Opinion ID: 426287
Heading Depth: 2
Heading Rank: 1

Heading: Fuller's Breach of Contract Claims Against CCOM.

Text: 24 Fuller assigns error to the jury instructions on the contract conditions precedent in Fuller's counterclaim against CCOM. Fuller's counterclaim alleged that CCOM had breached the construction contract. To recover, Fuller first had to prove that it had fulfilled its own contractual obligations. The court instructed the jurors that one of Fuller's contractual duties was to submit a list of proposed subcontractors to the architect within 45 days of the awarding of the construction contract. Fuller contends that this instruction was error because CCOM waived compliance with this obligation and it was immaterial. Fuller argues that the court either should have held the 45-day notice provision immaterial and waived as a matter of law, or instructed the jury concerning waiver of contract terms. In opposition, CCOM states that the instruction was unnecessary because Fuller failed to adduce sufficient evidence of waiver (in particular, that CCOM knowingly relinquished a right under the contract between the parties). 7 25 Fuller tendered the following instruction on waiver, which the district court refused as argumentative, unnecessary, and confusing. 26 Any party to a contract may waive any terms, conditions or other rights that it might have under the contract. Waiver may be accomplished by agreement of the parties or it may be inferred from acts or conduct, but to constitute a waiver there must be an intentional relinquishment of a known right.In considering whether either any contract obligations were not fulfilled by either Chicago College of Osteopathic Medicine or George A. Fuller Company, you may also consider whether any of the terms, conditions or other rights under the contract were waived by the other party. 27 We do not consider this instruction to be either argumentative, unduly confusing, or unnecessary. 28 To establish a waiver of performance of the terms of a contract, Illinois law requires that the facts and circumstances show an intentional relinquishment of a known right, and must be inconsistent with an intention to insist on the rights of the party under the contract. John Kubinski & Sons, Inc. v. Dockside Development Corp., 33 Ill.App.3d 1015, 1019-20, 339 N.E.2d 529, 533 (1st Dist.1975). A party to the contract may waive a condition precedent to performance on his part or a breach of the contract provisions by conduct manifesting a continued recognition of the contract's existence after learning of the breach thereof, such as by continuing to accept performance of the contract and to have the benefit thereof. I.L.P. Contracts Sec. 409 (1955); accord Royal Ornamental Iron, Inc. v. Devon Bank, 32 Ill.App.3d 101, 336 N.E.2d 105 (1st Dist.1975). Additionally, when a party lists specific objections to the sufficiency of performance, generally, Illinois courts hold that he has waived any other objections he has. I.L.P. Contracts Sec. 409 (1955); see generally John J. Calnan Co. v. Talsma Builders, Inc., 67 Ill.2d 213, 10 Ill.Dec. 242, 246, 367 N.E.2d 695, 699 (1977). 29 In the present case, CCOM proceeded with the contract for almost two years after Fuller had failed to timely list the names of the subcontractors. Additionally, when CCOM terminated Fuller by written notice, CCOM did not list the 45-day notice requirement as a default. CCOM states that these facts fail to establish waiver because Fuller offered no evidence that CCOM knew of Fuller's failure of performance. 30 Although Fuller points to nothing in the record which establishes that CCOM actually knew of the breach, the evidence does support a finding that SGE was aware of the breach and, as CCOM's agent, either had authority to waive the breach or a duty to inform CCOM of it. At oral argument, counsel for CCOM conceded awareness of all subcontractors within 45 days except for the caisson contractor. All caissons were installed by May 3, 1974. 31 Conceivably, SGE realized upon receipt of the list of subcontractors on the 45th day that the caisson subcontractor was missing, or SGE, during the course of its supervision of the construction, 8 learned that Fuller had not listed the caisson subcontractor. Further, the jurors could have concluded that this is the type of information which SGE has a duty to communicate to CCOM, and therefore, that CCOM was aware of the breach; or that SGE had the authority to waive the 45-day notice provision as CCOM's agent, and therefore, that CCOM should be held to have waived the requirement. See generally Neuberg v. Clute, 6 Ill.2d 58, 126 N.E.2d 648 (1955); W. Seavey, Agency Secs. 96-98 (1964); I.L.P. Contracts Secs. 127, 221 (1953). 32 Fuller thus adduced sufficient evidence of waiver to support a jury finding, and the district court's failure to give an instruction on waiver was error. We may reverse the jury verdict for CCOM, however, only if omission of the waiver instruction was not harmless error. On appeal, [e]rror is not to be presumed but must be made affirmatively to appear by the party asserting it ... every intendment must be indulged in favor of the validity of the judgment appealed from. McGrath v. Zenith Radio Corp., 651 F.2d 458, 472 (7th Cir. 1981) (quoting Wabash Railway Co. v. Bridal, 94 F.2d 117, 121 (8th Cir), cert. denied, 305 U.S. 602 (1938)). Reversal due to error in instructions is appropriate only where the jury's understanding of the issues was seriously affected, to the prejudice of the plaintiff[]. Wilk v. American Medical Association, 719 F.2d 207, 218-19 (7th Cir. 1983). Error embodied in a jury instruction is grounds for reversal unless it affirmatively appears, viewing the charge as a whole, that the error was harmless. Schybinger v. Interlake Steamship Co., 273 F.2d 307, 313 (7th Cir. 1959). 33 Failure to instruct the jury on waiver would have had prejudiced Fuller only if the jury found that Fuller had performed every contractual obligation except submission of the proposed subcontractor's list. The jury then would have had to find that the nonperformance of this duty alone was a material breach of Fuller's contractual obligations and thus Fuller could not recover on its counterclaim against CCOM. 34 Judge Leighton viewed submission to the jury of this and seven other of Fuller's contractual obligations as merely informing the jury what the contract between the parties provided with regard to Fuller's obligations, not as a statement on materiality. Tr. 2606-07. Concerning Fuller's counterclaim against CCOM, Judge Leighton instructed the jury that Fuller must show only that CCOM failed to meet one or more of its contractual obligations, that Fuller suffered losses, and that those losses were caused by CCOM's breach. Tr. 2789-90. No instruction told the jury that Fuller must have fully performed its own contractual obligations before it could recover on its counterclaim. However, the jury was told to consider the instructions on the several claims involved in this trial as a whole, and the instructions on CCOM's claims against Fuller informed the jury that the prerequisites to CCOM's recovery included proof by a preponderance of the evidence that CCOM substantially performed each of its obligations under the construction contract, and that Fuller materially and substantially breached one or more of its obligations under the construction contract. Tr. 2782. The jury thus was adequately informed that any breach by Fuller must be material before it could bar Fuller's counterclaim. 35 We find that Judge Leighton's instructions as a whole would have prevented a reasonable jury from finding that Fuller's only shortcoming under the contract was a material breach of the contract barring it from recovery on its counterclaim. Failure to give the waiver instruction was harmless error. 36