Opinion

Lake County Grading Co. v. Village of Antioch

2014 IL 115805

Court: Illinois Supreme Court
Filed: Nov 24, 2014
Status: Published
Cited by: 40 cases
Authority: More cited than 83.8%

The opinion

Illinois Official Reports

Supreme Court

Lake County Grading Co. v. Village of Antioch, 2014 IL 115805

Caption in Supreme LAKE COUNTY GRADING COMPANY, LLC, Appellee, v. THE

Court: VILLAGE OF ANTIOCH, Appellant.

Docket No. 115805

Filed October 17, 2014

Held The Public Construction Bond Act protects subcontractors for whom

(Note: This syllabus no right of mechanic’s lien exists against a public body by

constitutes no part of the guaranteeing that labor and materials furnished to one who contracts

opinion of the court but with a public body are paid for, even if such provisions are not

has been prepared by the specifically included in the bonds provided under the Act.

Reporter of Decisions

for the convenience of

the reader.)

Decision Under Appeal from the Appellate Court for the Second District; heard in that

Review court on appeal from the Circuit Court of Lake County, the Hon.

Margaret M. Mullen, Judge, presiding.

Judgment Appellate court judgment reversed.

Circuit court judgment reversed.

Cause remanded with directions.

Counsel on Robert J. Long, of Daniels, Long & Pinsel, LLC, of Waukegan, and

Appeal Lawrence R. Moelmann and Nancy G. Lischer, of Hinshaw &

Culbertson LLP, of Chicago, for appellant.

Bogdan Martinovich, of Ray & Glick, Ltd., of Libertyville, for

appellee.

Brian Day and Roger Huebner, of Springfield, for amicus curiae The

Illinois Municipal League.

Justices JUSTICE THEIS delivered the judgment of the court, with opinion.

Chief Justice Garman and Justices Thomas, Kilbride, and Karmeier

concurred in the judgment and opinion.

Justice Freeman dissented, with opinion, joined by Justice Burke.

OPINION

¶1 The circuit court of Lake County granted summary judgment to plaintiff, Lake County

Grading Company, LLC, on its third-party beneficiary breach of contract claims against

defendant, Village of Antioch (Village). The appellate court affirmed, holding that the Village

breached the subject contracts by violating section 1 of the Public Construction Bond Act

(Bond Act) (30 ILCS 550/1 (West 2008)). 2013 IL App (2d) 120474, ¶¶ 39-40. For the reasons

that follow, we hold that the Village did not violate section 1 of the Bond Act, and, therefore,

reverse the judgments of the appellate and circuit courts.

¶2 BACKGROUND

¶3 This cause of action arises from construction work performed in two residential

subdivisions located in Antioch, Illinois, known as the NeuHaven subdivision (formerly the

Deercrest subdivision), and the Clublands subdivision. Neumann Homes, Inc. (Neumann), was

the developer of both subdivisions.1

¶4 The Village entered into two infrastructure agreements (the contracts) with Neumann to

make certain public improvements in the subdivisions for the benefit of the Village. Pursuant

to the contracts, and based upon section 1 of the Bond Act, Neumann was required to provide

surety bonds, the amount of which was based on the total cost of the improvements.

¶5 Section 1 of the Bond Act provides, inter alia, that a political subdivision of the State, such

as the Village, contracting for public works above a specific dollar amount shall require the

contractor, as part of the agreement, to supply and deliver a bond. 30 ILCS 550/1 (West 2008).

Each such bond is “deemed” to contain certain provisions, even if they are not expressly

Neumann is not a party to this appeal.

-2-

included in the bond, and must provide for the completion of the contract, the payment of

materials used in the work, and all labor performed in the work, including work completed by

subcontractors. Id.

¶6 Neumann provided four surety bonds issued by Fidelity and Deposit Company of

Maryland (Fidelity) that were substantively identical. Each bond provided, in pertinent part:

“[The P]rincipal [Neumann] shall perform and complete *** improvement(s) to

*** development in accordance with either the plan(s)/specification(s)/agreement

[prepared by Pearson Brown & Associates, Inc. or Manhard Consulting], then this

obligation shall be void ***. This bond will terminate upon written acceptance of the

improvements by the obligee [Village] to the principal [Neumann] and/or surety

[Fidelity].”

