James McHugh Construction Co., v. International Fidelity Insurance Company

Filing 164

MEMORANDUM Opinion and Order Signed by the Honorable John Robert Blakey on 10/10/2017. Mailed notice(gel, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JAMES McHUGH CONSTRUCTION
CO.,
Plaintiff,

Case No. 14-cv-02399

v.

Judge John Robert Blakey

INTERNATIONAL FIDELITY
INSURANCE CO.,
Defendant.
MEMORANDUM OPINION AND ORDER
Plaintiff

James

McHugh

Construction

Company

sued

Defendant

International Fidelity Insurance Co. (IFIC) for breach of contract in the Circuit
Court of Cook County on March 20, 2014. [1-1] at 4, 9. 1 IFIC removed the case to
this Court on April 3, 2014. [1].
The following motions are before the Court: (1) IFIC’s second motion for
summary judgment on the grounds that McHugh’s claim is time-barred [125]; (2)
McHugh’s cross-motion for summary judgment on the grounds that IFIC waived the
statute of limitations defense or is estopped from asserting it [135]; and (3) the
parties’ cross-motions for partial summary judgment on the validity of certain
damages claimed by McHugh [131, 139].

In a prior ruling, this Court identified the date of filing as March 21, 2014. [81]. The Cook County
clerk’s stamp on the Complaint, however, establishes that it was actually filed on March 20, 2014.
[1-1] at 4. This adjustment does not affect the Court’s analysis on this motion or the previous
motion.
1

As explained below, this Court denies the parties’ motions for summary
judgment because factual issues remain in dispute, including the date upon which
McHugh’s claim accrued and the sequence of events that McHugh argues estop
IFIC’s limitations defense.

For similar reasons, this Court denies in part the

parties’ cross-motions for partial summary judgment on the scope of damages, but
grants Defendant’s motion as to the undisputed amount owed to its principal and
thus credited to Defendant in any subsequent calculation of damages.
I.

Background
An abridged history of this case follows below. This Court incorporates by

reference, and presumes familiarity with, its opinion denying IFIC’s previous
motion for summary judgment [81], and provides additional facts here as needed. 2
McHugh bases its suit upon the performance bonds IFIC issued for McHugh’s
subcontract with Builders Architectural Products (BAP). [1-1] at 9. McHugh was
the general contractor for the construction of two condominium buildings in
Chicago, Illinois, and subcontracted with BAP to install windows, doors, and related
elements. DSOF ¶ 5; [61-9]. The subcontract obligated BAP to correct any “fault or
defect” in its work at its own expense on seven days’ notice; gave McHugh the right
to complete BAP’s work in the event of a default; and required BAP to secure
performance bonds. [61-9] at 9, 10. IFIC issued two performance bonds on BAP’s
subcontract in 2006 and 2007, each naming IFIC as the surety, BAP as the

Additional facts are taken from the parties’ Local Rule 56.1 statements. “DSOF” refers to IFIC’s
statement of undisputed facts [127], and “PSAF” refers to McHugh’s statement of additional
undisputed facts [138]. References to additional filings are by docket number.
2

2

principal, and McHugh as the obligee.

[61-10] at 3; [61-11] at 2.

Both bonds

incorporate BAP’s subcontract with McHugh by reference. Id.
Throughout construction of the condominiums, BAP repeatedly failed to meet
deadlines and its work was often flawed. Defects in windows and terrace doors
surfaced as early as 2007 and continued to emerge until BAP left the job in
September 2010. 3

DSOF ¶ 35; [64] ¶¶ 11, 20–27, 33–44.

