Turner Construction Co. v. Midwest Curtainwalls, Inc.

543 N.E.2d 249, 187 Ill. App. 3d 417, 135 Ill. Dec. 14, 1989 Ill. App. LEXIS 1216
CourtAppellate Court of Illinois
DecidedAugust 11, 1989
Docket1-89-0731
StatusPublished
Cited by27 cases

This text of 543 N.E.2d 249 (Turner Construction Co. v. Midwest Curtainwalls, Inc.) 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
Turner Construction Co. v. Midwest Curtainwalls, Inc., 543 N.E.2d 249, 187 Ill. App. 3d 417, 135 Ill. Dec. 14, 1989 Ill. App. LEXIS 1216 (Ill. Ct. App. 1989).

Opinion

JUSTICE McNAMARA

delivered the opinion of the court:

In this construction dispute, plaintiff Turner Construction Company, the general contractor, filed a petition to stay arbitration proceedings after a demand for arbitration was filed by the subcontractor, defendant Midwest Curtainwalls, Inc., a/k/a Midwest Architectural Metals, Inc., and Ampat/Midwest Corporation. The trial court denied Turner’s petition to stay arbitration and granted Midwest’s motion to dismiss the petition pursuant to section 2 — 619 of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 619). Turner appeals from this interlocutory order (107 Ill. 2d R. 307), contending that the general contract language permitting arbitration is not incorporated into the language of the subcontract entered into by the parties.

On November 16, 1984, Turner entered into a construction contract with the owner of certain property. On the same day, Midwest entered into an agreement with Turner.

The general contract between Turner and the owner provides for arbitration of certain disputes:

“Section 7.9.1: All Claims, disputes and other matters in question between the Contractor and the Owner arising out of, or relating to, the Contract Documents or the breach thereof *** shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. *** No person other than the Owner or contractor shall be included as an original third party or additional third party to an arbitration whose interest or responsibility is insubstantial. Any consent to arbitration involving an additional person or persons shall not constitute consent to arbitration of any dispute not described therein or with any person not named or described therein.”

The subcontract between Turner and Midwest contains no arbitration clause. Article II of the subcontract states:

“Article II: The Plans, Specifications, General Conditions, Special Conditions, Addenda and General Contract, hereinabove mentioned, are available for examination by the Subcontractor at all reasonable times at the office of Turner, all of the aforesaid, including this Agreement, being hereinafter sometimes referred to as the Contract Documents. The Subcontractor represents and agrees that it has carefully examined and understands this Agreement and the other Contract Documents
With respect to the Work to be performed and furnished by the Subcontractor hereunder, the Subcontractor agrees to be bound to Turner by each and all of the terms and provisions of the General Contract and the other Contract Document, and to assume toward Turner all of the duties, obligations and responsibilities that Turner by those Contract Documents assumes toward the Owner, and the Subcontractor agrees further that Turner shall have the same rights and remedies as against the Subcontractor as the Owner under the terms and provisions of the General Contract and the other Contract Documents has against Turner with the same force and effect as though every such duty, obligation, responsibility, right or remedy were set forth herein in full. The terms and provisions of this Agreement with Subcontractor hereunder are intended to be and shall be in addition to and not in substitution for any of the terms and provisions of the General Contract and the other Contract Documents.”

On June 16, 1988, Midwest served Turner with a demand for arbitration, seeking over $1 million for delaying its work and failure to pay retainage. Upon receipt of the demand, Turner initiated this suit to stay the arbitration proceedings.

Turner contends that neither the subcontract nor the general contract provides for arbitration of claims between the parties. Whether an ambiguity exists in a contract is to be determined by the court as a question of law. (Kenny Construction Co. v. Hinsdale Sanitary District (1982), 111 Ill. App. 3d 690, 444 N.E.2d 510.) We find that, as a matter of law, the language of the subcontract is ambiguous.

Article II of the subcontract states that Midwest agrees that Turner “shall have the same rights and remedies as.against the subcontractor as the owner under the terms and provisions of the general contract *** with the same force and effect as though every such duty, obligation, responsibility, right or remedy were set forth herein in full.” It is not disputed that one of the “rights and remedies” which Turner has against the owner is arbitration.

The ambiguity arises where the subcontract precedes the “same rights and remedies” language with the phrase “[w]ith respect to the work to be performed.” Turner maintains that the subcontract’s “flow down” clause, permitting certain of the obligations and rights between the general contract and owner to pass to the subcontract, relates only to the “work to be performed” and not to the resolution of disputes between the parties here.

Thus, the language is reasonably susceptible of more than one construction. (See W.H. Lyman Construction Co. v. Village of Gurnee (1985), 131 Ill. App. 3d 87, 475 N.E.2d 273.) The intent of the parties to a contract must be determined from the contract as a whole, not merely by reference to particular words or isolated phrases, but instead by viewing each part in light of the others. (La Throp v. Bell Federal Savings & Loan Association (1977), 68 C. 2d 375, 370 N.E.2d 188.) The subcontract as a whole demonstrates the parties’ intent to incorporate the general contract.

Generally, one instrument may incorporate another instrument by reference. (Provident Federal Savings & Loan Association v. Realty Centre, Ltd. (1983), 97 Ill. 2d 187, 454 N.E.2d 249.) The contract must show an intent to incorporate the other document and make it part of the contract itself. (Golen v. Chamberlain Manufacturing Corp. (1985), 139 Ill. App. 3d 53, 487 N.E.2d 121.) Thus, a subcontract can specifically include provisions of the general contract, and the additional provisions then become part of the subcontract as if they were expressly written in it. Preski v. Warchol Construction Co. (1982), 111 Ill. App. 3d 641, 444 N.E.2d 1105.

Article II of the subcontract states that the terms and provisions of the subcontract are “in addition to and not in substitution for any of the terms and provisions of the General Contract and the other Contract Documents.” The subcontract defines “Contract Documents” to include the “general conditions” of the general contract.

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Bluebook (online)
543 N.E.2d 249, 187 Ill. App. 3d 417, 135 Ill. Dec. 14, 1989 Ill. App. LEXIS 1216, Counsel Stack Legal Research, https://law.counselstack.com/opinion/turner-construction-co-v-midwest-curtainwalls-inc-illappct-1989.