## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

Lake County Grading Co. v. V illage of Anti och , 2013 IL App (2d) 120474

Appellate Court Caption LAKE COUNTY GRADI NG C OMPANY, L L C, Plaintiff-Appellee
, v. T H E V ILL

A G E O F A

N T I O CH
, D e fenda

nt-Appellant (Ne uma

nn H o me s , Inc., De fenda

nt).

District & N o. Second District Docke t No. 2-12-0474

Filed Fe bruar y 20, 2013

Held (Note : T

his syl lab us

con st it ute s n o par t of the opi nio n of the cour t but has bee n pre

par ed by the Rep o rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) In an action by plaintiff subcontrac tor to rec over from defe ndant village for work perf

ormed in connec tion with public improvements require d by the village for defe ndant contra ctor’s residential subdivisions
, summary judgme nt was properly enter ed for plaintiff on its counts alleg ing brea ch of contra ct under a t h i rd -par ty benef iciary theory
, notwithstanding the village ’s contention that plaintiff had to proce ed under the Public Constructio n Bond Act, since plaintiff was a third-par ty benef iciary of the village ’s agr eeme nt with the contractor, the village ’s fail u re t o obtain a pay ment bond from the contra ctor made the Bond Act inapplicable, and plaintiff’s bre ach- of-c ontrac t claims were timely

.

Dec ision Under Review Appea l f rom the Circuit Court of L ake County , No. 08-L -329; the Hon. Marg are t J . Mullen, J udg e, pre siding.

J udg ment Affir med.Counsel on

Appea l Robert J

. L ong , of Daniels, L o n g & Pinsel, L L C, of Waukeg an, and L awr ence R. Moelmann and Nanc y G. L ischer, both of Hi n shaw & Culbertson L L P, of Chicag o, for a ppellant.

Bog dan Martinovich, of Ray & Glick, Ltd., of L iberty ville, for appellee

.

Panel PRES IDI NG J USTI CE BU RKE d e li v e r e d th e judgme nt of the court, with opinion.
J ustices McL are n and Hudson c oncurr ed in the judgment and opinion.

OP INION

¶ 1 Def

endant Ne u m an n Ho m es , I n c. , en t er ed into two infrastruc ture agree ments (the
contra ct) with defe ndan t t h e Villag e of Antioch (Villag e), to make cer tain public improvements in two residential subdivisions

. Pursuant to the contra ct, Neumann provided four surety bonds that guara nteed perf

ormanc e for the benef

it of the Villag e. The bonds did
not also guara

ntee pay ment to subcontrac tors, which was require d by section 1 of the Public Construction Bond Act (B ond Act). 30 I L CS 550/1 (West 2010). Neumann defa ulted on its
contra ct wit h the Vi l l age and also failed to pay plaintiff, L ake County Gra ding Co., L L C., a subcontra ctor that wor

ked on the pr oject. ¶ 2 Plaintiff filed a five-c ount seco n d am en d ed co mp l ai nt to rec over pay ment from the Villag e. The trial court g rante d plaintiff summary judgme nt on counts I I and IV, in which plaintiff alleg ed brea ch of contra ct under a third-par ty -bene ficiar

y theory

. Plaintiff’s theory

was that (1) section 1 of the Bond Act (see 30 I L CS 550/1 (West 2010)) require d the Villag e to obtain from Neuma

nn a pay ment bond for the be nefit of subc ontrac tors, (2) Ne umann’s bonds wer e only perf

ormanc e bonds and n o t pay ment bonds, and (3) the Villag e’s noncompliance with section 1 of the Bond Act rende red it liable for third-par ty -bene ficiar

y brea ch of contra ct. On appea l, the Villag e argues that under section 1 a p ay m en t bond provision was rea d into Neumann’ s perf ormanc e bonds, and ther ef o re p laintiff’s rec ourse

was to file an action on the bonds under section 2 of the Bond Act, which was barr ed by the 180-day limit ations period set out there in (30 I L CS 550/ 2 (West 2010)). We af firm.

