Illinois Construction Law Blog : Illinois Construction Lawyer & Attorney : Foran Glennon Palandech & Ponzi Law Firm : Chicago IL

We’ve been reporting repeatedly on the recent decisions regarding the different Appellate Divisions’ interpretations of the Home Repair Remodeling Act and its use as both a sword and a shield.

Today’s Chicago Daily Law Bulletin has an article by Bethany Krajelis discussing the leave to appeal filed in the case of Artisan Design Build v. Bilstrom.  If granted, the Illinois Supreme Court would be hearing the case and likely putting to rest the district split.

Our entry on Artisan can be found here.

 

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It’s still in its infancy, but Google Scholar’s beta version allows you to search scholarly articles, patents or legal opinions and journals. Here’s a sample search for “weather tite Illinois”

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We’ve been writing with updates regarding the recent decisions by the differing appellate district’s in the state on whether causes of action can exist for payment when a contractor has failed to follow the requirements of the Illinois Home Repair and Remodeling Act (815 ILCS 513/1 et seq.) The debate between the districts is fast becoming an issue that the Illinois Supreme Court should decide given the rampant differences in the manner non-compliance with the act is treated depending on which appellate district the non-compliance occurred.

Adding clarity and insight to this debate is a post from one of the best construction law blogs out there. Josh Glazov’s Construction Law Attorney Blog (based right here in Chicago). This recent post discussing both our articles and additional information concerning the reality of the way some trade associates are dealing with informing their members about the act, its requirements and offering recommendations about how to go about complying with the act is worth a read.

What’s also worth reading are the posts Mr. Glazov recently did on FDIC takeovers and how they can affect your projects along with these fun discussions of his recent jury duty on a case picked up and reported on in the Chicago Tribune by Ameet Sachdev.

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We thought this Friday would be a good time to highlight some great pieces from around the web that you may find interesting:

• There is an article up at Blair Kamin’s Cityscapes (formerly The Skyline) about Jeanne Gang’s Dwell Magazine featured project.
• Ken Adam’s has an extremely informative discussion going over at Adam’s Drafting regarding re-writing the American Arbitration Association’s Standard Arbitration Clause in light of the Manual of Style for Contract Drafting’s proposals on clearer contract language.  The read is important for people honestly interested in their contract language and some possible implications of using the AAA’s recommended language.
• The Fair Housing Defense Blog has an article about occupancy standards and why they matter.  For those dealing with FHA issues on a regular basis, this piece will pique your curiosity.
• Anyone who’s a fan of the Car Talk Puzzler will get a kick out of the Friday fun going on over at the venerable Drug and Device Law.  You may also be curious about this piece they did over a week ago regarding some non-empirical evidence of the life of legal blogs.  (For the record, ILCLB’s at One Year and 10 months.)

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R. David Donoghue of Holland & Knight had an informative post the other day on his Chicago IP Litigation Blog that linked to the Bryan Cave Art Law Blog.

The piece is about debunking common copyright myths. Written by Jonathan Pink, it is humorous and informative. Written in a multiple-choice formatted style, you can read the full text here.

Of note to our readers is Myth #9:

“Myth 9:
Sure, you can copyright a book, a movie, or a song, but there is no way you can copyright a house.
a. This must be true. Just drive through Orange County.
b. Not so fast. I'm from Orange County, and the houses are not all alike; those shades of beige are distinctly different.
c. This is false; you can copyright a building, but only if it was built less than a dozen years ago.
The answer is c. Architectural works are entitled to copyright protection if they were created after December 1, 1990, or embodied in unpublished plans or drawings created before that time, even though they were not actually constructed. See 17 USC §102.
This is good to know if you represent architects or developers. If you represent the developer, advise your client to acquire the copyright in any architectural plans he or she commissions. If you represent the architect, advise negotiating hard when it comes to determining the price of that copyright. Remember, working together, we can rid this state of unsightly farmland, pristine hillsides, and bucolic open spaces.”

We’ve written about the issue before. Obtaining the registered copyright puts you in line to make claims for your attorney’s fees and to have the statutory damages from the Act. In contracting for or against any given fee arrangement, realizing that these rights have value is an important step in understanding the full range of incentives inherent even in standard form agreements like the ConsensusDocs or the AIA standard form agreements.  

As a design professional, imagine not giving up the copyright until project completion… it is entirely possible that the filed copyright could add another cause of action brought in addition to those for past-due payments if an owner tries to complete the building using your plans with a different design professional.

As an owner, imagine owning copyright to plans and being able to finish the design without worrying about whether your disputes with a previous designer need to be resolved. Or better yet, imagine having full right and authority to use the plans on a second or third project.

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This month’s legislation update is no surprise to those who have been following our posts on the mechanic’s lien act amendments and the amendments to the counties code.

House Bill – 236 has now become Public Act 96-0654 – Amends the Illinois Mechanic’s Lien Act (770 ILCS 60/1 et seq.) - GC lien claimants on owner-occupied single-family residences now need to give an owner written notice of the filing of a lien against the property within 10 days of the filing.

Senate Bill – 1511 has now become Public Act 96-721 – Amends the Illinois Counties Code (55 ILCS 5/1 et seq.)- Allows county boards outside incorporated towns are now allowed to require occupancy permits for residential dwellings located outside the incorporated areas. Removes the right to charge fees for the residential permits unless the residential fees are grandfathered in.

Senate Bill – 138 has now become Public Act 96-0704 – Amends the Capital Development Board Act (20 ILCS 3105/10.09-1) – Orders local governments without building codes to adopt the model codes or inform the Capital Development Board of the adopted codes. Sets requirements for building inspectors enforcing code requirement under the act.

For design professionals who operate under a limited liability company structure, a certificate of registration is now required from the Department of Financial and Professional Regulation. Public Act 96-0679  - This appears to be in addition to the professional design firm registration already required.

And on an off-blog note, bowling alleys now have a safe harbor of their own.

Senate Bill – 1335 has now become Public Act 96-0713, the Bowling Center Act.

The Bowling Center Act, establishes the requirements for certain exemptions from personal injury suits for bowling alleys caused by patrons wearing bowling shoes outside the alley if the proper signs are posted at all entrances and exits. Citizens can rest easy knowing that the definitions of both “bowler” and “bowling shoes” are now statutorily codified.

