Burns Philp Food, Inc. v. Cavalea Cont’l Freight, Inc.

135 F.3d 526 (7th Cir. 1998)

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Nature of the Case

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Facts

P and D purchased parcels of land from Nabisco. Tax officials mistakenly treated P as the owner of two parcels that D had purchased. P paid the taxes without inquiry or protest. In mid-1993, P noticed that since 1987 it had paid almost $125,000 in taxes on D's land, and it sought reimbursement. D refused to pay a dime and P sued. D filed a counterclaim accusing P of building a fence that encroached onto its parcel. P retaliated with an additional claim charging D with spilling diesel fuel that polluted P’s land. The court ruled that P mistakenly bestowed a benefit on D and D must make restitution of the amount by which it was unjustly enriched. On appeal, D contends that restitution should be limited to the statute of limitations. D claims unjust-enrichment claims in Illinois rest on unwritten contracts implied in law and therefore must be commenced within five years. The trial court held that the statutes of limitation do not apply in equity cases and that unjust enrichment was an equity claim. P claims the discovery rule and that the period should not run until the discovery of the error in1993. P constructed a fence on what it thought was the border between its property and D's. One end of the fence was located several feet inside P's lot, and the other was 20 feet into D's. P occupied about 2,000 square feet of land that belonged to D. After Ameritech conducted a survey in 1995, D learned that some of its land was on the other side of the fence. It did not notify P of the problem until November 1995, when it filed the counterclaim seeking damages for trespass and an injunction requiring P to remove the fence. In December 1996 D ripped out the fence and appurtenances and placed a large container right at the property line, interfering with the use of P's loading dock. P now concedes that D was entitled to do these things. The district judge held that D is not entitled to damages, because it did not notify P that the fence had been erected on its land. D uses a 1974 model tanker-trailer as its diesel refueling station, although the trailer was not designed for this purpose and D has not installed a spill-containment system, although both municipal law and ordinary prudence require that step. P tried to prove that the fuel flowed onto its land because the land was sloped. The trial judge dismissed the action because P failed to prove damages in that the expert witness was not credible and avoided doing the kinds of tests that would have been more likely to identify the source of any contamination of P’s property than were the minimal tests that he did do. Both P and D appealed.