¶ 3 I . FACTS ¶ 4 This action ar ises from construc tion work perf ormed in two residential subdivisions in Antioch, commonly known as the NeuHa ven Subdivis ion and the Clublands Subdivis ion. Pursuant to the contra ct, Neumann agree d to construct cer tain public improvements for the Villag e’s benef

it. There afte r, Neumann and plaintiff enter ed into agree ments for plaintiff to

-2-perf orm cer tain g rading work require d under the contra ct. The pleading s prese nt no dispute that plaintiff completed the work in compliance with the contra ct but was not paid in full for its services

. Ne u m an n is not a party to this appea l. The Villag e issued two specia l service

are a (SSA) bonds to cove r some of the costs. ¶ 5 The cont ra ct required Neumann to provide surety bonds, the amounts of which we re based on the t otal cost of t he im p ro v em ents

. Neumann provided four surety bonds, issued by Fidelity and Deposit Company of Mary land (F idelity

), to cover the work. The four bonds

wer e substantively simil ar, eac h providing i n p ar t that “NOW THEREFO RE, THE CONDI TI ON OF THI S OB L I GATI ON I S SUCH, that, if said principal [Neumann] shall perf orm and complete said improvement(s) to said development in acc ordanc e with either the plan(s)/spec ification(s)/a g ree ment, then this obligation shall be void, otherwise to be and

rema in in full forc e and eff ect. THI S BO ND WI L L TERMI NATE upon written acc eptanc e of the improvements by the Oblige e [Vil lag e] to the Princip al [Neumann] and/or Surety [F id e li ty ]. ” Wh il e th e b o n d s guara

nteed perf ormanc e by Neumann, they wer e silent reg arding
pay ments to subcontrac tors, like plaintiff. ¶ 6 Ne u m an n wa s u nable to complete the improvements or to pay plaintiff in fu l l

. On November

1, 2007, Neumann de clar ed bankr uptcy . On Februar

y 18, 2008, plaintiff serve d Neumann and the Villag e with notices of a lien claim on a public improvement (s ee 7 70 I L CS 60/23 ( West 2010)) and notices of a bond claim (see 30 I L CS 550/1, 2 (West 2010)). Plaintiff last perf

ormed work on the NeuHa ven Subdivis ion on April 16, 2007, which made the 180th day October 13, 2007. Plaintiff last perf ormed work on the Clublands Subdivis ion

on Dec ember 23, 2006, which made the 180th day June 4, 2007. The parties do not dispute that plai n t i ff made its notices of claims more than 180 day s afte r last perf orming work or providing materia ls. Mark Reich, a manag ing member of plaintiff, testified that he handles lien and bond claims for plaintiff. Reich stated that plaintiff had delayed sending notices of its claims beca

use plaintiff did not want to risk its g ood business relationship with Neumann and fe are d losing futur e wor k. ¶ 7 Plaintiff filed a five-c ount second amende d complaint, seeking to rec over pay ment from the Vil lag e. C ounts I and I I I wer e li en claims for public funds (see 770 I L C S 6 0 / 2 3 (West 2010)) and cou nt V was a claim for unjust enric hment, but these claims ultimately wer e dismiss ed and a

re not pa rt of this appea l. ¶ 8 Counts I I and IV alleg ed third-par ty-bene ficiar

y brea ch of contra ct. Specifica lly
, plaintiff alleg ed that section 1 of the Bond Act and section 3.2(a) of the contra ct confe rre d third-par ty

benef iciary status upon plaintiff. Pl ai n t i ff alleg ed that the Villag e has brea ched its duty to require from Ne umann a suff icient pay ment bond for the be nefit of plaintiff. ¶ 9 F o ll o w ing c r o s s

- mo ti o n s f o r s u mm a r y judgment, the trial court grante d plaintiff summa r y judgme nt on counts I Iand IV. The V illage timely appea ls.

¶ 10 I I . ANALYSI S ¶ 11 A. Standard of Review ¶ 12 The purpose of summary judgme nt is not to try a question of fac t but, rathe r, to determine whether a g enuine issue of materia l fac t exis ts. Adams v. Northern Illinois Gas Co.
, 211 I ll.

