ERA VALDIVA CONTRACTORS INC v. THE STATE OF ILLINOIS (2002)

SECOND OPINION ON MOTION TO DISMISS

This contractor's claim is back before us for decision on the respondent's motion to dismiss for failure to exhaust the three-stage internal IDOT administrative procedure for resolving claims prescribed in Article 109.09 of IDOT's Standard Specifications that were incorporated into the parties contract.

The Exhaustion Motion

Respondent's motion contends that the Claimant failed to exhaust his administrative remedies by failing to follow the procedure set forth for the filing of a claim (Motion to Dismiss, f4); and by skipp(ing) levels 1, 2, and 3 of review (ibid., f7). Respondent's argument focused on its charge that the claimant did not fully comply with these (Article 109.09) provisions (Respondent's Reply Memo. In Support of its Motion to Dismiss, at 5) by not pursuing and completing levels #2 and #3. Claimant responded that it requested and received review (and a meeting) at level #1 by the District Engineer, and adequately exhausted IDOT's procedures because it never received a level #1 Decision and hence could not proceed to IDOT level's #2 and #3.

Prior Opinion: EVC-I

In our earlier opinion on this motion (August 31, 1999; hereinafter EVC-I), we construed the procedural requirements of Article 109.09 to mandate contractor-claimants to request all three levels to review as such requests become timely, but in the absence of a duty on IDOT to consider and decide a claim at each level, and with no deadlines for some ruling at each such stage, we held that the contractor need not pursue further internal IDOT review under Article 109.09 if IDOT has not responded..or..declined the contractor's request within a reasonable time (EVC-I, at 5).

On the application to this case of Article 109.09, as so construed, we found that the claimant request(ed) level #1 review of its claim by the District Engineer in January 1995, but that it is not clear whether there was an actual decision by the District Engineer in response (EVC-I, at 6). We concluded that the determination of whether or not claimant had adequately complied with Article 109.09 required a complete record of the IDOT administrative proceedings, and we directed the parties to file supplemental submissions to so provide (EVC-I, order, f2).

Later Submissions

On October 18, 1999 the parties filed a one page joint stipulation, with documentary Exhibits A-D in response to our order. The following day the Respondent filed a Response to Court's Order, which is a 6-page brief that it had not requested nor received leave to file. The Claimant, however, has neither objected nor replied to that Response. We therefore allow and address it.

Respondent now argues first that our EVC-I interpretation of the Article 109.09, i.e., in compliance with Article 109.09 (a); (2) Claimant's January 3, 1996 letter to the District Engineer did not constitute a claim within the terms of Article 109.09; (3) the District Engineer's responsive January 9, 1996 letter did not acknowledge that claimant had made a claim, (4) the parties February 9, 1999 meeting did not resolve the matters in dispute; and (5) that ERA-Valdiva left the meeting unsatisfied, and indicated that a claim would be submitted. IDOT reminded ERA-Valdiva that the contract contains a claims procedure if they were so inclined. (IDOT internal memo (Meeting Notes), February 9, 1999; Exhibit D to Stipulation).

Discussion

Respondent's critique of our construction of IDOT's claim review procedures of Article 109.09 is without merit. Respondent focuses on IDOT's intent, rather than its language. But as a boilerplate contract provision written and imposed by IDOT, Article 109.09 must be construed against IDOT insofar as there are competing constructions. Unarticulated intent is not enough especially when coupled with ambiguous or internally inconsistent terms.

We did not mention this elementary canon of interpretation in EVC-I because our primary task was to reconcile the internal language of IDOT's text, particularly the mixture of mandatory and permissive language, but also the absence of provisions that complete the 3-stage procedure to ensure that once entered, this administrative process will run to conclusion if the claimant-contractor takes the specified steps. We have rereviewed our EVC-I analysis in light of IDOT's critique; the court adheres to the EVC-I construction of Article 109.09 as now written.

On the other hand, Respondent's new argument (in its third brief) has merit. We must now find that the claimant's January 3, 1996 letter did not constitute a claim under Article 109.09, and based in the record as completed by the parties joint Stipulation, that the Claimant failed duly to file a claim with the IDOT District Engineer in compliance with Article 109.09 (a), and thus never initiated the IDOT administrative claim procedures mandated by Article 109.09. It is clear, upon review of Claimant's January 3, 1996 letter, that it not only fails expressly to assert a claim and fails to set forth all of the mandatory information or to attach the required supporting documentation, but also is not verified, all as plainly required by Article 109.09(a). These are not de minimus or purely formal requirements; we unhesitatingly enforce these clear contractual requisites.

We are also unpersuaded that IDOT treated the claimant's January 3, 1996 letter as a claim and waived the requisites of Article 109.09. Even without the interchange between IDOT and the Claimant at the end of their February 9, 1996 meeting (as memorialized in Exhibit D to the joint Stipulation), in which claimant affirmatively indicates that it had yet to submit a claim, the complete record shows and informal attempt to resolve a payment dispute rather than a formal claim.

The court must therefore vacate our incorrect finding that the claimant had filed a request for a level #1 review of its claim (EVC-I, at 5), and must now conclude that this claimant failed to commence or pursue the available IDOT administrative procedures. Accordingly, under /25 (705 ILCS 505/25) and Rule 60, this claim cannot proceed to a final disposition in this court. We would grant the motion to dismiss except for the uncertainty as to whether the claimant may still pursue its administrative remedies under Article 109.09 and if so whether it will seek to do so. The parties have taken no position on that issue. We will make our finding of non-exhaustion, deny the motion to dismiss without prejudice, and place this claim on general continuance pending further action.

Comment on Procedure

The court is disturbed that the Respondent failed initially to argue the inadequacy of Claimant's letter as a claim under Article 109.09 (a). The respondent did not dispute Claimant's contention that it had requested and obtained level #1 review, which contributed to this court's erroneous finding (although respondent's motion had cryptically asserted that the claimant had not follow(ed) the procedure.. for the filing of a claim (emph.added). The dispositive issue was advanced only after the court ordered a full administrative issue may have been generated by IDOT's failure to compile a timely Departmental Report detailing the entire administrative proceeding.

We are also displeased with the Claimant's assertions of level #1 review in the face of the inconsistent -- and undisputed -- interchange at the February 9, 1996 meeting (excerpted above).

Conclusion

For the foregoing reasons, it is hereby ORDERED:

1. Respondent's motion to dismiss for failure to exhaust remedies is denied without prejudice; however, the court finds that the Claimant has now failed to exhaust its administrative remedies; and

2. This claim is place on general continuance under Rule 70.

EPSTEIN, J.