R. D. Lawrence Construction Co. v. State

Holderman, J. This cause of action arose out of a contract between Claimant and Respondent, dated July 11, 1977. Claimant, in its complaint, sets forth that as a result of Respondent’s action Claimant incurred additional costs for labor and material put into the project by subcontractors working under Claimant’s supervision, pursuant to Claimant’s general contract. Claimant contends that the delay caused by Respondent’s action resulted in a higher wage scale being paid to the laborers on the job and higher material costs due to the passage of time. The original claim was in the amount of $126,010.00. It was agreed by and between the parties hereto that the amount of $39,794.00 is not in dispute and the amount remaining in dispute is $57,204.05. It is noted that the original claim of $126,010.00 has been reduced by Claimant to the sum of $96,998.05. Claimant has not paid the amount of $57,204.05 to his subcontractors, so this is not out-of-pocket expenses. It is Respondent’s contention that this claim should be dismissed because the subcontractors had a right to protect their interests by filing a mechanics’ lien and attempting to recover in that manner. It is also Respondent’s contention that Claimant, at this time having not paid this amount to the subcontractors, has not incurred out-of-pocket expenses and is not in a position to recover. The record is not clear as to whether the amount of $57,204.05 is due entirely to the subcontractors or whether the prime contractor, Claimant, had an interest in the same. If it does have an interest and this cause is dismissed, then the question arises as to what amount, if any, Claimant should receive. Respondent’s brief cites the case of Bates and Rogers Construction Corporation v. North Shore Sanitary District (1980), 92 Ill. App. 3d 90. The appellate court in that case ruled that in counts of contractor’s complaints against owners for breach of contract, to include subcontractors’ claims is wrong. The court stated that the general rule is that subcontractors cannot recover against the owner in absence of contractual arrangements, and in the absence of any allegation that they are third-party beneficiaries under the principal contract, they are not proper parties to such a suit. It is clear there is no privity of contract between the Respondent and the subcontractors and it is also clear that the subcontractors had a right to file a mechanics’ lien to protect their interests. In the negotiating proceedings prior to the filing of the complaint, it was suggested that a change order be issued but this was opposed and rejected by Respondent. In view of the authority above cited, the Court hereby enters an award in favor of Claimant in the amount of $39,794.00, and dismisses that portion of the complaint in the amount of $57,204.05.