McHugh kept IFIC

apprised of BAP’s shortcomings during this period. [64] ¶¶ 20, 22, 25–27, 44, 47.
While BAP remained on the job, it continued consulting with McHugh and the
condominium’s developer and performing corrective work to address the defects.
DSOF ¶ 21; [127-3] at 14, 27; [138-1] at 80–82.
On December 31, 2009, McHugh wrote to BAP about its “continuing failure to
correct” its defective work. [127-19]. If BAP did not complete the corrective work
within seven days, as required by the subcontract, McHugh would “proceed to retain
other firms to complete this work” and deduct those costs from “any amounts due to
BAP.” Id. On January 5, 2010—five days after writing to BAP—McHugh told IFIC
that BAP was “in default of their Subcontract Obligations to correct defective work.”
[127-20]. If BAP did not “promptly correct this defective work,” McHugh and the
condominium owner (the Owner) would have “no choice but to complete the work.”
Id. The January 5 letter noted that BAP had “continually delayed completion of the
corrective work,” and was now initiating a lien action on the condominiums. Id. As
a result, McHugh stated: “We anticipate that the remaining amounts due BAP are
The parties previously identified BAP’s departure date as October 2010, [81] at 13, but this Court
adopts the uncontested representation in the defendant’s present statement of facts, see DSOF ¶ 35;
PSAF (response indicating DSOF ¶ 35 is uncontroverted).
3

3

insufficient to both correct the defective work and pay our legal costs to remove any
lien that may be filed and, therefore, we advising you [sic] that a claim will be filed
against your firm under the surety bond you provided for the project.” Id.
IFIC responded on January 7, writing McHugh that they had “referred this
matter” to BAP.

[127-38] at 2.

IFIC stated: “We anticipate that you and our

Principal will work together to resolve any outstanding issues. Unless the Surety
hears otherwise, it will assume that all outstanding issues will be resolved between
you and our Principal.” Id.
Although the exact chronology of BAP’s corrective work remains vague, it
seems that, at this point, BAP remained on the job and continued repairs. The
record does not indicate that any other firm was engaged at this time. On January
26, BAP attended a meeting about additional defects with the condominium
developer, the Owner, McHugh, and a parts supplier. DSOF ¶¶ 21, 23, 28. In
February, McHugh again complained to BAP about the speed of its corrective work,
but as of March 3, BAP was still conducting repairs. DSOF ¶¶ 24, 29. Based upon
representations by McHugh and BAP, BAP appears to have continued corrective
work into the summer of 2010. PSAF ¶¶ 3, 6–9; [127-2] at 34–35; [138-1] at 79–80.
In July 2010, McHugh informed IFIC that BAP’s proposed schedule for
further repairs was unacceptable to the Owner, and McHugh would hire another
subcontractor to complete the work.

DSOF ¶¶ 33, 34; PSAF ¶ 11.

But BAP

remained on the project and McHugh did not hire a replacement subcontractor until

4

BAP left in September 2010. DSOF ¶¶ 35, 36. McHugh and the new subcontractor
completed the necessary corrective work in late 2012. Id. ¶ 37.
On April 12, 2013, McHugh submitted a claim to IFIC for the cost of
completing BAP’s work, totaling $966,338.41. [64] ¶ 55. In May, IFIC requested
additional documents, which McHugh provided in September 2013; IFIC then
denied the claim in January 2014. [61] ¶ 42; [64] ¶¶ 56, 57. On March 20, 2014,
McHugh sued IFIC in the Circuit Court of Cook County. [1-1] at 4. In March 2015,
while this suit was pending, McHugh entered into a $135,000 settlement agreement
with the Owner for costs and claims relating to BAP’s default. [133-11].
In September 2016, this Court denied IFIC’s previous motion for summary
judgment based upon a statute of limitations defense. [81]. In that ruling, this
Court held that a four-year statute of limitations applied to McHugh’s claim,
pursuant to 736 ILCS 5/13-214(a), so that if McHugh’s claim accrued before March
20, 2010, it would be time-barred.

Id. at 7.

