Trapani Construction Co.3-2573, Inc. v. Elliot Group, Inc.
2016 IL App (1st) 143734
| Ill. App. Ct. | 2016Background
- Trapani (general contractor) sent a series of draft contracts (last dated July 5, 2007) to The Elliott Group (developer) to perform site-work at the Arlington Market project; none of the drafts were signed but Trapani commenced and completed the work.
- Trapani submitted periodic payment applications and related documents addressed to Elliott; Elliott reviewed them, approved 16 change orders, and paid Trapani $2,042,846.50 over the course of performance.
- Trapani was not paid a final balance of $257,764.70 and sued for breach of a contract implied in fact (after dismissing other claims and co-defendants).
- Elliott claimed it was acting as agent/consultant for Arlington Market LLC (the property owner), pointed to an escrow/disbursement agreement signed by Arlington Market and to riders allegedly sent to Trapani identifying Arlington Market as owner. Elliott did not produce emails proving Trapani received the riders.
- The trial court found a contract implied in fact existed and that Elliott failed to disclose its agency relationship, making Elliott personally liable; the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a contract implied in fact | Performance, course of dealing, payment applications, inspections, approvals and progress payments show mutual intent to contract | No acceptance, no consideration, no meeting of minds because drafts were unsigned and parties never executed the July 5 draft | Court: Sufficient objective manifestations (course of dealing, payments, change orders, review/approval) supported a contract implied in fact; ruling not against manifest weight of evidence |
| Signature requirement on July 5 draft | Even if unsigned, signature not essential where assent is shown by conduct; performance and payments established acceptance | Draft required signature to bind; lack of signature precludes acceptance | Forfeited on appeal (issue not raised below); alternatively, court held assent shown by conduct so signature not required to bind under facts |
| Agency / disclosure of principal (Arlington Market) | Elliott did not clearly disclose he acted as agent; Trapani reasonably relied on Elliott and identified Elliott as owner on key documents | Documents (July 16 letter, escrow agreement, riders) put Trapani on notice Elliott acted for Arlington Market; payments came from Arlington Market | Court: Elliott failed to show actual, clear disclosure. Letter and escrow alone were insufficient; riders not proven delivered. Elliott thus personally liable; finding supported by evidence |
Key Cases Cited
- Foutch v. O’Bryant, 99 Ill. 2d 389 (procedural rule on appellant’s duty to provide complete record)
- Brody v. Finch Univ. of Health Sciences/The Chicago Med. Sch., 298 Ill. App. 3d 146 (manifest weight standard and when trial judge’s factual findings will not be disturbed)
- Bazydlo v. Volant, 164 Ill. 2d 207 (trial judge’s superior position to judge witness credibility)
- Matthews v. Chicago Transit Authority, 2016 IL 117638 (contract implied in fact as true contract; arises from promissory expression shown by facts and circumstances)
- Schivarelli v. Chicago Transit Authority, 355 Ill. App. 3d 93 (acceptance for implied-in-fact contract can be proven by course of dealing and conduct)
- Kimco Corp. v. Murdoch, Coll & Lillibridge, Inc., 313 Ill. App. 3d 768 (agent contracting for undisclosed principal remains personally liable unless identity is clearly disclosed)