ARCHON CONSTRUCTION COMPANY, INC., Plaintiff-Appellant and Counterdefendant-Cross-Appellee,
U.S. SHELTER, L.L.C., U.S. SHELTER GROUP, INC., and OAK RIDGE OF ELGIN, L.L.C., Defendants-Appellees, (U.S. Shelter, L.L.C., and Oak Ridge of Elgin, L.L.C., Counterplaintiffs-Cross-Appellants).
from the Circuit Court of Cook County No. 08 CH 15325
Honorable Lisa R. Curcio Judge Presiding.
PRESIDING JUSTICE ELLIS delivered the judgment of the court,
with opinion. Justices McBride and Burke concurred in the
judgment and opinion.
PRESIDING JUSTICE ELLIS
1 This appeal involves the trial court's decision on a
quantum meruit claim made by plaintiff, Archon
Construction Company, Inc. (Archon) against defendants, U.S.
Shelter, L.L.C., U.S. Shelter Group, Inc., and Oak Ridge of
Elgin, L.L.C. (collectively, U.S. Shelter). Archon appeals
the trial court's decision denying its claim. U.S.
Shelter cross-appeals the trial court's decision denying
its counterclaim for breach of contract against Archon.
2 Archon was hired by U.S. Shelter to install a sanitary
sewer system in a subdivision in the City of Elgin (city).
The system would have to be approved and accepted by the
city, which would ultimately own the system. The contract
required Archon to conduct a videotaping of the interior of
the completed system. After Archon completed the installation
of the system, the city's engineering inspector reviewed
videotapes of the system and required additional work before
the city would accept the system. Even though the proposal
submitted by Archon, which was accepted by U.S. Shelter, had
specified polyvinyl chloride (PVC) pipes, Archon had to
excavate, remove, and replace a portion of the system's
PVC pipes with ductile iron pipes. Archon submitted its bill
for the extra work to U.S. Shelter, who refused to pay.
3 This is the second time this matter is before this court.
On June 4, 2013, we reversed the circuit court's grant of
summary judgment on Archon's "extra work"
claim. See Archon Construction Co. v. U.S. Shelter,
L.L.C., 2013 IL App (1st) 121632-U. We concluded that
general issues of material fact existed regarding, among
other things, whether the "extra work" was made
necessary through the fault of Archon.
4 On remand, Archon voluntarily dismissed its "extra
work" and other breach of contract claims, and proceeded
to trial solely on its quantum meruit claim. After a
bench trial, the court ruled in favor of defendants,
concluding that Archon was not entitled to quasi-contractual
relief for the costs it incurred for the services it
performed. The court concluded that the services were covered
under the express contract between Archon and U.S. Shelter
and that Archon was the "contractor" responsible
for the costs of the additional work. The court also found in
favor of Archon on U.S. Shelter's breach of contract
counterclaim for its repair and restoration of the
surrounding property after Archon made its repairs to the
sanitary sewer system. Both parties appealed.
5 As we explain below, the contract required a sanitary sewer
system that was subject to the final approval of the city.
This matter actually involves a contractual dispute between
the parties for the extra work and costs involved in
obtaining that final approval. But, because an express
contract existed between Archon and U.S. Shelter, Archon
cannot recover under the quasi-contractual quantum
meruit theory. We also conclude that the circuit
court's decision finding in favor of Archon on U.S.
Shelter's counterclaim was not against the manifest
weight of the evidence. For the reasons that follow, we
affirm the judgment of the circuit court of Cook County.
6 I. BACKGROUND
7 Archon is an underground utility contractor. U.S. Shelter
is a home building company, primarily involved with
residential developments. The land in each development is
owned by a different limited liability company, of which
defendant, Oak Ridge of Elgin, L.L.C., was one. The instant
case involves the development of the residential subdivision
in the city of Elgin, known as Oak Ridge of Elgin
8 U.S. Shelter hired Spies and Associates (Spies), a firm of
civil engineers and land designers, to design plans for the
subdivision and to be the on-site engineer, as required by
the city and the Fox River Water Reclamation District
(FRWRD). Spies prepared the plans, titled "Public
Improvement Plans for Oak Ridge Subdivision" (Plans).
