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THIRD DIVISION

December 29, 2000

No. 1--99--3424

JUSTICE BURKE delivered the opinion of the court:

Defendant Intercargo Insurance Company, a surety on a publicconstruction bond, appeals from an order of the circuit courtentering judgment in favor of plaintiff MQ Construction Co., Inc.on plaintiff's claim against defendant's bond for money owed toplaintiff for certain construction work it performed on a publicconstruction project. On appeal, defendant contends that the trialcourt erred in finding that December 12, 1996, was the "last day ofwork" of plaintiff on the project for purposes of determiningwhether plaintiff filed a timely notice of its claim againstdefendant's bond as required by the Illinois Public ConstructionBond Act (Bond Act) (30 ILCS 550/2 (West 1996)). For the reasonsset forth below, we reverse.

The city of Chicago (City) hired Roadworks, Inc. (Roadworks)as the general contractor for a public works construction contract known as "project No. S-5-020, 1995 Model Block Group 21-A"(project). Plaintiff entered into an "agreement" with Roadworksfor certain work on the project, which included: "Type 4 curbremoval; Type 4 curb replacement; 5" PCC mainwalk; 5" PCC for thedisabled; 8" PCC driveway; Type 3 curb removal; Type 3 curbreplacement." Although a complete contract is not contained in therecord, portions of the "General Conditions and Special Conditions"for the City's project contract provided:

"The Contractors shall not be entitled todemand or receive final payment until all thestipulations, provisions and conditions as setforth in the contract have been complied with,and the work has been accepted by theCommissioner, whereupon the City will, at theexpiration of 30 calendar days after suchcompletion and acceptance, pay the wholeaccount of money due the contractor under thecontract.

The acceptance by the Contractor of the finalpayment above mentioned shall operate as andshall be a release to the City from all claimsor liability under this contract, or for anyact or neglect of the city relating to orconnected with this contract.

Contractor's Responsibility for Work

The Work shall be under the charge and care ofthe Contractor until final acceptance by theCommissioner, including all "Punch List" work,unless otherwise specified in the ContractDocuments.

The Work will not be considered as completedand accepted until a written notice from theCommissioner, confirming the Final Completionand acceptance of all Work, including "PunchList" Work has been received by theContractor."

On April 3, 1995, Roadworks, with defendant acting as surety,obtained a "Contractors's Performance Bond" in which it agreed tobe bound to the City for $783,989.55 for the work, labor, andmaterials used on the project. Between April 24, 1995, and May 12,1995, plaintiff performed its work on the project pursuant to itsagreement with Roadworks. On June 6, 1995, plaintiff sent an"invoice" to Roadworks for "full and final payment" pursuant to theagreement. The invoice itemized the work performed, listed the"total" for the work as $146,796.20, indicated that a previouspayment had been made for $70,000, and demanded payment of$81,796.20.

In December 1996, plaintiff received a copy of a "memorandum"and an accompanying "Preliminary Punch List" sent to Roadworks fromthe project director for the City. The document stated, in part:"Final payment shall be withheld until both preliminary and finalpunch list items are completed to the city's satisfaction." Items1, 3 through 8, and 10 on the punch list required patching orreplacing certain sections of sidewalk that plaintiff hadoriginally constructed in April or May 1995, but which had been"marred after pouring and after the wet cement had cured, or whichhad cracked subsequent to installation." On December 12, plaintiffreturned to the project site and performed the punch list itemsrelated to its work and did not perform any further work on theproject after that date. Plaintiff did not issue an invoice toRoadworks for the work plaintiff performed on December 12.

On January 17, 1997, plaintiff filed an "Original Contractor'sMechanic's Claim for Lien" against the City and Roadworks torecover the balance of $81,796.20 for the work plaintiff performedin "April, May, and June" 1995. On January 28, defendant receiveda copy of plaintiff's claim on defendant's bond for the project andrequested that plaintiff complete a "Proof of Claim" form andsupply other documentation supporting plaintiff's claim. Plaintiffcompleted the "Proof of Claim," indicating on the form that it lastfurnished labor, materials, supplies, and services in connectionwith the claim on December 12, 1996.

