MJC Constructors Inc. v. State of Illinois, Department of Transportation

OPINION

Storino, J.

Claimant, MJC Constructors, Inc., (MJC) brings this action against the State of Illinois, Department of Transportation - Division of Aeronautics (IDOT), Respondent, alleging breach of contract and seeks monetary damages, plus interest and costs of suit. This Court has jurisdiction pursuant to 705 ILCS 505/8.

Procedural History

MJC filed its Complaint on March 28, 2007, attaching a copy of the Construction [*143] Contract and Bond.

Respondent filed its Answer on May 29, 2007, denying generally the allegations in MJC's Complaint and setting forth affirmative defenses: a) MJC failed to timely complete the work as provided by Contract plus extension time; b) MJC completed its work 123 days after the allowable time; and c) Respondent is entitled to damages as provided by Contract for the failure to timely complete the work. Respondent seeks a reduction of any judgment that is rendered by a set-off amount that is attributable to MJC's breach of contract.

Final hearing was conducted October 22 and 23, 2008, before the assigned commissioner.

Facts

Claimant MJC was awarded Construction Contract No. 3501 (SC602) (the Contract) by IDOT on October 4, 2005, for all work to be performed on the Sedimentation Basin Conversion Project (the project) located at MidAmerica Airport in St. Clair County, Illinois. The three sedimentation basins (also referred to as ponds), designated as Basin No. 178 (pond 1), Basin No. 169 (pond 2) and Basin No. 145 (pond 3) were to be drained and reconstructed so as not to retain water. Generally speaking, the goal was to eliminate standing water near the runways so that birds and other wildlife would not be attracted to the area creating a safety hazard for air traffic. Pond 1 drained according to plan and is not at issue here. Ponds 2 and 3 did not drain as anticipated and are the center of this dispute.

The Contract

The required completion date under the terms of the Contract was sixty calendar days from the date of commencement of work. Specifically, the Contract provided that work shall be commenced within ten days after the Notice to Proceed (NTP) was issued. The NTP was issued by IDOT on October 31, 2005. MJC sent a Construction Start Date letter to IDOT advising that [*144] it began work on November 2, 2005. Accordingly, the initial required completion date was calculated to be January 2, 2006, and an agreed damage figure of $550 per day for each day beyond sixty days is provided by the Contract terms. MJC issued its notice of substantial completion to IDOT on November 3, 2006.

The Contract provided that MJC shall furnish the materials for and perform all the work in connection with the "sedimentation basin conversion" in the referenced project for the Contract price of $303,000.00, based upon: the unit bid prices submitted on estimated quantities, in strict accordance with listed provisions and employment practices; the Schedule of Prices attached; the June 10, 2005, plan drawings prepared for IDOT by Earth Tech, Inc. (Earth Tech) for the project; and the IDOT Standard Specifications for Construction of Airports dated January 1985, incorporated by reference into the Contract.

The parties agree that the Contract consists of the original Contract, the plan drawings dated June 10, 2005, the Proposal, Change Orders 1 and 2, and the Standard Specifications for Construction of Airports. The parties do not agree that Change Order 3 is part of the Contract at issue because it seeks to assess the disputed liquidated damages at issue here.

The Letters

Although the parties disagree about the proper course of action, they do agree that the

project stood idle for several months and ponds 2 and 3 did not drain. In late December 2005,

MJC sought clear direction from Earth Tech regarding material unsuitable for grading to the

tolerances as provided by plan on ponds 2 and 3, along with a few other concerns about disposal

and equipment necessitated by conditions different than planned. Earth Tech told MJC the

grading would be adequate if no ponding occurred, even if tolerances are exceeded.

On January 11, 2006, MJC wrote Earth Tech that it needed the Resident Engineer to [*145] locate and reference the centerline of survey and noted that MJC has been delayed by the lack of this layout since December 28, 2005. MJC further acknowledged Earth Tech's position that the work would be deemed acceptable if positive drainage is maintained. Further, MJC sets out the conditions of materials and elevations different than those that could have been determined prior to the bid and agreed to grade ponds 2 and 3, accordingly.

Thereafter, inclement weather rendered the site conditions unsuitable for work according to MJC and, in particular, the haul road to be used for access to the ponds could not be constructed. On February 7, 2006, MJC requested a Contract modification to allow for a solid base haul road to provide site access. MJC requested and attended a meeting to discuss accessibility on February 27, 2006. Thereafter, letters were exchanged disputing everything from the weather to drainage methods, grading and security clearances.

Mother Nature then contributed to the drainage problem with abundant rainfall during early 2006. Site conditions were saturated from December 2005, through March 2006. By March 27, 2006, MJC was still seeking clear direction from Earth Tech on how to proceed and had previously suggested a conference to air differences. On March 28, 2006, Earth Tech sent a non-responsive letter that says, in essence, you already have our answer. Earth Tech acknowledged the saturated condition of the ponds and the haul road on that date. On April 3, 2006, MJC wrote Earth Tech summarizing the work shutdown period on critical items since November 28, 2005, and predicted that period would extend well into the spring and possibly summer.

On May 9, 2006, MJC advised Earth Tech that 1) the pond excavations were complete to the best of their abilities given the site conditions 2) requested confirmation that the ponds were acceptable for seeding and erosion blanket, and 3) the haul route would be completed at the first [*146] opportunity allowed by weather. An e-mail correspondence on May 18, 2006, to Earth Tech from MJC advised that the haul route was still too wet and made the same request for Earth Tech to review the site.

In response, on May 19, 2006, Earth Tech directed MJC to drain ponds 2 and 3 by whatever means MJC decided was necessary with the goal of getting water to flow through.

