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DOING STEEL, INC. v. CASTLE CONSTRUCTION CORPORATION

February 18, 2004.

DOING STEEL, INC., a Missouri corporation, Plaintiff,
v.
CASTLE CONSTRUCTION CORPORATION, an Illinois corporation, Defendant,



The opinion of the court was delivered by: MARVIN ASPEN, Chief Judge, District

MEMORANDUM OPINION AND ORDER

Plaintiff, Doing Steel, Inc., ("Doing Steel") filed a three-count complaint against Defendant Castle Construction Corporation ("Castle") alleging breach of contract, conversion, and breach of fiduciary duty. In an earlier opinion, we dismissed Doing Steel's conversion and breach of fiduciary duty claims. See Doing Steel, Inc. v. Castle Const. Corp., No, 02-C-1674, 2002 WL 31664476 (N.D. Ill. Nov. 21, 2002). Doing Steel then filed the present Motion for Partial Summary Judgment or, In the Alternative, to Strike Castle Construction Corporation's First and Second Affirmative Defenses. For the reasons set forth below, we deny both the motion for partial summary judgment as well as the motion to strike.*fn1

BACKGROUND

  The following facts, unless otherwise specified, have been culled from the parties' Local Rule Page 2 56.1 Statements of Material Facts. In 1999, Defendant Castle Construction entered into a contract with Illinois School District #148 to build a school in Dolton, Illinois. On September 8, 1999, Plaintiff Doing Steel entered into a subcontract agreement with Castle for steel work to be done in connection with the school construction project. (Pl.'s L.R. 56.1 Statement, Ex. A) ("Subcontract"). Castle agreed to pay $721,000 to Doing Steel for "satisfactory performance" of Doing Steel's obligations under the Subcontract. (Subcontract, Art. 4.) Castle also authorized Doing Steel to perform extra work by approving change orders to the original Subcontract agreement in the amount of $9,146.95, *fn2 for a total contract price of $730,146.95.

  Doing Steel began work on the project in December 1999 and stopped working in December of 2000. On January 5, 2001, Castle issued a notice terminating Doing Steel as a subcontractor. Doing Steel filed the present lawsuit in July 2002, claiming that it stopped working on the project in 2000 because it had not been paid by Castle for ten months and that it is still owed $220,651.95 under the Subcontract. (Pl.'s L.R. 56.1 Statement ¶ 8.) Both parties agree that Castle requested and received from the school district payments "based on the amount of structural steel in place" totaling $114,520.50, and that Castle never passed that money on to Doing Steel. Castle claims that the reason Doing Steel was not paid was because Doing Steel had not provided "satisfactory performance" as required by the Subcontract because it failed to meet construction deadlines, interfered with the work of other contractors, and ultimately left some of its work unfinished. (Def.'s L.R. 56.1 Statement ¶ 8.) Doing Steel, on the other hand, maintains that it satisfactorily performed most of its contractual obligations. (Pl.'s L.R. 56.1 ¶ 10.) Page 3

  There are several areas of disagreement between the parties. First, they dispute the amount of work Doing Steel left unfinished after Castle terminated Doing Steel from the school project. Castle claims that Doing Steel never provided or installed aluminum railings, as was required by the Subcontract. (Def.'s L.R. 56.1 Statement ¶¶ 6-7.) The parties agree that Doing Steel never fabricated or installed any aluminum for the school project. Id. However, Doing Steel denies that it was required to do so, claiming that it works only with steel, that it is "neither an installer nor fabricator of aluminum," and that it was only contractually required to perform work related to furnishing and installing steel work for the school project, (Pl.'s L.R. 56.1 Statement ¶¶ 6-7.)

  The parties also disagree over whether Doing Steel completed its work in a timely manner. Doing Steel claims that it worked "continuously" on the school project from December of 1999 to December of 2000. (Pl.'s L.R. 56.1 Statement ¶ 8.) Castle responds that Doing Steel began work on the project over one month late, created numerous other delays, and that those delays prevented other contractors from beginning their portions of the school project as scheduled. (Def.'s L.R. 56.1 Statement ¶ 21.) Ultimately, Castle asserts that it was required to make up for Doing Steel's tardiness, incurring "$144,655.27 in acceleration costs stemming from overtime paid to subcontractors, roofer expenses for changing the sequence of work, overtime paid to Castle, and overhead expenses" in order to complete the school project on time. (Def.'s L.R, 56.1 Statement ¶ 25.)

  Doing Steel brought the present action in 2002, alleging that Castle breached the Subcontract by failing to pay Doing Steel. Castle asserts three affirmative defenses based on Doing Steel's alleged failure to perform under the Subcontract. Two of Castle's affirmative defenses are the subject of the present motion for summary judgment.*fn3 Page 4

  ANALYSIS

  I. Standard of Review: Motion for Summary Judgment*fn4

  Summary judgment is proper only when "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed R. Civ, P. 56(c). A genuine issue for trial exists when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). This standard places Page 5 the initial burden on the moving party to identify "those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (citations omitted). Once the moving party has met this burden of production, the nonmoving party "must set forth specific facts showing that there is a genuine issue for trial." Fed.R. Civ. P, 56(e). In deciding whether summary judgment is appropriate, we must accept the nonmoving party's evidence as true, and draw all inferences in that party's favor. See Anderson, 477 U.S. at 255.

  II. Discussion

  A. First Affirmative Defense: Set Off for Costs Incurred by Castle After Doing Steel's Termination

  In its first affirmative defense, Castle claims that it is entitled to a set off against any damages awarded to Doing Steel. Upon its termination from the Subcontract, Castle argues, Doing Steel became liable for costs incurred in completing Doing Steel's assigned tasks. Doing Steel does not contest the legal sufficiency of Castle's defense since the Subcontract explicitly allows Castle to recover the costs of performing Doing Steel's work upon Doing Steel's termination. (Subcontract, Art. 10.1.2.) Rather, Doing Steel argues that summary judgment is proper because Castle has not ...


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