author: Raucci, J. Raucci, J.

text:
    (No. 91-CC-0557
    Norman Dale Sloan, Claimant, v. The State of Illinois, Respondent.

      Opinion filed September 5, 1995.

      Order on petition for rehearing filed November 16, 1995.

    Womack & Associates (Mark A. Atkins and Gene A. Turk, of counsel), for Claimant.
    Jim Ryan, Attorney General (David Rumley, Assistant Attorney General, of counsel), for Respondent.
   OPINION

Raucci, J.

Claimant is a handicapped person who was present at the DuQuoin State Fairgrounds property on September 3, 1989. Claimants motorized wheelchair struck a pothole in a roadway and Claimant was caused to fall when the chair tipped over. Claimant contends that he sustained a traumatic injury to his buttocks which, due to his paralysis, did not heal properly, and for which the Claimant received considerable medical attention and hospitalization.

At the time of the accident, Claimant was accompanied by his brother-in-law, John Nelson. Claimant was in a scooter type vehicle. They walked (rode) through the gate and were sightseeing while traveling down a fairgrounds road. It was twilight and vehicles did not have headlights on. Two golf carts were coming down the road and Claimant and Nelson moved to the right side of the road. Nelson was walking to the left of, and ahead of, Claimant. Nelson was talking to Claimant and when he did not get an answer from Claimant, he turned to discover that Claimants wheelchair had turned over on the right and Claimant was half in and half out of the wheelchair.

The accident happened on a road area by the stables. The accident happened in the middle of the block. With the help of some concession campers, Nelson got Claimant back into his wheelchair and turned him upright. An ambulance was called. Claimant was upset, had sustained scratches and scrapes, and was embarrassed. The emergency medical technicians (EMTs) with the ambulance examined Claimant but did not examine his lower torso. They left the scene. Claimant did not leave in the ambulance.

Nelson and Claimant continued traveling around the fair and met with their wives and looked around the fairgrounds. About an hour after the incident, Claimant began complaining of pain in his butt area. Nelson stated that Claimant was “starting to sweat.”

On cross-examination, Nelson testified that the roadway was an asphalt type paved surface with curves “in parts of it.” Nelson did not recall a curve at the location of the accident. The margin between the edge of the paved area and the unpaved area was ragged where the pavement “had chunks out of it.” Nelson looked at the road briefly after the accident and observed that it was rough. Nelson was asked the following questions and gave the following answers:

“Q. Okay, now, you use the word pothole,’ I think in your testimony. Was there a hole near the area where you saw Mr. Sloan come out of his scooter?
A. There was not — I am talking about the edge of the road didn’t have holes; it had areas that were out.
Q. Okay.
A. But the road itself toward the edge had potholes in it.
Q. Did you look at the road after you saw Mr. Sloan on the ground?
A. Just briefly.
Q. Did you see anything that could have caused him to come out of the chair?
A. The road, you know, was all I could see was rough.
Q. And you mean ‘rough’ by an uneven surface?
A. A jagged surface where the asphalt has — the side of the road where it falls off, you know.” (R-29-30)

Nelson testified that at the area where Sloan came into contact with the pavement there was small gravel. Nelson did not see any particular pothole that Nelson felt caused the scooter to tip over. There was a jagged edge but there were no potholes on the side.

After the accident, Nelson, Claimant and members of their family stayed at the fairgrounds until midnight.

The accident happened as the Claimant and Nelson went from the gate after parking their vehicle. On examination by the Commissioner, Nelson testified that he did not observe any particular condition in respect to the rough edge of the road that he thought might have caused Claimant to fall, but just the general condition of asphalt breaking away from the edge of the road.

Claimant testified that he had been in incomplete quadriparesis since 1975, and had been confined to a wheelchair. At the time of the accident, he was operating a Rascal scooter that he had for three years. This is a specialized piece of equipment that Claimant used to go deer hunting. The scooter was in good working condition at the time of the accident. Claimant testified that as he and Nelson left the parking lot it had rained and there were a lot of holes and ruts in the parking lot itself which gave Claimant no problem. Claimant was able to negotiate the cornfield and had no problem getting to the paved area.

The roadway that Claimant was operating his scooter on was asphalt and Claimant did not pay particular attention to it. From the gate into tire fairgrounds where the accident happened would have been about 100 yards or a little more than that. The road was straight.

Claimant testified that the photograph marked as plaintiffs exhibit #4 revealed the location where he tilted over “in front of this horse buggy.” The horse buggy was not there but the photograph fairly and accurately represents the condition of the area because it was filled up with water at the time of the accident.

At the time of the accident, Claimant testified there were “thousands of people walking west” because that was the route to get into the fair. Claimant testified that one of the back wheels of his scooter hit a pothole or a hole. Claimant was going slow because his brother-in-law, Nelson, was walking next to him. Claimant was proceeding at a walking pace. Claimant felt the scooter lean over and he was flipped or thrown completely out. The surface Claimant fell on was loose gravel. Claimant saw a hole that had been filled up with gravel that was two or two and one-half feet in diameter. The hole was not perfectly circular. Claimant testified the hole was deep enough to cover up a ten-inch wheel.

Claimant contends that the Respondent breached its duty to Claimant as an invitee and asserts that Respondent, as a property owner, must use reasonable care and caution to maintain its premises in a reasonably safe condition for the use of its invitees, and to warn of any defects that are not readily apparent. Claimant cites Ratts v. State (1986), 38 Ill. Ct. Cl. 183. In Ratts, Claimant, an A.B. Dick Printing Press repairman, was called to the offices of the Department of Transportation to fix a printing press. While there, the Claimant testified he was working on the machine and asked one of the departments employees to “run another master on the camera.” The employee testified that he thought the Claimant had told him to “run more copies” and that after turning on the machine for the purpose of running more copies, the employee heard a funny noise and turned to find that Claimants hand had been injured. The testimony of the Claimant and the employee of the Department of Transportation were in direct conflict. This Court stated that the State was not an insurer of the safety of invitees, but must only exercise reasonable care for their safety. (Fleischer v. State (1983), 35 Ill. Ct. Cl. 799.) The burden is upon Claimant to prove, by a preponderance of the evidence, that the State breached its duty of reasonable care. (Ratts, supra, at 185.) Under the circumstances extant in the Ratts case, this Court de-. nied the claim and held that the Claimant had failed to prove that the State had breached its duty of reasonable care and that the Court could only speculate as to how Claimants injury had occurred. Claimant cites Nolen v. State (1983), 36 Ill. Ct. Cl. 194. In Nolen, Claimant was walking with a friend near the Stratton Building in Springfield, and while walking across the patio approaching a door, she tripped over a handicapped ramp and injured her ankle. She testified the area was dark and she was unfamiliar with the area. State employees testified that they had not received any complaints concerning the sufficiency of the fighting in the area and there had been no complaints of injuries due to insufficient fighting or because of the existence of the handicapped ramp in the area. This Court held that the Claimant in Nolen was an invitee, and that the State had a duty to use reasonable care and warn its invitees of defects not readily apparent. This Court observed that the ramp had been in existence for sixteen years, that there had been no accidents, and that the State is not an insurer against accidents that may occur by reason of the condition of a State highway. In Bloom v. State (1957), 22 Ill. Ct. Cl. 582, 584, the Court held that the same rule is applicable to sidewalks maintained by the State. The State has a duty to exercise reasonable care in the maintenance of its highways so that dangerous conditions likely to injure persons lawfully there shall not exist. In Sewell v. Board of Trustees of Southern Illinois University (1979), 32 Ill. Ct. Cl. 430, 433, we observed that the Court had held on many occasions that in order for a Claimant to recover damages arising from defects in the roadway (or sidewalk), the Claimant must prove the State was negligent and that such negligence was the proximate cause of the injury. This Court has also held that in order for Claimant to recover, Claimant must prove that the State had actual or constructive notice of the defect that caused the injury. See Weygandt v. State (1957), 22 Ill. Ct. Cl. 478, 485.

The record in this case is completely devoid of any actual or constructive notice of any defect in the area where the accident took place, with the sole exception of Claimants testimony that a hole existed and that the hole caused his scooter to tip over. Even Claimant’s brother-in-law, Nelson, did not testify to the existence of a “hole” at the area of the accident, but only as to an uneven surface along the edge of the paved portion of the asphalt road where pieces of asphalt had broken away. Two employees of the State familiar with the condition of the roads on the DuQuoin Fairgrounds testified that there were no holes of the type described by Claimant in the area where Claimant contends he was injured. Even if one were to assume that the Claimant was correct that a hole did exist of the size and dimensions stated by Claimant, the mere existence of such a hole does not establish either actual or constructive notice to the State of the existence of this condition.

In Cotner v. State (1987), 40 Ill. Ct. Cl. 70, Claimant brought a tort action against the State claiming that he was riding a motorcycle on a State-maintained road when he went over a bump, losing control and falling to the pavement receiving severe injuries. A companion cyclist testified that tire bump was six inches high and that a year earlier he had run over the same bump and it jarred his tape player so that the tape fell to the ground. The Claimants companion never complained about the bump and never notified the Illinois Department of Transportation. An investigating police officer found the bump and estimated that it was approximately four inches high. Claimants father measured the bump at 4 and 3/4 inches high. An IDOT field technician estimated the height of the bump as between 1 and 3 inches. Department of Transportation personnel testified that they made visual inspections of the area and did not see such a bump. Local police departments had not received public complaints and no IDOT agency employees reported any deficiency in the road surface. This Court held that Respondent was not an insurer of the safety of users of its highways. The burden is upon Claimant to show that the State had actual or constructive notice of defects that caused injuries. (Norman v. State (1982), 35 Ill. Ct. Cl. 693, 695.) “The mere fact that a defective condition existed if, in fact, it did exist, is not in and by itself sufficient to constitute an act of negligence on the part of the Respondent.” Palmer v. Northern Illinois University (1964), 25 Ill. Ct. Cl. 1; Cotner v. State (1987), 40 Ill. Ct. Cl. 70, 72.

