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Substantial performance doctrine: Contractor was successful against homeowner in collecting in a construction case. Ed Wolfe Const., Inc. v. Knight, 2014 IL App (5th) 130115-U

This case involved a dispute of a breach-of-contract action against the home owner (“Owner”) for his failure to pay for labor and materials provided by a Construction company in association with the restoration and renovation of his home.

The Owner contracted with the contractor to perform renovation work on the Owner’s home after a fire damaged the home.  After construction had started, the Owner requested that Wolfe Construction (the “Contractor”) complete construction and remodeling on parts of the house not affected by the fire and upgrades with regard to the restoration work, including painting, a new porch and custom kitchen cabinets, which totaled a “little over $30,000.”

Any additional work and upgrades would not be covered under the insurance policy and by a written agreement the Owner was to pay any additional amounts. Invoices were sent to the Owners reflecting those charges and requesting payment. The Owners failed to pay the entire amount billed for the additional work and upgrades.

The Owner and Contractor walked through the home to determine what needed to be completed. The Owner had created a “punch list” prior to the meeting, which identified all of the issues and projects that he believed needed to be fixed or completed. At this point, approximately 95% of the work was completed. The Owner at the meeting indicated that he would allow the Contractor to finish the job. Wolfe Construction worked through on the remaining projects, but was not allowed to complete all the items on the “punch list” because the Owner had called the Contractor’s office, and left a message that he was terminating their services.

The Court concluded that the Owners requested additional improvements and upgrades throughout the construction process that were not covered by the insurance policy work, which resulted in multiple adjustments to the cost and time of the entire construction project. They also requested several changes after work had already started or was completed, which also resulted in additional costs. Here, the the Court found the record indicated that the completion date was an estimate of when the project would be finished and that throughout the course of construction, the Owners requested changes, upgrades, and additional improvements, which consequently affected the anticipated finish date. With regard to the workmanship issues, the court concluded that the evidence “overwhelmingly established that the Owners demanded both perfection and the impossible.” The court noted that the Owner’s expert testified that it would cost in excess of $70,000 to repair Wolfe Construction’s work. However, the court found that this testimony “was not only incredible, it was laughable.”

The court explained that a contractor is not required to perform work under a contract perfectly, but rather is held only to the duty of substantial performance in a workmanlike manner. For substantial performance, a contractor must establish that there was an honest and faithful performance of the contract in its material and substantial parts, with no willful departure from, or omission of, the essential elements of the contract Folk v. Central National Bank & Trust Co. of Rockford, 210 Ill.App.3d 43, 46 (1990).

A party is generally responsible for his own attorney fees. J.B. Esker & Sons, Inc. v. Cle–Pa’s Partnership, 325 Ill.App.3d 276, 281 (2001). However, an exception exists where attorney fees are specifically authorized by a contract entered between the parties. Id. The standard of review applicable to a trial court’s award of attorney fees is abuse of discretion.In re Marriage of Vancura, 356 Ill.App.3d 200, 207 (2005). Similarly, it is a general rule in Illinois that interest is not recoverable unless contracted for or authorized by statute. In re Liquidation of Pine Top Insurance Co., 322 Ill.App.3d 693, 699 (2001). Here, the authorization to perform services, which the Court found to be a valid, enforceable written contract, specifically provided for attorney fees and interest.

The Appellate Court affirmed the trial court’s judgment in favor of Wolfe Construction against the Owners for $25,430.24, representing the Insurance Company check for the fire damage, and $17,813.22, representing the front porch and various upgrades.  In addition it affirmed the court’s award of contractual interest ($26,117) and attorney fees ($38,938.22) in favor of Wolfe Construction and against the Owner.  (Ed Wolfe Const., Inc. v. Knight2014 IL App (5th) 130115-U This order was filed under Supreme Court Rule 23and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).)

 

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