My Baps Construction Corporation v. The City of Chicago

2017 IL App (1st) 161020

• Court: Appellate Court of Illinois
• Decided: September 29, 2017
• Docket: 1-16-1020
• Status: Unpublished

Opinion

2017 IL App (1st) 161020

FIFTH DIVISION September 29, 2017

No. 1-16-1020

MY BAPS CONSTRUCTION CORPORATION, ) Appeal from the Circuit Court an Illinois Corporation, and GINA KROL, as ) of Cook County. Bankruptcy Trustee of the Estate of My Baps ) Construction Corporation, ) ) Plaintiffs-Appellants, ) ) v. ) No. 12 CH 11822 ) THE CITY OF CHICAGO, an Illinois Municipal ) Corporation; THE CITY OF CHICAGO ) DEPARTMENT OF PROCUREMENT ) SERVICES; JAMIE L. RHEE, Chief Procurement ) Officer for the City of Chicago Department of ) Honorable Chicago Procurement Services; THE CITY OF CHICAGO ) Kathleen G. Kennedy, DEPARTMENT OF TRANSPORTATION; and ) Judge Presiding. GABE KLEIN, Commissioner, the City of Chicago ) Department of Transportation, ) ) Defendants-Appellees. )

JUSTICE HALL delivered the judgment of the court, with opinion. Presiding Justice Reyes and Justice Lampkin concurred in the judgment and opinion.

OPINION

¶1 The plaintiffs, My Baps Construction Corporation and Gina Krol, 1 bankruptcy trustee for

the estate of My Baps Construction Corporation (collectively My Baps), filed a three-count

complaint in the circuit court of Cook County against the defendants, the City of Chicago,

1 During the circuit court proceedings, David Grochocinski, the original trustee in bankruptcy for My Baps, was replaced by Ms. Krol. No. 1-16-1020

the City of Chicago Department of Procurement Services (DOPS), Jamie L. Rhee, Chief

Procurement Officer (CPO) for the City of Chicago’s Department of Procurement Services

(CPO Rhee), the City of Chicago Department of Transportation (CDOT), and Gabe Klein,

Commissioner of the City of Chicago Department of Transportation (collectively the City).

Count I sought a writ of certiorari to challenge CPO Rhee’s decision denying My Baps’

claims. Counts II and III sought damages for breaches of two contracts the City awarded My

Baps. The circuit court granted the City’s section 2-615 of the Code of Civil Procedure (735

ILCS 5/2-615 (West 2012)) motion to dismiss counts II and III of the complaint for failure to

state a cause of action and quashed the writ of certiorari sought in count I of the complaint.

¶2 My Baps appeals contending that the circuit court erred when it (1) dismissed counts II

and III of the complaint for failure to state causes of action for breach of contract, (2) ruled

that the administrative proceeding did not violate the automatic stay in force after My Baps

filed for bankruptcy protection, (3) denied My Baps’ request to supplement the

administrative record, and (4) affirmed the decision of CPO Rhee. For the reasons stated

below, we confirm the decision of CPO Rhee and affirm the orders of the circuit court.

¶3 BACKGROUND

¶4 I. Facts

¶5 The City solicited bids for its “Green Alley” construction project. The project was for the

construction of new alleys and included removal of existing alley pavement, installation of

new sewer structures and mainlines, and installation of new pavement, driveways, and ramps.

The bid package included a pricing schedule, which contained line items for each type of

work to be performed, specified the quantity of material and how the material was to be

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measured, i.e., square feet, cubic feet, or feet. The contract bidder inserted the price per the

applicable measurement in order to arrive at the amount per line item. Bidders were

instructed to submit balanced bids for each line item and cautioned not to submit bids

nominally pricing some line items and enhancing the pricing for other line items.

¶6 Three line items are pertinent to the issues on appeal. Line item 2 was described as

“EARTH EXCAVATION” and provided for the clearing, grading, or excavating of “the

alley DEFINED AREAS.” Line item 3 was described as “SPECIAL EXCAVATION,” and

provided for “the excavation or removal and satisfactory disposal of only that volume of

material regardless of its nature” necessary to the construction of the improvements. Line

item 49 was described as “ALLEY PAVEMENT REMOVAL AND SUBGRADE

PREPARATION FOR GREEN ALLEY.”

¶7 My Baps bid on two contracts: the South Area contract and the North Area contract.

Under the South Area contract, line item 49 specified 7500 square yards. Under the North

Area contract, line item 49 specified 4,800 square yards. For line item 49, My Baps’ bid

provided a unit price of $72, for a total of $540,000 for the South Area contract and $345,600

for the North Area contract.

¶8 The City accepted My Baps’ bid and awarded it the South Area contract for a total of

$5,562,150 and the North Area contract for a total of $3,211,690. Both contracts were to

expire December 1, 2008, but both were extended through December 31, 2010. The contract

amounts were adjusted upwards and resulted in a final contract value of $11,562,150 for the

South Area contract and $9,211,690 for the North Area contract (hereinafter referred to as the

Contracts).

3 No. 1-16-1020

¶9 II. Claims and Disputes Resolution Procedures

¶ 10 A. Section XX Claims and Disputes Provision of the Contracts

¶ 11 Section XX of the Contracts set forth the procedure for resolving claims and disputes

arising during construction. Claimants were required to comply with the provisions of section

XX as a precondition of seeking judicial review of an adverse decision by the CPO. In

subsection B of section XX, a claimant was required to comply with the following:

“Within 14 days after a basis for claim arises, you must submit your claim in

writing to the City’s resident engineer or its project manager (‘Commissioner’s

Representative[’]). This written claim to the Commissioner’s Representative will

constitute ‘notice’ to the City for purposes of determining initial timeliness of the

claim; oral notice is insufficient. If you and the Commissioner’s Representative are

unable promptly (depending upon the complexity of the matter) to resolve the claim,

you must forward your claim in writing to the Commissioner together with the

documents listed *** below.”

¶ 12 In the event the claimant disputed the CDOT commissioner’s denial or resolution of its

claim, the claimant was required to invoke the dispute resolution procedure set forth in

subsection C of section XX and which provided as follows:

“you have 10 days to forward your claim and your documentation to the [CPO]

indicating to him that you are requesting resolution of a dispute and showing you

have complied with the preceding claims procedure. Your 10-day period to invoke

dispute resolution by the [CPO] is counted from the date the Commissioner’s written

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resolution was sent to you, or if he has not responded or forwarded the claim, from

the date on which the time for the Commissioner’s response lapsed.”

The failure to file a request for resolution of the dispute within the 10-day period, waives the

claim, as well as the right to make the claim later and the right to dispute the resolution or

denial of the claim.

¶ 13 Once the dispute resolution procedures are invoked, the CPO “will proceed to a final and

binding decision under such rules and regulations as he from time to time promulgates.” If

either the claimant or the commissioner disagrees with the CPO’s decision, “the exclusive

remedy is judicial review by a common law writ of certiorari. Unless such review is sought

within 35 days of receipt of the [CPO’s] decision, all rights to seek judicial review are

waived.”

¶ 14 B. DOPS Rules and Regulations

¶ 15 Pertinent to the issues on appeal are portions of the “REGULATIONS OF THE

DEPARTMENT OF PROCUREMENT SERVICES FOR RESOLUTION OF DISPUTES

BETWEEN CONTRACTORS AND THE CITY OF CHICAGO (DOPS regulations).” The

DOPS regulations “establish the dispute resolution procedures for Contracts. These

procedures apply to the resolution of a Contract dispute except to the extent that the subject

Contract specifies different procedures.” The DOPS regulations further provide that the

request for resolution of a claim “must be submitted no later than 120 days after the

expiration of the Contract. Failure to submit a Request either during the contract term or

within the 120 day time period after expiration will constitute a waiver of the opportunity to

initiate a dispute resolution.”

