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Teachers College Bd. v. Aetna Casualty Co.

OPINION FILED MAY 25, 1976.

TEACHERS COLLEGE BOARD OF THE STATE OF ILLINOIS EX REL. DURANT INSULATED PIPE COMPANY, PLAINTIFF AND COUNTERDEFENDANT-APPELLANT,

v.

AETNA CASUALTY AND SURETY COMPANY, DEFENDANT AND COUNTERPLAINTIFF-APPELLEE — (L.J. KEEFE, D/B/A L.J. KEEFE COMPANY, DEFENDANT, BOARD OF REGENTS, STATUTORY SUCCESSOR TO TEACHERS COLLEGE BOARD OF THE STATE OF ILLINOIS, INTERVENOR).



APPEAL from the Circuit Court of De Kalb County; the Hon. CARL A. SWANSON, JR., Judge, presiding.

MR. JUSTICE RECHENMACHER DELIVERED THE OPINION OF THE COURT:

This is an appeal from the judgment of the circuit court of De Kalb County in which the court awarded to the plaintiff the sum of $9244.81 representing the balance of the purchase price of certain insulated pipe and awarded to the defendant (counterplaintiff) the sum of $61,628 as damages arising out of a construction contract.

In January, 1964, the Teachers College Board (College Board) let a contract for a certain steam heating system to be installed at Northern Illinois University. The contractor was L.J. Keefe, one of the defendants, and later counterplaintiff (Keefe). The original plaintiff (and later, counterdefendant) was Durant Insulated Pipe Company (formerly known as Portage Insulated Pipe Co.) (herein called Durant). Durant was the supplier of the pipe which Keefe ordered as contractor and which Keefe proceeded to install as per drawings prepared by Durant and approved by the College Board's consulting engineer and architect. Some difficulty was encountered in laying the pipe due to moisture in the ground and in one place, quicksand, and the job was not completed until October, 1964. On October 23, 1964, Durant acknowledged by letter that Keefe had installed the piping system "in accordance with our current installation instructions except that all portions of the system that became wet during installation must be dried out when steam is turned on."

The system was not activated for another 6 months because of the delay in completing another and completely different heating system at Northern Illinois University, which was to be connected with the system being installed by Keefe. Steam was first introduced into the system in April, 1965, and very shortly problems developed — the system did not operate satisfactorily and the contractor was not able to dry it out so as to make it work efficiently. In June, 1965, it was decided by everyone involved that there were probably leaks in the system. Excavations were begun and a crack in the piping was discovered at a point known as Point 5. This crack was at a connection which had been welded at the Durant plant. Keefe repaired the crack by rewelding it in accordance with Durant's specifications but the system still did not operate properly and after further excavations another cracked weld was discovered at Point 6 in the system. This also was repaired by Keefe according to Durant's specifications.

The point which had cracked in both cases was a weld at a place where the pipe made a 90-degree turn. The system consisted of two pipes, a steam pipe about 10 inches in diameter and a return pipe about 5 inches in diameter (to draw off the water which had not turned to steam), both housed in a large 23-inch conduit made of corrugated sheet metal coated with asphalt and protected by asphalt felt. The steam pipe had a tendency to expand considerably and in order to give it plenty of room at the bends or turns in the system, the straight section and the right-angle section of the conduit where the turns were made were not designed to meet head-on or flush but were off-set 1 1/2 inches at such bends, giving the maximum room for expansion toward the direction the steam was flowing when it made its right-angle turn. This, of course, created a space between the nonaligned ends of the conduit, which were filled in by 1/4-inch steel plates. These steel plates were welded to the ends of the conduit so as to close the gap. It was at the point of these welds where the cracks developed.

After the cracks were repaired the system apparently passed a satisfactory test. However, the system still could not be dried out properly and it became the opinion of all concerned that water was still getting into the system, although the source could not be discovered. Keefe hired the Heath Engineering firm to determine the cause of the problem but after some investigation they reported they could not determine the cause of the wet condition of the conduit. Thereafter, in August, 1966, Keefe employed another engineering firm, Adams Company, but they also were unable to come up with a satisfactory answer. Next, the firm of Consoer-Townsend was employed and they tried to find the source of the system's problems but were unable to do so and they also gave up. The total fees of these three engineering firms was $11,856, but in spite of the time and effort spent in testing, analyzing and excavating, the source of the water in the conduit was not determined and water continued to get into the conduit. In addition to all the tests made by the three engineering firms, by Keefe himself and by university personnel, a test was made by a State chemist to determine whether the water in question was steam water or ground water. This, however, was also inconclusive. Finally, in 1968, having been informed by the engineers that the life of the system had been considerably shortened by water damage to the conduit, the College Board decided to scrap that part of the system which was thought to be the "wet" part. New piping was laid and a new manhole was constructed in the 515 feet of piping which was thought to be the defective part and after this was done the system operated satisfactorily.

The cost of installing the new piping was $48,723, the cost of the new manhole was $11,063 and Keefe spent $8,821 in repairing the cracked welds. By 1967, Keefe found himself financially unable to continue with the contract and his bonding company, Aetna Casualty and Surety Company, took over and was subrogated to any rights Keefe might have against anyone in connection with the contract. Aetna paid the engineering fees and the cost of laying the new pipe and for construction of the additional manhole.

Suit was originally filed by the College Board for the use and benefit of Durant against Keefe and Aetna for the remaining balance of $6,121 due for the piping material, Keefe having refused to pay this balance after the trouble developed. Keefe, by Aetna, then filed a counterclaim against Durant for all the sums expended by him and his insurer, Aetna, in investigating, repairing and rebuilding the system, amounting in total to some $108,000. Upon trial of the cause in November, 1974, before the court without a jury, the court, after hearing voluminous testimony and after considering the arguments and briefs of all the parties, being Durant, the College Board, Keefe and Aetna, issued its judgment order finding that:

(1) Durant was entitled to recover from Keefe (to be paid by Aetna) the sum of $6,121.28 plus some $3,000 interest for the remaining balance due on the bill for piping;

(2) Aetna, as subrogee of Keefe, was entitled to recover (including interest)

(a) $12,822.04 for welding repairs done by Keefe,

(b) $2,436.57 (including interest) for engineering fees of Heath;

(3) Durant and Keefe were jointly responsible ...


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