407 Ill. App. 3d 24
Ill. App. Ct.2011Background
- Plaintiff Leonard Kranzler loaned defendant Lewis Saltzman $100,000 on March 10, 1997, evidenced by a signed memo stating the loan and repayment with interest.
- Intermittent payments totaling $74,500 were made between 1997 and 2005; payments ceased on July 5, 2005.
- Plaintiff sued June 29, 2007, seeking the outstanding principal and interest; amended complaint added a calculation of holdings as of October 31, 2007.
- Default judgment was entered January 16, 2008; it was vacated on March 13, 2008, and defendant moved for judgment on the pleadings.
- Second amended complaint filed May 1, 2008; plaintiff sought summary judgment on liability later that year.
- Court held the writing constitutes “other evidence of indebtedness in writing” under 13-206 and timely filing was preserved by last payment within the 10-year period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which statute of limitations applies | Kranzler argues 13-206 applies | Saltzman argues 3-118(g) or 13-205/13-206 apply | 13-206 applies; writing qualifies as indebtedness in writing |
| Whether the memo is “other evidence of indebtedness” under 13-206 | Instrument contains all essential terms to pay | No complete promise to pay terms | Instrument constitutes other evidence of indebtedness in writing |
| Accrual date for the 10-year period | Accrual from the last payment | Accrual from loan date | Accrual from the date of the last payment (July 5, 2005) |
| Effect of multiple payments on 10-year period | Each payment restarts the 10-year period | Only one accrual at inception | A new 10-year period was triggered by the 15 payments; timely filing maintained |
Key Cases Cited
- Kozasa v. Guardian Electric Mfg. Co., 99 Ill.App.3d 669 (1981) (accrual starts at next due/undone payment when there are ongoing payments)
- In re Estate of Garrett, 24 Ill.App.3d 895 (1975) (written instruments may be “other evidence of indebtedness” if all essential terms present)
- Krajcir v. Egidi, 305 Ill.App.3d 613 (1999) (payments on a debt instrument trigger a new 10-year period)
- Toth v. Mansell, 207 Ill.App.3d 665 (1990) (promises to pay in writing suffice to constitute indebtedness)
- Portfolio Acquisitions, L.L.C. v. Feltman, 391 Ill.App.3d 642 (2009) (credit card contract as writing requires parol evidence to prove terms)