5 No. 1-16-1020

¶ 16 The DOPS regulations specify the documentation and materials required to be submitted

to the CPO in the request. In addition, the DOPS regulations provide that, in its request for

resolution of the dispute, a party could submit “a statement explaining why the Requesting

Party believes that prior to rendering a final decision, the [CPO] should meet with all or some

of the Requesting Parties, the Responding Parties,” or other parties necessary to the

resolution of the dispute. The purpose of such a meeting “is to enable the [CPO] to obtain

information that is not available in the written submissions of the Parties, or to better

understand the positions of the Parties concerning the dispute.” The responding party could

submit supplemental documentation or written information comparable to the information the

requesting party was required to submit.

¶ 17 In the event that the CPO agrees to hold a meeting, the DOPS regulations provide as

follows:

“The [CPO] will preside over the meeting ***. Each party may be represented by an

attorney. *** The [CPO] may question any party in any order. Each Party may be

allowed to question another Party, but will be subject to the restrictions of the [CPO].

The formal rules of evidence will not apply, but the Parties must avoid the

presentation of extraneous or irrelevant material.”

¶ 18 The DOPS regulations provide that the CPO’s final decision could be reached on the

written submissions of the parties only. Finally, the DOPS regulations provide that “[n]either

the [CPO’s] determination, nor the continued performance by either party, constitutes an

admission as to any factual and/or legal position in connection with the dispute or a waiver of

any rights under the Contract.”

6 No. 1-16-1020

¶ 19 My Baps commenced work on the project in 2007. It received its first payout on the

Contracts in late 2007.

¶ 20 III. Dispute Resolution Proceedings on My Baps’ Claims

¶ 21 A. Notice of Claims

¶ 22 In a November 4, 2009, letter to John Yonan, deputy commissioner of CDOT, Yashvant

Patel, president of My Baps, asserted that, under the Contracts, the excavation of the alleys to

the subgrade called for payment under line item 49 rather than line items 2 or 3. Mr. Patel

pointed out that on similar CDOT green alley projects the same work had been compensated

under line item 49, and he requested the same compensation under the Contracts.

¶ 23 In his March 2, 2010, response to Mr. Patel’s letter, Mr. Yonan denied My Baps’ request

for payment under line item 49. Mr. Yonan pointed out that My Baps did not comply with

the specific instructions for performing the work called for under line item 49, CDOT did not

request that My Baps perform the excavation of the alleys under line item 49, and the other

projects specified performance under line item 49. On December 17, 2010, Mr. Patel again

wrote Mr. Yonan complaining that My Baps had not been compensated for the work it

performed and that the work was still being paid for under line item 3 rather than under line

item 49.

¶ 24 On February 25, 2011, Mr. Yonan responded by pointing out that the construction

methods used by My Baps did not meet the requirements of line item 49. Mr. Yonan

specifically noted that item 49 required “that the existing pavement be utilized as a platform

for the removal equipment to operate from. This specification prohibits construction

equipment from driving on the exposed subgrade surface in an effort to minimize the

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compaction of the existing subgrade material. The construction of alleys performed to date

were not performed in this manner, therefore payment was made utilizing Item 2—Earth

Excavation and Item 3—Special Excavation in accordance with the contract documents.” Mr.

Yonan also denied My Baps’ request for payment for paving over the infiltration trenches.

Mr. Yonan explained that My Baps’ choice of paving over the trench and removing the

excess material as “contractor means and methods” and was considered as part of My Baps’

construction procedure and not a requirement of the contract. Therefore no additional

compensation was due My Baps for this work.

¶ 25 B. Proceedings Before the CDOT Commissioner

¶ 26 On September 20, 2011, My Baps’ attorney wrote to Bobby L. Ware, the commissioner

of the CDOT, submitting a written claim in accordance with section XX of the Contracts. In

the letter, the attorney explained that My Baps had attempted, albeit unsuccessfully, to

resolve the payment disputes with Mr. Yonan. The attorney informed Commissioner Ware

that My Baps was on the verge of bankruptcy. In compliance with the requirements of

section XX, My Baps submitted a draft complaint and exhibits thereto, a compact disc

containing records supporting the claim, and a summary of the damages totaling $6,382,197.

¶ 27 On October 14, 2011, Gabe Klein, the acting commissioner of CDOT, responded to My

Baps, denying its claim. Commissioner Klein determined that My Baps did not comply with

the Contracts’ claims’ provisions in that My Baps did not contact the resident engineer

regarding the claim and the claim was untimely, having been brought more than 14 days after

the basis for the claim arose. Commissioner Klein also denied the claim on the merits, noting

that there was no line item 49 for the alleys for which My Baps sought payment, though he

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acknowledged that the City had mistakenly paid My Baps under item 49 for other alleys. In

addition, My Baps failed to submit any supporting documentation that it complied with the

specifications required for payment under line item 49. Commissioner Klein also denied My

Baps request for payment for the retrenching work. Commissioner Klein advised My Baps

that in accordance with the dispute resolution procedure, it could file a request for resolution

of the dispute with the City’s CPO.

¶ 28 C. Proceedings Before the CPO

¶ 29 On October 28, 2011, My Baps’ attorney wrote to CPO Rhee, invoking the dispute

resolution procedure set forth in subsection C of section XX of the Contracts. My Baps

disputed Commissioner Klein’s denial of its claim, arguing that the notice to proceed with

the work instructed it to submit a copy of all correspondence to Mr. Yonan, that there were

complex issues which took time to resolve, and it exhausted all of its efforts to resolve the

disputes as required by the claim provisions in the Contracts. My Baps maintained that the

City directed it to remove the alley pavement and prepare the subgrade in accordance with

line item 49. My Baps further maintained that the City was simply trying to save money by

not paying My Baps, violating the terms and spirit of the Contracts, as well as its duty of

good faith and fair dealing.

¶ 30 Finally, My Baps’ attorney informed CPO Rhee that My Baps had filed for bankruptcy

protection on September 21, 2011. The attorney explained that My Baps was submitting this

letter to preserve its rights under the Contracts and that it did not intend to waive any rights

under the Bankruptcy Code.

9 No. 1-16-1020

¶ 31 On November 21, 2011, the City responded to My Baps’ request for dispute resolution of

its claim that it was owed additional compensation under line item 49. The City maintained

that Commissioner Klein correctly determined that My Baps’ claim was untimely and that

My Baps had not contacted the resident engineer as required by subsection B of section XX.

The City further maintained that My Baps’ reliance on the correspondence requirement in

notice to proceed was misplaced since the correspondence requirement did not reference the

Contracts’ specific procedures for resolving claims and disputes.

¶ 32 Addressing the merits of My Baps’ claim, the City relied on the supporting documents

and the affidavit of Ibrahim Hadzic, CDOT’s project manager. The City pointed out that My

Baps produced no documentation showing that the City directed it to perform work under

line item 49. After My Baps’ bid was selected, Mr. Hadzic estimated the quantities of the

necessary materials, which could not be altered unless the change was approved by the

resident engineers. After reviewing the estimates, My Baps never requested a change in the

estimated quantities from line items 2, 3, and 49. CDOT’s estimated quantities for two alleys

in the south area and one in the north area did not request quantities under line item 49. My

Baps claimed to have done work under line item 49, even though its spreadsheets indicated

that the City did not request work under line item 49.

