Amp-Rite Elec. Co., Inc. v. Wheaton Sanitary Dist.

• Decision Date: 17 October 1991
• Docket Number: AMP-RITE,No. 2-90-0906,2-90-0906
• Citation: 220 Ill.App.3d 130,580 N.E.2d 622
• Parties: , 162 Ill.Dec. 659 ELECTRIC COMPANY, INC., Plaintiff-Appellee, v. WHEATON SANITARY DISTRICT, Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 622

580 N.E.2d 622

220 Ill.App.3d 130, 162 Ill.Dec. 659

AMP-RITE ELECTRIC COMPANY, INC., Plaintiff-Appellee, v. WHEATON SANITARY DISTRICT, Defendant-Appellant.

No. 2-90-0906.

Appellate Court of Illinois Second District.

Oct. 17, 1991.

Querrey & Harrow, Ltd., Chicago, Paul T. Lively (argued), Michael Resis, for Wheaton Sanitary Dist.

Donovan & Roberts, P.C., Wheaton, Rodney W. Equi (argued), Robert R. Verchota, for Amp-Rite Elec. Co., Inc.

Justice UNVERZAGT delivered the opinion of the court:

The plaintiff, Amp-Rite Electric Company, Inc. (Amp-Rite), one of three prime contractors hired by the defendant, Wheaton Sanitary District (the District), for the District's wastewater treatment plant additions project (the project), sued the District for breach of contract. Count I charged that the District breached its contract with Amp-Rite in that it (a) failed to furnish, as indicated in the contract and not later than the date when needed by the plaintiff, the lands upon which its work was to be done; (b) failed to keep the buildings in such a state of forwardness so as to enable it to perform its work within the time contemplated in the contract; (c) actively created or passively permitted to continue a condition over which the District had control which rendered its performance under the contract more difficult and more expensive; and (d) failed to grant its requests for an increase in contract price. The gist of Amp-Rite's count I was that it incurred costs in excess of its bid for the project work because the District failed to control and coordinate the work of the other two prime contractors so as to keep the project moving forward according to the construction schedule set forth in the contract. Count II charged the District wrongfully withheld $9,500 from Amp-Rite as liquidated damages for delayed completion of its work.

The other two prime contractors on the project were the general construction contractor, Wil-Freds, Inc. (Wil-Freds), and the plumbing, heating and ventilating contractor, Northwestern Industrial Piping, Inc. (Northwestern). The District also contracted with Strand Associates, Inc. (Strand), to prepare contract documents, to provide consultation and advice during construction of the project, provide resident engineering services to the project and maintain overall review of the project.

Litigation arising out of the project delays was originally instituted by Wil-Freds, followed by Amp-Rite. Those cases were consolidated following which the District filed third-party complaints against Northwestern, claims against Wil-Freds and Amp-Rite and, ultimately, Strand. An action commenced against Wil-Freds by its subcontractor, Kocurek Concrete Contractors, Inc., was also consolidated with the Wil-Freds and Amp-Rite causes. With the exception of the instant cause, all these claims have been settled and dismissed.

It is undisputed that the project was delayed. The source of those delays was disputed. Delays from the District's perspective include the flooding of the deep foundations at the sand filter building where work on the project first began, Northwestern's inability to deliver various embedded items as needed by Wil-Freds, and Northwestern's inability to cause its underground pipe subcontractor, Davis Sewer and Water, to complete expeditiously the concrete pipe excavation and installation.

Amp-Rite perceived that its work was delayed and increased costs were incurred primarily due to: (1) flooding of the sand filter building excavations at the beginning of the job; (2) Wil-Freds' scheduling of concrete pours in sections for foundation walls and floors of the new structures; (3) Wil-Freds' pouring foundation walls and floors in more than one building at a time; (4) Northwestern not doing its excavation and installation of underground pipe for those runs where Amp-Rite wanted to install its underground conduit in Northwestern's trenches; (5) other contractors damaging Amp-Rite's work; (6) difficulty experienced by Amp-Rite in doing electrical work on equipment furnished by Northwestern; (7) problems with Amp-Rite's subcontractor, Allen Engineering; (8) noncooperation by Wil-Freds and Northwestern; (9) the physical condition of the site; and (10) acts of God. Amp-Rite claimed that these various factors combined caused it to incur increased costs totaling almost $254,000.