-3-2d 32, 42-43 (2004). Summary judgme nt is appropriate wher e the pl ea d i n gs , aff idavits, depositions, and admissions on file, when viewed in t h e light most favor able to the nonmoving party
, show that there is no g enuine issu e o f materia l fac t and that the m oving party is entitled to a judgme nt as a matter of law. 735 I L CS 5/2-1005(c) (West 2010); Klit zka

v. Hellios
, 348 I ll. App. 3d 594, 597 (2004). In revie wing a grant of summary judgme nt, this
court must construe the pleading s, depositions, admissions, and aff idavits strictly ag ainst the moving party and liberally in favor of the nonmoving party

. W illiams v. Manche

ster , 228 I ll. 2d 404, 417 (2008). Where rea sonable perso n s could draw diverg ent infere nces from the undisputed materia l fac ts or wher e there is a dispute as to a materia l fac t, summary judgme nt should be denied an d the issue decide d by the trier of fac t. Espinoza v. Elgin, Joliet & Eas t er n R

y. Co

. , 165 I ll. 2d 107, 114 (1995). I f a party moving for summary judgme nt introduces fac ts that, if not contra dicted, would entitle him to a judgme nt as a matter of law, the opposing party m ay not rely on his pleading s alone to raise issues of materia l fac t. Klit zka , 348 I ll. App. 3d at 597. ¶ 13 The summa ry j u d gm en t p ro ce du re i s to be encour ag ed as an aid in the expeditious dispositi on of a lawsuit. Adams
, 211 I ll. 2d at 43. Howeve r, summary judgme nt is a drastic

means of disposing of liti gat ion and should not be grante d unless the movant’s right to judgme nt is clear an d fr ee fr om doubt. Forsythe v. Clark USA, Inc.
, 224 I ll. 2d 274, 280 (2007). We note that, by filing cross-motions for summary judgme nt, parties agree that only

a question of l aw is involved and invi te t he court to decide the i ssues based on the reco rd

. Allen v. Mey er , 14 I ll. 2d 284, 292 (1958). Howeve r, the mere fi l i n g of cross-motions for
summary judgme nt does not establish that there i s n o i s s u e of materia l fac t, nor does it obligate a court to rende r summary judgme nt. Andrews v. Cramer
, 256 I ll. App. 3d 766, 769 (1993). ¶ 14 Where a case is decide d through summary judgme nt, our rev i ew i s de novo

. Schultz v. Illinois Farmers Insurance Co.
, 237 I ll. 2d 391, 399-400 (2010). De n ovo revie w is also
appropriate to the ex t en t that this case turns on construction of the provisi ons of the Bond Act, which prese nts a question of law. See Gaffney v. Board of Trustees of the Orland Fire Protec t i o n District
, 2012 I L 110012, ¶ 50. The fundame ntal objective of statutory construction is to asce rtain and g ive eff ect to the intent o f t h e leg islature, and the most reliable indicator of leg islative intent is the statutory languag e, g iven its plain and ordinary meaning

. Gaffney
, 2012 I L 110012, ¶ 5 6

. “W hen the statutory languag e is clea r and unambiguous, it must be applied as written without re sort to extrinsi c aids of statutory interpre tation.” Gaffney
, 2012 I L 110012, ¶ 56. “We will not depar t from the plain statutory languag e by rea ding into it exceptions, limit ati o n s , or conditions that conflict with the expressed intent of the leg islature.” Gaffney , 2012 I L110012, ¶ 56.

¶ 15 B. B ond Act ¶ 16 The Villag e argues that section 1 of the Bond Act incorporates pay ment and perf

ormanc e provisions in all surety bonds for public construction even if the bonds do not expr es s ly include such provisions, and there fore the bonds t h at Ne umann procur ed would satisfy plaintiff’s claims for pay

ment. Howeve r, the Villag e conclude s, beca use plaintiff g ave notice

-4-of its claims more than 180 da y s after last workingon the projec t, the claims are barr ed by the 180-day limit ations period of section 2 of the Bond Act. We disagree

. The Villag e’s
argument is ba sed on the flaw ed pre mise that plaintiff’s only rec ourse is to bringan ac tion under the Bond Act. Counts I I and IV of the second amende d complaint state common-law claims for third-par

ty -benefi ci ary brea ch of contra ct, not claims under the Bond Act. Although the Bond Act cause s cer tain terms to be rea d into the contra ct, plaintiff’s brea ch-of

contra ct action is distinct from an action brought under the statute, such that the Bond Act’s statute of limitations does not apply