In the case at bar, as in Cotner, supra, the State conducted investigations of the roadway in question on a regular basis. No defects were observed. No complaints were received. According to the record in this case, the accident which injured Claimant represents the only reported accident at this area of the roadways on the DuQuoin State Fairgrounds. In Cotner, supra, there was evidence from Claimants companion of the existence of the bump one year earlier, but this Court held such evidence to be insufficient to establish constructive notice of the existence of the bump, or of a dangerous condition. There is no serious contention that Claimants buttocks were not injured and that he has not had severe problems in obtaining a complete healing of the area over a long time after he fell from his scooter. The issue is whether the Respondent can, on the basis of the evidence adduced at trial in this case, be held accountable for allowing an unreasonably dangerous condition to exist which proximately resulted in Claimant’s injury. There is simply no evidence whatsoever that Respondent had actual or constructive notice of this allegedly dangerous condition. Indeed, the testimony of Claimant’s brother-in-law, who was present at the time of the accident, simply does not confirm the existence of this rather large pothole or hole as described by the Claimant in Claimant’s testimony. To the contrary, the brother-in-laws testimony was only to the effect that the edges of the asphalt’s surface on the road were uneven or jagged where pieces of asphalt had broken off. This testimony alone certainly does not establish the type of unreasonably dangerous condition which must be shown in order for Claimant to recover.

Counsel for Claimant argues that Claimant presented a prima facie case that the Respondent’s premises were unsafe. We do not agree. Counsel alludes to Claimant’s testimony. That testimony established that after the accident, Claimant observed the roadway where he fell. Claimant said he saw a hole that had been filled up with gravel. The hole was maybe two feet or two and one-half feet in diameter and was not perfectly circular. Claimant testified that the wheels on his scooter were ten inches and the hole “covered the wheel up” so that the wheel was completely underneath the surface of the hole. Counsel for Claimant argues that this testimony was confirmed by the brother-in-law, John Nelson. Nelson’s testimony was, in pertinent part, that after the accident, the scooter was off the side of the road. Nelson was asked if he saw any particular pothole that he felt had caused the scooter to tip. Nelson replied that “these weren’t potholes on the side. This was a jagged edge * * Thus, counsel’s conclusion that Nelson’s testimony confirmed the testimony of Claimant is not correct. Counsel also alludes to the testimony of EMT Brumley. Brumley was the EMT who arrived with the ambulance. Bromleys testimony was that he had absolutely no recollection of the incident, but identified his report. The report attached as exhibit #1 to the Brumley deposition does not allude in any way to the cause of this accident, but recites only that the Claimant had fallen out of his wheelchair. Counsel’s conclusion that Bromley’s deposition testimony lent weight to the conclusion that Respondent’s premises were not reasonably safe is misplaced. The only evidence of what might be perceived as a dangerous condition which proximately caused the Claimant’s injuries came from the Claimant’s testimony alone. There was no corroboration of the existence of the dangerous hole, even through the testimony of Claimant’s companion present at the time of the accident. Nevertheless, if this Court accords Claimant’s testimony sufficient weight to establish the existence of the pothole, there remains no proof whatsoever that Respondent had actual or constructive notice of the condition.

It is therefore ordered, adjudged and decreed that this Claim is dismissed and forever barred.

ORDER

Raucci, J.

This cause coming on to be heard on the Claimants petition for rehearing and/or for new trial, the Court being fully advised in the premises, the Court finds: the petition for rehearing should be denied.

It is therefore ordered that the Claimants petition for rehearing is denied.


source: Caselaw Access Project

author: Frederick, J.

license: Public Domain

text:
    (No. 91-CC-1477
    Robert Lucius, Claimant, v. The State of Illinois, Respondent.

      Opinion filed April 15, 1996.

    Robert M. Hodge, for Claimant.
    Jim Ryan, Attorney General (Brian Farley, Assistant Attorney General, of counsel), for Respondent.
   OPINION

Frederick, J.

The Claimant, Robert Lucius, filed his claim sounding in negligence in the Court of Claims on November 29, 1990. Claimant, who was at the time of the occurrence an inmate in the Illinois Department of Corrections, alleged that he suffered injury while working at the Vandalia Correctional Center farm in September of 1990. The Claimant seeks damages in the amount of thirty thousand dollars ($30,000).

The Commissioner set the cause for trial on May 11, 1993. Two days prior to trial, the Respondent filed a motion to dismiss alleging Claimant’s failure to exhaust his remedies pursuant to section 790.60 of the Court of Claims Regulations, 705 ILCS 505/25. Pursuant to section 790.90 of the Court of Claims Regulations, failure to exhaust remedies shall be grounds for dismissal. The Court denied the motion to dismiss on June 25, 1993, because the record before the Court was insufficient to grant the motion. The motion to dismiss was not supported by affidavit. The record at that time was bare as to whether there was an available administrative remedy for Claimant’s injury. The record was bare as to whether there was an alleged known tortfeasor. If the Respondent had filed an affidavit indicating that there was a known alleged tortfeasor and some facts to show some negligence on the part of the known tortfeasor, the claim would have been dismissed at that time. The Court did order that the Respondent could raise the issue of exhaustion of remedies at trial. The Court, in numerous decisions, has required that the remedy be a real remedy. The court has required there be an alleged known tortfeasor for Claimant to sue.

At trial, Claimant testified that during the summer of 1990, he was an inmate of the Illinois Department of Corrections and was assigned to work at the farm at Vandalia Correctional Center. In August of 1990, he was a member of a four-man crew assigned to bundle and load bales of freshly cut hay. The crews supervisor, Ed Bowman, was a State of Illinois employee who, at times, accompanied the crew out in the field.

The four-man crew was composed of inmates. One inmate drove the truck, one inmate stacked the bales of hay in the tractor, and Claimant and another inmate threw the bales onto the tractor. Claimant testified that he had never received any training for this job. The inmate driver was named James Maxwell. Inmate Robert Hayes threw the hay up on the trailer and inmate Clyde Dubose stacked the bales on the trailer.

The truck trailer was about 25 to 30 feet long with two wheels on each side in the middle of the trailer. The wheels on each side were about one and one-half feet apart.

Claimant testified that he had previously complained to Supervisor Bowman that the inmate driving the truck was driving too fast. Claimant stated that one week prior to the incident of Claimants injury, another inmates foot was run over by the same driver. Claimant further stated that no action was taken in regard to the complaints against the driver by Supervisor Bowman.

On September 4, 1990, the day of the incident, the Claimant testified that he began work at 7:00 a.m. and that he was wearing State issue work boots. He further explained that, in the beginning, the crew loaded the hay on the rear end of the trailer but as the trailer filled up, it became necessary for the Claimant to step in front of the trailer wheels to load the hay onto the trailer. Claimant had to stand between the tractor and the two wheels on the flat bed. He testified that he asked the inmate driver, James Maxwell, to slow down several times but that Claimants requests were ignored.

Claimant stated that as James Maxwell proceeded to drive the truck and trailer, Claimant and inmate Robert Hayes, would throw the bales of hay up onto the truck. Claimant testified that it was necessary to put his foot in front of the tire to throw the 80 to 100 pound bale up onto the truck and then he had to quickly move out of the way. At approximately 3:45 p.m., the incident occurred. Claimant stated that he threw a bale of hay up onto the truck and he wasn’t able to move out of the way quickly enough. Both trailer wheels ran over the Claimant’s ankle. It was necessary for the driver to back the trailer up to release the Claimant’s ankle from underneath the second tire.

Claimant’was treated at the infirmary and an x-ray revealed a fracture. He was transferred to the hospital in Centraba the following day. At Centraba, Claimant was given a walking cast and returned to non-working status at Vandalia. Claimant took Motrin for pain four times a day for one week. The cast remained on for approximately three months and Claimant relied on crutches for six months. Claimant testified that he had pain at the time of, and immediately following, the incident. He also described pain for the three months following the incident. Claimant reported some lost range of motion in the ankle and that activities such as baseball have been limited.

Claimant was released from the Illinois Department of Corrections in January, 1991, and at the time of the hearing was employed as a handler for the U.S. Postal Service.

Claimant testified that he had not filed a grievance with the Illinois Department of Corrections and that he had not sued the inmate driver of the truck. Claimant submitted a group exhibit consisting of the incident report and medical records. Respondent did not present any witnesses.

The Law

This Court has consistently held that the exhaustion of remedies provisions of the Court of Claims Regulations are an inescapable requirement. (Burns v. State (1990), 43 Ill. Ct. Cl. 323; Boe v. State (1984), 37 Ill. Ct. Cl. 72.) In the instant case, it is clear that inmate James Maxwell injured Claimant through his negligence or willful misconduct and Claimant failed to sue Mr. Maxwell. Claimant was aware of the identity of the driver of the vehicle and chose not to sue him. We cannot presume Mr. Maxwell to be judgment-proof without any evidence presented by Claimant. It was, therefore, incumbent on Claimant to exhaust his remedies against James Maxwell before seeking final disposition of his claim in this Court. Patton v. State (1988), 41 Ill. Ct. Cl. 77.

