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Heuerman v. B & M Construction, Inc.
State: Illinois
Court: 5th District Appellate
Docket No: 5-04-0170 Rel
Case Date: 07/12/2005

                       NOTICE
Decision filed 07/12/05.  The text of
this decision may be changed or
corrected prior to the filing of a
Petition for Rehearing or the
disposition of the same.

NO. 5-04-0170

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT


CHARLES HEUERMAN, d/b/a
CHARLES HEUERMAN TRUCKING,

     Plaintiff-Appellee,

v.

B & M CONSTRUCTION, INC.,

     Defendant-Appellant.

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Appeal from the
Circuit Court of
Effingham County.


No. 01-L-82

Honorable
Steven P. Seymour,
Judge, presiding.



JUSTICE GOLDENHERSH delivered the opinion of the court:

Plaintiff, Charles Heuerman, doing business as Charles Heuerman Trucking, sued defendant, B & M Construction, Inc., for breach of contract. After a bench trial, the circuit court of Effingham County entered a judgment in favor of plaintiff. On appeal, defendant raises these issues: (1) whether the trial court erred by not applying article 2 of the Uniform Commercial Code (Code) as adopted by the State of Illinois (810 ILCS 5/2-101 et seq. (West 2002)), (2) whether the trial court erred in assessing the amount of damages, (3) whether the award of interest was proper, and (4) whether the trial court erred by awarding attorney fees. We affirm.

FACTS

In the fall of 2000, the State of Illinois began taking bids for a road improvement project on Interstate 57 (I-57) between the Effingham County line and the Route 45 exit in Mattoon. Howell Asphalt and Howell Paving (Howell) were awarded the general contractor's position. Defendant was awarded a subcontract on this project for under-drain pipe work and hired plaintiff.

On February 2, 2001, plaintiff sent to defendant a document entitled "BID/QUOTE" (Bid). The Bid gives the location of the job site and also lists the quantities:

            "QUANTITY                     DESCRIPTION                  PRICE PER TON                                  PIT

            27,000-32,000               CA16 Gravel or Stone              $14.30

            10,000-15,000               CM14 Gravel in lieu of              $12.30

                                                     CA16 Gravel or Stone"
 

Plaintiff negotiated a contract with a gas station near I-57, which allowed plaintiff to stockpile materials for the project. The gas station was within two miles of the job site. Plaintiff was not a union shop, nor did it have a contract with any applicable workers' unions. The week before the highway work was to begin, the International Brotherhood of Teamsters union (Teamsters) threatened to put up pickets unless union labor was hired to move and spread the stockpiled materials. On the Friday before the project was to commence, representatives of plaintiff, defendant, and Howell huddled to solve the problem. Plaintiff declined to sign a contract with the Teamsters. Plaintiff offered to cross the picket line, but defendant and Howell rejected this option. The parties reached a solution. Defendant agreed to hire union trucks and drivers to haul the materials from the stockpile in Neoga to the rockbox on the job site, and plaintiff agreed to provide a loader to load the materials onto the union trucks. Defendant would hire a union operator for that loader and agreed to pay the full price of $14.30 per ton for the materials. Plaintiff agreed to reimburse defendant for its expenses in hiring union trucks, drivers, and loader operators. In the construction industry, this is called "double-gating."

Within one week of starting the under-drain work, the Illinois Department of Transportation (Department) modified the specifications of the project and decided that the pipe trench would run at a constant depth of 24 inches. This modified specification would require less gravel. The Department notified defendant.

Plaintiff hauled materials to the Neoga stockpile every day and met the 1,500-to-1,700-ton-per-day requirement. Charles Heuerman testified that he monitored the size of the Neoga stockpile but did not keep track of the progress at the job site.

