Stamps Body Shop v. State of Illinois

OPINION

BIRNBAUM, CJ.

Claimant Stamps Body Shop, LLC (“Stamps”) filed this breach of contract action seeking $7,561.33, the amount of the unpaid balance of a bill for the repair of an Illinois State Police vehicle, a 2016 Ford Explorer Police Interceptor, (hereinafter “Interceptor”) which was significantly damaged in a collision with a deer. Illinois Central Management Services (“CMS”), which reviews estimates and invoices for repair of damaged Illinois State Police (“ISP”) vehicles, approved the original $16,633.36 repair estimate for the Interceptor but failed or refused to approve the $7,561.33 supplemental estimate for parts and labor to repair damage discovered during the repair process.

The following facts are drawn from testimony and other submissions at the trial of this matter on May 8, 2019.

Tim Masching (Masching) and his wife own Stamps Body Shop in Pontiac, Illinois (“Stamps”). Masching has been in the auto repair business for 29 years, and has owned Stamps for the past 18 years. He has been repairing ISP vehicles for the last eight years, during which time he has repaired approximately 12 of them. Masching’s ISP liaison for all of these repairs has been Trooper Matthew Niehaus (“Niehaus”), the ISP District 6 Fleet Officer and Vehicle Investigation Officer, whose duties include acting as coordinator for evaluation and repair of damaged ISP vehicles within District 6, which is headquartered in Pontiac, Illinois.

From Masching’s perspective, the repair process began with a phone call from Niehaus requesting that he inspect a damaged ISP vehicle and prepare a repair estimate. In every instance, Masching inspected the damaged vehicle and forwarded his completed estimate to Niehaus, who upon his receipt of the estimate would contact Masching to indicate that he, Niehaus, would call Masching if and when Niehaus received approval of Masching’s estimate and authorization for the repair from CMS. Supplemental estimates (“supplements”) were involved in every repair due to a variety of factors, some of which include the design of vehicles to absorb impact energy by crushing, as well as the number of sensors and other modern technology lying beneath those crushable parts, which quite often leads to the discovery of hidden additional damage as visible damaged parts are removed during the repair process. Accordingly, Stamps’ initial September 29, 2016 estimate in this matter included a notice indicating as much, “This is preliminary estimate. Additional changes to the estimate may be required for the actual repair.” (Complaint, Ex. 3, p. 3) In previous ISP vehicle repairs, supplemental repairs were handled through phone [*157] calls with Niehaus in which Masching made Niehaus aware of the additional damage; they would discuss the repairs, following which Masching would finish the repair job and deliver his final invoice, including the supplement, with the repaired vehicle. Masching testified that supplemental repairs were always involved, were always resolved with Niehaus in this manner, and Stamps’ final invoice always was paid in full until the repair involved in this case.

Trooper Niehaus’ description of the repair and approval process was substantially similar to Masching’s. Niehaus added that it was and is his practice to obtain initial repair estimates from at least two repair shops and forward them to CMS, which decides whether to repair the vehicle and if so, selects the shop which will receive the Purchase Order, the document authorizing the repair by the chosen shop. Niehaus and Victor Samaan, the CMS Northern Regional Manager whose area of authority includes District 6, agreed that it was typical for unforeseen additional repair costs to arise as damage originally hidden was discovered.

Regarding supplemental repairs, Niehaus testified as follows:

Q. Is it - was it the practice that Tim [Masching] would give the paperwork to you and you would forward that to CMS?

A. Yes. Routinely, yes, that’s how we would do things. Once he had the work finished, the final invoice, I would have him normally give that to me or send me a copy, then I would make sure it got forwarded to the CMS, the final, you know, work invoice that was for work completed.

