{ "id": 4266975, "name": "CARROLL SEATING COMPANY et al., Plaintiffs-Appellees, v. PETER B. VERDICO et al., Defendants and Intervenors-Appellants (P.B. Verdico, Inc., et al., Defendants)", "name_abbreviation": "Carroll Seating Co. v. Verdico", "decision_date": "2006-12-21", "docket_number": "Nos. 1\u201404\u20143026, 1\u201404\u20143457 cons.", "first_page": "724", "last_page": "732", "citations": [ { "type": "official", "cite": "369 Ill. App. 3d 724" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "25 Geo. Wash. L. Rev. 206", "category": "journals:journal", "reporter": "Geo. Wash. L. Rev.", "year": 1956, "pin_cites": [ { "page": "210" } ], "opinion_index": 0 }, { "cite": "318 Ill. App. 3d 673", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 279478 ], "weight": 2, "year": 2000, "pin_cites": [ { "page": "684" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/318/0673-01" ] }, { "cite": "40 U.S.C. \u00a7270", "category": "laws:leg_statute", "reporter": "U.S.C.", "year": 2000, "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 }, { "cite": "38 Ill. App. 2d 38", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5255651 ], "weight": 2, "year": 1962, "pin_cites": [ { "page": "51", "parenthetical": "\"There is nothing to prevent the parties from entering into a contract and bond which go far beyond the statutory provisions, where they are entered into by parties competent to contract and they are not prohibited by law\"" }, { "page": "51" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/38/0038-01" ] }, { "cite": "317 Ill. App. 3d 764", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 1026024 ], "weight": 5, "year": 2000, "pin_cites": [ { "page": "770" }, { "page": "770" }, { "page": "771" }, { "page": "771" }, { "page": "770" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/317/0764-01" ] }, { "cite": "206 Ill. App. 3d 828", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2559312 ], "weight": 3, "year": 1990, "pin_cites": [ { "page": "853-54", "parenthetical": "\"The purpose of sections 1 and 2 [citation] of the Bond for Public Works Act is to protect payment to contractors and materialmen for whom no right of mechanics' liens exists against a public body, and to regulate claims against public monies\"" }, { "page": "855" }, { "page": "855" } ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/206/0828-01" ] }, { "cite": "120 Ill. App. 2d 226", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 1583471 ], "year": 1970, "pin_cites": [ { "page": "241" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/120/0226-01" ] }, { "cite": "32 N.E.2d 650", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1941, "pin_cites": [ { "page": "656" }, { "page": "656" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 839, "char_count": 19237, "ocr_confidence": 0.768, "pagerank": { "raw": 4.8172472706271035e-08, "percentile": 0.30271398062203625 }, "sha256": "de0e10b0cf971e7f44f0c5d2c7c60c5852054f36876ed9dc2858dbac63a11580", "simhash": "1:15fdfd0a6eca52cd", "word_count": 3177 }, "last_updated": "2023-07-14T20:04:07.948493+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "CARROLL SEATING COMPANY et al., Plaintiffs-Appellees, v. PETER B. VERDICO et al., Defendants and Intervenors-Appellants (P.B. Verdico, Inc., et al., Defendants)." ], "opinions": [ { "text": "PRESIDING JUSTICE QUINN\ndelivered the opinion of the court:\nDefendant-intervenors are the owners of a construction company, PB. Verdico, Inc. (Verdico), that was hired by School District 87 in Berkeley, Illinois, to renovate and build additions to several school buildings. Plaintiffs Carroll Seating Company, J.J.L., Inc., d/b/a American Roofing and Repair Co., Lombardi Electric, Inc., and Team Mechanical, Inc., were subcontractors hired by Verdico for the project.\nAs required by section 1 of the Public Construction Bond Act (Bond Act) (30 ILCS 550/1 (West 2002)), Verdico posted a payment bond for the project, with Travelers Casualty and Surety Company of America (Travelers) acting as the surety for the bond. When Verdico failed to pay plaintiffs the entire amount owed to them under their respective subcontracts, they sued Verdico, Travelers, and the school district to recover on the bond.\nAfter the circuit court had granted summary judgment to Carroll Seating, Verdico\u2019s owners intervened, claiming that they had a stake in the case because they had agreed to indemnify Travelers for any payments made under the bond. Seeking to have the circuit court reconsider and vacate its grant of summary judgment to Carroll Seating, intervenors argued that plaintiffs\u2019 claims on the bond were untimely because the six-month time limit contained in section 2 of the Bond Act (30 ILCS 550/2 (West 2002)), and not the one-year time limit contained in the bond supplied by Verdico, was applicable. The circuit court denied intervenors\u2019 motion for reconsideration. This appeal followed.