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Pathman Constr. Co. v. Hi-way Electric Co.

OPINION FILED OCTOBER 12, 1978.

PATHMAN CONSTRUCTION CO., PLAINTIFF AND COUNTERDEFENDANT-APPELLEE,

v.

HI-WAY ELECTRIC CO., DEFENDANT AND COUNTERPLAINTIFF-APPELLANT. — (THE HOME INDEMNITY COMPANY, COUNTERDEFENDANT-APPELLEE.)



APPEAL from the Circuit Court of Cook County; the Hon. REGINALD J. HOLZER, Judge, presiding.

MR. JUSTICE LINN DELIVERED THE OPINION OF THE COURT:

This is an action for damages sustained by plaintiff, Pathman Construction Co. (Pathman), allegedly due to the delay of defendant, Hi-way Electric Co. (Hi-way), in performing its work under an electrical subcontract agreement. After a bench trial in the circuit court of Cook County, the trial court entered judgment for plaintiff in the amount of $92,583.93. In a supplemental order the trial court set off this judgment against a judgment previously obtained by Hi-way against Pathman in the United States District Court for the Eastern District of Michigan which Hi-way had registered pursuant to statute. (Ill. Rev. Stat. (1975), ch. 77, pars. 88 through 105.) Hi-way appeals from the trial court's opinion and both final and supplemental orders.

The following issues are raised on appeal: (1) whether Pathman failed to plead and prove the necessary elements of its case; (2) whether the trial court erred in apportioning the damages for delay; (3) whether the trial court erred in failing to credit Hi-way with an extension granted on the prime contract; (4) whether the trial court's findings are against the manifest weight of the evidence; (5) whether the damages are supported by substantial evidence; (6) whether the trial court erred in refusing to admit certain testimony as judicial admissions against Pathman; and, (7) whether the trial court lacked authority to enter the supplemental order.

We affirm the decision of the trial court.

In 1967, the General Services Administration (GSA) entered into a contract with Pathman as prime contractor for the construction of a Federal office facility in Evansville, Indiana. Hi-way was Pathman's subcontractor for all the electrical work on the project under a subcontract agreement dated March 27, 1967. The portions of the subcontract which are relevant to this action state:

"6. The Sub-contractor agrees to prosecute said work with due diligence, without delay, and will not in any manner, by delay or otherwise, interfere with the work of the Contractor or other Sub-contractors, and should the said Contractor conclude that the said Sub-contractor is delaying said work, he shall so notify said Sub-contractor, who shall within forty-eight (48) hours thereafter, furnish whatever materials are required by said Contractor, and employ additional men, working two shifts if necessary, as required by said Contractor, and in case Sub-contractor fails to comply with said demand, the said Contractor shall have the right to furnish said materials and employ said additional men and charge the expense thereof against the said Sub-contractor and deduct same from monies due or to become due on this contract, or the Contractor may, at his discretion, cancel the contract with the Sub-contractor and let the balance of the work to another contractor, on a flat contract basis, it being understood and agreed that should the new contract for the balance of the work exceed the amount of the balance due the Sub-contractor, said Sub-contractor agrees to pay whatever excess cost has been incurred by the Contractor, due to such action. In the event it becomes necessary for the Contractor to collect any deficiency from the Sub-contractor by legal action, the Sub-contractor agrees to defray all legal and court expenses in connection with such action.

13. The Sub-contractor shall immediately upon the signing of this contract, prepare and submit to the Contractor, all shop drawings necessary * * * in connection with this work. * * * No allowance for time will be made Sub-contractor for delay in preparing his drawings or in securing approval of same when such drawings are not properly prepared for approval of Owner.

14. It is expressly UNDERSTOOD AND AGREED by and between the parties hereto that time is and shall be considered the essence of the contract on the part of said Sub-contractor, and in the event that the Sub-contractor shall fail in the performance of the entire work to be performed under this contract, by and at the time or times herein mentioned or referred to, the said Sub-contractor shall pay unto the said Contractor, as damages, all such actual damages or liquidated damages suffered by the Contractor by reason of such default; and the said Contractor shall have the right to deduct from any moneys otherwise due or to become due to the said Sub-contractor, or to sue for and recover compensation or damages for the non-performance of this contract at the time or times herein stipulated or provided for.

15. The Sub-contractor knows that the Contractor must have his contract performed on or before the 1 August day of 1968; and it is therefore understood and agreed that the work provided for herein shall be entirely completed on or before ____ and to that end the Sub-contractor will perform not less than the following average amount of work in accordance with the Critical Path Schedule and as directed by the contractor.

17. When extension of time for strikes, fire casualties or for any other reason beyond its control has been granted Contractor by Architect or Owner, the same extension shall be granted said Sub-contractor, it being expressly agreed, however, that the Contractor shall not be liable to the Sub-contractor for any such delays or for any other reason whether caused by the Contractor or its other Sub-contractors, the Owner or other independent contractors of the Owner."

The critical path (CPM) schedule referred to in paragraph 15 of the subcontract, was prepared by a professional construction analyst subcontracted by Pathman. By using a computer program, the analyst organized the various construction phases in sequence and assigned a certain period of time to each phase in an effort to insure completion of the entire project by the finish date required under Pathman's prime contract with GSA. The CPM schedule was revised periodically to reflect extensions granted to Pathman by GSA.

The judgment appealed from is for damages incurred by Pathman as a result of delays in Hi-way's performance under the electrical subcontract. The first serious problem relating to Hi-way's progress involved its late submission of the shop drawings and material lists required under paragraph 13 of the subcontract. Hi-way originally submitted shop drawings to Pathman for GSA approval on May 10, 1967. Because these shop drawings were not accompanied by the required material lists, the drawings were not approved by GSA until October 23, 1967. This delay was the subject of extensive correspondence between the parties and GSA from May until November 1967.

While the parties were attempting to resolve the shop drawing dispute, construction began on the project. A general labor strike occurred in April 1967, for which GSA subsequently granted Pathman a 24-day extension for completion of its performance on the prime contract. A revised CPM schedule, dated June 3, 1967, was prepared to reflect this extension. This revised schedule was employed by the trial court as a general guide to determine when Hi-way's performance was due under the subcontract.

Hi-way was required to install header duct, hollow tubing through which electrical conduit is run, upon the cellular decks installed under Pathman's supervision. Hi-way was to begin installation of header duct on the second floor of the main structure immediately after the cellular deck had been completed, and then proceed to install the third floor duct after the deck work had been completed on that floor. Work on the cellular deck began on September 18, 1967. The second floor was completed on September 29, 1967. Since Hi-way had not at that time obtained approval of its shop drawings it could not begin the header duct installation; however, the June 3, 1967, CPM schedule did not call for the installation of header duct to begin until November 9, 1967. The entire cellular decking job was not completed until October 5, 1967. Hi-way actually began installation of header duct on December 6, 1967, and did not complete this phase of the project until December 28, 1967.

During the fall of 1967 a steelhaulers' strike occurred for which GSA granted Pathman a 20-day extension on the contract. This strike apparently did not interfere with Hi-way's part of the project. Delays in completing the header duct installation delayed the pouring of concrete over the decking and forced Pathman to winterize the structure at additional expense to permit the concrete work to proceed during the cold weather.

The second phase of the project for which damages were sought against Hi-way included the installation of ceiling light fixtures. According to the CPM schedule, installation of the light fixtures was to be completed three days after the installation of the suspended ceiling grid system. The ceiling grid system was completed on February 13, ...


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