Robinhorne Construction Corp. v. Snyder

251 N.E.2d 641, 113 Ill. App. 2d 288, 1969 Ill. App. LEXIS 1399
CourtAppellate Court of Illinois
DecidedJuly 30, 1969
DocketGen. 11,058
StatusPublished
Cited by24 cases

This text of 251 N.E.2d 641 (Robinhorne Construction Corp. v. Snyder) 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
Robinhorne Construction Corp. v. Snyder, 251 N.E.2d 641, 113 Ill. App. 2d 288, 1969 Ill. App. LEXIS 1399 (Ill. Ct. App. 1969).

Opinion

CRAVEN, P. J.,

delivered the opinion of the court. This appeal is from judgments in two actions filed in the Circuit Court of Champaign County arising out of construction contracts for the erection of a Howard Johnson Motor Lodge in Urbana.

The first suit filed by Robinhorne Construction Corporation prayed for an accounting and damages from its join-venturer in the construction, Red Arrow Construction, Inc., and Crin L. Robson, and the owner, Jack 0. Snyder. Snyder counterclaimed against the joint-venturers and their surety, United States Fidelity & Guaranty Company (U. S. F. & G.), claiming damages for breach of contract and for the costs of suit against the surety.

The second suit filed by Robinhorne and Red Arrow Construction, Inc., sought a temporary injunction to restrain the owner, Snyder, from completing construction of the motor lodge and to enforce a mechanic’s lien against the property.

The two suits were consolidated for trial and heard by the court without a jury. After numerous hearings the trial court entered judgment against Robinhorne Construction Corporation and in favor of all defendants upon the first suit for an accounting and damages. On the counterclaim of the owner, Snyder, the court entered judgment against the contractors, Robinhorne, Red Arrow and Robson, and their surety, U. S. F. & G., in the amount of $159,832.64 with interest at six percent. Also, separate judgment on the counterclaim of the owner, Snyder, was entered against U. S. F. & G. for costs of suit including legal and accounting fees and expenses in the amount of $28,498.86 and interest. In the second suit a judgment was entered against the contractors and in favor of the owner Snyder.

The contractors and their surety appeal from the judgments on the counterclaim in the first suit and the contractors appeal from the judgment in the second suit.

The disposition of this appeal of the consolidated cases is dependent wholly upon the rights of the property owner and the contractors under the construction contract or contracts entered into by them. These rights involve determination of the basis of payment for construction and the termination provisions and completion by the owner Snyder under the applicable contract terms. The evidence is both detailed and conflicting, but so far as pertinent to the issues here on appeal, requires certain review.

The owner, Jack 0. Snyder, and his trustee, Peoples Bank of Bloomington, in April of 1965, employed a licensed architect to prepare plans and specifications for a Howard Johnson motel and restaurant on the land of the owners in Urbana.

The architect prepared the plans and specifications, using document forms recommended by the American Institute of Architects for lump-sum bid construction contracts. These were put out for bid. No lump-sum bids having been received by bid date, the owners proceeded to negotiate a cost-plus contract with Robinhorne Construction Corporation as contractor.

On July 10, 1965, the owners and Robinhorne entered into a written construction contract prepared by the owners’ attorney upon a 1951 form recommended by the American Institute of Architects for cost-plus contracts, but the general conditions, plans and specifications of the previous contract were not changed. This contract, by a rider attached to paragraph 4, provided that the owner Snyder pay the contractor the cost of construction plus a six percent fee, but that the cost-plus six percent should not exceed $1,018,700.

Thereafter, difficulties arose in the ability of the contractor Robinhorne to provide a performance bond and in the cost of such bond. It also was learned by Robinhorne that it would be unable to perform the work. Thus, a supplemental agreement was made that Red Arrow Construction, Inc., would become a joint-venturer with Robinhorne and O. L. Robson.

The supplemental agreement also provided that the performance bond to be furnished by the joint-venturer contractors be reduced to $500,000 for the general contract work; that subcontractors be obtained for the mechanical, electrical, masonry, store-front and dry-wall portions of the building, who would furnish performance bonds for their respective portions of the contract; and that a new contract be entered into by all parties.

On October 19, 1965, the final construction contract was executed and backdated to July 10, 1965. It was prepared by the owners and their attorney and was on a 1963 American Institute of Architects form for a cost-plus contract. This contract provided that the owner Snyder pay the contractors the cost of the improvements plus six percent, provided such total did not exceed $500,000, excluding the subcontracted work. This maximum of $500,000, plus the .estimated subcontracted excluded work equaled the original contract price of $1,018,700. No change was made in the original plans and specifications and general conditions prepared for the proposed original contract. A rider attached to paragraph 5 of the final contract provided that the contractors were to receive an additional fee equal to one-half of the difference between the total cost of the project (including the contractors’ six percent fee) and the previously agreed maximum price of $1,018,700, should the total costs be less than the maximum price.

Construction was undertaken and partially completed when the contractors advised the owner Snyder that the costs of construction would exceed the maximum contract price. The exact date the owner Snyder was informed of this situation is disputed. The contract had a completion date of February 1, 1966, but the construction still was incomplete in June of 1966, when meetings were had by the owner Snyder and various of the contractors. The cause of the delay also was disputed.

The contractors contend that they were substantially delayed in the work due to the failure of the owners to remove a preexisting building on a portion of the job site. Several of the contractors testified that the delay of some of the subcontractors delayed their work. Credit weakness of Robinhorne, causing delay in the delivery of materials, and the time which passed while Orin Robson was being persuaded to enter into the joint venture were additional causes asserted.

Certainly sometime during the June, 1966, meetings between the owner Snyder and the contractors it became apparent that the job was in financial difficulty. Discussions were had by the owner Snyder with representatives of the bonding company and considerable correspondence passed between the parties as to completion and cost. The representatives of Howard Johnson Company threatened cancellation of the owner’s lease and franchise agreement. During the latter days of June and the early part of July, 1966, the work proceeded at an extremely slow rate. Testimony was given that few, if any, workers remained on the job and that the construction superintendent had been taken off the job and sent back to Wichita, Kansas.

On July 11, 1966, Robinhorne filed its suit for accounting and damages against its joint-venturers and the owners. On July 18, 1966, the construction came to a standstill. On July 20, 1966, the owner Snyder delivered a copy of a notice of contract termination to Orin L. Robson and his attorney.

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Bluebook (online)
251 N.E.2d 641, 113 Ill. App. 2d 288, 1969 Ill. App. LEXIS 1399, Counsel Stack Legal Research, https://law.counselstack.com/opinion/robinhorne-construction-corp-v-snyder-illappct-1969.