{ "id": 2918008, "name": "BROOKFIELD-NORTH RIVERSIDE WATER COMMISSION, Plaintiff-Appellant, v. ABBOTT CONTRACTORS, INC., et al., Defendants-Appellees", "name_abbreviation": "Brookfield-North Riverside Water Commission v. Abbott Contractors, Inc.", "decision_date": "1993-08-02", "docket_number": "Nos. 1-92-1802, 1-92-2019", "first_page": "588", "last_page": "596", "citations": [ { "type": "official", "cite": "250 Ill. App. 3d 588" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "530 N.E.2d 439", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "124 Ill. 2d 435", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3218645 ], "weight": 4, "pin_cites": [ { "page": "445" }, { "page": "445" }, { "page": "445" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/124/0435-01" ] }, { "cite": "395 N.E.2d 613", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "76 Ill. App. 3d 812", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3277953 ], "weight": 2, "pin_cites": [ { "page": "816" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/76/0812-01" ] }, { "cite": "425 N.E.2d 439", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1979, "opinion_index": 0 }, { "cite": "97 Ill. App. 3d 1040", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3113409 ], "weight": 2, "year": 1979, "pin_cites": [ { "page": "1042" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/97/1040-01" ] }, { "cite": "392 N.E.2d 198", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "73 Ill. App. 3d 1046", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 3264387 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/73/1046-01" ] }, { "cite": "336 N.E.2d 491", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "32 Ill. App. 3d 231", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2799253 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/32/0231-01" ] } ], "analysis": { "cardinality": 799, "char_count": 22371, "ocr_confidence": 0.786, "pagerank": { "raw": 7.069933652438554e-08, "percentile": 0.425865948169179 }, "sha256": "fcca1595f3ae877f1e3973e2db2695d00f1f3688d4bbaff0b190d54dc27155f7", "simhash": "1:cf154b83e4504aa4", "word_count": 3552 }, "last_updated": "2023-07-14T16:41:36.340475+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "BROOKFIELD-NORTH RIVERSIDE WATER COMMISSION, Plaintiff-Appellant, v. ABBOTT CONTRACTORS, INC., et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE O\u2019CONNOR\ndelivered the opinion of the court:\nThis appeal stems from a dispute involving allegedly defective work performed during a public works project entitled \u201c1987 Water Supply Improvements Projects A \u2014 Transmission Mains and Cross Connections\u201d (project). In its complaint, plaintiff, Brookfield-North Riverside Water Commission (the Commission), alleged that defendant, Abbott Contractors, Inc. (Abbott), was responsible for the defective work. Ultimately, the circuit court granted Abbott partial summary judgment and ordered the parties to arbitration. The court also denied the Commission\u2019s motion for summary judgment. The Commission now challenges the propriety of those orders.\nWe reverse and remand.\nOn June 30, 1987, the Commission entered into a contract with Abbott, in which Abbott agreed to perform all the work and improvements for the project. The contract incorporated a separate document entitled \u201cSpecifications and Bidding Documents for Phase A \u2014 Transmission Mains and Cross Connection.\u201d These specifications were prepared by the project engineer, Edwin Hancock Engineering Company (the engineer). The purpose of the project was to make a supplemental source of water available for the residents within the Commission\u2019s jurisdiction. Abbott completed the work on June 19, 1988, and received its final payment on August 13,1988.\nIn February 1989, the Commission took water samples from the pipes after receiving complaints of oily, foul-smelling water from residents. These samples indicated that contaminants were in the water line, rendering it unsuitable. Three months later, the Commission had a \u201cbutterfly valve\u201d in the line opened, and oil and other contaminants were found there as well. Chemical tests performed in June confirmed the presence of benzene in the water. On June 14, 1989, the Commission notified Abbott that its work was \u201cdefective\u201d and \u201cunacceptable\u201d and, citing the contract\u2019s one-year warranty period, asked for compensation with regard to the cost of replacing and cleaning the unsuitable piping. Abbott responded with a denial that its work was defective. On July 14, 1989, the Commission submitted the dispute to the engineer. Upon notification of the submission, Abbott questioned the authority of the engineer to render a decision on completed work.\nOn August 11, 1989, the Commission wrote to the engineer requesting \u201cadditional time in which to submit *** data to and including October 14, 1989.\u201d On August 14, 1989, counsel for Abbott wrote to the engineer and again questioned the engineer\u2019s authority for undertaking review of the \u201cdispute.\u201d Abbott asked that this \u201cthreshold issue\u201d be resolved prior to any other determination and reserved the right to submit data if the dispute resolution was to proceed.