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Holmes & Son Constr. v. Gualdoni Elec.

OPINION FILED APRIL 13, 1982.

F.E. HOLMES & SON CONSTRUCTION COMPANY, INC., PLAINTIFF AND COUNTERDEFENDANT-APPELLANT AND CROSS-APPELLEE,

v.

GUALDONI ELECTRIC SERVICE, INC., DEFENDANT AND COUNTERPLAINTIFF-APPELLEE AND CROSS-APPELLANT.



APPEAL from the Circuit Court of Williamson County; the Hon. SNYDER HOWELL, Judge, presiding. PRESIDING JUSTICE KARNS DELIVERED THE OPINION OF THE COURT:

Counterdefendant, F.E. Holmes & Sons Construction Company, Inc. (hereinafter referred to as Holmes), brought an action to recover damages for breach of contract against counterplaintiff, Gualdoni Electric Service, Inc. (hereinafter referred to as Gualdoni Electric), in the circuit court of Williamson County. Gualdoni Electric filed a three-count counterclaim for damages for breach of three contracts. On request of Holmes, the court submitted to the jury special interrogatories relating to each count. The jury returned verdicts in favor of Gualdoni Electric on all three counts. The jury, however, answered a special interrogatory finding that Holmes had not breached the contract under count III. The court entered judgment in favor of Gualdoni Electric on count I and count II and entered judgment in favor of Holmes on the jury's answer to the special interrogatory on count III. Both parties have appealed from that part of the judgment entered against them.

The following issues are raised on appeal: (1) whether the jury verdicts in favor of Gualdoni Electric on count I and count II were against the manifest weight of the evidence; (2) whether the award of damages for breach of the contract under count I was not supported by the evidence; and (3) whether the trial court erred in entering judgment in favor of Holmes on the jury's answer to the special interrogatory on count III.

Warren King is owner and president of Gualdoni Electric which has its principal place of business at Murphysboro, Illinois. Richard Lynn Holmes is the secretary-treasurer of F.E. Holmes & Sons Construction Company located at Marion, Illinois. In the spring, 1978, Holmes entered into a contract with the Veterans Administration for the construction of a medical education annex to the V.A. Hospital in Marion, Illinois. Holmes was employed as general contractor for the project. On July 7, 1978, Holmes executed a subcontract with Warren King of Gualdoni Electric providing that Gualdoni Electric furnish all necessary electrical work on the project at the V.A. Hospital. This contract was the subject of count I in Gualdoni Electric's counterclaim.

On April 7, 1978, a separate contract was entered into between Holmes and Gualdoni Electric whereby Gualdoni Electric agreed to perform all electrical work involved in the construction of an air-conditioning unit to be installed at the V.A. Hospital in Marion. This second contractual agreement was the subject of count II of the counterclaim.

Count III of Gualdoni Electric's counterclaim concerned an alleged breach of a third contract executed by the parties on January 10, 1978. This contract related to the renovation project undertaken by Holmes and Gualdoni Electric on the First United Methodist Church in Murphysboro, Illinois. All three contracts were drafted by Holmes and were basically the same standard form and included similar provisions.

Gualdoni Electric commenced work on the medical education annex project at the V.A. Hospital in the summer of 1978. On August 14, 1978, Gualdoni Electric submitted its first pay request to Holmes and received payment for its services September 18, 1978. Subsequently, Gualdoni Electric submitted similar periodic pay requests on an approximate monthly basis and payments were obtained from the general contractor, Holmes.

A total of 10 pay requests were submitted by Gualdoni Electric to Holmes between August 1978 and June 1979 for work completed by Gualdoni Electric on the project. Payments were made on seven of these requests prior to stoppage of work by Gualdoni Electric on May 24, 1979. Warren King testified at trial that the reason he ordered the Gualdoni Electric workmen to walk off the project was because of the untimeliness in payments on the subcontractor's monthly billings. The time delay between pay requests and payments varied from 34 days to 63 days. King testified that such delays were unreasonable and not in accordance with the 30-day period considered to be the construction trade norm for payments. King further testified that he informed Holmes by letter of his intention to suspend performance on all three projects pending receipt of the outstanding overdue payments for work completed by Gualdoni Electric. At the time of the suspension of work, Gualdoni Electric had been paid $37,277.47 on the medical education annex contract price of $69,872.03. The jury found Holmes in material breach of contract and awarded Gualdoni Electric $20,560.60.

Count II of Gualdoni Electric's counterclaim related to the air-conditioning project at the V.A. Hospital and, like count I, involved nonpayment of money for services rendered. It was Gualdoni Electric's contention that Holmes was in breach of contract for failing to make reasonable, timely payments for work completed on the air-conditioning project. Moreover, King testified that Gualdoni Electric's tenth pay request dated March 15, 1979, which was resubmitted May 16, 1979, had never been paid in full by Holmes. Gualdoni Electric was awarded damages in the amount of $3,907.08 that was due on the final pay request.

As to count III, the trial court vacated the jury's verdict and award of $1,584.50 in favor of Gualdoni Electric on the contract concerning the Methodist Church project in Murphysboro, Illinois. Judgment notwithstanding the verdict was entered for Holmes because of an inconsistent finding in a special interrogatory.

• 1 The first issue raised is whether there was evidence from which the jury could conclude that Holmes breached the medical education annex contract, under count I, and the air-conditioning contract, under count II. As to both contracts, Holmes argues that Gualdoni Electric breached the contracts on May 24, 1979, by ordering its employees off the jobsites and stopping work. In this regard, Holmes first contends that paragraph 5.D. of the subcontracts establishes that it was the intention of the parties to make payment to Holmes by the Veteran's Administration a condition precedent to Holmes' duty to pay Gualdoni Electric. Holmes further contends that on the date performance was suspended, Holmes had paid Gualdoni Electric all sums allowed on its accounts by the Veteran's Administration, and, therefore, the suspension of work was in breach of contract.

Paragraph 5.D. of the subcontracts provided the following:

"The contractor agrees to pay the subcontractor the amount allowed to the contractor on account of the subcontractor's work to the extent of the subcontractor's interest therein."

We agree with the finding of the trial court that the contractual provision was ambiguous. Therefore, the meaning of the provision, a fact question, was presented for determination by the jury. (Brady Brick & Supply Co. v. Lotito (1976), 43 Ill. App.3d 69, 356 N.E.2d 1126.) The evidence at trial supports the conclusion that the parties did not intend paragraph 5.D. of the subcontract to impose a condition precedent to Holmes' duty to pay Gualdoni Electric.

• 2, 3 Where a party claims that his own language creates a condition precedent to his performance, it must be established clearly that the parties intended to create a condition at the time of contracting. (South Division Credit Union v. Deluxe Motors, Inc. (1976), 42 Ill. App.3d 219, 355 N.E.2d 715.) Here, the form contracts were provided by Holmes. The price to be paid Gualdoni Electric for its performance was stated in each contract. All witnesses agreed that the payment process consisted of Gualdoni Electric submitting its requests for payment to Holmes, who would incorporate them into its requests made to the Veteran's Administration. After approval of the requests, the Veteran's Administration would pay Holmes, who would then pay Gualdoni Electric. The evidence was conflicting, however, regarding Holmes' duty to pay Gualdoni Electric if Holmes did not receive payment by the Veteran's Administration. King testified that he hadn't thought about the meaning of paragraph 5.D. at the time of contracting but that he did expect to receive payment even if Holmes was not paid. Holmes testified that he had paid Gualdoni Electric all sums approved by the Veteran's Administration. In addition, we note that payment to Holmes by the Veteran's ...


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