Claimant argues that the Court has allowed claims without enforcing the exhaustion of remedies requirement for inmate claims of work-related injuries where another inmate was negligent but the proximate cause of the injury was the Respondents failure to supervise. Claimant cites Hughes v. State (1984), 37 Ill. Ct. Cl. 251 and Tucker v. State (1989), 42 Ill. Ct. Cl. 72 as authority. Hughes, supra, is distinguishable in that there was no evidence that the other inmates were negligent and the proximate causes of Hughes’ injury were the lack of supervision and the faulty equipment provided by the State. Tucker, supra, is also distinguishable. In that case, the State’s farm superintendent ordered Tucker to sit on the front of a tractor as it was driven down a road the superintendent knew was in poor condition. There was also no evidence the driver was negligent.

In the present case, the proximate cause of Claimants injury was the fast driving of James Maxwell and his failure to slow the vehicle after Claimant requested he slow down. Claimant also exhibited some comparative negligence. While the lack of supervision by the State is a factor, the negligence of James Maxwell was the proximate cause of Claimants injury. Under these circumstances, Claimant should have sued James Maxwell and had the claim against Respondent placed on general continuance. This he did not do.

For the foregoing reasons, it is the order of the Court that Claimants claim be and hereby is denied.


author: Epstein, J. Epstein, J.

text:
    (No. 91-CC-2735
    Orbit Transport, Inc., Claimant, v. The State of Illinois, Respondent.

      Opinion filed March 19, 1996.

      Supplementary order and award filed May 13, 1996.

    Loewenstein, Hagen, Oehlert & Smith, P.C. (Gary L. Smith, of counsel), for Claimant.
    Jim Ryan, Attorney General (Jennifer Johnson, Assistant Attorney General, of counsel), for Respondent.
   OPINION

Epstein, J.

This is a claim against the Respondents Department of Transportation (“IDOT”) for litigation expenses pursuant to section 10 — 55(a) of the Illinois Administrative Procedures Act (the “APA”). (5 ILCS 100/10 — 55(a).) This Court has jurisdiction of this claim under section 8(i) of our Act. 705 ILCS 505/8.

The statutory fee-shifting provision that is invoked here by the Claimant is paragraph (a) of APA section 10 — 55, which applies, insofar as material here, to a “contested case initiated by any agency that does not proceed to Court for judicial review * * A” The standard of liability for litigation expenses in APA section 10 — 55(a) reads as follows:

“* ° * any allegation made by the agency without reasonable cause and found to be untrue shall subject the agency mating the allegations to the payment of tire reasonable expenses, including attorney’s fees, actually incurred in defending against that allegation by the party against whom tire case was initiated. A claimant may not recover litigation expenses when the parties have executed a settlement agreement that, while not stipulating liability or violation, requires the claimant to take corrective action or pay a monetary sum.”

Claimant Orbit Transport, Inc. (“Orbit”) alleges that IDOT made an allegation of “knowing” conduct in an administrative enforcement complaint against it “without reasonable cause” and that the allegation was “found to be untrue” by the IDOT hearing officer. (IDOT did not seek administrative review of the hearing officers decision, and no settlement agreement was involved in those proceedings.)

This fee claim is based on an IDOT administrative “notice of probable violation” against the Claimant, a trucking company, that alleged a “knowing” violation of the Illinois Hazardous Material Transportation Act, 430 ILCS 30/1, et seq. (the “Act”). IDOT alleged that Claimant knowingly violated IDOT s placard regulations for transporting hazardous materials on Illinois highways that were adopted under the Act by driving a truck containing hazardous commodities when one of the several required placards had (somehow) come off the truck while traveling our highways. IDOT sought to impose civil penalties on the Claimant for this alleged violation. Following a stipulation between Orbit and IDOT that the Orbit driver did not have “actual knowledge” of the missing placard, the case was tried to an IDOT administrative hearing officer on a theory of “constructive knowledge.” The hearing officer found the charges unproven.

The critical issue before us on this fee claim is whether IDOTs allegation of a “knowing” violation of the placard rules was, or was not, made with “reasonable cause.” This is not quite as straightforward a question as it initially might seem, given the shifting meaning of the key word.

At the outset, it is clear that: (1) the Act allows civil penalties only against a “person * * # [who] knowingly committed an act that is a violation of this Act or any rule or regulation issued under this Act,” 403 ILCS 30/11, and that (2) IDOT accused Claimant of “knowingly” driving a truckload of hazardous materials with at least one of the required placards missing, and (3) the IDOT hearing officer found that IDOT had “failed to prove that the Respondent engaged in a knowing violation of the Act * * In the Matter of Orbit Transport, Inc., CP 89-1438 (October 30, 1990) (C.R. Draper), at 9.

The unusual twist in this case is that the meaning of “knowingly” — the allegedly false allegation — was itself a disputed issue in the administrative proceeding. The Claimant took the position then, and adheres to it now, that IDOT’s stipulation that Orbit’s truck driver did not have “actual knowledge” that the placard was missing is terminally dispositive of the violation charge. On Claimant’s view, the “knowingly” allegation meant, and under the Illinois statute and IDOT regulations had to mean, “actually knew” and that that was admitted to be false by IDOT’s stipulation.

IDOT takes the view that “knowingly” was intended by IDOT to mean “constructively knew,” and that it clearly and explicitly confirmed that by the pre-trial stipulation. Under that “constructive knowledge” interpretation, IDOT contends that its allegation of “knowingly” was reasonable under the circumstances, as well as a reasonable and properly aggressive attempt to obtain a stricter judicial interpretation of the statute that would be more favorable to enforcement of the Act. IDOT argues strenuously that it ought not be penalized — or at least not forced to pay Orbit’s litigation expenses — because it sought to advocate a legally plausible, but unsuccessful, interpretation of the law. Respondent urges that it acted reasonably at all stages of the administrative proceeding, and that APA section 55(a) requires a much more egregious behavior on the part of the agency before liability is imposed.

Both sides agree that the administrative action proceeded to trial on IDOT’s legal theory that the Act and regulations should be construed only to require “constructive knowledge” that the placard was missing, i.e., that the Orbit driver was somehow negligent or derelict of his duty in not determining that the placard had somehow come off the side of the truck during the first few hours of driving that day (after undisputedly leaving the dock with all signs in place). It appears that the IDOT hearing officer accepted this theory or at least applied it in this case.

As Claimant emphasizes, the hearing officer applied the lower “constructive knowledge” standard of scienter to this case and found it unproven by IDOT, which Claimant contends is tantamount to a finding that the allegation was untrue.

Under the circumstances presented here, we do not find it necessary to reach several of these interesting issues raised by the parties, including the issues of whether or not the “untrue allegation” liability of APA section 10 — 55(a) includes allegations of law as well as allegations of fact, a point on which neither party has produced precedent or analysis.

Our following findings suffice for us to decide the dispositive issue under the section 10 — 55(a) standard of liability for “untrue allegations” in IDOTs charge against this Claimant:

1. IDOTs administrative complaint alleged “knowing” misconduct under an Illinois statute that, on its face, and as then construed to date, required actual knowledge in order to trigger a civil penalty; no regulatory gloss purported to alter that statutory standard of scienter; IDOTs complaint sought a civil penalty against the Claimant and thus invoked the “knowingly” standard;

2. In order to plead its “constructive knowledge” theory of Claimant’s liability, IDOTs complaint could have, but did not, allege “constructive knowledge” as a fact conclusion and could have, but did not, allege facts known or thought to be known to the Claimant (i.e., to its driver or other personnel) that might support a conclusion of such constructive knowledge; this traditional pleading technique was not utilized by IDOT in this case;

3. From the time of the IDOT-Orbit stipulation, Claimant was not, and knew it was not, defending a charge of “actual knowledge” of the missing placard; but this case does not involve bad faith or intentional deception by IDOT;

4. The IDOT administrative hearing officer accepted the “constructive knowledge” application of the Act insofar as he applied that construction of the “knowing” element to the facts presented by IDOT at the administrative hearing, and found that IDOT failed to prove that Orbit (i.e., Orbits driver) had constructive knowledge of the missing placard; in the absence of complicating factors, this finding is tantamount to a determination that the charge was untrue;

5. In this Court and in the administrative hearing below, IDOT failed to make any significant showing of a factual basis for its allegation of “constructive knowledge” of the missing placard. IDOT failed to show a reasonable basis for alleging that the Orbit driver, at any time during approximately two hours of highway driving after leaving his departure point with all required hazardous material placards duly affixed in compliance with the IDOT regulations, and affixed in a manner that met IDOT regulations, knew facts that should have indicated to him, or otherwise had reason to know, that one hazardous materials placard had come off of tire truck.

These findings require us to conclude that IDOT has breached the standard of section 10 — 55(a) by its factual allegation of “knowing” violation, under both an actual knowledge and a constructive knowledge interpretation. Either way, the allegation was not reasonably made in this case. Claimant is entitled to an award of litigation expenses under the statute.

However, in awarding litigation expenses under this statute, we are commanded to award only such expenses, including attorneys fees, that were “actually incurred in defending against the [offending] allegation # * V’ Because of the shifting meaning of the critical allegation during the administrative proceedings, our award determination requires further comment.

