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Milligan Steel Erec. v. Garbe Iron Works





Appeal from the Circuit Court of Will County; the Hon. Thomas W. Vinson, Judge, presiding.


This case concerns a dispute primarily between a general contractor, Garbe Iron Works, Inc. (Garbe), and its subcontractor J.E. Milligan Steel Erectors, Inc. (Milligan). The subject matter of the dispute is a steel truss fabricated by Garbe according to "checked" detail drawings prepared by Kenneth Boitz, doing business as Technical Metals Service, and erected by Milligan over a plant owned by Olin Corporation (Olin). In 1978 Olin hired a company named Badger America to assist in the installation of pollution control systems for its factory near Joliet consisting of several buildings, one of which produced phosphoric acid. Badger America acted as Olin's agent and entered into an agreement around January of 1979 with Garbe for the fabrication and construction of steel structures for two projects — the "Phos Acid" and "Tripoly A & B" projects.

Garbe hired Milligan to provide labor and materials for the construction work and Boitz to provide checked detail drawings for the Phos Acid structure. Boitz' detailing contract was for fabrication only. It did not include erection drawings. Testimony at trial established that Kenneth Boitz prepared the drawings, and his partner, Philip Onagan, checked them. Boitz delivered the drawings to Ed Vedral, an employee of Garbe, and recommended that the truss be shop-assembled because of the large number of bolts required and to make sure the pieces fit together properly. Garbe paid $9,400 for the drawings.

In April of 1979, Mike Milligan, president of Milligan, and George Gebhardt, Milligan's field superintendent of erection, met with John Smith, salesman for Garbe, Don Lait from Olin, and Ivor McTavish, from Badger America, to arrange for the erection of the truss over the Phos Acid building. Because of the emission of noxious fumes from the plant operation, the factory had to be shut down on the date of erection. At this meeting, Olin agreed to shut down for the day at 5 a.m. of May 5, 1979, a Saturday.

In preparation for the erection, Milligan assembled the truss on the ground to the extent Gebhardt thought possible during the week leading up to May 5. Early in the morning of May 5, with the use of two cranes, the truss was lifted into place. Then one crane was cut loose to lift a vertical member which was to be inserted in the air at the point of a splice along the horizontal chord. After detaching the second crane, the first of four end diagonal members was lifted (by crane) to be attached to the vertical columns. At that point Al Wheeler, Milligan's erection foreman, learned that the diagonals were all cut a foot too long. Wheeler told Gebhardt about the problem and Gebhardt testified that he immediately went to Badger America's trailer on the site to call Garbe for instructions on handling the faulty members. According to Gebhardt, Ivor McTavish was at the site all day of May 5 and was present during his attempt to telephone Garbe. McTavish, however, denied learning that there was any problem with the end diagonals until the week following May 5. In any event, Gebhardt opted to lift two of the end diagonals for the east side and hang them to the columns so that the crane could be moved off the railroad tracks. The other two end diagonals were left lying on the ground when Gebhardt took his men off the job around 6 p.m. that evening. The truss at that point was set with the exception of the end diagonals and some other work along the west side.

According to Gebhardt, John Smith, McTavish, Ron Hudson, Badger's job engineer, Mike Milligan and Gebhardt met at the site on May 7 to discuss the problem with the end diagonals. The possibilities of cutting off a foot or refabricating the pieces were discussed, but no decision was reached. Most of the balance of construction work on the project was completed by Milligan so that Badger America could place fiberglass duct work on the truss. Two 12 foot sections of the ductwork were hoisted into place on May 8, but the remaining 30 sections had to be refabricated and were not installed until three weeks later.

According to McTavish, the problem with the end diagonals was first brought to his attention during the middle of the week following May 5. At that time he visually observed a "very noticeable deflection" in the lateral top chord along the north side of the truss. On May 30, McTavish directed that no more load be placed on the truss. On June 6, McTavish directed Milligan to cut the diagonals and attach them. This was done. Garbe then hired Robert Layer, a structural engineer, to investigate the truss problem.

On June 13, 1979, Layer visited the site and determined that the bottom chord, if not the top chord, was overstressed and would continue to subside without some support. Milligan proposed to do the truss repair work. However, because of a disagreement between Garbe and Milligan as to which entity was responsible for causing the deflection, Garbe chose to hire another firm, CT Erectors, to repair the truss. The out-of-pocket costs to Garbe of the repair work was $61,800.

Garbe discontinued payments to Milligan when it estimated that the amount it still owed on its contract and approved back charges equaled the cost of the truss repairs. Milligan, accordingly, pulled its men off the job on October 16, 1979. At that time the contract work on the Phos Acid project was considered substantially completed, but the Tri-Poly A & B project was not.

On October 23, 1979, Milligan had the cranes it had rented from Central Steel Company removed from the site. In November, at Garbe's request, representatives of Garbe and Milligan met at the site to review job tickets for back charges. Garbe made its last payment to Milligan on December 17, 1979. Finally, on January 15, 1980, Milligan served notice of a claim for lien in the amount of $95,044.43 on Garbe and Olin. The notice on its face claims a lien for "all work done pursuant to [the] contract [which] was completed on October 16, 1979."

The instant action was filed in the circuit court of Will County on April 16, 1980. The complaint contains three counts — count I for an accounting and foreclosure of a mechanic's lien against Garbe and Olin; count II for an account stated against Garbe; and count III for contract damages against Garbe. Garbe answered and counterclaimed for breach of contract damages in the amount of $90,000 against Milligan. Garbe further filed a third-party complaint and counterclaim against Ken Boitz and his partners, Philip Onagan and William Morgan, d/b/a Technical Metal Service, for indemnification of the amount owed by Garbe on Milligan's claim. Boitz answered the third-party complaint and countercomplaint, and counterclaimed against Milligan for indemnification of the amount that might be owed by Boitz on Garbe's third-party claim. Milligan then counterclaimed against Boitz, d/b/a Technical Metals Service, for negligence. After a lengthy bench trial on the merits, the court entered judgments as follows:

(1) On Milligan's complaint count I — a mechanic's lien for plaintiff Milligan and against Garbe and Olin in the amount of $64,144.43, plus statutory interest; count II — for defendant Garbe; count III — contract damages for plaintiff Milligan and against Garbe in the amount of $64,144.43;

(2) On Garbe's countercomplaint — for counterdefendant Milligan;

(3) On Garbe's third-party complaint/countercomplaint — for Garbe and against Boitz ...

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