitations | Ongoing profit sharing duty means each failure is a new breach, so limitations not triggered | Breach was total/material when Forbes leases were developed without him; continuing‑violation inapplicable to contract/fiduciary claims | Affirmed: continuing‑violation not applicable; total breach accrued in 2002 |
| Whether the 2004 release of Deep Rock releases Ceja (non‑party) | Release names only Deep Rock; Ceja cannot claim protection because it wasn't a signatory | Under Illinois common‑law rule, an unqualified release of one co‑obligor for a single indivisible injury releases all co‑obligors | Affirmed: release discharged Deep Rock and, by operation of law, released Ceja for the identical single injury |
| Effect of the assignment Hassebrock made to Deep Rock | Assignment did not bar claims against Ceja | Hassebrock assigned all rights, warranted title free of claims, and released specified claims named in his Notice (which named Ceja) | Affirmed: assignment/release transferred Hassebrock’s rights and barred his suit against Ceja |
Key Cases Cited
- DeLuna v. Burciaga, 223 Ill. 2d 49 (Ill. 2006) (section 2‑619 motions admit complaint’s legal sufficiency but assert affirmative defenses)
- Armstrong v. Guigler, 174 Ill. 2d 281 (Ill. 1996) (parol evidence needed to prove essential terms makes a contract effectively oral for limitations)
- Cherney v. Soldinger, 299 Ill. App. 3d 1066 (Ill. App. 1998) (unqualified release of one co‑obligor releases all co‑obligors for a single indivisible injury)
- Hi‑Lite Products Co. v. American Home Products Corp., 11 F.3d 1402 (7th Cir. 1993) (continuous‑performance contracts may yield multiple partial breaches but a single total breach starts limitations)
- In re Marriage of O’Brien, 2011 IL 109039 (Ill. 2011) (judge’s voluntary recusal under Rule 63 is discretionary and reviewed for abuse)
- Thornton v. Shah, 333 Ill. App. 3d 1011 (Ill. App. 2002) (standard for 2‑619 dismissal: dismissal only where no set of facts could entitle plaintiff to recover)