Earth Tech advised MJC that draining and discing those ponds would expedite drying and allow final grading to Contract specifications as discussed at the April 18, 2006, site meeting.

On May 24, 2006, MJC documented in a letter to Earth Tech that the site was still too wet to work on the haul route, and reiterated that ponds 2 and 3 had vastly different material than pond 1 at the bottom. The letter stated that as such, ponds 2 and 3 do not allow for excavation to a sound bottom and prohibit access by the equipment to cut and fill to the lines and grades on the plan drawings.

On May 31, 2006, MJC made a formal notice of claim for additional compensation and requested an extension of time due to conditions other than those provided in the Contract, i.e., the bottoms of the ponds at issue are lower than indicated on the plan drawings and the contours of those ponds are also different than those depicted on the contour sheets in the plan drawings.

In short, MJC asserted that pockets of water and unsuitable materials below the design elevations require excavation and drainage not anticipated at the time of the bid.

On June 9, 2006, Earth Tech wrote MJC (received June 13, 2006) regarding the same, now stale, disputes and claimed that it would consider recommending the exclusion of unworkable days from the Contract period during inclement weather and items out of MJC's control, if MJC details its justification for each day. Earth Tech directed MJC to return to work by June 26, 2006, or be considered as failing to respond. On June 27, 2006, MJC wrote Earth [*147] Tech confirming that MJC agreed to return to the site under protest, as well as track and complete the additional work and submit an equitable adjustment of the Contract. Disputes remain at the time of completion on ponds 2 and 3 as well as the necessity of the haul road.

The Ponds

Standing water remained in some areas of pond 3 in April 2006. On April 18, 2006, MJC informed Earth Tech that the basin elevation in pond 3 was lower than represented in the plan drawings preventing completion of work and a site meeting was held. This meeting confirmed MJC's position since December 2005, that the lack of drainage rendered the area unworkable and lower than depicted in the Contract.

On June 26, 2006, MJC wrote Earth Tech confirming that permission had been given by Earth Tech to allow MJC to cut a drainage ditch through the berms, so long as MJC fills in and re-establishes compaction to the berms' current condition. Also confirmed was MJC's reservation of rights for additional costs incurred to complete the work. On June 27, 2006, Earth Tech directed MJC to perform the work, claimed as additional work by MJC, under threat of termination.

MJC breached the berm on pond 3 on June 29, 2006, so that excavation and grading

could be completed. The parties had not anticipated this method of drainage in its Contract and

do not agree that the actual elevation was substantially different than the plan drawings on pond

3. According to MJC, the previously requested survey information from Earth Tech received on

July 12, 2006, illustrates material differences than existing conditions represented in the

Contract; in particular, the existing grades in pond 3 were eighteen inches lower than represented

in the Contract. As a result, pond 3 did not drain through the discharge structure as planned

during bidding.

[*148] Ultimately, after the berm was breached in pond 3, it was regraded to adjusted grades by

the field representative to eliminate ponding by filling in the area, instead of excavating one foot

as originally called for in the Contract. MJC claims that it incurred an additional $13,803.57, in

costs to complete the work on pond 3 by breaching the berm and regrading the basin. On August

23, 2006, MJC submitted its proposal to Earth Tech with supporting documentation for work

completed on pond 3.

On August 4, 2006, MJC again notified Earth Tech that the reconstruction work could not be performed according to the plan drawings for pond 2 because the conditions were materially different than represented in the Contract. After breaching the berm two and one-half feet lower than the drainage structure, the contours were as much as two feet lower in places than the Contract indicated. This necessitated importing material to attain the final grades contained in the Contract. Alternatively, a new outfall pipe could be installed at an elevation low enough to insure drainage but the existing materials could not be prepared for seeding and blanket work.

MJC's suggestions in this regard had been presented to Earth Tech's field representative but were summarily dismissed.

MJC received a letter dated August 14, 2006, from Earth Tech requesting a proposal to lower the flow by installation of a new drainage pipe without providing necessary details. In response, MJC submitted additional questions on August 17, 2006, regarding the specifications for the new drain pipe, grades and elevations, as well as existing soils and backfill for pond 2.

On August 22, 2006, MJC submitted a proposal, included with its proposal for corrections to pond 3, for a new discharge pipe installation for pond 2. On September 1, 2006, MJC re-submitted a proposal separately for pond 2 in the amount of $12,526.00, clarifying the scope of work and terms for the new discharge pipe, excluding investigative costs incurred to [*149] identify the problems. On October 11, 2006, MJC submitted yet another proposal on pond 2 in the amount of $23,989.00. This proposal included a 30 day extension. Work on pond 2 was idle from August 4, 2006, through September 7, 2006, at which time MJC received Earth Tech's approval to perform work now known as Change Order 2. MJC completed the grading work on pond 2 on October 6, 2006, but the weather did not allow for immediate seeding.

Completion

Ultimately, Earth Tech sent a non-compliance letter to MJC dated October 23, 2006, demanding corrective action within ten days by providing a written plan for the completion of the Contract and threatening default. MJC provided its written plan on October 26, 2006, addressing the outstanding work for seeding (3 to 4 days work) and removal of the silt fence after seventy-five percent growth (2 days work). Because Earth Tech would not discuss the contents of its non-compliance letter with MJC, the written plan was prepared based upon MJC's own assessment of the project and invited changes or corrections within two days.

On November 3, 2006, MJC notified Earth Tech of substantial completion and requested a final inspection. Earth Tech notified IDOT on November 13, 2006, of the substantial completion date. On November 20, 2006, Earth Tech requested MJC to provide its requested time extension justifying the accumulation of each calendar day beyond the sixty calendar days approved.