. ¶ 17 Section 1 of the Bond Act provides that (1) political subdivisions contra cting for public work must require the contra ctor to furnish a surety bond to guara ntee perf ormanc e as well
as pay ment owed to subcontrac tors and (2) eac h such bond is “dee med t o contain” cer tain provisions, even if they are not expressly included in the bond. Section 1 provides in rele vant part a s follows: “Except as otherwise provided by this Act, all officia ls, boards, commissions, or ag ents of this State in making contra cts for public work of any kind costing over $50,000 to be perf ormed for the State, and all officia ls, boards, commissions, or ag ents of any political subdivision of this State in making contra cts for public work of any k i n d costing over $5,000 to be perf

ormed for the political subdivision, shall require ever y contra ctor for the work to furnish, supply and deliver a bond t o th e S t at e, or to the political subdivision there of enter ing into the contra ct, as the case may be, with g ood and sufficie nt sur eties. The amount of the bond shall be fix ed by the offi ci al s , boards, commissions, commissioners or ag ents, and the bond, among other conditions, shall be conditioned for the completion of the contract, for the payme nt of material used in the work and for all labor performed in the work, whether by subcontractor or otherwise

. ***
Eac h such bond is deeme d to conta i n t h e fol lowing provisions whether such provisions are inse rted in such bond or not: ‘The principal and sureties on this bond agree that all the un dertakings, covena nts, terms, co n ditions and agr eeme nts of the contract or contra cts enter ed int o betwee n the principal and the State or any political subdivision there of will be perf ormed and fulfilled and to pay all persons, firms and corpor ations having contra cts with the principal or with subcontrac tors, all just claims due them under the provisions of such contra cts for labor perf ormed or materia ls furnished in the perf ormanc e of the contra ct on acc ount of which this bond is gi v en , wh en such claims are not satisfied out of the contra ct price of the
contra ct on acc ount of which this bond is g iven, afte r final set t l em en t b etwee n the office r, b o ard, commissi on or age nt of the S tate or of any political subdivision there of and the pr incipal has be en made .’ ” ( Emphasis added.) 30 I L CS 550/ 1 (West 2010). ¶ 18 In turn, section 2 of the Bond Act presc ribes a cause of action for an unpaid subcontrac tor on the bond. The r eleva

nt version of sec tion 2 provides in part as f ollows:
“Eve ry p er s o n furnishi ng materia l or perf orming labor, either as an individual or as a sub-contra ctor for any contra ctor, with the State, or a political subdivision there of wher e bond or letter of cr edit shall be executed a s provided in this Act, shall have the right to

-5-sue on such bond or letter of cre dit in the name of the State, or the political subdivision
t here of enter ing into such contra ct *** for his use and benef it, and in such s u i t t h e plaintiff shall file a copy of such bond ***, ce rt i fi ed b y the party or parties in whose charg e such bond *** shal l b e, wh i ch copy shall, unless execution there of be denied und er oath, be prima fac ie evidenc e of the execution and delivery of the orig inal; provided, howeve r, that this Ac t sha ll not be taken to in any way make the State, or the political subdivision there of entering into such contra ct, ** * li a b le to such sub-contra ctor *** to any g reater extent than it was liable under the law as it stood befor e the adoption of this Act.” 30 I L CS 550/ 2 (West 2010). ¶ 19 Any party seeking to e nforc e a claim for labor or materials has no right of action under the Bond Act unless the party files a verifie d notice of the claim wi t h t h e office r, board, burea u, or depar

tment awa

rding the contra ct, “within 180 day s afte r the date of the last item of work or t h e furnishing of the last item of materia ls.” 30 I L CS 550/2 (West 2010). Additio n al ly
, no action of any kind shall be brought under the Bond Act more than six months afte r the State or political subdivision acc epts the building projec t or work. 30 I L CS 550/2 (West 2010). 1 ¶ 20 The Villag e argues that the 180-day l i m i t at i o n s p er i o d of section 2 bars the claims contained in counts I I and IV of the second amende d complaint and, there fore
, the trial court should have enter ed summary judgme nt for the Villag e. Howeve r, section 2 of the Bond Act
states that “[t] he reme dy provided in this Section is in addit i o n t o and independe nt of any other rights and reme dies provided at law or in equity .” 30 I L CS 550/2 (West 2010). Counts I I and IV alleg ed common- la w th ird

