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Board of Ed. v. United States F. & G. Co.

OCTOBER 15, 1969.

BOARD OF EDUCATION, SCHOOL DISTRICT NO. 90, COOK COUNTY, ILLINOIS, FOR THE USE AND BENEFIT OF FENESTRA, INC., PLAINTIFF,

v.

UNITED STATES FIDELITY & GUARANTY COMPANY, A CORPORATION, AND ANKO CONSTRUCTION, INC., A CORPORATION, DEFENDANTS. ANKO CONSTRUCTION, INC., COUNTERPLAINTIFF, APPELLEE,

v.

FENESTRA, INC., COUNTERDEFENDANT, APPELLANT.



Appeal from the Circuit Court of Cook County; the Hon. ELMER N. HOLMGREN, Judge, presiding. Judgment affirmed.

MR. JUSTICE MCNAMARA DELIVERED THE OPINION OF THE COURT.

Board of Education, School District 90, Cook County, Illinois, for the use and benefit of Fenestra, Inc., brought this action against United States Fidelity and Guaranty Company and Anko Construction, Inc., on a performance bond to recover a balance due of $4,985.25 for materials and labor furnished in the construction of an addition to a school building. Anko counterclaimed against Fenestra, alleging that the latter had breached its subcontract agreement with Anko, thereby causing Anko to be relieved of its duties as general contractor on the project and to lose its expected profits. The jury returned a verdict of $4,985.25 in favor of the School District for the benefit of Fenestra on the complaint, and a verdict of $55,000 for Anko on its counterclaim against Fenestra. The trial judge entered judgments on the verdict, and denied the post-trial motions of Fenestra. Only Fenestra appeals from the judgment on the counterclaim and the denial of its post-trial motions. Fenestra raised several issues in its brief, but at oral argument its counsel stated that its only points on appeal were that the verdict was against the manifest weight of the evidence and that the damages were speculative.

Anko was the general contractor on the school addition, and Fenestra as subcontractor was to provide a standard curtain aluminum wall, aluminum windows and a steel sheet roof deck. After testimony was received concerning Fenestra's suit against Anko, the following is a summary of the evidence received on the counterclaim.

Anthony Antoniou, secretary of Anko, testified on behalf of Anko that he had formed the company with George Kouros in 1954. Originally engaged in design work, the company became involved in commercial construction, and by 1958, had built several schools. In January, 1958, he wrote to the architects, Cone and Dornbusch, requesting an opportunity to bid on a proposed addition to Roosevelt Junior High School. Anko signed a contract in May, 1958, and after approval by the architects, the contract was accepted by the Board of Education District 90 in June, 1958. Anko was to be paid about $240,000. Estimates of the total costs were $196,000, and the estimated profit to Anko was to be $44,000. Anko was to finish the job in 175 working days. After signing the contract, Anko selected the critical contracts, those which had to be let immediately. Fenestra was such a subcontractor, and this was the first contract let by Anko. The architects, in their plans, specified Fenestra as a subcontractor; Anko did not have a choice as to this subcontract. Immediately after the contract had been accepted by the School District, the witness contacted agents of Fenestra, and discussed delivery dates. Fenestra was to deliver the wall and windows September 1, 1958 and erect them by October 1. Fenestra officials said there would be no problem in delivering the wall in September. This was a critical part of the contract. The Fenestra curtain wall consisted of at least two-thirds of the outside of the building. The wall should have been delivered and erected in 70 working days. After the site had been established, Anko broke ground about June 10 or 15; the excavation and foundation proceeded normally. Within 70 working days Anko had the roof steel up, and was ready to receive the wall and deck from Fenestra.

During this period, Antoniou complained to Fenestra's agents by phone that he had not received shop drawings, and he did not receive the drawings until late September. In November, 1958, along with a representative of the architects, he went to Fenestra's offices in Philadelphia, where the curtain wall was to be constructed. He was told that Fenestra was so overwhelmed with orders that the curtain wall would not go into construction until the latter part of January, 1959, and would not be ready until February. Efforts to get an earlier construction failed. The curtain wall was delivered on 3 dates; mid-January, February and March or April. Because of a defect in the first delivery of curtain wall delivered in January, the glazing cracked. After the defect was discovered, new parts of the wall had to be obtained, and the wall was reerected in late March or April. Fenestra's promise to deliver the windows in January was not kept. There were 3 deliveries of windows; one in January, one in March, and the final one in August, 1959. The roof decking for the main building was not delivered until late November, and was erected in December, 1958. The roof decking for the corridor was delivered in the summer of 1959. Anko started to receive complaints in late 1958; prior to that, its relations with the school board and the architects were good. In January, 1959, Anko received complaints from the school board that the building was too cold. Anko had enclosed it as best it could in order to work inside, but the roofing could not go on because of the lack of metal decking. The project was to be completed in January, 1959; it was not completed until the fall because of the late delivery of the windows and curtain wall. Anko completed about 90 to 95 percent of the work. There was no penalty clause in the contract between Anko and Fenestra. The witness was unable to explain why the roofing could not be put up for lack of the curtain wall unless he could see the detailed blueprints. As of October, 1958 the structure was ready to receive the curtain wall and decking. Anko spent $9,000 to temporarily enclose the building in December. The school board was not charged for this extra cost, because Anko expected to sue Fenestra for that cost. There was some delay prior to September, but it was not substantial. There was also some delay caused by other subcontractors.