Following a jury trial of Amp-Rite's claims against the District, a verdict in Amp-Rite's favor in the amount of $163,000 was entered on count I, and a verdict in Amp-Rite's favor in the amount of $9,500 was entered on count II. Without conceding the propriety of the verdict on count II, the District appeals here only from the jury's count I verdict.

The District contends its motion for directed verdict and post-trial motion for judgment notwithstanding the verdict should have been granted. The District claims (1) that the court misconstrued its contractual obligations to Amp-Rite; (2) that Amp-Rite failed to prove that the District breached its contract with it; (3) that Amp-Rite failed to prove its damages under the "total cost" theory; (4) that Amp-Rite's proof of its other damages was insufficient; and (5) that the jury was improperly instructed on the matter of the District's contract obligations and the calculation of damages.

AMP-RITE'S BID PREPARATION

The project work advertised for bid by the District included the rehabilitation of existing facilities and the construction of new wastewater treatment facilities. It was divided into three possible contracts: general, plumbing, heating and ventilation and electrical. Bidders could submit a bid for each separate contract, for a combination of any two, or for all three. Based on its criterion of achieving the lowest total project cost and, after Strand determined they were qualified and responsible bidders, the District awarded the general construction contract to Wil-Freds, the plumbing, heating and ventilation contract to Northwestern and the electrical contract to Amp-Rite. By awarding these three contracts separately rather than to one contractor who would do all the work, the District avoided additional costs in the amount of approximately $847,000.

Preparation of Amp-Rite's bid on the project was a three-step process. First, an estimator, Dan Voss, reviewed the specifications and drawings for the project including the length of the project and the direction the job was to progress. He then did a material "takeoff," counting all the materials shown such as light fixtures, and measuring the quantity of conduit and wire shown on the drawings. These were added up and labor units assigned to the materials. In estimating the labor units required, Voss used the National Electrical Contractors Association (NECA) manual of labor units as a guide. The manual suggests labor units to be applied for the installation of each fixture, device and length of conduit wire, and it allows "factoring," an adjustment of labor units upward or downward, based on numerous considerations such as weather conditions, the height of the installation, multiple and/or parallel conduit runs, and works in the same area. For instance, pulling seven wires through a conduit as opposed to pulling just one takes about the same time. The manual instructs users that the selection of the appropriate labor unit is usually a matter of judgment and that the least favorable installation physical condition normally dictates the selection. Voss testified the general construction schedule set forth in the contract documents, which Amp-Rite believed indicated the project would progress from west to east, was considered in factoring the labor units because it meant the workers would be in one area and not traveling back and forth to multiple points of construction at the same time and that the buildings at the west end of the project would be enclosed during the winter of 1983.

Voss' estimate took into account that the underground conduit to be installed on the south side of Spring Brook Creek at the west end of the project would be "piggy-backed," that is, it would ride above the piping contractor's pipes which were at a much lower depth than the conduit. The piping contractor would trench to approximately 18 feet, lay its pipes and backfill to a level of about three feet below the finished grade. Backfilling would be interrupted at that point, electrical conduit would be laid and backfilling to finished grade level would be continued. Voss' estimate did not take into account the fact that the project work could be awarded on a multiple prime contract basis.

The labor units for Amp-Rite's estimate were assigned directly from the NECA manual by Voss and then modified by Amp-Rite's senior estimator and its president to take into account the numerous multiple conductors, parallel runs, etc., as well as Amp-Rite's past experience in electrical construction work. According to the NECA manual, projects such as chemical plants and power plants and other heavy industrial projects did not warrant reduction of labor units. Amp-Rite did not believe the instant project fell within that category because the physical sites of such heavy industrial projects would have been much larger, the buildings would have been extremely large, with ceilings 30 to 35 feet high, compared with 8- to 15-foot ceiling heights here. Electrical installations in a 30-foot-high ceiling would require use of hoist equipment whereas an 8- to 15-foot ceiling would require only a ladder. A normal amount of nonproductive labor such as walking, tool acquisition and other craft coordination time is also included in the NECA labor units.

Voss' work product was turned over to Amp-Rite's senior estimator, Mack Williamson, who factored the NECA labor units based on his education, his experience in the military with power generation plants and his years as an electrician. Williamson's labor estimate for the project was 4,040 hours....