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03/12/87 L. K. Comstock & Company, v. the Morse/Ubm Joint

March 12, 1987

L. K. COMSTOCK & COMPANY, INC., PLAINTIFF-APPELLANT

v.

THE MORSE/UBM JOINT VENTURE ET AL., DEFENDANTS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FOURTH DIVISION

505 N.E.2d 1253, 153 Ill. App. 3d 475, 106 Ill. Dec. 462 1987.IL.290

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

APPELLATE Judges:

Justice Jiganti delivered the opinion of the court. Johnson and Linn, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE JIGANTI

Plaintiff, L. K. Comstock (Comstock), contracted with the State of Illinois, acting by and through the Capital Development Board , to perform certain electrical construction on the University of Illinois replacement hospital project. The CDB, in turn, contracted with the defendants, Morse/Diesel, Inc. of Illinois, UBM, Inc., and the Morse/UBM Joint Venture, to act as the CDB's construction manager for this project. For convenience, the defendants in this appeal will be referred to as the construction manager. No contract was entered into by Comstock and the construction manager.

Comstock brought this action against the construction manager for damages in excess of $4.2 million arising out of a 23-month delay that Comstock encountered in performing its contract with the CDB. Count I of Comstock's complaint alleges that the construction manager caused this delay, thereby breaching its duty to Comstock, by failing to, among other things, coordinate, direct, supervise, organize, and expedite the construction project. Count III alleged that these failures by the construction manager were also a breach of the contract between the CDB and the construction manager and that Comstock was an intended third-party beneficiary of the CDB construction-manager contract who could therefore bring suit against the construction manager. The construction manager moved for summary judgment with respect to counts I and III and moved to dismiss count II. The trial court granted the construction manager's motions. Comstock appeals the granting of the motion for summary judgment as to counts I and III and the denial of Comstock's motion for rehearing, which requested leave to amend the complaint. No appeal is taken with respect to count II.

Resolution of the issues on appeal depends upon the construction of various provisions contained in the contract between the CDB and Comstock, principally the no-damage-for-delay provision contained in paragraph 4 -- 12.

Paragraph 4 -- 12provides:

"C. The Contractor [Comstock] shall not be entitled to any claim for damaged [ sic ] or compensation from CDB on account of any delays . . .."

Both parties argue on appeal that this provision warrants judgment in their favor. Comstock argues that, in light of the fact that some provisions in the contract specifically refer to the construction manager with regard to claims and delays and that paragraph 4 -- 12does not mention the construction manager, paragraph 4 -- 12does not bar claims for delay by Comstock against the construction manager. Alternatively, Comstock suggests that paragraph 4 -- 12is ambiguous and thus raises a question of fact which would preclude summary judgment.

In contrast, the construction manager argues that it is entitled to the protection of paragraph 4 -- 12because the construction manager is a third-party beneficiary of the no-damage-for-delay provision, is entitled to the CDB's privileges when performing the CDB's responsibilities, and is released from liability for delay to the same extent that the CDB is released. In support of its arguments, the construction manager primarily relies upon the case of Bates & Rogers Construction Corp. v. Greeley & Hansen (1985), 109 Ill. 2d 225, 486 N.E.2d 902.

In Bates & Rogers, the plaintiff-contractor, Bates & Rogers, entered into a contract with the North Shore Sanitary District (District). The defendants were retained by the District as engineers for the project. As in this case, the defendants-engineers did not execute a contract with the plaintiffs. The plaintiffs sought damages from the defendants on the grounds that the defendants were negligent in, among other things, exercising their powers as engineers for the project. After determining that the type of damages sought by the plaintiffs were in fact delay damages, the court addressed the issue of whether the exculpatory provision agreed to by the plaintiffs in their agreement with the District also barred suit against the defendants. That exculpatory provision provided:

"'The Contractor agrees to make no claim for damages for delay in the performance of this Contract occasioned by any act or omission to act of the District or any of its representatives, or because of any injunction which may be brought against the District or its representatives, and agrees that any such claim shall be fully compensated for by an extension of time to ...


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