Damages Claimed

MJC alleges that IDOT has failed to pay a remaining principal balance due of $67,330.07, pursuant to Contract and, further, failed to pay $13,803.57, as the value for the supervision, labor, material and equipment, including overhead and profit for extra work performed by MJC on pond 3. MJC also alleges that it is due $23,989.00 for extra work [*150] performed as directed by IDOT. Finally, MJC alleges that it performed extra work on the project haul road at the direction of IDOT valued at $9,790.43. The total amount MJC claims due and owing for all Contract work, including extra work on pond 2, pond 3 and the project haul road is $110,275.07. MJC contends that the liquidated damages clause in the Contract is invalid and unenforceable.

Respondent claims that it does not owe the amount claimed and, further, that the appropriate calculation of liquidated damages to be used as a set-off against any monies owed under the Contract is $550 per day, pursuant to the Proposal at page 2, for 123 days of unexcused delay.

Summary of Relevant Testimony

Cornell Meyer (Meyer), President and CEO of MJC at all relevant times, testified as follows: He has been in the construction industry since 1975 performing contracts of varied sizes. At the time of this Contract, MJC had sufficient capacity and experience to perform what should have been a relatively simple project. Meyer identified the plan drawings and described his course of action to drain the ponds. He was assured by Jim Anderson with the Division of Aeronautics that the Contract time was not an issue recognizing that the seeding, mulching and fertilizing could not be performed in the winter.

In bidding the Contract, Meyer relied on the information from the owner that the Contract documents were accurate and complete. Initial plans provided temporary measures to control sediment runoff and silt erosion in anticipation of drainage flow when the plug was pulled on the ponds. MJC mobilized its equipment on November 2, 2005, and demobilized in April 2006.

Pond 1 drained, the bottom was relatively stable and it was put to grade. In one of the ponds, they expected a problem in two smaller areas which would require a pump to drain. No problem [*151] was anticipated in the other pond, according to the plan drawings.

MJC began draining and grading even though Earth Tech did not perform the survey work establishing center line control points for staking of the project until January 2006. Two of the ponds did not drain as anticipated. In response, MJC proposed that the area be overexcavated, then filled instead of cut as required in the Contract at extra cost. Meyer testified that MJC could not get Earth Tech to address the problem and then unfavorable weather conditions set in. As the project sat idle for the next few months, MJC continued to monitor the site, remained mobilized and felt comfortable that time was not an issue. No one from IDOT or Earth Tech was complaining that the project was not completed nor threatening liquidated damages, even though the project was now outside the sixty day period.

Meyer scheduled a meeting with IDOT, Division of Aeronautics, and its representatives in February to address the outstanding issues but that meeting was unsuccessful. Meyer did not ask for a time extension on the Contract at any time, relying upon earlier representations by Jim Anderson, that time was not an issue. Earth Tech's letter to Meyer dated March 9, 2006, was the first mention to Meyer that the project was overdue.

The haul route did not have a complete design. It did not provide drainage for the low areas on the haul route and Earth Tech would not address that issue either. Ultimately, MJC waited for the haul road area to dry up in summer and they installed stone in areas that had flooded.

In late March 2006, MJC was still seeking direction from Earth Tech on how to handle the soft and yielding materials, i.e., whether they should use fill from the edge of the site or go off-site. Because this was a change not contemplated in the Contract, MJC could not make a unilateral decision. Earth Tech suggested a meeting at the work site would not be productive [*152] due to the saturated conditions. Excavation work had been completed and MJC demobilized in April 2006, because it was clear that material did not need to be hauled out due to the grades lower than the Contract plan.

MJC's letter dated May 31, 2006, to Earth Tech put them on notice that MJC was incurring additional costs and that Earth Tech's failure to address the issues presented had prevented MJC from performance under the Contract. Meyer explained that no work had been performed since April 28, 2006, because MJC was still waiting for the ponds to drain or direction on how to handle the conditions where the grades were too low. No one had replied to MJC's suggestion of overexcavating and backfilling or otherwise address the problems presented. MJC then proposed to Earth Tech, on June 20, 2006, a cut through the existing levies on the two problematic ponds. This work was considered extra work because it would have been unnecessary if the grades were as represented on the Contract drawings. This type of change in design, lowering grades and breaching berms, is something that must be authorized.

Meyer testified further that Earth Tech accepted MJC's proposal, the change work was performed and it took another month to drain the ponds to dry out the soil. When the pond drained, the elevations were determined to be one and one-half to two feet lower over about 80% of the pond than what the Contract drawings represented. Excavation was never needed in the areas where the grades were lower than represented. Once clearing and grubbing was complete, it was apparent that fill material would be needed to build up the bottom and reach final grade requirements of the Contract.

Earth Tech claimed the grades were lower due to earlier excavation by MJC. Meyer denied that was possible because excavation could not be performed until the pond was drained and all work done after drainage was just clearing and grubbing. Additional direction was [*153] needed to complete the project and ultimately MJC was instructed to leave the bottom materials in place.

Meyer calculated the pond 2 design changes and submitted a claim for $23,989.00.

Regarding pond 3, MJC was told to file a claim which it did in the amount of $13,803.57. No one challenged any of the costs or supporting documents submitted by MJC.

Significantly, MJC received a default notice on October 23, 2006, from IDOT (and copied to their bonding company) at a time when the only remaining work was three to four days of light duty seeding work. A default notice on MJC's record was a very serious matter that directly impacted their ability to obtain additional work. When MJC attempted to contact Earth Tech after receiving the default notice, MJC was told by Tom Goode at Earth Tech that the Division of Aeronautics instructed him not to talk to MJC.

