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Trapani Construction Co. Inc. v. The Elliot Group Inc.

Court of Appeals of Illinois, First District, Fifth Division

September 23, 2016

TRAPANI CONSTRUCTION COMPANY, INC., an Illinois Corporation, Plaintiff-Appellee,
v.
THE ELLIOT GROUP, INC., an Illinois Corporation; ARLINGTON MARKET, LLC, an Illinois Limited Liability Company; and PARKWAY BANK AND TRUST, INC., Defendants (The Elliot Group, Inc., an Illinois Corporation, Defendant-Appellant).

         Appeal from the Circuit Court of Cook County, No. 09-CH-51534; the Hon. Franklin U. Valderrama, Judge, presiding.

         Judgment Affirmed.

          George S. Bellas and Misty J. Cygan, both of Bellas & Wachowski, of Chicago, for appellant.

          Michael J. Wall and John D. Silk, both of Rothschild, Barry & Myers LLP, of Chicago, for appellee.

          Panel JUSTICE REYES delivered the judgment of the court, with opinion. Justices Lampkin and Burke concurred in the judgment and opinion.

          OPINION

          REYES JUSTICE.

         ¶ 1 Defendant The Elliot Group, Inc. (defendant), [1] a real estate developer, appeals on order of the circuit court of Cook County entering judgment in favor of and awarding $257, 764.70 to plaintiff Trapani Construction Co., Inc. (plaintiff), a general contractor. On appeal, defendant asserts the trial court erred in finding a contract implied in fact existed between the parties because (1) defendant never accepted plaintiff's offer to provide construction services, (2) an unsigned draft contract dated July 5, 2007, required defendant's acceptance by signature, and (3) defendant sufficiently disclosed to plaintiff it was acting as an agent of Arlington Market, LLC (Arlington Market), the owner of the property. For the following reasons, we affirm.

         ¶ 2 I. BACKGROUND

         ¶ 3 In early July 2007, plaintiff sent a draft contract to defendant indicating plaintiff would provide construction services to defendant on the property located at Kensington Road and Dryden Road in Arlington Heights, Illinois (the property), for a project known as the "Arlington Market Site Work" (the project). Defendant was listed as the project owner but did not sign the contract. Nevertheless, plaintiff commenced and completed the work pursuant to the terms of the contract. During the course of plaintiff's performance, payments totaling $2, 042, 846.50 were approved and made to plaintiff based on its payment requests to defendant. Plaintiff, however, was not paid in full and requested defendant pay the remaining $257, 764.70 for its work performed on the project. Defendant refused.

         ¶ 4 On December 22, 2009, plaintiff filed a three-count complaint against defendant, Arlington Market, and Parkway Bank & Trust Co. (Parkway Bank), [2] alleging foreclosure of mechanic's lien (count I), breach of contract (count II), and unjust enrichment, in the alternative (count III). Count I was dismissed by the trial court, and as a result Parkway Bank was dismissed from the case. On April 22, 2014, a bench trial commenced on counts II and III. On April 23, 2014, plaintiff dismissed its claim against Arlington Market and proceeded against defendant alone. At the conclusion of plaintiff's case-in-chief, defendant moved for a directed verdict. The trial court denied defendant's motion on count II. Plaintiff voluntarily dismissed count III with prejudice. Thereafter, on May 7, 2014, plaintiff filed a one-count amended complaint alleging that defendant's refusal to pay the remaining $257, 764.70 constituted a breach of contract implied in fact.

         ¶ 5 No transcript of the bench trial appears in the record on appeal. The parties, however, stipulated to a bystander's report that summarized the trial proceedings pursuant to Illinois Supreme Court Rule 323(c) (eff. Dec. 13, 2005), which was certified by the trial court. The following facts were adduced at trial.

         ¶ 6 A. Plaintiff's Evidence

         ¶ 7 Plaintiff presented the following evidence. Plaintiff had performed work for defendant as a general contractor on other construction projects prior to this project. On these occasions, plaintiff had performed under an unsigned contract and was paid in excess of $18 million by defendant for its work. Similarly, plaintiff performed under an unsigned contract and was paid in full by defendant for its work on a separate building, which was another part of this project.

         ¶ 8 On March 1, 2007, plaintiff submitted a proposal to defendant to provide construction services for this project. The proposal indicated plaintiff had "[e]specially prepared" the proposal for "Mr. Lou Elliott, The Elliott Group." Thereafter, plaintiff sent five draft contracts to defendant indicating plaintiff would provide construction services to defendant for the work at issue.[3] Defendant was listed as a contracting party in all five draft contracts. None of the draft contracts were ever executed.

