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AVIATION CONSTRUCTORS v. FEDERAL EXPRESS CORP.

February 2, 1993

AVIATION CONSTRUCTORS, MUNOZ, CASTLE, A JOINT VENTURE, CONSISTING OF AVIATION CONSTRUCTORS, INC., ALEX MUNOZ GENERAL CONTRACTOR, INC., and CASTLE CONSTRUCTION CORPORATION, Plaintiffs,
v.
FEDERAL EXPRESS CORPORATION, Defendant.



The opinion of the court was delivered by: MARVIN E. ASPEN

 MARVIN E. ASPEN, District Judge:

 The plaintiff this contract dispute, a joint venture consisting of Aviation Constructors Inc., Alex Munoz General Contractor, Inc., and Castle Construction Corp., (collectively "ACI"), has moved for partial summary judgment on the complaint, *fn1" summary judgment on defendant Federal Express Corporation's ("Federal Express") counterclaim, and for sanctions. For the following reasons, we deny plaintiff's motions for partial summary judgment on the complaint, deny in part and grant in part its motion for summary judgment on the counterclaim, and grant its motion for sanctions.

 I. Factual Background

 In 1988, Federal Express began work on the design and construction of a 287,000 square foot Metroplex Terminal at O'Hare International Airport. Having hired Teng & Associates to design the facility, the project proceeded on a fast track, with some portions of the project being built while others were still being designed. Federal Express divided the construction work into five bid packages, and entered into separate agreements with different contractors on each of them.

 In June 1988, ACI agreed with Federal Express to perform Bid Package No. 3. The relevant contract contained three parts. First, ACI was to construct the foundation walls and underground utilities for the cargo facility. Federal Express agreed to pay $ 2,420,783 for the work, which was to be completed by December 2, 1988. Second, ACI agreed to provide administrative and coordinating services. Under the contract, Federal Express reserved the right to assign bid packages and subcontractors to ACI. For a fee, ACI would then administer or coordinate the subcontractors' activities. The fee was to be based on the value of the assigned subcontracts and was to be calculated on a sliding scale. ACI was to receive a maximum fee of $ 1,400,000 for subcontracts exceeding $ 35 million. Finally, ACI was to provide general conditions and coordination from December 2, 1988 through April 1, 1990 (the projected completion date for the entire Metroplex) for work subsequent to the construction specified in Bid Package No. 3. Federal Express was to pay $ 49,224 per month for this service, with the total fee for the general conditions not to exceed $ 787,584.

 Under the contract, ACI was to furnish a performance bond in the amount of its fees. For its part, Federal Express was to reimburse the contractor for the cost of the bond.

 On December 26, 1989, Federal Express took partial occupancy of the facility. In 1990, after disagreements had erupted between the parties, ACI filed suit against Federal Express to recover on the contract. Federal Express answered the complaint and counterclaimed for over $ 1 million dollars. *fn2" $ 885,960 of the counterclaim stemmed from Federal Express' allegation that the project should have been completed prior to December 26, 1989.

 In April, 1991, ACI served a request for "all reports, diaries, logs or other such documents, including site studies, test reports, daily and weekly reports, supervisor's diary, periodic status reports, internal status report memoranda, informal notes, and meeting minutes. Federal Express did not turn over any project status reports at that time.

 In February, 1992, ACI deposed James E. Gibson, a Federal Express employee, who testified that monthly project status reports were issued on the Metroplex project. In March, six such status reports were turned over to plaintiff, three of which (September, November, and December, 1989) indicated that partial occupancy would occur on December 23, 1989, and stated that this was six months ahead of schedule. On April 3, 1992, defendant voluntarily dismissed those counterclaims relating to the alleged delay.

 II. Discussion

 A. First Motion for Partial Summary Judgment on the Complaint

 In its first motion for partial summary judgment on the complaint, ACI seeks judgment on the amounts due it under the contract for (1) administration of subcontracts, (2) provision of general conditions, and (3) payment of ...


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