The project was substantially complete for its design purpose in September 2006. On November 3, 2006, MJC advised that the project was 100% complete including the seeding work.

Regarding damages, Meyer testified that MJC and IDOT differed on certain pay items such as quantities for excavation work, seeding work, and clearing and grubbing. MJC incurred additional costs to drain and regrade the haul road. Meyer also testified that Nollau, the seeding contractor, is entitled through MJC to recover on the claim he submitted because the haul roads are specified on the Contract drawings as having areas of soil disturbance included for payment under the seeding clause. Meyer believes that IDOT's position is that the seeding near the haul road is incidental to the Contract despite contrary language in the Contract.

MJC submitted a request for a time extension detailing the delays caused by weather,

lack of direction and approval for changes, and additional work required because of the change [*154]

in conditions. The calendar submitted by Meyer marking the days that MJC was able to work on

the critical path indicated a total of 68 days. Meyer testified that he believes that he should

receive the time extension through the end of the project and no liquidated damages should be

assessed.

Upon cross-examination, Meyer testified that he believes each and every item of the

project has been completed, including punch list items given to him by IDOT such as silt fence,

construction debris and contractor's lock removal. He testified as to his awareness of a lawsuit in

St. Clair County claiming that MJC owes Nollau approximately $30,000 for work on this

project. Meyer admitted that MJC wrote a letter on February 7, 2006, claiming access to the site

was the problem, rather than basin conditions. Meyer also admitted that at the beginning of the

project, MJC was looking for the machine to put the rock down on the haul road. Meyer denied

that incompletion of the haul road until the summer of 2006 delayed the project and, instead,

Meyer claimed that MJC used the haul road anyway for their equipment and that all of the

excavation work was done without the haul road completion.

Meyer denied threatening Tom Goode at the meeting in Springfield with IDOT Aeronautics. Meyer admitted that there were several new plans that contemplated earlier completion dates which were not met. Meyer quoted four reasons for delays: 1) weather; 2) extremely wet soil after draining; 3) changes to the work caused by conditions materially different than the Contract documents represented; and 4) the award of the Contract at a time when it was impossible to perform the work inside of sixty calendar days. Meyer was unaware of being given an option to wait until spring to start the Contract. Security clearances and a permit acquisition initially held up issuance of the Notice to Proceed, according to Meyer. The airport was not busy so Meyer did not believe that MJC's presence was a problem, despite the [*155] necessity for ingress and egress clearance.

Meyer clarified that 90% of the sedimentation in pond 2 did not have to be excavated. He believed that an accurate quantity was difficult to determine and Meyer's best guess was based on the volume change. Meyer observed MJC employees shooting grades in the field and also observed the cross-sections supplied. The only excavation was clearing and grubbing of materials that stayed in the basin on top of the sediment for incorporation into the final grade.

The two berms breached for draining ponds 2 and 3 were changes to the Contract, in Meyer's opinion, and qualified for additional remuneration. Meyer agreed that he considered the berm cuts beyond the scope of the original Contract and understood that Earth Tech considered those cuts to be within the scope of the Contract. Meyer believed that the Contract drawings show reasonably what they could anticipate on how the project could perform but, because conditions were different than what was represented on the drawings, the drainage did not perform as anticipated. The only specified method of drainage in the Contract was to remove the portion of the outlet structures so the blockage would be removed. Methods for excavation were not specified in the Contract. To estimate the amount of soil excavated, Meyer testified that MJC verified the volume change calculations from the cross-sections that implied over 15,000 yards and used load counts to reach an estimate. However, Meyer maintains that MJC did not touch 90% of pond 2 for excavation.

Regarding the sixty calendar day completion requirement, Meyer testified that the calculation of time must consider changes and weather, versus critical path work, and points out that the Contract also required that work get started by September 16, 2005. The work actually started November 2, 2005, and work was performed through December 2005. Critical path work could not be resumed until September 2006.

[*156] The two maps used for reference during trial were drawn by MJC's engineer, Brian Marks, based on information contained in the Contract drawings and field shots. Meyer admitted that he is not a registered engineer by education and his testimony was based on experience. In his opinion, some shrinkage in the bottom of the ponds would occur from drainage and swelling may occur for a short period of time when it rained.

On re-direct, Meyer testified that after the berm was cut on pond 2, and it was verified that the bottom of that pond was lower than indicated in the Contract documents, Earth Tech then asked for a proposal for cutting the berm, a new pipe installation, lowering the elevation below the outlet structure, and backfilling the berm. Although Earth Tech may not have agreed in June 2006, that cutting the berm in pond 2 was outside the scope of the Contract, Meyer believes that by August, Earth Tech seemed to agree with MJC which ultimately led to a change order.

Regarding the punch list, Meyer testified that there was no reference in the final closeout

document from IDOT that there remained any punch list items open. Meyer also clarified his

position that the haul road did not need to be rocked to complete the dirt work and, MJC used a

grass haul road to access the site. Meyer also explained the requirement for the use of a rock

paver which was ultimately waived. In his experience, IDOT specifies the use of a rock paver to

minimize the amount of overage on the quantity of stone which is itemized as a unit price at

IDOT's expense. This has nothing to do with the performance of the roadway and, instead, is a

cost control measure. When stone application is quoted as a lump sum pay item, as it was here,

the requirement for a rock paver could be waived because the quality, amount and application

width of the stone is not a cost item to IDOT. In this case, IDOT asked for a $250 credit to

waive the rock paver and MJC agreed. By the time this agreement was reached, it was too far [*157]

into the winter months for work to continue.

