![]() Here, the plaintiffs failed to plead facts that the former client/underlying creditor acted in concert with the judgment debtor or the transferees. In such a case, the statute of limitations period can be tolled. It made clear that the fraudulent concealment of a cause of action must be based on the conduct of the defendant, not a third-party. The lone exception is where the person concealing a claim is in privity with or an agent of the defendant. The Court also nixed the plaintiffs’ related argument that the discovery rule applied based on the obstructionist actions of their former client. As a result, the Court affirmed trial court’s dismissal of plaintiffs’ actual fraud claim. ![]() It found the plaintiffs failed to allege specific facts or a chronology as to when they reasonably learned the defendants’ diverting funds from the corporate debtors’ accounts. The Court then rejected plaintiffs’ assertion that IFTA’s discovery rule saved the otherwise time-barred actual fraud claims. It held that the IFTA statute of limitations runs from the date of transfer, not, as plaintiffs argued, from the judgment. Looking to the plain text of IFTA Section 10, the First District affirmed the trial court’s dismissal of the plaintiffs’ constructive fraud claims. There is no discovery rule that extends the limitations term. Ĭonstructive fraud claims, by contrast, must be brought within 4 years of the transfer. To determine whether the discovery rule preserves a too-late claim, the court considers whether an injured party has (1) sufficient knowledge that its injury was caused by actions of another, and (2) sufficient information to ‘spark inquiry in a reasonable person’ as to whether the conduct of the party causing an injury is actionable. The trial court granted the motion to dismiss and the plaintiff appealed.Īffirming the lower court’s dismissal, the First District noted that while an SOL motion to dismiss is normally brought under Code Section 2-619, the SOL issue can be disposed of on a Code Section 2-615 motion where the complaint’s allegations make clear that claim(s) is time-barred.Īn IFTA actual fraud claim is subject to a four year limitations period, measured from the date of transfer. This section has a built-in discovery rule: where the fraud could not have reasonably been discovered within the 4-year post-transfer period, the fraud-in-fact claim must be brought within one year after the transfer was or could have reasonably been discovered. The judgment debtors and third party defendants moved to dismiss the IFTA claims on statute of limitation grounds and for failure to state a cause of action. alleging two members of the debtor LLCs pilfered corporate bank accounts and formed a corporation to avoid the judgment. 3 Build Construction, LLC, 2019 IL App (1 st) 181575-U, a judgment creditor’s former counsel and her new law firm who secured a $200K judgment against two limited liability companies, sued under the Illinois Fraudulent Transfer Act, 740 ILCS 160/1 et seq. The First District recently considered when the discovery rule can mitigate the harshness of a statute of limitations in a fraudulent transfer case.
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