The four surety bonds totalled $18,128,827.

¶7 It is undisputed the bonds provided by Neumann did not contain specific “payment bond”

language that expressly guaranteed payment to subcontractors for labor or materials. A

payment bond generally provides that if the contractor does not pay its subcontractors and

material suppliers, the surety will pay them. See Western Waterproofing Co. v. Springfield

Housing Authority, 669 F. Supp. 901, 903 (C.D. Ill. 1987). In contrast, a “completion bond”

(also known as a “performance bond”) provides that if the contractor does not complete a

project, the surety will pay for its completion. Id.

¶8 Plaintiff and Neumann also entered into agreements for plaintiff to provide certain labor

and materials for the public improvements required under the contracts. Plaintiff completed the

work, but was not paid in full. Neumann later defaulted on its contract with the Village and

declared bankruptcy on November 1, 2007. Plaintiff last performed work on the Clublands

subdivision on December 23, 2006. Plaintiff last performed work on the NeuHaven

subdivision on April 16, 2007. On February 18, 2008, plaintiff served Neumann and the

Village with notices of a lien claim for the work it had completed on the project.

¶9 Plaintiff ultimately filed a five-count second amended complaint seeking to recover

payment from the Village. In counts II and IV, the only counts at issue here, plaintiff alleged

breach of contract claims related to the work performed by plaintiff in the NeuHaven and

Clublands subdivisions. Specifically, plaintiff alleged the Village breached the contracts

because the surety bonds provided by Neumann did not contain actual language guaranteeing

payment to subcontractors as mandated by the first paragraph of section 1 of the Bond Act.

Plaintiff further alleged that by virtue of this provision in section 1, it became a third-party

beneficiary of the contracts between the Village and Neumann because the requirements

contained therein are read into every public works contract for the benefit of subcontractors

such as itself.

¶ 10 The parties filed cross-motions for summary judgment. The Village in its motion also

relied upon section 1. It asserted that based upon the “deeming language” contained in the

statute, the bonds procured by Neumann were sufficient because they contained both

completion and payment provisions as a matter of law and covered all of the site improvements

which plaintiff constructed. The Village argued that plaintiff’s only cause of action was against

the bonds themselves, but because plaintiff gave notice of its claims more than 180 days after

last working on the project, the claims were barred by the limitations period found in section 2

of the Bond Act (30 ILCS 550/2 (West 2008)).

-3-

¶ 11 In response to the Village’s motion for summary judgment, plaintiff did not dispute that it

made its notices of claims more than 180 days after last performing work or providing

materials, but argued that the limitations period applied only to a suit on the bond. Plaintiff

claimed that the 180-day limitations period was inapplicable to its breach of contract claims

because in a case such as this where no payment bond was procured, a suit on the bond is

impossible.

¶ 12 The issue before the trial court was therefore whether the surety bonds provided by

Neumann to the Village conformed with the relevant requirements of section 1 of the Bond

Act.

¶ 13 The trial court granted plaintiff’s motion for summary judgment on counts II and IV of the

second amended complaint for the work it performed on the two subdivisions, but granted the

Village’s cross-motion for summary judgment as to counts I, III, and V, dismissing those

counts with prejudice. As to counts II and IV, the only counts at issue here, the trial court

concluded that the bonds provided by Neumann were completion bonds, not payment bonds,

and that it could not impute the “deeming language” contained in section 1 into a completion

bond that did not specifically contain a payment bond provision. The trial court ultimately

entered judgment in plaintiff’s favor in the amount of $246,054.73.

