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

From time to time we report on new cases that have been filed that are related to the construction industry. 

In August 2006, Golub and Company LLC served as the real estate developer and project manager for the construction of an upscale hotel located at 11 East Walton called the Elysian. The Elysian shares an alley located at 20 East Delaware Place with the Talbott Hotel. Construction of the Elysian was completed in or about early 2010. Attorneys for the Talbott Hotel have filed suit against Golub, First Elysian Properties (the owner of the hotel), and the general contractor, James McHugh Construction Company. The complaint at law asserts five causes of action: res ipsa loquitur, negligence, nuisance, trespass, and tortuous interference with prospective economic advantage. The Talbott Hotel is requesting damages in excess of $50,000 plus costs of suit. 

The complaint alleges that the construction of the Elysian Hotel forced Talbott Hotel to abandon its use of the delivery dock located in the alley between the hotels due to falling debris from the construction project. There is an allegation that in one instance a Talbott Hotel employee was struck by falling wet cement. The loading dock was used for vendor deliveries and pick ups. As a result of the abandonment of the loading dock, the Talbott Hotel was required to use the main lobby entrance (utilized by guests) for deliveries. In addition, it is alleged that construction of the Elysian Hotel proceeded prior to 8:00 a.m. and continued unabated past 8:00 p.m. and it caused excessive vibration and noise that was detectable to guests residing in the north side rooms. The Talbott Hotel has alleged that it had to not only move guests to different rooms away from the north side, but that guests canceled reservations and cut short scheduled stays as a result of the excessive vibration and noise generated from the Elysian Hotel construction. Finally, it is alleged that the Talbot Hotel itself was physically damaged by falling debris that struck the hotel property. 

The lawsuit was filed on August 12, 2010. We will continue to monitor this case and report on any developments.

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From time to time we will report on new cases that have been filed that are related to the construction industry. 

Walsh Construction has filed suit against the City of Chicago requesting that the court declare that bids submitted by two other contractors for the Congress Parkway Interchange Improvements project are non-responsive and that its own bid is responsive.  In addition, Walsh is seeking an order enjoining the City from accepting either of the two bids.

Walsh, along with Paschen/Cabo and James McHugh, submitted a bid for the Congress Parkway Interchange Improvements project.  It is Walsh's contention that the City of Chicago violated its own Municipal Purchasing Act by even considering the other bids because they were non-responsive to the Bid Deposit specification.  Paschen/Cabo is alleged to have filed to include a bid deposit of any kind and McHugh is alleged to have provided the bid deposit in the form of a company check rather than the required certified check, cashier's check or money order.  Walsh alleges that it complied with the specification and, therefore, submitted the sole responsible and responsive bid.  It should also be noted that the Paschen/Cabo and McHugh bids were lower than Walsh's bid for the project.

We will continue to monitor this litigation and report on any important details.   

Just last week, a personal injury complaint was filed in the Circuit Court of Cook County against unknown architects, engineers, and designers of Golf Road in Des Plaines, Illinois.  The complaint, filed on behalf of Plaintiff Magdalena Walus, alleges that she was injured in a motor vehicle accident caused by an icy roadway on Golf Road near the Des Plaines River.  Specifically, the complaint alleges that Golf Road, where it meets the Des Plaines River, regularly floods with river water and freezes, causing dangerous conditions.  Furthermore, the complaint alleges that defendants had knowledge that such flooding took place at the time of designing, engineering, planning and constructing Golf Road and willfully disregarded said knowledge.

The complaint includes the City of Des Plaines, Cook County, and the State of Illinois as respondents in discovery and seeks discovery from those entities regarding similar motor vehicle accidents in the past in the same area.

The case presents interesting issues regarding the standard of care applicable to design professionals.

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The round-up this week:

In Dunnet Bay Construction Co. v. Angus Contractors, Inc., et al., the compliant alleges that the defendants, an engineering firm and a steel erecting contractor are responsible for the damage to the plaintiff’s bridge project for the IDOT. The allegations are made in the alternative against the defendants where claims for some of the same damages were filed with IDOT. According to the plaintiff, its property was damaged during the construction of ramps connecting I-80/294 to I-94 and I-394 in Lansing, Illinois, when a section of the bridge at that site collapsed while it was being erected. The GC sues the engineer that designed the project for negligence (they must believe that the sudden and calamitous nature of the collapse or damage to “other property” creates an exception to the economic loss doctrine) claiming, among other things, that it failed to issue modified specifications for the erection of the bridge since the bridge was a complex curved structure and the IDOT Standard Specifications were not appropriate for the erection. The GC also alleges that the steel subcontractor breached its contract by refusing to indemnify and defend the GC for the actions and damages that resulted from the collapse.