On April 8, 1997, defendant denied liability for plaintiff'sclaim, stating that its investigation revealed that plaintiff"completed its original contract work" in June 1995 and thatplaintiff's work in December 1996 was "corrective and cosmetic" anddid not extend the time that plaintiff was required to make a claimagainst the "contractor's bond." Because plaintiff had not fileda claim against the bond within 180 days of the completion of itswork in June 1995, as required by section 2 of the Bond Act,defendant denied the claim.

On June 12, 1997, plaintiff filed a verified complaint fordeclaratory judgment, alleging that it provided labor and materialson December 12, 1996, to cure punch list deficiencies "pursuant toits obligations to Roadworks," and that it properly filed a lien 36days after the "last item of work" pursuant to the Bond Act. Thecomplaint requested that the trial court declare that plaintiff wasentitled to coverage under the "Contractor's Performance Bond" andthat defendant was obligated to provide coverage for plaintiff'sloss pursuant to the terms of the bond.

Defendant filed a section 2--615 motion to dismiss thecomplaint (735 ILCS 5/2--615 (West 1996)), arguing that plaintiff'scase was inappropriate for declaratory relief because (1) plaintiffdid not seek a determination of the construction of an ambiguousstatute or contract provision, (2) plaintiff only sought theenforcement of a right "after the fact" and not a declaration ofpresent rights, and (3) section 2 of the Bond Act (30 ILCS 550/2(West 1996)) "provided a specifically enacted and far moreappropriate remedy than a declaratory judgment action." Theparties entered an agreed order which, among other things, struckthe prayer for relief of plaintiff's verified complaint fordeclaratory judgment, and granted plaintiff leave to file anamended complaint.

Plaintiff filed an amended complaint which containedallegations similar to those in the original complaint butrequested judgment in plaintiff's favor in the amount of$81,796.20, plus interest. Defendant filed its answer to theamended complaint, denying all material allegations against it,and, as an affirmative defense, stated that the "corrective" workperformed by plaintiff on December 12, 1996, did not extend thetime in which plaintiff was required to notify defendant of itsclaim and that plaintiff's claim was not filed within 180 days.

Thereafter, defendant filed a motion for summary judgment. Although defendant stated that there were no Illinois decisionsinterpreting the term "last work" in reference to the 180-day"claim notice" requirement in the Bond Act, defendant argued that"last work" should be interpreted in a fashion similar tointerpretations of similar terms in the federal Miller Act and theIllinois Mechanics Lien Act. Defendant argued that under thoseActs the applicable limitations period to demand payment under theActs begins on the day that the original work is completed on theproject and subsequent "corrective" work is not considered withrespect to the limitations period. Defendant contended that thetrial court, therefore, should adopt a similar interpretation forthe Bond Act by finding that plaintiff's "last work" on the projectoccurred in June 1995, starting the 180-day limitations periodunder the Act, and that the "corrective" work performed byplaintiff in December 1996 had no effect on this period.

In response to defendant's summary judgment motion, plaintiffargued that because it had received correspondence from the Cityindicating that final payment would not be made until all punchlist items were completed, the City did not consider "the contractsubstantially performed." Plaintiff maintained that this createda genuine issue of material fact as to whether it had substantiallyperformed its contract in a workmanlike manner in May 1995,entitling plaintiff to demand payment at that time, or in December1996, after it had completed the punch list items. Plaintiff alsoargued that defendant's position was not supported by Illinois law.

The trial court denied defendant's motion for summaryjudgment. On March 25, 1999, Michael Quaranta, plaintiff's owner,gave his deposition. He testified that he entered into a verbalagreement with the owner of Roadworks for the work on the project. Roadworks had agreed to pay plaintiff for the work plaintiffperformed at the same rate that Roadworks was to be paid by theCity for the same work. Plaintiff was not paid directly by theCity, and Roadworks did make an informal partial payment of $70,000to plaintiff. Quaranta was aware that Roadworks was no longer inbusiness, and Quaranta did not send an invoice to Roadworks for thework performed on December 12, 1996, because contractors aretypically not paid for punch list work. Quaranta admitted that thepunch list work was "corrective" in nature, but he did not considerthe work on the contract as complete, entitling him to payment,until all the punch list and corrective work had been completed.