¶ 14 The appellate court affirmed. 2013 IL App (2d) 120474, ¶ 40. In interpreting section 1 of

the Bond Act, the appellate court held that the Act mandates the public entity require the

general contractor to obtain a bond that contains language that expressly provides payment for

the benefit of subcontractors. Id. ¶ 36. It found the Village breached its contractual obligation

by not requiring Neumann to furnish a bond with an express payment provision for

subcontractors. Id. ¶ 33. The appellate court held that the requirement to obtain such a bond

became a term of the contract between Neumann and the Village and that plaintiff, as a

subcontractor, was a direct third-party beneficiary with the right to sue on the contract. Id.

¶ 15 The appellate court further held that the language found in section 1, which provides that

payment provisions are deemed to be included in the bond, applies only after the public entity

satisfies the predicate condition of requiring the contractor to procure a bond with a payment

guarantee. Id. ¶ 36. The appellate court concluded that the limitations period found in section 2

applied only to a suit on the bond and that where no payment bond is procured, this section is

inapplicable. Id. ¶ 39. Consequently, the appellate court found that plaintiff’s breach of

contract claims were not time barred because the four-year statute of limitations for

construction contracts (see 735 ILCS 5/13-214 (West 2008)) applied rather than the 180-day

limitations period contained in the Bond Act. 2013 IL App (2d) 120474, ¶ 39.

¶ 16 This court granted the Village’s petition for leave to appeal (Ill. S. Ct. R. 315(a) (eff.

July 1, 2013)) and also allowed the Illinois Municipal League to file an amicus curiae brief in

support of the Village (Ill. S. Ct. R. 345 (eff. Sept. 20, 2010)).

¶ 17 ANALYSIS

¶ 18 This case comes before us on the trial court’s grant of summary judgment. Summary

judgment is proper when “the pleadings, depositions, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any material fact and that the moving

party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West 2008). The

interpretation of a statute, such as the Bond Act at issue in this appeal, is a matter of law and

-4-

thus presents a matter that is appropriate for summary judgment. Village of Chatham, Illinois v.

County of Sangamon, Illinois, 216 Ill. 2d 402, 433 (2005). We review summary judgment

rulings and issues of statutory interpretation de novo. Williams v. Manchester, 228 Ill. 2d 404,

417 (2008).

¶ 19 It is well settled that our primary objective in construing a statute is to ascertain and give

effect to the intent of the legislature. MidAmerica Bank, FSB v. Charter One Bank, FSB, 232

Ill. 2d 560, 565 (2009). The plain language of a statute is the most reliable indication of

legislative intent. DeLuna v. Burciaga, 223 Ill. 2d 49, 59 (2006). “[W]hen the language of the

statute is clear, it must be applied as written without resort to aids or tools of interpretation.” Id.

¶ 20 At issue is whether the surety bonds provided by Neumann to the Village conformed with

the relevant requirements of section 1. If the surety bonds were not deficient under this

provision of the Bond Act, the Village is entitled to judgment in its favor as a matter of law on

plaintiff’s breach of contract claims.

¶ 21 The following portion of section 1 is at issue and provides, in pertinent part:

“§ 1 Except as otherwise provided by this Act, all officials, boards, commissions,

or agents of this State in making contracts for public work of any kind costing over

$50,000 to be performed for the State, and all officials, boards, commissions, or agents

of any political subdivision of this State in making contracts for public work of any

kind costing over $5,000[2] to be performed for the political subdivision, shall require

every contractor for the work to furnish, supply and deliver a bond to the State, or to the

political subdivision thereof entering into the contract, as the case may be, with good

and sufficient sureties. The amount of the bond shall be fixed by the officials, boards,

commissions, commissioners or agents, and the bond, among other conditions, shall be

conditioned for the completion of the contract, for the payment of material used in the

work and for all labor performed in the work, whether by subcontractor or otherwise.

If the contract is for emergency repairs as provided in the Illinois Procurement

Code, proof of payment for all labor, materials, apparatus, fixtures, and machinery may

be furnished in lieu of the bond required by this Section.

