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Kuch & Watson, Inc. v. Woodman

JUNE 26, 1975.

KUCH AND WATSON, INC., PLAINTIFF-APPELLANT,

v.

LORRIN E. WOODMAN, D/B/A BAXTER & WOODMAN ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Du Page County; the Hon. L.E. CAREY, Judge, presiding.

MR. JUSTICE GUILD DELIVERED THE OPINION OF THE COURT:

Plaintiff appeals from the dismissal of its amended complaint against defendants Lorrin E. Woodman, doing business as Baxter & Woodman (hereinafter Woodman) and the Village of Gurnee (hereinafter the Village) for failure to state a cause of action.

Plaintiff's amended complaint is in four counts; the first two counts are directed against defendant Woodman and Counts III and IV are directed against defendant Village. In substance, the amended complaint alleges that in 1961 the Village and Woodman entered into a contract whereby Woodman would plan a sewerage system for the Village. In 1966 the prior agreement was supplemented by Woodman, agreeing to furnish certain supervision over the construction of the sewer system. This contract provided that:

"The Engineers' Supervision is for the purpose of assuring the owner [the Village] that the plans and specifications are being properly executed * * *"

and

"The owner [the Village] will furnish engineering and inspection service to insure the work being carried out in accordance with the contract * * *."

In 1965 the Village entered into a contract with the Preston Woodall Company (hereinafter Woodall) whereby Woodall would act as the contractor for the installation of the sewerage system, with Maryland Casualty Co. (hereinafter Maryland) as surety.

The complaint further alleges that Woodall then "purported to satisfactorily install" approximately 60% of the sewerage system with the defendant Woodman and the defendant Village "supervising each stage of construction, and approving the same." In 1967 Woodall was unable to complete the contract and was declared in default by the Village. Maryland, under its bond, then became liable for the completion of the project and in response to an invitation to bid to complete the contract the plaintiff submitted a $612,000 bid which was accepted by Maryland.

The complaint further alleges that in submitting its bid, plaintiff relied upon the contract between the defendants, specifically relying upon the supervision and approval of the work previously performed by Woodall. Plaintiff also alleges that it relied upon "assurances" of the defendant Woodman that the portion previously completed had been completed in a satisfactory manner. Plaintiff further contends that the defendant Woodman is charged with knowledge that the undertaking of work by the plaintiff would require that plaintiff assume complete responsibility for completing the entire sewerage system and that any failure on Woodman's part to have properly supervised the previous work would cause plaintiff financial damage.

Plaintiff then alleges that Woodman failed to perform its duties under its contract with the Village by approving certain detailed substandard work, thereby requiring plaintiff to expend sums to satisfactorily complete the project. In Count I of the complaint plaintiff prays for an award of $210,000 in damages against the defendant Woodman and in Count II plaintiff prays for an award of $100,000 against the defendant Woodman as recovery of lost profits.

Count III, which as noted above is directed against the defendant Village, in addition to realleging much of Count I, also alleges that plaintiff's contract with Maryland incorporated the contract which the Village had entered into with Woodall and that the duties of the Village under the Village-Woodall contract accrued to plaintiff. Plaintiff then alleges that the Village breached its duties under that contract in several detailed respects. Plaintiff then prays for an award of $210,000 damages against the defendant Village and in Count II prays for an award of $100,000 against the defendant Village as a recovery of lost profits.

Plaintiff also filed three contracts, which it entered into with Maryland, which covered various portions of the work to be performed by plaintiff. Each of the contracts contained the following language:

"Whereas, the Contractor has examined the site of the work and has also inspected that portion of the work under said Contract heretofore performed by Woodall * * * and has offered to assume complete responsibility thereunder * * * including, without limiting, responsibility and liability of all maintenance, guarantee, and corrections or replacement of any defective work heretofore performed ...


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