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Annecca, Inc. v. Met. Fair & Expo. Auth.

OPINION FILED DECEMBER 28, 1984.

ANNECCA, INC., D/B/A U.S. ELECTRIC COMPANY, PLAINTIFF-APPELLEE,

v.

THE METROPOLITAN FAIR AND EXPOSITION AUTHORITY, DEFENDANT-APPELLANT (HYRE ELECTRIC COMPANY, PLAINTIFF-APPELLEE AND CROSS-APPELLANT).



Appeal from the Circuit Court of Cook County; the Hon. Harold A. Siegan, Judge, presiding. PRESIDING JUSTICE MEJDA DELIVERED THE OPINION OF THE COURT:

Rehearing denied February 4, 1985.

Plaintiff Annecca, Inc., doing business as U.S. Electric Company (Annecca), brought this action to enjoin the Metropolitan Fair and Exposition Authority (the Authority) from performing in-house electrical services for trade shows and expositions in place of an outside contractor at McCormick Place and Donnelly Hall in Chicago. Plaintiff Hyre Electric Company (Hyre) also brought suit against the Authority alleging that it should be awarded the electrical contract pursuant to competitive bidding procedures. The two cases were initially consolidated and later severed in part, but by order of court remained consolidated for Hyre's participation in the preliminary injunction proceeding in the Annecca action which is the subject of this appeal. The circuit court held that the Authority's performance of the in-house electrical services would be ultra vires acts outside the scope of the Authority's powers and preliminarily enjoined it from removing Annecca as the interim electrical contractor.

The Authority appeals from the ultra vires holding and the issuance of the preliminary injunction. Hyre's cross-appeal also seeks dissolution of the preliminary injunction. The issues presented for review are: (1) whether the Authority's performance of in-house electrical services for trade shows and expositions is ultra vires, and (2) whether the preliminary injunction was properly entered.

Annecca and the Authority have submitted an agreed statement of facts in lieu of a record on appeal pursuant to Supreme Court Rule 311 (87 Ill.2d R. 311). The pertinent facts are set forth as follows. Defendant Authority is a municipal corporation operating pursuant to statutory authority. (Ill. Rev. Stat. 1983, ch. 85, par. 1221 et seq.) The Authority operates McCormick Place and Donnelly Hall in Chicago to accommodate public and private expositions. These facilities are used by the Authority for such activities as trade shows, theatrical performances, meetings and a wide variety of other events which require temporary installation of electrical machinery, lighting fixtures, switches, receptacles and controls. All such equipment must be removed after each event.

When the Authority presents a show, it enters into a contract with a show manager for the rental of space. The show manager sometimes hires the independent contractors to perform specific services. Such electrical work is billed to the exhibitors at an hourly rate. Prior to 1981, the trade show related electrical work was performed by Fischbach & Moore Electrical Contracting, Inc. Since January 1, 1981, the trade show related electrical work has been performed by Annecca, pursuant to a letter dated December 15, 1980. Annecca currently charges the Authority $25.82 an hour for journeyman work, $27.21 an hour for foreman work, and $29.96 an hour for superintendent work. These rates vary if overtime is necessary. The Authority, in turn, charges the exhibitors $40 an hour for the electrical work.

On November 21, 1983, the Authority placed advertisements for bids for the electrical services at McCormick Place and Donnelly Hall. Bids were only solicited for the trade show and exposition work, not for general electrical maintenance. Eight bids were received by the Authority and turned over to its accountants for financial analysis. Annecca's bid was $24.09 an hour for journeyman work, $25.09 an hour for foreman work, $26.09 an hour for general foreman work, and $29.34 for superintendent work.

At its January 13, 1984, board meeting, the Authority rejected all eight bids and directed a re-examination of the feasibility of performing the electrical work in-house. Joseph Hannon, managing director of the Authority, requested Hugo Alumni, the Authority's comptroller, to analyze the savings which the Authority could generate by performing the electrical services in-house.

Subsequently, the Authority reached an agreement with the union involved as to the Authority's performing the electrical work in-house and sent a letter to Annecca terminating its work as of June 15, 1984. Hyre filed suit on May 3, and Annecca filed suit on May 11, each alleging that the performance of electrical service in-house was ultra vires and each claiming it should be awarded the contract as the lowest bidder pursuant to the advertisement for bids. The two suits were initially consolidated and then severed, but the Hyre suit was then consolidated "for the purpose of allowing Plaintiff, Hyre Electric Company, a right to participate in the hearing for preliminary injunction." Hyre has never moved for preliminary injunction relief.

Annecca's performance of the electrical work is supervised by Michael Annecca, president of U.S. Electric. He employs a superintendent and a general foreman, as well as 21 additional electricians to perform the work for the Authority. Each of these 23 electricians is currently employed by the Authority for maintenance work when they are not doing electrical work for plaintiff Annecca.

Twenty of the 23 electricians employed by Annecca worked for Fischbach & Moore prior to performing the same services for Annecca. The Authority's letter of December 18, 1980, directs Annecca to utilize these electricians at McCormick Place. The Authority has now agreed that if it is permitted to perform the electrical work in-house, it will use the same 23 electricians currently performing the work for Annecca. In addition to the part-time electricians, the Authority employs 12 full-time electricians for electrical maintenance at McCormick Place.

Plumbing work for the trade shows is performed by employees of the Authority and billed to exhibitors at an hourly rate. In addition, security, janitorial services, coat check services and telephone rental services are all provided by employees of the Authority.

On June 14, 1984, Annecca filed a motion for preliminary injunction. Pending hearing thereon, the court on June 26, 1984, enjoined the Authority from removing Annecca as the electrical contractor. Oral argument thereafter was had on the threshold question of whether performance of electrical services by the Authority was within its statutory powers. Hyre participated in the argument although not a party to the motion. An order was entered July 18, 1984, finding that the performance of electrical services for setting up and taking down trade shows and expositions at McCormick Place and Donnelly Hall is outside the scope of the corporate powers of the Authority. The court denied the Authority's motion for judgment on the pleadings as to the power to perform the electrical services and ordered that the injunctions entered June 26, 1984, and extended on July 12, 1984, preventing removal of Annecca, remain in force until further order of court, provided that this order be vacated if Annecca does not join in seeking an immediate expedited appeal should the Authority seek an interlocutory appeal. Annecca was further ordered to post an injunction bond aggregating $75,000 to cover any losses suffered by the Authority by reason of Annecca's continued performance. The Authority filed an interlocutory appeal, and Hyre filed a cross-appeal. An expedited appeal was granted.

OPINION

The Authority contends on appeal that the performance of electrical services in-house for trade shows and expositions is not an ultra vires act. This contention necessarily involves consideration of the provisions of the Metropolitan Fair and Exposition Authority Act (the Act) (Ill. Rev. Stat. ...


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