The Court, however, could not

determine as a matter of law when McHugh’s claim accrued, and so denied the
motion. Id. at 19.
IFIC renews its motion based upon information obtained in the March 2017
deposition of Suzanne Browne, a former project manager for McHugh. [127-42] at
4. Browne prepared the documents that McHugh submitted to IFIC to support its
claim in September 2013.

[126] at 1–2; [127-42] at 4.

IFIC asserts that this

deposition contextualizes McHugh’s January 5 letter, establishing that McHugh
knew of its injury well before March 2010.

5

In her deposition, Browne discussed her work organizing McHugh’s claim
documentation in the spring and summer of 2013. [127-42] at 4–7. She testified
that McHugh’s paperwork included documentation of damages beginning on
January 4, 2010. Id. at 9, 10. The documents included time sheets associated with
the costs of assessing and correcting BAP’s work, “based upon an initial observation
on January 4, 2010.” Id. at 5, 7, 8–9; see also [127-44] at 3 (summary included in
the materials prepared by Browne).

The records assembled by Browne support

McHugh’s present calculation of damages. [126] at 6–7; [127-42] at 8–9.
McHugh’s cross-motion for summary judgment argues that IFIC has either
waived its statute of limitations defense by asserting a time-barred counterclaim, or
is estopped from asserting the defense because McHugh reasonably relied upon
BAP’s remedial efforts until it left the job in September 2010. [137] at 6, 12–13.
The parties also filed cross-motions for partial summary judgment on the
limited issue of the validity of certain damages claimed by McHugh. [131, 139].
II.

Legal Standard
A motion for summary judgment can be granted only when there are no

genuine issues of material fact and the moving party is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(a). A genuine dispute of material fact exists where
“the evidence is such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The
party seeking summary judgment has the burden of establishing that there is no
genuine dispute as to any material fact. See Celotex Corp. v. Catrett, 477 U.S. 317,
323 (1986). The motion will be granted only if, viewing the record in the light most
6

favorable to the nonmoving party, no jury could reasonably find in the nonmoving
party’s favor. McDonald v. Hardy, 821 F.3d 882, 888 (7th Cir. 2016). Rule 56(a)
also permits summary judgment on part of a claim or defense, subject to the same
standard. See Hotel 71 Mezz Lender LLC v. Nat’l Ret. Fund, 778 F.3d 593, 606 (7th
Cir. 2015); Fed. R. Civ. P. 56(a).
III.

Analysis
IFIC’s second motion for summary judgment once more argues that

McHugh’s claim is barred by the four-year statute of limitations on construction
actions, pursuant to 735 ILCS 5/13-214(a). That limit began to run when McHugh’s
claims against BAP accrued. See § 13-214(a); P.A. 85-887 § 1, eff. Nov. 6, 1987.
Because McHugh initiated this suit on March 20, 2014, the suit is barred if
McHugh’s claims against BAP accrued by March 20, 2010.
McHugh’s cross-motion for summary judgment argues that IFIC waived the
statute of limitations defense by invoking a “saving” provision to shield its own
counterclaim from being time-barred, which prevents IFIC from invoking a similar
limitation against McHugh. [137] at 5–6. Because IFIC is no longer asserting a
counterclaim [159, 160], this argument is moot. In the alternative, McHugh argues
that BAP’s assurances and repairs in the spring and summer of 2010 induced
McHugh to rely on BAP’s continued progress, such that IFIC is equitably estopped
from invoking the statute of limitations.
The parties’ cross-motions for partial summary judgment are limited to the
question of whether certain damages claimed by McHugh are compensable, or
whether they represent costs of third-parties not covered by the bond. [131, 139].
7

This Court will address each issue in turn.
A. The Accrual Date for McHugh’s Claims Against BAP Cannot be
Resolved at Summary Judgment
As to IFIC’s second motion for summary judgment, this Court again
concludes that, with the significant number of material facts remaining in dispute,
it cannot determine as a matter of law that McHugh’s claim accrued prior to March
20, 2010.
To briefly revisit the “discovery rule” governing McHugh’s claim: under § 13214(a), a construction-related action must be brought within four years of the date
that the plaintiff “knew or should reasonably have known” of the injurious act or
omission. This rule delays the running of the limitations period until the injured
party: (1) “knows or reasonably should know of his injury”; and (2) “knows or
reasonably should know that it was wrongfully caused.”