¶ 33 The City pointed out that the specific removal procedures in line item 49 were to avoid

compaction of the subgrade. Line item 49 would only have been used in alleys where the

subgrade was not already compacted and would not have been used in the majority of the

City’s alleys, which had been traveled on for 100 years. The City’s quantity estimates and

costs budget anticipated that the removal and disposal work would be done under line items 2

and 3 rather than 49. Finally, the City maintained that My Baps was not entitled to additional

10 No. 1-16-1020

compensation for the installation of the infiltration trenches and the removal of the pavement

since those costs were the result of My Baps’ chosen method of construction and not required

under the contracts.

¶ 34 On February 27, 2012, CPO Rhee denied My Baps’ claims for compensation under the

contracts for removing existing pavement and for its work in connection with the new

infiltration trenches. Based upon the documentation submitted by My Baps and the City,

CPO Rhee found that My Baps’ request for resolution of the claims was not timely as it was

submitted more than 120 days after the expiration of the Contracts. The Contracts expired on

December 31, 2010. Because the last day to file the request fell on a Saturday, My Baps was

required to request dispute resolution by Monday, May 2, 2011. My Baps did not submit its

request until October 27, 2011, 2 or 300 days after the expiration of the Contracts. Therefore,

My Baps waived its opportunity to invoke dispute resolution under the Contracts.

¶ 35 CPO Rhee also found that My Baps’ submittal of its claims to the CDOT commissioner

was also untimely since they were not submitted within 14 days after the basis of the claim

arose. The CPO found nothing in My Baps’ letter of November 4, 2009, establishing when

the basis for its claim under line item 49 arose and made no mention of any claim for its

work on the infiltration trenches. Moreover, My Baps’ records indicated that it had been

receiving payments for two years prior to November 4, 2009, and should have been aware of

any payment issues. Therefore, CPO Rhee upheld Commissioner Klein’s untimeliness

determination.

¶ 36 CPO Rhee further found that My Baps’ reliance on the notice to proceed to explain why

it dealt with Mr. Yonan rather than the resident engineer or the project manager was

2 The letter from My Baps’ attorney to CPO Rhee was dated October 28, 2011.

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misplaced. Mr. Yonan was never designated the resident engineer or the project manager.

The notice to proceed referred to correspondence related to the construction work whereas

section XX of the Contracts controlled the resolution of written claims.

¶ 37 Based on the Contracts and the competent evidence, CPO Rhee found that My Baps’

claims were properly denied on their merits. CPO Rhee noted that My Baps’ did not dispute

that, based on the City’s estimated material quantities, it was not authorized to proceed under

line item 49. Rather, My Baps’ argued it should have been authorized under line item 49, not

under line item 2, earth excavation, or line item 3, special excavation. My Baps failed to raise

the issue and request a deviation from the City’s estimates prior to commencing work. In

fact, it was two years before My Baps raised the issue with Mr. Yonan.

¶ 38 CPO Rhee pointed out that the specifications for line item 3 informed My Baps that the

work authorized under those items include removal of existing pavement, regardless of what

the existing pavement consisted of, as required to construct the project upgrades. My Baps

agreed to those terms by commencing work on the project.

¶ 39 CPO Rhee acknowledged the evidence that My Baps was paid for work under line item

49. In his affidavit, Mr. Hadzic stated that those payments were made in error since CDOT

did not direct My Baps to perform work under line item 49 in any of those alleys, and he had

denied other requests by My Baps for payment under line item 49. The quantity of material

estimates for those alleys further supported the fact that those payments were made in error.

¶ 40 Turning to the evidence My Baps submitted in support of its claim, CPO Rhee found that

despite the vast amount of documentation it produced, My Baps made no attempt to relate the

documents to the dispositive issue. At best, the documentation offered only My Baps’

opinion that it was entitled to payment under line item 49 and the amount. My Baps’ own

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spreadsheets and copies of the estimated material quantities it furnished confirmed that the

City authorized the work under line items 2 and 3 but not under line item 49.

¶ 41 Regarding My Baps’ claim for payment for the work it did in connection with the

infiltration trenches, CPO Rhee found that My Baps failed to submit any evidence that

required it to perform the work in the manner it chose. My Baps merely took issue with

Commissioner Klein’s determination that the additional cost was due to the means and

methods chosen by My Baps to perform the work. There was no evidence that the City

directed My Baps to utilize the procedure it chose to do the work or that a provision in the

Contracts required the City to pay for means and methods of a contractor to perform the

work. The Contracts called for payment for work pursuant to the basis of payment specified

for each alley.

¶ 42 IV. Circuit Court Proceedings

¶ 43 On April 2, 2012, My Baps filed a three-count complaint in the circuit court of Cook

County against the City. Count I sought a writ of certiorari. Counts II and III sought

damages for breaches of the Contracts.

¶ 44 The City filed a motion to dismiss pursuant to section 2-615 of the Code of Civil

Procedure (Code) (735 ILCS 5/2-615 (West 2012)). The City maintained that the Contracts

provided that the sole remedy from the CPO’s decision was a writ of certiorari, which My

Baps sought in count I. Therefore, counts II and III for breach of contract should be

dismissed with prejudice.

¶ 45 My Baps responded that the Contracts did not limit its relief to a writ of certiorari since

the section XX of the Contracts provided that the CPO’s determination did not constitute “a

13 No. 1-16-1020

waiver of any rights under the Contract.” My Baps maintained that it was not afforded a full

and fair administrative proceeding on its claims and, therefore, the circuit court’s jurisdiction

was not limited to review under the writ of certiorari. Finally, My Baps maintained that the

administrative proceeding violated the automatic stay order entered when My Baps filed for

bankruptcy on September 21, 2011. After the City filed a reply, the circuit court heard

arguments on the motion to dismiss.

¶ 46 On May 30, 2013, the circuit court issued its opinion and order granting the City’s

motion to dismiss counts II and III for breach of contract. The court rejected My Baps’

nonwaiver of rights argument because the Contracts did not give it any right to review other

than by a writ of certiorari. Contrary to My Baps’ arguments, the court found that the plain

language of the contracts set forth the mandatory procedure before the parties could seek

judicial review and clearly contemplated an administrative proceeding. The court determined

that CPO Rhee had authority to render a decision pursuant to section 8-10-16(e) of the

Illinois Municipal Code (Purchasing Act) (65 ILCS 5/8-10-16(e) (West 2012) (enforcement

of written specifications)). In addition, while unusual for a government agency and a private

party do so, the court noted that parties may designate anyone to adjudicate their differences.

The court further found that it could grant the relief the plaintiffs sought in counts II and III

pursuant to the writ of certiorari. Finally, the circuit court found that the administrative

proceedings did not violate the automatic stay since it was My Baps who initiated the dispute

resolution proceedings.

¶ 47 On July 15, 2013, My Baps filed a motion for clarification of the circuit court’s order.

My Baps requested the court to identify which step My Baps took that constituted its

invoking of the dispute resolution proceeding under the Contracts. My Baps also sought to

14 No. 1-16-1020

clarify whether the trustee in bankruptcy’s filing of the present complaint operated

retroactively to modify the automatic stay order. On September 13, 2013, the court denied

the motion to clarify.

¶ 48 As its answer to count I of the complaint, the City filed the administrative record. The

circuit court ordered the parties to brief the issue of whether new material could be added to

the existing administrative record. My Baps argued that under section XX of the Contracts,

providing that it did not admit either factual or legal positions, allowed it to present

additional material in a writ of certiorari proceedings. It maintained that a writ of certiorari

was subject to the rules of the Code, which required the City to file an answer addressing

each allegation of the complaint. The City maintained that the long-standing rule in Illinois

held that certiorari proceedings were limited to the record of the administrative proceeding.