Q. Do you know, do you have any recollection that he ever submitted an additional or supplemental estimate?

A. No. I don’t recall any additional updated or supplemental estimate before getting the final - final invoice. (Record p. 65) On or about September 29, 2016, Masching submitted a preliminary estimate for $16,633.36 the repair of the Interceptor with the notice referenced above that it was a preliminary estimate. Repairs were officially authorized by CMS on October 11, 2016. As the repair process progressed, and in addition to previously hidden damage, Masching encountered a number of unanticipated electrical and technological problems. Because the “Police Interceptor” version of the 2016 Explorer incorporated modifications made by an entity other than Ford, parts diagrams were not available for the headlight assemblies, and Masching had to invest time searching for them, ultimately requiring Masching to disassemble the right headlight assembly to get part numbers to assist in identifying the parts from the destroyed left headlight assembly.

Toward the end of the repair process, Masching encountered a problem of continuing reported “faults” in the airbag system that could only be identified and analyzed by Ford diagnostic computer programs; this required Masching to take the vehicle to a Ford repair shop for analysis of the reported faults and ultimately to purchase a new steering column (where some of the airbag technology was located) and other parts. Masching also discovered a previously hidden wiring harness that was broken and had to be replaced. Masching either handed or faxed to Niehaus on January 17, 2017 a supplemental estimate which constituted the final invoice and [*158] included the cost of the supplemental repairs and parts. Niehaus forwarded them to CMS, which authorized payment of the original $16,633.36 estimate but, despite CMS’ accepting the repaired vehicle without complaint then or at any later time, and the observation of CMS Northern Regional Manager Division Manager Samaan that the vehicle came out “very nicely,” CMS refused to authorize payment of the supplemental estimate/invoice of $7,561.33 for two stated reasons: the supplemental invoice was not submitted for prior approval; and the fiscal year ended before approval of the supplemental invoice, requiring Masching to seek payment in the Court of Claims.

Trooper Niehaus testified regarding his understanding that if the cost of repairs exceeded the original estimate by more than ten percent, a new estimate should be submitted (Record p. 61). From his numerous phone conversations with Masching he understood that Masching had encountered several unforeseen additional repairs, including replacing the steering column, wiring harness, and a front seat cover, together with delays and additional costs arising from fault warnings from the electronic airbag deployment system (ultimately necessitating replacement of the steering wheel), and other items Masching did not originally believe would need to be repaired. Nevertheless, Niehaus never requested pricing and cost information from Masching for the additional repairs although he admitted that he should have asked how much more the repairs were going to cost. (Record p. 66, 67) Niehaus had never before encountered a repair job in which additional hidden damage was costly enough to require what he described as a “major reworking” of the estimate, and which he testified was one reason he failed to request a new estimate for the Interceptor repairs even though he knew Masching was doing substantial additional work and purchasing costly additional parts (Record p. 63). Had Niehaus made such a request for cost information, he presumably would have recognized the need to submit a new estimate for approval prior to the completion of repairs, an estimate which could have been considered prior to the end of the 2016-2017 fiscal year.

LEGAL ANALYSIS

Respondent raises two defenses to Stamps’ claim: first, that Stamps’ failure to submit a supplemental estimate for CMS approval prior to the completion of the repairs described in the supplemental estimate, and its submission instead of the supplemental estimate as part of the final invoice upon completion of repairs, violated an unwritten CMS past practice which required the prior approval by CMS of a supplemental estimate when the cost of the supplemental repairs are estimated to exceed ten percent of the original estimate; second, the 2016-2017 fiscal year ended before approval of the supplemental portion of the final invoice, requiring Stamps to seek payment in the Court of Claims.