DuPage County v.

Graham, Anderson, Probst & White, 485 N.E.2d 1076, 1080 (Ill. 1985) (internal
quotation marks omitted). A person knows that an injury “is wrongfully caused
when they possess enough information about the injury to alert a reasonable person
to the need for further inquiries to determine if the cause of injury is actionable at
law.” LaSalle Bank v. Skidmore, Owens & Merrill, 635 N.E.2d 564, 567 (Ill. App.
Ct. 1994). At summary judgment, a trial court can only make this determination,
as a matter of law, when “the facts known by the plaintiff” are not in dispute and
“only one conclusion can be drawn” from them; and thus, a jury usually identifies
the “discovery date” after a trial. Id.

8

The question here is the same question this Court faced a year ago when
addressing IFIC’s first motion for summary judgment: it is unclear when McHugh
was on notice that it was “wrongfully” injured by BAP. Even though undisputed
portions of the record indicate that McHugh had problems with BAP’s work
throughout BAP’s time on the condominium project, the record also shows that BAP
remained on the job, actively undertaking repairs, months into 2010. DSOF ¶¶ 735, 24, 28, 29; PSAF ¶¶ 3, 6–9; [127-2] at 34–35; [138-1] at 79–80. The timeline of
those repairs remains vague, increasing the difficulty of determining exactly what
McHugh knew and when.

McHugh’s senior project manager stated that “BAP

would address the issues when they came up. Sometimes successfully, sometimes
not successfully.

It was just an ongoing process.”

[127-3] at 14.

BAP’s vice

president described BAP’s corrective work as continuing into the summer of 2010.
[138-1] at 80. He also noted that construction typically involves some corrective
work, and it wasn’t until the scope of the defects became clear that anything
appeared out of the ordinary. Id. Moreover, McHugh’s senior vice president stated
that the scope was only clear to McHugh at some point between April and June
2010. [127-2] at 34–35.
On this record, McHugh might have been on notice of a wrongful injury
before March 20, 2010, in light of its continued problems with BAP and its threat to
sue IFIC in January. On the other hand, given that some amount of delay or defect
is expected in construction, and that BAP continued corrective work pursuant to its
contract at least through the spring of 2010, it is equally possible that a “reasonable

9

person” would not have seen the “need for further inquiries” into BAP’s conduct
until some later date. LaSalle, 635 N.E.2d at 567. McHugh might reasonably have
believed it was not wrongfully injured until April 2010, when the scope of defects
emerged, or September 2010, when BAP walked off the job with necessary repairs
incomplete.
McHugh’s situation resembles that of the plaintiff county in DuPage. In that
case, the plaintiff knew of significant moisture problems in its administrative
building, but received explanations that were not actionable and attempted a series
of repairs based upon those explanations. DuPage County, 485 N.E.2d at 178, 1080.
Like here, such a combination of uncertainty and sequential repairs might have
been “adequate to keep a reasonable person from investigating further,” and thus it
remained a determination that the Illinois Supreme Court left to the factfinder. Id.
at 1080–81. Similarly, in LaSalle, the plaintiff knew of heating problems in its
building

soon

after

construction

was

completed,

but

received

conflicting

explanations and attempted various repairs. 635 N.E.2d at 566. Where actionable
and non-actionable theories are available, summary judgment on the discovery date
is inappropriate. Id. at 569.
The facts emphasized by IFIC do not change this analysis. IFIC argues that
Suzanne Browne’s deposition, establishing that McHugh believes its damages
commenced on January 4, 2010, combined with the January 5 letter threatening
IFIC with suit, proves that McHugh knew it was “wrongfully” injured by January 5,
2010. [126] at 10. That is a reasonable conclusion, but it is not the only one.

