Patrick Eng'g, Inc. v. City of Naperville
| Decision Date | 20 September 2012 |
| Docket Number | No. 113148.,113148. |
| Citation | 2012 IL 113148,976 N.E.2d 318,364 Ill.Dec. 40 |
| Parties | PATRICK ENGINEERING, INC., Appellee, v. The CITY OF NAPERVILLE, Appellant. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Margo Ely, Patricia Johnson Lord, Mark Antonio Scarlato, Naperville, for appellant.
Phillip A. Luetkehans, Robert W. Funk, Schirott, Luetkehans & Garner, P.C., Itasca, for appellee.
Michael J. Sturino, Itasca, for amicus curiae Illinois Road and Transportation Builders Association.
[364 Ill.Dec. 42]¶ 1 This case involves an agreement between Patrick Engineering, Inc., and the City of Naperville for a stormwater management system. When the City refused to pay Patrick Engineering, Patrick Engineering terminated the agreement and sued the City. The trial court dismissed Patrick Engineering's third and fourth amended complaints, and the appellate court reversed and remanded for further proceedings. 2011 IL App (2d) 100695, 353 Ill.Dec. 462, 955 N.E.2d 1273.
¶ 2 The primary issue before us, according to the City, is whether the doctrine of equitable estoppel may apply against a municipality based upon the alleged apparent authority of its employees. We hold that equitable estoppel does not apply against a municipality when a plaintiff has alleged that a municipal official possessed apparent authority, but only when a plaintiff has alleged specific facts to show that a municipal official possessed express authority and that the plaintiff reasonably relied upon statements or conduct by the official. For the reasons that follow, we reverse and remand for further proceedings.
¶ 4 In early 2007, the City had partially completed a project to manage its stormwater, and accepted bids to finish it. The City, through its department of public works, its transportation, engineering and development business group, and its information technology department, published a “General Scope of Services” for interested vendors. According to the City, the remaining work included a “Stormwater Needs Analysis” for the entire city, as well as several tasks in a 23.5–square–mile area called Area B, which would begin with data collection and conversion for a three-square-mile “pilot area” selected by the City. The City notified vendors that the pilot area data collection and “any required process changes” would have to be completed and accepted by the City before proceeding with the data collection and conversion in Area B. The City offered vendors a worksheet on which they could list proposed costs for the various areas of the project. Patrick Engineering completed and submitted the worksheet as part of its bid. This table shows Patrick Engineering's proposed cost for each project area, as well as its total proposed cost:
+---------------------------------------------+
¦Project Area ¦Proposed Cost ¦
+-----------------------------+---------------¦
¦Project Management ¦$ 44,432 ¦
+-----------------------------+---------------¦
¦Stormwater Needs Analysis ¦$ 35,580 ¦
+-----------------------------+---------------¦
¦Pilot Area Data Conversion ¦$ 73,420 ¦
+-----------------------------+---------------¦
¦Area B Data Conversion ¦$244,306 ¦
+-----------------------------+---------------¦
¦Software Configuration ¦$ 37,454 ¦
+-----------------------------+---------------¦
¦Other Costs ¦$ 1,200 ¦
+-----------------------------+---------------¦
¦TOTAL ¦$436,392 ¦
+---------------------------------------------+
The City accepted Patrick Engineering's offer, and on March 29, 2007, the parties signed a “Consultant Services Agreement.” Patrick Engineering agreed to provide the City with a “Stormwater Asset Management and GIS Information System,” and in return the City agreed to pay Patrick Engineering $436,392.
¶ 5 Section 2.1 of the agreement provided a procedure under which the City could request and authorize “Additional Services” beyond those listed in the scope of services:
¶ 6 Shortly after the parties signed the agreement, the City asked Patrick Engineering what additional services would cost. On April 2, 2007, Patrick Engineering's manager of enterprise solutions, Michael Blalock, wrote a letter to Debbie Kresl, a City employee, outlining the “cost per feature,” which would be used if the City decided “to create a change order.” No change order was made at that time.
¶ 7 Several weeks later, Blalock and Kresl exchanged emails regarding the project. On April 20, 2007, Blalock told Kresl that Patrick Engineering wanted to begin its work, and asked her for a purchase order from which he could generate invoices for the City. Kresl asked him for a list of tasks that Patrick Engineering would start because her superiors likely would demand more details. She explained why a purchase order was necessary, and referred to “sign off and reviews” within the City decisionmaking process. She stated,
[364 Ill.Dec. 44]¶ 8 That response came quickly. On April 23, 2007, Kresl sent a message to Blalock: Although the City instructed Patrick Engineering to proceed generally in Area B, Kresl added, “I am also working to identify preliminary 1 square mile areas, to select from, for the 3 square mile pilot area.” Shortly thereafter, the City issued a purchase order, and Patrick Engineering began its work under the contract.
¶ 9 On July 3, 2007, Patrick Engineering delivered the stormwater needs analysis to the City. On July 17, Patrick Engineering's project manager, Scott Stocking, met with Beth Lang, the strategic services manager for the City's department of public works, and informed her that the “feature count” under the contract would be reached before Patrick Engineering completed its work, and that a change order would be necessary. On July 23, Stocking sent a follow-up email to Lang reiterating Patrick Engineering's belief that the City would need to issue a change order. The City notified Patrick Engineering that it would not do so, and Patrick Engineering stopped its work.
¶ 10 On August 10, 2007, Lang sent a letter to Stocking. Lang stated that City representatives had reviewed Stocking's email, as well as the agreement and its attachments. Lang further stated that the City's worksheet had instructed vendors to include all costs for data collection and conversion in the pilot area. According to Lang, “given the accepted contract language for the pilot area,” the City would pay only the amount specified in the agreement for Patrick Engineering's work there. Lang requested that Patrick Engineering resume its work on the pilot area and complete that work within a month. She continued:
“Upon delivery and review of the pilot data, the City will work with Patrick to determine if a change in scope to complete the remainder of Area B is required. At that time, the project specifications, feature count projections, and budget will undergo thorough review and any necessary changes will be made.
Please note, until the pilot area receives formal acceptance by the City, work performed in the remainder of Area B without prior authorization from the city's assigned Project Manager is at your own risk.”
The letter did not identify the project manager, but it was copied to several city officials, including “Debbie Kresl, Technology Project Manager.”
¶ 11 Patrick Engineering returned to work. Between May 2007 and September 2008, Patrick Engineering sent five invoices to the City. This table shows the dates and amounts of these invoices:
+---------------------------------------+
¦Invoice Date ¦Invoice Amount ¦
+-----------------+---------------------¦
¦May 31, 2007 ¦$ 6,910.00 ¦
+-----------------+---------------------¦
¦September 5, 2007¦$136,326.10 ¦
+-----------------+---------------------¦
¦February 6, 2008 ¦$259,232.67 ¦
+-----------------+---------------------¦
¦May 22, 2008 ¦$ 12,253.40 ¦
+-----------------+---------------------¦
¦September 9, 2008¦$ 21,660.66 ¦
+---------------------------------------+
This table shows Patrick Engineering's proposed cost and invoiced amount for each project area, as well as its total proposed cost and total invoiced amount:
+------------------------------------------------------------------------+
¦Project Area ¦Proposed Cost ¦Invoiced Amount ¦
+--------------------------+--------------------+------------------------¦
¦Project Management ¦$ 44,432 ¦$ 60,047.67 1 ¦
+--------------------------+--------------------+------------------------¦
¦Stormwater Needs Analysis ¦$ 35,580 ¦$ 59,184.66 ¦...To continue reading
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