In Thienes v. Planned Property Management, Inc., the complaint seeks a class action against a property management and leasing company on behalf of apartment renters. The damages sought against the apartment leasing company are for the alleged failure of the company to provide those renting apartments with a “lawful” summary of the Chicago Residential Landlord Tenant Ordinance including porch safety language and mandatory interest rate disclosures for the interest the tenants would earn on their security deposits, and for failing to disclose the building code violations that had occurred at the rented properties within the 12 prior to the execution of the leases.

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It’s Friday and time for the round-up of industry related claims. This edition has a bad church roof, some poor damage repair work and a fire.

In Dadian v. Midwest Clothing and Restoration, Inc., the complaint alleges that the plaintiff alleges that she retained the defendant to repair damage to her home caused by a burst pipe. The contractor allegedly dried the home through the “use of dehumidification, air movement, and negative air equipment.”  Apparently the remediation may not have been enough for plaintiff. She retained Environmental Diagnostics, Inc., to inspect the damages restoration efforts and the second consultant allegedly established that the original water damage mitigation and restoration efforts were substantially incomplete. The counts against the defendant sound in negligence, breach of contract, breach of guarantee (based off a letter that is attached to the complaint) and consumer fraud.

In Brotherhood Mutual Insurance Co. v. Christo d/b/a Accurate Roofing, the complaint alleges that defendant was hired to perform work on the roof of Sign of the Dove Church in April of 2008 and that after the work, in September of 2008, the Church was severely damaged when its roof collapsed after a heavy rain. The collapse was caused by improper drainage. The plaintiff’s allege that despite representations made by the contractor that the roof was clear of debris and guaranteed for 7 years, the roof collapsed and had properly drained prior to the defendants’ work. The complaint alleges negligence and breach of contract.

Greif, Inc. v. Advanced Waste Services, Inc. et al., is an action involving a fire allegedly caused by a poor cleaning job. The complaint alleges that Greif, a manufacturer of large 55-gallon drums, hired defendants to clean paint residue from the inside of a pollution control unit that is connected to a furnace. The allegations are that the job created loose paint particles and debris which ignited after the cleaning when the furnace was turned back on. The fire damaged the facility and interrupted the steel drum production causing damages in excess of $1,651,780. The causes of action are for breach of contract and negligence.

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It’s New Suit Friday and this week we have some new cases that just about every reader will be interested in. From attorneys looking at sample complaints and causes of action to design professionals, owners and contractors wondering what issues they might face and what could give rise to liability, this week’s spot is interesting.

In Erickson v. 2678 Orchard LLC, the plaintiff is alleging that the defendant violated several building code regulations after the plaintiff’s property became infested with rodents shortly following the beginning of excavation of the defendant’s property. The complaint also alleges that plaintiff’s tenant vacated the rental property due to the infestation and plaintiff had to reimburse pre-paid rent and incurred a revenue loss. The plaintiff seeks a permanent injunction forcing defendant to remove materials from plaintiff’s property, an end to the trespassing, correction of damages to the property and compliance with the building codes along with counts for trespass, negligence and nuisance.

In Phillips v. Savino, the plaintiffs allege that defendant, contractor, breached its contract when it failed to complete home renovations it had been paid to perform. The complaint states that the plaintiffs purchased their home and contracted with Savino for construction work, the purchase of construction materials, and services as a general contractor. The plaintiffs allege that they paid Savino for work, materials and services approximately $250,000 and that defendant did not complete and/or deficiently completed excavation of the patio, interior and exterior calking, roof flashing, floor resanding, driveway damage and siding work they also seek damages for work performed to fix work that defendant performed, and other out-of-pocket expenses they were asked to pay by the defendant during the term of the job.

In K-Mart Corp. v. Menard, Inc., a sublessor is suing a sublessee for damages which allegedly incurred during the sublessee’s 18 year tenancy in a building in Hanover Park. The complaint seeks damages for monies K-Mart says it had to/ or will have to expend to replace a parking lot a drainage system, a building roof, exposed wiring and many other problems that it claims the sublessee had a duty to maintain and keep in good repair under the lease.

In McWalters v. Lee and GLP, Inc., a partner in a design firm is suing another partner alleging that the partner and the company have damaged him by breaching their shareholder agreement which required that his shares be purchased back at a price described in a specific formula, that the defendant partner breached fiduciary duties to both the plaintiff partner and the company and the because of the breach, the shares are worth less than what they would be worth had the breach not occurred, and that the plaintiff partner was fraudulently induced into purchasing his shares of the company based on the defendant’s false representations that the shares would be redeemed at the price derived through the specified formula. As a shareholder, the plaintiff partner also asserts causes of action against the defendant partner on behalf of the company. The allegations include claims that the defendant partner used company money for personal travel and renovation of his private residences, to pay himself an undeserved salary, to start up a publishing company, and offered a rent-free sublet to a friend.

