United States District Court, N.D. Illinois, Eastern Division
May 5, 2005.
RICHARDS-WILCOX, INC. Plaintiff,
MINSOR POWERTRAIN SYSTEMS, LLC, Defendant.
The opinion of the court was delivered by: JAMES ZAGEL, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff Richards-Wilcox, Inc. ("Richards-Wilcox") designs and
installs overhead conveyor systems. Defendant Minsor Powertrain
Systems ("Minsor") is engaged in the business of machining and
painting engine blocks for the automotive industry.
Richards-Wilcox's suit for breach of contract arises out of the
failed installation of a conveyor system in Minsor's Saginaw
In February 2001, Richards-Wilcox became aware that Minsor was
interested in purchasing a conveyor system for its plant in
Saginaw, Michigan. On May 9, 2001, Richards-Wilcox submitted a
proposal for the creation and installation of an expanded
overhead conveyor system. Minsor accepted Richards-Wilcox's
proposal with purchase order # 7285, which was executed by
Minsor's plant manager, Charles Wise. The original contract
provided for the installation of a turnkey conveyor system,
installation of new trolleys and swivel on the existing conveyor
chain, and completion of work to take place during Minsor's
customer shutdown period between July 2 and July 16.
On June 20, 2001, Richards-Wilcox prepared and sent a drawing
of the proposed conveyor system to Minsor. As is typical, Minsor
requested some changes to the proposed system, including the
addition of 100 feet of new track and a change in the conveyor's
direction. To allow for these changes, Wise executed two change orders: the first on
July 2nd, 2001 and the second on July 16th, 2001. The July
2nd change order stated that "the final tie-in will require a
four-day weekend, the date to be determined," the "contract time"
would be "extended by X days," and the "contract change amount"
was $27, 471. The July 2nd change order was accepted by
Richard-Wilcox's representative, Michael Nash, the same day. The
July 16th change order stated that the final tie-in would
require 8 consecutive dates of installation: the first 4 days to
be completed during production and the last 4 days to be
completed during a shutdown of the plant. The July 16th
change order also added an additional $10,099 to the contract
price. It was accepted by Nash on August 7, 2001.
After the execution of the change orders, Richards-Wilcox
continued installing the conveyor system at Minsor's plant. In
August 2001, Richards-Wilcox's subcontractor finished all of the
installation work that could be completed without shutting down
Minsor's preexisting conveyor system. Thereafter, the parties had
difficulty scheduling a shutdown time. On October 16 and 17,
2001, the parties met to discuss a mutually agreeable shutdown
date. At that time, Minsor agreed to shut the existing conveyor
lines down on two upcoming weekends. Despite this agreement,
Minsor did not shutdown its conveyor lines and eventually elected
to abandon the project.
Richards-Wilcox now seeks summary judgment on its breach of
contract claim. Summary judgment is proper when there is no
genuine issue of material fact and the moving party is entitled
to judgment as a matter of law. Celotex Corp. v. Catrett,
477 U.S. 317, 322-323 (1986). In determining whether any genuine
issue of material fact exists, I must construe all facts in the
light most favorable to the non-moving party and draw all
reasonable and justifiable inferences in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). A genuine issue of fact exists only when, based on the
record as a whole, a reasonable jury could find for the
non-movant. Pipitone v. United States, 180 F.3d 859, 861 (7th
Richards-Wilcox argues that Minsor breached its agreement when
it refused to allow Richards-Wilcox to finish the conveyor system
installation. Minsor does not dispute that it abandoned the
project but argues instead that Richards-Wilcox had already
breached their agreement by failing to (1) complete the
installation within the designated time, (2) design a system that
met the parties' contractual requirements, and (3) install a
system that was structurally sound.
As a preliminary matter, Minsor argues that Michigan and not
Illinois law should apply to this case. As a general rule,
Illinois courts construe contracts according to the law of the
state in which the contracts were entered. Wildey v. Springs,
840 F. Supp. 1259, 1263 (N.D. Ill. 1994) (citing Wm. J. Lemp
Brewing Co. v. Ems Brewing Co., 164 F.2d 290, 293 (7th Cir.
1947)) rev'd on other grounds. That is, unless the contract is
performed in another state; in which case, the laws of that state
will govern in the event that the laws differ. Id. Minsor
claims that Michigan law should apply since the contract was to
be performed in Michigan. While Minsor is correct in this
assertion, it fails to point out any conflict between the
Illinois and Michigan laws as they apply to this case. And where
there is no demonstrated conflict, Illinois choice of law rules
dictate that I must proceed under the law of the forum state.