The City further maintained that the dispute resolution procedure provision that the CPO’s

determination did not constitute binding admissions factual or legal on My Baps’ part still

allowed My Baps to challenge the correctness of the determination on either factual or legal

grounds contained in the administrative record.

¶ 49 On February 14, 2014, the circuit court sustained the City’s objections to supplementing

the administrative record. After the parties submitted their respective briefs on the issuance

of the writ of certiorari and the court heard arguments by the parties, the court ordered

additional briefing on the Contracts’ requirement that compliance with the provisions of

section XX was a precondition to seeking judicial review of an adverse decision of the CPO.

¶ 50 On March 3, 2016, the circuit court issued its opinion and order. Initially, the court

determined that it had jurisdiction to review the decision of the CPO without first

establishing that My Baps had satisfied the contractual precondition to judicial review.

15 No. 1-16-1020

¶ 51 The circuit court then addressed the issue of timeliness. The court found that My Baps

failed to establish that it complied with the 14-day time frame for submitting its claims in

writing to the Commissioner. The court further found that My Baps failed to establish that it

complied with the DOPS regulations, which applied unless the contracts specified different

procedures. The DOPS regulations required that claims be submitted to the CPO during the

contract term or within the 120-day period following the expiration of the contract. The court

found that the Contracts expired on December 31, 2010, but My Baps did not submit its

claim to the CPO Rhee until October 27, 2011. 3

¶ 52 The circuit court considered My Baps’ equitable estoppel assertions: My Baps attempted

to resolve the dispute with Mr. Yonan, rather than Mr. Hadzic, because Mr. Hadzic was the

source of the dispute; Mr. Yonan never advised them that he was not the individual it should

be dealing with; and Mr. Hadzic was copied on all the communications with Mr. Yonan,

making him a recipient of the communications as required by the Contracts. The court found

that these facts were insufficient to establish the elements of equitable estoppel.

¶ 53 The circuit court rejected My Baps’ due process claims. The court found that My Baps

failed to raise the issue of CPO Rhee’s impartiality during the administrative proceedings and

it was procedurally defaulted from raising it in the circuit court. In addition, My Baps had

contractually agreed that the CPO would serve as the final decision maker. The court also

rejected My Baps’ argument that it was entitled to an evidentiary hearing. CPO Rhee’s

decision reflected her consideration of the parties’ submissions, the relevant documents, and

the case law. The DOPS regulations did provide for a more expansive review, but My Baps

did not opt to request a meeting with CPO Rhee.

3 As previously noted, the correct date was October 28, 2011.

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¶ 54 The circuit court rejected My Baps’ substantive due process claim. The court found that

substantive due process did not apply to My Baps’ breach of contract claims since the claims

did not involve legislative governmental action and My Baps failed to allege a violation of

another substantive constitutional right or allege that the available state remedies were

inadequate.

¶ 55 Finally, the circuit court determined that CPO Rhee’s decision was not against the

manifest weight of the evidence. My Baps claimed that CPO Rhee improperly relied on Mr.

Hadzic’s affidavit. The court found that in addition to the affidavit, CPO Rhee conducted her

own analysis of the specifications and the contracts before concluding that My Baps was not

entitled to be paid for its work under line item 49 and that My Baps failed to establish its

claims for payment for the work done in connection with the infiltration trenches.

¶ 56 The circuit court affirmed the decision of CPO Rhee and ordered the writ of certiorari

quashed.

¶ 57 On April 1, 2016, My Baps filed a timely notice of appeal from the orders of the circuit

court dismissing counts II and III of its complaint, affirming the decision of CPO Rhee, and

quashing the writ of certiorari requested in count I of the complaint.

¶ 58 ANALYSIS

¶ 59 I. Section 2-615 Dismissal of Breach of Contract Claims

¶ 60 My Baps contends the circuit court erred when it determined that the exclusive remedy

under the contracts was judicial review by a writ of certiorari. My Baps argues that the

contracts did not contemplate an administrative proceeding, the CPO did not have statutory

authority to conduct administrative proceedings and to issue a decision binding on the

17 No. 1-16-1020

parties, and it did not knowingly, voluntarily, or intentionally waive its right to pursue its

contract remedies.

¶ 61 A. Standard of Review

¶ 62 We review dismissals pursuant to section 2-615 of the Code de novo. Kagan v. Waldheim

Cemetery Co. 2016 IL App (1st) 131274, ¶ 26. “ ‘A section 2-615 motion to dismiss attacks

the legal sufficiency of the complaint based upon defects appearing on the face of the

complaint.’ ” Kagan, 2016 IL App (1st) 131274, ¶ 29 (quoting Compton v. Country Mutual

Insurance Co., 382 Ill. App. 3d 323, 325-26 (2008)). “All well-pleaded facts and all

reasonable inferences from those facts are taken as true.” Kagan, 2016 IL App (1st) 131274,

¶ 29. “Unless it is clearly apparent that the plaintiff could prove no set of facts that would

entitle him to relief, a complaint should not be dismissed.” Kagan, 2016 IL App (1st)

131274, ¶ 29.

¶ 63 B. Discussion

¶ 64 My Baps contends that the contracts did not contemplate or provide for an administrative

hearing because (1) the contracts did not refer to an administrative proceeding but rather

describe a precondition to seeking judicial review of the parties’ dispute, (2) it had no right to

respond to the commissioner’s decision, and (3) the only relief it could receive was a

modification of the contract.

¶ 65 In the absence of any case or statutory support for its argument, My Baps’ argument is

forfeited. Ill. S. Ct. R. 341(h)(7) (eff. July 1, 2017). We note, however, that contrary to My

Baps’ argument, its relief was not limited to a contract modification. Rather, the dispute

18 No. 1-16-1020

resolution procedure provided that the commissioner’s response to a claim “may be in the

form of a contract modification.”

¶ 66 Next, My Baps contends that the CPO did not have statutory authority to conduct

administrative proceedings and therefore, her decision was void. My Baps maintains that

section 8-10-16 of the Purchasing Act (65 ILCS 5/8-10-16 (West 2016)) does not contain any

language granting the CPO the power to conduct administrative hearings or render final

binding decisions. We disagree.

¶ 67 My Baps correctly notes that administrative agencies exercise purely statutory powers

and possess no inherent or common law powers. O’Grady v. Cook County Sheriff’s Merit

Board, 260 Ill. App. 3d 529, 534 (1994). The power and authority claimed by an

administrative agency must come from within the provisions of the statute by which the

agency was created. O’Grady, 260 Ill. App. 3d at 534. “The authority of an administrative

agency must derive either from the express language of the enabling act or by fair

implication and intendment from the express provisions of the act as an incident to achieving

the objectives for which the agency was created.” O’Grady, 260 Ill. App. 3d at 534-35.

¶ 68 Pursuant to the Purchasing Act, the City created a department of purchases, contracts, and

supplies to be headed by the purchasing agent. Chicago Food Management, Inc. v. City of

Chicago, 163 Ill. App. 3d 638, 643-44 (1987). The purchasing agent is the sole agent of the

municipality in contracting for labor, services material, or work. 65 ILCS 5/8-10-16(b) (West

2016). Section 8-10-16 of the Purchasing Act sets forth the duties of the purchasing agent

and provides in pertinent part as follows:

“The purchasing agent shall: (a) adopt, promulgate and from time to time revise rules

and regulations for the proper conduct of his office; *** [and] (e) enforce written

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specifications describing standards established in conformity with this Division 10[.]”

