Intaglio Service Corp. v. J. L. Williams & Co., Inc., No. 80-456

• Court: United States Appellate Court of Illinois
• Writing for the Court: ROMITI
• Citation: 420 N.E.2d 634,95 Ill.App.3d 708,51 Ill.Dec. 220
• Decision Date: 23 April 1981
• Docket Number: No. 80-456
• Parties: , 51 Ill.Dec. 220 INTAGLIO SERVICE CORPORATION, a corporation, Plaintiff-Appellant, v. J. L. WILLIAMS & CO., INC., a corporation, Defendant and Third Party Plaintiff- Appellee-Cross-Appellant, v. McCARTY BROTHERS, INC., a corporation, Third Party Defendant-Cross-Appellee.

Page 634

420 N.E.2d 634 95 Ill.App.3d 708, 51 Ill.Dec. 220 INTAGLIO SERVICE CORPORATION, a corporation, Plaintiff-Appellant,
v.
J. L. WILLIAMS & CO., INC., a corporation, Defendant and
Third Party Plaintiff- Appellee-Cross-Appellant,
v.
McCARTY BROTHERS, INC., a corporation, Third Party
Defendant-Cross-Appellee. No. 80-456. Appellate Court of Illinois, First District, Fourth Division. April 23, 1981.

Page 635

[95 Ill.App.3d 709] [51 Ill.Dec. 221] O'Brien, Carey, McNamara, Scheuneman & Campbell, Ltd., Chicago (Donald V. O'Brien, LaDonna Loitz Chuchro, Stephen P. Bedell, Chicago, of counsel), for plaintiff-appellant.

Marks, Katz, Johnson, Randall, Weinberg & Blatt, Chicago (Donald L. Johnson and William Biederman, Chicago, of counsel), for defendant and third party plaintiff-appellee-cross-appellant.

ROMITI, Presiding Justice:

The issue in this case is whether a person who agreed to build and lease a building can be held liable for damages suffered by the lessee, even after the promisor-lessor had sold the building to another, when the building did not meet the guarantees laid down in the specifications. The trial court held that promisor-lessor could not be held liable as a matter of law. We disagree and reverse.

The plaintiff, Intaglio Service Corporation, filed suit on June 14, 1974 alleging that on or about July 15, 1967 it had accepted a proposal submitted by the defendant, J. L. Williams & Co., Inc., whereby defendant would design, build and lease to plaintiff a plant and offices for gravure engraving; that the parties thereafter entered into a leasing agreement and the defendant thereafter in furtherance of the agreement prepared or caused to be prepared plans and specifications for the building and in its capacity as designer engineer, general contractor and landlord proceeded with the construction of the building; that the plans and specifications contained certain guarantees; that in addition the defendant as engineer-designer impliedly warranted the adequacy and sufficiency of its plans and specifications to accomplish and produce the essential requirements of plaintiff's business operation; that completion of the building was delayed to the extent that

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[51 Ill.Dec. 222] plaintiff was not able to obtain occupancy until late October, 1968; and the building was not substantially completed until January 31, 1969 and punch list and corrective work occurred well into 1970; that unless temperature and humidity is maintained within the tight tolerance described in the specifications, severe prejudice to plaintiff's machinery and chemical processes results and its product becomes unmerchantable; that the environmental control system furnished by defendant chronically overheats, undercools and [95 Ill.App.3d 710] severely malfunctions from a humidity control standpoint. The defendant in its answer denied most of the allegations but did admit it had served as general contractor in the construction of the building.

The contract of August 21, 1967 between the two parties reads in relevant part as follows:

"ARTICLE I

PREMISES AND TERM

Lessor * * * leases to the lessee * * *:

TO HAVE AND TO HOLD the above described premises, together with the buildings and improvements situated thereon * * * for and during a term of twenty (20) years commencing on the first day of the month following the substantial completion of the building and improvements which are to be constructed pursuant to the provisions of Article II hereof, * * *. The leased premises shall be deemed ready for occupancy and substantially completed when the Lessor procures and delivers to Lessee a certificate of occupancy and other permits, if any, required by local authorities for use and occupancy of the premises by Lessee under the terms of this lease and when the architect, hereinafter named, shall so certify in writing directed to the respective parties; or when after the receipt of such certificate of occupancy and permits the Lessee shall have entered said premises, taken possession, and commenced business therein, whichever shall first occur. Upon issuance of architect's certificate aforesaid or on the date of entry by Lessee for commencement of its business Lessee shall issue and deliver its letter accepting the premises as completed in accordance with the plans and specifications provided for in Section 1 of Article II of this lease. The obligation of the Lessee to pay rent and to perform all of the covenants, conditions and agreements of this lease on the part of the Lessee to be performed shall not commence until said premises shall be deemed ready for occupancy and substantially completed as herein defined. The fact that the Lessee takes possession upon substantial completion and the term of the lease has commenced shall not, however, excuse Lessor from the prompt completion of all work required to be done by Lessor pursuant to the terms of this lease. * * *

ARTICLE II IMPROVEMENTS TO BE ERECTED

Section 1. Prior to the commencement of the term of this lease, Lessor shall erect and complete, at Lessor's expense, a one-story [95 Ill.App.3d 711] office and brick manufacturing building containing approximately 60,000 square feet, including approximately 52,000 square feet of air conditioned space. All work will be done in accordance with plans and specifications prepared by Thomas A. Rambert, Architect, and approved and initialed by Lessor and Lessee.

Section 2. (Provides for liquidated damages for each day completion delayed beyond July 1, 1968.)

Section 3. Lessor warrants that the building and improvements shall be free from defects of workmanship and materials. Lessor will promptly repair, remedy or replace any such defects which may appear within the first year of the term of this lease. * * *

ARTICLE V USE AND CARE OF PREMISES

Section 1. Prior to taking possession of the demised premises hereunder, Lessee

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[51 Ill.Dec. 223] will have inspected said premises and the improvements thereon and will acknowledge that said premises are found to be in a safe and satisfactory condition. * * *

Section 4. Lessee shall use and occupy the demised premises for its business of rotogravure, letterpress, offset or other engravings process and the storage of supplies, materials and equipment relating to such business, and for any other lawful purpose. * * * "

Specifications drawn up by the architect Rambert were approved on November 6, 1967. In the Specifications are the following provisions:

"51 Guarantee: Material and Workmanship

(a) The Contractor shall guarantee all materials, equipment and labor to be free of defects, and shall agree to replace or repair, without cost to the Owner, any such defects within twelve (12) months of date of final acceptance by the Owner.

(b) He shall also guarantee that all workmanship is of high quality and that all...