\nANALYSIS\nOn appeal, plaintiffs first argue that intervenors lacked standing to intervene in the underlying lawsuit. In their petition to intervene, intervenors alleged that they had an interest in the proceedings because they had \u201cpersonally guaranteed to Travelers payment of any losses suffered by Travelers regarding the subject payment bond.\u201d Plaintiffs argue that intervenors provided no evidence of that guarantee in the record before this court.\nAs intervenors point out, however, plaintiffs did not contest their standing to intervene in the circuit court below. Thus, we find that plaintiffs\u2019 lack-of-standing argument is waived and express no opinion as to whether intervenors had standing to intervene. See Greer v. Illinois Housing Development Authority, 122 iLL. 2d 462, 508 (1988) (stating that \u201clack of standing in a civil case is an affirmative defense, which will be waived if not raised in a timely fashion in the trial court\u201d).\nThe next question on appeal is which claim-filing limitations period is applicable, the six-month time limit found in the Bond Act, or the one-year time frame contained in the bond supplied by Verdico. Prior to the passage of the Bond Act, materialmen and laborers had no right to impose a mechanic\u2019s lien on a public work. See Fodge v. Board of Education of the Village of Oak Park, District 97, 309 iLL. App. 109, 122, 32 N.E.2d 650, 656 (1941), citing Gunther v. O\u2019Brien Bros. Construction Co., 369 iLL. 362, 370 (1938). Additionally, in interpreting public works contracts between the state and its contractors, Illinois courts had found that those contracts did not confer upon subcontractors the status of third-party beneficiaries to those contracts or create a \u201ccommon-law right of action against a surety,\u201d even where, in some cases, those contracts contained a provision stating that \u201cthe principal contractor agree[d] \u2018to pay the subcontractor.\u2019 \u201d Fodge, 309 iLL. App. at 122, 32 N.E.2d at 656. Without the ability to place a lien on public property and with no imputed rights under the bond contract between the state and general contractor, many subcontractors were left with no legal recourse when a general contractor failed to fulfill his contractual obligation.\nIn 1931 the Bond Act was passed, requiring that state officials obtain a payment bond from contractors who agree to perform \u201cpublic work of any kind costing over $5,000.\u201d 30 ILCS 550/1 (West 2002). The aim of the Bond Act was twofold: it protected \u201cthose who furnish[ed] labor or materials on public works\u201d and guarded \u201cthe tax money allotted for public works.\u201d Housing Authority v. Holtzman, 120 Ill. App. 2d 226, 241 (1970); see also Aluma Systems, Inc. v. Frederick Quinn Corp., 206 Ill. App. 3d 828, 853-54 (1990) (\u201cThe purpose of sections 1 and 2 [citation] of the Bond for Public Works Act is to protect payment to contractors and materialmen for whom no right of mechanics\u2019 liens exists against a public body, and to regulate claims against public monies\u201d).\nThese dual aims were codified into the claim-filing procedures contained in section 2 of the Bond Act, which allows subcontractors, materialmen, or laborers employed on a public works project to sue on the payment bond, but requires any such suit to be filed within six months of the state\u2019s acceptance of the project:\n\u201cEvery person furnishing material or performing labor, either as an individual or as a sub-contractor for any contractor, with the State, or a political subdivision *** in this Act, shall have the right to sue on such bond or letter of credit in the name of the State, or the political subdivision thereof entering into such contract, as the case may be, for his use and benefit, *** provided, however, that this Act shall not be taken to in any way make the State, or the political subdivision thereof entering into such contract, as the case may be, liable to such sub-contractor, materialman or laborer to any greater extent than it was liable under the law as it stood before the adoption of this Act. ***\n?\u00a1t 5\u00a1: j{\u00ed\nProvided, further, that no action shall be brought until the expiration of 120 days after the date of the last item of work or the furnishing of the last item of materials *** nor shall any action of any kind be brought later than 6 months after the acceptance by the State or political subdivision thereof of the building project or work. Such action shall be brought only in the circuit court of this State in the judicial circuit in which the contract is to be performed.