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Brewer v. Custom Builders Corp.





APPEAL from the Circuit Court of Madison County; the Hon. THOMAS GIBBONS, Judge, presiding. MR. JUSTICE JONES DELIVERED THE OPINION OF THE COURT:

Rehearing denied November 3, 1976.

Plaintiffs, Dave and Jo Ann Brewer, brought an action for breach of a written contract the terms of which called for defendant, Custom Builders Corp., to build the "shell" of a single-family residence at a price of $17,985. Under the terms of the contract plaintiffs, who acted as their own general contractor, agreed to pay for all necessary permits and to make payments on the contract to defendant as the work progressed. Defendant agreed to build the shell according to a building plan which was incorporated into the contract and to perform "all carpenter work in the best workmanlike manner."

At the time this action was brought, plaintiffs had paid to defendant $15,150, of which $15,124 had been applied toward the contract price and $26 had been applied toward a building permit. Defendant had completed most, but not all, of the work described in the contract; however, it was plaintiffs' claim that much of the work had not been done in the best workmanlike manner. After a trial without a jury, the court awarded plaintiffs $8,294 as "net damages." Thereafter, defendant timely filed a post-trial motion, which was denied. Defendant has appealed.

In this appeal, defendant asserts that the trial court "erred in permitting plaintiffs-appellees to bring their cause of action without first complying with the express terms of the contract," and that the trial court erred in certain aspects of the assessment of damages.

Defendant's first contention is based upon paragraph 11 of the contract, which provides:

"If any defect is specified by the Purchaser and accepted as such by the Seller and cannot be remedied within a period of forty-eight (48) hours, the Purchaser may retain not more than two percent (2%) of the purchase price, ninety-eight percent (98%) shall be paid upon the delivery and erection of said house as aforesaid. The two percent (2%) withheld above shall be paid to the seller immediately upon the remedying of the defect."

Defendant argues that this paragraph amounts to a condition precedent to plaintiffs' bringing suit. Defendant asserts that this paragraph imposed upon plaintiffs a duty to pay, at least, 98% of the contract price, or to withhold no more than 2% of the contract price, and, since plaintiffs did not fulfill this duty, the instant suit could not have been brought. We do not agree with defendant's contention.

• 1 First of all, we note that paragraph 11 begins with the words, "If any defect is specified by the Purchaser and accepted as such by the Seller * * *." It would appear then that this paragraph does not even apply unless plaintiffs had specified certain work to be defective and defendant had thereafter agreed that that work was defective. There is no allegation in any of the pleadings in this case to the effect that the parties had agreed on any work as being defective. Moreover, we find no express reference in paragraph 11 to the bringing of a suit. In the absence of such an express reference, we are reluctant to find that the parties intended for a court action to be barred unless plaintiffs had first paid 98% of the contract price.

• 2 The trial court found that defendant had substantially breached the contract by failing to perform many aspects of the construction in a workmanlike manner. The trial court then held that paragraph 11 was ambiguous in that it was "not clear at all to the court from a reading of paragraph numbered 11 of the agreement in writing * * * that plaintiffs are required to pay 98% of the purchase price where defendant has first and in a substantial manner breached the written agreement." The court ruled that since the contract had been written by defendant, the ambiguity of paragraph 11 should be construed against defendant. We agree the paragraph is ambiguous and find no error in the court's construing the ambiguity against defendant. Watson Lumber Co. v. Guennewig, 79 Ill. App.2d 377, 226 N.E.2d 270; Bost v. Paulson's Enterprises, Inc., 36 Ill. App.3d 135, 343 N.E.2d 168.

Defendant's second contention concerns the amount of damages awarded plaintiffs by the trial court. The trial court's order specified four categories for which damages were awarded: (1) defects which had been corrected by Dave Brewer through his own labor; (2) defects relating specifically to the roof, which could be repaired by a professional builder; (3) defects which affect the market value of the residential structure but which cannot be corrected without prohibitive damage to the structure; and (4) savings on materials, specifically, cedar siding, because of plaintiffs' decision to use brick rather than cedar siding on a substantial portion of the exterior walls. The court specified the amount awarded for each category, as follows:

$ 815.00 self repairs 3,090.00 roof repairs *fn1 7,500.00 loss of market value 250.00 savings on cedar __________ 11,655.00 total damages

The court held that defendant was entitled to an offset of $2,361, the amount which defendant claimed was still to be paid on the contract. *fn2 The court then calculated the amount of "net damages" as $8,294. *fn3

The ordinary rule applied in cases involving building contracts is that a builder is not required to perform perfectly, but rather he is held only to a duty of substantial performance in a workmanlike manner. (Watson Lumber Co. v. Guennewig; Ehard v. Pistakee Builders, Inc., 111 Ill. App.2d 227, 250 N.E.2d 1.) The purchaser who receives substantial performance of the building contract must pay the price bargained for, less a credit as compensation for deficiencies existing in what he received as compared to what strict performance would have given him. Watson Lumber Co. v. Guennewig; Broncata v. Timbercrest Estates, Inc., 100 Ill. App.2d 49, 241 N.E.2d 569; Ed Keim Builders, Inc. v. Webb, 1 Ill. App.3d 375, 274 N.E.2d 192; 13 Am.Jur.2d Building and Construction Contracts § 80, at 82 (1964).

According to Professor Corbin, a contractor whose work amounts to less than substantial performance has no right to the contract price; he is said to have no remedy on the contract. In such case, the purchaser's refusal to pay is not a breach of contract, even though he may eventually be compelled to pay something. If the purchaser must pay, his duty is non-contractual in character and can more appropriately be called "quasi-contractual." The builder's right is, under a theory of quantum meruit, a right to recover only reasonable compensation for value received by ...

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