Ordinarily, the defense of an allegation would seemingly require the allegation to have been made. Ordinarily, recoverable defense expenses based on an improper allegation would exclude defense efforts preceding the making of the allegation. However, under the peculiar procedural facts involved in this administrative action, where the legal and factual issues are so closely intertwined, where the first (“actual knowledge”) as well as the second (“constructive knowledge”) interpretative version of the unreasonable/false allegation was false, and where the administrative Respondent from the outset had to defend itself against baseless charges, we are not inclined to draw fine lines to demark the onset of the recoverable defense expenses, and we are not persuaded that Claimant’s knowledge of the intended meaning of the charge is a reason to reduce its recompense in these circumstances.

Accordingly, we will award Claimant his requested litigation expenses, consisting of attorney’s fees based on 19.5 hours of time in the administrative hearing process (at $100 per hour), including pre-trial and pre-stipulation time, as set forth in Claimants bill of particulars. We will add to the award Claimants counsel fees for the filing, briefing and hearing in this Court, as allowed by the statute and conceded to be appropriate by the Respondent.

The Court finds liability in favor of the Claimant. Claimant shall file a supplementary bill of particulars covering its litigation expenses in this court within 14 days after this order. Respondent may file objections within 14 days after its receipt thereof.

Judgment is entered for Claimant and against the Respondent. An award will follow.

SUPPLEMENTARY ORDER AND AWARD

Epstein, J.

On March 19, 1996, the Court issued its opinion in this case granting this claim and entered an order directing supplemental submissions by the parties on the Claimants attorneys fees in this court. Claimant filed its supplementary bill of particulars, requesting $2,200 in attorneys fees (and no other litigation expenses) in addition to the $1,950 in attorneys fees previously approved in the Courts opinion, and the Respondent has not interposed any objection.

Accordingly, pursuant to our opinion and order of March 19, 1996, it is hereby ordered: Claimant Orbit Transport, Inc. is awarded the sum of $4,150 in full and complete satisfaction of all claims presented in this matter.

       IDOT’s constructive knowledge theory was based on at least one judicial decision so construing a parallel Federal statute. IDOT concedes, however, that that decision relied on a Federal administrative rule that defined the required "knowledge" element to include constructive (“should have known") knowledge, but that no parallel Illinois administrative rule has been adopted by IDOT (assuming arguendo that one could be, consistent with the language of the Act itself). In any event, the decision on which IDOT relied was not rendered by an Illinois court and was not a construction of the Illinois statute or of IDOT regulations; and no Illinois court has directly addressed this issue.

       Tills Court need not and does not intimate any opinion as to the proper interpretation of the “knowledge” element of the Act and, correspondingly, of the IDOT hazardous material transportation regulations.


text:
    (No. 91-CC-3047
    Thos. M. Madden Co., Claimant, v. The State of Illinois, Respondent.

      Opinion filed January 23, 1996.

      Order filed May 7, 1996.

    McNeela & Griffin, Ltd. (Paul A. Brocksmith, of counsel), for Claimant.
    Jim Ryan, Attorney General (Sebastian Danziger, Assistant Attorney General, of counsel), for Respondent.
   OPINION

Epstein, J.

This is a contractors claim against the Illinois Department of Transportation (“IDOT”) for $73,352.15 of alleged additional work ordered by IDOT on a 1989 construction contract. This case arises out of IDOT contract no. 80340 for the construction of a double box culvert and removal of the old two-span concrete bridge on Illinois Route 47 over Rob Roy Creek (the “creek”) at U.S. Route 30 in Kane County, Illinois (original contract price $756,254.41).

The Claimant, Thos. J. Madden Co. (“Madden”), was hired by IDOT to build a new bridge over an old creek. The construction required diversion of the creek around the work site. To everyone’s great surprise, however, the creek diversion caused water to back up underground into the surrounding farm fields through drainage tiles located under those fields. Both IDOT and the contractor were blissfully unaware of the tiles until angry farmers complained that they could not plant their mysteriously wet fields. In response to the angry neighboring farmers’ complaints, IDOT ordered additional “dewatering” or diversion of the creek flow to reduce the water level to an altitude lower than that of the farmers’ fields (specifically, below elevation 651.0). The issue in this case is who pays the $73,000+ cost of the “additional” diversion.

Procedural Posture of this Claim

Thos. M. Madden Co. (“Claimant” or “Madden”) filed a one count complaint, sounding in contract, claiming $73,352.15 of additional compensation for the equipment, labor and miscellaneous costs of the “additional” dewatering work ordered by IDOT. The Respondent did not answer, which our rules permit, but filed its Departmental Report as allowed under our rules and later amended that report. The Claimant moved for summary judgment and the Respondent tardily moved to dismiss the claim for failure to state a cause of action, asserting that the contract failed to provide a basis for Claimant to recover.

Because both parties’ motions squarely contend that this claim is determinable on the face of the contract and the pleaded facts, and because both parties maintain that the relevant contract provisions are unambiguous and only require interpretation and application to the undisputed facts, we directed, without objection, that the motions would be treated as cross-motions for summary judgment, (order of May 24,1995.)

Contentions of the Parties

The Claimant, Madden, contends in essence that it had already met its dewatering and creek diversion duties under the contract terms when IDOT ordered the additional dewatering and that the added work was not required by any provision of the contract and is an “extra” that is separately compensable under the additional work provisions. Alternatively, Madden contends the unknown subsurface drainage problem was a changed condition that warrants additional compensation. Madden maintains that neither party in fact knew about the underground tiles in the area, that in any case it was IDOT’s responsibility to inform the contract bidders of any such condition, and that as a bidder and contractor it was unable to determine the existence of the tiles in off-site areas beforehand because drainage tiles are not of record and because contractors lack access to private offsite properties and therefore cannot malee inspections or subsurface tests.

The Respondent disputes Maddens claim in its entirety, contending that the additional dewatering was the contractor’s responsibility under the original contract terms and was within the scope of the contracted work. Respondent urges that the contractor is responsible for hidden underground conditions as well as avoidance of damage to private property under express contract terms, and was obliged by the contract to inspect the adjacent areas as well as the contract site. IDOT disputes the applicability of the “changed condition” clause. IDOT concedes that both parties were in fact unaware of the existence of the underground drain tiles, but claims that such tiles are commonplace in certain areas of Illinois and contends that this is sufficient to put the contractor on notice.

The Contract Issues

The interpretation issues presented concern the application of contract language to an unexpected circumstance — the presence of underground drainage tiles in areas adjacent to the construction site — in this construction job. It is undisputed that neither IDOT nor Madden actually knew beforehand that the subsurface drain tiles were there. Neither side contends that the off-site water backup was caused by subsurface conditions on the site itself. Both parties concede that underground drain tiles are commonplace in some areas of the State, at least in farm areas with certain soil conditions. A question of some precedential significance, therefore, is presented by this issue of who bears the responsibility for unknown underground tiles in IDOT construction projects under IDOTs standard specifications for road and bridge construction (“Standard Specifications”) which are part of most if not all IDOT construction contracts.

Of course, in construing this or any construction contract, it is axiomatic that the specific contract provisions directed at the particular project ordinarily take precedence, as a matter of interpretation, over the standard specifications, which are general provisions by their nature, to the extent that the two may be inconsistent or in conflict. However, it is also true that the law of interpretation of contracts mandates that provisions be reconciled insofar as possible and practicable, so that findings of conflicts are minimized. We are also mindful, especially in cases of complex government construction jobs, that the language of the contracts is almost always drafted by the State and is almost always written in terminology and style comporting with the standard conditions.

The primary contract provisions on which the Claimant relies, are as follows:

“It shall be the responsibility of the Contractor to divert the stream flow during construction in order to keep the construction areas free of water. The method of water diversion shall be subject to the approval of the Engineer and the cost shall be included in the unit bid price * e Culvert Details, specifications sheet no. 2 of 8 sheets.
"9. The undersigned further agrees that the Engineer may at any time during the progress of work covered by this contract order other work or materials incidental thereto and that all such work and materials as do not appear in the proposal or contract as a specific item accompanied by a unit price, and which are not included under the bid price for other items in the contract, shall be performed as extra work, and that he will accept full compensation therefor as provided in the specifications.” Madden Bid Proposal (on IDOT prescribed form).

