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Bowler v. Metropolitan Sanitary Dist.

DECEMBER 4, 1969.




Appeal from the Circuit Court of Cook County; the Hon. EDWARD J. EGAN, Judge, presiding. Affirmed.

MR. PRESIDING JUSTICE DEMPSEY DELIVERED THE OPINION OF THE COURT. In November 1962, the Metropolitan Sanitary District of Greater Chicago advertised for bids for the construction of a sewer known as Calumet Intercepting Sewer, Contract 11-8. The plaintiffs, Thomas J. Bowler and John P. Bowler, doing business under the name of Brighton Building and Maintenance Company, submitted a bid in December 1962. They were successful and the contract was awarded to them in February 1963. In May 1963, the City of Chicago passed an ordinance granting an easement to the project which provided that the City would perform certain services such as replacing and maintaining water mains and electrical systems where these conduits traversed City property. Under the terms of the ordinance the sanitary district was required to reimburse the City for such work.

The plaintiffs constructed the sewer and as the work progressed the City billed the district for its services. The district paid the City and reimbursed itself by deducting the same amounts from the periodic payments due the plaintiffs under their contract.

The plaintiffs disputed the right of the district to charge them for the payments it made to the City. They started this action for declaratory judgment, seeking an interpretation of their contract and the recovery of the sums withheld from them. They estimated that the deductions would total $91,334.83. They subsequently sought, in a different suit, a determination of damages for the use of additional labor and material. The second suit was consolidated with the present action. The district answered the complaint for declaratory judgment, stated that it had been billed by the City in the total sum of $75,081.53, and admitted that this sum had been deducted from the money owed the plaintiffs. The district asserted that the plaintiffs knew the ordinance was contemplated, were notified when it was adopted and agreed to assume and perform all the covenants contained therein insofar as they pertained to the plaintiffs' undertaking. The district further alleged that the plaintiffs had agreed to keep it harmless from liability or expense incurred by reason of the ordinance. The plaintiffs replied to the answer, denied its affirmative allegations, and asserted that they became informed of the terms of the ordinance after its adoption.

The district then moved for summary judgment and its motion was granted. Although the plaintiffs' claim for damages was undisposed of, the trial court, pursuant to Supreme Court Rule 304, found that there was no just reason for delaying an appeal from the order granting summary judgment to the defendant.

The plaintiffs contend that the payments were wrongfully withheld from them because at no time did they assume the district's obligation to pay the City. They stress the fact that the ordinance was not in existence at the time their contract was executed, that the easement was negotiated by the district without their knowledge or participation, and that at the time the contract was signed they had no reason to anticipate that the district would enter into an agreement which would entail payments by them of sums then unknown and unascertainable. They further contend that since the contract was prepared by the district it should be construed most strongly against the district; that the contract is ambiguous and that its ambiguity is shown by the district's inconsistent interpretations of its easement provisions. They point to an easement obtained from the Pennsylvania Railroad which contained conditions similar to the City's ordinance but state that under the railroad easement the district did not shift its obligations to the plaintiffs as it did under the City's easement.

The district's proposal for the Calumet Intercepting Sewer was incorporated in its contract with the plaintiffs. Pertinent provisions of the proposal are these:

"Ordinances, easements and permits are being acquired for a crossing under their respective rights of way and property for the construction of the intercepting sewer from the following:

"Ordinance from City of Chicago

"The contractor hereby agrees to assume, carry out and perform all of the covenants and conditions of said easements insofar as they pertain to the construction of the work under this contract."

The specific instructions to bidders which also became part of the contract stated:

"In preparing a proposal for doing the work herein specified, the bidder shall examine and inform himself as to the covenants and conditions prescribed in the various laws, ordinances and permits hereinafter mentioned in Article 2 of the General Conditions, and in the easements mentioned in the Contract (when easements are required)."

In Article 2 of the General Conditions section of the proposal and contract the contractor's obligations under a municipal ordinance are further articulated:

"The contractor . . . shall strictly comply with all ordinances, statutes, and regulations of the Sanitary District, and municipalities within which the work is being carried on, the State of Illinois, and the United States Government in any manner affecting the work hereunder or controlling or limiting ...

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