Justia Contracts Opinion SummariesArticles Posted in Illinois Supreme Court
Gillespie Cmty. Unit Sch. Dist. No. 7 v. Wight & Co.
In 1998 the Gillespie School District hired Wight under for services preliminary to the actual designing and construction of a new elementary school building. Wight agreed to perform a “site mine investigation.” Wight hired Hanson Engineers to assess the potential for coal mine subsidence. A physical engineer at Hanson sent a letter to Wight, noting recorded subsidence events, including five to six events since 1979, affecting more than 40 structures in the area. The letter stated: “No one can predict when or if the land above the roof-and-pillar mine will subside… The owner should consider the fact that there is no economically feasible corrective action… to guarantee against future subsidence… it can be intuitively concluded that there is a relatively high risk of subsidence in the Benld/Gillespie area. The letter was not attached to the report, which noted some of its highlights. The school was built and occupied, but in 2009 was severely damaged as the result of subsidence and was condemned. The District sued Wight, alleging professional negligence, breach of implied warranty, and fraudulent misrepresentation by concealment of material fact. The court entered summary judgment in favor of Wight, based on statutes of limitations applicable to the claims. The appellate court affirmed. The Illinois Supreme Court affirmed, noting that it was expressing no opinion concerning the merits of various claims. View "Gillespie Cmty. Unit Sch. Dist. No. 7 v. Wight & Co." on Justia Law
VC&M, Ltd. v. Andrews
Defendant moved to dismiss a breach of contract suit. Plaintiff e-filed a response to the motions. There was no objection. The circuit court dismissed; plaintiff e-filed a motion to reconsider. Defendant asserted that e-filing the motion was improper. The trial court denied the motion on the merits without comment on the manner of filing. Plaintiff e-filed its notice of appeal. The appellate court dismissed for lack of jurisdiction, finding that plaintiff improperly e-filed its motion to reconsider in violation of local rule 5.03 so that the motion was ineffective to toll the time for filing notice of appeal and that plaintiff also violated the rule by e-filing notice of appeal. The Illinois Supreme Court reversed. The violation of the rule was brought to the court’s attention at the hearing on the motion to reconsider. Defendants did not claim prejudice and the court chose to consider plaintiff’s motion on its merits, which it had discretion to do. Where a deficiency in the notice of appeal is one of form only and not of substance, the appellate court is not deprived of jurisdiction; in this case, the notice of appeal, although improperly filed, was sufficient to confer jurisdiction, particularly because a backup paper copy was required to be maintained in a parallel manual court file. Defendants were advised of the nature of the appeal and have not argued that they suffered any prejudice. View "VC&M, Ltd. v. Andrews" on Justia Law
Pielet v. Pielet
Pielet Brothers Scrap Iron and Metal, was founded Arthur Pielet and his brothers shortly after World War II. Arthur sold his interest to his sons in 1986 through an agreement providing for a lifetime payment to him of a “consulting” fee, and, on his death, for a lifetime fee payment to his wife, Dorothy. The agreement was binding on successors and assigns. In 1994, the then- successor company, P.B.S., dissolved, but payments to Arthur continued until 1998, when its successor, MM, had financial difficulties. It filed for bankruptcy in 1999. Litigation began. The trial court awarded Dorothy almost $2 million. In the appellate court, P.B.S. argued the traditional rule that a cause of action that accrued (1998) after dissolution (1994) cannot be brought against a dissolved corporation. The appellate court rejected the argument, holding that Dorothy’s claim could survive, but remanded for determination of whether the companies could be relieved of liability for the fee under a theory of novation. The Supreme Court reversed in part, holding that the claim of breach of contract against P.B.S. could not survive the corporate dissolution. The issue of novation is relevant as to two other successor corporations and required remand. View "Pielet v. Pielet" on Justia Law
Patrick Eng’g v. City of Naperville
