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08/31/95 LAKE COUNTY GRADING COMPANY LIBERTYVILLE

August 31, 1995

LAKE COUNTY GRADING COMPANY OF LIBERTYVILLE, INC., PLAINTIFF-APPELLANT,
v.
ADVANCE MECHANICAL CONTRACTORS, INC., DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Lake County. No. 93-L-588. Honorable William D. Block, Judge, Presiding.

The Honorable Justice Bowman delivered the opinion of the court: Thomas and Hutchinson, JJ., concur.

The opinion of the court was delivered by: Bowman

JUSTICE BOWMAN delivered the opinion of the court:

Plaintiff, Lake County Grading Company of Libertyville, Inc., appeals the entry of judgment for defendant Advance Mechanical Contractors, Inc. following a bench trial. We affirm.

The following is a summary of the facts relevant to the issues raised on appeal. In April 1992, defendant submitted a bid to perform construction work for Abbott Laboratories (Abbott). The construction project on which defendant bid was composed of two major parts. The first part, to be performed by defendant, involved the installation of underground lake water, fresh water, and fire water lines. The second part involved the installation of a sanitary sewer line. Because defendant did not possess the equipment necessary to install the sanitary sewer line, it entered into a subcontract with plaintiff for this portion of the work.

The contract required plaintiff to locate and lay out the path of the sewer line which it was to install. On May 20, 1992, defendant notified plaintiff by letter that the correct location for the sewer line was 25 feet west of the location shown on drawings prepared for the project. This location was 10 feet west of the new fresh water line, which defendant was in the process of installing. The May 20 letter further stated that the proper location of the sewer line was to be coordinated with defendant's field foreman. Ultimately, plaintiff mislocated the sewer line. Rather than installing the sewer line 10 feet west of the fresh water line, plaintiff installed it 19.87 feet west of the fresh water line.

On June 30, 1992, representatives of Abbott, plaintiff, and defendant met at the Abbott construction site. At this meeting, the parties discovered for the first time that the location of the sewer line was in conflict with the proposed foundation for a structure on Abbott's property known as building R12/R13. However, according to the testimony of Timothy Klein, defendant's plumbing division manager, defendant did not know as of June 30, 1992, that plaintiff had mislocated the sewer line. Rather, Klein testified, defendant assumed the conflict between the sewer line and the R12/R13 building was due to Abbott's extension of the building's foundation.

Abbott's site construction manager, Elizabeth Riordan, testified that she became aware of the conflict between the R12/R13 foundation and the sewer line on June 30, 1992. At this time, however, she did not know the cause of the conflict. On July 1, 1992, Abbott issued a "speed letter" requesting a price proposal for relocating the sewer line. According to Riordan, when Abbott issued the speed letter, it did not know who was at fault for the conflict and wanted to know the extent of its exposure. Riordan confirmed that the true cause of the conflict, plaintiff's mislocation of the sewer line, did not come to light until some time after the June 30 meeting.

Plaintiff responded to the speed letter with a proposal to relocate the sewer line and remedy the conflict with the R12/R13 foundation. On July 6, 1992, defendant directed plaintiff to proceed on a "time and materials" basis, and the sewer line was moved accordingly. Klein stated that "a couple of weeks" after defendant authorized plaintiff to relocate the sewer line, and after the relocation work was complete, he discovered that plaintiff had mislocated it the first time. According to Klein, if plaintiff had installed the sewer line as instructed in the May 20 letter, it would not have been in conflict with the R12/R13 building. Following the revelation that plaintiff had mislocated the sewer line, defendant refused to pay for its relocation. However, defendant did pay in full for the original installation, making payments on August 4, 1992, and January 19, 1993.

Plaintiff filed a two-count complaint against defendant seeking payment for the relocation of the sewer line. Count I alleged a breach of contract; count II alleged a violation of section 2 of the Consumer Fraud and Deceptive Business Practices Act (Act) (815 ILCS 505/2 (West 1994)). Specifically, the complaint alleged that on or about July 6, 1992, plaintiff entered into a contract under which plaintiff agreed to relocate the sewer line on Abbott's property. The complaint alleged that plaintiff performed the work called for but that defendant breached the contract by failing to pay for the work. Count II repeated the factual allegations of count I and also alleged, on information and belief, that at the time defendant engaged plaintiff to relocate the sewer line defendant had no intention of paying for it. Finally, count II alleged that plaintiff relied on defendant's misrepresentations that it would pay for the relocation. Count II did not allege any evidentiary facts; instead, it simply incorporated the facts contained in count I.

Pursuant to defendant's motion to dismiss under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1994)), the trial court found that the claim did not fall within the ambit of the Act because it involved only an isolated breach of contract between entities which were not consumers of each other's goods or services. Accordingly, it dismissed count II of the complaint without prejudice. Plaintiff then filed an amended count II which was identical to the original in all respects except for the addition of an allegation that "Plaintiff and Defendant have been engaged in another project and Plaintiff has bid on a number of projects at the request of the Defendant." Pursuant to a second section 2-615 motion filed by defendant, the trial court dismissed count II of the amended complaint and denied plaintiff's motion for leave to file a second amended complaint.

Regarding count I, the trial court allowed defendant to assert the affirmative defense of setoff. In support of its setoff defense, defendant alleged that plaintiff's breach of the original contract for the installation of the sewer line necessitated the relocation of the sewer line. Defendant asserted that, because plaintiff had breached the original contract, it was entitled to set off the amounts claimed by plaintiff for the relocation. In response to this affirmative defense, plaintiff contended that defendant accepted plaintiff's performance under the original contract and waived its right to seek a setoff of the amounts due on the relocation contract when it authorized plaintiff to proceed with the relocation on a "time and materials" basis.

The cause proceeded to trial. After hearing testimony and receiving various documentary exhibits, the trial court entered judgment for defendant. On appeal, plaintiff contends (1) the trial court erred in dismissing count II with prejudice; and (2) the trial court's finding that defendant was entitled to a setoff is against the manifest weight of the evidence.

Plaintiff's first contention is that the trial court erred in dismissing count II. In support of this contention, plaintiff argues that (1) a single deceptive act is sufficient to permit recovery under the Act; and (2) the Act's protections are not limited to consumers. Plaintiff further argues that the trial court abused its ...


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