George Kouros testified in behalf of Anko that he ran the office for Anko until June, 1959, at which time he took over as field supervisor of the project in question. The reason for the delay in completing construction was Fenestra's delay in delivery, which was a minimum of four or five months. The contract price was approximately $240,900, and Anko's anticipated profit was about 15 percent of that price. That would be $36,000. In addition to that amount, Anko expected a profit of $6,000 to $7,000 for subcontract work it did on the job. Thus the total expected profit was $42,000 to $44,000.

Loss of profits began in November, 1958, and was caused by delays, damage by the elements, and length of time for completion. Because of extras, Anko's final bill to the school board was $265,000. Anko was paid $207,000 by the board. When Anko left the job in October, 1959, it had an out-of-pocket loss of about $60,000 caused by Fenestra. After this job, Anko could not get bonded, and went out of business in 1959 or 1960. During this job, Anko had to sandblast and repaint the corroded wall, caused by exposure to the elements. This was due to the Fenestra delay, and cost between $4,000 and $6,000. Anko had difficulty with all the subcontractors, because they were all experiencing losses. There was an extensive amount of rain in the summer of 1959. Anko did everything in its power to run the job efficiently. The witness did not recall if Anko ever alleged that the faulty work of the masonry contractor caused the delay; nor did he remember if Anko alleged that other subcontractors caused delays. The school board had extended the date of completion several times. At the end of July, 80 percent of Fenestra's work was completed. In 1957, Anko made a profit of $40,000; in 1958, it had a loss of $16,000; and in 1959, it lost about $12,000. During this job, it had an overhead of $30,000 to $45,000 attributable to this project. Anko's books and records were turned over to the Goettsche accounting firm.

Kermit Medlock testified in behalf of Anko that he was presently employed by Anvan Corp., owned wholly or partially by Antoniou. He was construction superintendent for Anko at the time of the job in question. He supervised personnel and trades. There was no major delay on the job prior to October, 1958. At that time, they were waiting for the roof deck and curtain wall. Men were idle, and material was damaged because of the delay. Steel had to be sandblasted and repainted. The plastic sheathing erected for protection did not do much good. The curtain wall was finally completed in March, 1959. In June, 1959, about 75 percent to 80 percent of the job was done, and the remainder should have been completed in two months.

Wallace Sugden testified in behalf of Fenestra that he was superintendent of the River Forest Public Schools during the years 1958 and 1959. The original contract between the school board and Anko called for a completion date of 175 working days. This would have meant completion in January, 1959. It was not completed at that time, and Anko was granted several extensions, one until March, another until June, and a third until August. Anko never completed the construction, and the job was completed by Weigert Company. When Anko left the job, between $40,000 and $50,000 was due from the school board. Anko did not work regularly on the job during the summer of 1959, and did not try to complete the job that summer.

Carlyle Joye testified for Fenestra that he was in charge of the erection of Fenestra materials during 1958 and 1959. He saw the final approved shop drawings pertaining to this job in September, 1958. The schedule for the manufacture of this curtain wall was sixteen weeks after receipt of the drawings. The roof decking took four to six weeks to manufacture. Before either could be erected, the structural steel had to be in place. The job site was ready for the curtain wall in January, 1959, and the wall was installed in January, February and March. The roof decking was installed in February, and the windows were installed in July. The job site was not ready for the erection of the curtain wall until January because the structural steel was not in place. However, after looking at a list of invoices, the witness testified that, according to the invoices, all the structural steel had been delivered by October 7. When he testified that the site was not ready to receive the wall and decking until January, he meant that it was necessary to sandblast and repaint the steel which had been erected. There were some defects in the horizontal members of the aluminum, and it was corrected by Fenestra in February. Anko complained about the delay in delivery of the curtain wall and decking.

Spencer Cone, a partner of Cone and Dornbusch, architects on the job, testified for Fenestra that Anko was the low bidder, and received the contract. School construction is competitive, and the profit margins are low. His opinion as to the usual profit margin was that it would be 6 or 7 percent. The original completion date on the job was January or February, 1959, and was extended several times. The job did not progress normally from the time ground was broken in June, 1958. The contract was finally terminated because of Anko's general incompetence and disregard of the specifications, culminating in close to a year's delay. Anko was incompetent in providing a temporary enclosure and in leaving dangerous conditions unguarded. There was a substantial delay in excavation, and almost all materials arrived late. There was a delay in pouring the foundation, and part of it had to be redone. Total delay was caused by Anko. Although Fenestra was late in its delivery, the structural steel was probably two or three months behind schedule. Anko did not have a choice in hiring Fenestra as a subcontractor. Under its contract, Anko could request a substitution of subcontractor from the school board and architect. Anko made such a request with respect to Fenestra, but it was denied.

Dale Floyd, president of a steel erecting company, testified that his company erected steel on this job, and in 1959 sued Anko for nonpayment.

Roger Goettsche, a member of a firm of certified public accountants, testified that his firm had never had in its ...


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