Patrick Engineering signed a 2007 contract with the City of Naperville for work on a stormwater management system. Some work was done and some payments were made, but the parties fell into a dispute over “additional services.” Patrick terminated the agreement and sued Naperville, seeking $436,392. The agreement provided that if Naperville made a verbal request for additional services, the engineers were required to confirm that request in writing and were not obligated to perform the changes until authorized in writing. This procedure was not followed; equitable estoppel became the crux of the case. The trial court dismissed. The appellate court reversed. The city did not appeal with respect to claims of quantum meruit and under the Illinois Local Government Prompt Payment Act, which remain pending in the trial court. The supreme court reversed with respect to other claims and reinstated the dismissals. While equitable estoppel may apply against municipalities in extraordinary and compelling circumstances, Illinois courts have never held that apparent authority may be applied against municipalities. To recover in equitable estoppel, plaintiff must allege specific facts showing that municipal officials possessed actual, rather than apparent, authority on which plaintiff reasonably relied.View "Patrick Eng'g v. City of Naperville" on Justia Law
Innovative Modular Solutions v. Hazel Crest Sch. Dist. 152.5
Defendant, a school district, leased portable classrooms from plaintiff under contracts including penalties for early cancellation or default. Under the Downstate School Finance Authority for Elementary Districts Law (105 ILCS 5/1F-1) the state later created the Authority to manage the District's finances. The Authority canceled the leases before expiration, but did not authorize payment of the cancellation fees. The trial court granted summary judgment, finding it was legally impossible for the District to pay the cancellation fees, but also finding that the Authority had to comply with the cancellation terms of the leasing contracts. The appellate court affirmed the judgment in favor of the District on the cancellation fees and vacated as moot the declaratory judgment in favor of plaintiff. The Illinois Supreme Court concluded that the legislature intended the Act to permit the Authority to cancel a school district's contract with a third party, but that cancellation must be consistent with the contractual terms agreed to by the school district and the third party. The Authority can cancel the leasing contracts, but must pay the contractual fees for early cancellation.
Crossroads Ford Truck Sales, Inc. v. Sterling Truck Corp.
The manufacturer notified franchise dealers that it was discontinuing the Sterling (a subsidiary of Daimler) line of trucks. The letter offered dealers the opportunity to continue as a service dealership under a new agreement. Plaintiff, a dealer, was warned that, following the termination of the existing agreement, if it did not sign the general release and agree to terminate its Sterling franchise, Daimler Trucks would not renew its Detroit Diesel Direct Dealer Agreement. Daimler later terminated that agreement, which plaintiff alleges prevented it from obtaining parts at wholesale and performing warranty work on Detroit Diesel engines. Plaintiff alleged violations of the Motor Vehicle Franchise Act, 815 ILCS 710/1 and claims of breach of contract, tortious interference with contract, and fraud. The circuit court dismissed all but two counts. The appellate court affirmed, holding that the circuit court lacked subject matter jurisdiction to hear several counts under the Act, because those counts should have been brought before the Motor Vehicle Review Board. The Supreme Court affirmed.
Reliable Fire Equip. Co. v. Arredondo
Plaintiff sells, installs, and services fire extinguishers and fire suppression and fire alarm systems, which it designs for commercial customers. Defendant Garcia, hired as a systems technician in 1992, became a sales person. In 1997 he signed a noncompetition agreement. Defendant Arredondo, a salesperson, signed a noncompetition agreement about a week after being hired in 1998. The agreement prohibited competition during their employment and for one year after termination in Illinois, Indiana, or Wisconsin and prohibited solicitation of plaintiff's customers, referral sources, and employees. In 2004 defendants formed a competing company; Arredondo resigned, Garcia was fired. The trial court found the covenants unenforceable and a divided appellate court affirmed. The Illinois Supreme Court remanded. Assessment of a covenant includes analysis of the employer's legitimate business interest, based on the totality of the circumstances.Factors include, but are not limited to, the near-permanence of customer relationships, the employee’s acquisition of confidential information through his employment, and time and place restrictions. No factor carries any more weight than any other,
Phoenix Insurance Company v. Rosen
Phoenix Insurance Company ("Phoenix") filed a complaint in circuit court rejecting the arbitration award given to appellee when she requested coverage under the underinsured-motorist provisions of her policy with Phoenix after she was injured in a car accident and the other driver's vehicle was underinsured. At issue was whether a provision allowing either party to an insurance contract to demand a trial de novo following arbitration was unenforceable when it appeared in an underinsured-motorist policy. The court held that the provision in appellee's underinsured-motorist policy allowing either party to reject an award over the statutory minimum for liability coverage did not violate public policy and was not unconscionable.