10

The January 5 letter indicates that McHugh would file a claim only if the
corrective work was not completed and if the costs of McHugh taking on that work
and addressing BAP’s latent lien action exceeded the amount remaining on BAP’s
contract. [127-20]. But BAP apparently resumed its corrective work soon after and
McHugh did not take over until September. The record confirms the conditional
nature of the letter (despite McHugh’s statement that BAP was already “in
default”), because on January 5, BAP, in fact, had two more days to address defects
under the seven-day notice provision of its contract. Id.; [61-9] at 10.
Browne’s deposition likewise fails to resolve the issue as a matter of law.
Browne’s only connection to the construction project was her work assembling
documents in support of the claim McHugh eventually made against IFIC in 2013.
[127-42] at 4, 10. She conducted this work from spring to September 2013. Id. at 4.
The fact that, in 2013, McHugh decided to include in its calculation of damages
costs incurred in January 2010 sheds no light on what McHugh knew or reasonably
should have known in 2010. Obviously, the parties do not dispute that McHugh
believed itself “wrongfully” injured by 2013.

To prevail on summary judgment,

however, IFIC needs to prove that the only reasonable conclusion is that McHugh
knew it was “wrongfully” injured before March 20, 2010. LaSalle, 635 N.E. 2d at
567. This it has failed to do.
The cases IFIC cites in support of summary judgment are unavailing—all
involve situations with more definite information about the plaintiff’s injury
available at a specific date. See Johnston v. Tri-City Blacktop, Inc., 577 N.E.2d 529,

11

530, 532 (Ill. App. Ct. 1991) (blacktop that normally lasts 10–15 years showed
unusual, obvious deterioration before discovery date); Freeport Memorial Hospital v.
Lankton, Ziegel, Terry & Assoc., 525 N.E.2d 194, 197–98 (Ill. App. Ct. 1988)
(plaintiffs possessed investigative report identifying abnormal structural conditions
that indicated defendants’ liability); People ex rel. Skinner v. Graham, 524 N.E.2d
642, 650 (Ill. App. Ct. 1988) (plaintiffs knew of “irremediable” defects and failure to
conduct repairs prior to discovery date). In each case, construction work ceased and
the actionable defendants were no longer on the job, in clear contrast to the status
of BAP’s work in March 2010. Here, a jury could conclude that it was reasonable for
McHugh to believe that BAP would correct its defective work in timely manner, as
is typical in the construction industry and not necessarily actionable.
In short, determining the date of discovery “is generally a question of fact
inappropriate for summary judgment,” and such is the case here. LaSalle, 635 N.E.
2d at 902–03. IFIC’s motion for summary judgment is denied.
B. Equitable Estoppel Cannot Be Applied to IFIC’s Limitations
Defense at Summary Judgment
In its cross-motion, McHugh seeks to bar application of the statute of
limitations to its claim on a theory of equitable estoppel. [137] at 12. McHugh
argues that it relied on BAP’s promised repairs to its detriment, and therefore
cannot be held to the limitations period. Id. As should be clear from the preceding
discussion, much remains in doubt about the nature and timing of BAP’s remedial
work in 2010, and these doubts doom McHugh’s cross-motion for summary
judgment.
12

Equitable estoppel is appropriate where: (1) the plaintiff “reasonably relied
on the defendant’s conduct in forbearing suit”; and (2) suffered a detriment as a
result. Senior Hous., Inc. v. Nakawatase, Rutkowski, Wins & Yi, Inc., 549 N.E.2d
604, 608 (Ill. App. Ct. 1989). In a few instances, Illinois courts have equitably
estopped a statute of limitations defense in construction actions based upon the
plaintiff’s reliance on the defendant’s repair work. In AXIA, Inc. v I.C. Harbour
Construction Co., the plaintiff’s contractor attempted to repair serious leaks in the
building over a four-year period.

