Illinois Supreme Court Civil Issues Pending: Contract Law
[UPDATED THROUGH May 14, 2012]
Patrick Engineering, Inc. v. The City of Naperville
Supreme Court Number: 113148
Appellate Court: Second District
Appellate Court Case Number: 2-10-0695
Issue Presented: In an action arising from plaintiff's contract to perform consulting services for defendant city, should plaintiff's claimed for work performed under the contract, additional work performed, quantum meruit, accounts stated, and violation of the Local Government Prompt Payment Act have been dismissed?
Appellate Court Opinion Summary: The parties entered into a contract for consulting services in connection with the development of a stormwater asset management system and geographic information system. Plaintiff informed defendant that the "feature count" -- a basic rule for calculating costs -- would be reached prior to the completion of the contract, and that a change order would be needed. When defendant refused to issue a change order, plaintiff ceased work. Plaintiff alleged that based on defendant's assurances that necessary budget adjustments would be made, it returned to work. In Count I of its complaint, plaintiff sought to recover both for work performed under the contract and for additional work required by the city. Although the extra work had not been authorized in writing or approved by the City council, plaintiff alleged that representations and conduct of City agents had given rise to an equitable estoppel preventing the defendant from denying payment. Count II related to additional work in the pilot area; count III was a claim for quantum meruit for work performed. Count IV was for accounts stated. Count V brought the same allegations as Count IV, restated under the Local Government Prompt Payment Act. Defendant moved to dismiss, arguing that plaintiff had not obtained written authorization for additional work, the doctrine of equitable estoppel did not apply, the contract governed the work between the parties, making quantum meruit inapplicable, and the Local Government Prompt Payment Act was inapplicable since no money was owed. The trial court granted the motion. Plaintiff re-pled, focusing on the contract work, but the trial court dismissed again, holding that the work performed had not been adequately described. The Appellate Court reversed on the contract claim, holding that the defendant's nonacceptance of pilot area data was not a prerequisite to other work on the contract. With respect to non-contractual work, the Appellate Court also reversed, holding that City agents' alleged assurances that plaintiff would be compensated for such additional work created a triable issue of estoppel. Distinguishing Nielsen-Massey Vanillas v. City of Waukegan, 276 Ill.App.3d 148 (1995) and D. C. Consulting Engineers, Inc. v. Batavia Park Dist., 143 Ill.App.3d 60 (1986), the Court declined to hold that where a contract was not, as a whole, ultra vires, an act must be that of the municipality itself to create an estoppel. The Court reversed with respect to Count III as well, holding that plaintiff's allegations respecting the contract elsewhere were not judicial admissions barring a claim for quantum meruit. With respect to the claim for accounts stated, the Court reversed, finding that plaintiff had adequately alleged that defendant had not disputed the amount owed. Finally, the Court reversed the dismissal of Count V, holding that the defendant's claim -- that plaintiff had not provided goods or services sufficient to justify its invoices -- went to the merits, and was thus beyond the scope of pretrial dismissal.
Pielet v. Pielet
Supreme Court Case Number: 112064
Appellate Court: Second District
Appellate Court Case Number: 2-09-0210 & 2-09-0242
Issues Presented: (1) Was plaintiff's cause of action for breach of a long-term consulting agreement viable against corporation under the Survival Statute, 805 ILCS 5/12.80, even though the agreement was not breached until five years after dissolution of the corporation? (2) Was the defendant relieved of its obligations under the contract pursuant to the doctrine of novation?
Appellate Court Opinion Summary: Plaintiff sued various entities for breach of contract and related torts, alleging that the defendants had breached a life-time consulting agreement signed by her late husband. The agreement was signed in 1986 with Pielet Bros. Scrap Iron and Metal, Inc. Two years later, the company sold an undivided one-half of its assets to PBS One, which expressly assumed the Consulting Agreement. Three years later, PBS One transferred its share in Pielet to National Material, whose general partner was NM Holding. In 1993, Pielet changed its name to Midwest Metallics, and in 1998, it ceased payments under the agreement. In Count IX, plaintiff alleged that National Material had assumed the obligations of PBS One to the consulting agreement, and NM Holding was liable as the general partner of National Material. In Count X, plaintiff alleged that National Material and NM Holding were liable as the successors to PBS One. Count XI alleged that PBS One remained liable on the agreement even after its dissolution. The Circuit Court entered summary judgment on all three counts, finding that PBS One had assumed Pielet's obligation; that the Survival Statute continued PBS's obligations in force, even though the breach of contract action did not accrue until later, and that National Material was liable on the basis of assumption, and as a "mere continuation" of the earlier entities. On appeal, the Appellate Court held that the fact that plaintiff's claim had not yet accrued was not a barrier to its survival under the Survival Statute, which preserves not merely "claims," but "rights" and "liabilities." The Court further held that plaintiff's contingent right to payment upon her husband's death survived until the statute, even though the husband did not die until later. Nevertheless, the Court reversed the judgment, finding that a triable issue of fact existed on whether a novation occurred by virtue of the formation of Pielet LP, or the husband's continued acceptance of payments from Pielet LP and Midwest Metallics.
