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

Heading: Fuller's Appeal.

Text: 23
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
37 Despite Fuller's contention that the district court erred in refusing to instruct the jury on its claim that SGE breached duties owed to Fuller arising ex contractu, we affirm the district court refusal because SGE owed no contractual obligations to Fuller. 38 Fuller recognizes that it and SGE did not enter into any written contract. Rather, Fuller claims a breach of contract by SGE based upon the written agreement between Fuller and CCOM. According to Fuller's theory, SGE was CCOM's agent during the construction phase and that, as such agent, SGE agreed to be bound by the terms of the contract between Fuller and CCOM, a contract to which SGE was not a party. As support for this theory, Fuller points out that the Fuller/CCOM contract expressly refers to activities to be performed by the architect personally and that the SGE partner in charge of the project, Lawrence Harrison, testified that he considered himself bound by the provisions in that contract .... Tr. 825. 39 Fuller also recognizes that a disclosed agent is usually not contractually obligated to the other party, but states that an agent is personally bound if he agrees to be or if, by reasonable inference, his personal agreement can be implied in the contract. While the proposition is correct, Fuller's conclusion that SGE agreed to be bound is incorrect. 9 40 In Gateway Erectors Division v. Lutheran General Hospital, 102 Ill.App.3d 300, 58 Ill.Dec. 78, 430 N.E.2d 20 (1st Dist.1981), the cement contractor alleged that the construction manager owed contractual duties to the cement contractor based upon the contract between the cement contractor and the owner. That contract, to which the construction manager was not a party, expressly referred to many tasks which the manager was to carry out. The court affirmed the dismissal of the contract claim, concluding that the manager was the agent of a disclosed principal and did not agree, either expressly or inferentially, to become personally liable under the contract. 41 Here, Fuller was not a party to the CCOM/SGE contract and SGE was not a party to the CCOM/Fuller contract. SGE never expressly agreed to be bound by the CCOM/Fuller agreement. The district court properly refused to give Fuller's tendered jury instructions on its contract claim against SGE. 42
43 The district court gave the following jury instruction on the standard of care owed by architects: 44 In performing its duties, an architect must possess and apply the knowledge and use the skill and care that is ordinarily used by reasonably well-qualified architects in the locality in which he practices or in similar localities in similar cases and circumstances. A failure to do so is a form of negligence that is called malpractice. 45 The only way in which you may decide whether Schmidt, Garden & Erickson possessed and applied the knowledge and used the skill and care which the law required of it is from evidence presented in this trial by architects called as expert witnesses. You must not attempt to determine this question from any personal knowledge you have. 46 This instruction was modeled after the medical malpractice jury instruction set forth in Illinois Pattern Jury Instructions, Civil Sec. 105.01 (2d ed. 1971). 47 Fuller contends that the district court erred in giving the malpractice jury instruction with respect to Fuller's negligence claim against SGE, and in refusing to give its proffered instruction which imposed on SGE a lesser duty, i.e., to use only ordinary care, 10 particularly with respect to SGE's role of supervising the construction. Additionally, Fuller argues that regardless of the standard of care required, the district court erred in instructing the jurors that SGE's negligence could be established only by way of expert testimony, because the jurors could evaluate SGE's conduct based on common knowledge. 48 We conclude that the district court properly held SGE to the standard of care ordinarily demanded of architects, both in the performance of its supervisory duties and the preparation of plans. Miller v. De Witt, 59 Ill.App.2d 38, 89-92, 111-12, 208 N.E.2d 249, 273-75, 284 (4th Dist.1965), aff'd in pertinent part and rev'd in part on other grounds, 37 Ill.2d 273, 226 N.E.2d 630 (1967). 11 Other courts also have applied the professional standard of care to supervisory and administrative activities as well as to the preparation of plans and designs. See, e.g., Peerless Insurance Co. v. Cerny & Associates, Inc., 199 F.Supp. 951, 955 (D.Minn.1961); Nauman v. Harold K. Beecher & Associates, 24 Utah 2d 172, 467 P.2d 610, 615 (1970); 530 East 89 Corp. v. Unger, 43 N.Y.2d 776, 402 N.Y.S.2d 382, 373 N.E.2d 276, 277 (1977); Evans v. Howard R. Green Co., 231 N.W.2d 907, 913 (Iowa 1975). 12 49 We also find that the district court correctly instructed the jury regarding the necessity of expert-witness testimony to prove a breach of an architect's standard of professional conduct. The standard of care ordinarily expected of architects in executing their obligations is generally not a matter of common knowledge, 13 although a particular case may only call upon the common sense of laymen or involve gross negligence obvious to lay observation. See generally Walski v. Tiesenga, 72 Ill.2d 249, 256, 21 Ill.Dec. 201, 207, 381 N.E.2d 279, 285 (1978); Annot., Necessity of Expert Testimony to Show Malpractice of Architect, 3 A.L.R. 4th 1023 (1981). 50 Fuller charges that SGE acted negligently in authorizing extra compensation for changes in the structural steel design, in approving certain charges for extra services and in assuring payment for delay claims. Analogous claims of malpractice occurred in Peerless Insurance Co. v. Cerny & Associates, Inc., 199 F.Supp. 951, 953 (D.Minn.1961), and 530 East 89 Corp., 43 N.Y.2d 776, 402 N.Y.S.2d 382, 383, 373 N.E.2d 276, 277 (1977). In Peerless Insurance Co., the court considered expert-witness testimony in finding the defendant architect negligent in approving and certifying payments. The architect in 530 East 89 Corp. allegedly delayed inordinately long in responding to objections made by the city's department of buildings and procrastinated in remedying the problems; the court ruled that such allegations of architectural malpractice were not within the competence of an untutored layman to evaluate. 402 N.Y.S.2d at 383, 373 N.E.2d at 277. 51 Here, too, the acts of which Fuller complains are not within the realm of jurors' common experience and observation. To properly assess SGE's actions, the jury needed a witness with an expertise in the field of architecture to explain the nature of the judgment calls SGE made and the accuracy to be expected. 52