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There haven’t been very many interesting cases for this week’s New Suit Fridays here are the few we’ve pulled for you:

In Stone, DDS v. Franzia, MD a dentist has filed this complaint against a doctor who leased medical office space from the dentist. It’s alleged that after failing to pay rent and being served with a notice of default on this commercial lease, the doctor vacated the property and the dentist discovered broken windows, holes in the drywall, exposed wires along with missing molding. The dentist seeks damages for the failure to pay the rent, real estate taxes, utilities, failure to keep the property in good repair and the attorney’s fees. A copy of the lease is attached to the complaint along with the notice sent from the attorneys for the dentist.

In First American Title Insurance v. LaSalle Title Company, the complaint alleges that its agent failed to investigate a suspicious mortgage release before issuing a title commitment. This case will be of interest to any title company or its insurer. The allegation is that a release recorded on the property in 2005 for a mortgage recorded in 2003 should have been a red flag to the title searcher where there was no record of a refinancing. After a title policy was issued the previous lender moved to foreclose and confirmed that the release and property deed for the sale were forgeries and plaintiff ended up paying $288,000 in settlement damages to the lender. The counts are for professional negligence, and breach of contract seeking indemnity.

In Cuchetto v. Bilecki et al., a complaint alleges damages against an appraiser, a mortgage company, an attorney, and real estate agents involved in a real estate purchase for a civil conspiracy regarding representations made about the value and zoning classification of the property that the plaintiff purchased. Similar to the complaint above, this one is also alleging that the title company should have noticed inconsistencies in some of the documents that arguably should have alerted them to the alleged fraud. The complaint alleges fraud, breach of fiduciary duty, negligence, civil conspiracy and constructive trust.

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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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It’s Friday, so you know what that means, we bring you a collection of the complaints in some of the latest suits filed regarding matters touching on the industry:

• Sure to be of interest to Chicago White Sox fans, Pacific Construction has brought a  breach of contract claim against Maverick Pools. The complaint alleges that Maverick breached the contract by “refusing to unload and install” two pre-manufactured pools and to construct a thermal pool. The damages sought are in excess of $107,496.00.

• The complaints and allegations regarding the current mortgage crisis and the industry are likely just beginning. In this suit, a class action suit for federal securities violations is brought against Corus Bank and several others. The allegations are that Corus failed to tell investors that it was buying condominiums at prices that were inflated in developments financed by Corus and that the purchases caused inflated appraisals which led to inflated values on Corus’ books… So the bank allegedly didn’t actualize the proper losses on the loans it had made for the condominiums.

• In one of the weirder suits we’ve seen over the past year, some owners allege that a building was built on their land without their knowledge. Gavric v. Brosna Construction alleges that the defendants owning a parcel adjacent to the plaintiffs’ constructed “a three story, sub-standard, apartment building” on their property illegally. The complaint alleges trespass, conversion, negligence, seeks termination of a lien placed on their land by the contractor who built the project, a count for slander of title, and seeks remedy under Illinois Forcible Entry and Detainer Act. (735 ILCS 5/9-101 et seq.)

• In a home defect case, Rangel v. Jumic, et al, alleges that defendants failed to disclose material defects that they were aware of prior to the sale of a home to plaintiffs. The defects complained of include problems with the heat distribution system, water infiltrating through the masonry, cracks in portions of the home and problems with the hardwood floors. The suit contains counts for breach of contract, breach of the implied warranty of habitability and fitness for a particular purpose and violations of the Illinois Residential Real Property Disclosure Act. (765 ILCS 77/1 et seq.)

• Finally, a condominium association has brought a suit against the developer of its property at 1255 South State Street as well as the owner of the garage in which residents of the condominium park. The complaint alleges that the developers deal with the owner of the garage and the effect of forcing a fee for parking in the garage that a recorded Declaration had on the plaintiffs was not disclosed to the plaintiffs. Prior to November of 2007, the residents had access to the garage and their parking spaces by use of “a remote clicker” provided by the garage owner and that in November of 2007, the garage owner installed a parking “toll system” that restricted the residents ability to come and go from their parking spaces.  There are several problems with the transponders alleged in the complaint among them, that the new parking system is not a benefit to the users of the property, that the residents were not properly informed of its installation, and that the owner has improperly requested that the residents pay for a portion of the new system. The residents seek a declaratory judgment regarding the new parking system and their rights granted by easement, and allege breach of fiduciary duty, fraud and consumer fraud.

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