Each such bond is deemed to contain the following provisions whether such

provisions are inserted in such bond or not:

‘The principal and sureties on this bond agree that all the undertakings, covenants,

terms, conditions and agreements of the contract or contracts entered into between the

principal and the State or any political subdivision thereof will be performed and

fulfilled and to pay all persons, firms and corporations having contracts with the

principal or with subcontractors, all just claims due them under the provisions of such

contracts for labor performed or materials furnished in the performance of the contract

on account of which this bond is given, when such claims are not satisfied out of the

contract price of the contract on account of which this bond is given, after final

settlement between the officer, board, commission or agent of the State or of any

Public Act 98-216, effective August 9, 2013, increased the threshold amount before a bond would

be required for projects by local governments to those costing over $50,000. Based upon the effective

date, this amendment is not applicable to this case.

-5-

political subdivision thereof and the principal has been made.[’] ” (Emphases added.)

30 ILCS 550/1 (West 2008).

¶ 22 Thereafter, section 2 prescribes, in pertinent part, that any party seeking to enforce a claim

for labor or materials has no right of action under the Bond Act unless the party files a verified

notice of the claim with the officer, board, bureau, or department awarding the contract, within

180 days after the date of the last item of work or the furnishing of the last item of materials. 30

ILCS 550/2 (West 2008).

¶ 23 The Village contends, as it did in the appellate court, that section 1 incorporates completion

and payment provisions in all surety bonds for public construction in Illinois, even if the bonds

themselves do not expressly include such provisions, due to the “deemed to contain” language

found in paragraph three. The Village asserts that the bonds procured by Neumann would have

satisfied all of plaintiff’s claims for payment if plaintiff had made a claim against the bonds

within the 180-day limitations period.

¶ 24 We agree. Based upon its plain language, the first paragraph of section 1 mandates that a

political subdivision of the State, such as the Village, whenever making a contract for public

works in excess of the specified dollar threshold, must have the contractor deliver “a bond”

with good and sufficient sureties. This paragraph further provides that the amount of “the

bond” shall be fixed by the public official and “the bond” shall be conditioned, among other

conditions, upon the completion of the contract and for the payment of material and labor.

Consequently, this paragraph does not require, as plaintiff suggests, the furnishing of a

“completion bond” and a “payment bond” but, rather, the procurement of “a bond” for the

public work.

¶ 25 Thereafter, the third paragraph stipulates that “[e]ach such bond is deemed to contain the

following provisions whether such provisions are inserted in such bond or not.” (Emphasis

added.) 30 ILCS 550/1 (West 2008). This paragraph continues by providing language that

ensures payment to all persons who have performed labor or provided materials “in the

performance of the contract on account of which this bond is given.” Therefore, regardless of

the actual language contained in a public construction bond procured in accordance with

section 1, the legislature has unambiguously provided that all such bonds are deemed to

contain both completion and payment provisions as a matter of law. Simply put, we cannot

envision a clearer indication of legislative intent concerning the question before us than the

language contained in paragraph three that “[e]ach such bond is deemed to contain the

following [payment and completion] provisions whether such provisions are inserted in such

bond or not.”

¶ 26 Plaintiff’s suggested interpretation is also inconsistent with the well established two-fold

purpose of section 1 of the Bond Act. First, the language at issue in this appeal protects

subcontractors for whom no right of mechanic’s lien exists against a public body by

guaranteeing payment for their labor and materials furnished to the contractor. See, e.g.,

Carroll Seating Co. v. Verdico, 369 Ill. App. 3d 724, 727 (2006); Aluma Systems, Inc. v.

Frederick Quinn Corp., 206 Ill. App. 3d 828, 853-54 (1990); Housing Authority v. Holtzman,

120 Ill. App. 2d 226, 241 (1970). This provision assures payment to subcontractors who make

a timely demand on the bond, pursuant to section 2, who might otherwise have to depend

solely on the responsibility of the contractor to make payment for the labor and material

provided. Id. Second, this provision of the Bond Act guards the tax money allotted for public

-6-

works by assuring that the terms, conditions and agreements of the contract will be fulfilled

and paid by the surety if the contractor does not complete the project. Id. Consistent with this

dual purpose, and contrary to plaintiff’s suggested construction, the language in paragraph

three of section 1 guarantees completion and payment provisions are deemed in every bond

procured for a public project to assure that sufficient funds are available to pay both

subcontractors and material suppliers and to complete the project if the contractor does not.

