Appellate Court of Illinois Holds Engineer’s Decision Is Reviewable in Cases of Clear Mistake Notwithstanding Provision That Engineer’s Decision is Final

R.W. Dunteman Company v. The Village of Lombard,
1996 Ill. App. LEXIS 375.

R.W. Dunteman Co. (Dunteman), entered into a construction contract with the Village of Lombard (Village), including the terms that Dunteman would remove and replace some road-way within the Village. The contract provided two different rates potentially applicable for the removal of pavement: a) pavement removal rate and b) special excavation rate, which was the lower rate of the two. A dispute arose over the rate at which Dunteman should be paid. The engineer in charge determined the lower rate applied.

The trial court held the determination of the engineer as to payment rate was not binding upon the parties, and that Dunteman was entitled to be paid at the higher rate.

On appeal, the Village contended that the trial court erred in determining that the engineer’s decision was not binding.

The issue of the engineer’s decision was examined by the appellate court. The parties had not disputed that article 105.01 of the Standard Specifications for Road and Bridge Construction, Illinois Dept of Transportation (1988) was incorporated into the contract. This article provided”[the] Engineer’s decision shall be final and shall be a condition precedent to the right of the Contractor to receive money due to the Contractor under the contract.”

The courts held that provisions which give the engineer authority to make final decisions are enforceable, if so intended by the parties, except where his actions are fraudulent, collusive, unreasonable, made in bad faith, or contain evident mistake. The appellate court held that there was a clear mistake by the engineer when he determined that the “special excavation” rate applied to the removal work because, although it applied generally to the work, the pavement removal rate was more specific in its application.

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