\u201d 30 ILCS 550/2 (West 2002).\nIntervenors argue that the Bond Act\u2019s claim-filing provisions (i.e., the six-month limitations period which begins to run after the project is accepted) are applicable to the bond provided by Verdico because (1) the plain language of the bond itself evidences an intent to incorporate the Bond Act\u2019s claim-filing provisions, and (2) even if the bond cannot be so read, the Bond Act\u2019s provisions preempt or \u201coverride[ ]\u201d the bond\u2019s one-year filing period. We disagree.\nParagraph 11 of the bond provided by Verdico states:\n\u201cNo suit or action shall be commenced by a Claimant under this Bond other than in a court of competent jurisdiction in the location in which the work or part of the work is located or after the expiration of one year from the date (1) on which the Claimant gave notice required by Subparagraph 4.1 or Clause 4.2.3, or (2) on which the last labor or service was performed by anyone or the last materials or equipment were furnished by anyone under the Construction Contract, whichever of (1) or (2) first occurs. If the provisions of this Paragraph are void or prohibited by law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the suit shall be applicable.\u201d\nThus, the plain language of paragraph 11 allows subcontractors one year from the date on which the last work was done or material was furnished by anyone on the project to file suit, unless that time allowance is \u201cvoid or prohibited by law.\u201d\nParagraph 13 states:\n\u201cWhen this Bond has been furnished to comply with a statutory or other legal requirement in the location where the construction was to be performed, any provision in this Bond conflicting with said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming to such statutory or other legal requirement shall be deemed incorporated herein. The intent is that this Bond shall be construed as a statutory bond and not as a common law bond.\u201d\nIntervenors argue that the \u201cvoid or prohibited by law\u201d language of paragraph 11, coupled with paragraph 13\u2019s \u201cdelete\u201d and \u201cincorporate\u201d mechanism in the event of conflicting provisions, evidences an intent by the parties to the bond that the Bond Act\u2019s claim-filing provisions be engrafted into the bond; this is so, according to intervenors, even though nowhere in the bond is the Bond Act mentioned or referenced.\nTheir argument, however, hinges on the effect the Bond Act\u2019s claim-filing provisions have on public works bonds. If those provisions are mandatory for all such bonds, then they are right because either (1) the one-year time limit contained in the bond is \u201cvoid or prohibited by law\u201d or (2) a conflict exists between the claim-filing provisions of the bond and the Bond Act, activating the delete and incorporate provision of paragraph 13. We find, however, that the Bond Act\u2019s claim-filing provisions are not mandatory for all public works bonds for two reasons.\nFirst, where the legislature intended to mandate the inclusion of Bond Act provisions into all public works bonds, it did so expressly. See 30 ILCS 550/1 (West 2002). (containing a mandatory insert for all public works bonds \u201cwhether such provisions are inserted in such bond or not\u201d). The Bond Act contains no similar mandate for its claim-filing provisions.\nSecond, this court has consistently found that due to the Bond Act\u2019s remedied nature, parties to a public works bond \u201care free to contract for protection that exceeds the [Act\u2019s] minimum.\u201d William J. Templeman Co. v. United States Fidelity & Guaranty Co., 317 Ill. App. 3d 764, 770 (2000) (finding that the parties to a public works bond could set the notice requirement for a claim on that bond at 90 days, instead of the 120 days required by the Bond Act, because \u201c[i]t is well established that parties who enter into contracts may waive provisions beneficial to them\u201d and \u201ca contractor and its surety are free to contract for protection that exceeds the minimum statutory provisions\u201d); Aluma Systems, 206 Ill. App. 3d at 855 (\u201cAlthough the express provisions of the statute are deemed to be contained in every bond for a public construction project, whether actually inserted in the bond or not, the contractor and its surety are free to contract with the public entity for additional liability which exceeds the statutory provisions\u201d); Illinois State Toll Highway Comm\u2019n ex rel. Patten Tractor & Equipment Co. v. M.J. Boyle & Co., 38 Ill. App. 2d 38, 51 (1962) (\u201cThere is nothing to prevent the parties from entering into a contract and bond which go far beyond the statutory provisions, where they are entered into by parties competent to contract and they are not prohibited by law\u201d).