A letter dated April 21, 2006, from MJC to Earth Tech assumed that nothing more could

be done with respect to excavating and grading ponds 2 and 3 and requested permission to seed

the pond basins, as is. That request was denied, so the schedule could not be met. Another

schedule was proposed by MJC to Earth Tech on May 9, 2006, which was dependent upon

approval of design changes given the site conditions, and that request was also denied rendering

the proposed schedule impossible. Meyer testified this was another example of MJC trying to

solve the problems presented by the changed site conditions. Meyer was firm that MJC was not

"dragging its feet."

On re-cross examination, Meyer testified that IDOT was not giving them a solution, so

he was proposing a schedule to just finish up seeding even though pond 2 still had water in its

basin. Meyer was asked whether or not the change order included compensation for the berm

cut, and he specifically referenced the acceptance of his proposal which allowed for a change to

cut the channel, remove existing structure, install a new pipe and backfill. Meyer testified that

change order 3 was an adjustment of pay quantities. He did not believe it to be part of the

original agreement.

The Respondent called to testify Daniel Jason Trapp (Trapp), a professional civil engineer who worked for Earth Tech as the engineer of record on this project. At the time of his testimony Trapp was employed by St. Clair County, MidAmerica Airport. He testified that Earth Tech developed the original plans for the project at issue and had an employee on site during 95% of the work. Trapp testified that the one-foot contours on the maps provided as exhibits and part of the Contract drawings are accurate within one foot showing a very irregular contour on the surface of the basins. These were provided by a licensed surveyor prior to the start of the [*158] project using boats and waders while water was present in the pond. Given the contours, Trapp believed the specifications would call for filling the areas with existing soils, not imported material. Step one would be draining the existing water by removing the perforated pipe in each of the basins. Based upon the drawings, Trapp estimated the approximately one-half of pond 2 would not drain based upon the contours represented. After the plug was pulled, he believed that the drainage looked similar to the contours represented, and expected the southern half of the pond to retain water. On pond 3, MJC used the same method of pulling the plug to remove water. The entire purpose of the project was to drain the ponds so that they did not attract wildlife in the area of the airport.

Trapp testified that, in the spirit of getting things done, they agreed to allow pond 2 to be graded at the same elevation with fine grading of any irregularities for drainage. A new drain was installed beneath the lowest elevation which allowed performance admittedly not at the elevations originally intended. Earth Tech calculated a quantity of excavation based upon the existing contours. The actual measured quantities were based upon another set of surveys after the plugs were pulled and most of the water had drained. A different surveyor than the one who did the existing contours took the cross sections. After the grading was complete, the second surveyor took final cross sections to calculate the final earth work quantities. Trapp testified that the general layout of the existing contours was not dramatically different than the proposed elevations.

Trapp did not recommend that the claim for extra work by MJC on pond 2 be paid. He also felt that MJC's claim for work to cut the berm for drainage on pond 3 was not extra work but, instead, was required as a part of the Contract with no changes in the scope of the work.

Trapp has seen contractors use sumps to drain water and does not know whether MJC used a [*159] sump for drainage because he was not on site every day.

The unique qualities of this project were within the airport security regulations, so the contractor's personnel did have security clearance and were required to maintain radio control with air traffic control. Trapp would have expected the haul road to be the first thing completed because it provided access to the site but the rock was not put in until the following summer. He believes that MJC used an area adjacent to the haul road for their work, even though that area was not intended for construction traffic. The haul road was excavated but rock was not timely placed so water could not drain. Trapp believes this was in violation of the Standard Specifications for Construction of Airports, incorporated into the Contract, which says the grade shall be maintained so that it will be well drained at all times. Trapp testified that MJC's letter of February 7, 2006, claiming that site access was delaying the project was written during the time frame when the haul route was dug, but no rock placed in it.

In his opinion, Trapp believed that the basin soils were not, as claimed by Meyer,

"unsuitable." Earth Tech told MJC in letters, and verbally, that there was no problem with the

suitability of the soils, but that the basins were wet and needed drainage, according to Trapp. On

several occasions, Earth Tech told MJC that the ponded areas needed to be drained, keeping in

mind the goal of water flow through the basins with no ponding.

Eventually, MJC was authorized to proceed with a change order to install the new outlet structure at the lower elevation and was paid $12,526.00 for that installation. This included the berm cut with filling and replacing. However, Trapp did not consider this payment a concession that the berm cut was an addition or change to the Contract. Instead, the change order was issued in the spirit of cooperation. Trapp admitted that the lower elevation was a foot to a footand-a-half lower than the existing elevation which caused the final grades to be revised to a [*160] lower point for the new structure.

Trapp explained his comments on the IDOT contractor's performance evaluation that MJC was confrontational, uncooperative and nonresponsive throughout the duration of the project. He cited instances of confrontational words, blocked communications and refusal to perform the Contract requirements such as rock placement on the haul road and drainage of the basins. Trapp believed that MJC just refused to complete the project and, ultimately, a default letter was issued.

The third and final change order included line item deductions or add-ons such as a oneand-a-half acre deduction from the Contract for clearing and grubbing unclassified excavations.

In comparing the items, Trapp noted that there was roughly a twenty percent increase in the estimated cubic yards of unclassified excavation because the final grades did not match the proposed grades in the plans.

Regarding Contract time, Trapp testified that it took 367 calendar days to complete this project and MJC was given 184 calendar days of credit. According to Trapp, this project never went into a winter shutdown period. He referenced several daily reports citing workable conditions but no work by MJC. In addition, Trapp believed seven punch list items remained incomplete.