- p a r ty

- b e n e f ic ia r y c o n tra c t claims, which are independe nt of the ty pe of action presc ribed by section 2. Thus, plaintiff’s claims turn on the languag e of the contra ct. ¶ 21 The construction, interpre tation, or leg al eff ect of a contra ct is a matter to be deter mined by the court as a question of law ( Ave ry v. State Farm Mutual Automobile Insurance Co.
, 216 I ll. 2d 100, 129 (2005))
, which we revie w de novo ( Gallagher v. Lenart
, 226 I ll. 2d 208, 219 (2007))

. “ ‘The elements of a breac h of contract claim are : (1) the exis tence of a valid and enfor cea ble contra ct; (2) perf

ormanc e b y t h e plaintiff; (3) brea ch of contra ct by the defe ndant; and (4) resultant injury to the plai n t i ff .’ ” Timan v. Ourada
, 2012 I L App (2d) 100834, ¶ 24 (quoting Hende rson-Smith & Associates, Inc. v. N a h a mani Family Servic e Center, Inc

. , 323 I ll. App. 3d 15, 27 (2001)). ¶ 22 “An individual not a party to a contra ct may only enfor ce the contra ct’s rights when the
contra ct’s orig inal parties intentionally enter ed into the contra ct for the direc t benef it of the individual.” Martis v. Grinnell Mutual Reinsurance Co.
, 388 I ll. App. 3d 1017, 1020 (2009). “The re is a s t ro n g presumption that the parties to a contra ct intend that the contra ct’s provisions apply only to them, and not to third parties.” Martis
, 388 I ll. App. 3d at 1020. Wit hout co ntra c t la

n g u ag e , th e c o ntra c ting parties’ knowledg e, expectation, or even intention that others will benef

it from their agree ment is not enough to overc ome the presumption that

Publ ic Act 97- 487 (e ff

. J an. 1, 20 12) re wrot e s ect ion 2 i n pa rtto ext end fr om si x m ont hs 1
to one year t he p er iodfo r b ri nging an ac ti on u nde r s ect ion 2 of th e Bon d Act

.
-6-the contra ct was intended for t he direc t benef it of the parties. Martis
, 388 I ll. App. 3d at 1020. ¶ 23 A pers o n ’s s t at u s as a third-par ty benef iciary turns on whether the contra ct languag e shows such an intent of the contra cting parties. Martis
, 388 I ll. App. 3d at 1020. The contra ct languag e must show that the contra ct was made for the direc t, not mere ly incidental, benef it of the third party

. Martis , 388 I ll. App. 3d at 1020. Such an intention must be shown by an express provision in the contra ct identifying the third-par ty ben efic iary by name or by description of a class to which the third party belong s. “I f a contra ct makes no mention of the plaintiff or the class to which he belong s, he is not a third-par ty benef iciary of the contra ct.” Martis
, 388 I ll. App. 3d at 1020. “The plaintiff bear s the burden of showing that the parties
to the contra ct intended to confe r a direc t benef it on him.” Martis
, 388 I ll. App. 3d at 1020. ¶ 24 Plaintiff qua lifies as a third-par ty benef iciary

. The pa

y ment bond require ment found in section 1 of the Bond Act is rea d into a public works contra ct betwee n a public entity and a g ener al contra ctor. Ardon Electric Co. v

. W interset Construction, Inc

. , 354 I ll. App. 3d 28, 3 4 (2 0 0 4 ). S pecif

ically
, section 1 states that, as part of its agree ment with the g ener al
contra ctor, the public entity “shall require every contra ctor fo r t h e work to furnish, suppl y and deliver a bond,” and the bond shall be conditioned for the completion of the contra ct, for the pay ment of materia l used in the work, and for all labor perf ormed in the work, including work c ompleted by

subcontrac tors. 30 I L CS 550/ 1 (West 2010). ¶ 25 “T h e Bo n d Ac t i s re medial and ‘ “is liberally construed to eff ectuate the Gene ral Assembly ’s intent to encour ag e and protec t artisans, materia lmen, and tra d e s men