501 N.E.2d 1339, 1346 (Ill. App. Ct. 1986).

Because the contractor took “affirmative steps” over that “continuing” period, in
“apparent acknowledgement of its responsibility under the contract,” the plaintiff
reasonably relied on the contractor’s efforts at correction, “the natural effect of
which was to forebear legal action.” Id. at 1347. Similarly, in Senior Housing, the
plaintiff reasonably relied upon its architectural and engineering firm’s efforts at
repair, based on the firm’s “representations that remedial measures would be
taken” as needed, according to its contractual obligations. 549 N.E.2d at 608. In
Freeport Memorial Hospital, an Illinois appellate court read these cases to require
that the vendor have “insisted that the repairs will correct the problem” for reliance
to be reasonable. 525 N.E.2d at 198.
Ostensibly, these cases may apply here: BAP continued repairs into 2010,
taking affirmative steps to fulfill its contractual obligation, and possibly leaving
McHugh with the reasonable expectation that the work would be completed in a
reasonable time and fashion. On a motion for summary judgment, however, the

13

facts must be construed in favor of the nonmovant, IFIC. Considering BAP’s 2010
repairs within the context of its repeated failures to meet deadlines; the continued
recurrence of defects in BAP’s work; and McHugh’s repeated claims that BAP was
“in default”; this Court cannot conclude that, as a matter of law, it was reasonable
for McHugh to rely on BAP’s efforts at repair. Cf. AXIA, 501 N.E.2d at 1347. The
record fails to establish that BAP’s conduct could have reasonably “lulled” McHugh
“into a false sense of security,” and thus justify estoppel. Freeport, 525 N.E.2d at
198. Construing the facts in the light most favorable to IFIC, reliance on BAP’s
promises of repair may have been unreasonable, and the Court cannot determine
otherwise at summary judgment. See McDonald, 821 F.3d at 888.
C. McHugh’s Damages Cannot be Established at Summary Judgment
The parties’ cross-motions for partial summary judgment contest the validity
of certain damages claimed by McHugh. IFIC asks this Court to rule that IFIC’s
bond does not cover any damages claimed by McHugh that were actually incurred
by the Owner. [132] at 7–8, 10.

In turn, McHugh argues that third-party

beneficiaries—such as the Owner—are not precluded from recovering on the bond,
[141] at 7, but admits that the Owner “has no rights under the bond,” [145] at 2.
McHugh characterizes its 2015 settlement with the Owner as a direct loss covered
by the bonds, [145] at 2, 5, but then tries to leave a door open to claim additional
costs incurred by the Owner, over and above the settlement amount, [153] at 1–2.
McHugh, however, offers no evidence of any outstanding claims or costs
unaddressed by the settlement, and its senior vice president stated that McHugh

14

made no payments to the Owner beyond that settlement. [145], [153], [133-1] at 35.
The record contains no other costs or claims by McHugh.
The record does make clear, however, that IFIC seeks to cap any damages
arising from the Owner’s claims and costs at $135,000—the amount of McHugh’s
settlement with the Owner. [132] at 8. In doing so, IFIC tacitly admits that the
settlement itself remains compensable under the bonds, subject to proof that it truly
represents costs relating to BAP’s default, rather than any other dispute between
McHugh and the Owner. Id. In the other corner, McHugh seeks to protect its right
to reimbursement for the $135,000 settlement without giving up the right to claim
other damages it might prove up at a later date. See [153] at 1–2. The parties’
mutual invocation of future proofs demonstrate the existence of material issues of
fact that remain unresolved, and thus, both motions must be denied.
Even though the parties invite this Court to resolve the indemnification and
third-party issues here at the summary judgment stage, there is no need to do so
now. Suffice to say, under the plain terms of the bond, material factual issues
remain as to the source and validity of McHugh’s claimed damages, as well as the
bond’s primary purpose. See Anderson, 477 U.S. at 248.
In Illinois, a performance bond constitutes a contract subject to principles of
contract interpretation, with a strong emphasis on the text of the agreement. Solai
& Cameron, Inc. v. Plainfield Cmty. Consol. Sch. Dist. No. 22, 871 N.E.2d 944, 953
(Ill. App. Ct. 2007).