The primary contract provisions on which the Respondent relies, all of which are provisions of the standard specifications, are as follows:

“502.01 Description. This work shall consist of the excavation required for the construction of all structures including all bailing, draining, pumping, sheeting; the construction of cofferdams, or temporary cribs if found necessary, and their subsequent removal; the disposal of all material obtained from such excavation; and backfiling to the level of the ground surface as it existed before any excavation was made by the Contractor.
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102.05 Examination of Plans, Specifications, Special provisions and Site of Work. The prospective bidder shall, before submitting a bid, carefully examine the proposal form, plans, Specifications, Special Provisions and form of contract and bond. The bidder shall inspect in detail the site of the proposed work and be familiar with all the local conditions affecting the contract and the detailed requirements of construction. If his/her bid is accepted, the bidder will be responsible for all errors in the proposal resulting from his/her failure or neglect to comply with these instructions. The Department will, in no case, be responsible for any change in anticipated profits resulting from such failure or neglect.
When the plans or Special Provisions include information pertaining to subsurface exploration; borings, test pits and other preliminary investigation, such information represents only the best knowledge of the Department as to the location, character or quantity of the materials encountered and is only included for the convenience of the bidder. The Department assumes no responsibility whatever in respect to the sufficiency or accuracy of the information, and there is no guaranty, either expressed or implied, that the conditions indicated are representative of those existing throughout the work, or that unanticipated developments may not occur. All soil information upon which tlie design was prepared is available for examination by all prospective bidders * * *.
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107.19 Protection and Restoration of Property. If corporate or private property interferes with the work, the Contractor shall notify, in writing, the owners of such property advising them of the nature of the interference and shall arrange to cooperate with them for the protection or disposition of such property. The Contractor shall furnish the Engineer with copies of such notifications and with copies of any agreements between the Contractor and the property owners concerning such protection or disposition.
The Contractor shall take all necessary precautions for the protection of corporate or private property, such as walls and foundations of buildings, vaults, underground structures of public utilities, underground drainage facilities, overhead structures of public utilities, trees, shrubbery, crops and fences contiguous to the work, of which the contract does not provide for removal. The Contractor shall protect and carefully preserve all official survey monuments * * * or other similar monuments * * *.
The Contractor shall be responsible for the damage or destruction of property of any character resulting from neglect, misconduct, or omission in his/her manner or method of execution or nonexecution of the work, or caused by defective work or the use of unsatisfactory materials, and such responsibility shall not be released until the work shall have been completed and accepted and the requirements of the Specifications complied with.
Whenever public or private property is so damaged or destroyed, the Contractor shall, at his/her own expense, restore such property to a condition equal to that existing before such damage or injury was done by repairing, rebuilding or replacing it as may be directed, or the Contractor shall otherwise make good such damage or destruction in an acceptable manner * * *.
« * «
The cost of all materials required and all labor necessary to comply with the above Provisions will not be paid for separately, but shall be considered as incidental to the contract.”

Discussion

This contract dispute presents two predicates of liability for our consideration. First is the Claimants argument that the additional dewatering work is a simple extra outside the scope of the original contract work (i.e., the dewatering specified in the contract), but within the scope of the “additional payment” provision of the contract (section 9 of the bid). Second is the contractors alternative theory that the unknown underground drain tiles constituted a changed condition within the scope of article 104.04 of the standard provision. The parties’ arguments all fall within these two theories.

The contractor’s argument about its inability to ascertain the existence of the subsurface tiles — because they are not of record and are located on private property to which bidders and IDOT itself normally lack access for onsite inspection — relates to the changed condition theory of the case. Similarly, two of IDOT’s contentions similarly relate to the changed condition analysis and its allocation of responsibility for undisclosed or unknown conditions affecting performance of the contract: the article 102.05 duty of the contractor to inspect the site and be informed about the local conditions; and the article 102.05 provision making the bidder responsible for errors in his bid.

Similarly, IDOT’s arguments about the contractor’s article 107.19 contract duty to avoid damage to property and its article 502.01 contract duty to drain and pump excavation sites both relate to the issue of whether the “additional” pumping ordered by IDOT was within the scope of the contracted work.

Having sorted out the issues, it becomes clear that the two issues presented are alternative theories factually as well as legally, and that the threshold question for our determination is the scope of work dispute. This is because the two legal theories have fundamentally different and inconsistent factual predicates.

The “extra” work theory is based on the factual/contractual premise that the additional disputed work, and thus the additional disputed compensation, was not the responsibility of the contractor under the original contract. In such event, the disputed work became a duty only because of a supplemental work order which in effect became an amendment to the contract that was previously contemplated and authorized by the parties in their original contract. Where that is the case (i.e., if the additional work is found to be supplemental to the contract-specified work) then the dispute is resolved by straightforward application of the payment provisions to the additional work. In that circumstance, the “changed condition” analysis does not apply, because the “additional” work is an add-on that was not covered by the terms of the original contract at the time it was bid or let.

On the other hand, where the disputed work is within the scope of the original contract, the “changed condition” analysis is applicable — under the contractual changed conditions clause — as the primary contract term that governs unknown conditions and similar surprises. The changed condition analysis pertains to the conditions and circumstances that affect the performance of the contracted work. The court must emphasize, however, that contrary to the Respondents arguments in this case, it is well settled that there are two (not one) kinds of changed conditions, as we recently analyzed in our opinion in Fru-Con Corp. v. State (1996), no. 86-CC-0870, scheduled for publication in 49 Ill. Ct. Cl.

“The standard specifications contained articles which are commonly referred to as changed conditions provisions. Article 104.04 recognizes two classes of changed conditions. The first type of changed condition is a subsurface or latent physical condition which differs materially from that which is indicated by the contract documents. The second type of changed condition occurs where the contractor encounters a subsurface or latent physical condition which differs materially from that which is ordinarily encountered and generally recognized as inherent in the work of the character provided for in the contract documents.”

Changed conditions provisions typically allocate the risks of unknown conditions and are especially important when encountering, as here, unknown and possibly unknowable subsurface conditions and structures. The competing considerations are important both in individual cases, and in the general case, because the allocation of risk for unknowns as between the contractor and the State affects the bid price of all projects let by the State:

“The starting point of the policy expressed in the changed conditions clause is the great risk, for bidders on construction projects, of adverse subsurface conditions: ‘no one can ever know with certainty what will be found during subsurface operations.' Kaiser Indus. Corp. v. United States, supra, 340 F. 2d at 329, 169 Ct. Cl. at 323. Whenever dependable information on the subsurface is unavailable, bidders will make their own borings or, more likely, include in their bids a contingency element to cover the risk. Either alternative inflates the costs to the Government. The Government therefore often makes such borings and provides them for the use of the bidders, as part of a contract containing the standard changed conditions clause.
Bidders are thereby given information on which they may rely in making their bids, and are at the same time promised an equitable adjustment under the changed conditions clause, if subsurface conditions turn out to be materially different than those indicated * s *. The two elements work together; the presence of the changed conditions clause works to reassure bidders that they may confidently rely on the logs and need not include a contingency element in their bids. Reliance is affirmatively desired by the Government, for if bidders feel they cannot rely, they will revert to the practice of increasing their bids.
The purpose of the changed conditions clause is thus to take at least some of the gamble on subsurface conditions out of bidding. Bidders need not weigh the cost and ease of making their own borings against the risk of encountering an adverse subsurface, and they need not consider how large a contingency should be added to the bid to cover the risk. They will have no windfalls and no disasters. The Government benefits from more accurate bidding, without inflation for difficult subsurface work only when it is encountered and was not indicated * * Foster Const. C.A. & Williams Bros. Co. v. United States (1970), 435 F.2d 873, 887 (U.S. Ct. Cl).

We thus turn to the analysis of whether the “additional” dewatering work was, or was not, within the scope of the work of the original contract. Madden cites the dewatering language of the contract (quoted in full above), and emphasizes that it was required to, and did, submit a specific dewatering plan that the IDOT engineers approved, and claims that this satisfied its dewatering and creek diversion obligations under the original contract.

The Respondent contends, initially, that Madden was required “to divert the flow of the creek during construction to prevent water from invading the construction area” and that this diversion was “intended * * * to be included in the contractors price.” Respondent emphasizes that the standard specification for excavation, article 502.01, makes it clear that Madden had the duty to perform all pumping and draining “necessary for the satisfactory completion of the project.” Secondarily, the Respondent contends that the contractors duty to avoid damage to private property under article 107.19, which specifically includes “crops,” imposed a duty on Madden to effect sufficient diversion of the creek to avoid the situation that, in fact, occurred.

On the first component of the analysis, which turns on the contract specifications of the dewatering/diversion work, we find that Madden clearly had the duty to perform such dewatering of the site as was necessary “in order to keep the construction areas free of water” (emphasis added) and nothing more. Madden was not contractually bound to meet any other standard of performance and its contract obligation was not with reference to any area beyond the construction site itself.

Article 502.01, cited by the Respondent, is immaterial: it adds nothing to the analysis, as it is purely descriptive and sets forth no performance standards whatsoever. The fact that IDOT approved a specific dewatering plan that contemplated a particular flow diversion that was less than a 100% diversion of the creek is just icing on this particular cake. IDOT could have, but did not, specify a dewatering standard in its contract specifications — which could have been a water-flow standard or a percentage of the creek flow standard or, as IDOT finally chose in its supplemental work order, an elevation standard. But having elected not to impose a specific standard on this dewatering work, and having failed to show or even to contend that the contractor failed to meet the only standard identifiable in this contract — the “dry construction site” standard — IDOT cannot now claim that the contract terms required more work than Madden performed with its own approval.

The second component of the scope of work analysis is a closer question. Article 107.19 of the standard specifications, imposing a duty to protect private property, including crops, that are “contiguous to the work,” which the Respondent cites to us, is plainly an imposition of an important duty on IDOT construction contractors and is clearly germane here. However, we are not persuaded that this provision is broad enough or strong enough to reach the facts presented in this case, for several reasons.

First, the private property that was here affected by the contractors performance was not merely contiguous to the work site, but extended considerable distances from the creek and bridge; this “contiguous” property language is simply not aimed at, and does not encompass, non-adjacent drainage problems as are involved in this case. Second, a reading of the entire article 107.09 indicates that its focus is on physical damage due to movement or alteration of structures and ground. Although the language is broad enough to encompass water damage caused by construction activities, the language is just not broad enough or specific enough to reach the kind of underground drainage problems that are not specific to the construction site. Indeed, if this language were construed to reach drainage problems on non-adjacent properties, it would impose a substantial and unpredictable risk on every contractor in every urbanized or suburbanized area of the State — where water deliveiy and drainage systems are always present — and in every rural project where a local water source is present. Imposition of such far-reaching risks without specific language mandating them is not our province. We find no such language in any of IDOTs standard specifications to which we have been directed.

