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Orput-orput & Assoc. v. Mccarthy

MAY 18, 1973.

ORPUT-ORPUT & ASSOCIATES, INC., PLAINTIFF-APPELLEE,

v.

DANIEL F. MCCARTHY, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. JOHN J. LUPE, Judge, presiding.

MR. JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:

This appeal involves a contract between the architectural firm of Orput-Orput & Associates, Inc., plaintiff, and Daniel F. McCarthy, defendant. Defendant appeals from the entry of judgment for $24,521.23 plus interest against him for breach of contract and from the dismissal of his counterclaim.

EVIDENCE

In 1960 the J.C. Penney Company agreed to lease 14,000 square feet of first-floor space in a three-story building to be constructed by defendant. Defendant retained Perkins & Will, architects, to prepare preliminary plans. Later, because of delays in planning the project, Ralph Betts, Penney's representative, suggested a change in architects. Defendant was contacted by Raymond Orput, president of plaintiff, and later held three meetings with him. At the first meeting on December 14 or 15, 1960 in Evanston, defendant told Orput of Penney's projected October 1, 1961 occupancy date. Defendant testified that Orput agreed that if retained as architect the building would be completed in time for Penney to take possession on October 1, 1961 and the construction cost would not exceed $20 per square foot, including architect's fees. Orput denied making either statement.

On December 22, 1960, the two men, accompanied by Marshall Stevens, a construction superintendent of plaintiff, held the second meeting at defendant's Evanston office. Raymond Orput agreed to reduce the architectural fee from the standard six per cent of construction cost to five per cent if retained. Defendant claims and plaintiff denies that Raymond Orput again agreed to a $20 per square foot maximum on construction cost.

The third meeting occurred on December 30, 1960, at plaintiff's Rockford office and at a Rockford restaurant. Raymond Orput presented a written contract, a standard printed form of the American Institute of Architects, completed by typing in the following fee provision:

"B. The Owner agrees to pay the Architect for such services a fee of not to exceed five (5%) percent of the construction cost of the Project, with other payments and reimbursements as hereinafter provided, the said percentage being hereinafter called the Basic Rate. The Architect is to be paid a guaranteed fee of 1 1/2 [per cent] profit plus actual and all overhead for handling the professional architectual [sic] — Engineering costs in performing [sic] this work but in no event shall the total architectural fee exceed 5% of the total cost of the Project. The Architect's fee shall apply to all alternates whether accepted or not. The office building will have plans developed on the first floor only. Plans for the interior development of other than the first floor will be performed [sic] at the rate of $15.00 per hour."

Paragraph C-3 of the contract was changed by defendant's requiring addition of a provision that the building would be constructed in separate phases and that separate contracts, at no additional cost to defendant, would be taken on each phase. The evidence is undisputed that defendant made no request to incorporate into the contract a guaranteed time limitation for completion of construction or a square foot cost maximum. Raymond Orput, Alden Orput, his son and vice president of plaintiff, and defendant signed the contract.

Thereafter in mid-January, 1961, defendant and J.C. Penney executed a lease, providing for occupancy by October 1, 1961, but cancellable only if occupancy were not available by June 1, 1962. On January 3, 1961, defendant had met with Raymond and Alden Orput for the purpose of defining as closely as possible the features of the building. Defendant presented the Orputs with the very sketchy preliminary drawings prepared by Perkins and Will for the J.C. Penney layout. Between January 10th and 30th, 1961, four sets of preliminary plans were sent to defendant by plaintiff. The plans, forwarded to J.C. Penney, changed the layout slightly so as to relocate some of the private offices. Penney, by letter dated February 10, 1961, rejected the changes, insisting that the original plans be followed. Plaintiff revised the drawings to Penney's satisfaction and they were approved on February 17, 1961. Phase one final plans and preliminary specifications were completed on March 13, 1961. Changes made by plaintiff had resulted in the addition of 3930 square feet of rentable space without alteration of exterior dimensions. J.C. Harris & Sons, on the basis of competitive bidding, was then awarded the general construction contract for phase one and commenced construction immediately thereafter. After construction began, defendant at various times considered adding to the building a restaurant, a swimming pool, offices for retired executives, a health club, and a fourth and fifth floor, and cutting back the building to two floors, all of which delayed by about six weeks the construction schedule.

Defendant requested and plaintiff sent to him on May 11, 1961 a cost estimate listing the total construction cost (not including architectural fees) at $1,280,000 or $18.33 per square foot. In order to save the time of taking further bids, J.C. Harris was retained in late June for the balance of the contract by means of a contract negotiated directly between Harris and defendant. In early July plaintiff prepared a form contract for this work including a penalty provision of $300 per day for failure of completion by October 1, 1961. Defendant, however, delayed signing this agreement until mid-September and agreed with Harris to delete this provision.

In July competitive bids from subcontractors under J.C. Harris and from mechanical and electrical contractors were taken. Raymond Orput, upon reviewing all bids, speculated that the estimated cost guidelines would be met. Defendant testified that plaintiff refused to approve defendant's color selection and thus delayed unnecessarily for two weeks the ordering of precast panels. The panels were not delivered until December 23 or 24, 1961; installation was completed around February 1, 1962. Some of the tenants moved in immediately thereafter. There was evidence that Harris refused to order the panels until after his own contract was signed by defendant. There was also delay by the subcontractor in submitting shop drawings to plaintiff for approval until the day after the completed panels were supposed to have been delivered under the subcontract.

Defendant was billed on phase one by the contractors and subcontractors for $1,194,175.12, the amount of their contracts. After extensive bargaining, defendant settled all the bills at $1,070,000. Plaintiff sues defendant for five per cent of the construction cost of phase one (5% of $1,194,175.12) or $59,708.76 and for $41,510.09 ($15 per hour worked) on the remainder of the project for a total of $101,218.85. Defendant's payments to plaintiff under the contract totaled $70,000. Accordingly, plaintiff prayed for $31,218.85 in its complaint for breach of contract under Count I and for $50,000 for additional services, performed over and above the contract in Count II. Defendant counterclaimed for $305,337.54, claiming damages arising out of the breach of the two alleged oral agreements (an October 31, 1961 deadline and a $20 per square foot cost maximum). The trial court dismissed Count II of the complaint and the entire counterclaim for want of equity, awarding damages of only $24,521.23 (the number of hours the court found that plaintiff had actually worked on the project, at $15 per hour) plus interest at five per cent, on Count I. Defendant appeals from the entry of judgment on Count I and from the dismissal of the counterclaim, the dismissal of Count II and the discrepancy between the amount prayed for and the amount awarded being uncontested by plaintiff.

OPINION

The first issue presented for review is whether the following findings made by the trial court in construing the contract are against the manifest weight of the evidence: the parties did not orally agree to a cost per square foot limitation or a deadline date; the parties intended the contract term "cost" to refer to the amount charged, not the amount paid; the parties intended the five per cent contract limitation on architecture fees to refer to the cost of the structure, foundation, and interior of the first floor only, rather than to the entire cost of the project; there was no responsibility on the part of plaintiff for construction delays which resulted in any excuse to defendant to ...


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