\nApparently, the engineer\u2019s decision was rendered prior to the receipt of either Abbott\u2019s or the Commission\u2019s letters because, on August 11, 1989, the engineer, in a letter addressed to both parties, stated that the \u201cresolution on our part of this dispute would be in accordance with Paragraphs 9.11 and 9.12\u201d of the contract. After making several findings as to the cause of the contamination, the engineer concluded that Abbott should bear the \u201cfull responsibility\u201d for the costs of removing the contaminants.\nFour days later, the engineer notified both parties that it had received their requests for additional time after the completion of the dispute \u201cresolution.\u201d In light of that fact, the engineer recommended that both the Commission and Abbott \u201ctake sufficient time to review the findings we have presented in our resolution dated August 11, 1989, after which a conference can be scheduled with both parties and our office to discuss the items in dispute in further detail. At that time, if it can be shown, by either party, that there is additional qualified data available, or becoming available, to add support to its position and to justify a review of our resolution, a time extension can be granted to allow for this date [sic] to be submitted.\u201d Neither party availed itself of the opportunity to submit additional data to the engineer.\nOn February 1, 1990, the Commission filed its eight-count complaint, sounding in negligence and breach of contract, against Abbott. Relevant here is count I, which alleged that Abbott had failed to seek timely review of the engineer\u2019s decision, and as a result, was liable for the defective work as found by the engineer in its August 11, 1989, resolution of the dispute. The Commission sought court enforcement of the engineer\u2019s decision. On May 20, 1991, the Commission filed a motion for partial summary judgment on count I of the complaint. The affidavit of William F. Bucha, the president of the engineering firm affiliated with the project, was submitted to the court in support of the motion. In it, Bucha swore that the dispute between the Commission and Abbott was submitted to the engineer on July 14, 1989, and the engineer\u2019s decision was rendered on August 11, 1989. According to Bucha, the letter of August 11, 1989, \u201cis the final, written decision of Hancock [the engineer] concerning the dispute between Abbott and the Commission.\u201d\nOn June 14, 1991, Abbott demanded a review of the engineer\u2019s decision by the American Arbitration Association (AAA). In its demand, Abbott sought a determination of whether the engineer was the proper party to resolve the dispute. Abbott later amended the demand to include determinations of all the claims raised by the Commission in its litigation. Meanwhile, in the circuit court, Abbott filed a motion to compel arbitration and stay proceedings in the case pending the resolution of the arbitration. Abbott also moved for cross partial summary judgment on count I of the complaint, contending that the engineer\u2019s decision of August 11, 1989, was neither valid nor final.\nFollowing arguments on the motions, the circuit court granted Abbott\u2019s motion for partial summary judgment as to count I of the complaint, granted Abbott\u2019s motion to compel arbitration, and denied the Commission\u2019s motion for partial summary judgment as to count I of the complaint. In his ruling, the trial judge stated that he could not \u201caccept the letter [of August 11, 1989] as final\u201d because the engineer \u201cdidn\u2019t really grant Abbott its day in court.\u201d The Commission filed two timely notices of appeal. The first chailenges that portion of the circuit court\u2019s order which compelled arbitration and stayed proceedings pending the resolution of the arbitration. The second notice of appeal challenges that portion of the circuit court\u2019s order which denied the Commission\u2019s motion for partial summary judgment as to count I and granted Abbott\u2019s cross-motion for summary judgment as to count I. This court granted the Commission\u2019s motion to consolidate the appeals on July 7,1992.\nThe Commission maintains that the circuit court erred in denying its motion for partial summary judgment. It asserts that the dispute between the parties properly was submitted to the engineer under the contract, that Abbott should have appealed the engineer\u2019s decision to the AAA under the contract\u2019s 30-day provision, and that because Abbott did not do so, it is too late for the matter to be sent to arbitration. Abbott responds that the engineer did not have the authority to render the decision. Moreover, assuming it did have authority, Abbott insists that the engineer\u2019s letter is not a resolution of the dispute because the engineer subsequently allowed both parties to submit additional data. Abbott further contends that it timely sought arbitration.