¶ 27 Plaintiff attempts to circumvent the plain language of section 1 of our Bond Act by

suggesting the phrase “[e]ach such bond” in the third paragraph applies only to bonds which

already have payment bond provisions contained therein. Plaintiff asserts that “the import of

section 1 of the Bond Act is to deem the stated language added only after it has been

established that payment bonds were obtained pursuant to that section.” It is self-evident,

however, that if a bond already has a provision for payment to subcontractors it would be

unnecessary to deem the payment language contained in paragraph three into that bond.

Plaintiff’s suggested interpretation would render the language contained in paragraph three

that “[e]ach such bond is deemed to contain the following provisions whether such [payment

or completion] provisions are inserted in such bond or not” meaningless or redundant. See

People v. Jones, 223 Ill. 2d 569, 594 (2006) (this court has an obligation to avoid a

construction of a statute which would render a part of it redundant or superfluous and instead

must presume that each part of the statute has meaning).

¶ 28 We note for purposes of comparison that the language found in section 1 of our Bond Act

contrasts significantly with the statutory language found in the comparable federal bond

statute. Under the federal statute, a contractor is required to furnish to the government both a

“[p]erformance bond” and a “[p]ayment bond.” See 40 U.S.C. § 3131(b)(1), (2) (2012) (“Type

of bonds required.—Before any contract of more than $100,000 is awarded for the

construction, alteration, or repair of any public building or public work of the Federal

Government, a person must furnish to the Government the following bonds, which become

binding when the contract is awarded: (1) Performance bond. *** (2) Payment Bond.”).

¶ 29 Our research further reveals that, unlike our Bond Act, certain other state statutes contain

similar language to the federal bond statute which specifically requires the procurement of a

payment bond and a completion bond for public works. See, e.g., Tex. Gov’t Code

§ 2253.021(a) (West 2012) (“A government entity that makes a public work contract with a

prime contractor shall require the contractor, before beginning the work, to execute to the

governmental entity: (1) a performance bond if the contract is in excess of $100,000; and (2) a

payment bond if *** the contract is in excess of $50,000, and the governmental entity is a

municipality ***.”); N.Y. State Fin. Law § 137 (West 2012) (“In addition to other bond or

bonds, if any, required by law for the completion of a work specified in a contract for the

prosecution of a public improvement *** the comptroller *** shall nevertheless require *** a

bond guaranteeing prompt payment of moneys due to all persons furnishing labor or materials

to the contractor ***.”); Minn. Stat. Ann. § 574.26 Subd. 2 (West 2012) (“[a] contract with a

public body for the doing of any public work is not valid unless the contractor gives (1) a

performance bond to the public body *** and (2) a payment bond”).

¶ 30 In contrast to the language contained in the federal and state statutes above, our Bond Act

only requires the procurement of “a bond” in connection with a public work and once the bond

is obtained, it is deemed to include both a payment and performance provision. This language

-7-

is markedly different from that contained in the federal and state statutes quoted above that

plainly require the procurement of a performance and a payment bond.

¶ 31 Plaintiff has not cited, and our research has not revealed, any case where a contractor

furnished a bond as required under section 1 and the court found that the payment provisions

contained therein were not deemed part of the bond. The cases relied upon by plaintiff do not

inform our decision because, in contrast to the instant case, they either involved circumstances

where the contractor failed to procure a bond of any kind (see, e.g., A.E.I. Music Network, Inc.

v. Business Computers, Inc., 290 F.3d 952, 954 (7th Cir. 2002)), or where the case was based

on the absence of a payment bond and there was no discussion of whether the public entities

had procured a completion bond into which the payment provisions of section 1 could be read

(see, e.g., Ardon Electric Co. v. Winterset Construction, Inc., 354 Ill. App. 3d 28, 32 (2004)).