65 ILCS 5/8-10-16 (West 2016).

¶ 69 The fact that section 8-10-16 does not expressly grant the purchasing agent the power to

conduct an administrative proceeding is not the final word on the issue. “An express grant of

power to an administrative body or officer includes the authority to do all that is reasonably

necessary to execute that power or to perform the duty specifically conferred.” O’Grady, 260

Ill. App. 3d at 535-36. In order to carry out its duties, the purchasing agent is given

rulemaking and enforcement powers. While not expressly authorized by the Purchasing Act,

the purchasing agent’s rulemaking and enforcement powers imply the use of an

administrative proceeding in order to execute those powers. See O’Grady, 260 Ill. App. 3d at

535-36 (the express authority given to the sheriff’s merit board to investigate and enforce the

Merit Act (55 ILCS 5/3-7015 (West 1992)) implied the authority of the merit board to void

appointments made in violation of the Merit Act).

¶ 70 Next, My Baps maintains that it did not knowingly, voluntarily, or intentionally waive its

right to remedies other than the writ of certiorari. My Baps argues that the claims and

disputes provisions in the Contracts did not alert it that it was waiving its right to seek relief

via a breach of contract suit in circuit court. However, the claims and disputes provision,

which My Baps admits it agreed to, specifically limited the resolution of any disagreement

with the CPO’s decision to “judicial review by a common law writ of certiorari.”

Nonetheless, My Baps points out that under section XX of the contracts as well as the DOPS

regulations, “[n]either the [CPO’s] determination, nor the fact continued performance by

either party, constitutes an admission as to any factual and/or legal position in connection

with the dispute or a waiver of any right under the Contract.” My Baps maintains that those

20 No. 1-16-1020

provisions established that it did not waive its right to pursue a breach of contract claim

against the City.

¶ 71 “The interpretation of a contract presents a question of law subject to de novo review on

appeal in accordance with the general rules applicable to contract interpretation.” Storino,

Ramello & Durkin v. Rackow, 2015 IL App (1st) 142961, ¶ 18. In construing a contract, our

primary objective is to give effect to the parties’ intent. Thompson v. Gordon, 241 Ill. 2d 428,

441 (2011). We construe the contract as a whole, viewing each portion in light of the other

provisions. Thompson, 241 Ill. 2d at 441. “The parties’ intent is not determined by viewing a

clause or provision in isolation, or in looking at detached portions of the contract.”

Thompson, 241 Ill. 2d at 441.

¶ 72 Neither section XX nor the DOPS regulations expanded the remedies available to My

Baps. The nonwaiver provision referred to “any rights under the Contract.” Under the

Contracts, My Baps’ exclusive remedy for disagreement with the CPO’s decision was

judicial review by the writ of certiorari.

¶ 73 My Baps agreed to the terms of the contracts, which included the claims and disputes

resolution provision. That provision clearly limited the parties’ remedy for disagreement with

the CPO’s final determination to judicial review by the writ of certiorari. Therefore, we

reject My Baps’ argument that it did not knowingly, voluntarily, or intentionally waive its

right to pursue a breach of contract action against the City.

¶ 74 Next, My Baps argues that the DOPS regulations do not apply to its contracts with the

City because the contracts specified different procedures than those set forth in the DOPS

regulations. We disagree. Under the DOPS regulations, the procedures establishing dispute

resolution procedures apply, “except to the extent that the subject Contract specifies different

21 No. 1-16-1020

procedures.” The parties agreed to follow the claims and disputes resolution proceedings

provision in the contracts, which specifically provided that the CPO “will proceed to a final

and binding decision under such rules and regulations as he from time to time promulgates.”

¶ 75 Finally, My Baps directs our attention to a decision by Judge Kathleen Pantle of the Cook

County circuit court. In George W. Kennedy Construction Co. v. City of Chicago, No. 11 CH

16385 (Cir. Ct. Cook Co.), Judge Pantle rejected the City’s argument that the same dispute

resolution procedure did not constitute a waiver of a party’s right to sue the City in a court of

law. My Baps acknowledges that Judge Pantle’s decision is not binding on this court’s

construction of the contracts in the case before us. See People v. Leavitt, 2014 IL App (1st)

121323, ¶ 48 (this court is only obliged to follow the decisions of the Illinois Supreme Court

and of the United States Supreme Court, as both of these tribunals exercise appellate

jurisdiction over the Illinois Appellate Court).

¶ 76 We conclude that under the Purchasing Act, the CPO had an implied right to conduct an

administrative proceeding to enforce her statutory duties. We further conclude that My Baps

waiver of its right to pursue a breach of contract remedy was voluntary, intentional, and

knowing. Therefore, the dismissal of counts II and III alleging breach of contract was proper.

¶ 77 II. Violation of Bankruptcy Stay

¶ 78 My Baps contends the City violated the automatic bankruptcy stay by moving forward

with the administrative proceeding. My Baps filed for bankruptcy on September 21, 2011.

¶ 79 In Williams Awning Co. v. Illinois Workers’ Compensation Comm’n, 2011 IL App (1st)

102810WC, the reviewing court noted that section 362 of the Bankruptcy Code (11 U.S.C.

§ 362 (2006)) provided that a bankruptcy petition “ ‘operates as a stay, applicable to all

22 No. 1-16-1020

entities, of *** the commencement or continuation *** of a judicial *** action or proceeding

against the debtor that was or could have been commenced’ before the debtor filed for

bankruptcy protection.” Williams Awning Co., 2011 IL App (1st) 102810WC, ¶ 11 (quoting

Cohen v. Salata, 303 Ill. App. 3d 1060, 1064 (1999)). An action taken in violation of the

automatic stay provisions is void. Williams Awning Co., 2011 IL App (1st) 102810WC, ¶ 11.

¶ 80 The City and the circuit court below relied on Martin-Trigona v. Champion Federal

Savings & Loan Ass’n, 892 F.2d 575 (7th Cir. 1989). See Cohen, 303 Ill. App. 3d at 1065

(this court is bound to follow the interpretation adopted by the federal courts in interpreting

federal statutes). In Martin-Trigona, the court of appeals held that the automatic stay was

inapplicable to matters initiated by the debtor because the language of the statute referred to

an action against the debtor. Martin-Trigona, 892 F.2d at 577. Unlike the workers’

compensation proceedings in Williams Awning Co., the dispute resolution proceedings was

initiated by My Baps when it invoked the Contracts’ disputes resolution procedure in its

October 28, 2011, letter to CDOT Commissioner Ware.

¶ 81 Therefore, the circuit court did not err in finding that the City did not violate the

bankruptcy court’s automatic stay order.

¶ 82 III. Admission of the Administrative Record and Denial of Request to Supplement the

Administrative Record

¶ 83 My Baps contends that the circuit court erred when it allowed the City to file the record

of the administrative proceedings as its answer to the complaint and denied My Baps’ request

to supplement the administrative record. We disagree.

23 No. 1-16-1020

¶ 84 My Baps argues that because the Purchasing Act did not adopt the Administrative

Review Law (735 ILCS 5/3-101 et seq. (West 2016)), the Code applies to the proceedings in

this case. Rodriguez v. Sheriff’s Merit Comm’n, 218 Ill. 2d 342, 354 (2006) (supreme court

rules and the Civil Practice Law (735 ILCS 5/art. II (West 2002)) apply to all proceedings in

the trial court, except to the extent they are regulated by a different statute). Therefore, the

City was required to file an answer complying with the requirements of section 2-610 of the

Code (735 ILCS 5/2-610 (West 2016)).

¶ 85 Section 2-610 of the Code provides in pertinent part as follows:

“(a) Every answer and subsequent pleading shall contain an explicit admission or

denial of each allegation of the pleading to which it relates.