Earth Tech submitted amendments to its original consulting agreement for $33,000.00,

additional costs incurred due to the Contract overrun. On cross-examination, Trapp testified that

the costs submitted in the amendments had nothing to do with design services and he did not

know the exact amount that was charged by Earth Tech to IDOT. He also did not know whether

IDOT should be required to pay for Earth Tech services of being on site during the same period

of time MJC was given a time extension. Trapp claimed they did not specifically keep track of [*161]

time extension days separately because that was the intent of the liquidated damages. He was

on-site during the beginning of the Contract during spring and summer and would make a site

visit two to three times a week. Other Earth Tech personnel were responsible for being there on

a daily basis. It would take approximately ten minutes to drive to the project site and about an

hour total to gain access, check the site, do the paperwork and return. Trapp made no effort and

was not asked to calculate the time Earth Tech charged IDOT for days where MJC did not work,

but could have worked.

Trapp could not recall the exact date when Earth Tech actually approved the design

change giving MJC notice to proceed but believes it was reasonably on or about September 7,

2006. Prior to that, work in that pond was not proceeding. Earth Tech's sample of daily field

reports during August 2006, recorded that the site was workable but MJC was not working and

did not reference that MJC was waiting on direction from Earth Tech.

When the berm was breached on pond 2 with Earth Tech's permission, Trapp did not consider it to be an extra to the Contract. He witnessed the rush of water as soon as the berm was breached and agreed that no materials were taken out of the basin after it dried. Instead, materials were moved within the basin for fine grading. Trapp agreed that the existing elevations were lower than the proposed elevations but contended that Earth Tech knew from the existing contours that the basin was lower than the outflow structure and that is why it did not drain. Trapp did not agree that the entire pond was a foot to two feet less than as indicated in the Contract documents. He believed the bottom half varied in existing contours and, eventually, Trapp agreed that to grade the bottom of pond 2, to the planned elevation, it would have required fill in the bottom part. Trapp testified that Earth Tech had as-built elevations which are the final cross sections used for quantity calculations.

[*162] In May 2005, Trapp used the Contract plans and the cross sections of the baseline established by survey to estimate cut and fill in the proposed project in the amounts of total cut, 3,828.38 cubic yards, and fill, 1,347.48 cubic yards. Trapp agreed that MJC's calculations for cut and fill were fairly close to these estimates. For pond 2, the final cut measurement was 5,988 cubic yards instead of the anticipated 3,828 cubic yards because the proposed grades were different than the final grades which were much lower.

Trapp did not agree that the design change needed to lower the outflow structure was because when the pond dried up, it was two feet lower than anticipated. Trapp testified that when it was dry, the pond was very similar to what was shown on the plans with tons of irregularities and holes which needed regrading to drain. Trapp did not realize MJC had used a sump pump in recognition of low areas that did not drain and would not admit that one of the assumptions made in allotting time for this Contract was how long it would take for initial drainage.

After cross-examination pertaining to a scratch sheet produced in discovery by Earth

Tech estimating two days for dewatering of the project, Trapp claimed it was not his

handwriting, and that he did not know if it pertained to this project or whether the estimation

contemplated draining only the ponds at issue. He believed that dewatering could have included

a sump pump, pulling the plugs or cutting temporary ditches. Trapp maintained that all the pond

bottoms existed as were represented in the Contract documents. The MidAmerica St. Louis

Airport Sedimentation Basin Maintenance Project workday estimate prepared by Earth Tech as a

preliminary work-up included two days for dewatering of all basins and partial demolition of

existing outflow structures. The estimate for dewatering did not reference breaching a berm and

Trapp agreed that Earth Tech would certainly request permission for doing so.

[*163] Regarding Change Order 2, Trapp testified that it would not have been fair to approve a new pipe and not approve payment for cutting the ditch. According to Trapp, MJC refused to place the final grades as shown on the plans so an additional outflow structure was necessary.

However, Trapp admitted that in order for MJC to place the grades on pond 2, to the planned elevation, it would have required a couple thousand yards of fill.

Trapp believed the Contract contained terms that allow for MJC to elect a winter shutdown for a reasonable amount of time and Earth Tech recommended they do so. Since MJC returned to work in April 2006, it could have shut down for six months beginning in November 2005, through April 2006, without incurring any additional calendar days on the Contract.

After extensive questioning on excavation from pond 2, Trapp would not concede that the large cut overrun was because the bottom was lower than planned. He believed the amount shown on the final survey results was excavated by MJC from pond 2 despite the fact that MJC demobilized at the end of April 2006, and the records show no excavation had gone on in pond 2 since that time.

The punch list was not sent to MJC after December 2006, because, according to Trapp, the list had been made clear before that time and nobody had responded. Trapp did not recall any clearing or grubbing in pond 2 after the berm was breached. At the time of the default letter threatening termination of MJC, there was not a lot of work to be done, and Trapp believed the Contract was not substantially complete at that time because three days of seeding work was pretty significant.

Trapp agreed that the haul road should have conformed to the contours of the land and the contractor was not allowed to raise or lower areas. He believed that if the rock had been placed down, the road would have held up, even in the low areas underwater. The seeding for [*164] the haul road was included in the lump sum payment, according to Trapp, and there was no Contract clause that would allow seeding as a separate pay item. He believed seeding and mulch would be required for the construction of the haul road because the Contract required any areas disturbed by activities related to the project shall be returned to the original condition. This work was considered incidental to the Contract.

Earth Tech did have as-built drawings for the ponds done and Trapp knew the location of

those drawings but they were not produced in connection with the lawsuit. When questioned

about the survey initially performed on these ponds, Trapp testified that he did not watch the

surveyors and does not know their specific methods but he believed them to be licensed

surveyors who accurately represented the existing contours of the ponds.

