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Butler v. Metz

OPINION FILED JULY 18, 1978.

WILLIAM F. BUTLER ET AL., PLAINTIFFS AND COUNTERDEFENDANTS-APPELLEES,

v.

METZ, TRAIN, OLSON & YOUNGREN, INC., DEFENDANT-COUNTERPLAINTIFF-THIRD-PARTY PLAINTIFF-APPELLANT. — (STATE BANK OF ST. CHARLES ET AL., THIRD-PARTY DEFENDANTS-APPELLEES.)



APPEAL from the Circuit Court of Kane County; the Hon. WILLIAM VANDERWATER, Judge, presiding.

MR. JUSTICE RECHENMACHER DELIVERED THE OPINION OF THE COURT:

In April of 1973, a suit for declaratory judgment was filed by William F. Butler and William F. Butler Builder, Inc., against the architectural firm of Metz, Train, Olson & Youngren, Inc., the counterplaintiffs (hereinafter referred to as "Train" or "Train firm"), to determine the responsibility of Butler for architects' fees. Train filed an answer and counterclaim, claiming over $48,000 for unpaid fees and interest as well as an action to foreclose Butler's beneficial interest in Lot 3, pursuant to a security agreement executed by Butler on September 8, 1969.

The trial court found that the September 8 agreement was coerced and therefore void; that Train's claim for fees was not enforceable and that the assignment of Butler's beneficial interest in Lot 3 was likewise the result of coercion and not enforceable. The counterplaintiff, Train, appeals.

The complaint related that Train was continuing to claim fees in connection with two buildings for which he had furnished architectural services, when only one building had been built and, moreover, that Train had failed to account properly for payments already made by Butler and the complaint asked that the court (1) declare that Butler was only liable to pay fees attributable to the cost of constructing the one building that was actually completed and (2) that the court fix a balance as the actual amount due to Train, after giving credit for payments Butler had already made.

Attached to the complaint was a copy of the original agreement dated January 22, 1968. This was in the form of a contract between the parties whereby Train agreed to furnish architectural services, including preliminary drawings, "working" detailed drawings and on-site supervision for the construction of an apartment complex which the contract relates "will consist of two similar buildings, each containing approximately 100 apartment units and 100 enclosed parking places."

The scope of the architects' proposed services was described in three paragraphs, being I-A, I-B and I-C. I-A was investigation of site, including utilities, zoning and other restrictions and preliminary sketches needed for obtaining financing. I-B included preparation of all final working drawings, including structural, mechanical and electrical details, floor plans, elevations, cross-sections, etc. Under I-C the Train firm was to assist in the solicitation of competitive bids, the checking of contractors' shop drawings, the appraisal of material samples, and the issuance of certificates of payment and "full time inspection of construction."

Section II of the contract set forth the basis of compensation for the Train firm's services. Since it is a focal point of the controversy, we reproduce this section in full:

"II. COMPENSATION

For our services outlined in Section I-A, we are to receive the cost of our technical personnel assigned to the project plus one hundred and fifty per cent (150%) to cover overhead and profit. If the project proceeds and our services as described in Section I are completed, we are to receive the cost of our technical personnel assigned to the project plus one hundred and fifty per cent (150%) for overhead and profit up to a maximum of 3.25% of construction costs.

Technical personnel shall include principals and officers, when involved in a technical capacity, and all other personnel assigned to the project, including specification typists, but exclusive of general office employees such as accountants, bookkeepers, secretaries, stenographers, plan clerks, switchboard operators and office boys."

The testimony at trial indicates that Butler had heretofore built only single family residences. He conceived the plan of building a "Y"-shaped apartment building in the St. Charles area, where he had been building houses and which would be bigger and more attractive than anything previously built in that area.

Arthur Train, executive vice-president of the architectural firm, testified that Butler at first proposed a simple two-story building of 200 apartments in a "Y"-shaped form but that Train pointed out that there were problems with such a large building, chiefly the length of the halls, if it was built as one building of two stories. He suggested that the project would be more attractive as living quarters if it were constructed as two separate buildings.

In the original agreement of January 22, 1968, there was no mention of the possibility of only one building being built, nor is there any suggestion that the construction of the second building would be dependent upon the achievement of a substantial percentage of tenancy in the first building. The question as to whether there was initially any consideration given to the possibility of stopping after only one building was completed, is regarded by Butler as critical to his case, since he contends he is only obligated under the contract of January 22, 1968, to pay a maximum fee of 3.25% of "construction costs," and construction costs mean brick and mortar in place for whatever is actually built. He contends that since only one building was actually built, he owes only 3.25% of the actual construction costs of that building and he has already paid that amount and more.

Train's testimony, on the other hand, was that when they began preliminary discussions with Butler in December of 1967, and prior to January 22, 1968, he had indicated a maximum fee of 6.5% of construction costs, based on two buildings with different site locations. Train testified that Butler's response to this was that he thought a 6.5% architectural fee might not be attractive to lenders and that he (Butler) countered with the request that the fee be split and allocated one-half to each building, that is 3.25% for each building. That is, Train testified, that the fee remained 6.5% but was merely allocated one-half or 3.25% to each building. Train testified that this fee took into ...


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