Mayfair Construction Co. v. Waveland Associates Phase I Limited Partnership

619 N.E.2d 144, 249 Ill. App. 3d 188, 188 Ill. Dec. 780
CourtAppellate Court of Illinois
DecidedAugust 20, 1993
Docket1-91-4056
StatusPublished
Cited by43 cases

This text of 619 N.E.2d 144 (Mayfair Construction Co. v. Waveland Associates Phase I Limited Partnership) 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
Mayfair Construction Co. v. Waveland Associates Phase I Limited Partnership, 619 N.E.2d 144, 249 Ill. App. 3d 188, 188 Ill. Dec. 780 (Ill. Ct. App. 1993).

Opinion

PRESIDING JUSTICE McNAMARA

delivered the opinion of the court:

Defendant, Waveland Associates Phase I Limited Partnership, is appealing from an order of the trial court declaring that Waveland materially breached its contract with plaintiff, Mayfair Construction Company, by refusing to submit disputes initially to the project architect for determination prior to litigating them in the circuit court of Cook County. As a result of this breach, the trial court in its order precluded Waveland from raising any defenses or affirmative defenses to claims raised by Mayfair which were subject to being decided by the architect. The trial court’s order was based on a jury’s determination that, under the parties’ contract, Waveland was required to submit disputes initially to the architect and that its failure to do so was a material breach. Waveland also appeals from these jury findings.

Waveland raises several issues on appeal. Initially, it contends that the jury’s factual findings are erroneous and that the trial court’s order barring it from raising any defenses or affirmative defenses to Mayfair’s claims is legally unprecedented and unjustified. It also contends that the trial court erred by: (1) refusing to instruct the jury as to the legal meaning of “material breach”; (2) refusing to allow the issue of Mayfair’s own alleged contract breach to be raised at trial, precluding all evidence relating to it, and then issuing an order finding that Mayfair had substantially performed its contract obligations; (3) allowing the Mayfair attorney who negotiated the contract to testify at length, while precluding Waveland’s attorney who negotiated the contract from testifying on the same points; (4) making certain factual findings, and incorporating them into its order, that the jury was not asked to and did not resolve; and (5) denying Waveland’s motion to dismiss this declaratory judgment action on the grounds that Mayfair was really seeking an advisory opinion and had waived the only viable remedy, i.e., an order requiring disputes to be submitted to the architect.

Mayfair has filed a cross-appeal, contending that, in addition to barring Waveland from raising any defenses to Mayfair’s claims, the trial court should have also barred Waveland from raising any claims against Mayfair that were to have been initially decided by the architect.

This cause arises from the construction of a real estate project known as the New York Apartments located at 3660 North Lake Shore Drive in Chicago (the project). The project consisted of the construction of two buildings — a high-rise apartment building and an associated low-rise commercial building. After extensive negotiations, on November 19, 1985, Mayfair and Waveland entered into a construction contract under which Mayfair agreed to serve as general contractor for the project, of which Waveland was the owner. Throughout the contract negotiations, Mayfair sought to include in the contract a method for a neutral third party to resolve disputes between the parties. The principals of Mayfair and Waveland participated in six or seven negotiation meetings; their lawyers (Howard Kamin for Mayfair and Paul Lurie for Waveland) met on many other occasions and had numerous phone conversations during which the construction contract was discussed.

The construction contract consisted principally of two parts, the owner-contractor agreement and the general conditions. According to Waveland, article 17 of the owner-contractor agreement was the key dispute-resolution provision. In pertinent part, article 17 provides:

“17.1 — No decision of the Architect, Construction Manager, Owner, Contractor, or Lender hereunder which is disputed shall be final; and any such decision shall be subject to determination through litigation.
17.2 — Any dispute between Owner and Contractor hereunder may be litigated in the Circuit Court of Cook County, Illinois and the parties hereunder agree, and shall cause all parties in privity with them to agree to jurisdiction in such Court and that all discovery in such proceeding shall be completed within 90 days of the filing of the initial complaint therein and that the parties shall jointly apply to such Court for a trial thereon within 150 days of such filing.”

According to Mayfair, articles 2.2.14, 2.2.15, and 2.2.16 of the general conditions represent the pivotal dispute-resolution provisions. Article 2.2.14 provides:

“2.2.14 — The Architect will be the interpreter of the requirements of the Contract Documents and the initial judge of the performance thereunder by both the Owner and Contractor.”

Article 2.2.15 states:

“Claims, disputes and other matters in question between the Contractor and the Owner relating to the execution or progress of the Work or the interpretation of the Contract Documents shall be referred initially to the Architect for decision which he will render in writing within a reasonable time. Such decision may be litigated by either party.”

Finally, article 2.2.16 provides:

“All interpretations and decisions of the Architect shall be consistent with the intent of and reasonably inferable from the Contract Documents[.] *** In his capacity as interpreter and judge, he will endeavor to secure faithful performance by both the Owner and Contractor, [and] will not show partiality to either[.]”

Construction on the project began on or about November 19, 1985, the date Mayfair and Waveland signed the construction contract. In February of that year, Waveland entered into a contract with the project architect; that contract specifically excluded a standard provision that would have required the architect to be the judge of performance on the project and to issue decisions on disputes arising between Waveland and Mayfair. The architect’s contract was negotiated for Waveland by Waveland’s principal and Lurie, the same people who later negotiated the Mayfair contract. Mayfair was not made aware that there was any conflict between the two contracts with respect to the method of resolving disputes until very late in the negotiations, and when Kamin pointed out the conflict to Lurie, according to Kamin, Lurie told him that the architect would in fact be required to decide disputes. Throughout the period of negotiations between Waveland and Mayfair, the architect pointed out to Waveland that there were significant conflicts between the construction contract and the architect’s contract, most importantly that the architect’s decision-making role in the construction contract was not contemplated in the architect’s contract.

Under the terms of the construction contract, construction work on the project was to be substantially completed by September 18, 1987, unless the time of performance was extended by a change order. For every day after that date on which the project was not substantially completed, Mayfair was to pay Waveland $18,169 in liquidated damages. Mayfair was to be paid a bonus of $9,698 for each day the project was substantially completed before August 4, 1987. In addition, if any work was suspended by the owner for more than six months, Mayfair was entitled under the construction contract to renegotiate the price for that work or refuse to do it.

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Bluebook (online)
619 N.E.2d 144, 249 Ill. App. 3d 188, 188 Ill. Dec. 780, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mayfair-construction-co-v-waveland-associates-phase-i-limited-partnership-illappct-1993.