The parties entered into a "Joint Final Pre-Trial Memorandum"containing a statement of stipulated facts which listed factssimilar to those above. Both parties separately filed a memorandumin support of their position at trial. Plaintiff again argued thatDecember 12, 1996, was its "last day of work" because it wasrequired to complete punch list items to the City's satisfactionbefore receiving payment. In support of its argument, plaintiffcited to the portions of the "General Conditions and SpecialConditions" to the contract for the project, as stated above. Defendant argued in its memorandum that the Bond Act at issue, thefederal Miller Act, and the Illinois Mechanics Lien Act all hadsimilar purposes and contained "last work"-based limitations. Defendant argued, therefore, that the Bond Act should beinterpreted similarly to the Miller Act and the Mechanics Lien Act,which interpreted "last work" to refer to the last originalperformance of the work as opposed to subsequent repairs.

A bench trial on plaintiff's complaint was held on July 21,1999. The parties did not present any witnesses. On August 19,1999, the trial court issued a written order in favor of plaintiff,finding that "the date that the Plaintiff completed its workpursuant to the Contract between it and Roadworks [was] thecontrolling date for purposes of running the 180 [day] claim filingperiod." After quoting portions of "The City Contract," statingthat final payment would not be received until the provisions ofthe contract had been complied with and final acceptance of thework, including punch list items, by the Commissioner, as statedabove, the trial court stated:

"The Court finds that the work performed by MQon December 12, 1996, was pursuant to theprovisions of the underlying contract whichrequired full completion of all Punch ListWork and corrective work before the terms ofthe contract were considered complied with. Hence it was reasonable for MQ to believe ithas 180 days from December 12, 1996 to file aClaim if the amount sought was not paid. There is no evidence that the work on December12, 1996, was other than pursuant to theoriginal contract for work, [n]or is there anyevidence to support a finding that the workwas done to extend the time for filing theclaim."

On September 2, the trial court awarded plaintiff $76,796.20, andthis appeal followed.

Defendant argues that the standard of review is de novobecause the issue is one of statutory interpretation requiring alegal conclusion based on stipulated facts and documentarysubmissions. Plaintiff does not state a standard of review in itsbrief. It is well settled that "[w]hen the only question before acourt is the legal conclusion to be drawn from a given set of factsand the credibility of witnesses is not in issue, review of a trialcourt's holding is de novo." Stojkovich v. Monadnock Building, 281Ill. App. 3d 733, 742-43, 666 N.E.2d 704 (1996). In the presentcase, because no witnesses testified at trial, the facts before thecourt were stipulated to by the parties, and the trial court madea legal conclusion based on these facts, the standard of reviewhere is de novo.

Defendant first contends that the Bond Act shares a "commonpurpose" with the federal Miller Act and the Illinois MechanicsLien Act by protecting suppliers of labor and material. Defendantalso contends that the limitations period in the Bond Act,requiring notice of a claim within 180 days from the date that thesupplier performed its "last work" on the project, offersprotection to project owners, sureties, and prime contractorssimilar to the limitations periods found in the Miller Act and theMechanics Lien Act. Defendant argues that courts, wheninterpreting the "last work"-based notifications and limitationsprovisions in the Miller Act and Mechanics Lien Act, havedisregarded the date of performance of "corrective work" andinstead looked to the "date of completion of the originalperformance of the contract for purposes of fixing the date of'last work'" to determine when the limitations period begins torun. Defendant maintains that because the Bond Act shares a commonpurpose with the Miller Act and Mechanics Lien Act, it should beinterpreted in a similar fashion. According to defendant,plaintiff originally performed its contract work in May 1995,beginning the 180-day limitations period, and the work plaintiffperformed in December 1996, was "corrective" in nature and did notaffect the limitations period. Defendant argues, therefore, thatbecause plaintiff did not file a claim against defendant's bondwithin 180 days of its "last work" in May 1995, plaintiff's claimis untimely, and the trial court erred in entering judgment infavor of plaintiff.

