INTERBORO PACKAGING CORP v. STATE OF ILLINOIS (2016)

ORDER

PROCEDURAL POSTURE

This matter is presently before the Court on Claimants Motion for Summary Judgment. Claimant, in its motion, seeks a judgment in the amount of $30,000.40, the amount originally invoiced to IDOC in 2012, plus interest. Respondent filed a Response to Claimants Motion for Summary Judgment on April 20, 2015 and Claimant filed a Reply in Support of Motion for Summary Judgment on May 13, 2015. Respondent previously filed a Motion for Summary Judgment on March 5, 2014 which this Court denied on July 18, 2014 on the basis that a question of fact existed as to whether Respondents order for latex gloves was an “emergency order.” Discovery has since been conducted and Claimant now presents its Motion for Summary Judgment.

ISSUES

This Court is presented the following questions:

1. Did the DOC order the latex gloves from Claimant on an emergency basis such that a written contract need not be filed with the Comptroller before delivery of goods to warrant payment to Claimant?

2. Should Respondents failure and/or refusal to comply, with the emergency provisions of the Procurement Act be imputed to Claimant such that Claimant shall not be paid?

LEGAL STANDARD

Summary judgment is proper when the pleadings, affidavits, and other evidence on file viewed in the light most favorable to the non-movant demonstrate that there is no issue of material fact and that the movant is entitled to judgment as a matter of law. 735 ILCS 5/2-1005; Srivastava v. Russell's Barbecue, Inc., 168 Ill.App.3d 726, 730, 119 Ill.Dec. 562, 565, 523 N.E.2d 30, 33(1988). Construction of a contract is a question of law and thus is suitable for summary judgment. Srivastava, Id. at 730.

ANALYSIS

I. IDOC ORDERED THE GLOVES FROM CLAIMANT ON AN EMRGENCY BASIS

Claimant contends that IDOCs latex glove order was placed on an emergency basis. Respondent does not directly address Claimants contention that the purchase was made on an emergency basis and instead asserts only that the IDOC did not follow proper procedure under the Procurement Act. Respondent does not offer a rebuttal to Claimants contention that a separate protocol applies to purchases made on an emergency basis and instead argues only that Claimant and the IDOC did not adhere to the requirements of the Procureent Code. The relevant portion of the Procurement Code, at the time that Claimant provided the goods in question, read as follows:

Whenever a grant, defined pursuant to accounting standards established by the Comptroller, or a contract liability, except for (1) contracts paid from personal services, or (2) contracts between the State and its employees to defer compensation in accordance with “Article 24 of the Illinois Pension Code, exceeding $10,000.00 is insured by any State agency, a copy of the contract, purchase order, grant, or lease shall be filed within 15 days thereafter. 30 ILCS 500/20-8(b).

In the event that the contract is not filed timely, the Comptroller shall refuse payment:

When a contract, purchase order, grant, or lease required to be filed by this Section has not been filed within 15 calendar days of execution, the Comptroller shall refuse to issue a warrant for payment thereunder until the agency files with the Comptroller the contract, purchase order, grant, or lease and an affidavit, signed by the chief executive officer of the agency or his or her designee, setting forth an explanation of why the contract liability was not filed within 15 calendar days of execution. A copy of this affidavit shall be filed with the Auditor General. 30 ILCS 500/20-8(b).

The Procurement Code further states:

No voucher shall be submitted to the Comptroller for a warrant to be drawn for the payment of money from the State treasury or from other funds held by the State Treasurer on account of any contract unless the contract is reduced to writing before the services are performed and filed with the Comptroller. Vendors shall not be paid for any goods that were received or services that were rendered before the contract was reduced to writing and signed by all necessary parties…. This Section shall not apply w emergency purchases if notice of the emergency purchase is filed with the Procurement Policy Board and published in the Bulletin as required by this Code. 30 ILCS 500/20-8(b) (emphasis added).

Claimant contends that the gloves were purchased on an emergency basis and therefore a copy need not be filed with the Comptroller. Section 20-30, which governs emergency purchases, reads as follows:

In accordance with standards set by rule, a purchasing agency may make emergency procurements without competitive sealed bidding or prior notice when there exists a threat to public health or public safety, or when immediate expenditure is necessary for repairs to State property in order to protect against further loss of or damage to State property, to prevent or minimize serious disruption in critical state services that affect health, safety, or collect State records; provided, however, that the term of the emergency purchase shall be limited to the time reasonably needed for a competitive procurement, not to exceed 90 calendar days. 30 ILCS 500/20-30fa).

Interboro contends that the Bakery Supervisor for the IDOCs Illinois Correctional Industries, Mr. Weaver, contacted Claimant and advised Claimant that the gloves were required on an emergency basis to ensure safe food handling procedures at the ICI Bakery. In support of this assertion, Claimant proffers an affidavit signed by Abraham Jeremias, Vice President of Interboro, attesting to the fact that, during subsequent discussions, Mr. Weaver informed Mr. Jeremias that the gloves were required on an emergency basis. Claimants Motion for Sumary Judgment, Exhibit 4. Claimant also offers an email from Weaver to Claimant indicating that the IDOC is “… in desperate need of the gloves here at ICI Bakery… [and has] no contract in place for the latex gloves.” Claimants Motion for Summary Judgment, Exhibit 3. Moreover, Claimant provides an internal email chain between State employees after the order was fulfilled and Claimant's payment voucher was denied by the Comptroller which indicates that the purchase was a one-time purchase made on an emergency basis:

Kathy Powers: And you ordered for all of ICI? And it wasnt a (sic) emergency?