Regarding the first defense, nowhere in the record, including in the testimony of Trooper Niehaus, Masching’s ISP liaison, is there any evidence that Masching knew or had been at any time advised of CMS’ unwritten past practice that required the payment process for this repair to be handled differently by CMS from all the previous ISP vehicle repairs, and that in this instance he would need to prepare and submit a supplemental estimate for prior approval before he would receive payment for the supplemental repairs. Niehaus was aware of the substantial nature of the supplemental and additional parts and admitted that he should have gathered the supplemental cost information and alerted Masching that prior approval of supplemental repairs of this scope [*159] and cost was required. Moreover, the CMS Northern Regional Manager, Victor Samaan, admitted there was no dispute that the repair work described in the supplemental estimate/final invoice was done and that he recalled a statement in CMS correspondence that “…the car came out very nice with the repairs…” The second “defense,” is not a defense to the merits of the asserted claim, but rather a procedural requirement that a claimant whose claim is not paid by the end of the fiscal year in which it is submitted must seek recovery in the Court of Claims, which requirement Claimant has satisfied through his filing and prosecution of this litigation. In this regard, the record reflects that Masching forwarded his supplemental estimate/final invoice to Niehaus on January 17, 2017, roughly five and one-half months prior to the end of the 2016- 2017 fiscal year, after which both the approval of the invoice, as well as the speed with which the invoice could have been approved, were in the sole control of CMS. Nothing in the record indicates that there was anything more Masching could have done to accelerate or otherwise affect the approval process or the final decision to approve or deny his final estimate at any rate.

Respondent offered neither evidence nor argument to suggest that the final estimate/invoice was overstated, incorrect or that the invoice or the involved repair work were not legitimate. The Court therefore does not feel that Stamps should be barred from receiving the amount of its supplemental invoice either for breaching an unwritten prior approval past practice of which it was not aware, or for the failure of a process over which it had no control to approve its supplemental estimate/invoice prior to the end of the fiscal year.

In light of these particular circumstances, the Court should look to the course of dealing between the Stamps and CMS to determine the parties’ actual contract. See, Genie Construction Co., Inc. v. State, 51 Ill. Ct. Cl. 153 (1991), where this Court recognized evidence of the course of dealing between the parties as “evidence relevant to the inquiry of the parties’ bargain in fact…” to determine the actual agreement of the parties rather than enforcing the terms of a written contract in mechanical fashion. In this case, the record reflects a series of approximately 12 oral contracts over the preceding eight years between Stamps and Respondent pursuant to each of which Stamps repaired an ISP vehicle. In each instance, Masching was asked to submit an initial repair estimate which CMS approved and authorized repairs to begin, following which Masching discovered additional hidden damage during the course of the repairs. When this occurred, Niehaus was made aware of the additional damage through a series of contacts with Masching during the repair process, and Masching completed the entire repair and delivered the final bill, including the supplement, with the repaired vehicle. In each and every prior circumstance, the final bill was paid in full. The evidence in the record is clear that the actions of the parties in this case were consistent with and followed the existing course of dealing between Stamps and CMS; the final estimate/invoice, including the supplemental bill, was delivered or sent to Niehaus when the repaired vehicle was returned to ISP. Accordingly, the Court FINDS that this repair was consistent with the course of dealing of the parties with each other as established in the series of previous ISP vehicle repairs, and the Court therefore finds that Claimant should have been paid, and is entitled to be paid, the full amount of its $7,561.33 invoice for the supplemental repairs.

However, the question of entering an award is before the Court. This Court cannot enter an award unless sufficient funds remain unexpended in the appropriation made to fund the contract. See Loewenburg/Fitch Partnership v. State, 38 Ill. Ct. Cl. 22 (1986). It is this Court’s policy in breach of contract claims to limit awards so as not to exceed the amount of funds, [*160] appropriated and lapsed, with which payment could have been made. James Cape & Sons Co. v.

State, 53 Ill. Ct. Cl. 322, 366 (2000). To do otherwise would be the same as granting a deficiency appropriation.

IT IS HEREBY ORDERED that Respondent shall file, within 21 days, a report authored by the Illinois State Police which includes fiscal information regarding the amount of funds that lapsed in the appropriation designated to pay for the underlying services related to this case, so the Court can determine the amount to be awarded.