Berg and Associates, Inc. v. Nelsen Steel & Wire Co.

• Decision Date: 10 May 1991
• Docket Number: No. 1-90-1475,1-90-1475
• Citation: 580 N.E.2d 1198,221 Ill.App.3d 526,162 Ill.Dec. 779
• Parties: , 162 Ill.Dec. 779 BERG AND ASSOCIATES, INC., Plaintiff-Appellee, v. NELSEN STEEL & WIRE CO., Defendant-Appellant.
• Court: United States Appellate Court of Illinois

Page 1198

580 N.E.2d 1198

221 Ill.App.3d 526, 162 Ill.Dec. 779

BERG AND ASSOCIATES, INC., Plaintiff-Appellee, v. NELSEN STEEL & WIRE CO., Defendant-Appellant.

No. 1-90-1475.

Appellate Court of Illinois,

First District, Fifth Division.

May 10, 1991.

Rehearing Denied Nov. 1, 1991.

Bedell A. Tippins, Catherine A.T. Nelson, Keck, Mahin & Cate, Chicago, for defendant-appellant.

Ronald N. Primack, Lansing, for plaintiff-appellee.

Justice MURRAY delivered the opinion of the court:

On or about October 20, 1979, defendant, Nelsen Steel & Wire Company (Nelsen), and plaintiff, Berg & Associates, Inc. (Berg), entered into an oral contract. On May 3, 1990, following a bench trial, the trial court entered a judgment against Nelsen in the amount of $150,000. Nelsen appeals the final order entering judgment.

The facts are as follows.

In October 1979, Nelsen and Berg entered into a verbal agreement whereby Berg was to serve as a construction manager for Nelsen in connection with the construction of a restaurant and small assembly facility known as "Scandals". The restaurant and facility were to occupy three acres of a nine-acre parcel of property owned by Nelsen on Hilton Head Island. Albert Berg testified that he sent Nelsen an ASIA Standard Form of Agreement Between Owner and Construction Manager, which contained the terms of the agreement Berg and Nelsen had worked out in late September. Nelsen acknowledges receipt of a copy of the ASIA Contract.

Nelsen engaged the services of an architect to prepare the plans and drawings. Nelsen also entered into a contract with Austin Construction Co. to serve as general contractors. Work on the project commenced in November 1979, and the facility was allegedly completed in April of 1980. Commencing with the construction of Scandals in November 1979, Berg submitted invoices for construction management services to Nelsen on a monthly basis. On July 31, 1980, Berg submitted its "final invoice for construction management services." There is no dispute that the billings through this "final invoice" were paid.

Richard Berg and Albert Berg III testified that from January 1981, through March 1981, they worked on the site plan for the Phase II development of Nelsen's nine-acre parcel on Hilton Head Island. Albert Berg, Jr. testified that he presented the site plan to Dan Nelsen at his offices on April 25, 1981. Albert Berg III testified that he met with Mr. Goode at their offices to review the site plan. Both Albert Berg, Jr. and Albert Berg III testified that at that meeting they were instructed by Dan Nelsen to go ahead and start working drawings for Phase II, based on the site plan. Albert Berg, Jr. testified that they discussed the schedule of construction, costs involved, and a rough budget based on 60 condominiums at a cost of $100,000 each.

Dan Nelsen testified that the Berg's testimony regarding the April 1981 meeting was absolutely false and at no time did they talk about building condominiums on the property. Dan Nelsen denied authorizing Albert Berg, Jr. to undertake any activities on behalf of Nelsen with respect to condominiums on the Hilton Head property.

Clifford Nelsen testified that he recalled meeting with Albert Berg with respect to the Hilton Head Island investment in the early summer of 1981. The meeting took place at Nelsen's offices and Albert Berg and Ed Goode were in attendance. He remembers being shown the site plan and that it had been presented as an example of what could be done with the property. At this meeting Mr. Berg and Mr. Goode did not indicate in any way that they were interested in acquiring the property. However, at a subsequent meeting, probably in mid summer, Mr. Berg and Mr. Goode indicated that they wanted to be the buyers of the property, having formed a group called Southern Pines. Clifford Nelsen further recalls receiving invoices from Berg in the amount of $150,000. He did not recall the date of the bill, but recalled that Nelsen received the bill years after the services.

Testifying on behalf of Nelsen, Mr. Goode testified that he did not recall any invoice in 1981 or 1982, and that the first invoice he recalls was one he saw approximately three to four months before suit was filed. Further, Ed Goode testified that no meeting between Albert Berg, Jr., Albert Berg III, Dan Nelsen and himself ever took place.