(b) Every allegation, except allegations of damages, not explicitly denied is

admitted, unless the party states in his or her pleading that he or she has no

knowledge thereof sufficient to form a belief, and attaches an affidavit of the truth of

the statement of want of knowledge, or unless the party has had no opportunity to

deny.” 735 ILCS 5/2-610(a), (b) (West 2016).

Because the City failed to file an answer denying the allegations of count I of the complaint,

My Baps concludes that the circuit court should have entered judgment for My Baps on

count I and granted the writ of certiorari.

¶ 86 “A common law writ of certiorari is a general method of obtaining circuit court review

of administrative actions when the act conferring power on the agency does not expressly

adopt the Administrative Review Law and provides for no other form of review.” Hanrahan

v. Williams, 174 Ill. 2d 268, 272 (1996). The same standard of review is applicable to a writ

24 No. 1-16-1020

of certiorari and actions under the Administrative Review Law. Sroga v. Personnel Board of

the City of Chicago, 359 Ill. App. 3d 107, 110 (2005).

¶ 87 In Des Plaines Currency Exchange, Inc. v. Knight, 29 Ill. 2d 244 (1963), the supreme

court determined that the provisions of the Civil Practice Act did not apply to administrative

review proceedings. Citing its prior decision in Jewell v. Carpentier, 22 Ill. 2d 445 (1961),

the court reiterated that “the Administrative Review Act 4 does not contemplate that issues of

fact shall be framed by complaint and answer. The review under the act is upon the record of

the administrative agency and the provisions of the Civil Practice Act do not apply.” Des

Plaines Currency Exchange, Inc., 29 Ill. 2d at 248.

¶ 88 Since the circuit court’s review is limited to the record of the administrative agency in

writ of certiorari proceedings and actions under the Administrative Review Law, we find

that the requirements of section 2-610 of the Code do not apply in this case. Therefore, My

Baps is not entitled to judgment on count I of the complaint.

¶ 89 We further determine that My Baps’ request to supplement the administrative record was

properly denied. My Baps points out that the dispute resolution procedure provided that

neither the CPO’s determination nor My Baps’ continuation with the work under the

contracts constituted an admission. Therefore, My Baps was not bound by the CPO’s factual

determinations. Since the dispute resolution procedure contained no language barring the

presentation of additional evidence, My Baps reasons that it was not precluded from offering

additional evidence.

¶ 90 “The purpose of the writ [of certiorari] is to have the entire record of the inferior tribunal

brought before the court to determine, from that record alone, that the inferior tribunal

4 Renamed the Administrative Review Law.

25 No. 1-16-1020

proceeded according to the applicable law.” American Federation of State, County &

Municipal Employees v. Department of Central Management Services, 288 Ill. App. 3d 701,

710 (1997). My Baps’ argument fails because it agreed to have the CPO’s final decision

reviewed by a writ of certiorari.

¶ 91 Since the circuit court’s review was confined to the record before the CPO, the denial of

My Baps’ request to supplement the record in the circuit court was correct.

¶ 92 IV. CPO Rhee’s Decision

¶ 93 My Baps contends that the proceeding before CPO Rhee violated its rights to due

process, and CPO Rhee’s decision was against the manifest weight of the evidence.

¶ 94 A. Due Process

¶ 95 1. Standard of Review

¶ 96 Whether a party has been denied due process presents a question of law which this court

reviews de novo. Majid v. Retirement Board of the Policemen’s Annuity & Benefit Fund of

the City of Chicago, 2015 IL App (1st) 132182, ¶ 32.

¶ 97 2. Discussion

¶ 98 “[A]n administrative proceeding is governed by the fundamental principles and

requirements of due process of law. However, due process is a flexible concept and requires

only such procedural protections as fundamental principles of justice and the particular

situation demand.” Abrahamson v. Illinois Department of Professional Regulation, 153 Ill.

2d 76, 92 (1992). Due process does not require that an administrative proceeding be

26 No. 1-16-1020

conducted in the same manner as a judicial proceeding. Majid, 2015 IL App (1st) 132182,

¶ 34. To comport with due process, the parties must be given the opportunity to be heard, the

right to cross-examine adverse witnesses and impartiality in ruling on the evidence. Majid,

2015 IL App (1st) 132182, ¶ 34. “To succeed on a claim of a due process violation, there

must be a showing of prejudice in the proceeding.” Majid, 2015 IL App (1st) 132182, ¶ 34.

¶ 99 a. No Opportunity to Be Heard

¶ 100 My Baps argues the dispute resolution process denied it the opportunity to present

evidence and to cross-examine witnesses.

¶ 101 My Baps failed to challenge the dispute resolution procedure before the CPO. Failure to

raise an issue, even if the issue concerns constitutional due process rights before an

administrative body, forfeits the issue on appeal. Perez v. Illinois Concealed Carry Licensing

Review Board, 2016 IL App (1st) 152087, ¶ 28; see Cinkus v. Village of Stickney Municipal

Officers Electoral Board, 228 Ill. 2d 200, 213 (2008) (raising an issue for the first time in the

circuit court on administrative review is insufficient since the circuit court is acting as the

first-tier court of review).

¶ 102 By entering into the Contacts with the City, My Baps agreed to the dispute resolution

procedure provision, which included the right to present evidence and the opportunity to

question the opposing party if it requested such a meeting. My Baps did not question or raise

any objections to the dispute resolution procedure when it entered into the Contracts with the

City. Significantly, My Baps agreed to the Contracts’ provision that the CPO could render

the final decision solely on the basis of the documentation. A party may not complain of an

error to which he consented. See Perez, 2016 IL App (1st) 152087, ¶ 28 (the plaintiff

27 No. 1-16-1020

forfeited his claim that he was denied a hearing since he did not challenge the administrative

procedure that allowed for his application for a concealed-carry license to be denied without

an evidentiary hearing). For the same reason, My Baps cannot claim now that it was

prejudiced by a procedure for resolving disputes by which it agreed to be bound.

¶ 103 Forfeiture aside, in an administrative hearing, a party has the right to cross-examine an

adverse witness as a matter of fairness. Morgan v. Department of Financial & Professional

Regulation, 388 Ill. App. 3d 633, 661 (2009). However, an evidentiary hearing is not

required in every circumstance. Peacock v. Board of Trustees of the Police Pension Fund,

395 Ill. App. 3d 644, 654 (2009). What is required is that “the administrative proceedings

employed must provide the party affected with a meaningful procedure to assert his claim

prior to the deprivation or impairment of a property right.” Peacock, 395 Ill. App. 3d at 654

(citing Mathews v. Eldridge, 424 U.S. 319, 348-49 (1976)).

¶ 104 The dispute resolution procedure provided an extensive list of material My Baps could

submit in support of its claims. The dispute resolution procedure provided that either party

could request a meeting to allow the CPO to have a better understanding of the positions of

the parties. At the meeting, the parties could have legal representation and question the other

party. Even though it disagreed with the basis for the denials of its request for additional

payments by Mr. Yonan and Commissioner Klein, My Baps did not take the opportunity to

request a meeting so it could better explain to CPO Rhee why it believed it was entitled to the

additional payments. Prior to the proceedings before CPO Rhee, the Contracts gave My Baps

the right to bring its claim to the attention of the City’s resident engineer or project manager

and to resolve the claim with him and, failing that, then with the CDOT commissioner. See

Mathews, 424 U.S. at 343 (the court may consider the fairness and reliability of the existing

28 No. 1-16-1020

pretermination procedures and the probable value, if any, of additional procedural

safeguards).