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Gary L. Cole over at Law/Ark has published the first part in what promises to be a multiple-part article on the legal liability issues faced by design professionals and contractors. His piece “The Real Green Goblin – Emerging Legal Liability for Green Design Professionals and Contractors (Part 1)” promises to be interesting and the first installment delivers:

“The purpose of this Law/Ark discussion, which will be presented in several short installments, is to highlight the missteps that design professionals and contractors may make along the green path of good intentions which increase their exposure to later claims of liability when things go wrong – as they often do in construction.”

The article will be worth following as the themes are developed and explained by Mr. Cole. Additionally, while this blog hadn’t been on our radar before, we’ve added a link to it at the right along with the other construction related blogs we recommend.

 

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There are a few interesting cases for today.

In what is sure to be a case you’ll want to follow… the complaint in Weatherguard Construction Company, Inc. et al. v. John Does 1-18 is brought by construction companies against posters to a comment section on the website Topix.com for allegedly defamatory remarks and postings about the companies. The complaint includes the comments as well as the IP addresses of many of the posters. In a count for interference with a prospective business relationship, the complaint sets out other comments from the thread which allegedly show people indicating they would not be using the services of the companies after reading the website. The Cook County Clerk of Court’s website lists another case between Weatherguard and Topix.

This complaint in Burns v. GFGR, Inc. et al, alleges breach of contract, professional negligence, consumer fraud and conspiracy arising out of a transaction for the purchase of property. The plaintiffs, real estate investors, are suing, among others, an engineering firm and a real estate agent after they had to pay money to repair a building they bought that had allegedly been inspected at plaintiffs’ request by the engineering firm and found “structurally sound.” Plaintiffs claim they relied on the report prepared by the engineers when they agreed to purchase the building and later were cited by the City of Chicago for code violations including “an unstable West wall structure, rotting columns, beams and insufficient structural support of the rear porch and a front balcony lacking sufficient structural support.” The docket is here. The breach of contract claim seeks damages that include reimbursement for the “lost market opportunity in that Plaintiffs was [sic] unable to take advantage of selling 1619 West Carmen in a favorable real estate market due to delays caused by remediation of the material structural deficiencies mandated by the City of Chicago.”

The complaint in American Builders and Contractors Supply Co., Inc. v. Singles Roofing Company, et al, is brought by a supply company that was charged a $132,752.99 restocking fee by a third-party vendor when a roofing company allegedly cancelled its order. The supply company received a refund, but the restocking fee was a cost they apparently had to pay. The complaint contains counts for fraud, breach of contract and detrimental reliance.

Alleged construction defects led to the complaint in Sundararaj v. Kot. Plaintiffs claim they hired the defendant to build them a $930,000 house in accordance with “certain plans and specifications” and closed on the home in October of 2005. In 2006 and 2007 some leaks were noticed and the leaks were taken care of, in 2008 the plaintiffs noticed “a musty smell in multiple rooms” and had the property evaluated, the result of the evaluation: an allegation of “serious problems” with the construction of the property and are listed in the complaint at paragraph 15. They include the lack of a vapor barrier behind the drywall for the exterior walls, lack of proper flashing at parts of the roof, elevated mold levels and top floor bedrooms with a +20% moisture reading using a TRAMEX moisture meter. The complaint is for breach of contract.

The complaint in Studio D Architecture LLC v. Maresso et al alleges that a former employee of the architecture firm set up a competing company before he ceased working for the plaintiff. Plaintiff claims that the defendant misappropriated proprietary information including computer files, created false files on the plaintiff’s computer system and disabled their website. The trade secret count alleges that several other defendants used the proprietary information and that they knew it was proprietary since the defendant was not an architect.

 

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You can find it over at Law 21. This weeks review is entitled “All The News That Fits.”

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…is up over at May It Please The Court. This week’s theme – All Things Scottish.

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We’ve been following this mechanic’s lien case for you and wrote about the appellate court opinion here, and the decision to allow appeal here. Now that oral argument has occurred, we can soon expect the opinion, but before that happens, here’s something you’ll want to watch… the video of the oral argument. (.wmv file new window)  A link to just the Audio is available as well. (new window)

 

 

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For the owner/developer on smaller projects financing is usually the key to the entire transaction. Getting the financing in place and making sure money exists for your draws is one of the tasks you have during the construction phase that gets you to your end profit… be it selling what you’ve built, or having a building of your own.

You really do need to make sure that what you’re getting from your lender is what you want. You need to read the documents and double-check the figures or you could end up with, literally, a hole in the ground.

We’ve heard the radio reports and read the news articles about what some loan companies are alleged to have done to those seeking financing over the past few years. The mortgage crisis is partially a result of supplying loans that weren’t justified by the numbers. But for some developers, even with the numbers, getting the terms they bargained for and the loan they wanted appears to have been a problem. It’s why you really do need to be vigilant even in the beginning of the transaction, not just at closing on the loan.

This complaint reads like a parade of horribles and alleges what must have been a nightmare for the plaintiff.

After purchasing a piece of land and constructing a home for sale the financing errors which were allegedly generated through the application and appraisal process, compounded by the closing documents, and exacerbated by the lenders action in processing payments, resulted in an upside down mortgage situation for a developer now stuck with the fruits of what are allegedly the fraud and deceptive practices people have been reporting on since the crisis began.

You need to watch the financing process like a hawk, especially if no one is there to help explain everything to you.

 

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That’s right, you’ve seen them everywhere, and we’ve been watching HB 1142 for some time. Now that the bill is out of out of committee and has been properly amended, it’s worth being aware of.

The bill seeks to create the “Manufactured Housing Buyer Protection Act.” Introduced by Representative Michael W. Tryon (R – Crystal Lake) the full text of the bill can be found here.

From the Illinois Congressional Website, the bill:

“Provides that, if, after a reasonable number of attempts, the seller of a manufactured housing unit is unable to conform the manufactured housing unit to any of its applicable express warranties, then the manufacturer must either provide the consumer with a new manufactured housing unit of like model line, if available, or otherwise a comparable manufactured housing unit as a replacement, or accept the return of the manufactured housing unit from the consumer and refund to the consumer the full purchase price or lease cost of the new manufactured housing unit, including all collateral charges, less a reasonable allowance for consumer use of the manufactured housing unit, but only when the consumer has first resorted to an informal settlement procedure applicable to such disputes. Provides that persons electing to proceed and settle under the Act are barred from a separate cause of action under the Uniform Commercial Code. Provides guidelines for commencement of such actions. Requires the seller who sells a new manufactured housing unit to a consumer, upon delivery of that manufactured housing unit to the consumer, to provide the consumer with a written statement clearly and conspicuously setting forth in full detail the consumer's rights under specified provisions of the Act. Makes the Act applicable to manufactured housing sold after the effective date of this Act.”