John Weaver: Yes everybody was in need and it was a one time purchase.

Kathy Powers: Okay, Ill behave now. No more sarcasm. Please let me know all the details (who, what, why, when etc.) and Ill take it to the SPO and see how we can salvage this without getting into too much hot water.

Additionally, Respondent in its response to Claimants Motion for Summary Judgment cites the Departmental Report (“Report”) filed on behalf of the IDOC on March 5, 2014 and argues that this report is prima facie evidence of the facts set forth therein. Respondents Response to Motion for Summary Judgment. Pg. 2. Although the Report does repeatedly indicate that proper purchasing protocol was not followed, it also states that the intended purchase of the expenditure was “to fulfill safety and sanitation needs in preparation of various ICI facilities and the products they produce.” In fact, the Order for Delivery dated July 25, 2012 states that the order is for the purpose of ““safety and sanitation needs.” This is further buttressed by the Procurement Business Case attached to Respondents First Supplement to its Departmental Report which indicates that “latex gloves is use [sic] in safety and sanitation needs in preparation of ICI Bakery Products,” that IDOCs current vendors “are refusing to ship orders under pre-existing Master Contracts,” and that “[the current vendor] refused shipment at the last minute,” thereby creating an emergency need for sanitation products. Respondents First Supplement to Departmental Report, Pg. 000146. Respondent did not change the categorization of the purchase from “emergency” to “small purchase” until November 7, 2012, more than a month after The Illinois Office of the Comptroller deleted the payment voucher and Respondent began to work with Claimant to resolve the payment issue. Id. at Pg. 000145.

It is clear from the evidence provided that the contract was awarded on an emergency basis. Certainly, running out of latex gloves that are needed to produce food in a safe and sanitary environment constitutes an emergency. Respondent was notified at the “last minute” that its existing supply vendor would not deliver latex gloves based on Respondents failure to pay outstanding invoices. The record indicates that many of the IDOC facilities were running low on latex gloves. Therefore, IDOC acted quickly to place a one-time supply order to be completed inside of 90 days. This order was placed to fulfill safety and sanitation needs at IDOC. As such, this Court finds that the order for latex gloves was placed on an emergency basis.

II. ADHERENCE TO THE EMERGENCY PROVISIONS IS STRICTLY WITHIN THE CONTROL OF RESPONDENT AND SHOULD NOT BE IMPUTED TO CLAIMANT.

Respondent contends that, even if the order was made on an emergency basis, proper protocol was not followed for emergency procurements and therefore Claimants invoice is not properly payable. Claimant contends that the States failure to comply with emergency provisions of the Procurement Code rests entirely within the control of the State and the States nonfeasance should not be imputed to Claimant. Claimant is again correct in its argument.

In support of its assertion, Claimant cites Miller v. State, 34 Ill.Ct.Cl. 82, 87 [1980], for the assertion that, where such filing is peculiarly within the control of the Respondent, its failure to do so cannot be the basis of a denial of the subject claim. In Miller, the claim was based on an alleged contract between Claimant and the Department of Local Government Affairs. Id. at 82. Claimant received a request from the State to review a procedure for appraisal of railroads. Id. Claimant prepared a estimate and tendered the estimate to the State. Id. Thereafter, Claimant completed the work and submitted an invoice on August 21, 1976. Id. On December 20, 1976, the State requested dates of travel and hotel expenses and advised Claimant that there would be a problem processing the invoice for the fiscal year ending June 30, 1976. Id. Claimant supplied the requested information on December 22 and, on January 13, 1977, the State acknowledged the existing of an agreement between the parties but stated that payment for fiscal year 1976 could only be made through the Court of Claims. Id. at 83. On February 3, 1977, Claimant received a letter-from the State advising that the contract violated the Illinois Purchasing Act and that Claimants invoice would not be paid. Id. One of the arguments that the State asserted was that a memorandum was not filed with the Coptroller. Id. at 86. This Court held, however, that the proposal of the Claimant constituted a memorandum that the State “could have, should have, and still may file with the Office of the Comptroller” and that, since this action is “peculiarly within the control of the Respondent” it should not be a basis for denial of the claim. Id. at 87.

Thus, the facts in Miller are similar to the case before this Court. The Procurement Code provides a mechanis for procuring payment on emergency orders. Specifically, the requirements of the Code do not apply if “notice of the emergency purchase is filed with the Procurement Policy Board and published in the Bulletin as required by this Code.” 30 ILCS 500/20-8(d). The foregoing requirements for emergency orders fall entirely within the control of Respondent and Respondent, just as was the case in Miller, could have, should have filed with the Office of the Comptroller.

CONCLUSION

For the reasons stated herein, this Court finds that, although there was no written contract at the time of purchase as required by the Procurement Act, the gloves were purchased on an emergency basis and that the Respondent's failure to follow protocol with regard to the emergency purchase shall not be a basis to prevent payment in this case. However, Claimant does not proffer a contract or any other proof sufficient for this Court to find that the Prompt Payment Act should apply. For these reasons, the Court finds in favor of the Claimant only in the amount of $30,000.40, the amount originally invoiced to IDOC in 2012.

The Departmental Report submitted by Respondent indicates that sufficient lapsed funds would have been available from fund no. 0301-426- 98-1300-000 to pay the $30,000.40 amount due Claimant.

IT IS HEREBY ORDERED that Claimants Motion for Summary Judgment is granted and Claimant is awarded $30,000.40 as full disposition of this case.

BIRNBAUM, C J.