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W.h. Lyman Constr. Co. v. Vil. of Gurnee

OPINION FILED APRIL 30, 1980.

W.H. LYMAN CONSTRUCTION CO., PLAINTIFF-APPELLANT,

v.

THE VILLAGE OF GURNEE ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Lake County; the Hon. LLOYD A. VAN DEUSEN, Judge, presiding.

MR. JUSTICE UNVERZAGT DELIVERED THE OPINION OF THE COURT:

W.H. Lyman Construction Co. bid successfully on a sanitary sewer project advertised by the Village of Gurnee. Lyman's bid was computed on the basis of the plans and specifications prepared for the village by Baxter & Woodman. Baxter & Woodman also acted as supervising engineer on behalf of the village for the project. The amount of the contract entered into by Lyman and the village was $349,307.04. Following completion of the project, Lyman filed a complaint which was stricken on motions by both the village and Baxter & Woodman. A later amended complaint was filed by Lyman which alleged that the village had breached its contract with Lyman and its implied warranty of the accuracy and sufficiency of the plans and specifications, and that Baxter & Woodman acted negligently and breached its implied warranty of accuracy and sufficiency of the plans and specifications. As the result of these breaches by the village and Baxter & Woodman, Lyman alleged it was required to expend a significant amount over and above the stated amount of the contract and by its complaint sought damages in the amount of $675,000.

The village and Baxter & Woodman filed motions to strike and dismiss the amended complaint. Lyman responded to the motions, the court heard arguments of counsel, and Lyman's amended complaint was stricken for failure to state a cause of action against either the village or Baxter & Woodman for breach of contract, breach of implied warranty or negligence. Lyman filed a motion to reconsider which was denied after additional arguments of counsel. This appeal was then timely filed in order to determine whether the court improperly dismissed the complaint as to both defendants for failure to state a cause of action.

When Lyman began work on the project, a portion of which ran parallel for a distance with a length of the DesPlaines River, it was discovered that the sewer had to be constructed through subsurface soil that was for the most part water-bearing sand and silt, rather than clay as indicated by the soil boring logs shown on the plans. A high ground water table was also discovered, and this required that Lyman install numerous dewatering wells. Due to the high subsurface hydrostatic pressures, the manhole bases as designed were unable to be sealed by the means permitted in the plans and specifications. Lyman requested approval from Baxter & Woodman to use a sealing method which was prohibited by the plans, and Baxter & Woodman allegedly did not grant this approval for many months, causing delay in sealing the bases. The project was finally completed, was accepted by the village, and is functioning.

Lyman contends its complaint states a cause of action and in support of its contention argues that an owner — in this case the village — warrants as a matter of law the accuracy and sufficiency of the plans and specifications it supplies to the contractor, and that this implied warranty is not overcome by the general exculpatory clauses provided in the plans and specifications. Lyman further contends that a cause of action has been stated against the engineer in that Baxter & Woodman owed it a duty of care in both its design and administration of the project so as to avoid negligently causing extra expenses in the completion of a functioning project and that this duty of care is not negated by the inclusion of expulatory and admonitory language in the plans and specifications.

The village first argues that when plaintiff's complaint is stripped of mere conclusions and allegations which are directly contradicted by provisions of the contract or which negate the element of reasonable reliance necessary to a breach of warranty claim, no cause of action is stated. Secondly, the village distinguishes the cases cited by the plaintiff for the proposition that the village impliedly warrants the plans will enable the contractor to satisfactorily complete the project, and if faulty specifications delay completion of the project, the contractor is entitled to recover damages for the village's breach of its implied warranty. The village's third argument is that it would be contrary to public policy and detrimental to the public interest to ignore provisions which are inserted into a contract for specific objectives and which outline the responsibility of a prospective bidder.

Baxter & Woodman also argues that when the complaint is stripped of allegations which contradict specific portions of the contract which was attached as an exhibit, no cause of action is stated. Further, Baxter & Woodman argues that contractors who depart from the plans made a part of the contract do so at their own peril.

This case lends itself to three main considerations: (1) Does the village impliedly warrant that the plans and specifications it requires the contractor to follow will enable it to produce the desired improvement? (2) Can the engineer who designs plans and specifications for the village be held responsible to the contractor in tort for delay occasioned by the faultiness of those plans and specifications and by its administration of the contract? (3) When plaintiff's complaint is stripped of allegations contrary to the provisions of the contract, is a cause of action stated?