The only amendment to the bill has changed the definition of Manufactured Housing in the Act to coincide with the definition of Manufactured Home from the portion of the Illinois Administrative Code governing Modular Dwellings and Mobile Structures (77 Il. Adm. Code 880.10) which reads:

"Manufactured Home" means a structure that is transportable in one or more sections that, in the traveling mode, is 8 body feet or more in width or 40 body feet or more in length or, when erected on site, is 320 or more square feet; that is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities; and that includes the plumbing, heating, air-conditioning, and electrical systems contained in the structure.  These units previously were known as "mobile homes".  The construction of these units is regulated by the federal Department of Housing and Urban Development.

If you take a look at the amendment, it looks like the bill is excepting those Manufactured Homes that have a permanent foundation.

Of note to those involved in the installation, purchasing, or manufacturer of this form of housing is that an informal mediation/dispute resolution procedure has been added for the parties pursuing their rights under this act. Also, the election to proceed under the act would mean that a party cannot sue under the UCC. Finally, everyone should be aware that an 18 month statute of limitations is created by this act that runs from the date the housing unit is delivered to the consumer.

The process involved in making this type of housing is the subject of an interesting three-part video from Behind the Scenes (link to Part 1) over at Youtube.

The other parts of this video can be found here:

Part 2

Part 3

 

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With the economy in tatters and so many people losing their jobs and looking for work it’s refreshing to hear about people taking charge of their destiny and succeeding. NPR ran a story on Morning Edition this morning about John Morefield (find it here). Morefield is a Seattle Architect who has been the topic of other blogs recently. (The picture at the left is from the Kelsey Keith article at Flavorwire.)

After being laid off from two separate jobs in one year as projects for the firms he worked for went away, Morefield took to offering advice with a booth at a local farmer’s market with a sign that read “Architecture 5¢”. The task wasn’t a gimmick, it was an honest way to try an develop a business and clientele in a market that has turned sour… and its working.

Morefield’s website “architecture5cents.com” is taking off and the booth has generated numerous contacts and business as homeowners walk by and drop a nickel in his can for some free advice about their building and architecture concerns.

The target audience is the individual homeowner, but good advice and a good idea can lead to a host of possibilities. It’s even been adopted to a certain fashion by lawyers in both print and … blogs.

While we’re generally prohibited from offering specific advice to people by ethical rules and codes of conduct, legal blogs and information sources offer a host of targeted answers and commentary on topics that are relevant to everyone… especially in the construction industry.

Even more poignant is the ability to help out in a tough economy. Every nickel from Morefield’s virtual website is donated to the Ballard Food Bank.

With so much talk about a stimulus package and infrastructure dollars headed our way, its easy to lose sight of the traditional word-of-mouth methods for marketing and face-to-face discussions that can help build a business. But there is no substitute for human interaction.  

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Above the Law is the host of this week’s Blawg Review. In true ATL form, nothing is sacred.

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The Sun-Times has a short piece today on SB 0456 which became Public Act 95-0998. We first reported on this bill back in May of 2008. The Sun-Times’ article reflects that the bill will go into effect on June 1. If you scroll down to Sec. 3-102(h), you’ll see that the failure of the notary to get the fingerprint as part of the record doesn’t mean much outside an allegation of fraud:

(h) The failure of a notary to comply with the procedure set forth in this Section shall not affect the validity of the Residential Real Property transaction in connection to which the Document of Conveyance is executed, in the absence of fraud.

Also, if you’re a property owner with some reason to worry about providing your thumbprint, the act has a provision regarding how and when these records will be disclosed:

(i) The Notarial Record or other medium containing the thumbprint or fingerprint required by subsection (c)(6) shall be made available or disclosed only upon receipt of a subpoena duly authorized by a court of competent jurisdiction. Such Notarial Record or other medium shall not be subject to disclosure under the Freedom of Information Act and shall not be made available to any other party, other than a party in succession of interest to the party maintaining the Notarial Record or other medium pursuant to subsection (d) or (e).

The weirdest part about the whole act is that most of the changes will be nullified by the statute’s own language on July 1, 2013 unless the legislature acts by then to amend the law:

(k) Subsections (a) through (i) shall not apply on and after July 1, 2013.

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News & Notes is a section we have dedicated to interesting items that do not contain enough information to have full entries but are certainly worth noting.

Blair Kamin over at the Chicago Tribune’s Skyline Blog has posted some interesting stories:

Today’s is a piece on Chicago philanthropist Richard Driehaus’ announcement at a Landmarks Illinois event on Saturday night of the creation of grant program to preserve Historic Illinois Courthouses – certainly of interest to anyone in the restoration business.

Skyline also has this piece featuring an article about the new Blue Chip Casino Hotel  in Michigan City by Chicago architect Lucien Lagrange.

Additionally, the best video of the Trump spire going into place comes from the Tribune.

The South Carolina Construction Law Blog has an article detailing a New York case interpreting a New York statute similar to Illinois’ own Construction Contract Indemnification for Negligence Act. The Illinois statute has become a must-know for anyone in the industry since the Virginia Surety decision and carries the possibility of drastically altering the limitation of liability that would otherwise be in place for parties under the worker’s compensation statutes.

We’d also like to be the first to welcome the Chicago Construction Law Developments blog to the blogosphere. Illinois is gaining independent information sources for its construction industry at a fast pace.

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We'd like to welcome the attorneys at Cole Schotz to the Construction Law Blogosphere. 

The attorneys of their construction practice group have launched the Real Estate and Construction Law Monitor.

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The good people over at Construction Lien Blog, have a posting that let us know about a social networking website called Construction Exchange.

The website is populated with a bevy of information and individuals who participate in a host of informational exchanges from Q&A style discussions, to information about projects and bidding.