IDOT is free to alter its standard specifications to impose such extensive drainage responsibilities on its contractors, if it chooses, notwithstanding Maddens protest that it — like all bidders and contractors — lacks the knowledge and the access to obtain the knowledge of underground conditions on off-site properties from which it could calculate a reasonable risk-cost to include in its bid. That is a policy decision for IDOT to make. We find, however, that the current provision at issue here just does not reach or encompass the kind of drainage backup problem on adjacent and non-adjacent farmlands as occurred in this case. Accordingly, we again find that the “additional” dewatering work directed by IDOT was not work that was required under the terms of the original contract.

Conclusion

For these reasons, we find that the additional dewatering work directed by IDOT was a contract addition under the terms of the original contract, and that the Claimant is entitled to additional compensation for its additional performance.

Given this finding, and in accordance with our analysis above, there is no need to decide the alternative “changed condition” theory of liability. We observe, in passing, however, that the applicability of the changed condition doctrine is at least seemingly inapplicable to this claim, as neither party has even alleged that the subsurface drainage “condition” had any impact on the performance of the construction work, and in light of our rejection of the contention that the contractor was contractually responsible for these off-site property damages.

Although the Respondent has not disputed the damages claimed by the Claimant in its summary judgment motion, the focus of the parties’ motions has been on the liability issue, and we are reluctant to foreclose the Respondent or to remit it to a petition for rehearing on the damages issue, particularly in light of the parties’ failure to advise the Court as to the status of the appropriation from which this project was to be paid, and in light of the Claimant’s request for pre-judgment interest which has not been addressed by either party. We are unable now to determine if we can enter judgment on this claim.

The Court grants partial summary judgment to the Claimant on the issue of liability.

The Respondent is directed to file a supplementary submission setting forth (a) any legal or factual objections to the Claimant’s claim of $73,352.15 in contract damages and (b) any legal objections to Claimant’s request for prejudgment interest, and (c) a report on the status of the appropriations relevant to this claim, within 28 days of the entry of this opinion and order.

The Claimant may file a reply to the Respondent’s supplemental submission within 21 days after it is filed and served on Claimant’s counsel.

The Court will enter an appropriate award or judgment upon receipt of the foregoing submissions.

ORDER

Epstein, J.

On January 23, 1996, this Court issued an opinion in this case granting summary judgment as to liability on this claim. The Court did not make an award, but granted the Respondent time to submit any objections to Claimant’s damages and pre-judgment interest claims, and directed the Respondent to report on the status of the appropriations germane to this claim so that an appropriate award might be made if lapsed appropriations authority in fact would support an award. The State has not complied with our order, and has failed to file, anything in response to our directive. The Claimant, understandably, has not filed further pleadings.

Because we are not advised as to the status of the appropriations and lapses, the Court cannot make an award on this claim. However, we will not allow this claim on a 1989 IDOT construction contract, having been adjudicated in favor of the Claimant, to go unpaid because of the State’s unresponsiveness. Accordingly, on our own motion, it is hereby ordered:

1. Claimant’s demand for pre-judgment interest is denied;

2. Claimant’s actual damages are found to be $73,352.15; and

3. No award is made solely due to the uncertainty of the existence of proper supporting lapsed appropriations to IDOT; and

4. It is recommended that the General Assembly appropriate the sum of $73,352.15 to Claimant, Thos. M. Madden Co. as full and complete compensation for its claim herein.


text:
    (Nos. 91-CC-3559, 92-CC-0604 cons.
    Sargent & Lundy and The Earth Technology Corp., Claimants, v. The State of Illinois, Respondent.

      Opinion filed January 30, 1996.

    McDermott, Will, & Emery (Richard Sandler, of counsel), for Claimants.
    Claudia Lovelette, for Respondent.
   OPINION

Frederick, J.

This case comes before the Court on Respondents motion to dismiss and for summary judgment. These two cases have been consolidated for trial purposes. The Court has carefully reviewed all of the pleadings in this case, and the Court has heard the oral arguments of counsel for all of the parties.

The Facts

Pursuant to the Low-Level Radioactive Waste Policy Act of 1980, 42 U.S.C., 2021b, et seq., the Respondent, State of Illinois, was designated by the Central Midwest Interstate Low-Level Radioactive Waste Commission as the entity responsible for providing a low-level radioactive waste disposal facility for the State of Illinois and the Commonwealth of Kentucky. Acting through the Illinois Department of Nuclear Safety (“IDNS”), the State of Illinois entered into a contract with Westinghouse Electric Corporation (“Westinghouse”) after Westinghouse submitted a proposal for the design, development, construction, and operation of a low-level radioactive waste disposal facility on land to be selected and acquired by IDNS for that purpose. The contract between the State of Illinois and Westinghouse was executed effective September 1,1988.

In May of 1989, Westinghouse abandoned the project. Westinghouse failed to make substantial progress in any phase of the work. After Westinghouse s abandonment of the project, the Respondent was forced to start the project over again with a new contractor. At the time Westinghouse stopped work on the project, the State had paid Westinghouse and its subcontractors, including Claimants, Sargent & Lundy and The Earth Technology Corporation, in excess of $1.85 million for unusable work. Also, at the time Westinghouse stopped working, it had submitted invoices in excess of $1.6 million which the Respondent has declined to pay. Westinghouse has never sued the State of Illinois to recover this $1.6 million from the State of Illinois.

On February 6, 1989, Claimant, The Earth Technology Corporation, executed a subcontract with Westinghouse to provide environmental studies in connection with the low-level waste facility project. In early May of 1989, just weeks before Westinghouse abandoned the project, Claimant, Sargent & Lundy, signed a subcontract with Westinghouse to provide design and engineering services. The Respondent did not participate in the negotiations of these two subcontracts with Westinghouse. A memorandum prepared by R.J. Suslick, Sargent & Lundy’s project manager, indicated the State was purposely excluded from these negotiations. The memorandum stated, “IDNS had expressed an interest to Westinghouse to participate in their subcontract negotiations with Sargent & Lundy. Westinghouse denied this request.”

The Claimants claim that they are owed money for work they did prior to Westinghouse’s abandonment of the project. The Earth Technology Corporation chairman and CEO, Jack Schoustra, repeatedly threatened to sue Westinghouse but The Earth Technology Corporation never acted on those threats, and neither Claimant has sued Westinghouse to recover any monies.

In these consolidated actions, Sargent & Lundy and The Earth Technology Corporation, subcontractors to Westinghouse, seek to recover directly from the State for unpaid invoices that they submitted to Westinghouse. There is no dispute that neither Sargent & Lundy nor The Earth Technology Corporation had a contract with the State. Both Sargent & Lundy and The Earth Technology Corporation were subcontractors of Westinghouse and received payment from the State based on invoices they submitted to Westinghouse. The contract between Westinghouse and the State did specify that the State would pay Sargent & Lundy and The Earth Technology Corporation directly and not through Westinghouse. It is uncontradicted that this procedure was adopted for the benefit of the State in an effort to save the State the cost of Westinghouse’s substantial mark-up.

The Respondent’s contract with Westinghouse provides that Westinghouse was to be paid on a cost plus basis. The State’s contract with Westinghouse provided:

“B. The services of all Subcontractors, other than of Sargent & Lundy and Earth Technology, in performance of the Work and the costs of all materials used by (Westinghouse) or any Subcontractor, other than Sargent & Lundy and Earth Technology, in performance of the Work shall be invoiced to the Department at one hundred ten percent (110%) of the sum of actual cost plus (Westinghouse’s) general and administration cost as hereinafter defined (‘G&A’). (Westinghouse’s) G&A rate for 1988 shall be forty-eight percent (48%) * * “.
C. The services of, and the costs of all materials used by, Sargent & Lundy and Earth Technology shall be invoiced to the Department at face value. In addition, (Westinghouse) may invoice the Department for a fee of not more than ten percent (10%) of any amount invoiced to the Department for Sargent & Lundy and Earth Technology, and any additional direct costs actually incurred by (Westinghouse) in managing and administering the Sargent & Lundy and Earth Technology Subcontracts, using the rates specified in part (A) above.”

The State refuses to pay Claimants.

The Law

Although Claimants have no privity of contract with the Respondent, the Claimants have failed to sue Westinghouse with whom they have privity of contract. Because there is no privity of contract with the State and because this Court will only imply a contract in very limited emergency situations, the Claimants seek to recover against the State of Illinois as third-party beneficiaries. This is not an emergency situation where this Court would consider finding an implied contract. There is no other basis upon which Claimants could recover on their claims before this Court at this time.

Therefore, the only way the Claimants could possibly recover is if Claimants are found to be third-party beneficiaries of the agreement between the State of Illinois and Westinghouse which was a public contract in existence prior to the two subcontracts. However, the public prime contract between the State of Illinois and Westinghouse specifically states, “Nothing in this agreement, however, shall create or be deemed to create any third-party beneficiary rights * * Under Illinois law, there is a strong presumption against creating rights in a third-party beneficiary. (Midwest Concrete Products Co. v. LaSalle National Bank (1981), 94 Ill. App. 3d 394.) To overcome this presumption, the intent to benefit a third party must affirmatively appear from the language of the instrument and the circumstances surrounding the parties at the time of its execution. (Bates & Rogers Construction Corp. v. Greeley & Hansen (1985), 109 Ill. 2d 225.) The Court in Bates & Rogers, supra, stated:

“Only third parties who are direct beneficiaries have rights under a contract. It is not enough that the third parly will reap incidental benefits from the contract. The test is whether the benefit to the third person is direct to him or is but an incidental benefit to him arising from the contract. A third party is a direct beneficiary when the contracting parties have manifested an intent to confer a benefit upon the third party.
With respect to construction contracts this court has held that it is not enough that the parties to the contract know, expect or intend that others will benefit from the construction of the building in that they will be users of it. The contract must be undertaken for the plaintiff’s direct benefit and the contract itself must affirmatively make this intention clear. 155 Harbor Drive Condominium Ass’n. v. Harbor Point, Inc. (1991), 209 Ill. App. 3d 631; Altevogt v. Brinkoetter (1981), 85 Ill. 2d 44.”

