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Bigelow-liptak Corp. v. Mazzucco Const. Co.

MARCH 8, 1972.

BIGELOW-LIPTAK CORPORATION, PLAINTIFF-APPELLEE,

v.

MAZZUCCO CONSTRUCTION COMPANY, DEFENDANT-APPELLANT (AMERICAN INCINERATOR CORPORATION ET AL., DEFENDANTS) — HOUSING AUTHORITY OF JOLIET, FOR THE USE AND BENEFIT OF BIGELOW-LIPTAK CORPORATION, DEFENDANT-APPELLEE,

v.

AMERICAN CASUALTY COMPANY ET AL., DEFENDANT-APPELLANTS.



APPEAL from the Circuit Court of Will County; the Hon. MICHAEL A. ORENIC, Judge, presiding.

MR. JUSTICE SCOTT DELIVERED THE OPINION OF THE COURT:

Rehearing denied April 3, 1972.

The defendant Mazzucco Construction Company, hereinafter referred to as "defendant Mazzucco", contracted with the Housing Authority of Joliet, hereinafter referred to as the "Housing Authority", to construct three buildings in the city of Joliet which were to be used for senior citizen housing. In connection with this contract the defendant Mazzucco executed and delivered to the Housing Authority a payment bond as required by Chapter 29, Section 15, Illinois Revised Statutes. The defendant Mazzucco was the principal on this bond and the surety thereon was the American Casualty Company, hereinafter referred to as the "defendant American Casualty."

The defendant Mazzucco subcontracted with American Incinerator Corporation for the furnishing of certain incinerators which were to be installed in the housing project. American Incinerator on May 18, 1967, contracted with the plaintiff, Bigelow-Liptak Corporation, hereinafter referred to as the "plaintiff," for the purchasing of the refractory installations in the incinerators. The plaintiff completely performed its contract by September 19, 1967, and on October 27, 1967, became entitled to a payment of $7,302.52 for labor and materials furnished.

Late in December, 1967, American Incinerator Corporation instituted proceedings under the Bankruptcy Act and on December 28, 1967, the plaintiff through its general counsel informed the Housing Authority that it had fully performed the work under its contract with American Incinerators, a subcontractor of the defendant Mazzucco, and had not been paid for labor and materials furnished. On February 29, 1968, the plaintiff in accordance with the procedure set forth in Chapter 29, Section 16, Illinois Revised Statutes, notified the Housing Authority of its claim for the sum of $7,302.52 and likewise the defendant Mazzucco was notified of said claim on March 1, 1968. The Receiver in Bankruptcy for American Incinerator was notified on March 11, 1968, and American Casualty, the surety on the payment bond, was notified on March 18, 1968.

On March 1, 1968, the plaintiff gave to the Housing Authority and the defendant Mazzucco written notice and claim for lien against all monies due the defendant Mazzucco written notice and claim for lien against all monies due the defendant Mazzucco, said claim being in the amount of $7,424.22, which also included in the sum the amount of $121.70 as interest.

The notice provisions required by our statute governing Contracts for Public Works, namely, Chapter 29, Section 16, Illinois Revised Statutes, was fully complied with by the plaintiff, notice was served on the Housing Authority less than 180 days after the work was completed and the instant action was commenced on April 22, 1968, being not sooner than 120 days after the date the last work was performed on the contract by the plaintiff and not later than six months after acceptance of the project by the Housing Authority.

As we have stated, the instant suit was commenced on April 22, 1968, when the plaintiff and the Housing Authority for the use of the plaintiff filed a complaint which contained two counts. Count I, referred to as the lien count, sought a lien upon monies due the defendant Mazzucco or American Incinerator from the Housing Authority. Count II, referred to as the bond count, sought judgment against the defendant American Casualty and defendant Mazzucco in the sum of $7,302.52, plus interest from October 27, 1967, and this count was predicated upon the terms of the payment bond on which the defendant Mazzucco was principal and the defendant American Casualty was surety.

