Faerber Electrical Co. v. International Telephone & Telegraph Corp.

463 N.E.2d 820, 123 Ill. App. 3d 704, 79 Ill. Dec. 266, 1984 Ill. App. LEXIS 1750
CourtAppellate Court of Illinois
DecidedApril 23, 1984
Docket83-1291
StatusPublished
Cited by4 cases

This text of 463 N.E.2d 820 (Faerber Electrical Co. v. International Telephone & Telegraph Corp.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Faerber Electrical Co. v. International Telephone & Telegraph Corp., 463 N.E.2d 820, 123 Ill. App. 3d 704, 79 Ill. Dec. 266, 1984 Ill. App. LEXIS 1750 (Ill. Ct. App. 1984).

Opinion

JUSTICE CAMPBELL

delivered the opinion of the court:

Plaintiff, Faerber Electric Company, Inc., appeals from the dismissal of count I of its three-count complaint pursuant to section 2— 619(a)(9) of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 619(a)(9)). Count I sought to foreclose on a mechanics’ lien allegedly arising out of an oral contract between an agent of the lessee, International Telephone and Telegraph Corporation (ITT), and plaintiff, the subcontractor of a general contractor retained by the lessee to renovate a portion of the leased property. On appeal, plaintiff raises the issue: whether the subcontractor’s waiver of all mechanics’ liens rights in his subcontract also applies to an alleged new oral contract between the subcontractor and the lessee for whom the work was performed when the lessee has allegedly taken over practical charge of the work from the contractor, and the lessee agreed to pay the subcontractor for additional work caused by changed work conditions and erroneous site plans.

Plaintiff, a Delaware Corporation qualified to do business in Illinois, brought a three-count complaint against various defendants as a result of certain work it performed in premises leased by ITT in an office building at 25 East Washington Street in Chicago. Count I sought to enforce plaintiff’s mechanics’ lien. Count II alleged a breach of contract action against ITT and count III alleged a negligence action against the architectural firm that drew the site plans. Subsequent to this appeal, plaintiff added another count alleging, in the alternative to counts I and II, a breach of contract action against the contractor.

In its complaint plaintiff alleged that ITT entered into a contract with the Interior Alterations, Inc., whereby Interior Alterations would serve as general contractor for the repair and remodeling of premises leased by ITT in the office building known as the “Field Annex Building.” These tenant improvements were to be constructed in accordance with pre-existing plans and specifications which ITT prepared for the project. The contract provided that the general contractor waived any right to record a mechanics’ lien and required that the general contractor obtain similar waivers from its subcontractors.

The general contractor awarded plaintiff the subcontract for electrical work to be performed in accordance with the plans and specifications. Pursuant to the subcontract, the contractor issued a series of written purchase orders to plaintiff between May 1, 1980, and August 25, 1980. Plaintiff accepted each of these purchase orders. The purchase orders stated that “in consideration of future work to be performed for contractor, the subcontractor agrees that the terms and conditions shall be binding with respect to all future work performed for the contractor (whether covered by specific contracts, purchase orders, or otherwise).” One of the terms of the purchase order was that “No mechanic’s lien shall be filed against the premises for work done or materials furnished by the subcontractor.” Plaintiff alleged that it performed the work required of it under the terms of its contract with the contractor, and also performed extra work ordered by the contractor and has received full payment for that work.

Plaintiff alleged, however, that the problems arose when it became apparent that the plans furnished to plaintiff were inaccurate and the lessee substantially changed the sequence and the conditions in which the work was to be performed. Specifically, plaintiff claimed that its bid to perform the electrical work was based on the representation that plaintiff would install electrical computer cables, conduits and other electrical equipment under a certain raised floor prior to the installation of computer components on the raised floor. Nevertheless, ITT installed the computer equipment before plaintiff had the opportunity to perform its work. Also, computer technicians on the job site materially interfered with plaintiffs ability to perform its contract. Plaintiff further alleged that ITT’s plans designated a particular vertical shaft as the location of certain electrical raisers and junctions boxes. That specific shaft was obstructed, and ITT failed to obtain permission from the premises owner to use the next best alternative vertical shaft. Instead, ITT directed plaintiff to use another shaft which resulted in increased labor and material costs. The extra work caused by ITTs actions cost plaintiff $129,755 or 81% of the original contract price, including extras approved by the general contractor.

Plaintiff alleged that during its performance under the contract, ITT, through its agent Walt Roden, began to take practical charge of the project away from the general contractor by participating in discussions of how the work was to be done, by causing dramatic changes in the plans and by supervising the performance of the work. In July 1980 plaintiff complained to Roden that under the circumstances it could not perform its work at the contract price. Plaintiff alleged that Roden then authorized and directed plaintiff to proceed with the work required by the contract and assured plaintiff that ITT would pay for the additional costs. At the completion of its electrical work, plaintiff billed ITT for the extra work caused by the inaccurate plans, the changed conditions and the work which had to be performed out of its proper sequence. ITT refused to consider plaintiff’s claim. Consequently, plaintiff filed a mechanics’ lien claim as an original contractor on the basis of the new and independent contract between plaintiff and ITT.

ITT filed a motion to dismiss count I of plaintiff’s complaint based upon the “no lien” provisions contained in the purchase orders, and “no lien” provisions in the contract between ITT and the general contractor. The trial court granted ITT’s motion and dismissed count I of plaintiff’s complaint. The court found that the “no lien” provisions of plaintiff’s contract prohibit the filing of a mechanics’ lien foreclosure action. The court held that plaintiff’s allegations that ITT took practical charge of the work places ITT in the position of a “Successor ‘acting general contractor’ ” so that all work ordered by ITT was to be performed under the same terms and conditions as the original contract. The court also held that the dismissal of the lien does not extinguish any other remedy available to plaintiff to recover for work performed at the request of ITT.

On appeal, plaintiff argues that the extra work for which it seeks compensation in this suit was not performed pursuant to the subcontract. Rather, it was performed pursuant to a new and independent contract between plaintiff and ITT. Plaintiff asserts that the new contract did not contain any waiver of lien rights and places plaintiff in the position of a contractor entitling plaintiff to perfect its lien under the Mechanics’ Liens Act (Ill. Rev. Stat. 1981, ch. 82, pars. 1, 7). Plaintiff further contends that it is not bound by the “no lien” provisions in the contract between ITT and the general contract because under section 21 of the statute a subcontractor is not bound by such a provision when the subcontractor had no actual notice of its existence. Ill. Rev. Stat. 1981, ch. 82, par. 21.

ITT contends that the lien waiver contained in the series of purchase order agreements applies to the alleged contract between plaintiff and ITT under the authority of William Aupperle & Sons, Inc. v.

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Cite This Page — Counsel Stack

Bluebook (online)
463 N.E.2d 820, 123 Ill. App. 3d 704, 79 Ill. Dec. 266, 1984 Ill. App. LEXIS 1750, Counsel Stack Legal Research, https://law.counselstack.com/opinion/faerber-electrical-co-v-international-telephone-telegraph-corp-illappct-1984.