 

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With all the talk recently of Ethics in State Government and the recently enacted mandates about State Contracting, we thought we would take the time to inform our readers about the topic.

Illinois law, (Public Act 95-971; 10 ILCS 5/9-35; 30 ILCS 500/20-160 and 30 ILCS 500/50-37) requires that vendors register with the State Board of Elections; requires that a copy of the registration with the Board of Elections be submitted with bids/proposals for State contracts; and requires contract certifications of State Vendors; and restricts political contributions to State Officers and Congressional Representatives by State Vendors and their affiliated entities.

a.            The Brief Timeline of the Act

In an effort to establish new restrictions on campaign contributions and solicitations for contract awards by state contractors and bidders, Governor Rod Blagojevich issued Executive Order Number 3 on August 26, 2008. The intention of the Executive Order was the enhancement of transparency in the State procurement process and to ensure that the award of State contracts is based solely upon price, quality, service and other merit-based factors. “What all State vendors need to know about new ethics requirements” Fact Sheet, Illinois Department of Central Management Services, accessed February 24, 2009.

Following the Governor’s lead, the Illinois Legislature passed its own version of the Executive Order into law on September 25, 2008, as Public Act 095-0917. The Executive Order contains restrictions that appear to be broader than the Act. The effect of passing the Act into law was to take an Order that could otherwise have been rescinded by a successive Governor and turn it into a law that arguably, is less stringent than the order.

The Act and Executive Order took effect January 1, 2009.

b.            The Entities Impacted By the Act

The Act and Order basically apply to any for profit entity or an affiliated entity of a for profit entity in the State of Illinois that has bids or proposals on State Contracts exceeding $50,000; is awarded State Contracts exceeding $50,000; or a combination thereof exceeding $50,000.  

Under the Act, State Contracts are contracts with any State Agency including all boards, commissions, agencies, institutions, authorities, and bodies politic and corporate of the State, created by or in accordance with the Illinois Constitution or State Statute, of the executive branch of State government and includes, colleges, universities, public employee retirement systems, and institutions under the jurisdiction of the governing boards of the University of Illinois, Southern Illinois University, Illinois State University, Eastern Illinois University, Northern Illinois University, Western Illinois University, Chicago State University, Governors State University, Northeastern Illinois University, and the Illinois Board of Higher Education. 30 ILCS 500/50-37.

Pursuant to Executive Order No. 3 the following and their boards of directors/governors are also included:

Capital Development Board

Department on Aging

Department of Agriculture

Department of Central Management Services

Department of Children and Family Services

Department of Commerce and Economic Opportunity

Department of Corrections

Department of Employment Security

Department of Financial and Professional Regulation

Department of Healthcare and Family Services

Department of Human Rights 

Department of Human Services

Department of Juvenile Justice

Department of Labor

Department of Military Affairs

Department of Natural Resources 

Department of Public Health

Department of Revenue

Department of State Police

Department of Transportation

Department of Veterans’ Affairs

Governor’s Office of Management and Budget

Guardianship and Advocacy Commission

Historic Preservation Agency

Illinois Arts Council

Illinois Criminal Justice Information Authority

Illinois Emergency Management Agency

Illinois Finance Authority

Illinois Housing Development Authority

Illinois Investment and Development Authority

Illinois Power Agency

State Fire Marshal

“A State contract is any type of agreement between a State agency and a business entity that is governed by the Illinois Procurement Code, including contracts for the procurement, use or disposal of supplies, services, professional or artistic services. A State contract also includes construction contracts, leases of real property, or capital improvements contracts, including master contracts, contracts for financing through use of installment or lease-purchase arrangements, renegotiated contracts and change orders. State contracts governed by the new ethics requirements do not include cost reimbursement contracts; purchase of care contracts as defined by Section 1-15.68 of the Illinois Procurement Code; grants, including but not limited to grants for job training or transportation; and grants, loans or tax credit agreements for economic development purposes.” Illinois Department of Central Management Services Fact Sheet.

The Act also applies to any affiliated entities of those entities covered by the Act. The Act defines affiliated entities as:

“i) any subsidiary of the bidding or contracting business entity, (ii) any member of the same unitary business group, (iii) any organization recognized by the United States Internal Revenue Service as a tax‑exempt organization described in Section 501(c) of the Internal Revenue Code of 1986 (or any successor provision of federal tax law) established by the bidding or contracting business entity, any affiliated entity of that business entity, or any affiliated person of that business entity, or (iv) any political committee for which the bidding or contracting business entity, or any 501(c) organization described in item (iii) related to that business entity, is the sponsoring entity.” 30 ILCS 500/50-37.

If an entity questions the Act’s applicability the following examples from the State of Illinois Fact Sheet in assessing the matter are helpful:

c.             The Requirements and Restrictions Placed on Those Affected by The Act

Executive Order Number 3 (2008) and Public Act 095-0971 place requirements and restrictions on their affiliated entities and all affiliated persons. 

An Affiliated Person is described under the act as:

“(i) any person with an ownership interest or distributive share of the entiy or an Affiliated Entity in excess of 7.5%, (ii) an executive employee of the entity or an Affiliated Entity, or (iii) the spouse or minor child of anyone covered by (i) or (ii).” 30 ILCS 500/50-37

Any qualifying business entity is required to register with the State Board of Elections pursuant to the Illinois Election Code 10 ILCS 5/9-35. Any qualifying entity must submit certification to the State procurement officer in charge of its qualifying contracts stating that it has registered and it must provide proof of registration when bidding on future contracts pursuant to the Illinois Procurement Code 30 ILCS 500/20-160. Any business entity, affiliated person or affiliated entity is prohibited from making political contributions as described in the Illinois Procurement Code 30 ILCS 500/50-37.    

1.            REGISTRATION

 

Pursuant to the Act and Executive Order Number 3, all qualifying entities were required to register with the State Board of Elections by January 31, 2009. If an entity has not registered with the State Board of Elections, the directions for registration may be found at:

http://www.elections.il.gov/BusinessRegistration/RegistrationProcess.aspx

And the proper form for registration may be found:

http://www.elections.il.gov/Downloads/BusinessRegistration/PDF/BEREPForm.pdf

The form must be completed and submitted to the State Board of Elections as described in the directions. The form must include the information regarding all “affiliated entities” and all “affiliated persons” for the entity.