\nOur analysis must begin with the determination of what was actually \u201cdisputed\u201d by the parties. By letter dated June 14, 1989, the Commission charged Abbott with providing \u201cdefective,\u201d \u201cfaulty,\u201d and \u201cdeficient\u201d work. The letter contained a detailed description of the work the Commission considered defective and cited the specifications of the contract in reference to the defective work. The letter concluded by requesting Abbott to bear the cost of the repair and replacement. On June 23, 1989, Abbott responded to the Commission\u2019s letter, denying that its work was \u201cdefective in any way.\u201d Had Abbott accepted the Commission\u2019s findings and agreed to bear the costs of repair, none of the ensuing events would have occurred. In view of these facts, it would appear that, as of June 23, 1989, the parties \u201cdisputed\u201d whether the work was performed in a defective manner.\nHaving identified the dispute as one concerning defective work, this court must ascertain how the parties intended such disputes to be resolved. In so doing, we must look to the parties\u2019 contract, because the rights of the parties are governed by its terms. Kohenn v. Plantation Baking Co. (1975), 32 Ill. App. 3d 231, 336 N.E.2d 491.\nThe contract here provides that the \u201cContractor [Abbott] warrants and guarantees to OWNER and ENGINEER that all Work will be in accordance with the Contract Documents and will not be defective. All defective Work, whether or not in place, may be rejected.\u201d (Emphasis in original.) The contract also provides for a \u201cone year correction period\u201d after completion in which Abbott was to repair, replace, or bear the cost of replacement for any work \u201cfound to be defective.\" (Emphasis in original.) It should also be noted that the contract specifically states that the making and acceptance of final payment did not constitute a waiver of claims arising \u201cfrom defective work *** [or] from failure to comply with the contract documents.\u201d (Emphasis in original.) Moreover, final payment to Abbott did not constitute \u201can acceptance of Work not in accordance with Contract Documents\u201d and did not release Abbott from the obligation to perform the work in accordance with the contract documents. The contract identifies the engineer as the \u201cinitial interpreter of the requirements of the Contract Documents and judge of the acceptability of the work thereunder.\u201d To that end, the engineer was charged with the authority to disapprove or reject work which the engineer believed to be defective \u201cwhether or not the Work is fabricated, installed or completed.\u201d\nGiven this language and the fact that the dispute fell within the one-year warranty provision, the engineer, under the contract, had the authority to make an \u201cinitial\u201d determination concerning the Commission\u2019s claims that Abbott\u2019s work was \u201cdefective\u201d and failed to comply with the contract\u2019s documents. Accordingly, Abbott\u2019s arguments concerning the engineer\u2019s lack of authority must fail because the contract specifically provides the engineer with such authority with regard to work acceptability and without regard to the completion of the project.\nThe contract also sets forth the method by which the parties were to submit such \u201cdisputes\u201d to the engineer for decision. Under section 9.11, the claimant must make its request for a \u201cformal decision\u201d \u201cin writing,\u201d after which the engineer must \u201crender\u201d its decision \u201cin writing within a reasonable time.\u201d In addition, the claimant is required to give \u201cwritten notice\u201d of its claim to the other party no later than 30 days after the occurrence of the event \u201cgiving rise thereto.\u201d The contract provides that written supporting data is to be submitted to the engineer and the \u201cother party\u201d within 60 days after such occurrence unless the engineer allows for an additional time period. Section 9.12 of the contract makes the \u201crendering of a decision\u201d by the engineer, pursuant to section 9.11, a \u201ccondition precedent to any exercise by OWNER or CONTRACTOR of such rights or remedies as either may otherwise have under the Contract.\u201d\nAs noted previously, Abbott\u2019s denial of defective work on June 23, 1989, was the \u201coccurrence\u201d which gave rise to the claim at issue here. On July 14, 1989, the Commission submitted its written claim to the engineer, well within the 30-day period required under the contract. The Commission also provided Abbott with written notice of the claim within the requisite time period. The record indicates that neither party availed itself of the 60-day period within which data was to be submitted. Under the contract, August 23, 1989, would have been the last day on which data could be submitted. On August 11, 1989, following a telephone conversation with Abbott\u2019s counsel, counsel for the Commission sent the engineer a letter requesting additional time to and including October 14, 1989, in which to submit additional data. Specifically, the letter stated that \u201cunless the undersigned learns from you otherwise by 5 p.m., Monday August 14, 1989, we will assume that you will allow the extension of time as requested herein.