\nIn this case, the parties did just that; instead of allowing material-men six months from the date that the project was accepted in which to file suit on the bond, they chose to allow them one year from the date the last work was performed by anyone on the project. These provisions do not conflict with the Bond Act\u2019s mandates in a manner like a provision that allowed materialmen only one week from the date the project was accepted to file suit would; they merely extend the Bond Act\u2019s protective, remedial reach.\nWe find Templeman to be instructive. In Templeman, the public works bond exempted claimants who had \u201ca direct contract with the principal\u201d from providing notice of a claim on the bond. Templeman, 317 Ill. App. 3d at 770. When one such claimant filed suit on the bond without providing notice, the bond\u2019s surety objected and argued that the claimant should have followed the notice requirement contained in section 2 of the Bond Act. Templeman, 317 Ill. App. 3d at 771, citing 30 ILCS 550/2 (West 1996). We rejected the surety\u2019s attempt to rely on the Bond Act\u2019s notice provisions:\n\u201cIn effect, [the surety] asks to be permitted to issue a bond that provides no notice is required prior to suit, but when a claimant relies on that language, to avoid payment by invoking the Bond Act, which contains a notice requirement. This we refuse. Instead, we construe the language contained in the bond issued and drafted by [the surety] against [the surety] and conclude as a matter of law that notice by [the claimant] was waived.\u201d Templeman, 317 Ill. App. 3d at 771.\nJust as in Templeman, the parties in this case utilized a bond that provided materialmen one year from the last date anyone on the project finished their work. Because the Bond Act\u2019s claim-filing provisions are not mandatory for all public works bonds, but merely a minimum below which parties may not go (see Templeman, 317 Ill. App. 3d at 770; Aluma Systems, 206 Ill. App. 3d at 855; Illinois State Toll Highway Comm\u2019n, 38 Ill. App. 2d at 51), the bond\u2019s claim-filing provisions are both valid and applicable.\nThe final issue before us is whether the circuit court properly found that no genuine issue exists as to whether plaintiffs\u2019 lawsuits to recover on the bond were timely. The question, under paragraph 11 of the bond, is whether these lawsuits were filed \u201cone year from the date *** on which the last labor or service was performed by anyone or the last materials or equipment were furnished by anyone under the Construction Contract.\u201d\nPlaintiffs filed suit on the following dates:\nTeam Mechanical on July 8, 2003;\nCarroll Seating on August 28, 2003;\nAmerican Roofing on September 9, 2003; and Lombardi Electric on January 13, 2004.\nIn its motion for summary judgment, Carroll Seating provided an affidavit indicating that it had performed work on the project on April 4, 2003, when it replaced a drawer that had been damaged.\nIntervenors do not dispute that Carroll Seating replaced this drawer on that date. Instead, they argue that this date should not qualify as the starting point for the one-year claim limitations period contained in paragraph 11 of the bond because the work performed by Carroll Seating on that day was not \u201csubstantive\u201d work but, rather, merely repair or replacement work.\nIn their petition for rehearing, intervenors repeat their argument on appeal that this distinction is significant in that the bond form used in the present case, the ALA A312, uses language that is virtually identical to the language found in both the federal Miller Act (40 U.S.C. \u00a7270 et seq. (2000)) and the Illinois Bond Act.\nThe relevant language of the bond provides that a claimant must bring suit before the \u201cexpiration of one year from the date *** on which last labor or service was performed by anyone under the Construction Contract.\u201d\nThe federal Miller Act provides that suit must be brought by a claimant no later than \u201cafter the expiration of one year after the day on which the last of the labor was performed or material was supplied by him.\u201d 40 U.S.C. \u00a7270b(b) (2000).\nThe Illinois Bond Act requires that a claimant furnish notice within \u201c180 days after the date of the last item of work or the furnishing of the last item of materials.\u201d 30 ILCS 550/2 (2002).