After registration, the Board of Elections is required to provide a “certificate of registration” to the entity. The statute mandates that this certificate will be electronic and accessible through the State of Illinois Board of Elections website. However, the Board currently lacks the resources to fulfill this provision, thus, it is currently time-stamping copies of the first page of the registration forms and returning them to the registering entity to serve as the certificates of registration. State Board of Elections, BEREP Procedures website (last accessed February 24, 2009).  Here's a little more on this topic from the Illinois Issues Blog.

2.            CERTIFICATION

The Act imposes some affirmative duties on qualifying entities and their affiliates regarding the certification of its registration including:

               

I.             Within 10 days of registration, the entity must provide a copy of the certificate to each affiliated entity and affiliated person disclosed in the registration form.

II.                  The entity must notify all political committees to which it contributes, at the time of contribution, that it is registered with the State Board of Elections. Each of the entity’s affiliated entities or affiliated persons must also notify the political committees to which they contribute, at the time of contribution, that they are affiliated with the entity, which is registered.

III.                Every bid or proposal submitted by the entity for a State Contract after January 1, 2009, must be accompanied by a copy of the certificate of registration received after registration has been sent to the Board of Elections.

IV.                Every State Contract the entity receives after January 1, 2009, should contain a statement that the entity has registered as a business entity with the State Board of Elections and acknowledging the entity’s continuing duty to update its registration. The contracts will also include a statement that the contract is voidable for the entity’s failure to update its registration.

V.                  By March 31, 2009, the entity must submit a copy of the certificate of registration all of the applicable chief procurement officer(s) for the entity’s contract(s):

There are 5 Chief Procurement Officers for the State. 

·         For contracts for vertical construction or vertical construction-related services, the Chief Procurement Officer is the Executive Director of the Capital Development Board.

·         For contracts for highway construction or highway construction-related services, the Chief Procurement Officer is the Secretary of the Illinois Department of Transportation.

·         For contracts for procurements made by a public institution of higher education, the Chief Procurement Officer is designated by each public institution of higher education.

·         For contracts for procurements made by the Illinois Power Agency, the Chief Procurement Officer is the Director of the Illinois Power Agency.

·         For all other procurements, the Chief Procurement Officer is the Director of the Department of Central Management Services.

VI.                The entity has a continuing duty to ensure that the registration is accurate, and must report any change in information to the State Board of Elections within the time periods set forth in Public Act 95-0971. Notify the BOE within 10 days of any change if a contract is in place, within 2 days of any change if a bid or proposal is pending.

VII.              The entity has a duty to keep the registration information up to date for 2 years following the completion of any State Contract.

3.            ENTITY’S and AFFILIATE’S POLITICAL CONTRIBUTION RESTRICTIONS

                The Act and Executive Order Number 3 impose some restrictions on the entity, its affiliated entities and affiliated persons contributions to political campaigns. The following restrictions appear to apply to all three groups:

I.                    Contributions cannot be made to any political committees established to promote the candidacy of the officeholder responsible for awarding any of the contracts the entity currently has or bids on. From the time of the term of office of the officeholder to 2 years following the expiration of the contract, whichever period is longer.

II.                  Contributions cannot be made to any candidate for the office responsible for awarding contracts that entity currently has or bids on. For 2 years following the completion of the contracts.

For the purposes of these rules, the Lieutenant Governor, Attorney General, Secretary of State, Comptroller and Treasurer are the responsible officeholders for the contracts awarded by their agencies. For all other contracts awarded by executive branch state agencies, the Governor is considered the responsible officeholder. 

Additionally, if the contract or bid is with one of the above listed executive branch agencies, Executive Order No. 3 prohibits:

III.                The entity and its affiliates cannot solicit a political contribution on behalf of or make a political contribution to any State office or declared candidate for state office or any political party. Note: this apparently includes any member of the general assembly and any other state office. These restrictions are in place for two years after the contract ends or until the bid is awarded.

IV.                The entity will be required to certify that no such contributions have been made.

d.            The Penalties Provided Under the Act and Executive Order

 

                In addition to the monetary penalties already delineated for the failure to register. Any Contract awarded to an entity that fails to comply with the Act may be rescinded by the awarding agency or the State, without recourse to the contract recipient.

                The Act imposes further monetary penalties of $1001.00 dollars for the failure to notify the entity’s affiliated entities and affiliated persons of registration.

                If an entity violates the requirements of the Act 3 or more times within a 36-month period, then all contracts between the State and that entity shall be voided and the entity shall not bid for any State contract for 3 years from the date of the last violation.

                Any political committee that receives or has received a contribution in violation of the Act shall pay an amount equal to the value of the contribution to the Sate within 30 days of receiving notice of the violation.

                If a political contribution is inadvertently made in violation of the Executive Order, then the entity may request full reimbursement from the receiving entity. Any contributions made within 60 days of a gubernatorial primary or general election are not considered inadvertent.

 

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Stimuluswatch.org is reporting on the stimulus package and the projects proposed for Illinois. A link to the Illinois projects is here. The database is searchable and includes the localities, descriptions of the projects and the amounts proposed.

 

 

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The Illinois Supreme Court has granted leave to appeal in Weather-Tite, Inc. v. University of St. Francis. The case involved whether a subcontractor could recover money from an owner when the owner had not complied with the withholding provisions of the mechanic’s lien act once it received the final notice from the GC and did not withhold the funds stated in the notice for the subcontractor.

We previously covered and discussed this opinion here. 

The Court’s determination that it will accept briefing on the matter means that it could address issues related to striking a balance between the statute and the reality that payments are often disbursed to a GC by an owner without meticulously following the act and withholding payments when a balance is owed to subs.

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ConsensusDocs released their BIM addendum a while back and the AIA has now announced the release of six new IPD and BIM documents which include a BIM Exhibit that should help facilitate direct communication of each party's duties and an on-site project representation document that should be interesting.  A full press release from the AIA can be read here.

It's impossible to keep the excitement that surrounds BIM projects from spilling over into construction's legal sphere.  The challenges of contracting for a collaborative exercise and answering the new questions that are raised in an atmosphere that could become an entirely open and instant exchange of information will likely end up creating the need for many future revisions and additions to all the collaborative agreements.

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Hello and Welcome!