         ¶ 9 The last draft contract forwarded to defendant by plaintiff was dated July 5, 2007. Plaintiff's witnesses testified defendant had provided plaintiff with landscape drawings and civil drawings for the work at issue and that the drawings were attached to and made part of the draft contract dated July 5, 2007. Plaintiff's proposal was also attached to the draft contract as a "contract document."

         ¶ 10 Plaintiff's witnesses testified that, in early July 2007, plaintiff commenced performing on the work at issue.[4] Plaintiff's witnesses further testified the project specifications were provided by defendant and prepared by third parties hired by defendant. The project specifications indicated they were prepared at the request of defendant or the Elliott Home Builders. Plaintiff's witnesses asserted plaintiff performed pursuant to the terms and specifications of the draft contract dated July 5, 2007, and the attached documents.

         ¶ 11 Plaintiff's witnesses also testified plaintiff followed the procedures set out in the draft contract dated July 5, 2007, to obtain payment. The payments were made periodically. For each payment request plaintiff sent to defendant during the course of plaintiff's performance, plaintiff submitted to defendant a contract activity report, a certificate for payment, an application and certification for payment, an application and certificate for payment, and lien waivers. All documents listed defendant and plaintiff as the contracting parties and defendant as the project owner. Payments totaling $2, 042, 846.50 were approved and tendered to plaintiff based on the payment requests addressed to defendant. The contract amount on the draft contract dated July 5, 2007, matched the amounts on the payment requests and lien waivers plaintiff submitted to defendant.

         ¶ 12 Maria Weisbruch (Weisbruch), plaintiff's employee, testified she prepared the documents for the payment requests. She stated that Mark Elliott, the president of defendant, would review the payment requests and other related documents with her. Weisbruch further testified defendant would "meticulously review" the payment requests and would often require changes in them before plaintiff was paid. David Cartwright (Cartwright), plaintiff's senior vice president, testified defendant discussed the payment requests with plaintiff.[5]Defendant did not deny receiving these documents or that payments were tendered to plaintiff based on these documents.

         ¶ 13 Plaintiff's witnesses also testified plaintiff entered into subcontracts with subcontractors to perform the work required by the draft contract dated July 5, 2007. Each subcontract identified defendant as the project owner and was observed by defendant.

         ¶ 14 Plaintiff also obtained certificates of insurance for the work at issue and named defendant as an additional insured. All certificates were sent to defendant. Further, defendant was identified as the project owner in certificates of insurance obtained by third parties who were hired by defendant to work on the same project. Cartwright testified plaintiff was required to obtain the certificates of insurance before it could commence work on the project.

         ¶ 15 Plaintiff's witnesses also testified that during the course of plaintiff's work at issue, 16 written change orders were approved by defendant. Each change order identified defendant as the "owner." Change order No. 16 was signed by Jon Elliott under "The Elliott Group, Inc., Owner."[6] Weisbruch testified plaintiff could not have performed without defendant's approval of the change orders.[7]

         ¶ 16 Plaintiff's witnesses testified construction progress reports were sent to defendant weekly during plaintiff's performance until January 18, 2008. Further, plaintiff and defendant exchanged "numerous" e-mails and correspondences regarding the work at issue. Thereafter, plaintiff was not paid in full for its work and requested defendant to pay the remaining $257, 784.50 it was owed. Defendant refused. Mark Elliot testified in an affidavit that Arlington Market and defendant do not contest the amount of work that was performed by plaintiff.

         ¶ 17 Plaintiff's witnesses further testified defendant never disclosed to plaintiff that it was acting as the agent of Arlington Market. Plaintiff's witnesses also testified defendant never corrected the subcontracts, certificates of insurance, change orders, construction progress reports, and the documents for payment requests including lien waivers, which listed defendant as the project owner.

         ¶ 18 B. Defendant's Evidence

         ¶ 19 Defendant presented the following evidence. Defendant is an Illinois corporation engaged in the business of real estate development and consulting. In 2004, defendant entered into a contract to purchase the property. Defendant petitioned the Village of Arlington Heights to develop the property for the project, which the Village of Arlington Heights approved.

         ¶ 20 Thereafter, Arlington Market was formed to own, develop, manage, and sell the property. It was common practice in the residential development industry to establish a "single-purpose LLC" to own the property. In February 2007, defendant assigned its contract for purchase of the property to Arlington Market. On February 28, 2007, Arlington Market obtained a loan from Parkway Bank to finance its purchase and development of the property. On that same day, Arlington Market purchased the property. Arlington Market had no employees and employed defendant to ...


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