BLINDERMAN CONST. v. METRO. WATER RECLAM.

• Decision Date: 04 September 2001
• Docket Number: No. 1-00-1940.,1-00-1940.
• Citation: 325 Ill. App.3d 362,259 Ill.Dec. 68,757 N.E.2d 931
• Parties: BLINDERMAN CONSTRUCTION CO., INC., Plaintiff-Appellant, v. METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

757 N.E.2d 931

325 Ill. App.3d 362

259 Ill.Dec. 68

BLINDERMAN CONSTRUCTION CO., INC., Plaintiff-Appellant, v. METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO, Defendant-Appellee.

No. 1-00-1940.

Appellate Court of Illinois, First District, Second Division.

September 4, 2001.

Scott F. Turow, Natalie J. Spears, Lea R. Bruno, Sonnenschein Nath & Rosenthal, Chicago, for Plaintiff.

Steven H. Gistenson, Christopher E. Stout, Foran & Schultz, Chicago, for Defendant.

Justice GORDON delivered the opinion of the court:

Plaintiff Blinderman Construction Company (plaintiff or Blinderman) appeals from the judgment of the circuit court of Cook County granting summary judgment in favor of defendant the Metropolitan Water Reclamation District of Greater Chicago (defendant or the District) on the grounds that plaintiff's claim is time barred. On appeal plaintiff argues that the ten-year statute of limitations for written contracts applies to its claim pursuant to section 13-206 of the Code of Civil Procedure (735 ILCS 5/13-206 (West 1992)), rather than the four-year statute of limitations provided in section 13-214(a) (735 ILCS 5/13-214(a) (West 1992)). We affirm.

BACKGROUND

The essential facts of this case are not in dispute. The parties entered into the contract at issue in this case on or about April 28, 1983. Under the contract, which will be more fully set out in the analysis section of this order, Blinderman agreed to construct a laboratory building for the District for the amount of $8,534,748. Blinderman was paid $8,852,611.84, for its work on the project.

In its verified two count complaint filed December 16, 1993, Blinderman contends that it is owed the additional amount of $3,268,774.79. This amount consists of $378,804.79, for "extra work" due to certain "additions and deletions [which] were agreed on by the parties" and $2,889,970.00, for additional "extra work" performed "at the direction of the District," pursuant to "change proposals." Count I alleged that the District breached the contract by failing to pay for the extra work and change proposals. Count II alleged that the District breached the implied covenant of good faith and fair dealing by inducing Blinderman to engage in good-faith negotiations over the amount due knowing that in the interim Blinderman was forbearing filing suit and then falsely asserting that negotiations had ended years earlier.

On February 16, 1994, the District moved "to dismiss [Blinderman's] complaint" pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 1992)) on the grounds that it was time barred under the limitations provisions of section 13-214 of the Code of Civil Procedure (735 ILCS 5/13-214(a) (West 1992)). That statute provides for a four-year period of limitations for actions based on tort or contract against any person for an act or omission occurring in the performance of certain activities related to construction (the relevant portions of section 13-214(a) will be set out in full in the analysis section of this order). In its motion to dismiss the District argued that it was entitled to the protection of section 13-214(a) because the contract at issue "was for the construction of improvements to real estate and [therefore] comes within the" provisions of section 13-214(a). Blinderman contended that this action was governed by the ten-year statute of limitations for written contracts pursuant to section 13-206 (735 ILCS 5/13-206 (West 1992)). At a hearing on the motion to dismiss on May 6, 1994, Judge Gillis ("the first judge") denied that motion, agreeing with Blinderman that the action was not time-barred by section 13-214(a).

Apparently before an answer was filed, on July 18, 1994, Blinderman filed a first amended verified complaint which included the same breach of contract claim as count I, but substituted a different cause of action in count II. The amended complaint alleged in count II a violation of the Local Government Prompt Payment Act (50 ILCS 505/1 et seq. (West 1992)). Blinderman contended that under the Prompt Payment Act any bill for goods or services provided by a contractor to a contracting governmental entity must be paid within 30 days of its approval. In its answer on December 20, 1994, the District raised the statute of limitations as an affirmative defense. In its reply to the District's answer on January 17, 1995, Blinderman contended that the District was estopped from raising the statute of limitations, apparently because of the protracted settlement negotiations between it and the District as alleged in count II of the original complaint.

