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06/13/97 ARCH ILLINOIS v. S.K. GEORGE PAINTING

June 13, 1997

ARCH OF ILLINOIS, INC., PLAINTIFF-APPELLANT,
v.
S.K. GEORGE PAINTING CONTRACTORS, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF-APPELLEE, V. THE SHERWIN-WILLIAMS COMPANY, THIRD-PARTY DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Perry County. No. 91-L-36. Honorable James W. Campanella, Judge, presiding.

As Corrected June 26, 1997.

The Honorable Justice Maag delivered the opinion of the court. Kuehn, P.j., and Hopkins, J., concur.

The opinion of the court was delivered by: Maag

The Honorable Justice MAAG delivered the opinion of the court:

The plaintiff, Arch of Illinois, Inc. ("Arch"), entered into a contract with S.K. George Painting Contractors, Inc. ("S.K. George"), whereby S.K. George was to apply one coat of primer and one coat of enamel to Arch's preparation plant in Percy, Illinois. The total amount of the contract was $59,000.

After the new paint allegedly started peeling off the surface of the plant, Arch filed suit against S.K. George in Perry County Circuit Court for breach of contract.

S.K. George then filed a third-party complaint against The Sherwin-Williams Company ("Sherwin-Williams") for breach of the implied warranties of fitness for a particular purpose and merchantability, alleging that it had supplied defective paint. Sherwin-Williams subsequently filed a counterclaim against S.K. George, alleging negligence and improper application of the paint by S.K. George. Later, Arch amended its complaint to add Sherwin-Williams as a direct defendant.

During discovery, Arch disclosed the amount of its claimed damages, based upon three bids for the cost of repair. The bids ranged from $120,000 to $248,000 to sandblast the peeling paint, prime the surface, and repaint the preparation plant.

In April 1996, Sherwin-Williams filed a motion in limine to preclude Arch from presenting evidence at trial of the cost to repair. The circuit court granted the motion but certified the following question for our review: "Should evidence of the cost to repair damages be excluded by a motion in limine in an industrial breach of contract case?" Pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308), we allowed the appeal.

Specifically, Arch contends:

1. A motion in limine may not be granted if it would exclude relevant evidence;

2. The cost of repair is relevant evidence in an industrial construction breach of contract case; and

3. A jury must determine both the amount of damages and the method which should be used to measure those damages.

S.K. George did not file a brief on appeal. It is well settled in Illinois that the measure of damages for a breach of contract when a builder has provided less than full performance or has provided defective performance is generally the cost of correcting the defective condition. Park v. Sohn, 89 Ill. 2d 453, 464, 433 N.E.2d 651, 657, 60 Ill. Dec. 609 (1982). However, two exceptions exist. First, if the defects can only be corrected at a cost unreasonably disproportionate to the benefit to the purchaser, or second, if correcting the defects would entail an unreasonable destruction of the builder's work, then the measure of damages is the amount by which the defects have reduced the value of the property as a whole. Park, 89 Ill. 2d at 464, 433 N.E.2d at 657; ...


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