We hope you enjoy the new site and address.  Now that we're up and running, we'll continue to provide the same great content along with a new look.  All the entries from the previous incarnation are now incorporated into the new blog and you can find them through the search function or through the topics listed at the right.

We'd love to hear what you think of our new design and welcome any comments or suggestions on how we can make this site better for our readers.

Thanks,

Illinois Construction Law Blog

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The First District has filed a new opinion relating to control exerted over an independent contractor by a GC in Gregory v. Beazer East, et al., (Doc. No. 1-06-3597).  The court held in an asbestos related action that the facts surrounding the worker's employment in the construction of a facility back in 1970-71 did not give rise to a finding of liability in a construction negligence action.  While the defendant (the facility owner) had the ability to stop work, monitor work, and control access to the site "these were simply general rights it had as the ultimate employer on the construction project."

 

Periodically, we see cases in which an owner will assert a claim against a design professional pursuant to the consumer fraud act.  In an interesting case initiated pursuant to an act with similar provisions, the Second District has held that a corporation in the business of restoring vintage cars can qualify as an "Automotive Repair Facility" under the Automotive Repair Act.  In Montgomery v. Nostalgia Lane, Inc., (Doc. No. 2-07-0661) this finding required reversal of a summary judgment in favor of the repair facility after the plaintiff sued for damages where the facility allegedly low-balled its bid and then ended up over-charging.

 

The tenants of a commission run trailer park were allowed to keep their claims against the commission for an unlawful taking and for inverse condemnation and beat a dismissal motion.  In Mester v. Otter Lake Water Commission, (C.D. IL, Doc. No. 08-3080) the court found that there were facts and allegations sufficient to preclude a determination that the actions of the commission in limiting and restricting tenants rights and their ability to sell their lots or transfer ownership did not amount to an unlawful taking or condemnation.

 

In DOT v. Anderson, et al. (Doc. No. 3-07-0877), the Third District found that despite the private claims of an individual to ownership interest in a parcel, where the recorded documents showed title was vested in another, and that the common law requirement of possession use or control had not been met, the plaintiff was not an owner under the Eminent Domain Act.

 

Shari Shapiro, over at Green Building Law, has an article published at Green Buildings about an action filed by some HVAC providers against the City of Albuquerque to stop regulations passed by the city requiring higher efficiency heating and cooling units from going into effect.

 

BLAWG REVIEW #168 is up over at West Virginia Business Litigation and provides some interesting diversions.  Notably, a few great links discussing legal writing and some entries about topics that came up in blogs last week.  In general, this posting does not center around a theme as most of the review's tend to; it sums up some postings that were interesting to the author.

 

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We're still in the process of transferring the site to www.illinoisconstructionlawblog.com, as we continue to improve the presentation of our blog.  We'll continue to keep posting updates and cases and should have the new interface and address up and running within the next two weeks.

Some interesting updates and some things we've missed over the past few days:

• The Second Annual Conference on Illinois Construction Law 2008 will be taking place on July 10th and 11th at the Gleacher Center in Chicago.  More information on the program is available by following the link.  The seminar boasts some prominent speakers from the Legal field as well as the industry and looks to be a worthwhile presentation.  For those unable to make it, the seminar is offered on DVD as well.
• The Tribune's Clout Street Blog is reporting on a cessation in the measures proposed in the Chicago City Council to require licensing for permit expediters after May's Federal allegations of bribes for permits within the city.
• The Chicago IP Litigation Blog is reporting on a new move by the Copyright Office to begin accepting basic copyright registrations electronically.

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We've been undergoing some changes  recently and within the next few weeks, the Illinois Construction Law Blog will have a new address at http://www.illinoisconstructionlawblog.com courtesy of the fine people over at Lexblog.

Getting back into the swing of things, there are several noteworthy opinions that have come down in the past week:

• TSP-Hope, Inc. v. Home Innovators of Illinois, LLC (4^th Dist. Doc. No. 4-07-1028)  In this case, the plaintiff had contracted with the defendant to build residential units.  The contract contained an arbitration clause and although the defendant answered the complaint and filed a counter-claim and affirmative defenses, the court found that it had not waived its right to arbitrate the contract dispute.  Additionally, the plaintiff had served the defendant with a §34 notice under the Mechanic's Lien Act (requiring the lien claimant to file a complaint within 30 days or lose the lien rights).  The court found that because the §34 notice required the filing of a foreclosure claim in court, taking the action did not amount to a waiver of rights under arbitration when the defendant would arguably have been forced to lose its rights if it had not filed the foreclosure claim.

• In Winnebago County Citizens for Controlled Growth v. County of Winnebago (2^nd Dist. Doc. No. 2-07-0362) the court found that a not-for-profit association may have standing to challenge the county's decision to grant a planned community development special use permit.  Although the association was formed, arguably, in response to the development, the fact that some members may have to participate in the litigation did not preclude the association from bringing suit.  The court reversed a trial court's decision to dismiss two counts of the association's complaint where it found that a clearer understanding of the potential nature and involvement of certain members of the association could only be developed in litigation.

Also, we would like to take a moment to recognize that 100 years ago today one of the greatest Justices in modern times was born.  On July 2^nd 1908, in Baltimore, Maryland, the once Chief Counsel to the NAACP, 2^nd Circuit Judge, U.S. Solicitor General and Supreme Court Justice Thurgood Marshall came into the world.  In honor of this event, we present this interesting article from Mary L. Dudziak published in the Spring 2008 issue of the Green Bag which is a short testament to the work Marshall did in helping to craft the Kenyan Constitution.  "Reflecting on this episode in later years, Marshall would express great satisfaction: "That, to my mind, is really working toward democracy, when you can give to the white man in Africa what you couldn't give the black man in Mississippi. It's good."

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• The good folks over at Womble Carlyle's Construction Industry Blog have this interesting post commenting on an article in GreenSource that USGBC will finally be outsourcing the LEED Certification work to independent third-party accredited certifiers and overseen by a non-profit associated with the USGBC. 
• Both the Federal Construction Contracting Blog and the Ahlers & Cressman Construction Law Blog are posting about the GAO's decision to sustain Boeing's protest of the contract award to Northrop Grumman for the aerial tanker contract.
• The ABA Forum on Construction has posted the brochure for its fall meeting focusing on the ConsensusDocs.

