Restore Constr. Co. v. Bd. of Educ. of Proviso Twp. High Sch. Dist. 209

• Decision Date: 16 April 2020
• Docket Number: Docket No. 125133
• Citation: 444 Ill.Dec. 663,164 N.E.3d 1238,2020 IL 125133
• Parties: RESTORE CONSTRUCTION COMPANY, INC., et al., Appellees, v. The BOARD OF EDUCATION OF PROVISO TOWNSHIP HIGH SCHOOLS DISTRICT 209, Appellant.
• Court: Illinois Supreme Court

2020 IL 125133

164 N.E.3d 1238

444 Ill.Dec. 663

RESTORE CONSTRUCTION COMPANY, INC., et al., Appellees,

v.The BOARD OF EDUCATION OF PROVISO TOWNSHIP HIGH SCHOOLS DISTRICT 209, Appellant.

Docket No. 125133

Supreme Court of Illinois.

Opinion filed April 16, 2020

JUSTICE KARMEIER delivered the judgment of the court, with opinion.

¶ 1 At issue in this case is whether the circuit court of Cook County erred when it concluded that Restore Construction Company, Inc., and Restore Restoration, Inc. (referred to collectively as Restore), are barred from recovering the remaining sums they seek for emergency repair and reconstruction work they performed on behalf of the Board of Education of Proviso Township High Schools District 209 (the Board and District, respectively) solely because certain steps normally required by the School Code ( 105 ILCS 5/1-1 et seq. (West 2014)) for approval of contracts may not have been followed. Although the Board was operating under the control of a Financial Oversight Panel (FOP) (see id. § 1H-1), the FOP's chief fiscal officer approved the contracts once they were signed by District officials, the work was undertaken on an emergency basis and informally approved by a majority of the Board following its completion, there was no dispute as to the need for the work or the reasonableness of the charges, and Restore received timely payment from the Board's insurance company for most of the work it performed, the circuit court believed that under the law the Board should have let the project out for competitive bidding and then approved the contracts by a formal vote before the work commenced. In the view of the circuit court, its failure to do so precluded any further payments to Restore. It therefore dismissed all counts of Restore's third amended complaint with prejudice, leaving the parties in the position it found them when the litigation began.

¶ 2 On appeal, Restore challenged only the circuit court's disposition of counts I and II of its third amended complaint. Those counts, which sought recovery based on quantum meruit , were dismissed by the trial court pursuant to section 2-619(a)(9) of the Code of Civil Procedure ( 735 ILCS 5/2-619(a)(9) (West 2018). The appellate court reversed and remanded. It held that Restore is entitled to proceed against the Board based on quantum meruit and that the quantum meruit counts asserted by Restore in counts I and II of its third amended complaint remain viable. 2019 IL App (1st) 181580, 433 Ill.Dec. 723, 133 N.E.3d 71. We granted the Board leave to appeal ( Ill. S. Ct. R. 315 (eff. July 1, 2018)). For the reasons that follow, we affirm the appellate court's judgment.

¶ 3 BACKGROUND

¶ 4 Because this matter comes before us in the context of a dismissal under section 2-619 of the Code of Civil Procedure, we accept as true all well-pleaded facts in the plaintiff's complaint and all inferences that may reasonably be drawn in the plaintiff's favor. Ferguson v. City of Chicago , 213 Ill. 2d 94, 96-97, 289 Ill.Dec. 679, 820 N.E.2d 455 (2004). Pursuant to this standard and based on the allegations in Restore's complaint, we take the facts of this case to be as follows for the purposes of our review.

¶ 5 On May 10, 2014, a serious fire broke out at Proviso East High School (Proviso East) in Maywood, one of three public high schools operated by Proviso Township High Schools District 209. The blaze caused significant damage to the structure and its contents, jeopardizing the ability of the District to safely reopen it in time for the planned beginning of the next school year the following August, just three months away.

¶ 6 At the time of the fire the District was governed by a seven-member elected board of education led by Daniel J. Adams, the Board's president. Among Adams's responsibilities were presiding over the business of the Board at official meetings and signing official District documents. Netti Collins-Hart, Ed.D, was employed by the Board as superintendent of schools. In that capacity, she served as the District's chief executive officer and was responsible for the administration and management of the District's schools in accordance with the Board's policies and state and federal law.

