In an unusual decision, a Cook County judge says a road contractor that claims to be owed more than $2 million for work on a road construction project in suburban Harvey has no further obligation under its contract to maintain temporary traffic signals for the incomplete project, because the judge said the city of Harvey has no possibility of coming up with the funds to pay them.
In the ruling, delivered April 15, Judge Neil Cohen further ordered the Illinois Department of Transportation to take control of the traffic signals, despite IDOT's contention the project falls short of the standards it normally requires before control over such signals can be transferred.
The decision comes as the next step in a court fight that dates back to 2016.
Bob Fioretti
| Facebook
At that time, Harvey-based Capitol Cement Company filed suit against the city and IDOT, among others.
The lawsuit centered on a project, intiated in 2013 to reconstruct 167th Street in Harvey from Center Avenue to Lowe Avenue in Harvey. This included 167th Street's intersection with Illinois Route 1, which is maintained by IDOT.
The project was also to include temporary traffic signals, which would operate during the duration of construction, and ultimately be converted to permanent traffic control signals, which would be turned over to IDOT.
According to court documents, Capitol Cement was expected to receive $4.96 million for the project.
According to court documents, funding for the project was to come from a grant for $2.5 million from the Illinois Department of Commerce and Economic Opportunity; $2 million from IDOT's Economic Development Program; $900,000 from Cook County motor fuel tax funds; and $250,000 from Harvey.
However, according to court documents, Harvey has not come anywhere close to paying for the project in full. According to court documents, Capitol Cement is still owed more than $2 million.
The company filed suit in 2016, winning a default judgment requiring Harvey to pay the outstanding amount. However, the company says it has not been able to collect on that default judgment "due to Harvey's severe financial constraints," in no small part as a result of alleged financial mismanagement and alleged shady financial dealings by city officials.
In the meantime, Capitol Cement says it has abided by its contract, which has required it to maintain the temporary traffic signals, at its own expense, indefinitely, as the project remains incomplete.
The company then filed suit again in 2019, seeking to rescind the contract under the "doctrine of impossibility or impracticability," or win a court order requiring the city to spend the money needed to complete the project and pay the company what they are owed.
According to court documents, the city responded, by asking the judge to dismiss Capitol Cement's payment demands, asserting the company cannot recover funds from the city under the contract, nor can the court order the city to spend funds its city council has not appropriated.
Judge Cohen agreed with the city on those counts, and dismissed Capitol Cement's demands for payment.
However, the judge released Capitol Cement from any further obligations under the contract. He noted that all of the grant funds and other sources of funding from the state of Illinois and Cook County that had been set aside for the project had dried up, given the passage of time and limits on the funding. To secure those funds, all of the state and county agencies would again need to agree to appropriate those funds.
Without such guarantees, the judge said it was clearly impossible for Harvey to pay to complete the road project, so their contract could no longer be enforced.
Judge Cohen rescinded the contract.
Further, even though IDOT had testified the traffic signals were not up to standards IDOT expects before the state will take operational control, Judge Cohen ordered IDOT to take control of the signals.
"Capitol's performance under the Contract has been rendered impossible," the judge wrote. "Therefore, Capitol is entitled to rescission of the Contract...
"As Capitol's obligation to maintain the temporary traffic signals arose from the Contract, and the Contract is rescinded, Capitol's obligation to maintain the temporary traffic signals no longer exists. Therefore, control of the traffic signals will revert back to IDOT."
Attorney Robert Fioretti, of the firm of Fioretti Campbell, of Chicago, represented the city of Harvey in the case.
He said the ruling, while unusual, was not a surprise, as Harvey had argued "from Day One" that the state should be "the responsible party here."
He also noted Harvey had paid what it owed under the funding arrangement.
A spokesperson for IDOT said the agency "will be reviewing the litigation and respectfully decline comment at this time."