¶ 105 We conclude that My Baps failed to establish that the Contracts’ dispute resolution

procedure set forth in section XX did not comport with due process.

¶ 106 b. No Impartial Fact Finder

¶ 107 My Baps claims that its due process right to an impartial fact finder was violated because

CPO Rhee (1) was a fact witness to the dispute since she was copied on the correspondence

between CDOT and My Baps, (2) was an employee of the City and appointed by the mayor

and could be fired at any time, and (3) was the only person authorized to enter into contracts

for the City.

¶ 108 My Baps forfeited its right to object to the CPO’s rendering the final binding decision in

this case. “ ‘A claim of disqualifying bias or partiality on the part of a member of the

judiciary or an administrative agency must be asserted promptly after knowledge of the

alleged disqualification.’ ” E&E Hauling, Inc. v. Pollution Control Board, 107 Ill. 2d 33, 38

(1985) (quoting Duffield v. Charleston Area Medical Center, Inc. 503 F.2d 512, 515-16 (4th

Cir. 1974), abrogated on other grounds in Modaber v. Culpeper Memorial Hospital, Inc.,

674 F.2d 1023 (4th Cir. 1982)). In E&E Hauling, Inc., the supreme court explained as

“The basis for this [rule] can readily be seen. To allow a party to first seek a ruling in

a matter and, upon obtaining an unfavorable one, permit him to assert a claim of bias

would be improper.” E&E Hauling, Inc., 107 Ill. 2d at 38-39.

29 No. 1-16-1020

Nonetheless, the court declined to apply the forfeiture rule and considered the issue in part

because of the likelihood of its recurrence. E&E Hauling, Inc., 107 Ill. 2d at 39. We have no

such concern in the present case.

¶ 109 All of the reasons My Baps sets out for establishing the impartiality of the CPO were

known or should have been known by My Baps prior to it entering into the Contracts with

the City. The appointment of the CPO and the CPO’s duties are set forth in the Purchasing

Act. See 65 ILSC 5/8-10-15, 8-10-16 (West 2016). Despite this knowledge, My Baps entered

into the Contract with the City, agreeing to have the final decision on any claim made by the

CPO and never objected to the CPO’s role in resolving disputes until after CPO Rhee ruled

against it. By its own admission, My Baps was aware that CPO Rhee was copied on the

correspondence between CDOT and My Baps. “There must be more than ‘the mere

possibility of bias or that the decision maker is familiar with the facts of the case.’ ” Williams

v. Board of Trustees of the Morton Grove Firefighters’ Pension Fund, 398 Ill. App. 3d 680,

693 (2010) (quoting Danko v. Board of Trustees of the City of Harvey Pension Board, 240

Ill. App. 3d 633, 641 (1992)).

¶ 110 We conclude that My Baps forfeited any claim of impartiality or bias on the part of the

CPO.

¶ 111 B. CPO Rhee’s Decision

¶ 112 My Baps contends that CPO Rhee’s decision was contrary to the law and the evidence.

My Baps argues that CPO Rhee erred in determining that its claims were untimely both

30 No. 1-16-1020

under the Contracts and the DOPS regulations and that CPO Rhee erred when she determined

that My Baps was not owed additional payments under line item 49 of the Contracts. 5

¶ 113 1. Standard of Review

¶ 114 The nature and extent of judicial review are virtually the same under the Administrative

Review Law and the writ of certiorari. Dubin v. Personnel Board of the City of Chicago, 128

Ill. 2d 490, 498 (1989); Sroga, 359 Ill. App. 3d at 110. We review the decision of the

administrative agency, not the determination of the circuit court. Majid, 2015 IL App (1st)

132182, ¶ 13.

¶ 115 “ ‘The applicable standard of review depends upon whether the question presented is one

of fact, one of law, or a mixed question of fact and law.’ ” Howe v. Retirement Board of the

Firemen’s Annuity & Benefit Fund, 2015 IL App (1st) 141350, ¶ 43 (quoting American

Federation of State, County & Municipal Employees, Council 31 v. Illinois State Labor

Relations Board, State Panel, 216 Ill. 2d 569, 577 (2005)). “A mixed question of law and

fact typically arises when ‘the historical facts are not in dispute and the issue is whether the

established facts satisfy the statutory standard.’ ” Howe, 2015 IL App (1st) 141350, ¶ 46

(quoting Village of Hazel Crest v. Illinois Labor Relations Board, 385 Ill. App. 3d 109, 113

(2008)). Since the pertinent facts are not disputed, the case before us presents mixed

questions of fact and law.

¶ 116 Mixed questions of law and fact are subject to the clearly erroneous standard of review.

Howe, 2015 IL App (1st) 141350, ¶ 46. The administrative agency’s decision is clearly

5 On appeal, My Baps does not present a separate argument in support of its claim that it is entitled to additional payment for the paving of the infiltration trenches. For that reason, that issue is forfeited. Ill. S. Ct. R. 341(h)(7) (eff. July 1, 2017). Nonetheless, our analysis of the issue would consider the same factors, resulting in the same determination reached with regard to the line item 49 issue.

31 No. 1-16-1020

erroneous only where the reviewing court, considering the entire record, is left with the

definite and firm conviction that a mistake has been made. AFM Messenger Service, Inc. v.

Department of Employment Security, 198 Ill. 2d 380, 395 (2001). Under any standard of

review, the plaintiff bears the burden of proof. Cole v. Retirement Board of the Policemen’s

Annuity & Benefit Fund of the City of Chicago, 396 Ill. App. 3d 357, 367 (2009).

¶ 117 2. Discussion

¶ 118 a. Timeliness of Request to CPO

¶ 119 My Baps maintains CPO Rhee erred when she determine that it had not complied with

the DOPS regulation that the request for dispute resolution must be submitted no later than

120 days after expiration of the Contracts. My Baps points to section 1.2 of the DOPS

regulations, which states that the procedures set forth in the DOPS regulations “apply to the

resolution of a Contract dispute except to the extent the subject Contract specifies different

procedures.” My Baps argues that since the Contracts’ dispute resolution procedure did not

contain or incorporate the 120-day limitation period, the limitation period did not apply to its

Contracts with the City. We disagree.

¶ 120 “A court will not interpret a contract in a manner that would nullify or render provisions

meaningless, or in a way that is contrary to the plain and obvious meaning of the language

used.” Thompson, 241 Ill. 2d at 442. “[W]hen parties agree to and insert language into a

contract, it is presumed that it was done purposefully, so that the language employed is to be

given effect.” Thompson, 241 Ill. 2d at 442.

¶ 121 My Baps agreed to the dispute resolution procedure in the Contracts, which included the

application of the DOPS regulations. In turn, the DOPS regulations provided that they

32 No. 1-16-1020

applied to the resolution of a contract dispute “except to the extent” the contract specified a

different procedure. The 14-day requirement addressed the time for commencing the initial

attempt to resolve the claim prior to referring the claim to the CPO for resolution. The 120-

day requirement addressed the time limitation applicable to invoking the dispute resolution

procedure before the CPO. As the provisions address different aspects of the dispute

resolution procedure, in this respect the Contracts’ dispute resolution procedure did not differ

from the dispute resolution procedure in the DOPS regulations.

¶ 122 My Baps points out that the 120-day limitation period did not bar its claim because under

the Contracts’ dispute resolution procedure, the DOPS regulations did not even apply until

after the dispute was submitted to the CPO. We disagree.