On December 15, 2001, plaintiff filed a complaint against defendant, alleging breach of contract. A copy of the Bid was attached to the complaint, but plaintiff alleged that, at defendant's request, the contract had been orally modified in order to resolve the dilemma with the Teamsters. Defendant filed a motion to dismiss, stating that the Bid called for the sale of goods (gravel) and arguing that the asserted oral modifications violated the Illinois statute of frauds for the sale of goods as found in the Code (810 ILCS 5/2-201 (West 2002)). The court denied the motion to dismiss and ordered defendant to answer the complaint. The court ordered:

"The Complaint states a cause of action. The allegations are sufficient to take the case out of the statute of frauds. The terms of delivery were not specifically delineated in the contract[,] only showing a job site of a stretch of interstate and not actually requiring delivery to that site. The allegation also shows the product was actually delivered to a place agreed upon by the parties. All the modifications in the contract have to do with the service portion of the contract[,] not the goods portion of the contract. Further[,] the [p]laintiff alleges full compliance with the terms of the contract by the delivery alleged."

Defendant filed an answer to the complaint and filed two affirmative defenses, including alleging that the complaint was not in compliance with the requirements set forth in the Code (810 ILCS 5/2-101 et seq. (West 2002)). Plaintiff filed a first amended complaint, adding a second count seeking an additional $3 per ton for the hauling of 4,000 tons of gravel from the stockpile to the job site.

After a bench trial, the court entered a judgment in favor of plaintiff. The court stated:

"[Defendant's] position that by the custom and usage of the trade[] the contract with [plaintiff] is a 'Requirements' contract obligating [defendant] to accept only so much CA16 as it actually used to install the under[-]drains is not supported by the facts or the law. Likewise, [defendant's] position that this transaction is governed by the [Code] is not well taken: the theory was not pled by [defendant]; no evidence specific to [defendant's] [Code] arguments was offered (nor would it have been admitted absent amendments to the pleadings); the contract in question is no more predominantly for the delivery of CA16 (not covered by the [Code] Article 2 Sales) than for the sale of CA16 (covered by the [Code] Article 2 Sales)[,] but the dispute between the parties in this litigation revolves exclusively around the delivery portion and not the goods portion of their contract; and, most significantly, [defendant's] failure to inform [plaintiff] to decrease the amount of material by approximately 25% below the contract's minimum material term vitiates the [Code] requirement that [defendant] acted in 'good faith,' a necessary condition precedent for [defendant's] [Code] theories."

The court found that there was no requirements contract. The court stated that even if there had been a requirements contract, plaintiff's conduct would have been excused. In addition to amounts due for the performance of the contract, the court awarded plaintiff attorney fees in the amount of $26,141.04. Defendant appeals.

ANALYSIS

On appeal, defendant contends that the parties entered into a requirements contract for the sale of gravel as goods. As an initial matter, a finding that the parties entered into a requirements contract would require a finding that the Code applies. Because we find the trial court properly ruled that the Code does not apply, we do not address other issues raised on appeal.

Plaintiff contends that defendant waived any argument that the Code applied to this case. Indeed, the trial court found that defendant had not properly pled that the Code applied. A review of the record indicates that defendant objected to plaintiff's original complaint for a failure to comply with the Code and that the court denied the motion. We find that the record is sufficient to review the issue of whether the Code applies to the contract between plaintiff and defendant. Because we find that the Code does not govern this contract, we need not address whether defendant properly pled that this was a requirements contract.

Defendant contends that the trial court erred by not applying the Code. The resolution of this issue is determined by whether the contract was for the sale of goods or whether it was for the sale of services. Article 2 of the Code only applies to the sale of goods. 810 ILCS 5/2-102 (West 2002); Tivoli Enterprises, Inc. v. Brunswick Bowling & Billiards Corp., 269 Ill. App. 3d 638, 645, 646 N.E.2d 943, 947 (1995); Zielinski v. Miller, 277 Ill. App. 3d 735, 741, 660 N.E.2d 1289, 1294 (1995); see 67 Am. Jur. 2d Sales

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