¶ 7 The District was also subject to an additional level of supervision and control. In 2008, the State Board of Education established an FOP to oversee the District pursuant to the School District Financial Oversight Panel and Emergency Financial Assistance Law ( 105 ILCS 5/1B-1 et seq. (West 2008)). The District subsequently became subject to the Financial Oversight Panel Law ( 105 ILCS 5/1H-1 et seq. (West 2012)), which took effect in 2011, and it operated under an FOP established in accordance with that statute (see id. § 1H-15) at the time of the fire.

¶ 8 As authorized by section 1H-30(3) of the Financial Oversight Panel Law ( 105 ILCS 5/1H-30(3) (West 2014)), the FOP employed Todd Drafall to serve as chief fiscal officer. In that capacity Drafall possessed "all of the powers and duties of the district's chief school business official" and had responsibility for any other duties regarding financial matters assigned to him by the FOP. Id. As required by statute, Drafall reported to the FOP rather than the District when carrying out those responsibilities. Id. § 1H-30.

¶ 9 Restore Construction, Inc., is an Illinois corporation engaged in the business of, among other things, repairing fire-damaged structures and providing related construction services. It shares common ownership and management with Restore Restoration, Inc., which provides disaster mitigation and related restoration services. Shortly after the fire, Restore Construction was contacted by representatives of the District and asked to provide emergency mitigation services at Proviso East. Restore had provided similar service to the District in the past and was recognized by the District as possessing a high degree of professional skill.

¶ 10 The District's customary practice when contracting for repair and payment of losses covered by its property loss insurance was to proceed without a recorded vote of its Board. The loss in question here was covered by the District's insurance—as a member of the Collective Liability Insurance Cooperative it was insured by Travelers Indemnity Company (Travelers)—and that is how it handled the emergency mitigation and repair work following the Proviso East fire. Promptly after the fire took place, representatives of the District contacted Restore to request emergency mitigation services and advised Restore that the District "would approve contracting with Restore Restoration to mitigate and remediate damage due to the fire and with Restore Construction to repair the property loss damage to the School."

¶ 11 On May 22, 2014, the District's superintendent, Collins-Hart, executed two contracts, one with Restore Restoration to mitigate and remediate fire damage and the other with Restore Construction to repair the fire-damaged school. Both contracts were signed by Collins-Hart and represented by her to be on behalf of the District. The District also hired Legat Architects, Inc. (Legat), an Illinois corporation engaged in the business of providing professional architectural services, to prepare plans and work specifications for the fire damage renovations and to act as contract administrator on the project.

¶ 12 The project manual prepared by Legat set out the responsibilities of all participants in the project, including the District, Legat, Restore, and Travelers. At the direction of the District, the specifications prepared and issued by Legat also incorporated statutory labor wage standards and rates. This was done pursuant to a policy adopted by the Board in June 2014 and approved by the Board's president.

¶ 13 The hiring of Legat and adoption of the specifications were affirmed by Collins-Hart. In addition, Drafall, the FOP's chief fiscal officer, attended construction meetings on the project, either in-person, via telephone conference, or through a designee, and accepted and approved as fair and reasonable numerous subcontracts, quotations, bids, sales orders, change orders, and invoices for the project. At Drafall's direction, the District's project manager, Ron Anderson, executed and approved as fair and reasonable additional work. The District's buildings and grounds manager did so as well. According to Restore's complaint, this was all done with the District's knowledge and consent. In addition, in August 2014, the Board's president signed an amended agreement with Restore governing repair of the fire damage at the school. An affidavit signed by Drafall and attached as an exhibit to Restore's complaint states that he reviewed and initialed both the amended agreement and the two contracts previously signed by the superintendent.

¶ 14 Restore performed the emergency mitigation and repair work it was hired to do in accordance with the specifications prepared by Legat and approved, adopted, and implemented by the District and its insurers, including Travelers. Restore was paid in part and expected to be paid in full for its work on the school through the Travelers policy covering the District's loss. Restore dealt directly with the claims administrator for Travelers, and Restore was paid for its work through the District's insurers. Where insurance checks were issued to the District, the District would endorse the checks over to Restore.

¶ 15 Throughout the course of the project, Drafall provided regular updates to the Board and the FOP on the work that was being done. The Board participated in the Project by, among other things, having District employees, Legat, and other hires attend construction meetings and report back to it. Neither the Board nor the FOP ever disapproved of any actions taken by Drafall or District employees acting on the Board's behalf. To the contrary, all actions of Drafall on the project were accepted by both the Board and the FOP.

¶ 16 According to the...