¶ 123 Section XX(C)(3) of the Contracts provides that “[o]nce the dispute resolution

procedures are invoked, the [CPO] will proceed to a final and binding decision under such

rules and regulations as he from time to time promulgates.” The dispute resolution provision

then refers the party to where a copy of the DOPS regulations could be obtained. CPO

Rhee’s final decision in this case included the finding that My Baps failed to comply with the

120-day requirement in the DOPS regulations.

¶ 124 Finally, My Baps argues that CPO Rhee erred in finding it did not comply with the 120-

day requirement because the City provided it with the revised final estimates of quantities for

lump sum items and final material deficiency notices on February 21, 2012, and it had seven

days to resolve any disputes before the City would proceed with the closeout of the contracts.

However, My Baps’ argument ignores the fact that DOPS regulations state “expiration of the

Contract,” not the closeout of the Contract. My Baps never disputed that the Contracts finally

“expired” on December 31, 2010.

33 No. 1-16-1020

¶ 125 We conclude that the CPO Rule requiring My Baps to submit its request to the CPO

during the contract term or within 120-days of the expiration of the Contracts or waive its

opportunity to initiate a dispute resolution applied to the Contracts in this case. As it was

undisputed that the Contracts expired on December 31, 2010, My Baps’ October 28, 2011,

request to CPO Rhee to initiate dispute resolution proceedings was untimely.

¶ 126 b. Timeliness of Claim Notification

¶ 127 We further determine that CPO Rhee did not err in her determination that My Baps did

not establish its compliance with the claim notification requirement. Pursuant to the dispute

resolution procedure, in order to seek judicial review of an adverse decision on a claim, My

Baps was required to submit a written claim to the City’s resident engineer or the project

manager within 14 days after the basis of the claim arose.

¶ 128 My Baps maintains that it complied with the procedure by submitting its claim in writing

to Mr. Yonan on November 4, 2009, the date it determined it had a basis for a claim. We

disagree.

¶ 129 The November 4, 2009, letter did not provide information as to when the claim that My

Baps had not been paid under line item 49 arose, information necessary to establish its

compliance with the 14-day notification requirement. My Baps’ November 4, 2009, letter

was directed to Mr. Yonan. It is undisputed that Mr. Yonan was neither the City’s resident

engineer nor the project manager.

¶ 130 My Baps maintains that it dealt with Mr. Yonan, rather than Mr. Hadzic, the project

manager because (1) Mr. Hadzic was the source of the dispute and therefore dealing with him

would have been futile and (2) Mr. Yonan was Mr. Hadzic’s superior. My Baps further

34 No. 1-16-1020

maintains that, throughout their correspondence, Mr. Yonan never informed My Baps that he

was not the proper person to be dealing with under the Contracts’ dispute resolution

procedure. However, nothing in Mr. Patel’s November 4, 2009, letter informed Mr. Yonan

that it was submitting a claim under the dispute resolution section of the Contracts and that it

could not resolve the claim with Mr. Hadzic as required by the Contracts.

¶ 131 My Baps’ reliance on the notice to proceed is misplaced. “When a contract contains both

specific and general provisions relating to the same subject, the specific provision controls.”

Skidmore v. Throgmorton, 323 Ill. App. 3d 417, 426 (2001). The notice to proceed directed

My Baps to send correspondence to Mr. Yonan. The notice to proceed dealt with general

work-related issues, whereas claims and disputes regarding the work were specifically dealt

with under the dispute resolution procedure.

¶ 132 Therefore, My Baps failed to comply with the notice of claim procedure required by the

dispute resolution procedure as a precondition for judicial review.

¶ 133 c. Breach of Contract

¶ 134 My Baps contends that the City breached the Contracts by refusing to pay for pavement

removal under line item 49. It maintains that the Contracts unambiguously required that the

general removal of the existing concrete and asphalt in the alleys fell under line item 49 in

the price schedule.

¶ 135 My Baps points out that the general construction requirements mandated the removal of

pavement from the alleys. Line item 49 was captioned “Alley Pavement Removal and

Subgrade Preparation for Green Alley,” and the City’s quantity estimates resulted in line item

49 being the largest single cost component of labor under the Contracts. My Baps maintained

35 No. 1-16-1020

that its bid for the Contracts was based on it being paid $72 per square foot for removing the

existing pavement.

¶ 136 According to Mr. Hadzic’s affidavit, after the City accepted My Baps’ bid, a

preconstruction meeting was held on July 19, 2007. At that meeting, which was attended by

Mr. Patel of My Baps, a draft of the schedules of quantities was handed out. The contractors

were required to construct the alleys within the limits of the engineer’s estimate and any

deviations required prior approval of CDOT and detailed documentation from the consultant

construction engineer. Quantity estimates were prepared for each alley.

¶ 137 In addition to Mr. Hadzic’ affidavit, CPO Rhee reviewed the spreadsheets setting forth

the quantity estimates for the alleys. With regard to the alleys constructed by My Baps, the

task order for “MA #153” did not contain line item 49 but did contain line item 2—earth

excavation. The task order for “MA #154” did not contain a line item 49 but did contain line

items 2 and 3—special excavation. The engineer’s quantity estimates for “MA #99” showed

estimated quantities for earth excavation and special excavation, for “MA #163” estimated

quantity for special excavation, for” MA #169” estimated quantities for earth excavation and

special excavation, and for “MA #170” estimated quantities for earth excavation and special

excavation. There were no quantity estimates for alley pavement removal, requiring payment

pursuant to line item 49, in “MA # 99,” “MA #163,” “MA # 169,” or “MA #170.” 6 The

spreadsheets also showed that between June 25, 2009, and September 28, 2009, My Baps’

requests for payment under line item 49 were denied.

¶ 138 My Baps failed to produce any evidence contradicting the estimates in the spreadsheets.

As CPO Rhee pointed out, My Baps’ argument was that it ought to have been paid under line

6 What the acronym MA stands for is unclear.

36 No. 1-16-1020

item 49 rather than under line items 2 and 3. However, My Baps never objected to the

quantity estimates or requested a change prior to commencing work on the project. The City

conceded that My Baps had been paid under line item 49 but that those payments were in

error. My Baps failed to present any evidence that it was in fact entitled to those payments.

¶ 139 Moreover, My Baps’ continued reliance on the price schedule in the bid proposal is

misplaced. In the project information section of the bid package, My Baps was advised as

“Any quantities shown on the Proposal page are estimated quantities for the initial

Term of the Contract and such are for bid canvassing purposes only. The City

reserves the right to increase or decrease quantities. The City will be obligated to pay

only for those quantities of Work that are preformed and accepted under sub-orders

issued by the Department.”

¶ 140 CPO Rhee’s decision is further supported by evidence that My Baps did not perform the

work it seeks payment for in accordance with the requirements of line item 49. The

specifications for performing work under line item 49 described the method by which the

alley pavement was to be removed and prohibited construction equipment, including

passenger vehicles and trucks, from driving on or having direct contact with the exposed

subgrade surfaces until such time as the paving portion of the paving operation. Attached to

Mr. Hadzic’s affidavit were photographs of various alleys My Baps constructed, showing

construction equipment being driven over the subgrade during the work.

¶ 141 The record does not support My Baps’ claims of error on the part of CPO Rhee in

reaching her decision in this case. Having considered the entire record, we are not convinced

37 No. 1-16-1020

that a mistake was made in denying My Baps’ request for additional payments under its

Contracts with the City.Therefore, CPO Rhee’s decision is not clearly erroneous.

¶ 142 CONCLUSION

¶ 143 We confirm the decision of the CPO. We affirm the orders of the circuit court dismissing

counts II and III of My Baps’ complaint and quashing the writ of certiorari requested in

count I.

¶ 144 Circuit court affirmed; writ quashed.