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Edward Electric Co. v. Metropolitan San. Dist.

DECEMBER 13, 1973.




APPEAL from the Circuit Court of Cook County; the Hon. THOMAS H. FITZGERALD, Judge, presiding.


Plaintiff, the Edward Electric Company, filed this action in the circuit court of Cook County seeking additional compensation for extra expenses and for fire repair work pursuant to provisions of its contract with defendant, The Metropolitan Sanitary District of Greater Chicago. A bench trial resulted in a judgment for defendant on the issue of additional compensation, and plaintiff appeals. The trial court entered judgment for the plaintiff on the issue of fire repair work in the amount of $1,992.04. Plaintiff, however, contends that the award was inadequate and also appeals that judgment.

Since this matter revolves around the construction of a written contract 137 pages in length and consists of a record of approximately 2,000 pages, we will attempt to set out the salient facts only.

On February 21, 1963, defendant advertised for competitive bids on miscellaneous electrical work to be performed in conjunction with related contracts on a site located in Stickney, Illinois, Contract Division SH. On April 25, 1963, plaintiff was awarded the contract on the basis of its low cost bid of $478,393.00.

The contract contained several provisions intending to forestall any future contractual difficulties. It specified that cooperation among the different contractors was mandatory since the work of each depended upon, related to, and was tied into the other contractors. Plaintiff had to arrange its work and equipment to be accessible to the other contractors at any time without unreasonable and unnecessary expense. To encourage prompt completion of the contracted work, a liquidated damage clause was inserted into the contract providing for a charge of $150 per day for unfinished work after the agreed upon completion date.

On November 3, 1963, a fire of undetermined origin occurred on the job site. On the basis of plaintiff's cost estimate of $2,534, defendant authorized plaintiff to repair the work damaged by the fire. Plaintiff's bill of $1,992.04 was later rejected by defendant's chief engineer, and plaintiff reserved its claim for that amount while it continued to perform the contract.

Plaintiff's electrical work proceeded on schedule toward its scheduled September 21, 1964 completion date until July 15, 1964. On that date plaintiff notified defendant's chief engineer that other contractor's delays in the completion of their contracts were causing plaintiff to delay work on its contract, and it requested that he grant an extension of its completion date pursuant to the Unavoidable Delay Clause of the General Conditions of the contract, hereafter referred to as Article 27. On September 21, 1964, the chief engineer granted the request. On July 15, 1964, plaintiff had completed 96.12 percent of its contracted work.

From July 15 to March 19, 1965, the actual completion date, plaintiff kept men and equipment on the job site daily. Plaintiff's witnesses testified that it would decide each morning how many men would be needed to work that day, but stated that the crews were not always working because their work was dependent upon the completion of related work of other contractors. Plaintiff's witnesses also stated that defendant never told it to reduce its crews or suspend its work. Although plaintiff notified defendant's chief engineer from time to time that its costs and expenses were increasing and that it would expect additional compensation for the expenses incurred in having to delay completion of its contract, it never presented any claims to the chief engineer specifying the nature of the continuing costs and the chief engineer did not investigate them on his own. Plaintiff seeks damages in the alternative, $41,795.41 or $46,014.12.

Plaintiff's primary contention on appeal is that the trial court erred in construing the contract on the matter of additional expenses. The crux of the issue is the proper construction to be given two of the contractual provisions, the aforementioned Article 27, and the Power of Engineer clause of the General Specifications of the contract, hereafter referred to as Article 2. In relevant part Article 2 states as follows:

"To prevent all disputes and litigations, it is further agreed by and between the Sanitary District and the contractor that the Engineer shall in all cases decide every question of an engineering character which may arise relative to the execution of the work under this contract, and his decision shall be final and conclusive on both parties hereto; and such decision, in case any question may arise, shall be a condition precedent to the right of the contractor to receive any money or compensation for anything done or furnished under this contract."

Article 27 provides in part as follows:

"Should the contractor be obstructed or delayed in the commencement, prosecution, or completion of the work hereunder by any act or delay of the Sanitary District * * * or to other causes, which causes and delays mentioned in this Article 27, the Engineer shall determine to be entirely beyond the control of the contractor, then the times fixed in this Agreement for the completion of said work to the extent specified shall be extended for a period equivalent to the time lost by reason of any of the aforesaid causes mentioned in this Article 27. No such allowance of time shall be made, however, unless notice in writing of a claim therefor is presented to the Engineer before the thirtieth of each succeeding month of all delays occurring within the preceding month, and the Contractor shall satisfy the Engineer that the delays so claimed are unavoidable and substantial and could not be reasonably anticipated or adequately guarded against.

It is further expressly understood and agreed that the Contractor shall not be entitled to any damages or compensation from the Sanitary District except on account of any delay or delays resulting from any act or delay of the Sanitary District or other parties under contract with the Sanitary District, and such damages shall be limited solely to premiums actually paid by the Contractor on his bond and for wages and salaries of employees and other extra expenses of the Contractor that are necessary only for the proper maintenance of the work and of the plant and equipment of the Contractor during or on account only of a delay or delays caused by the Sanitary District or other contractors for said Sanitary District. The Engineer shall determine the number of days if any, that the Contractor has been so delayed and the amount of such extra costs to the Contractor due to said delay or delays and the amount of extra compensation to be paid to the Contractor therefor, and his decision shall be final and binding upon parties to this contract."

Plaintiff, in asserting its claim for extra compensation, contends that Article 2 of the contract, placing the burden of initiating a damage claim on the aggrieved contractor, is inapplicable. Rather it argues that Article 27 places the burden of initiating the claim on defendant's chief engineer, and ...

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