Respondent next called to testify Michael F. Wilhelm (Wilhelm) who works for IDOT as the section chief of construction and materials at the Illinois Division of Aeronautics. The Division of Aeronautics functions as the agent of the airport using an agency-inparticipation agreement. He is familiar with the Contract at issue and the liquidated damages component at $550 per day as well as MidAmerica Airport. Wilhelm believed the airport was financially impacted by its safety concerns and project overruns requiring engineering personnel to be out in the field. IDOT also incurred added costs on this project such as monitoring the work not performed yet and closing out the grant. The extra time involved is not calculated because there is no physical way to keep track of other entities.

On cross-examination, Wilhelm testified that ninety-five percent of the liquidated damages would go to the federal government, FAA, and two-and-a-half percent would go back to the state and two-and-a-half percent would go to the local sponsor, the airport. He admitted that IDOT would have precise billings from Earth Tech on the 116 days not excused for delay [*165] and could calculate to the penny how much Earth Tech charged for its services. He admitted that such calculation had not been done.

Wilhelm's information on the project came from Earth Tech representatives and what he witnessed at the site. He believed that MJC refused to place fill in pond 2 as required by the Contract and disapproved the extra requested by MJC to do so. In the spirit of cooperation, they did approve a different type of extra to solve the problem in pond 2, in an effort to get the work complete and the uncooperative contractor out of the site. Wilhelm was involved with the project by information received from their consultant, Earth Tech, and having visited the site one time and at the final inspection. He was present at the Springfield meeting and considered Meyer to be belligerent and threatening.

On rebuttal, Meyer testified that MJC is a foreign corporation and was in good standing

in Missouri. After learning that MJC's certificate in Illinois had expired, he renewed the

certificate in Illinois on that date. With regard to pond 2, Meyer testified that MJC had been

proposing all along to bring in materials to meet the planned elevations. However, the grades

had dropped out of the pond when it was drained. The disconnect for Earth Tech and IDOT is

that, instead of 2,000 yards of fill, it would require 4,000 yards of fill to balance the grade. MJC

requested, as an extra to the Contract, the additional fill to bring the pond up to final grades

according to plan. This request was interpreted by Earth Tech and IDOT to be a refusal. Meyer

believed that after the pond drained out at the end of July, the bottom dropped out and that

explained where the dirt went after the end of April. No excavation work was done in pond 2

after April 2006. This difference was illustrated on the color-coded computer interpretation

created by comparing the original estimate by Earth Tech that called for taking out 1,800 to

2,000 yards of cut in the pond (which would have left enough dirt to balance the fill requirement [*166]

in the rest of the pond) with the revised interpretation based on actual grades.

To clarify MJC's efforts to drain the ponds, Meyer testified that MJC did use sump

pumps on ponds 2 and 3 and cut trenches within the basin. He believed that breaching the berms

was not contemplated by the Contract and permission was necessary before doing so. MJC's

records show that the excavation equipment was removed from the job site on April 26, 2006,

and no excavation work was done after that date, other than to breach two berms and refill.

Meyer was unaware of any e-mail blocking as alleged by Earth Tech but is aware of problems

with e-mail attachments.

The new outflow pipe was installed on pond 2 at a different elevation, and, without that change, the project could not have been completed in accordance with the Contract.

On cross-examination, Meyer testified that it would have been possible to make the final grades on pond 2 according to plan, if the State had been willing to pay for it. The color-ceded computer interpretation was prepared using the Contract drawings and the final grades shot by MJC. Meyer testified that it is possible that the pond shrank or that the materials were never there in the first instance, making it impossible to determine an accurate excavation quantity.

Legal Analysis

Changed Conditions

The instant matter is a classic case of what is commonly referred to in contract law as "changed conditions" which entitles a contractor to additional compensation under the contract for extra worked performed. Kenny Construction Co. of Illinois, v. Metropolitan Sanitary District of Greater Chicago, 56 Ill. 2d 516; 309 N.E.2d 221 (1974). In this case, MJC reasonably relied on the Contract documents with the elevations given to assume that the basins would gravity drain once the plugs were pulled. In fact, documents used by Earth Tech to [*167] prepare an estimate of Contract performance time assumed a two-day drainage. Pond 1 did gravity drain, exactly as predicted. Ponds 2 and 3 did not drain as anticipated when the drainage plug was pulled because, the bottom was actually different than depicted on the Contract drawings, in some areas, rendering the anticipated gravity drainage impossible. If the bottom was, indeed, as depicted on the Contract drawings, then those basins would have drained in a matter of a few days. They did not. Instead, ponds 2 and 3 required berms to be cut and an outflow structure to be installed two feet below the design elevation.

Earth Tech's position on pond 2 is that MJC must have excavated too much material.

This argument is not supported by the facts. Clearly, MJC had performed approximately onehalf of the planned cut in pond 2 and then demobilized its excavation equipment. No excavation was performed in pond 2 after April 2006, according to site reports. After the berm was cut, the pond drained and a final survey was taken, it was discovered that the actual bottom elevation on pond 2 was lower than the Contract drawings, explaining why gravity drainage did not work.

Pond 3 also required a berm to be cut to achieve drainage.

The substantial amount of fill required to meet the planned grades is further evidence that the conditions were materially different than contemplated by the Contract.

Damages

This Court recognizes the "Spearin Doctrine" which sets forth that an owner "in a construction situation necessarily impliedly warrants that the plans and specifications are possible to perform, are adequate for performance and free from defects." United States v.