The Plans were approved by the city, FRWRD, and the Illinois
Environmental Protection Agency.
9 The Plans included the "City of Elgin General
Notes" (General Notes), a document provided by the city
that includes the specifications the city requires for all
sanitary sewer systems installed in the city. The General
Notes state that all underground construction must comply
with the "City of Elgin Engineering and Construction
Standards and Specifications" (Elgin Specifications) and
the "Standard Specifications for Water and Sewer Main
Construction in Illinois" (Illinois Specifications).
10 U.S. Shelter sought bids for the installation of a
sanitary sewer system for the subdivision and hired Archon
after it submitted the successful bid. In addition to
installing the sanitary sewer system, Archon agreed to
install water main and storm sewers, for a total contract
price of $890, 955.29. The storm sewer and water
systems are not at issue.
11 Archon's five-page proposal for the sanitary sewer
system was based on the Plans. There is no dispute that the
Plans, including the General Notes, the Elgin Specifications,
and the Illinois Specifications, were incorporated into, and
became a part of, the contract between Archon and U.S.
12 The General Notes, in the section titled "Sanitary
Sewer, " state: "All sanitary sewers shall be
televised and tested as required by [the city and FRWRD]
prior to acceptance."
13 The Elgin Specifications state: "
A mandatory televising of the sanitary sewer mains shall be
performed by the developer one year after the successful
completion of the sewer. The contractor shall then provide a
copy of the video tape to the City of Elgin Engineering
Division of Public Works for review. Any deficiencies or
defects in the pipe material or construction, as noted by the
engineer, shall be repaired at the contractor's expense
prior to final acceptance by the city."
14 The Illinois Specifications state, among other things,
that "[i]n the event the ENGINEER finds the materials or
the finished product in which the materials are used or the
WORK performed are not in conformity with the Plans and
Specifications including tolerances and have resulted in an
inferior or unsatisfactory product, the WORK or material
shall be removed and replaced or otherwise corrected by and
at the expense of the CONTRACTOR."
15 Archon's proposal included a line item "Testing
and Televise, " with a price of $14, 670.10. The
proposal also contained itemized prices for materials,
including types and quantities. The proposal further stated:
"Any additional work items not listed will be completed
on negotiated price or [time and materials]." Although
the General Notes specified that the material of the sanitary
sewer pipes could be either ductile iron or PVC (minimum SDR
26), Archon's proposal did not provide for installation
of ductile iron pipe for any of the sanitary sewer lines.
Archon's proposal provided that the sanitary sewer system
would be constructed of PVC pipe, minimum SDR
16 Spies confirmed to U.S. Shelter that Archon's proposal
complied with the Plans. Chuck Mensik, on behalf of U.S.
Shelter, and Garry A. Sementa, on behalf of Archon, signed
the final proposal dated January 6, 2005. Under its contract
with U.S. Shelter, Spies was to oversee the installation of
the sanitary sewer system.
17 Archon began installing the sanitary sewer system on
February 23, 2005, and completed the installation around
August 8, 2005. Prior to completing its installation of the
sanitary sewer system, Archon had the pipes air tested and
mandrel tested. FRWRD reviewed the air test and observed the
mandrel test, and found both tests acceptable. Around the
time Archon completed the installation, Spies confirmed to
U.S. Shelter that Archon's work complied with the Plans,
the Elgin Specifications, and the Illinois
18 During construction, on three separate occasions, Archon
had to excavate and repair various portions of the sanitary
sewer system, including the portion between manhole (MH) 108
and MH 110. This extra work apparently resulted from
Archon's use of fittings made of SDR 35 material, which
was weaker and thinner than that required by the Plans,
namely SDR 26 material. All of the repairs were completed by
August 2005, and Archon did not request additional payments
from U.S. Shelter for that extra work. The cost of that extra
work is not at issue in this appeal.
19 As noted, the contract required televising of the sanitary
sewer system before the city would accept the system. Archon
had agreed to perform testing and televising of the sanitary
sewer system in the contract. The city required that the
televising be performed at least a year after installation to
make sure that any potential settling had already occurred.
In early 2007, Archon hired a company, H.R. Stewart to
televise the sanitary sewer system. A camera was run through
the system, and a ...