Sterling Fin. Mgmt., L.P. v. UBS PaineWebber, 782 N.E.2d 895
In the instant case, it is clear that Minsor breached its
agreement with Richards-Wilcox by failing to allow
Richards-Wilcox to finish the conveyor system installation. The
question which remains, however, is whether Richards-Wilcox also breached the
agreement. "It is commonplace contract law that a party cannot
have the benefits of a contract unless he has also performed the
obligations." McBride v. Pennant Supply Corp., 623 N.E.2d 1047,
1052 (Ill.App.Ct. 1993) (quoting Kobus v. Jefferson Ice Co.,
276 N.E.2d 725, 727 (Ill.App.Ct. 1971)). Thus, if
Richards-Wilcox breached the agreement before Minsor abandoned
the project, Richards-Wilcox may not be entitled to compensation.
First and foremost, Minsor claims that Richards-Wilcox breached
their agreement by failing to install the conveyor system during
the originally designated time. The contract explicitly states
that "time is of the essence, all work to be completed between
our customer shutdown periods: July 2-16." The evidence clearly
demonstrates that Richards-Wilcox could not and did not complete
the work before July 16, 2001. Richards-Wilcox argues, however,
that the terms related to timing of the project were validly
modified by two change orders submitted by Minsor.
Under Illinois law, "a valid modification of a contract must
satisfy all the criteria essential for a valid contract,
including offer, acceptance, and consideration." Schwinder v.
Austin Bank, 809 N.E.2d 180, 189 (Ill.App.Ct. 2004). When a
contract is modified, the terms of the modification, not the
original contract, control in an action for breach of contract.
Id. "A modified contract containing a term inconsistent with a
term of an earlier contract between the same parties is
interpreted as including an agreement to rescind the inconsistent
term in the earlier contract." Id. Here there is not much
debate as to the validity of the modification. The change orders
were authored by Wise, Minsor's representative, and accepted by
Nash, Richards-Wilcox's representative, and each contained
additional consideration in the form of payments to be made by Minsor: the first in the amount of $27,471 and the second in the
amount of $10,099. What is at issue is the meaning of the change
The first change order, submitted on July 2, 2001, stated that
the shutdown required to finalize the conveyor system
installation would occur on a "date to be determined" and that
the "contract time" would be "extended by X days." The second
change order, submitted on July 16, 2001, stated that the "final
tie-in will require 8 consecutive days of installation. The first
4 days can be completed during production. The last 4 days must
be completed during shutdown." Taken together, these change
orders show that Minsor was willing to and did extend the time of
installation past the contract's original July 16th deadline.
Each of the change orders clearly referenced work which was to be
completed after the original July 16th deadline, with the
July 2nd change order providing for an unspecified extension of
What's more, Minsor allowed Richards-Wilcox to continue its
installation efforts long after the July 16th deadline had
passed. Minsor allowed Richards-Wilcox to complete the first of
the four remaining days of installation in August 2001 and
continued to discuss with Richards-Wilcox possible shutdown dates
well into October 2001. This demonstrates Minsor's intention to
extend the time allowed for completion of the conveyor system
through its change orders.
Minsor argues briefly that it was fraudulently induced into
submitting the change orders at issue here. It claims that
Richards-Wilcox intentionally submitted its proposed system
drawings late so that Minsor would have to extend the time in
order to incorporate necessary changes. According to Minsor,
Richards-Wilcox was attempting to stall the project and cover-up
the fact it could not make timely completion. Given that the statements extending time were incorporated into
the change orders by Minsor's representative, it is difficult to
see how those extensions were induced by Richards-Wilcox's
actions. There is nothing in the record to indicate that Wise
pressed the timing issue with Richards-Wilcox. In fact, he did
the opposite; instead of emphasizing the need to incorporate the
changes during the prearranged time, he wrote an extension of
time into the first change order and then continued to plan the
installation after the deadline had passed. Accordingly, I find
that the original contract was validly modified to extend the
project deadline. Because the time was extended, Richards-Wilcox
did not breach the contract's timing provisions.
Next, Minsor argues that Richards-Wilcox breached the parties'
agreement by failing to provide a turnkey conveyor system and by
failing to provide a system that was structurally sound. Minsor
provides testimony that Richards-Wilcox refused to provide the
controls and other parts needed to make a turnkey system. Minsor
also provides expert testimony that the parts of the conveyors
that were installed were structurally unsound. These, unlike the
contract modification, are issues of fact, not law, which are not
properly resolved during summary judgment.
For the reasons herein, Richards-Wilcox's Motion for Summary
Judgment is GRANTED in part and DENIED in part.
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