Premier Elec. Const. v. morse/diesel

628 N.E.2d 1090, 257 Ill. App. 3d 445, 195 Ill. Dec. 626, 1993 Ill. App. LEXIS 2090
CourtAppellate Court of Illinois
DecidedDecember 30, 1993
Docket1-92-2104, 1-92-3653
StatusPublished
Cited by6 cases

This text of 628 N.E.2d 1090 (Premier Elec. Const. v. morse/diesel) 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
Premier Elec. Const. v. morse/diesel, 628 N.E.2d 1090, 257 Ill. App. 3d 445, 195 Ill. Dec. 626, 1993 Ill. App. LEXIS 2090 (Ill. Ct. App. 1993).

Opinion

628 N.E.2d 1090 (1993)
257 Ill. App.3d 445
195 Ill.Dec. 626

PREMIER ELECTRICAL CONSTRUCTION COMPANY, Plaintiff-Appellant,
v.
MORSE/DIESEL, INC. and Francis X. O'Boyle, Defendants-Appellees.

Nos. 1-92-2104, 1-92-3653.

Appellate Court of Illinois, First District, Sixth Division.

December 30, 1993.

*1092 Michael W. Rathsack, Chicago (Marc E. Levine and Michael W. Rathsack, of counsel), for plaintiff-appellant.

Peter M. D'Ambrosio, Krista L. Peterson, Smith, Pachter, McWhorter & D'Ambrosio, Vienna, VA (Constatine John Gekas, Harvitt & Gekas, Ltd., Chicago, of counsel), for defendants-appellees.

Presiding Justice McNAMARA delivered the opinion of the court:

On May 15,1987, plaintiff Premier Electrical Construction Company ("Premier") filed a verified complaint wherein it alleged fraudulent misrepresentation and breach of contract and sought punitive damages. Specifically, the complaint alleged that in January 1981, Premier entered into negotiations with defendant Morse/Diesel, Inc. and defendant Francis X. O'Boyle, Morse's Vice-President, (collectively referred to as "Morse"), to secure the bid for electrical work on the Furniture Mart building renovation project at 666 North Lake Shore Drive. During those negotiations, Morse represented to Premier's agents, Michael Hughes, Premier's Vice-President, and Douglas Boyko, Premier's Project Manager/Estimator, that Morse had received two lower competing bids for the electrical work. Morse then gave Premier the option of reducing its bid by $500,000 or forfeiting the subcontract entirely.

Relying on Morse's allegedly fraudulent oral representations, Premier reduced its bid from $4.8 million to $4.3 million and was awarded the contract. Premier later learned, however, in October 1983, from James Driscoll, Charles Gustafson and William Wachter that the purported competitive bids were false, and that they had been misrepresented to Premier by Morse in an effort to persuade Premier to reduce its bid for the electrical work.

Morse filed an unverified answer, while another defendant, David Paul, filed a motion claiming that he was a nonresident and, therefore, a beneficiary of the fiduciary shield doctrine. Service of process as to Paul was then quashed.

Morse subsequently filed a motion for summary judgment which set forth the background of the project. David Paul, owner and general partner of 666 North Lake Shore Drive Associates, engaged in the renovation of the Furniture Mart, renamed 666 North Lake Shore Drive, between the years 1979 and 1984. Initially, Paul solicited the services of W.E. O'Neil Construction Company ("O'Neil") as general contractor for the project. Although no contract was ever signed between O'Neil and 666 North Lake Shore Drive Associates, O'Neil acted in the capacity of general contractor until November 1980. During the time period that O'Neil served as general contractor, Premier submitted a bid to O'Neil in the amount of approximately $2.4 million to perform the electrical subcontract on the project. Although Premier acquired construction materials under a letter of intent, it never entered into a subcontract with O'Neil.

In November 1980, final contract negotiations between O'Neil and Paul were unsuccessful. Thereafter, on December 24, 1980, Paul entered into a general construction contract for the project with Morse. Premier then submitted a revised bid of $4.8 million to 666 North Lake Shore Drive Associates and Morse for the electrical subcontract. Paul, O'Boyle, Hughes and Boyko met on several occasions in late December 1980 and early January 1981 to negotiate the electrical subcontract. According to the deposition testimony of Hughes, Premier was reviewing the scope of the proposed work so that Morse would understand what was included in the bid price; Premier was not actually negotiating its price at that time.

During one such meeting which was held on January 7, 1981, Paul and O'Boyle informed Hughes and Boyko that they had received two oral bids, each in the amount of $4.3 million, from other electrical contractors to perform the electrical work. Morse admits *1093 that it made this representation to Premier. When Hughes asked to see these bids, the meeting was adjourned for several hours so that the details of the bids could be provided to Premier. Boyko confirmed this fact. A representative of Morse contacted Lawrence Dolan, Executive Vice-President of Commercial Light, Inc. ("Commercial Light") who then provided a copy of Commercial Light's oral bid of $4.3 million. Hughes testified at his deposition that "the scope of the work had been pretty well thrashed out" either at or prior to that January 7 meeting and that Morse was asking Premier to reduce its markup, fee or some other items that it had included in its proposal. Hughes could not recall whether Premier had been allowed to ask for certain exclusions or qualifications to the scope of the work in order to arrive at the lower figure.

When the meeting reconvened later that day, Morse gave Hughes and Boyko a copy of Commercial Light's bid, while Paul orally relayed to them the details of the bid from Sievert Electric Corporation ("Sievert"). Boyko's contemporaneous notes of that meeting confirmed that he and Hughes received a written Commercial Light bid as well as oral details of the Sievert bid at the meeting. According to the deposition testimony of O'Boyle, the Commercial Light and the Sievert bids were based on an 18 month rather than a 24 month project. O'Boyle further testified that he first saw a written bid from Commercial Light when it was sent over by messenger during the course of the meeting with Premier. Boyko testified at his deposition that he did not recall a discussion regarding a comparison being made between the Sievert and the Premier bids at the January 7 meeting. Although Boyko remembered that there was a bid from Sievert for the project, he could not recall whether it was oral or written. He did not remember seeing a bid from Commercial Light. Boyko further testified that at some point, he and Hughes presumably agreed that $4.3 million was a reasonable price for which to perform the work.

In addition to these bids being discussed, negotiations regarding revisions to Premier's planned 24 month construction schedule and scope of work ensued. During these negotiations which continued for more than a week following the January 7, 1981 meeting, Premier proposed various revisions to the subcontract as well as a shortened construction schedule which allowed it to reduce its bid to $4.3 million.

At no time during the January 7, 1981 meeting or at any subsequent meeting did Premier challenge the authenticity, accuracy or scope of the Commercial Light and Sievert bids. Moreover, Premier did not attempt to contact Commercial Light and Sievert regarding their bids.

Boyko testified at his deposition hearing that he sent a letter dated January 9,1981 to O'Boyle confirming the terms and conditions under which Premier would perform the work for $4.3 million. Subsequently, on or about February 19,1981, Morse and Premier signed a subcontract for the electrical work in the amount of $4.3 million. Premier's lower bid reflected a construction schedule which had been shortened from 24 to 18 months as well as revisions to the subcontract including, for example, not requiring that the low voltage be encased in conduit. Premier substantially completed its contract in 1984.

Dolan stated in his affidavit that Morse contacted him in or around December 1980, requesting that Commercial Light submit a bid for the subject project.

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628 N.E.2d 1090, 257 Ill. App. 3d 445, 195 Ill. Dec. 626, 1993 Ill. App. LEXIS 2090, Counsel Stack Legal Research, https://law.counselstack.com/opinion/premier-elec-const-v-morsediesel-illappct-1993.