Kenny Construction Co. v. Metropolitan Sanitary District
Docket: No. 46043
Court: Illinois Supreme Court; March 20, 1974; Illinois; State Supreme Court
A legal dispute exists between Kenny Construction Company (plaintiff) and the Metropolitan Sanitary District of Greater Chicago (defendant) regarding the payment due under a sewer construction contract. Initially, the circuit court awarded Kenny $131,237.71. However, the Appellate Court reversed this decision, stating the Sanitary District was not liable. The Supreme Court then accepted the case, overturned the appellate ruling, and remanded it for a reassessment of the compensation owed to Kenny due to changed site conditions.
Upon remand, the circuit court determined the total amount due to Kenny was $344,809.95. It also reaffirmed the original judgment of $131,237.71 as valid, resulting in a net balance owed of $213,572.24, for which an additional judgment was issued. The Sanitary District appealed again, leading to this court's review.
The case's background involves Kenny's original contract to construct an 8,100-linear-foot sewer, where unforeseen subsoil conditions complicated the construction of 1,600 linear feet. After unsuccessful attempts to resolve these issues, the Sanitary District approved a new construction method, which allowed completion of the project. Kenny's claim for extra compensation was initially upheld by the circuit court under the contract's changed-conditions clause but was later reduced by deducting profits from other work. The Supreme Court ruled that the deduction was erroneous, reaffirming Kenny's right to additional compensation without offsetting the profits from other sections.
Kenny is entitled to compensation for additional work necessitated by unforeseen conditions in the south section of the tunnel, based on an implied promise of payment. The costs for this work should be assessed independently of the contractor's profits or losses on unaffected contract sections. The case is remanded to the circuit court to determine Kenny's costs associated with liner-plate construction at the tunnel's south end per the contract, specifically article 8, minus any amounts already received and applicable deductions.
The construction contract involved over 20 bid items, but only item 1, concerning 8100 linear feet of sewer tunnel, is relevant here. Kenny's bid was $109.50 per linear foot. Evidence presented at the remand hearing showed actual costs for labor, materials, subcontractor expenses, and equipment for the changed-conditions work, resulting in a total cost of $520,009.95 for 1600 linear feet. After deducting $175,200 already paid by the Sanitary District, Kenny was found entitled to an additional $344,809.95. However, the circuit court, maintaining its previous judgment of $131,237.71, awarded Kenny an additional $213,572.24 instead.
The Sanitary District contended that the compensation calculation was flawed in two ways: it should be limited to the 4-month period of liner-plate installation rather than the entire 18-month construction period, and certain tasks like trash removal and site cleaning, minimally impacted by changed conditions, should not qualify for the additional recovery. The court upheld the circuit court's compensation formula as correct and consistent with article 8 and its previous opinion, rejecting the Sanitary District's arguments regarding the timeframe and nature of the work.
Kenny is entitled to compensation for the construction of the south 1600 feet of sewer under changed conditions, as affirmed by the earlier decision. The compensation will be based on the actual cost of the changed-conditions work, plus specified percentage markups, minus any amounts previously paid. The term 'liner plate construction' was used to describe the method employed by Kenny, but this was not meant to limit compensation calculations to the installation period of the liner plates.
While the Sanitary District argued that some work was minimally affected by changed conditions, the circuit court rightly viewed all aspects of the work as integral to the bid item 1 project. Due to unforeseen subsoil conditions, a different construction method was necessary, aligning with the contract's provisions for changed conditions. The disputed dollar amounts related to the Sanitary District's claims are relatively insignificant compared to the total project cost, and further litigation on these points would not be beneficial.
The circuit court's determination regarding Kenny's compensation is upheld, but its previous judgment from July 18, 1968, was not an affirmance of the compensation amount; rather, it reversed that judgment. Consequently, the Cook County circuit court is instructed to vacate earlier judgments in favor of the plaintiff and issue a new judgment for $344,809.95 in favor of the plaintiff as of May 16, 1973. The judgment is affirmed in part, reversed in part, and remanded with specific directions.