Before a determination of this cause was made by the trial court the various parties involved filed answers, affirmative defenses, additional affirmative defenses, motions to strike affirmative defenses, motions for summary judgments, affidavits in support of motions for summary judgment, and answers to motions for summary judgments. We will recount the pertinent pleadings as we deem them to be of significance in a determination of the issues presented to us by this appeal.

This cause was ultimately decided by the trial court by granting of a certain motion for summary judgment and the denial of other motions seeking the same relief. Chronologically, the defendant Mazzucco first moved for a summary judgment against Bigelow-Liptak on Count I, being the lien count. The main thrust of this motion was that since American Incinerator had no money due it at the time the plaintiff gave notice of its lien, then no lien could be asserted against the defendant Mazzucco or the Housing Authority.

The defendant Mazzucco and defendant American Casualty also filed a motion for summary judgment against the plaintiff on Count II, being the bond count. The affidavit supporting this motion averred that the plaintiff did not have a "just claim" because of his conduct in failing to timely inform the defendant Mazzucco of the bankruptcy proceedings of American Incinerator and thereby both the defendant Mazzucco and the defendant American Casualty were prevented from withholding funds due American Incinerator which could have been paid to the plaintiff. Further it was averred that in order for the plaintiff to recover on Count II that the court would have to find that the plaintiff had a right to recovery against the Housing Authority, which in turn would give the Housing Authority the right to recover against the defendant Mazzucco and the defendant American Casualty. It was the affiant's contention that Chapter 29, Section 16, Illinois Revised Statutes, which we refer to as the "Bond for Public Works Act," specifically limits the Housing Authority's liability to what it was before the enactment of Section 16 and that consequently the Housing Authority's liability is limited to the amount of money due American Incinerator at the time the plaintiff gave notice of its claim and it was the affiant's contention that at the time no money was due American Incinerator; hence there being no liability to the plaintiff, there could be no claim against the defendant Mazzucco and the defendant American Casualty.

Next the Housing Authority for use of the plaintiff filed a motion for summary judgment against the defendant Mazzucco and the defendant American Casualty on Count II, being the bond count of the complaint. The affidavit supporting this motion stated among other things (1) that Count II of the complaint is an action on the bond executed pursuant to Chapter 29, Section 15 and 16, Illinois Revised Statutes, (2) that the defendant Mazzucco knew of the plaintiff's contract with American Incinerator and also of the presence of the plaintiff on the job site, (3) that notice of the claim of the plaintiff was served on the Housing Authority, the defendant Mazzucco, American Incinerator and the defendant American Casualty pursuant to Chapter 29, Section 16, Illinois Revised Statutes, within 180 days after the plaintiff completed its work and legal action was not instituted sooner than 120 days after the date of the last work nor later than six months after the acceptance of the project by the Housing Authority, (4) that in addition to the foregoing notice the plaintiff on December 28, 1967, had notified the Housing Authority that its contract had been fully performed but payment had not been received, (5) that the plaintiff made two requests, one upon the Housing Authority and the other upon the City of Joliet for the address of the defendant Mazzucco, the latest request being February 2, 1968, but that no reply was ever received, (6) that at the time actual or constructive notice was received the defendant Mazzucco had funds available with which to pay the plaintiff but instead failed to take reasonable steps in order to ascertain if subcontractors had been paid before disbursing the funds to American Incinerator, and (7) that there was a lack of diligence on the part of the defendant Mazzucco and not on the part of plaintiff in that the latter gave all notices required by law and in fact had given additional notices over and above those required by the pertinent statute.

Lastly, the plaintiff filed a motion for summary judgment against the defendant Mazzucco on Count I, being the lien count of its complaint.

After this profusion of pleadings had been filed the trial court heard oral arguments and on December 29, 1970, denied both the plaintiff and defendant Mazzucco's motions for summary judgment on Count I of the complaint. The court granted the plaintiff's motion for summary judgment on Count II of the complaint and judgment was entered in favor of the plaintiff and against the defendant Mazzucco and ...


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