. ” ’ ” Ardon
, 354 I ll. App. 3d at 34 (quoting East Peoria Community High School District No. 309 v. Grand Stage Lighti ng Co. , 235 I ll. App. 3d 756, 759-60 (1992), quoting Chicago Housing Authority v. United States Fidelity & Guaran t y Co.
, 49 I ll. App. 2d 407, 410 (1964))

. There fore
, the Bond Act mandates that the publi c en t i t y require the g ener al contra ctor to obtain a pay

ment bond. Ardon
, 354 I ll. App. 3d at 34 (citing East Peoria
, 235 I ll. App. 3d
at 760). The Villag e violated section 1, and thus brea ch ed t h e contract, when it failed to require Neumann to pr ocure such a pa y ment bond. ¶ 26 A s ubcontra ctor is a thi rd-pa rty benef iciary of a contra ct betwe en a public entity and a
g ener al contra ctor beca

use, “ ‘[a]s a policy matter, it would be meaning less here to rea d the Bond Act require ments into the [gene ral contra ct] without rea ding in third-par ty rights to enfor ce that statute.’ ” Ardon
, 354 I ll. App. 3d a t 34 (quoting East Peoria
, 235 I ll. App. 3d at 761). ¶ 27 Moreove r, consistent with the pay men t b o n d provision, section 3.2(a) of the contra ct provides that “[t] he Villag e agree s that [Neumann] shall construct the public improvements

u s i ng subcontrac tors and materia lmen selec ted from time to time by [Neumann ] i n [Neumann’s] sole discretion.” The pay ment bond provision rea d into the contra ct as well as section 3

. 2 (a) of the contra ct itself show the intent of Neumann and the Villag e to make plaintif f a third-par

ty benef iciary

. See East Peoria
, 235 I ll. App. 3d at 761-62 (“pr omises
reg arding pay

ment show that the parties anticipated that subcontrac tors’ service s would be provided on cre dit and that the parties wanted to make express arr ang ements for pay ment to them”).

-7-¶ 28 The Appellate Court, First District, Second Division, rea ched a differ ent result in Shaw

Industries, Inc. v. Community College District No. 515
, 318 I ll. App. 3d 661, 667-69 (2000). In Shaw Industries
, the g ener al contra ctor, Prairie State Associates, Inc. (PSA), hired Shaw
to complete work under a contra ct betwee n PSA and Prairie State College

. L ike plaintiff in this case , Shaw filed a complaint ag ainst the colleg e alleg ing a b re ac h o f contra ct arising from the colleg e’s failure to require PSA to procur e a pay ment bond as require d by the Bond Act. The colleg e moved to dismiss the complaint, arg uing, inter alia
, that Shaw was barr ed by the 180-day limit ations period set out in section 2 of the Bond Act. The trial court grante d the motion to dis miss. Shaw Industries , 318 I ll. App. 3d at 664. ¶ 29 The a

ppellate c ourt aff

irmed the dis missal, holding that the contract between P SA and the college did not contain any provis i o n s i ndicating that the contract was enter ed int o for Shaw’s direc t benef

it. The court distinguished East Peoria and W estern W aterproofing Co.

v. Springfield Housing Authority
, 669 F. Supp. 901 (C.D. I ll. 1987), explaining that in eac h of t hose case s the contra ct was enter ed into for the direc t benef it of a third party

