TRAPANI CONST. CO. v. ELLIOT GROUP, INC. APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION

TRAPANI CONST. CO. v. ELLIOT GROUP, INC. APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION [64 NE 3D 132 (2016).] In February 2007, The Elliot Group, Inc., an Illinois real estate developer, made a deal with the Village of Arlington Heights to develop property in that village. Arlington Market, LLC, was subsequently formed by The Elliot Group to develop, manage, and sell the property, a common practice in the residential development industry. Since Arlington Market had no employees, members of the Elliot Group instead managed the LLC. In March 2007, the Trapani Construction
TRAPANI CONST. CO. v. ELLIOT GROUP, INC. APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, FIFTH DIVISION [64 NE 3D 132 (2016).] In February 2007, The Elliot Group, Inc., an Illinois real estate developer, made a deal with the Village of Arlington Heights to develop property in that village. Arlington Market, LLC, was subsequently formed by The Elliot Group to develop, manage, and sell the property, a common practice in the residential development industry. Since Arlington Market had no employees, members of the Elliot Group instead managed the LLC. In March 2007, the Trapani Construction Company sent a proposal to The Elliot Group to provide construction services for the Arlington property. Trapani had previously performed work for The Elliot Group. Between March and July of 2007, Trapani sent a total of five draft contracts to the Elliot Group in which the Elliot Group were listed as the contracting party. Although none of the draft contracts were ever signed, Trapani began construction at the Arlington site in early July. The case in question arose after Trapani finished its work at the Arlington site in accordance with the terms of the draft contract and sought payment. Despite having paid Trapani for previous payment requests on the Arlington project, The Elliot Group did not pay the final invoice. Trapani sued for breach of implied-in-fact contract, and The Elliot Group asserted that there was no contract between them and the plaintiff. The trial court ruled in favor of Trapani and The Elliot Group appealed. JUDGE REYES_Defendant asserts there was no contract implied in fact between plaintiff and defendant because (1) defendant never accepted plaintiffs offer, (2) no consideration was provided to defendant, and (3) there was no meeting of the minds or mutual assent. Even in the absence of an express contract, an implied contract can be created as a result of the parties actions. In Illinois, two types of implied contracts are recognized, those implied in fact and those implied in law. Contracts implied in law are equitable in nature, predicated on the fundamental principle that no one should unjustly enrich himself at anothers expense. Contracts implied in fact, as aforementioned, arise from a promissory expression that may be inferred from the facts and circumstances that demonstrate the parties intent to be bound. . . . A contract implied in fact, which applies here, is a true contract. The elements of a contract are an offer, acceptance, and consideration. Thus, a contract implied in fact contains all of the elements of a contract, including a meeting of the minds. Generally, for a contract to be valid, an acceptance must be objectively manifested; if it is not, there is no meeting of the minds. Acceptance of a contract implied in fact, however, can be proven by circumstances demonstrating that the parties intended to contract and by the general course of dealing between the parties. Similarly, mutual intent to contract can be established by the ordinary course of dealing and the common understanding of persons. . . . In the instant case, plaintiff was paid in excess of $18 million by defendant for its work on other construction projects that was performed under similar circumstances, i.e., under unsigned draft contracts. Plaintiff was also paid in full by defendant for its work on another building that was part of this particular project, also under an unsigned draft contract. For the work at issue, plaintiff submitted a proposal to defendant and performed pursuant to the terms and specifications in the draft contract dated July 5, 2007. To obtain payment for the work at issue, plaintiff submitted payment requests to defendant which defendant meticulously review[ed] before paying $2,041,846.50 to plaintiff in accordance with the draft contract. Further, defendant approved 16 written contract change orders that allowed plaintiff to continue to work on the project. In addition to these facts, defendant never corrected the subcontracts, certificates of insurance, change orders, weekly construction progress reports, contract activity reports, and documents for payment requests sent by plaintiff that identified defendant as the project owner. Moreover, defendant did not reject plaintiffs work or instruct plaintiff to cease work at any time. In light of this evidence, we find the circumstances and behaviors of the parties demonstrated a general course of dealing and a mutual intent to contract. Accordingly, we find there is ample evidence to support the trial courts ruling that a contract implied in fact existed between the parties. Defendant further argues plaintiff knew Arlington Market was the owner and had agreed to pay for plaintiffs work because plaintiff and Arlington Market had both signed the construction escrow agreement. Plaintiff asserts defendant misrepresents the meaning of the escrow agreement that was between the lender, the title company and Arlington Market. Plaintiff claims its signature on the construction escrow agreement did nothing more than acknowledge [the construction escrow agreements] existence and it contained no commitment from or to the plaintiff. When interpreting a contract, the primary goal is to give effect to the parties intentions at the time the contract was formed. The best indication of the parties intent is ascertained from the plain language of the contract. A careful reading of the construction escrow agreement reveals there is no express language indicating Arlington Market promised to pay plaintiff, the general contractor, for its work on the project. Rather, the plain language of the construction escrow agreement states the agreement is not intended by any of the undersigned to give any benefits, rights, privileges, actions, or remedies to any person, partnership, firm or corporation other than Escrow Trustee, Lender, and Owner/Borrower * * * under any theory of law. Further, considering that defendant never corrected the payment requests, subcontracts, certificates of insurance, change orders, or weekly construction progress reports that identified defendant as the project owner and that plaintiff was paid seven progress payments based on the payment requests it addressed to defendant, we are unpersuaded by defendants argument that plaintiff definitely knew Arlington Market was responsible for paying plaintiff simply because it had signed the construction escrow agreement. Defendant also contends that, based on Michael Elliotts [An Elliot Group attorney] testimony, the riders that listed Arlington Market as the owner were e-mailed to Cartwright [Trapanis senior vice president]. Cartwrights testimony, which the trial court credited, however, indicates plaintiff never received the riders. Here, the trial court found Michael Elliotts testimony was lacking in credibility. As the trial court noted (1) Michael Elliott did not testify as to who sent the e-mail, (2) defendant did not submit any e-mails or provide corroborating evidence that the riders were sent or received by plaintiff, and (3) Cartwright testified he never received the riders. . . We thus find the trial courts finding as to the credibility of Michael Elliotts testimony was neither unreasonable nor arbitrary. For all of these reasons, we conclude the trial courts finding that a contract implied in fact existed between the parties was not against the manifest weight of the evidence. CRITICAL THINKING Although in this case, it may seem obvious that facts and circumstances point to the mutual intent to contract, what kind of situations would this be less clear? What kind of evidence would be sufficient, and what kind of evidence would merely be necessary to show the mutual intent to contract needed to show an implied-in-fact contract? ETHICAL DECISION MAKING Which stakeholders interests are helped by this decision? Which stakeholders interests are harmed?

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