Pepper Constr. Co. v. Palmolive Tower Condominiums, LLC

59 N.E.3d 41

405 Ill.Dec. 748

PEPPER CONSTRUCTION COMPANY, Plaintiff and Counterdefendant–Appellee and Cross–Appellant,

v.PALMOLIVE TOWER CONDOMINIUMS, LLC, ABN Amro Mortgage Corp., Inc., Alzenstein, Neal, Almeida, Jill F., Almeida, Richard J., American Brokers Conduit, f/k/a American Home Mortgage Co., Anning–Johnson Co., Antares Iron and Copper, Inc., Asher Brothers Co., Inc., ATG Trust Co., As Trustee of t/a # 10261 Dated 7/25/2006, Ballas, Peter G., As Trustee of the Peter G. Ballas Revocable Trust Dated 5/23/2003, Bank of America, Bank United FSB, Barrett, Marilyn E., Barry, Marcella, Barry, Robert, Barry Thomas Plumbing, Inc., Barsanti Woodwork Corp., Bergdahl, Linda J., Berglund Construction, Bernhard Woodworks, Ltd., Big Beaver and Crooks, Ltd., LLC, Birkel, Martin P., Blazer, Judith E. and Henry E. Fuldner, As Trustees of the Judith E. Blazer Living Trust, u/a/d 10/21/1996, Booth, Laurence, Booth, Patricia, Bourbon Tile and Marble, Inc., Boysen, Rowena, Break Thru Enterprises, Inc., Buckley, Mortimer, Burkard, Jeffrey, Bynoe, Linda Walker, Bynoe, Peter, Cabrera, Maria, Calkins, Catherine B., Calkins III, Russell W., Camino Modular Systems USA, Inc., Capitol Glass, Charles Schwab Bank, Chicago Bancorp Inc., Chicago Financial Services, Inc., Chicago Title and Trust, Co., Citibank, Citi Mortgage, Inc., Colco Services, Inc., Cole Taylor Bank, Column Financial, Inc., Combs, Mark E., Connaughton, James T., Connellan, John, Countrywide Home Loan, Creative Industries Terrazzo, Custom Stainless, Daw, James F., Delaney, Madeleine, Deleers Millwork Inc., Deleeuw, Debra Anne Sylvan, Deleeuw, Robert, Demirjian, Charles, Dimauro, Alexander, Douglas Iron Works, Inc., Dp 159e. Walton, LLC, R.A., Draper and Kramer Mortgage, Earhart, Barrie, As Trustee of the Barrie M. Earhart Revocable Trust Dated 2/24/2003, Elsman, Cynthia, Elsman, Jr., James L., Elsman III, James L., Elsman, Janice M., Eztech Manufacturing, Inc., Feeney, Louise, First Franklin, First Midwest Bank, Flooring Resources Corp., The Gaslight Companies, Georges, Christos, Georges, Maria, Georgis, Mary Lou, Germont, Joy, Glaros, Willis H., Glickman, Ross B., Glickman, Suzanne A., Grand Appliance and TV, Grunberg, Ted, Gurtz Electric Co., Harris NA, Hawkins, James B., Hawkins, Mary Pat, Henkel, Frances C., Henkel, Michael C., Hill Mechanical Corp., Hourihane, Kristina K., Hourihane, Patrick D., International Marble and Granite Supply, Inc., J. Kapcheck and Co., John Caretti and Co., Johnstone, Lisa A., Johnstone, Michael B., Jones, Herbert A., Jones, Kimberly M., JP Morgan Chase Bank, K7K Iron Works, Inc., Kehoe, Thomas G., Laforce Hardware and Manufacturing, Co./ Wisconsin, Gregory J. Landis, As Trustee of the Gregory J. Landis Declaration of Trust Dated 9/14/1998, Lecoque, Jay K., Lilie, Harold J., Loeffler, Kelly L., Loomis, Brian S., Lyn–Den, Inc., Makam, Padmini S., Makam, Satyaprakash N., Manson, Julie N., Aria Mazer Living Trust, Dated 9/23/2005, Rick Mazer Living Trust, Dated 9/23/2005, Mazer Construction Co., McGrath, Kristina, McGrath, Michael, Menendez, Alicia S., Midwest Woodwork and Veneering, Inc., Miller, Susan H., MK Industries, Inc., Moore, Helen, Moore, Wayne, Mortgage Electronic Registration, Murad, Nadia, Mabs Investments, LLC, R.A., National City Mortgage, National Electrical Benefit Fund, Nayer, Rajeev, Nayer, Ritu, Northstar Fire Protection, Marla Nyberg Declaration of Trust, Dated 12/1/1998, Oak Brook Bank, O'Connell, Cormac, Palmolive Building Base, LLC, Park National Bank, Pappas, Nicholas J., Parenti and Raffaelli Ltd., Pedersen, Myrna E., Frank S. Perry, As Trustee of the Frank S. Perry Trust Dated 1/17/2002, Pimentel, George B. Pimentel, Zana, Poliform, Prince, Cynthia, Prochnow, Douglas L., Rampy, Resnick, Nancy, Resnick, Phillip, Rosen, Brian, Ross, Maria, Ross, Richard, Rozran, Dawn F., Rozran, Jack L., Rubenstein, Marc A., Beth S. Rubin Revocable Trust 3/7/2007, Ines Morroni Sardo, Trustee of the Ines Morroni Sardo Trust, Dated 12/17/2004, Shimer, Robert J., Showerworks, Shutter, Jennifer M., Shutter, Jon D., Marcy Simon Trust of the Marcy Simon Trust, Dated 9/19/1999, Spech, Larry, Sprecher, Jeffrey C., Stevenson, Chase, Stevenson, John, Stewart, Jay S., Stewart, Judith D., Stringfellow, James, The Northern Trust Company of Illinois, The Private Bank Mortgage Co., Tidy International, Tirapelli, Ronald, Travers, Suzanne, Trinity Roofing Services, Inc., The Vav2005 Trust, Dated 8/8/2005, Vorwaller, Ava M., Vorwaller, Gregory S., Wallack, Lewis, Washington Mutual Bank, Weaver, Amy J., Weaver, Richard G., Wells Fargo Bank, Weiner, Barbara A., Willmot, Peter S. Wittenmyer, Eric, Woodfield Planning Corp., Nonrecord Claimants, and Bourbon Marble, Inc., Defendants

