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Playskool, Inc. v. Elsa Benson

OPINION FILED AUGUST 25, 1986.

PLAYSKOOL, INC., PLAINTIFF,

v.

ELSA BENSON, INC., F/N/A RAGNAR BENSON, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLANT (CST CONSTRUCTION COMPANY ET AL., THIRD-PARTY DEFENDANTS-APPELLEES).



Appeal from the Circuit Court of Cook County; the Hon. Warren D. Wolfson, Judge, presiding. JUSTICE BUCKLEY DELIVERED THE OPINION OF THE COURT:

Plaintiff, Playskool, Inc., filed a complaint against Ragnar Benson, Inc., seeking damages for breach of contract and fraud in connection with the construction of a manufacturing/warehouse facility. Ragnar Benson, in turn, filed a third-party action against CST Construction Company, Midwest Concrete Products and Blakeslee-Midwest Prestressed Concrete Company seeking indemnity for its liability to Playskool. At the close of Ragnar Benson's case, the trial court entered directed verdicts in favor of all third-party defendants. Ragnar Benson, now Elsa Benson, Inc. (Benson), appeals this ruling. For the following reasons, we affirm.

Benson is engaged in the business of providing architectural, engineering and general-contracting services. CST Construction Company (CST) erects buildings. Midwest Concrete Products (Midwest) and Blakeslee-Midwest Prestressed Concrete Company (Blakeslee) manufacture precast concrete components.

In December 1972, Playskool and Benson entered into a contract whereby Benson agreed to design and construct a two-story warehouse adjacent to Playskool's existing manufacturing facility at 4501 West Augusta Boulevard in Chicago. The new facility was to be designed to connect into and become an integral part of the existing facility. Certain basic criteria for the project were provided to Benson by Playskool, including the size and purpose of the building and the fact that the building's second floor was to have a live-load-bearing capacity of 175 pounds per square foot on the second floor. *fn1

Pursuant to a provision in its contract with Playskool authorizing the use of subcontractors, Benson entered into a contract with CST wherein CST agreed to design, provide and install precast concrete beams and other structural members for the precast concrete second floor of the proposed facility. CST, in turn, subcontracted with Midwest and Blakeslee to design and fabricate various component parts for the second-floor system. Specifically, Midwest was to design and fabricate precast concrete ledger beams and columns to be used in the construction. Blakeslee was to design and fabricate precast concrete double-T beams for the project.

During the preerection stage of the project, Midwest and Blakeslee prepared shop drawings which were reviewed by Benson, as the architect/engineer of record. The shop drawings provided the dimension, materials and placement of reinforcement for the various concrete components. Certain shop drawings also provided detail as to the manner of connecting the components. Ultimately, Benson's engineering department approved each and every shop drawing in final form.

Following approval of the drawings, the precast system was erected by CST. Joseph Galassi, CST's job superintendent on the site, was accountable to Jack Bavarro, Benson's job superintendent, who was present each day of the entire construction. Galassi was also accountable to Gunnar Nelson, Benson's project manager. Joseph Pfendt, Benson's vice-president of construction, testified at trial that Bavarro and Nelson both had the duty to inspect not only the construction but also the materials. They also had the obligation to reject any materials which did not comply with the specifications and shop drawings. The construction went without incident and the precast phase of the construction was completed by February 1973.

After the construction work was finished by CST, the concrete topping which was to provide the surface for the second floor was poured by Kalman Floor Company (Kalman), a subcontractor hired by Benson. Subsequently, the walls were constructed by Benson's own employees. The second floor was framed and the roof was constructed by Benson's employees.

Playskool took possession of the new facility in December 1973. Early in 1974, however, separation occurred between the second floor and one of the outside walls. During 1974 and 1975 the separation increased in dimension and additional separations began to appear in other areas of the second floor along the same wall. In an attempt to remedy the situation, Benson installed metal brackets between the east wall of the building and the second floor. The restraints were ineffective and the separations continued.

Also during 1974, cracking developed in the second floor. Kalman, the firm which installed the concrete floor over the double-T beams, was brought in by Benson to repair the cracks. The repairs were insufficient, as the cracking continued into 1975 when a hole developed through the second floor.

Playskool asked Benson to make a recommendation as to what was needed to rectify the situation. Benson thereafter made recommendations relating to the cracks in the floor. Although all but one of the recommended repairs were implemented, the problems continued.

In February 1976, Playskool experienced its first incident of "spalling," a phenomenon involving concrete separating from the base of the ledger beam and falling to the first floor. Benson immediately inserted timber shoring at the points of failure and agreed to investigate. Subsequently, Joseph Pfendt, Benson's vice-president, inspected the site and then wrote a letter to Playskool dated March 8, 1976, in which he stated that "substantial evidence exists that virtually all the problems which plague and afflict your building are directly traceable to the destructive presence of the forklift trucks on the second floor."

The following week, however, Pfendt wrote a letter to Joseph Nuzzo of CST in which he gave different reasons as to the causes of the spalling. In that letter, he stated that the "root causes" consist of the following: (1) improperly located or omitted reinforcing steel; (2) inadequate bearing of "double-T" beams upon "inverted T" beam shelves; (3) irregularity of bearing surfaces; and (4) deficiencies in the length of "double-T" beams.

In May and July 1976, meetings were held between Benson, CST, Blakeslee and Midwest concerning implementation of a repair program. Following the meetings, 59 steel brackets were installed at locations where spalling was evident. Despite these repairs, problems persisted at the new facility. In early 1977, another spalling incident occurred.

Consequently, in April 1977, Playskool filed a complaint against Benson, alleging that as a result of Benson's defective design, construction and installation, Playskool has been and will be forced to curtail normal manufacturing and storage operations at the new facility. In its final form, Playskool's complaint against Benson contained three counts. Count I alleged breach of contract and sought $9,500,000 in damages. Count II alleged breach of an implied warranty of fitness and sought damages in the same amount. Count III alleged that Benson committed fraud by not informing Playskool of the construction defects ...


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