Plaintiff contends that defendant's argument ignores thespecific contract provisions by which plaintiff was bound duringthe project. Specifically, plaintiff argues that irrespective ofwhether the work it performed on the project was "original" versus"corrective," this court must determine, as the trial courtdetermined, whether plaintiff was performing work pursuant to itscontract when evaluating which was the last date of work thatplaintiff provided labor or materials. Plaintiff claims that thework it performed in December 1996 was "at the request and demandof the City" and "required" by the contract because the relevantterms of the contract stated that the project would not beconsidered complete, and payment made, unless all punch list itemswere performed and accepted by the Commissioner. Plaintiffmaintains that its notice of its claim on the bond was timelybecause it was made within 180 days of the work performed inDecember 1996.

Defendant counters that the contractual provisions relied onby plaintiff were included in the contract between the City, asowner of the project, and Roadworks and that plaintiff, asRoadworks' subcontractor, was not in contractual privity with theowner. Defendant contends, therefore, that plaintiff's reliance onthe contractual provision that the work would not be consideredcomplete nor payment made until all punch list items were finishedis misplaced. Defendant maintains that plaintiff was not obligatedto respond to a request or a demand from the City to complete punchlist work. Defendant reasserts that it is the nature of the work,i.e., whether corrective or original, that determines when thelimitations period in section 2 of the Bond Act begins to run.

Section 2 of the Bond Act provides, in relevant part:

"Every person furnishing material orperforming labor, either as an individual oras a sub-contractor for any contractor, withthe State, or a political subdivision thereofwhere bond or letter of credit shall beexecuted as provided in this Act, shall havethe right to sue on such bond or letter ofcredit in the name of the State *** for hisuse and benefit ***. *** Provided, however,that any person having a claim for labor, andmaterial as aforesaid shall have no such rightof action unless he shall have filed averified notice of said claim with theofficer, board, bureau or department awardingthe contract, within 180 days after the dateof the last item of work or the furnishing ofthe last item of materials, and shall havefurnished a copy of such verified notice tothe contractor within 10 days of the filing ofthe notice with the agency awarding thecontract." 30 ILCS 550/2 (West 1996).

The Bond Act provides an "alternate remedy to that afforded by theMechanics' Lien Act" and the Bond Act's purpose is to protectcontractors and materialmen for whom no right of a mechanic's lienexists against a public body and to regulate claims against publicmonies. Chicago ex rel. Charles Equipment Co. v. U.S. Fidelity &Guaranty Co., 142 Ill. App. 3d 621, 626, 491 N.E.2d 1269 (1986). Similarly, the purpose of the Illinois Mechanics Lien Act is toprotect those who in good faith furnish material or labor for theconstruction of buildings. Miller v. Reed, 13 Ill. App. 3d 1074,1076, 302 N.E.2d 131 (1973).

The primary rule of statutory construction, to which all otherrules are subordinate, is to ascertain and give effect to theintent and meaning of the legislature. In re Application forJudgment & Sale of Delinquent Properties for the Tax Year 1989, 167Ill. 2d 161, 168, 656 N.E.2d 1049 (1995). Courts should look tothe language of the statute as the best indication of legislativeintent, giving the terms of the statute their ordinary meaning. Inre Application for Judgment, 167 Ill. 2d at 168. Statutes shouldbe construed in conjunction with other statutes addressing the samesubject. In re Application for Judgment, 167 Ill. 2d at 168-69. We presume that statutes which relate to one subject are governedby one spirit and a single policy, and that the legislatureintended the enactments to be consistent and harmonious. Even whenapparent conflicts exist, we are to construe such statutes inharmony with each other, if reasonably possible. People v. Maya,105 Ill. 2d 281, 286-87, 473 N.E.2d 1287 (1985). "Reference toanother statute by analogy is also a common method ofinterpretation and has been relied upon by this court on manyoccasions." Waste Management of Illinois, Inc. v. IllinoisPollution Control Board, 145 Ill. 2d 345, 351, 585 N.E.2d 606(1991). As a noted authority has explained: "On the basis ofanalogy the interpretation of a doubtful statute may be influencedby language of other statutes which are not specifically related,but which apply to similar persons, things, or relationships. Byreferring to other similar legislation, a court is able to learnthe purpose and course of legislation in general, and bytransposing the clear intent expressed in one or several statutesto a similar statute of doubtful meaning, the court not only isable to give effect to the probable intent of the legislature, butalso to establish a more uniform and harmonious system of law." 2BN. Singer, Sutherland on Statutory Construction