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The internet's record of history regarding the revolving door is a bit murky.  For some reason, Answers.com informs us that the revolving door was in use somewhere in Chicago in 1790, and then, in an entry regarding the happenings of 1888 insists that 1888 was the year that Theopholis Van Kannel gave it to the world by installing the first revolving door somewhere in Philadelphia.  We know that Van Kannel received a patent for the door, after a German, H. Bockhacker, but Wikipedia says it was U.S. Patent 387,571, and invent.org insists it was # 641,563 and makes no mention of Bockhacker.  (There were multiple patents awarded to Van Kannel, both are for doors, but 387,571 was the first). 

The purposes listed for the thing involve every intent from controlling crowd capacity to keeping the windows from blowing out of skyscrapers and rarely mention that the fine folks at MIT have definitively stated and proven that the door saves energy and should probably be considered a sustainable instrument... and if you have a greater interest, you can always pick up Beardmore's "The Revolving Door Since 1881."

Whatever the use and history, our interest stems from a case recently decided by the Illinois 1^st District Appellate Court called Britton v. University of Chicago Hospitals.

The plaintiff was attempting to enter the Hospital through a revolving door when the door jammed and he decided to give it a "shove."  After he pushed, the door didn't move and next, the outer glass surrounding the door broke and injured the plaintiff's left shin and knee.

Plaintiff sued the University of Chicago Hospital alleging that it was careless in its management of the revolving door alleging that the Hospital had a duty to maintain a proper ingress and egress from the premises and stating that the Hospital failed to make a reasonable inspection of the entrance and that the failure amounted to constructive notice that the door was defective - he also argue that whether the Hospital made a proper inspection was a question of fact.

The trial court granted summary judgment for the Hospital.  The appellate court affirmed the decision for the Hospital noting that the plaintiff was required to have some evidence tending to prove that a specific condition under the Hospital's control caused the glass to break.

"There is nothing in the record regarding any defect in the glass or the revolving door.  There is nothing in the record regarding maintenance of the revolving door.  Further, there is nothing in the record to indicate that the hospital had actual or constructive notice of any defect in the revolving door.  Here the record merely contains general allegations against the defendant but no evidence creating any issues of material fact."

The court also addressed the plaintiff's contention that the door's breaking constituted evidence of negligence in-and-of itself under the legal doctrine of res ipsa loquitor (the thing, for/to itself, speaks).  The court rejected this argument stating that the plaintiff was operating the door and caused it to revolve and... "where a structure not obviously dangerous has been in daily use for an extended period of time" [note that they didn't resolve the 1881/1790/1888 issue] "and has proven adequate, safe, and convenient for the purposes to which it was being put, it may be further continued in use without the imputation of negligence."

That last language is important.  The court came to that reasoning through its understanding that the plaintiff (or anyone) was using the door and taking a distinct part in the operation of the door and thereby, the person is chargeable with the exercise of due care as well.

The case isn't earth-shattering, but it is a good one that people operating a building should have in the deck for premises liability claims.  And, if nothing else, noting the name of Van Kannel could get you another role of the die in trivial pursuit.

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Blawg Review, "The Carnival of Law Bloggers" has come out with its latest issue:  Blawg Review #156 - This review is dedicated to all things legal and virtual.

The author of this review, Benjamin Duranske of Virtually Blind, does a great job with his Q & A format in covering recent posts from around the legal blogging world regarding issues touching the law and virtual world (especially in defining the "virtual world").

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As we continue to follow HB 2094, we are pleased to present the 1907 edition of the Structural Work Act.  We'd like to thank our friends over at the Cook County Law Library for having an in-tact copy of the 1908 Code.  The spine of the book can be seen to the left.

As you can see, not much is different between the HB 2094 proposed act and the 1907 version.  Except the penalties.  It used to be that the penalty for violation could cost an architect $25 to $200, now it would be a "petty offense."

In one of the cases that established the "good faith" exception to the exclusionary rule exercised for 4^th Amendment violations (United States v. Leon, 468 US 897 (1985)), Justice Blackmun delivered a concurring opinion addressing decisions based on  empirical data and offered some guidance regarding how the law should approach its own determinations when they are premised on empirical evidence:

    "As the Court's opinion in this case makes clear, the Court has narrowed the scope of the exclusionary rule because of an empirical judgment that the rule has little appreciable effect in cases where officers act in objectively reasonable reliance on search warrants. Because I share the view that the exclusionary rule is not a constitutionally compelled corollary of the Fourth Amendment itself, I see no way to avoid making an empirical judgment of this sort, and I am satisfied that the Court has made the correct one on the information before it. Like all courts, we face institutional limitations on our ability to gather information about "legislative facts," and the exclusionary rule itself has exacerbated the shortage of hard data concerning the behavior of police officers in the absence of such a rule. Nonetheless, we cannot escape the responsibility to decide the question before us, however imperfect our information may be, and I am prepared to join the Court on the information now at hand.
    "What must be stressed, however, is that any empirical judgment about the effect of the exclusionary rule in a particular class of cases necessarily is a provisional one. By their very nature, the assumptions on which we proceed today cannot be cast in stone. To the contrary, they now will be tested in the real world of state and federal law enforcement, and this Court will attend to the results. If it should emerge from experience that, contrary to our expectations, the good-faith exception to the exclusionary rule results in a material change in police compliance with the Fourth Amendment, we shall have to reconsider what we have undertaken here. The logic of a decision that rests on untested predictions about police conduct demands no less."

If the Supreme Court of the United States can recognize that empirical evidence can lead to the need to reconsider its own rules then, when:

"It is the intent of the General Assembly that this Act is to be liberally construed to effectuate its beneficial purpose of protecting persons engaging in occupations of working in and about construction, repairing, alteration, or removal of buildings, bridges, viaducts, and other structures. This liberal interpretation exists so as to provide workers with a safe place to work and to afford relief to injured workers."

a state legislature drafting a law designed for a purpose (Worker Safety) should also revisit its law with empirical evidence and determine if the standards set out in that law can accomplish that goal.  The point is exacerbated by the fact that Structural Work Act was in effect from 1907 to 1995.  There should be plenty of data out there to determine if the standards and rules set forth by this statute should be updated.

