Illinois Supreme Court rules in Restore Construction’s favor

April 20, 2020

Contact: Michael Santoro, vice president

847-455-3000

 

Illinois Supreme Court rules in Restore Construction’s favor

Proviso Township High School District 209 cannot stop paying on its contract with Restore Construction, Inc. for the repairs to its East Campus just because the school board did not follow the standard procedure for obtaining bids and a board vote, according to an April 20 Illinois Supreme Court ruling. The repairs made following an April 2014 fire exceeded $7.27 million, and Restore Construction is still owed approximately $1.42 million.

The District 209 Board of Education took its case to the state’s high court after losing an appeal, claiming it had failed to properly execute the repair contract and, therefore, the contract was not valid. The former school superintendent signed two contracts, one for emergency mitigation and one for reconstruction. The contracts were subsequently reviewed by the chief fiscal officer of the Financial Oversight Panel, a panel the Illinois Board of Education appointed to monitor the district due to its severe financial difficulties. 

“Restore worked in good faith to quickly and responsibly make substantial repairs to a public building, enabling thousands of students and teachers to begin their 2014-2015 school year on time,” said Restore Construction Inc. Vice President Michael Santoro. “Throughout the work, we kept school officials and board members apprised of our progress. In addition, the money due to Restore comes from the insurance settlement. We are not asking the taxpayers of the district to shoulder an additional burden.”

In fact, the primary problem with the payments was that the district’s insurance company would not cover the cost of the prevailing wages for the workers completing the repairs. School districts are required by law to pay prevailing wages, and the District’s contract with Restore called for paying workers prevailing wages. Over time, with changes in the school leadership, the District chose not to pursue further insurance funds to honor the contract. 

Restore and the district worked well together at the beginning of the process, with Restore completing immediate cleanup after the weekend fire, which affected more than 280,000 square feet of the building, allowing much of the building to reopen by the Wednesday following the fire. Major repairs completed over that summer allowed the auditorium to be ready for teacher in-services in August and the school year to begin on time.

Restore completed repair work in July 2015. The company filed suit against the district and other parties when the district refused to pay the final amount due. The Cook County Circuit Court dismissed the suit, and Restore appealed based upon two counts. In November 2019, the Appellate Court ruled in the company’s favor, and the Supreme Court has now upheld the ruling.

The majority of the justices concurred that the board’s position was flawed because state law gives the Financial Oversight Panel authority to “make, cancel, modify, or execute contracts,” and “to approve all contracts and other obligations as the Panel deems necessary and appropriate.” Additionally, the fact that the Board did not strictly comply with the bidding and approval procedure “does not doom Restore’s right to seek payment,” Justice Lloyd Karmeier wrote in the majority opinion. Furthermore, the “work performed by Restore and the reasonableness of the amounts it charged were subject to multiple levels of oversight and were unquestioned. The mistakes were the Board’s alone.” 

The district’s contract with Restore states that the company will only be paid from insurance proceeds. Payments did not come from taxpayer dollars. 

“We hope to resume a solid working relationship with the district and address the root of this problem: the insurance company’s refusal to honor the prevailing wages for the workers,” Santoro said.

Restore Restoration Inc. and Restore Construction Inc. are family-owned and -operated entities that have been assisting homeowners and business owners in the Chicagoland area for nearly 40 years. Restore has helped more than 10,000 residential and commercial customers recover from fire, flood, and storm damage.

 

Written by: Paige Fumo-Fox

Edited by: Katie Garner