The opinion of the court was delivered by: Robson, District Judge.
Defendant has moved for summary judgment and plaintiff has
filed a countermotion for the same relief. Plaintiff has also
moved to strike portions of the defendant's answer, as amended.
The suit involves the parties' rights and liabilities under a
written construction contract of December 21, 1961, governing
plaintiff's furnishing and erecting for $1,734,200 the steel work
for a section of the South Route Superhighway known as Section
The critical provision of the contract here involved is that
which provides for $1,000 "liquidated damages" for each day of
delay. The work was originally to have been completed on or
before July 29, 1962, but that date was extended by the City to
September 20, 1962. The work was actually completed November 21,
1962 — 52 days late — giving rise to the City's claim of the
right to deduct $52,000 from the contract price.
The court concludes that there is no genuine issue of fact, and
that the defendant's motion for summary judgment should be
granted as to the $52,000 item. The plaintiff's countermotion for
summary judgment should be denied as well as its motion to strike
portions of the defendant's answer, as amended.
Plaintiff raises the further issue of the right to five per
cent interest on $98,464.69, the remainder of the balance owed
it, from February 7, 1963, or, in the alternative, from January
29, 1964, from which latter date (the time this suit was
instituted) it also seeks interest on the $52,000 item.
Pursuant to the court's direction, defendant prepared and filed
on July 7, 1964, its proposed stipulation of facts, which
plaintiff has refused to sign. However, as the court reviews the
proposed stipulation it concludes that it is founded on
unchallenged documentary proof.
The work which Bethlehem undertook was the erection in Chicago
of structural steel for a 22-span steel stringer elevated highway
structure, approximately 1,815 feet long, to carry the South
Route Superhighway from South Canal Street to the South Branch of
the Chicago River. Bethlehem's work was preceded and followed by
the work of other contractors on the same section.
The "Proposal and Acceptance" in the instructions to bidders
required the bidders to "* * * complete * * * within the
specified time the work required. * * *" Time was expressly
stated to be the essence of the contract and specified provisions
were made for delivery of the steel within 105 days thereafter,
or a total of 195 days after commencement of work, which was to
be not later than 15 days from notification. The successful
bidder was to submit to the Commissioner of Public Works a "Time
Schedule" for his work and if "less than the amount * * *
specified to be completed" were accomplished "the City may
declare this contract forfeited. * * *" The work had to be
completed irrespective of weather conditions.
The all important provision specifying $1,000 a day "liquidated
damages" for delay is as follows:
"The work under this contract covers a very
important section of the South Route Superhighway,
and any delay in the completion of this work will
materially delay the completion of and opening of the
South Route Superhighway thereby causing great
inconvenience to the public, added cost of
engineering and supervision, maintenance of detours,
and other tangible and intangible losses. Therefore,
if any work shall remain uncompleted after the time
specified in the Contract Documents for the
completion of the work or after any authorized
extension of such stipulated time, the Contractor
shall pay to the City the sum listed in the following
schedule for each and every day that such work
remains uncompleted, and such moneys shall be paid as
liquidated damages, not a penalty, to partially cover
losses and expenses to the City.
"Amount of Liquidated Damages per Day * * *.
"The City shall recover said liquidated damages by
deducting the amount thereof out of any moneys due or
that may become due the Contractor. * * *"
Provision was made to cover delay in a contractor's starting
due to preceding contractor's delay. Unavoidable delays by the
contractor were also covered, and extensions therefor accordingly
There was delay in the preceding contractor's work, and
Bethlehem was advised that certain parts of the work would be
ready to receive the structural steel by May 10, 1962. Bethlehem
noted the day and asked a 32-calendar day extension of its own
completion date, and in a letter of June 2, 1962, requested
instead a 35-day extension; still later a 52-day extension and
then a 69-day extension. In reply to the last letter, the Chief
Engineer of the City wrote Bethlehem on July 3, 1962:
"This will acknowledge receipt of your letter dated
June 29, 1962 in which you claim an additional
extension of time of seventeen (17) calendar days
making a total of sixty-nine (69) days.
"Our records show that due to your own delay in
fabrication you were unable to deliver the steel for
erection as scheduled. Had the piers in question been
completed you still were unable to supply the
structural steel for erection. * * *
The contractor whose work depended on Bethlehem's wrote on July
13, 1962, to the City's Chief Engineer with reference to
"We are greatly alarmed by the lack of progress on
the erection of structural steel. We have started
framing for deck slabs in Spans 2, 3, 4 and 5, but it
appears that we will very shortly run out of space to
work to keep our deck slab pouring operation
continuous. Since Bethlehem Steel Company is not our
subcontractor on this steel erection, we are turning
to you for assistance in expediting erection to
enable us to proceed with docks and complete
them. * * *"
The same contractor wrote again on July 20, 1962, in regard to
"* * * [I]t will be noted that steel erection is
pushed back over one month, which indicates their
work will be two months behind their contract
completion date of July 29, 1962.
"This structural steel delay, over which we have
absolutely no control, will delay final completion of
the job, unless some measures are taken to expedite