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Amelco Electric Co. v. Arcole Midwest Corp.





APPEAL from the Circuit Court of Cook County; the Hon. F.E. MORRISSEY, Judge, presiding.


Amelco Electric Company, Inc. (plaintiff) appeals from a summary judgment entered against it and in favor of Arcole Midwest Corporation and Allied Asphalt Paving Company (defendants). The judgment denied plaintiff's claim for a mechanics' lien upon public funds held by the City of Chicago as advanced in the first count of plaintiff's complaint.

Defendants' motion for summary judgment is supported by two affidavits. Plaintiff responded with two counteraffidavits. These documents and the balance of the record furnish the following factual background.

The City of Chicago contemplated improvement of certain runways at O'Hare Airport. Defendants formed a joint venture and submitted a general contractor's bid on the project. Prior to submission of their bid, defendants, on May 29, 1974, requested a subcontractor's bid by plaintiff for performance of certain portions of the work. Plaintiff received from the City detailed specifications and contract plans which included a "Specified Completion Time" schedule. About June 14, 1974, plaintiff submitted to defendants an oral bid of approximately $475,000 for performance of this work.

On or about June 14, 1974, defendants' bid for performance of the work as general contractor was accepted by the City. Thereafter various meetings were held between representatives of plaintiff and defendants on various dates until July 10, 1974. About July 10, 1974, defendants received a letter from the City bearing that date advising that the general contractor's job was to be let out to defendants, subject to certain specifications in defendants' bid. The letter advised defendants that they could proceed with the provisions of the specifications subject to the approval of the contract by the comptroller and mayor of the City and to the furnishing of a satisfactory performance bond.

By letter dated July 11, 1974, and received by plaintiff, defendants confirmed telephone advice to plaintiff of acceptance by the City of defendants' bid and sent plaintiff a copy of the letter from the City. Defendants' letter stated:

"We will prepare the subcontracts within the next few days and should have yours in the mail the early part of next week.

As per our previous conversations, I believe it advisable for you to now place your orders for all material needed for this contract."

The letter also advised plaintiff that the City of Chicago wished to approve products to be used by plaintiff prior to requesting priority from Federal authorities.

Commencing about July 12, 1974, plaintiff took certain steps to make itself ready to enter upon performance of the agreement. These steps, done with the knowledge of defendants, "consisted of ordering the necessary materials, preparing the necessary drawings and taking the necessary steps to obtain sufficient labor to implement its bid."

On July 15, 1974, plaintiff wrote to defendants' representative enclosing a copy of material indicating the proportion of the work expressed in total number of man-hours which would be performed by minority persons. This was stated by way of an appendix pertaining to performance of the contract in connection with plaintiff's bid and was executed by plaintiff, by its president.

On July 16, 1974, defendants wrote a letter to plaintiff which was received on the following day. This letter enclosed an original and three copies of a written subcontract agreement dated July 16, 1974, between defendants and plaintiff for performance of plaintiff's bid as subcontractor. This subcontract contained 28 detailed provisions expressed upon a printed form together with a typewritten rider containing the details of the work to be done for a total price of $479,995. Among other provisions, the subcontract provided for a performance bond in the amount of the agreement to be executed by corporate surety, indemnity by the subcontractor to the contractor, incorporation into the subcontract of every provision of the general contract; and, of material importance here, a specific waiver and release of all rights to mechanics' lien against funds due or to become due the contractor, and an agreement to indemnify the contractor against loss or expense including attorneys' fees in connection with claims or liens filed by or through the subcontractor. The letter transmitting the subcontract provided:

"If this meets with your approval, will you please execute three copies of the agreement in the manner indicated and return them to us. We will then return one fully executed copy of the agreement for your file. Please be sure to execute the rider also."

The letter also enclosed the "Chicago Plan-Appendix A." for estimated man-hours to be worked by minority persons with the request that this document be completed and signed by plaintiff and returned to defendants for transmittal to the City of Chicago, "in order to have you approved as a subcontractor." The letter also enclosed an additional copy of the agreement to be forwarded by plaintiff to its insurance carrier and requested that plaintiff procure and ...

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