J.M. Process Systems, Inc. v. W.L. Thompson Electric Co.

578 N.E.2d 264, 218 Ill. App. 3d 350, 161 Ill. Dec. 137, 1991 Ill. App. LEXIS 1368
CourtAppellate Court of Illinois
DecidedAugust 13, 1991
Docket1-90-2923
StatusPublished
Cited by12 cases

This text of 578 N.E.2d 264 (J.M. Process Systems, Inc. v. W.L. Thompson Electric Co.) 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
J.M. Process Systems, Inc. v. W.L. Thompson Electric Co., 578 N.E.2d 264, 218 Ill. App. 3d 350, 161 Ill. Dec. 137, 1991 Ill. App. LEXIS 1368 (Ill. Ct. App. 1991).

Opinion

JUSTICE HARTMAN

delivered the opinion of the court:

Plaintiff, J.M. Process Systems, Inc. (Process), appeals from an order of the circuit court granting defendant W.L. Thompson Electric Company, Inc.’s (Thompson’s) motion for summary judgment in a construction contract controversy.

Process asks for review of whether (1) Process, as a subcontractor, was required by its contract with Thompson to provide waivers of liens as conditions prerequisite to payment; (2) section 22 of the Mechanics’ Liens Act (Ill. Rev. Stat. 1987, ch. 82, par. 22) (Act) applied to subcontractors and material suppliers; (3) Thompson timely demanded a section 22 statement from Process; and (4) the circuit court erred in granting Thompson’s motion for reconsideration. For reasons which follow, we affirm.

The genesis of this dispute was the proposed construction of a ground storage reservoir in the Village of Westmont. In September 1987, the village issued “Specifications of Material and Labor” (specifications) in order to elicit written bids from general contractors. CBI Na-Con was awarded the general contract and served in that capacity during the construction project.

On October 23, 1987, Thompson, an Illinois corporation doing business in Schaumburg, successfully bid for the electrical subcontract contained in the specifications. As part of the subcontract awarded by CBI Na-Con, Thompson was to provide the “Instrumentation/Metering Systems and Supervisory Controls” required by the specifications. On October 19, 1987, pursuant to Thompson’s subcontract, Process, an Illinois corporation doing business in Alsip, proposed to furnish an “Aquatrol” system package which complied with the specifications. On February 26, 1988, Thompson, through its president, James D. Martin, sent Process a purchase order to obtain the equipment described in Process’ proposal for $38,508.

Process shipped the system on May 2, 1989. Its invoice, mailed on May 5, 1989, was received by Thompson, which made no payment. On September 29, 1989, Process notified the village that it had not yet been paid and threatened to discontinue service and its warranty. In response, Thompson advised Process that at the time it wrote the letter to the village, the control system Process had provided was not working and had not been corrected until October 6, 1989. Since the contract called for a “working system,” no payment could have been made prior to October 6, 1989. Thompson also informed Process that a check for 75% of the contract price was ready to be sent upon Thompson’s receipt of Process’ “partial waivers.” The check had been available since mid-July 1989, but had not been picked up and no waivers had been received. Thompson also offered to have 95% of the amount ready within 24 hours’ notice if the partial waiver was received. Because of the previous equipment failure, Thompson advised Process that 5% of the amount would be withheld until the system functioned, without failure, for 30 consecutive days; at that time it would be accepted “per the specifications.” Process responded that the waivers of liens were not a condition of sale and found the demand “insulting and outdated.” Process subsequently brought this action for breach of contract on January 10, 1990.

In lieu of filing an answer, Thompson moved for summary judgment on April 10, 1990, postulating that, under their contract, Process was required to provide Thompson with waivers of liens before Process could be paid. Since no waivers of liens had been received, Thompson asserted it was not obligated to pay. In addition, citing the Act, Thompson claimed that Process failed to submit an affidavit in compliance with section 22 of the Act (III. Rev. Stat. 1987, ch. 82, par. 22) and, as a result, that it could not now bring a breach of contract action against Thompson. Attached to the motion was the affidavit of James D. Martin, who swore that the waivers of liens were required by the contract specifications which Process had proposed to fulfill in its October 19 proposal. A copy of the specifications was also attached to the motion as was the correspondence between these parties.

James McDermott, Process’ company president, also filed an affidavit in which he denied that the waivers of liens language applied to the parties’ contract. Process’ response to Thompson’s motion for summary judgment raised arguments regarding whether the waivers of liens condition had been incorporated properly into the parties’ contract and whether section 22 of the Act pertained to it. A letter from CBI Na-Con to the village, which certified that all waivers of liens had been received, was also attached to Process’ response.

The circuit court granted Thompson’s motion for summary judgment without prejudice on June 28, 1990, and gave Process leave to file an amended complaint within 14 days. The circuit court appears to have ruled that the written contract between the parties required compliance with the waivers of liens clause as a condition precedent to payment. On July 12, 1990, Thompson successfully moved for reconsideration, to the effect that the June 28 order was modified to read “with prejudice.” The latter order was entered on September 10, 1990. By timely notice of appeal, Process challenges both orders.

I

Initially, Process argues that the contract did not condition payment upon tender of waivers of liens and that the provisions of the contract between the general contractor, CBI Na-Con and Thompson were not incorporated into Process’ subsequent subcontract with Thompson.

Process proposed to furnish the materials needed to meet the specifications explicitly set forth in sections 91 and 93 of the document. Thompson’s purchase order accepted the proposed equipment expressly “per specifications.” Specification sections 91 and 93 both refer to the general conditions of the contract, which begin with the following paragraphs:

“These Specifications, in general, call the Contractor’s attention to the various items required to complete the work. The Plans and Specifications are intended to include everything obviously requisite and necessary to the proper and entire finishing of each branch or trade of the work, whether each necessary item is mentioned herein or not.
All work herein specified or called for by the accompanying Plans must be executed in accordance with all applicable federal, state and local laws, ordinances, rules and regulations pertaining, but not limited, to building codes and safety of persons and property. The Contractor and Subcontractors shall pay all applicable sales, consumer, use and other similar taxes required by law for the purchase of equipment, materials and supplies for the work.
The clauses in these General Conditions, unless otherwise mentioned, are to apply to all parts of the work.”

Included among the general conditions was the following requirement, now at issue here:

“WAIVER OF LIENS:

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Bluebook (online)
578 N.E.2d 264, 218 Ill. App. 3d 350, 161 Ill. Dec. 137, 1991 Ill. App. LEXIS 1368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jm-process-systems-inc-v-wl-thompson-electric-co-illappct-1991.