\nIn MQ Construction Co. v. Intercargo Insurance Co., 318 Ill. App. 3d 673 (2000), this court held:\n\u201cBecause of the absence of Illinois authority and the similarity of the purposes of the Bond Act, the Miller Act and the Mechanics Lien Act, we believe that the term \u2018last work,\u2019 as used in the Bond Act, should be interpreted in a manner similar to the nearly identical terms in the Miller Act and the Mechanics Lien Act. Under those Acts, *** corrective or repair work is not considered in determining the date that a contractor supplied its \u2018last work\u2019 on a project for purposes of calculating the limitations period for claims relating to that work. We find that the legislature\u2019s use of a similar term in the Bond Act suggests that the legislature also intended to exclude corrective or repair work when determining the date of \u2018last work\u2019 under the Bond Act.\u201d MQ Construction Co. v. Intercargo Insurance Co., 318 Ill. App. 3d at 684.\nWe agree with intervenors that it is important that language in published bond forms be interpreted in the same manner as similar language contained in public statutes. However, this interpretation does not aid intervenors\u2019 position. The intervenors strenuously argue that Carroll Seating\u2019s replacement of a drawer on April 4, 2003, was repair work, not substantive work. It would appear that the trial court found otherwise, considering the court\u2019s order denying intervenors\u2019 motion for reconsideration explicitly stated: \u201cThe Court specifically finds that \u2018work\u2019 as used in the phrase \u2018last day of work\u2019 means substantive work, as opposed to warranty or remediation work.\u201d\nIn addition to Carroll Seating\u2019s affidavit, the legal significance of which intervenors question, Team Mechanical\u2019s project manager, Wayne Orlowski, also provided an affidavit to the court on May 18, 2004. In that affidavit, Mr. Orlowski averred that Team Mechanical performed \u201cbalancing work\u201d on the school building\u2019s heating and air-conditioning system in February 2003. He further averred that this was not repair work, was not on the punch list, had not been previously performed and was not related to Team Mechanical\u2019s warranty. Team Mechanical submitted its final pay application number in May 2003.\nTaking Orlowski\u2019s uncontradicted affidavit as providing the \u201cdate on which the last labor or services was performed by anyone *** under the Construction Contract,\u201d all of the subcontractors\u2019 suits were filed within the one-year period provided under paragraph 11 of the bond.\nAffirmed.\nCAMPBELL and GREIMAN, JJ, concur.\nCarroll Seating did not file a brief in this matter.\nThe practical benefits of requiring a \u201cpayment bond\u201d have been stated as follows:\n\u201cBy guaranteeing payment for labor and materials furnished the contractor under the contract, the payment bond assures the contractor\u2019s credit, and thus expedites the subcontractor\u2019s performance. It reduces to a minimum the filing of mechanic\u2019s liens and the loss of time and money necessary for enforcing them by litigation. As mechanic\u2019s liens or other liens cannot be filed against property of the United States and of most states, the payment bonds have a singular value with respect to public works contracts as they assure payment to those who might otherwise have to depend solely on the personal responsibility of the contractor. Hence, the bond requirement tends to lower bids because it eliminates the tendency to add to the bid a figure to cover the credit hazard.\u201d T. Hass, The Corporate Surety and Public Construction Bonds, 25 Geo. Wash. L. Rev. 206, 210 (1956-57).", "type": "majority", "author": "PRESIDING JUSTICE QUINN" } ], "attorneys": [ "DiMonte & Lizak, LLC, of Park Ridge (Eugene A. DiMonte and Margherita M. Albarello, of counsel), for appellants.", "Deutsch, Levy & Engel, Chtrd. (Michael J. Devine and David J. Ben-Dov, of counsel), and Fagelhaber, LLC (Edward L. Filer, Darren R. Bertram, and James L. Oakley, of counsel), and Addis, Greenberg & Schultz, L.L.C., of Northbrook, for appellees." ], "corrections": "", "head_matter": "CARROLL SEATING COMPANY et al., Plaintiffs-Appellees, v. PETER B. VERDICO et al., Defendants and Intervenors-Appellants (P.B. Verdico, Inc., et al., Defendants).\nFirst District (4th Division)\nNos. 1\u201404\u20143026, 1\u201404\u20143457 cons.\nOpinion filed December 21, 2006.\nDiMonte & Lizak, LLC, of Park Ridge (Eugene A. DiMonte and Margherita M. Albarello, of counsel), for appellants.\nDeutsch, Levy & Engel, Chtrd. (Michael J. Devine and David J. Ben-Dov, of counsel), and Fagelhaber, LLC (Edward L. Filer, Darren R. Bertram, and James L. Oakley, of counsel), and Addis, Greenberg & Schultz, L.L.C., of Northbrook, for appellees." }, "file_name": "0724-01", "first_page_order": 740, "last_page_order": 748 }