Albert Berg testified that Berg submitted its initial billing to Nelsen in July 1981, billing Nelsen for $1,800 for a site plan, and for 75% of the design phase of his management for the working drawings which had been completed to that date. Albert Berg further testified that after Ed Goode, Nelsen's controller, explained to him the circumstances at Nelsen, and told him that he would be paid when the funds were available, Berg accepted that arrangement and continued to work for Nelsen both on the working drawings for Phase II, and for on-going additional work. The on-going additional work included work on additional punchlists, dance floor repairs and supervision, work on answers to interrogatories in a lawsuit, clean-up supervision, inventory and sewer application documentation. In April 1982, Berg submitted its invoice for $150,000, representing an additional $80,700 for 97% completion of the design phase, 8% of the construction phase for the work involved in getting the permits in place for the project, and the additional work for the Scandals' property.

On July 1, 1987, Berg filed a suit charging Nelsen with a breach of a written contract. Berg sought to recover damages in the amount of $150,000. Although Berg attached a copy of a written contract to the complaint, it is undisputed that the contract was never signed by Nelsen. A bench trial followed during 1990. At the end of Berg's case-in-chief, Nelsen moved for a directed verdict based on the statute of limitations. Nelsen's motion for a directed verdict was denied. The trial court found in Berg's favor and entered judgment in the amount of $150,000. This timely appeal followed.

On appeal Nelsen presents the following issues for review: (1) whether the trial court erred in denying defendant's motion for a directed verdict based on the expiration of the five-year statute of limitations; (2) whether a reversal is required where a material variance exists between the pleading and the proof; (3) whether the court's ruling of $150,000 in favor of Berg is against the manifest weight of the evidence; and (4) whether Nelsen is entitled to a new trial where the record, considered in its entirety, illustrates that Nelsen was denied a fair and impartial trial on the merits.

I

The first issue Nelsen raises is whether the trial court erred in failing to direct a verdict based on the expiration of the five-year statute of limitation pursuant to § 13-205 of the Illinois Code of Civil Procedure. Nelsen claims the breach occurred no later than May 30, 1982, triggering the five-year statute of limitation applicable to oral contracts. Since Berg's suit was not filed until July 1, 1987, Nelsen claims the suit is time barred, having been filed some 30 days after the expiration of the statute.

The statute of limitations begins to run when a party to be barred has the right to invoke the aid of the court and to enforce his remedy. April 30, 1982, was admittedly the date of the final statement, however, Berg argues that in construction contracts, the undertaking of a contractor is a single endeavor and the statute of limitations does not begin to run until the completion of that endeavor. Berg is correct in this regard. In cases involving construction contracts, the courts of Illinois have recognized an exception to the rule that statutes of limitations begin to run on the due date of the monetary installments due on the contract. (Santucci Construction Co. v. City of Danville (1984), 128 Ill.App.3d 954, 956, 84 Ill.Dec. 234, 235, 471 N.E.2d 1000, 1001.) Illinois courts have viewed such contracts as a single endeavor and have held that the statute does not begin to run until the endeavor is complete. (O'Brien v. Sexton (1892), 140 Ill. 517, 30 N.E. 461; Santucci Construction Co. v. City of Danville (1984), 128 Ill.App.3d 954, 84 Ill.Dec. 234, 471 N.E.2d 1000.)

Applying this exception to the facts of this case we must reject Nelson's contentions as to the tolling of the statute of limitations. The record reflects evidence that Berg provided supervisory clean up work as late as November 1982. In light of this, we determine that the trial judge was correct in denying Nelsen's charge that Berg's claim was time barred by the statute of limitations.

II

The second issue Nelsen raises is that a fatal variance exists between pleading and proof. As reflected in the statute of limitation's issue, Berg's proof related to extra work he performed under the contract. Nelsen claims that this is a fatal variance requiring a reversal of the matter. The complaint in the instant case alleges in relevant part:

"3. On or about October 20, 1979, Berg and Nelsen entered into a written contract, a copy of which is attached hereto, and made a part of this Complaint as Exhibit A (consisting of ten (10) pages).

4. By the terms of the contract, Berg was to be paid by Nelsen as a construction manager regarding property known as the Shipyard Commercial Area at Hilton Head Island, South Carolina.

5. Berg did all of the work called for by the terms of the contract in a good, expert and professional manner, including the design phase of the project and the construction phase.

6. Berg's work consisted of:

1. Hired architect and secured land.

2. Assisted in design and development of working drawings for a building known as Scandals.

3. Obtained contractors and suppliers; issued contracts and supervised construction.

4. Prepared and approved payouts to suppliers and contractors.

5. Prepared punchlists and all closing documents.

6. Continued development of property by preparing working drawings for 60...