. Shaw Industries
, 318 I ll. App. 3d at 668-69. The Shaw Industries court rec ognized the well-settled principle that a third-par ty-bene ficiar

y contra ct action can be asser ted b y an unpaid subcontrac tor ag ainst a public entity wher e such public entity has failed to procur e from the
g ener al contra cto r a pay

ment bond as require d by the Bond Act. Shaw Industries
, 318 I ll. App. 3d at 669. Howeve r, the court held that S h aw wa s n o t a direc t benef iciary under the
express terms of the contra ct and that rea ding the pay ment bond provision into the contra ct rende red Shaw’s third-par ty -be n e f ic ia r y action vulnera

ble to the limit ations provisions of the Bond Act. Shaw Industries
, 318 I ll. App. 3d at 672. In the view of the Shaw Industries court, Sh aw ’s cause of action was limit ed to the protec tion offe red by the Bond Act, and

acc ording ly the outcome was controlled by the provisions of the Bond Ac t , including the 180-day limit ations period set for th in section 2. Shaw Industries , 318 I ll. App. 3d at 672. ¶ 30 In A.E.I. Music Network, Inc. v. Business Computers, Inc.
, 290 F.3d 952 (7th Cir. 2002)
, the Seventh Circuit sug g ested that the applicability of section 2’s l i m i t at i ons period “has divided I llinois ’s intermediate appellate court.” A.E.I. Music Network
, 290 F.3d at 954. The
court explained that Shaw Industries deter mined that the 180-day limit ations period applied beca use the suit, howeve r ca

ptioned, was ne cessa

rily a suit to e nforc e the B ond Act, while East Peoria implied that the 180-day limit ations period did not apply
, beca use t h e court described the subcontractor’s suit ag ainst the ag ency as a third-par ty -bene ficiar

y suit for brea ch of contra ct rathe r than as a suit under the Bond Act. A.E.I. Music Network
, 290 F.3d at 954. ¶ 31 T h e S ev en t h C i rc u i t d eclined to follow Shaw Industries
, holding that the statute of limit ation s i n s ec t i on 2 of the Bond Act applies only to a suit on the bond; and wher e no bond is procure d, a suit on the bond is impossibl e. A.E.I. MusicNetwork, 290 F.3d at 954. Instead, th e co u rt rea soned, the “natur al reme dy” is a brea ch-of -contra ct claim by the subcontra ct o r aga i n st the public entity

. Be cause the bond require ment in section 1 of the Bond Act is rea d in t o p ub l ic construction contra cts to g ive subcontrac tors a reme dy
, the third-par ty -bene ficiar

y doctrine entitles a subcontrac tor to sue for brea ch of contra ct. Thus,

a subcontrac tor suing as a third-par ty benef iciary under a g ener al contra ct has four year s to file a complaint under section 13-214 of the Code of Civil Procedur e. A.E.I. Music Network
,

-8-290 F.3d at 955; see also Ardon , 354 I ll. App. 3d at 39.

¶ 32 We disa v o w S h a w In dustries to the extent that it incorre ctly applied the Bond A ct’s limit ations period to a brea ch-of -contra ct claim. Conversely Ardon
, A.E.I. MusicNetwork
, and East Peoria corr ectly applied the statute of limit ations for a brea ch-of -constructioncontra ct action under simil ar fac ts. Be cause a public works contra ct is de emed to inc lude a pay ment bond require ment with specific ve rbiag e pursua nt to section 1 of the Bond Act, a subcontrac tor’s third-par

ty-bene ficiar

y action is not a sui t on the bond and the Bond Act’s limit ations provisions do not apply

. Rather, unless the surety is being dunned, the subcontrac tor’s action is on the terms contained in the contra ct. Fur ther, we n o te that this

case is fac tual l y distinguishable from Shaw Industries
, wher e the express terms of the
contra ct did not make the subc ontrac tor a third-pa rty benef iciary

. ¶ 33 We hold that the Villag e brea ched th e co n tra ct when it failed to require Neumann to furnish a pay

ment bond for the benef

it of subcontrac tors. Section 1 of the Bond Act require s the g ener al contra ctor to post a pay ment bond, and that requir em en t i s re ad into a public construction contra ct prec isely to g ive the subcontrac tor a reme dy ; thus a p aym en t b ond beca me a term of the contra ct betwee n Neumann and the Vill age

. As a d i rec t third-par ty benef iciary
, plaintiff had the right to sue on the contra ct. See Ardon
, 354 I ll. App. 3d at 39. The limit ations period of section 2 of the Bond Act applies only to a suit on the bond; wher e no bond was proc ured, a

suit on the bond is impossible. A.E.I. Music Network
, 290 F.3d at 954. Applying the Bond Act’s limit ations period to a brea ch- o f- contract suit, as Shaw Industries did, is a non sequitur

