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Pr. El. Const. Co. v. Ragnar Benson





Appeal from the Circuit Court of Cook County; the Hon. Thomas J. O'Brien, Judge, presiding.


Plaintiff, Premier Electrical Construction Company (Premier), an electrical subcontractor, filed a three-count complaint against Ragnar Benson, Inc. (Benson), a general contractor, in the circuit court of Cook County. The complaint charged Benson with wrongfully rejecting claims made by Premier for additional payment to cover costs not included in the contract between the two parties. In response, Benson moved to dismiss Premier's complaint on the ground that paragraph 14 of the same contract precluded litigation of claims by providing alternate dispute-resolving mechanisms to settle disagreements arising under the contract. After reviewing the pleadings and the contract and hearing oral argument, the trial court decided that it had no jurisdiction over the matter and therefore dismissed Premier's complaint with prejudice. Premier appeals, claiming that (1) the trial court erred in holding that all three counts of Premier's complaint were to be resolved according to the dispute-resolution procedures specified in the contract, and (2) paragraph 14 of the agreement is so vague that Premier should not be held to the methods of resolving disputes provided by that paragraph.

We find that the one count of Premier's complaint dealing with substituted construction materials is not covered by the contractual provisions for dispute resolution, and we therefore reverse the trial court's dismissal of that count. We affirm the trial court's ruling on the remaining two counts.


The record discloses that Benson was the general contractor for the construction of an addition to the Chicago Stamping Plant of Ford Motor Company. In order to prepare its own bid, Benson had distributed to various subcontractors the construction drawings and specifications provided by Ford. After Benson reviewed the bids, selected Premier as the electrical subcontractor, and in turn was awarded the general contract, the two parties signed a subcontract containing the following clauses pertinent to the instant litigation:


1. That he has examined the General Contract, all plans, drawings and specifications prepared by the Owner [Ford] * * *, for the entire work, * * * and that he and his subcontractors will be and are bound by any and all parts of said plans, drawings, specifications and General Contract insofar as they relate * * * to the work undertaken herein, and shall be further bound to the General and Special Conditions of the Specifications, also that he has thoroughly familiarized himself with * * * all other matters and conditions which will affect the operations and completion of said work and he assumes all risks therefrom.

2. To furnish and pay for all labor, material, tools, supplies, equipment * * * necessary to construct and complete in a workmanlike manner all the work included in this Agreement * * *.

13. Contractor [Benson] * * * may order additions, omissions or alterations to or in the said work, materials or equipment, but no such changes shall be made except by a written order * * * in which the additional amount to be paid * * * or to be deducted from said contract price * * * shall be stated.

14. All disputes concerning questions of fact, arising under the Agreement, shall be decided by the Contractor subject to written appeal by the Subcontractor within seven (7) days to the Contractor, who in turn will submit said appeal to the Owner [Ford] or his representative, whose decision shall be final and conclusive upon the parties thereto. In the event the Owner or its representative does not have jurisdiction over any such disputes, settlement of disputes shall be in accordance with the Standard Form of Arbitration Procedure as used by the American Institute of Architects. In the meantime, the Subcontractor shall diligently proceed with the work as directed.

21. To assume all risk and liability for loss or damage to the Subcontractor's material tools or equipment not incorporated in the work due to Subcontractor's negligence."

In addition, section 30-A of the General Conditions, mentioned in paragraph 1 of the subcontract, states,

"The Owner shall assume the risk of loss of or damage to all work performed and materials delivered to the site whether or not installed * * * caused by fire, extended covered perils, vandalism, malicious mischief, and the contractor shall in no event be liable for any such loss or damage."

During the course of construction, Premier notified Benson of three claims for additional payment. First, Premier requested $18,458.48 as reimbursement for electrical materials that allegedly had been stolen from the jobsite after delivery. Second, Premier requested additional payment for the installation of certain ceiling fixtures because its bid had been based in part on the assumption that an overhead traveling crane depicted in the construction drawings would be available for Premier's use. The unusually high ceiling precluded the use of ordinary scaffolding, so when the overhead crane was not installed and available as anticipated, Premier was forced to incur additional expenses of $11,000 for a boom truck and operator, an additional ground man, and the additional hours of labor. ...

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