“A surety is not bound beyond the express terms of the

performance bond and, when interpreting a performance bond, the court must look

15

solely to the unambiguous language of the bond as evidence of the intentions of the
parties.” Id.
Here, the terms of IFIC’s bond are simple: McHugh is indemnified for “any
and all loss, damage, and expense” that McHugh incurred “by reason of” BAP’s
failure to perform its obligations under the subcontract. [61-10]. Relying upon this
broad language, McHugh cites to Illinois cases upholding broad coverage, albeit in
simple indemnity agreements rather than construction bonds. See Water Tower
Realty Co. v. Fordham 25 E. Superior, LLC, 936 N.E.2d 1127, 1133–34 (Ill. App. Ct.
2010). Nevertheless, given the state of the factual record, this Court can neither
confirm nor exclude McHugh’s claimed damages at summary judgment.
To recover under the bond, McHugh must prove some loss or damage caused
by BAP’s default on the subcontract. See [61-10]. The $135,000 settlement McHugh
paid the Owner appears to have been paid “by reason of” BAP’s initial default,
which would satisfy those requirements. [133-11]. But both parties acknowledge
that factual issues remain as to what that $135,000 represents. [132] at 8; [145] at
2. That issue, therefore, requires resolution at trial. See Anderson, 477 U.S. at 248.
As for any additional claims by the Owner, conflicts arise in the record as to
what those claims might be, compare [132] at 3; [133-1] at 35 with [153] at 1–2, 6,
and whether they are covered under the bond.

In Illinois, the bond’s “primary

object and purpose,” as well as the parties’ intentions in making the bond,
determine the viability of any third-party claims based upon its provisions. See Bd.
of Ed. of Cmty. High Sch. Dist. No. 99, DuPage C’ty v. Hartford Acc. and Indem. Co.,

16

504 N.E.2d 1000, 1005 (Ill. App. Ct. 1987). To date, no evidence exists as to the
bond’s “primary object and purpose.” As a result, this issue is also inappropriate for
resolution at summary judgment. See Anderson, 477 U.S. at 248.
This Court, however, can resolve one issue before trial. The parties do not
dispute that, whatever the ultimate calculation of damages is, IFIC should be
credited $147,639.48. This is the amount that remained unpaid on BAP’s contract,
[127-32] at 2, which is properly deducted from any damages assessed under the
bond, see, e.g., Castricone v. Michaud, 223 Ill. App. 138, 139 (Ill. App. Ct. 1991)
(explaining that damages on construction contracts are generally “the difference
between the total cost of” completion and “the contract price”). Because McHugh
agrees that this amount is owed, [145] at 2, and offers no evidence or arguments to
the contrary, “no genuine dispute of material fact exists,” Carroll v. Lynch, 698 F.3d
561, 566 (7th Cir. 2012).

Without expressing any opinion as to the final sum

against which the contract balance may be credited, this Court finds that BAP’s
subcontract balance in the amount of $147,639.48 is owed to IFIC, and grants
partial summary judgment as to that part of Defendant’s motion. Hotel 71 Mezz
Lender, 778 F.3d at 606; Fed. R. Civ. P. 56(a).

17

IV. Conclusion
The parties’ cross-motions for summary judgment [125, 135] are denied. The
parties’ cross-motions for partial summary judgment [131, 139] are granted in part
and denied in part.
Dated: October 10, 2017
Entered:

____________________________
John Robert Blakey
United States District Judge

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