. Plaintiff’s b re ac h -of- contra ct claims are not time barr ed beca use the four- year statute of limit ations for construction contra cts (see 7 3 5 IL CS 5 /1 3 -214 (West 2010)) applies rathe r than the 180-day limit ations period in section 2 of the Bond Act. ¶ 34 In its reply b ri ef
, t h e Vi l l age arg

ues that we need not follow Ardon
, A.E.I. Music Network
, and East Peoria beca use, in those case s, the g ener al contra ctors failed to pr ocure

a bond of any kind, while in this case the Villag e obtained perf ormanc e bonds. The Villag e contends that, while we must rea d section 1’s subcontrac tor p ay ment provision into Neumann ’s p er formanc e bonds, such a provision could not be rea d into a bond in Ardon
, A.E.I. MusicNetwork, and East Peoria wher e no bonds existed. W e disagree

. ¶ 35 Admittedly
, in A.E.I. Music Network
, “no bond was posted; and as a result A.E.I

. could
not tur n to a surety

when it was stiffe d.” A.E.I. MusicNetwork, 290 F.3d at 953. Howeve r, the actions brought in Ardon and East Peoria wer e based only on the absenc e of a pay ment bond; it is unclea

r whether the public entities procur ed any other kind of bond into which the
pay ment provision of section 1 could be rea d. Ardon
, 354 I ll. App. 3d at 30 (“no payme nt bond was available ” (empha sis added) ); East Peoria
, 235 I ll. App. 3d at 759 (“The first issue fo r revie w is whether the Bond Act mandated that [the high school] require [t h e gen er al
contra ctor] t o o btain a payme nt bond.” (Emphasis added.) ). The Villag e makes an unsupported fa ctual stateme nt about Ardon and East Peoria

. ¶ 36 Fur

thermore
, afte r providing that the public entity must require the contra ctor to furnish

a surety bond to guara

ntee pay ment owed to subcontrac tors, section 1 of the Bond Act states that “such bonds” are deeme d to inc lude cer tain languag e set forth in the section. I f a bond does not mention pay

ment to subcontrac tors, it is not “such [a] bond.” The specific languag e

-9-to be included in the bond pursuant to section 1 is intended to clarify what might otherwise

be seen as ambiguous bond languag e, not to expand a p er fo rm ance bond into a pay ment bond. In other words, the statute’s specific language relating to pay ment is deeme d to be included in the bond only afte r the public entity satisfies the predic ate condition of requiring the contra ctor to procur e a pay ment guara

ntee. To hold otherwise would cre ate the prac tical absurdity of the c laimant havingto seek re cover y on a bond that does not e x ist. ¶ 37 I f we wer e to adopt the Villag e’s argument, we would improperly shift from the Villag e to Fideli t y th e b u rd en of ensuring compliance with section 1 of the Bond Act. Section 1
states that a public entity like the Villag e “shall require ever y contra ctor fo r t h e work to furnish, supply and deliver a bond” for the benef it of subcontrac tors, but the statute imposes

no such duty on the surety

. Fur thermore
, beca

use Fidelity was not a party to the contra ct, its
exposure was c alculate d based on c ontrac t terms over which it had no control.

¶ 38 I I I . CONCLUSI ON ¶ 39 Section 1 of the Bond Act, as well as section 3.2(a) of the contra ct itself, made plaintiff

a direc t third-par

ty benef iciary with the right to sue on the contra ct. See Ardon
, 354 I ll. App. 3d at 39. Be cause the Villag e did not require Neumann to procur e a pay ment bond, a suit on such a bond is impossibl e and the statute of limit ations of section 2 of the Bond Act does not apply

. A.E.I. Music Network
, 290 F.3d at 954. Plaintif f ’ s b re a ch-of

-contra ct claims are timely under the four- year statute of limit ations for construction contra cts (see 735 I L CS 5/13-214 (West 2010)). ¶ 40 For

the re asons stated, the summar y judgme nt entere d in favor of plaintiff is aff

irmed.

¶ 41 Affir

med.

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