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B & C Electric, Inc. v. Pullman Bk. & Trust Co.







APPEAL from the Circuit Court of Cook County; the Hon. HAROLD A. SIEGAN, Judge, presiding.


Rehearing denied June 3, 1981.

This case involves a dispute between a general contractor, Talsma Builders, Inc. (TBI), and its electrical subcontractor, B & C Electric, Inc. (B & C), concerning the scope of work to be performed by B & C on the Pullman Bank & Trust Company building (Pullman). Both parties accuse the other of breach of contract. The action proceeded to trial on B & C's complaint against Pullman, TBI and United States Fidelity and Guaranty Company (TBI's surety) consolidated with TBI's complaint against B & C and Fidelity and Deposit Company of Maryland (B & C's surety). Following a lengthy bench trial the court awarded B & C a judgment against the defendants in the amount of $97,244 and a mechanics' lien on the Pullman Bank building. The court dismissed with prejudice TBI's complaint and entered judgment in favor of B & C and its surety. It is from these judgments that the defendants appeal.

The evidence presented at trial reveals the following sequence of events. In February of 1973, James Magro, an estimator for B & C, reviewed the plans and specifications for the Pullman job. Magro discovered what he believed to be a discrepancy in the specifications concerning the provision of the temporary electrical service for the project.

Paragraph 16A3(a) of the specifications provides that the electrical contractor shall "perform all Electrical work as shown on the drawings and as described in separate actions hereinafter under one Electrical Contract." Subparagraph (g) further provides that the electrical contractor shall "include all temporary power and lighting in this contract in accordance with the General Contractor's requirements." Paragraph 16B9 states that the electrical contractor shall "provide all temporary facilities required to supply temporary power and light. * * * The General Contractor shall arrange and pay for all temporary light and power, as well as the operating expense."

Magro brought these provisions to the attention of William Jackson, an officer and director of B & C. In the presence of Magro, Jackson telephoned the office of the architect who had prepared the plans to ascertain who was responsible for the cost of installing the temporary service. Someone from the architect's office responded that the electrical contractor was to install all the temporary wiring, and the general contractor was to pay for it. Thereafter, B & C telephoned TBI with its bid for the Pullman job, which did not include the cost of labor and material to install the temporary services.

Subsequently, TBI was awarded the Pullman construction contract. On March 20, 1973, TBI received B & C's written proposal to perform the electrical work on the project "in accordance with plans and specifications" for the sum of $342,500. During a phone conversation a few days later between Jackson and Arthur Talsma, TBI's president, this figure was revised to $350,000.

On April 11, 1973, TBI prepared a written subcontract agreement and forwarded it to B & C. The contract provided that B & C would furnish all necessary temporary service.

Jackson testified that when he received the proposed contract, he went to TBI's offices and informed Talsma that B & C's bid did not include the cost of the temporary services. After some discussion, Jackson suggested that B & C absorb the cost for the temporary wiring for the inside of the building, and that TBI pay for the temporary wiring of the outside of the building and the excess facilities charge. According to Jackson, Talsma agreed with this modification and advised Jackson to send him a cover letter regarding the contract.

On May 30, 1973, Jackson sent a letter to Talsma returning the contract upon which he had crossed out the provision concerning the temporary service. The letter referred to the situation "which I explained to you in your office on April 13, 1973, and at which time you requested B & C Electric, Inc. to write a cover letter regarding same."

Talsma testified that he did not meet with Jackson on April 13. He also denied the existence of any agreement concerning the cost of the temporary service and asserted that he had not heard of the alleged agreement until he read a copy of the complaint in the present action.

During the month of June 1973, B & C electricians worked at the construction site. On June 26 TBI's executive vice-president, Byron Whitford, returned the contract to Jackson along with a letter indicating that TBI would not accept the deletion of the provision concerning the temporary service.

Jackson claimed that he did not receive this letter until July 31. Jackson immediately responded with a letter dated July 31, 1973, to TBI in which he maintained that Talsma had agreed to the deletion. He further stated that B & C would proceed with its work without a contract in order to avoid any delay in the construction.

B & C continued its performance pursuant to the contract. It billed and received progress payments for labor and materials including the installation of the temporary service. Although B & C designated the $7980 due for the temporary service as an extra to the contract, TBI credited its payment for the temporary service against the $350,000 contract price.

On November 13, 1973, B & C sent TBI a breakdown of the bill for the temporary service. On November 16, 1973, Talsma wrote Jackson reiterating TBI's position that B & C was responsible for the temporary service.

Work proceeded on the construction without incident through February 1974. According to Talsma, on February 14 Magro of B & C indicated to the architect at a job-site meeting that unless TBI paid for the temporary service, B & C would not order the electrical fixtures for the job. On March 1 TBI wrote B & C disclaiming again its responsibility for the temporary service. TBI warned B & C that unless it was advised within seven days that the fixtures had been ordered, it would hold B & C in default of its contract.

David Obert, TBI's project superintendent, testified that on March 19 at a job-site meeting, Jackson informed him that B & C would not order the fixtures until the dispute was resolved. Jackson, however, denied that he made such a statement. Obert also testified that the architect informed Jackson at this meeting that the temporary power was B & C's responsibility.

Meanwhile, attorneys for both parties became involved in the dispute. Donald Bradley, TBI's attorney, testified that on March 15 Warren Ross, B & C's attorney, acknowledged that B & C would not order the fixtures or procure a Chicago building permit until TBI paid for the temporary service. However, on March 26 Ross advised Bradley that the fixtures ...

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