Neither Sargent & Lundy nor The Earth Technology Corporation can satisfy this burden because the prime contract between IDNS and Westinghouse expressly bars third-party beneficiaries, and the direct payment provision in the IDNS contract was intended to benefit the State, by avoiding Westinghouse s substantial mark-up of charges that it paid. There is no benefit that Claimants can claim from the fact that payment was directly from the Respondent rather than from Westinghouse.

The contract between the State and Westinghouse expressly negates any intent to benefit either Sargent & Lundy or The Earth Technology Corporation. Paragraph 29.11 of the prime contract provides in express and unqualified terms that: Claimants have provided no authority to the Court which indicates there can be a third-party beneficiary in the face of this specific language prohibiting third-party beneficiary status. Claimants want the Court to rewrite the prime contract to add the language “except for Sargent & Lundy and The Earth Technology Corporation” at the end of Paragraph 29.11 of the contract between the State of Illinois and Westinghouse. This we cannot do. This was a public contract in existence at the time the Claimants entered into their subcontracts. Neither Sargent & Lundy nor The Earth Technology Corporation is a signatory to the prime agreement. Neither Sargent & Lundy nor The Earth Technology Corporation has the right to sue the State as third-party beneficiaries of this prime agreement.

“Nothing in this Agreement, however, shall create or be deemed to create any third-party beneficiary rights in any Person not a signatoiy party to this Agreement.”

The Court does not accept Claimants’ argument that they are unable to sue Westinghouse for their work. Claimants may have a claim against Westinghouse but in the event they do not, it is solely the result of poor contract language in the face of the express bar to third-party beneficiary status in the Westinghouse-State prime public agreement. Anyone who deals with the State must understand that you do not work on a handshake or hope of third-party beneficiary status. New Life Development Corp. v. State (1992), 45 Ill. Ct. Cl. 65.

This Court must construe the prime contract as it exists and will not rewrite the contract. Absent any authority to the contrary, the bar to third-party beneficiary rights will be upheld.

Additionally, there is no manifest intention from which to imply such rights. As clearly shown in the provisions of the contract excusing the State from paying Westinghouse’s 48 percent G&A rate of these subcontractors’ invoices, the direct payment provision of the IDNS-Westinghouse contract was intended to benefit the State and not Sargent & Lundy and The Earth Technology Corporation. By separately processing the payment of the invoices of these two subcontractors, the State could potentially save millions of dollars. The State, not Sargent & Lundy and The Earth Technology Corporation, was the intended beneficiary of this provision.

In Ables v. United States (1983), 2 Cl. Ct. 494, aff'd 732 F.2d 166 (Fed. Cir. 1984), the United States Court of Claims reviewed a similar factual situation and concluded that a provision requiring payment to a third party did not create third-party beneficiary rights in that third party.

The contract at issue in Abies was an arbitration agreement between the Air Force and a labor union, and the Claimant was an arbitrator who performed services for the parties. The Claimant sought recovery based upon a provision in the arbitration agreement that stated, “Each party shall pay the costs and expenses of the [arbitrator] they [sic] select. The parties shall share equally the costs and expenses of the neutral member.” (2 Cl. Ct. at 500.) The Court ruled that the payment provision did not create a third-party beneficiary relationship, reasoning that the agreement contemplated that payment would emanate from separate agreements between the parties and the arbitrator.

As in the pay arrangement in Abies, the contract between the IDNS and Westinghouse also contemplated a separate agreement creating contract rights in the purported third-party beneficiary, Sargent & Lundy. If Sargent & Lundy and The Earth Technology Corporation signed agreements without the States participation or approval that they now believe impair their right to payment from Westinghouse, this action did not create a third-party beneficiary relationship between Sargent & Lundy and The Earth Technology Corporation and the State.

We find there are no material issues of fact. The two Claimants are not third-party beneficiaries of the contract between the State of Illinois and Westinghouse. The specific language of that prime contract prohibits third-party beneficiary status for Claimants. We cannot ignore or strike out paragraph 29.11. While the prime contract is an unusual contract, the prohibition of third-party benefits is clear. Based on the foregoing, the Respondent, State of Illinois, is entitled to a judgment as a matter of law and the Respondent’s motion for summary judgment should be allowed. Because we are entering judgment in favor of Respondent, the Court need not consider the Respondent’s motion to dismiss for failure of Claimants to exhaust remedies for failure to sue Westinghouse and failure to file a hen pursuant to the Public Funds Lien Act.

Therefore, it is ordered:

A. The Respondent’s motion for summary judgment is granted against both Claimants.

B. Judgment is entered in favor of Respondent and against Claimants, Sargent & Lundy, an Illinois general partnership, and The Earth Technology Corporation, on Claimants’ amended complaint.

C. That the claim of Claimant, Sargent & Lundy, an Illinois general partnership, is denied.

D. That the claim of Claimant, The Earth Technology Corporation, is denied.


author: Raucci, J.

text:
    (No. 92-CC-0388
    Dana van Der Heyden, Claimant, v. The State of Illinois, Respondent.

      Opinion filed April 11, 1996.

    Murphy, Hupp, Foote, Mielke and Kinnally (Timothy D. O’Neil, of counsel), for Claimant.
    Jim Ryan, Attorney General (Brian K. Farley, Assistant Attorney General, of counsel), for Respondent.
   OPINION

Raucci, J.

This matter comes before us after hearing before the Commissioner. On Labor Day weekend, September 3, 1989, Claimant, Dana van Der Heyden (“Claimant”), his wife and several friends visited Starved Rock State Park (“Starved Rock”) near Ottawa, Illinois. After approximately an hour hiking on the trails, Claimant, his wife and one of his friends were trying to find their way back to their van in the parking lot near the Riverside entrance. When they spotted a vehicle entrance, they left the trail and cut across a wooded area to a grassy area near the vehicular entrance gate. At the side of the 32-foot double gate, the park administration had constructed barricades designed to keep motorcycles, four-wheel drive and utility vehicles and other off-road vehicles from gaining access to the park during the times when the gates, and thus the park, are closed. The barricade, built in 1977, consists of 55-gallon drums sunk approximately two-thirds of the way into the ground, allowing about 12 inches of exposed barrel to remain above ground. The drums are filled with concrete and have a cable strung in continuous fashion from the edge of the steel gate to each drum at spaced intervals, with tire cable terminating by being wrapped around the trunk of a tree and tied. The cable runs approximately 10 to 12 inches off the ground. In negotiating his way back to the parking lot, Claimant has testified that he tripped over the cable, causing him to fall on his elbow, striking the concrete “lid” in the middle drum of five situated on the east side of the entrance. Claimant sustained serious injury to his elbow, necessitating multiple surgeries and causing Claimant to lose several months of work. Claimant also alleges that his inability to “lock” his elbow has curtailed his career as an HVAC (heating, ventilating and air conditioning) installer, permanently depressed his earning power, and caused him embarrassing disfigurement, pain and suffering, and permanent injury.

The Court does not doubt that Claimant suffered an injury and that it might well have been caused by Claimant’s striking a concrete-filled barrel at the park. The question is whether Claimant proved by a preponderance of the evidence that (a) a dangerous condition existed; (b) that the State knew of the condition; and, (c) that the condition caused the fall.

Because the State erected the barricade in question, the State was obviously aware of the existence of the barricade. The question becomes one of whether the barricade, as originally erected and as maintained, presented an unreasonably dangerous condition on July 3, 1989. The question of liability ultimately is whether the State should have reasonably foreseen that pedestrians using the park would decide to cut across established trails, circumvent the gate and would not recognize that a cable had been strung between the barrels used as a barricade.

Claimant relies on the testimony of his expert, Francis W. Biehl, an engineer. Mr. Biehl testified that he relied upon guides used in setting up snowmobiling and skiing trails as well as general forest management guides. It was Mr. Biehls opinion that the park could have utilized other methods and materials at the accident scene, giving as examples, four-foot upright timbers spaced apart, wooden posts with an upright steel cable hung between, and even using fallen trees or brush. However, the testimony of complex superintendent Jon Blume is compelling. Wooden gates and posts had been used prior to 1977. Motorcycle gangs and other people intent on violating the parks curfew and substance abuse laws, or on committing acts of vandalism would drive over the wooden gates smashing them, use chain saws on other wooden barricades, use winches to tear down post-and-upright barricades, rip trees from the ground, and set fire to brush or logs used as barricades. Only the concrete-filled barrels and cable have effectively deterred lawbreakers. Given the potential for crime and mischief and the States duty to protect campers from criminal conduct and forest fires, the States solution is neither draconian nor unreasonable. Mr. Biehl suggested that the cable should have been placed at a higher level, possibly four feet or eye level; however, he had earlier stated that he testified in Michigan concerning a snowmobile decapitation. Mr. Biehl further admitted that during the considerable time he spent observing the barricade and the surrounding area, he saw no one attempt to walk over the barrier as Claimant had attempted.