\u201d On August 14, 1989, Abbott wrote to the engineer, acknowledging the Commission\u2019s extension request of August 11, 1989. Once again, Abbott questioned the engineer\u2019s authority to hear the matter and requested that that issue be resolved initially. The letter went on to \u201creserve the right to submit additional data relevant to the proceeding.\u201d\nThe engineer rendered a decision on the dispute on August 11, 1989, apparently unaware of the parties\u2019 concerns. In his letter, the engineer stated that \u201cthis resolution on our part of this dispute would be in accordance with Paragraphs 9.11 and 9.12\u201d of the contract and further stated that \u201c[t]he presence of materials *** in the transmission main and the flooding of the pipe trench *** are factors supporting our conclusion that the high degrees of concentration of certain volatile compounds found in the water *** are the result of these compounds entering the transmission main during the time of its installation.\u201d (Emphasis added.) The engineer\u2019s letter stated that it was \u201cour finding\u201d that Abbott bear the full responsibility for having the pipes cleaned. (Emphasis added.)\nOn August 15, 1989, the engineer, apparently in response to the parties\u2019 letters, recommended to both parties that they \u201ctake sufficient time to review the findings we have presented in our resolution dated August 11, 1989 after which a conference can be scheduled with both parties and our office to discuss the items in dispute in further detail. At that time, if it can be shown, by either party, that there is additional qualified data available to add support to its position and to justify a review of our resolution, a time extension can be granted.\u201d (Emphasis added.) Neither party took advantage of the engineer\u2019s invitation. Moreover, no party submitted any data prior to the October 14, 1989, extension date mentioned in the Commission\u2019s letter to the engineer prior to the August 11 resolution.\nClearly, the wording of the engineer\u2019s letter of August 11, 1989, as underscored above, indicates the engineer considered its findings to be a \u201cdecision\u201d \u201crendered\u201d on the dispute in accordance with sections 9.11 and 9.12 of the contract. This is manifested by what was not stated in the engineer\u2019s letter of August 15, 1989. In that correspondence, the engineer did not withdraw its August 11, 1989, decision, but, rather, offered both parties the possibility of a \u201creview\u201d of the decision if either side could show that additional data justified such action. Neither party availed itself of this opportunity. With the favorable August 11 decision in hand, the Commission\u2019s inaction at this part of the proceedings is hardly surprising. Abbott\u2019s inaction, however, is inexplicable as the August 11 decision was unfavorable to it. Not only did that decision resolve the dispute regarding defective work against Abbott, but it also resolved the issue of the engineer\u2019s authority against Abbott. It should be noted that Abbott has continued to question that authority even in this court. Nevertheless, Abbott did not return to the engineer. This alone, however, is not fatal to Abbott\u2019s claims because Abbott did have one other avenue of recourse available under the terms of the contract.\nSection 16.1 of the contract provides that all claims, disputes and other matters in question between the parties were to' be decided by the AAA, subject to the limitations contained within article 16. The only such limitation relevant to this litigation is the following: \u201cNo demand for arbitration of any such claim, dispute or other matter will be made later than thirty days after the date on which the ENGINEER has rendered a written decision in respect thereof in accordance with paragraph 9.11. and the failure to demand arbitration within said thirty day period shall result in ENGINEER\u2019S decision being final and binding upon the parties.\u201d (Emphasis added.)\nNo demand for arbitration was made by Abbott until June 14, 1991, almost two years after the engineer\u2019s decision was rendered. Although Abbott contends that the engineer\u2019s August 15 letter indicates that the dispute was still unresolved, the facts in the record do not support that argument. Abbott\u2019s actions following the receipt of the letter do not conform with those of a party seeking to present additional data. To this date, it does not appear that Abbott has made any attempt to submit the additional data it maintained it had during the summer of 1989. We note that in its correspondence to the engineer, Abbott\u2019s counsel asked the engineer to resolve the \u201cthreshold issue\u201d of the engineer\u2019s authority prior to resolving the dispute regarding the defective work: \u201cIf the binding resolution of this issue is that your firm is to proceed with the dispute resolution *** then we would reserve the right to submit additional data relevant to the proceeding.