(Pepper Construction Co., Plaintiff and Counterdefendant–Appellee and Cross–Appellant; Bourbon Marble, Inc., Defendant and Counterplaintiff–Appellant and Cross–Appellee; Palmolive Tower Condominiums, LLC, ABN AMRO Mortgage Corp., LLC, Air Products Equipment Co., Ascher Brothers Co., Inc., Bank of America, Camino Modular Systems USA Inc., Connellan, John, Delaney, Madeleine, Deleers Millwork, Inc., Draper and Kramer Mortgage, Friend, Howard, Friend, Loren, Gold Coast Bank, Judson C. Green and Joyce T. Green, as Trustees of the Green Family Trust Dated 6/28/1993, as Restated 11/21/2005, Laforce Hardware and Manufacturing/Wisconsin, Lecoque, Jay K., Loeffler, Kelly L., Medendez, Alicia S., Midwest Woodwork and Veneering, Inc., National City Mortgage, National Electric Benefit Fund, Palmolive Building Base, LLC, Parenti and Raffaelli Ltd., Pimentel, George B., Pimentel, Zana, Private Co., Shimer, Robert J., Sprecher, Jeffrey C., The Private Bank Mortgage Co., Tirapelli, Ronald, Vorwaller, George S., Vorwaller, Ava M., Wittenmyer, Eric, Wittenmyer, Jill, Unknown Necessary, Unknown Owners, and Nonrecord Claimants, Counterdefendants).

No. 1–14–2754.

Appellate Court of Illinois, First District, First Division.

June 20, 2016.

David J. Lloyd and James T. Rohlfing, both of James T. Rohlfing & Associates, P.C., of Chicago, and Peter F. Herzog, of Naperville, for appellant and cross-appellee.

Eric A. Oesterle, of Miller Shakman & Beem LLP, of Chicago, for appellee and cross-appellant.

OPINION

Justice CONNORS delivered the judgment of the court, with opinion.

¶ 1 This appeal involves a dispute between the general contractor for a construction project, Pepper Construction Company (Pepper), and one of its subcontractors, Bourbon Marble, Inc. (Bourbon). Beginning in 2004, Pepper and Bourbon worked on an interior build-out of approximately 96 condominium units in a building owned by Palmolive Tower Condominiums, LLC (Palmolive), and located at 919 North Michigan Avenue in Chicago. At one point, disputes arose and in March 2007, Pepper filed a demand for arbitration against Palmolive. The arbitration proceedings involved Palmolive, Pepper, and Bourbon, along with several other subcontractors of Pepper. The arbitration award was confirmed in the circuit court, and following a global settlement agreement, only issues between Pepper and Bourbon remained. Bourbon attempted to pursue damages against Pepper, but Pepper successfully contended at the summary judgment stage that Bourbon was judicially estopped from pursuing those damages. The remaining issues were resolved at a bench trial, where Pepper was awarded $36,312 in backcharges.

¶ 2 Both parties appeal. Bourbon asserts that: (1) judicial estoppel should have applied to Pepper, but not Bourbon; (2) the judicial estoppel ruling should be reversed because the court misapplied the rules pertaining to judicial admissions; (3) the trial judgment should be reversed because the trial court failed to enforce Pepper's judicial admissions; and (4) the trial court improperly denied Bourbon's petition for attorney fees. For its part, Pepper: (1) maintains that Bourbon's claims were barred by judicial estoppel, res judicata, collateral estoppel, and an agreement between the parties; and (2) asserts that the court improperly granted a directed verdict at trial to Bourbon; and (3) Pepper was the prevailing party and entitled to attorney fees.

¶ 3 I. BACKGROUND

¶ 4 A. Arbitration Proceedings

¶ 5 We first summarize the arbitration proceedings. In its demand and amended demand for arbitration, Pepper asserted that due to certain actions taken by Palmolive, Pepper had incurred significant cost increases and damages. Among other acts, Pepper asserted that Palmolive released construction drawings out of sequence and behind schedule, issued numerous drawing revisions during construction that affected almost every trade on the project, and breached the change order process, which deprived Pepper and its subcontractors of working capital. Pepper also stated that several subcontractors with outstanding claims were joining Pepper in the arbitration proceeding against Palmolive. In response, Palmolive stated that Pepper was responsible for significant delays and had failed to properly manage the work on the project.

¶ 6 Previously, Pepper had entered into a joint interest and liquidating agreement (JILA) with some of its subcontractors. The JILA was signed by the president of Bourbon Tile & Marble, Inc., among other subcontractor entities.¹ The JILA stated that the damages and losses suffered by Pepper and the subcontractors were “overwhelmingly caused” by Palmolive and any backcharges Pepper and the subcontractors had against each other were “incidental to and not capable of being calculated until resolution of [Palmolive's] liability is determined by an award in arbitration or settlement of this matter.” The JILA further provided that Pepper and the subcontractors recognized their “common interest in their dispute” with Palmolive and “the mutual benefit of pursuing these interests jointly,” which included “providing a coordinated and joint strategy in the Arbitration.” Under the JILA, each subcontractor agreed to accept as its “sole and exclusive compensation for its...