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07/13/87 Walter E. Oldenburg, D/B/A v. Ralph L. Hagemann

July 13, 1987

CONTRACTOR, PLAINTIFF AND COUNTERDEFENDANT-APPELLEE

v.

RALPH L. HAGEMANN, D/B/A RALPH'S LATHING AND DRY WALL, DEFENDANT AND COUNTERPLAINTIFF AND THIRD-PARTY, PLAINTIFF-APPELLANT (RICHARD L. JOHNSON, D/B/A RICHARD L. JOHNSON ASSOCIATES, INC., THIRD-PARTY DEFENDANT-APPELLEE)



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

WALTER E. OLDENBURG, d/b/a Walter E. Oldenburg Plastering

512 N.E.2d 718, 159 Ill. App. 3d 631, 111 Ill. Dec. 329 1987.IL.981

Appeal from the Circuit Court of Winnebago County; the Hon. John C. Layng, Judge, presiding.

APPELLATE Judges:

JUSTICE HOPF delivered the opinion of the court. LINDBERG, P.J., and WOODWARD, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE HOPF

Defendant, Ralph L. Hagemann, d/b/a Ralph's Lathing and Dry Wall (Hagemann), brings this appeal following the trial court's dismissal of count IV of his amended counterclaim against Walter E. Oldenburg, d/b/a Walter E. Oldenburg Plastering Contractor (Oldenburg), and count II of his third-party complaint against Richard L. Johnson, d/b/a Richard L. Johnson Associates, Inc. (Johnson).

On January 10, 1984, Oldenburg filed a complaint for breach of contract against Hagemann. On a periodic and regular basis Oldenburg and Hagemann had entered into various agreements in which they would bid and subcontract certain construction jobs in the northern Illinois and southern Wisconsin area. On or about May 5, 1982, Oldenburg bid and contracted to supply certain materials and labor for a construction project located at Fort Atkinson High School in Fort Atkinson, Wisconsin. Pursuant to an oral and written agreement with Oldenburg, Hagemann, as a subcontractor, was to supply certain materials and labor for the Fort Atkinson project. Oldenburg alleged in his complaint that Hagemann failed to complete the work as agreed, thereby causing Oldenburg to provide additional materials and labor to complete the construction job.

Hagemann filed a counterclaim against Oldenburg, alleging in count III that Oldenburg had breached his agreement with Hagemann by not furnishing the proper or adequate plans and specifications upon which Hagemann relied to make his bid on the Fort Atkinson project. As a result, the ceiling tile used by Hagemann for the project was incorrect and needed to be torn down and replaced with a classification of tile more expensive than the tile which had been specified and approved and on which Hagemann had based his proposal. Hagemann sought damages for labor and material furnished, as well as for additional labor and materials, and for deprivation of payment brought about by Oldenburg's refusal to permit Hagemann to complete the job as agreed.

On March 17, 1986, count IV was added to Hagemann's counterclaim. In count IV Hagemann alleged that Oldenburg was negligent in failing to obtain a written bid for Hagemann, in failing to advise Hagemann that his bid was not in conformance with the addenda to the project and did not include certain work, in failing to conduct proper inspections, in failing to advise Hagemann that he was installing the wrong ceiling assemblies, and in failing to consult with the architect, Johnson, to determine if Hagemann's work complied with the specifications. Oldenburg moved the court to strike and dismiss count IV of the counterclaim. The court granted defendant's motion, finding that count IV sought recovery of a purely economic loss under a tort theory and

Hagemann had also filed a third-party complaint against the architect Johnson on December 21, 1984, alleging that Johnson was the architect for the design of the plans and specifications for the Fort Atkinson project, that Johnson supervised the construction work at the project, that Hagemann presented to Johnson the type of ceiling tile to be installed by Hagemann, that this tile was approved by Johnson as proper, that subsequent to the installation of the tile, Oldenburg informed Hagemann that the ceiling tile was substandard and would have to be removed and replaced, that Johnson knew or should have known Hagemann was relying on Johnson's judgment and skill in selecting the proper ceiling tile, and that, therefore, if Hagemann was held liable to Oldenburg for the costs of removing and replacing the tile, Johnson should ultimately be held liable for those costs.

On March 17, 1986, Hagemann filed count II of the third-party complaint, alleging Johnson was negligent in approving the wrong ceiling tile, in failing to properly inspect Hagemann's work and to advise Hagemann that he was installing the wrong ceiling tile, and in failing to see that Hagemann's bid conformed to the specifications. Johnson moved to dismiss both counts of the third-party complaint. The trial court granted Johnson's motion, finding that Hagemann conceded, during oral argument on the motion to dismiss, that contribution, as sought in count I, had no application to a contract action and that count II was barred by the statute of limitations and sought recovery of economic losses which were not recoverable in a tort action.

Hagemann appeals contending: (1) that count IV, the negligence count, of his amended counterclaim against Oldenburg states a valid cause of action; (2) that count IV of the amended counterclaim is not barred by the statute of limitations; (3) that the damages sought in count IV of the amended counterclaim are not economic damages barred by tort; (4) that count II of the third-party complaint against Johnson, the architect, is not barred by the statute of limitations; and (5) that the damages for economic loss sought in count II of the third-party complaint are recoverable in tort.

Count IV of Hagemann's amended counterclaim against Oldenburg alleges Oldenburg was negligent in failing to advise Hagemann that his bid was not in conformance with addenda to the Fort Atkinson project and in failing to properly inspect Hagemann's work and advise him that he was installing the wrong ceiling tile. In this court, Hagemann argues that Oldenburg, as the contractor who supplied Hagemann with the plans and specifications for the project, owed Hagemann a duty to inform Hagemann that his bid did not conform to the addenda to the specifications for the project and to inform Hagemann that he was installing the wrong materials. Hagemann maintains that Oldenburg's failure to do so amounted to a breach of duty resulting in damages to Hagemann. Conversely, Oldenburg contends that based on the contractual relationship between the parties, as admitted in both Oldenburg's complaint and Hagemann's counterclaim, no independent duty based in tort law existed, as any duty owed by Oldenburg to Hagemann would have to arise out of the parties' contractual relationship.

Hagemann relies on Normoyle-Berg & Associates, Inc. v. Village of Deer Creek (1976), 39 Ill. App. 3d 744, 350 N.E.2d 559, to support his negligence claim that due to the relationship between Oldenburg and Hagemann, Oldenburg owed a duty to Hagemann which Oldenburg breached. Normoyle, however, is distinguishable from the case at bar. In Normoyle a village had entered into separate contracts with an engineering firm and a contractor for the construction of a sewer system for the village. The engineering firm was to supervise the construction, while the contractor was to act as general contractor for the project. There was no contract between the engineering firm and the contractor. The contractor filed a complaint, alleging in two of the counts that he had incurred expenses above those originally anticipated due to the negligent supervision of the project by the engineers. The ...


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