The real question then is, have methods, means and ability of contractors and construction trades to provide for safety changed such that the standards should be augmented?  Is it sound law that the physical requirements of structures under the act should just read as they did in 1907, given that the industry has advanced?  What about OSHA requirments? 

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    For anyone practicing law in today's information age, the constant fees and assessments put forth by different counties for access to recorded documents, court filings, or any other public record is well known.  In fact, the charges for information can sometimes be exorbitant if someone is getting involved in multi-party litigation.

    This newly proposed Senate Bill #2175 should come as a welcome proposal to the small practioner concerned about handing over the expense of accessing public data to a client.

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The new ConsensusDOCS forms were published late last year and will be the subject of the ABA Construction Industry Forum's 2008 Fall Meeting.  With all the buzz we thought it would be pertinent to sit down and read these documents.  This posting is one of many expected to come regarding the new ConsensusDOCS.

            The language implying a fiduciary duty hasn't changed much over the years and is often described by the courts as a "relationship of trust and confidence" between parties.  With that definition entrenched in case law we thought it a bit peculiar that the normal contracting relationship between an architect and an owner would be particularly described as one of "trust and confidence" in ConsensusDOCS 240 section 2.2. 

In the construction setting, plaintiff's with claims have been seeking to impose a fiduciary relationship in one form or another on contractors and architects to gain more damages and a heightened standard of care for some time.  Thankfully, many courts have often struck down the concept of parties contracting for construction services as entering into a fiduciary relationship thus allowing plaintiff's to bring causes of action outside the normal breach of contract claim or based on a heightened standard of care.  (See, 262 F. Supp. 2d 1004; 812 F. Supp. 72)

With the concept of "trust and confidence" and its implication of a fiduciary relationship in mind, it's odd that the ConsensusDOCS Guidebook from October 31, 2007, would explicitly delineate that the contracting parties should not be agreeing to a heightened standard of care:

• "Standard of Care (Section 2.1): A definition of the standard of care applicable to architectural and engineering services performed under this Agreement is not included in this Agreement (previous additions of AGC contracts did include such a definition). The drafters of the new Consensus documents determined that it would be better for the design professionals to be held to a standard imposed on them by their own profession, rather than one defined by this Agreement.

• "Contractors and Owners should not modify this Agreement by adding language that would hold any design professional to a standard of care that is above that which is customary and normal for design professionals in the same time and location, because that might result in the unintended consequence of voiding errors and omissions coverage available to the respective design professionals."

 
But then go on to say that the A/E is accepting a relationship of trust and confidence in Section 2.1 of document 240:

 

• "Relationship of the Parties (Section 2.2): This provision requires the Architect/Engineer (A/E) to accept the relationship of trust and confidence in exercising its skill and judgment in furthering the interests of the Owner and expressly affirms the A/E's representation that it possesses the requisite skill, expertise, and licensing to perform the required services. The new language is preferable, but it should be noted that it was not included in the previous AGC 240 Owner-Designer professional Agreement, no longer published."

       It is also a bit boggling that understanding the implication of the "trust and confidence" language, that no other provision in the document would specifically state that nothing in the contract should be construed as creating a fiduciary relationship between the parties.  Perhaps the authors just thought such a provision unnecessary given the lack of case law supporting a fiduciary relationship in such a setting.  But why then be specific as to the language of "trust and confidence" between the parties?  Why not just state that the parties agree to "good faith and fair dealing" or accept a "contractual relationship for the provision of A/E services"?  And, even if a standard of care is not affected by the language, could "trust and confidence" through its fiduciary implications mean that there are now added duties that the A/E must be aware of?

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       It started with a simple article about developers paying to have their properties re-zoned in a Sunday edition of the Chicago Tribune.  The expose blossomed into a myriad of comments and subsequent features and commentary all the way to a piece soliciting comment from the Mayor.  Chicago Neighborhoods were beginning to look a bit more like the image below with set-offs and accommodations made in different zones for single-zoned lots and properties:

    That media attention and discussion has now resulted in Senate Bills 2014 and 2022.   SB 2014 seeks to allow de novo review of decisions regarding zoning applications, altering the previous system of review upon the approval and adoption of a zoning decision.  SB 2022 alters the notice times for publication regarding hearings for changes, and in unincorporated parts of the state, requires that notice be sent to adjacent parcels within 1.5 miles of the proposed re-zoning.
    These changes come too fast on the heals of those articles and reports to realistically be deemed anything but fallout from scrutiny into the development practices going on in the State.  Thus, developers should be aware that they may soon have a few extra technical hurdles to overcome before getting those zoning requirements they need for their projects.

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            If the story in this case (Klose v. Mende, (3rd Dist.)) were about saving a school or an orphanage, it would be a made for TV Movie.  A town found documents from 1856 while cleaning out the old town hall, and those documents were enough to save their proposed plan to repave a portion of their roads.  The lack of the documents had forced a court to rule against the town and in favor of plaintiffs - who did not want a portion of their property paved over.

            After finding the records, the town made their deadline for filing before the limitations period ran and it looks like they'll be getting their road.

            The lesson for everyone here cannot be underscored enough, save the documents.  From lien waivers to deeds and even mortgage releases, the chance that they could defeat some form of litigation is worth placing them in a safe or safety deposit box, and if nothing else, they may serve to clarify some issues that might otherwise be disputed.

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            We're constantly in wonderment over the different building initiatives and collaborations that can occur when good people get together for something important and worthwhile.  This recent article at Quad-Cities Online reports on one of those projects in the making.

            Apparently, the fine developers at Artspace are again eyeing Illinois for a project, this time in Rock Island.  As part of the growing trend across Illinois' different towns to revitalize downtown areas as a place for community and commerce to interact, Rock Island's own District project is well on its way.

These initiatives are bringing construction work to many areas, and as public interest projects and artistically centered and planned locations, are allowing architects to have some free reign in progressive and green design.  We think an Artspace project in Rock Island would make a fine addition to their downtown, which already merits a visit in its own right and includes some delectable treats like The Blue Cat Brew Pub, and Lagomarcino's vintage confectionary just across the Mississippi river.  And, we'd be remiss to not mention that the area is home to a true Illinoisconstructionblog "must-see", Saarinen's John Deere Corporate Headquarters.

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The Chicago Tribune has taken some interesting photographs of the structural failure to Montrose Avenue in Chicago that occurred on Tuesday morning.

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