• 1 Considering the third point first, the contract which plaintiff and the village entered into was appended to the plaintiff's complaint as an exhibit. Cases cited by the village are persuasive for the proposition that facts set forth in an exhibit control over contrary allegations set forth in a complaint. (DeVito v. Village of Elburn (1962), 37 Ill. App.2d 59; Kuch & Watson, Inc. v. Woodman (1975), 29 Ill. App.3d 638.) This means that the allegations plaintiff set forth regarding the inaccurate soil-boring logs and the presence of the high ground water table requiring the installation of dewatering wells must be disregarded since they are in direct contradiction to several provisions of the contract wherein plaintiff assumed the risk of encountering adverse subsurface soil conditions which would require dewatering and other drainage measures.

• 2, 3 It is well settled that a contractor cannot claim it is entitled to additional compensation simply because the task it has undertaken turns out to be more difficult due to weather conditions, the subsidence of the soil, etc. To find otherwise would be contrary to public policy and detrimental to the public interest. It is not unusual for municipalities and local government units to use contract forms and "Instructions to Bidders" which require the contractor to make an independent inspection of the work site, including subsurface conditions. There was nothing in the plans in the case at bar which might have indicated to the plaintiff that the soil-boring logs shown on the plans were meant to be specially relied upon so as to relieve the contractor of its contractual responsibility to inspect the site, including subsurface conditions. There are instances, however, where an agency seeking bids as low as possible will undertake to conduct soil borings on its own so that bidders may rely on them and need not include in their proposals additional amounts to cover the costs of their own soil borings and the chance of encountering poor subsurface conditions. Fattore Co. v. Metropolitan Sewerage Com. (7th Cir. 1971), 454 F.2d 537, cert. denied (1972), 406 U.S. 921, 32 L.Ed.2d 120, 92 S.Ct. 1779, and (7th Cir. 1974), 505 F.2d 1, is an example of a case wherein broad exculpatory clauses requiring the contractor to examine the site were held not to preclude the contractor from relying on the subsurface conditions indicated by the plans and specifications. This was because the agency supplying the specific information about the subsurface conditions in order to get lower bids was deemed to warrant their accuracy. The contract in Fattore also contained a "changed conditions" provision which is not evident in the case at bar. Since there is nothing to suggest in the case at bar that the Village of Gurnee was utilizing this type of bidding procedure, the boring logs in the instant case were entitled to no special reliability and did not relieve plaintiff of its duty to comply with the site inspection requirements, nor its duty to deal with adverse subsoil conditions and additional expenses encountered during construction due to plaintiff's failure to so inspect. Furthermore, the affirmative duty imposed by the contract on plaintiff to inspect the site, including subsurface conditions, would negate the element of plaintiff's reliance on the soil borings which would be a necessary element to prove misrepresentation on the part of Baxter & Woodman of the condition of the subsurface soil. This is true even though there is no privity of contract between plaintiff and Baxter & Woodman. Accordingly, we affirm the dismissal of the complaint as to both defendants insofar as the allegations therein related to subsurface conditions which plaintiff had a duty to inspect.

If these were the only allegations plaintiff had made, the matter could be resolved fairly in favor of the defendants because the complaint would have been stripped of allegations which might conceivably have stated a cause of action. However, plaintiff has also alleged that the village required and included, and the engineer designed and included, in its plans and specifications a manhole base which, when constructed and sealed according to the plans, was inadequate to withstand the subsurface hydrostatic pressures so as to meet the allowable infiltration requirements set forth in the plans and specifications. The specific allegations read as follows:

"8. That defendant, VILLAGE OF GURNEE, breached its contractual obligation to plaintiff and the implied warranty of accuracy and sufficiency of its plans and specifications in one or more of the following respects:

(c) Included and required in its plans and specifications the design of a manhole base which when constructed could not withstand the hydrostatic sub-surface pressures and which could not be sealed by any of the methods permitted by the plans and specifications, but which in fact could only be brought within the allowable infiltration requirements of the specifications by methods forbidden by the said plans and specifications.

9. That defendant BAXTER & WOODMAN, INC., negligently and in breach of implied warranty of accuracy and sufficiency of its plans and ...


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