Spearin, 248 U.S. 132 (1918); Gust K. Newberg Const. Co. v. State, 36 Ill. Ct.Cl. 93, 95-96 (1984). The government, as owner, is required to reimburse a contractor who incurs additional costs due to a faulty plan or specifications the government provides the contractor to perform the [*168] contract. See Oldenburg v. Hagemann, 159 Ill. App.3d 631, 512 N.E.2d 718 (2d Dist. 1987).

Here, MJC had the right to rely, and did rely, on the accuracy of the Contract drawings to perform the Contract. According to the elevations represented, if the plugs were pulled on the ponds, gravity drainage would occur with the exception of two small areas in pond 2 that may have been lower than the plug. MJC anticipated that the bottoms may have been higher than represented because of sedimentation, but in no event did MJC expect the pond bottoms to be lower than depicted on the Contract drawings because there is no scour. This was a reasonable assumption confirmed by Earth Tech's pre-bid reports estimating two days for "dewatering of all basins ..." and anticipation of a rush of water once the plugs were pulled. Pond 1 drainage was further evidence that gravity drainage would be sufficient if the elevations were accurately represented.

Pond 2 would have required 4,000 cubic yards of fill to bring the grades to planned elevations and raise the bottom of the pond to level of the existing plug. IDOT elected the lesser expensive option and eventually chose to lower the plug and reshape the bottoms lower than the planned elevations. Since no excavation had been performed since April 2006, and MJC had only performed one-half of the anticipated cut, clearly the bottom of pond 2 was substantially lower than represented on the Contract drawings in at least one-half of the pond.

To compute the 123 day delay ($67,650.00 in claimed liquidated damages), IDOT does

not factor in its own delay in approving the design change necessitated by the basin conditions

being different than represented in the Contract drawings. In the end, Change Order 2 for

critical path work essential to the completion of the Project, i.e., installation of a new outfall

pipe and grading below planned elevation in pond 2, was formally approved by Earth Tech in its

letter of September 7, 2006. Design changes cannot be made by the contractor, MJC, so delays [*169]

up to that date should have been excused. The project was substantially complete by November

3, 2006, so liquidated damages cannot be assessed by IDOT for Contract delay.

Furthermore, the Court is not convinced that the liquidated damages provision at issue

($550 per day) would have been enforceable as a "reasonable forecast of just compensation" nor

is it convinced that actual damages would have been very difficult to determine. The amount

withheld by IDOT would have functioned more as an impermissible penalty on these facts, since

time was not of the essence and no analysis was undertaken to set an approximation of actual

damages. In fact, IDOT could have proven to the penny how much it paid Earth Tech during the

claimed delayed period, but failed to do so.

MJC also makes a damage claim for IDOT's failure to pay $23,989.00, due for extra work on pond 2 and $13,803.57, due for extra work on pond 3, for costs incurred as the consequences of defects in the Contract drawings. IDOT has not challenged the reasonableness or quantifications for those charges.

IDOT does challenge the extra costs incurred for MJC to raise the general elevation of the haul road. The Contract required MJC to put in a rock road on the existing contours of the land. However, the design did not address drainage problems on the road and, additional rock was required to meet Contract plans.

Respondent requests a set-off for $33,000.00, in costs incurred for its Resident Engineer during the time period it alleges MJC delayed. Those costs were not proven by Respondent and, in any event, cannot be assessed against MJC when it was not the cause of the delay. Earth Tech acknowledged that during this time period, MJC was entitled to an extension. MJC is correct that it cannot be "charged," in the form of a setoff, for time spent by Earth Tech on a day for which MJC was given an extension. No set-off is warranted on these facts.

[*170] The issue of outstanding bills, if any, owed by MJC to Nollau, its subcontractor, is not before this Court.

CONCLUSION

For the forgoing reasons, this Court finds in favor of Claimant MJC Constructors, Inc., and against Respondent in the sum of $110,275.07, which includes the release of $67,650.00, withheld in liquidated damages. Claimant is denied interest and costs of suit as such damages are not recoverable. See Tully v. State, 47 Ill. Ct. Cl. 400, 404-405 (1994).

However, as is often the case, the question of entering an award remains before the Court. This Court cannot enter an award unless sufficient funds remain unexpended in the appropriation made to fund the project. See Loewenburg/Fitch Partnership v. State, 38 Ill. Ct.

Cl. 227 (1986); see also Ude, Inc. v. State, 35 Ill. Ct. Cl. 384 (1982). There is no evidence in the record before the Court as to the amount of funds remaining from the project.

It is this Court's policy in breach of contract claims to limit awards so as not to exceed the amount of funds, appropriated and lapsed, with which payment could have been made. James Cape & Sons Co. v. State, 52 Ill. Ct. Cl. 322, 366 (2000). To do otherwise would be the same as granting a deficiency appropriation. Id. The appropriation of State funds is the constitutional prerogative of the Illinois General Assembly. It is the Court's duty to advise the General Assembly. Thorlief Larsen and Son, Inc. v. State, 42 Ill. Ct. Cl. 195 (1990); J. F. Inc. v. State, 41 Ill. Ct. Cl. 5 (1988); Fru-Con Corp. v. State, 50 Ill. Ct. Cl. 50 (1996). Therefore, before entering an award for the Claimant or making a recommendation to the General Assembly, we need additional information.

Accordingly, Respondent is ordered to file the fiscal data on this project, including the

balance of the funds which lapsed at the conclusion of this project. Respondent shall file this [*171]

information with the Clerk of this Court within 21 days. Upon the Court's receipt of the fiscal

information, the Court will enter its final order in this case.