\u201d The engineer allowed for this in its letter of August 15, which offered the possibility of a review if additional data were available. Abbott, however, did nothing. Even more puzzling is Abbott\u2019s failure to challenge the engineer\u2019s authority to render the decision even though Abbott had a right to do so under the contract\u2019s terms. Under the plain language of the contract, as highlighted above, it was Abbott\u2019s failure to demand arbitration within a timely fashion that rendered the engineer\u2019s August 11 decision final and binding.\nThe Commission argues that Abbott\u2019s failure to make a timely demand for arbitration following the engineer\u2019s decision precludes arbitration.\nBoth parties correctly maintain that arbitration is a favored method of settling disputes. The object of arbitration is to achieve a final disposition of disputes in an easier, more expeditious, and less expensive manner than by litigation. (Wilcox Co. v. Bouramas (1979), 73 Ill. App. 3d 1046, 392 N.E.2d 198.) Nevertheless, our courts have recognized that a contractual right to arbitration can be waived like any other contractual right. (Brennan v. Kenwick (1981), 97 Ill. App. 3d 1040, 425 N.E.2d 439; Gateway Drywall & Decorating, Inc. v. Village Construction Co. (1979), 76 Ill. App. 3d 812, 395 N.E.2d 613.) Waiver will be found when a party\u2019s conduct has been inconsistent with the arbitration clause contained within the contract so as to indicate that the party has abandoned his right to arbitrate. Brennan, 97 Ill. App. 3d at 1042; Gateway, 76 Ill. App. 3d at 816.\nHere, the contract specifically limits the time period within which demands for arbitration from the engineer\u2019s rulings can be made. Although the circuit court was concerned that Abbott did not \u201chave its day in court,\u201d it appears that Abbott\u2019s own actions were the reason for any lack of hearing that occurred. The engineer gave Abbott the chance to submit data. Abbott failed to do so. Furthermore, under the arbitration clause within the contract, Abbott was free to take the engineer\u2019s resolution to the AAA, but it did not do so. These facts indicate that Abbott\u2019s conduct was inconsistent with the arbitration provision within the contract. Accordingly, the circuit court incorrectly denied the Commission\u2019s motion for partial summary judgment as to this issue and erroneously granted Abbott summary judgment.\nIn view of the foregoing, the circuit court incorrectly granted Abbott\u2019s motion to compel arbitration. The sole issue before the court on such a motion is whether there is an agreement to arbitrate. (Donaldson, Lufkin, & Jenrette Futures, Inc. v. Barr (1988), 124 Ill. 2d 435, 530 N.E.2d 439.) Where the language of the arbitration agreement is clear, and it is apparent that the dispute sought to be arbitrated falls within the .scope of the agreement, the court should decide the arbitrability issue and compel arbitration. (Donaldson, 124 Ill. 2d at 445.) If, however, it is apparent that the issue sought to be arbitrated is not within the ambit of the arbitration clause, the court must decide the arbitrability issue in favor of the party opposing arbitration because there is no agreement to arbitrate. (Donaldson, 124 Ill. 2d at 445.) The critical element in determining the parties\u2019 intention is the scope of the arbitration clause contained within the contract. Donaldson, 124 Ill. 2d at 445.\nIn the present case, the parties agreed to arbitrate all disputes, claims, and questions arising under the contract. However, this broad intent was limited with regard to disputes initially interpreted by the engineer. In those cases, arbitration demands were to be made within 30 days of that decision. If no demand was made, the decision became final and binding. As a result, the parties only agreed to arbitrate the engineer\u2019s decisions within 30 days. Those decisions outside the 30-day period, therefore, were specifically excluded by the parties. Accordingly, the circuit court erred in granting the motion to compel arbitration.\nTherefore, the order of the circuit court granting Abbott\u2019s motion for partial summary judgment and for compelled arbitration is reversed and the circuit court\u2019s order denying the Commission\u2019s motion for partial summary judgment is reversed. The cause is remanded for further proceedings consistent with this opinion.\nReversed and remanded.\nMANNING, P.J., and BUCKLEY, J., concur.", "type": "majority", "author": "JUSTICE O\u2019CONNOR" } ], "attorneys": [ "Chapman & Cutler, of Chicago (James P. O\u2019Brien and Robert M. Baratta, Jr., of counsel), for appellant.", "O\u2019Reilly, Cunningham, Norton & Mancini, of Wheaton (Thomas R. Weiler, of counsel), for appellee Abbott Contractors, Inc." ], "corrections": "", "head_matter": "BROOKFIELD-NORTH RIVERSIDE WATER COMMISSION, Plaintiff-Appellant, v. ABBOTT CONTRACTORS, INC., et al., Defendants-Appellees.\nFirst District (1st Division)\nNos. 1 \u2014 92\u20141802, 1\u201492\u20142019 cons.\nOpinion filed August 2, 1993.\nRehearing denied September 7, 1993.\nChapman & Cutler, of Chicago (James P. O\u2019Brien and Robert M. Baratta, Jr., of counsel), for appellant.\nO\u2019Reilly, Cunningham, Norton & Mancini, of Wheaton (Thomas R. Weiler, of counsel), for appellee Abbott Contractors, Inc." }, "file_name": "0588-01", "first_page_order": 606, "last_page_order": 614 }