The opinion of the court was delivered by: MARTIN ASHMAN, Magistrate Judge
MEMORANDUM OPINION AND ORDER
This case was brought as an action under the Miller Act,
40 U.S.C. § 270a et seq., and for breach of contract by Plaintiff
Advance Iron Works, Inc. ("Advance") against Defendant John
Edwards Construction Company ("JECC"), as the general contractor,
and Everest Reinsurance Company and Mid-State Surety Corporation,
as co-sureties on the Miller Act bond. JECC filed a counterclaim
alleging breach of contract and quantum meruit. The parties have
consented to have this Court conduct any and all proceedings in
this case, including the entry of final judgment. See
28 U.S.C. § 636(c); Local R. 73.1(a).
After conducting a bench trial, the Court has carefully
considered the testimony of the witnesses who appeared at trial,
the exhibits introduced into evidence, the written submissions of
the parties and the arguments of counsel. The following are the
Court's findings of fact and conclusions of law pursuant to
Federal Rule of Civil Procedure 52(a). To the extent certain
findings of fact may be deemed to be conclusions of law, they
shall also be considered the Court's conclusions of law. Similarly, to the extent matters
contained in the conclusions of law may be deemed findings of
fact, they shall also be considered the Court's factual findings.
1. JECC and Advance entered into an agreement whereby Advance
was to furnish and install certain structural steel for a project
known as the VA Hines Reactivation Center Renovation (the
"Project"). Advance claims that it furnished and erected certain
of the structural steel elements but was unable to erect and
deliver all of the steel due to delays in the Project. JECC
improperly terminated Advance's subcontract even though Advance
was ready, willing, and able to complete the work on the Project.
2. JECC claims that Advance breached the subcontract by failing
to properly complete the subcontract work on a timely basis. It
also claims that Advance breached its subcontract with Up-Rite
Steel Company, which has since settled with JECC and assigned its
claims to JECC (consolidated case 02 C 1152).
3. Advance is an Illinois corporation, with its principal place
of doing business in East Hazel Crest, Cook County, Illinois.
Advance is in the business of manufacturing and providing
structural and miscellaneous steel and related services,
including the erection of said steel. Robert Sutphen, the Vice
President of Advance, testified at trial on behalf of Advance. 4. JECC is an Illinois corporation with its offices in Downers
Grove, Illinois. JECC is in the business of acting as a general
contractor. John Pilut testified at trial. Since 1980 he has been
President and sole owner of JECC. Del Calhoun, a project manager
and general superintendent for JECC, also testified at trial. His
duties include scheduling, on-site field adjustments and, in this
case, running the Project in the field. Vincent Allegra, an
estimator and project manager for Up-Rite Steel Erectors, also
testified at trial. The final witness was Marc Bennett Karlin.
During the pertinent time, Karlin's duties at JECC included
handling invoices from vendors within the company and
distributing funds to the vendors.
5. Defendant Everest Reinsurance Company is a New Jersey
corporation, authorized to do business in the State of Illinois.
It is in the business of issuing surety bonds.
6. Defendant Mid-State Corporation is a Michigan corporation,
authorized to do business in the State of Illinois. It is in the
business of issuing surety bonds.
C. The Pertinent Contracts
7. In July of 1999, JECC was awarded a contract by the
Department of Veterans Affairs in response to its bid of
$2,855,500.00 to renovate the Reactivation Center located at the
Edward Hines Jr. VA Hospital in Hines, Illinois (the "General
Contract"). The schedule called for the Project to be completed
in November, 2000. (JTX 5.)*fn1
8. Prior to the award of the General Contract, Advance
submitted a proposal to JECC to provide steel fabrication and
erection for the Project. (JTX 1.) 9. On November 23, 1999, JECC and Advance entered into a
subcontract for the steel work for the sum of $220,000 (the
"Advance Subcontract"). (JTX 3.)
10. On March 16, 1999, Advance and Up-Rite Steel entered into a
subcontract in the amount of $50,000 for the erection of the
steel for the Project (the "Up-Rite Subcontract"). (DX 74.)
D. Relevant Provisions of the Subcontract
11. The dates of commencement and substantial completion were
not set forth in the Advance Subcontract; rather, the parties
agreed that the dates would be set according to the schedule from
JECC. (JTX 3 at §§ 9.1-9.3 & Ex. B.)
12. The parties agreed that time was of the essence in the
completion of the Advance Subcontract. (JTX 3 at § 9.4 and Ex.
13. One mobilization was included for the Advance work.
Additional mobilizations would require additional compensation
from JECC. (JTX 3 at Ex. H.) Advance agreed to "cooperate with
[JECC] in scheduling and performing their Work to avoid conflict
or interference with the work of others." (JTX 3 at Ex. B.)
14. AIA Document A201, the General Conditions of the Contract
for Construction (the "General Conditions"), was incorporated by
reference into the Advance Subcontract. (JTX 3 at § 1.2.)
Paragraph 4.3 of the General Conditions governs the procedure for
claims and disputes that might arise between JECC and Advance
with respect to the Project. (JTX 4.) A "claim" is a "demand or assertion by one of the parties seeking, as a matter
of right, adjustment or interpretation of Contract terms, payment
of money, extension of time or other relief with respect to the
terms of the Contract." It also includes "other disputes and
matters in question between [JECC and Advance] arising out of or
relating to the Contract."
15. Claims must be initiated by written notice within 21 days
after occurrence of the event giving rise to the claim or within
21 days after the claimant first recognizes the condition giving
rise to the claim, whichever is later. (JTX 4 at §§ 4.3.1 &
16. Pending final resolution of the claim, Advance was to
proceed diligently with performance of the Advance Subcontract,
unless it had not been paid, and JECC was to continue to make
payments in accordance with the terms of the subcontract. (JTX 4
at § 4.3.3.)
17. Under the terms of the Advance Subcontract, Advance was
required to promptly make all claims for additional cost,
extension of time and damages to JECC. (JTX 3 at § 5.3.)
18. Pursuant to section 6.1.1 of the Advance Subcontract, any
claim arising out of the subcontract was to be subject to
mediation as a condition precedent to the filing of a lawsuit.
Mediation was also required (with limited ...