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02/23/88 the People Ex Rel. Samuel v. Fgm

February 23, 1988





THE PEOPLE ex rel. SAMUEL K. SKINNER, Chairman of the

520 N.E.2d 1024, 166 Ill. App. 3d 802, 117 Ill. Dec. 673 1988.IL.250

Appeal from the Circuit Court of Effingham County; the Hon. William D. Kelly, Judge, presiding.


JUSTICE CALVO delivered the opinion of the court. KARNS and WELCH, JJ., concur.


Plaintiffs, the People of the State of Illinois on relation of the Chairman of the Capital Development Board and Altamont Community Unit School District No. 10 (Altamont), have perfected this appeal from the dismissal of their causes of action against all defendants on the ground that they were barred by section 13-214 of the Code of Civil Procedure (the Construction Limitations Act) (Ill. Rev. Stat. 1983, ch. 110, par. 13-214). The facts are as follows.

On October 15, 1974, defendant FGM, Inc., a firm of architects and engineers, entered into an agreement with the CDB to plan, design, and supervise the building of an elementary school for Altamont. This agreement was subsequently modified, but these modifications do not affect the issues at hand.

On May 5, 1975, defendant Lipps Construction Company entered into a construction contract with the CDB and secured a performance bond from defendant Fidelity Deposit Company of Maryland. The construction contract provided that Lipps would construct the school in accordance with contract specifications, that it would supervise and coordinate all construction work, that the work would be free of faults and defects, and that it would be responsible for the acts or omissions of its subcontractors. Among others, Lipps subcontracted work on the project to defendant Eater Sheet Metal Company and defendant Cox & Hunter Company.

Section 7 -- B of the roofing system specifications authorized Lipps to select defendant Celotex Corporation to manufacture certain "built up" materials (i.e., asphalt, asbestos base sheets, ply felts, emulsion and bitumen) which were to be installed on top of a Zonolite Deck manufactured by defendant W. R. Grace & Company. Together, these components were to comprise the elementary school roof.

Prior to completion and pursuant to specifications established by CDB, Lipps obtained a 10-year "Roof Inspection and Service Contract" from Celotex, with an option to renew for an additional 10 years. This contract, which became effective on May 6, 1976, the date of completion, provided that Celotex would pay the cost of repairing roof leaks attributable to (1) deterioration caused by usual and ordinary effect of wear and weather, (2) errors or mistakes in workmanship in applying roofing materials, (3) blisters, bare spots, buckles, wrinkles and ridges, (4) splits in roofing membrane or base flashing (except as excluded), (5) damage to roofing membrane or base flashing resulting from extreme temperatures, (6) breaks in flashing strips over gravel stop or other metal flanges, and (7) slippage of roofing membrane or base flashing. Among other things, this warranty did not cover (1) structural failures such as settling, shifting, distorting, splitting, cracking of roof decks, walls, girders, foundations, etc., or (2) improper application or failure of any component underlying the roofing membrane or base flashing such as deck, roof insulation, vapor barrier, etc. The contract further provided that CDB or Altamont would promptly notify Celotex of any leaks in the roof. Celotex would then inspect the roof to determine whether or not the cause of the leak was covered by the contract. Although Celotex initially refused to issue the contract, Celotex did so in 1980 after Celotex employees inspected the roof.

Shortly after construction was completed Altamont noticed some water leakage. Each time Altamont noticed a leakage problem, it notified FGM and Celotex. Although leaks persisted between 1976 and 1980, the problem became more frequent and severe in 1980. In 1980, plaintiffs sought repairs from Celotex in accordance with the "Roof Inspection and Service Contract."

From 1980 through 1982, Celotex and FGM attempted to solve the leakage problems with no success. In late 1982 or early 1983, plaintiffs became aware that Celotex believed the roofing problems at the Altamont school were not covered by the contract. Plaintiffs allege that the defects which they subsequently discovered were latent and incapable of being detected by visual inspection. On June 19, 1983, plaintiffs filed a complaint against all defendants which was subsequently amended twice. Plaintiffs' first amended complaint consisted of 12 counts: Respectively, counts I, II and IV alleged that Celotex, FGM, and Lipps breached their contracts with plaintiffs; counts VII and IX alleged that Eater and Cox & Hunter materially breached their contracts with Lipps and that, as a consequence, they were liable to plaintiffs, who were third-party beneficiaries of their contracts with Lipps; counts III, V, VIII and X alleged negligence on the part of FGM, Lipps, Eater and Cox &

Hunter; counts XI and XII alleged liability on the part of Celotex and Grace for manufacturing materials which were "unreasonably dangerous to plaintiffs' property when used as directed and for the purposes sold;" and count VI alleged ...

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