Finally, Blume and Vecchi, the site superintendent, testified that neither of them have any record or recollection of any report of injury or complaint regarding the barricaded area. Much was made by Claimant of the question of what color the cable was on the day of the injury. We accept the testimony of Claimants expert that it was a “grayish steel color.” Whether the State should have painted the cable a bright yellow or orange is speculation, and does not indicate that a different color cable would have prevented this accident.

Claimant hurt his credibility in at least two instances. First, Claimants attempts to prove lost wages were lamentable. Claimant admitted that he made about $19,000 to $20,000 in 1988, but reported only $12,703 for 1989, the year in which the injury occurred. This $12,703, representing eight months wages, only extrapolates, at best, to about $19,000, but Claimant stated that $12,703 was that high, because he had had a “good summer. I made a lot of money.” Claimant further testified that during his rehabilitation, his father helped out with checks drawn on the company which employed Claimant, meaning the $12,703 was further inflated from the amount Claimant actually would have earned in 1989 and 1990. The record indicates Claimant would have earned no more than $16,000 to $20,000 per year during the lost time, not $31,000 to $32,000 as Claimant testified. Further, Claimant testified that he had been “made a manager” in 1980, and ostensibly was not an installer, upon which he based his income testimony.

Second, Claimant testified that the cable was dangerous because it was totally obscured by leaves. This would have required leaves piled up to almost ten inches in depth. The difficulty with this reasoning is: (1) Labor Day weekend marks the end of summer and is usually still extremely warm. The leaves would not have changed color by then, much less fall in the quantities needed to accumulate a layer ten inches deep; and, (2) Claimants own pictures, taken either “shortly after the accident” or “within one week after the accident,” which should, being deeper into the fall, show more fallen leaves, instead show insufficient leaves to cover the grass, much less canopy the cable in question.

The barricade and cable system installed by the State of Illinois at Starved Rock near the main vehicular entrance and in four other areas of the park, was designed to ameliorate a serious problem of criminal trespass to park grounds after curfew. Its design and execution are reasonable under such circumstances. More importandy, the State had no notice that its barricades represented a dangerous condition to park users. The lack of incidents in the 12 years after installation of the barricade but prior to the Claimants injury, and in the nearly five years after the injury but prior to the trial, indicates to the contrary.

It is therefore ordered, adjudged and decreed that this claim be, and it is hereby, dismissed with prejudice and forever barred.


author: JANN, J.

text:
    (No. 92-CC-0834
    Krystal Johnson, a minor, by her Mother and Next Friend, Doris Johnson, Claimant, v. The State of Illinois, Respondent.

      Opinion filed May 15, 1996.

    William E. Reynolds and Phillip J. Rartolementi, for Claimant.

      Kralovec, Marquard, Doyle & Gibbons (Michael R. Clarke, of counsel), for Respondent.
   OPINION

JANN, J.

This is a claim brought by Claimant Kiystal Johnson, a minor against the State of Illinois, University of Illinois Childrens Center, seeking damages for personal injury she sustained after falling from a swing at the University day-care center.

Trial was held in this matter on September 9, 1994. On the trial date Respondent made an oral motion to exclude the testimony of Claimant due to the fact that she was three and one-half years old at the time of the incident. The Commissioner denied the motion since Claimant was offering testimony as to her current physical condition relevant to the issue of damages, and further, that the court could weigh the credibility of the incident testimony. As there would not be any resulting prejudice to the Respondents case, the Claimant was granted leave to testify.

The facts are as follows:

Doris Johnson, Claimants mother, testified that on April 5,1990 she was working for the University of Illinois Nutritional Services and her daughter Krystal was enrolled in day-care at the University of Illinois Childrens Center. At approximately 11:00 a.m., Doris Johnson was at work when she received a phone call that Krystal had fallen and that she appeared to be all right, so Doris finished her work shift and proceeded to pick Krystal up at approximately 2:45 p.m.

When Doris arrived, she observed Krystal lying on her cot. Krystal was crying and complained of pain in her shoulder and on her whole right side. Doris took Krystal to the hospital and x-rays determined that she had suffered a broken collarbone and her arm was put in a sling. Krystal wore the sling for four to six weeks and her play activities were restricted during that period. Krystal required assistance eating, dressing herself and going to the washroom. Krystal complained of throbbing pain, she took Motrin and soaked in a warm tub for relief. Doris testified that Krystal complained of pain as recently as the weekend prior to the trial date.

On cross-examination, Doris acknowledged that Krystal was again treated at the emergency room for an injury to her right collarbone when she fell out of bed in December, 1990. She further admitted that Krystal had not received any treatment for her shoulder from May 18, 1990 (approximately one month after the first incident) to December, 1990 when she was treated for her fall from bed.

The Claimant, Krystal Johnson, testified that at the time of the trial she was eight years old. She identified a picture of the Childrens Center, related some of the activities she was involved in at the center and identified her teachers, David and Linda, in the courtroom.

She testified that on the day of the incident she was on the tire swing with two other girls. She said that she had her feet in the hole and her hands on the chains. David, the teacher, was pushing the swing in a circular motion. She had been on the swing with David pushing on prior occasions.

She testified that in a “normal” voice she asked David to take her off the swing because she was getting sick and dizzy, but that David didn’t respond because he was talking to the other teacher.

She stated that she asked him to take her off a second time and then she fell off the swing. She said that she fell on her right side and that she was crying and experiencing a “throbbing” pain. She went to take her nap and stayed on the cot for the rest of the day until her mother came to pick her up.

Krystal related the trip to the hospital and receiving pain medication and a sling for her arm. She testified that she couldn’t play or feed herself and that she experienced pain during the period she had the sling on her arm. She testified that she still experiences pain when she plays in gym or lays on her right side or occasionally when she reaches for something. She testified that she did not have any recollection of falling out of bed.

On cross-examination, Krystal said that she was “coming up on three” years old at the time of the accident. She testified that she was at the Children’s Center for approximately a month prior to the incident and that she went on the tire swing approximately every other day. She stated that she did let go of the tire swing because she got “dizzy, and it got out of control,” and that the swing was not broken.

She testified that the injury doesn’t hurt her very often and she participates in gym class and plays on the football team at school.

The Claimant submitted medical bills in the amount of $356.25. The Respondent called Linda Sims Johnson, child development supervisor at the Children’s Center. She testified that in April of 1990, she was one of two supervisors for 15 children at the University of Illinois Children’s Center. She stated that she was present, standing at a distance of about ten feet, and observed David pushing Krystal and two other children on the tire swing just prior to Krystal’s accident on April 5, 1990. She testified that she was not talking to David at the time of the incident. She recalled David pushing the children back and forth in a safe manner. She observed the children holding the chains and that they appeared to be having fun. She did not hear any of the children call out to stop the swing. The witness did not see Krystal fall from the swing.

The Respondent also called David Martines. He testified that he is currently a classroom teacher in the Head Start School Program in Milwaukee, Wisconsin. At the time of trial he had been in the child development field for ten years and received his master’s degree in early childhood development in 1990. David testified that tire tire swing was fun for children and encouraged socialization. He stated that he would typically push the children by holding the chains in two spots and initiating a circular motion and that he frequently reminded the children to hold on to the chains.

At the time of Krystal’s accident, Mr. Martines pushed the swing as he normally would, the children appeared to be having a good time and he did not hear Krystal ask to stop the swing. David testified that they were on the swing for approximately one minute when Krystal let go of the swing and he saw her fall backwards.

David estimated that while he was pushing the swing, the highest point the swing would have reached was about three feet. He confirmed that he was not talking to Linda at the time of Krystals fall but stated that he had turned his back slightly to clear his body from the motion of the swing. He concluded that there was nothing he could have done to prevent Krystal from falling.

Neither party submitted a brief in support of their claim.

The law is well established that in order to maintain an action in negligence the Claimant must establish by a preponderance of the evidence that the Respondent owed Claimant a duty, that the duty to Claimant was breached by a negligent act or omission to act, and that the negligence proximately caused the compensable injury. O’Neill v. State (1983), 46 Ill. Ct. Cl. 146, 148.

In this case it is clear that, as a minor child in the charge of the State-operated facility, Claimant was entitled to an expectation of reasonable care. The Claimants complaint alleges that the State was negligent by allowing the swing to be in a defective condition and by failing to warn Claimant of the defect. However, at hearing the Claimant did not offer any evidence that the swing was defective or in disrepair.

The issue at the hearing primarily centered on an alleged failure by the caretakers or teachers to properly supervise the young students, although those allegations were never made in the complaint.

The facts are basically uncontested that there were two qualified teachers physically present and supervising a group of 15 children in the play lot of the Childrens Center. One of the teachers was pushing Claimant and two other children in a reasonable and usual manner for about one minute when the four-year-old Claimant became frightened or dizzy and let go of the chains, causing her to fall backwards from the swing.

Both the Claimant and the teacher established that the Claimant had been on the swing many times prior to the date of her fall without incident.

Clearly, the injury to the Claimant was an unfortunate incident, but there is not credible evidence to establish that the Respondent or its agents were in any way negligent by act or omission. The teachers acted reasonably and with due care for the Claimant. The Claimant, even at age eight, is a soft-spoken, mild-mannered young lady and it is clear that if she did, in fact, ask David to stop the swing, he did not hear her.

The Claimant in this case has failed to meet her burden of proof. This claim is hereby denied.