The case proceeded through discovery, at the close of which the District moved for summary judgement on November 21, 1997. With respect to count I, the District once again contended that it was time-barred by section 13-214(a) because the District participated in the construction of the project. In its memorandum in support of its motion, the District contended that it "prepared all contract plans, specifications and drawings, including the detailed drawings for the project's process design, structural design, electrical design and electrical design-power and electrical-design lighting." The District also contended that under the contract it is permitted to make "any changes to the specifications and plans deemed necessary." The District's engineer is vested with broad powers, including the power to direct that extra work be performed (unless its cost exceeds $5,000, in which case in the District's board must approve it). Additionally the District pointed out that under the contract the power of the engineer extends to the imposition of liquidated damages unless the engineer determines that the delay was not Blinderman's fault. In the latter event, the completion date could be extended to avoid the imposition of liquidated damages. The engineer also has the power to reject substandard materials, and to determine the amount of damages growing out of any violation of the contract. Additionally, in support of its motion for summary judgment with respect to count I, the District urged that its conduct in settlement negotiations prior to the commencement of Blinderman's suit did not estop it from raising the statute of limitations as a defense.

The District also urged that it was entitled to summary judgement on count II because the Prompt Payment Act claim was barred due to Blinderman's failure to fulfill a condition precedent. The District argued that its approval of the bill which Blinderman claimed was not paid within 30 days as required by the Act was contingent on Blinderman's submitting a release, which Blinderman did not do.

One March 5, 1998, Judge Neville ("the second judge") denied the District's motion for summary judgment as to count I.¹ He ruled that while section 13-214(a) applied to this case, there was an issue of fact as to whether the District was estopped from raising it. On May 14, 1998, the trial court entered an order granting the District's motion for summary judgment on count II. Concomitantly, the court also granted the District's motion for a bifurcated trial on count I. The first trial would determine if the District was estopped from raising the statute of limitations as a defense to count I. If it was necessary, a trial on the merits of Blinderman's claim in count I would be held later.

A bench trial on the estoppel issue before Judge Henry ("the third judge") began on November 4, 1999. After the evidence was closed, the District moved for a directed finding and its motion was granted. Blinderman then moved for reconsideration of the second judge's ruling than section 13-214(a) applied to this case. This motion was denied.

ANALYSIS

On appeal Blinderman contends, as it did below, that the statute of limitations applicable to this case is section 13-206 which provides for a ten-year limitation period. The District contends that the four-year limitation period under section 13-214(a) is applicable to actions based on tort or contract for acts or omissions of persons engaged in the design, planning, supervision, observation, or management of construction. We agree with the District.

Blinderman would urge that the provisions of section 13-214(a) were intended to apply to actions for recovery of damages to incurred through defects in the construction work performed, whether under tort or contract whether occasioned by negligence in tort, or by breach of contract. Typically, such actions would involve things such as cracks in a foundation discovered well after construction is completed. Blinderman therefore urges that the statute be limited to the scope espoused by various legislators in the debates on its enactment. See generally, 81st Ill. Gen. Assem., House Proceedings, May 25, 1979 at 29-41. Such an interpretation, however, does violence to the plain and unambiguous language of the statute.

Section 13-214(a) provides:

"Actions based upon tort, contract, or otherwise against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property shall be commenced within 4 years from the time the person bringing an action, or his or her privity, knew or should reasonably have known of such an act or omission." 735 ILCS 5/13-214(a) (West 1992).

When construing a statute, the intent of the legislature must be ascertained and given effect. General Motors Corp. v. Industrial Commission, 62 Ill.2d 106, 112, 338 N.E.2d 561, (1975). However, the "language used in a statute is the primary source for determining this intent, and where that language is certain and unambiguous, the proper function of the courts is to enforce the statute as enacted." 155 Harbor Drive Condominium Association v. Harbor Point, Inc., 209 Ill. App.3d 631, 642, 154 Ill.Dec. 365, 568 N.E.2d 365, 372 (1991) (refusing to examine the legislative history of ...