¶ 32 For these reasons, we conclude that based upon the deeming language contained in

paragraph three of section 1, the four surety bonds furnished by Neumann contained both

completion and payment provisions as a matter of law. In light of our determination, we need

not consider, and we make no comment today, on the Village’s additional claim that plaintiff

did not qualify as a third-party beneficiary under the contracts the Village entered into with

Neumann.

¶ 33 Finally, plaintiff raises two alternative underdeveloped arguments that the lower courts did

not reach for affirming the award of summary judgment. As far as we can discern, plaintiff

initially claims the Village also violated section 1 of the Bond Act because the four surety

bonds issued by Fidelity did not cover all of the unpaid work it performed. Plaintiff’s argument

appears to be based on a claim that the Village did not obtain any bond related to the work

performed during “phase two” and “phase four” in the Clublands subdivision. The record

establishes that the four surety bonds covered different phases of the project in the two

subdivisions. One of the four surety bonds specifically covered “phase one” at Clublands while

a second surety bond covered “phase three” there.

¶ 34 Count IV of the second amended complaint contained plaintiff’s breach of contract claim

concerning the work it performed at Clublands. This count included an attached exhibit with a

description and specific cost of all the work and materials provided by plaintiff. Our review of

this exhibit, however, indicates that it only concerns improvements provided by plaintiff

during phase one and phase three at Clublands. Therefore, any claim by plaintiff regarding lack

of a surety bond for work performed during phases two and four at Clublands was not properly

pled by plaintiff and is irrelevant to our determination here.

¶ 35 Plaintiff’s second alternative argument is even more underdeveloped and occupies less

than one page of its brief. Plaintiff simply claims that the Village also violated section 1 of the

Bond Act because a clause in the contracts “show[s] that [the Village] never intended to have

any Payment Bonds for the protection of the subcontractors, but that the subcontractors were to

be paid solely from SSA bond proceeds.” This argument is apparently related to the fact that

the Village paid for a portion of the site improvement costs by issuing two “Special Service

Area” bonds for each of the subdivisions. Plaintiff, however, does not provide any elaboration

or real argument of how this payment scheme involving the SSA bonds impacted it or could

constitute a repudiation of the requirements of section 1. Furthermore, plaintiff does not cite to

any authority.

-8-

¶ 36 As we have previously instructed, “a reviewing court is not simply a depository into which

a party may dump the burden of argument and research.” People ex rel. Illinois Department of

Labor v. E.R.H. Enterprises, Inc., 2013 IL 115106, ¶ 56. “A court of review is entitled to have

the issues clearly defined and to be cited pertinent authority.” (Emphasis omitted.) Id. “A point

not argued or supported by citation to relevant authority fails to satisfy the requirements of

Supreme Court Rule 341(h)(7), (i) (see Ill. S. Ct. R. 341(h)(7), (i) (eff. Feb. 6, 2013)

[citation]).” Id. Both argument and citation to relevant authority are required. Id. Where, as

here, the issue “ ‘is merely listed or included in a vague allegation of error [it] is not ‘argued’

and will not satisfy the requirements of the rule.’ ” Id. (quoting Vancura v. Katris, 238 Ill. 2d

352, 370 (2010)). Accordingly, plaintiff has forfeited review of this issue. Id.

¶ 37 CONCLUSION

¶ 38 We hold that under the plain language of the statute, the bonds furnished by Neumann to

the Village were sufficient and did not violate the pertinent provisions of section 1 of the Bond

Act. Therefore, the Village did not breach any contractual obligation owed to plaintiff in

obtaining the bonds for the public work performed by Neumann.

¶ 39 For the foregoing reasons, the judgments of the appellate and circuit courts are reversed,

and the cause remanded to the trial court with directions to enter an order granting summary

judgment in the Village’s favor on counts II and IV of the second amended complaint.

¶ 40 Appellate court judgment reversed.

¶ 41 Circuit court judgment reversed.

¶ 42 Cause remanded with directions.

¶ 43 JUSTICE FREEMAN, dissenting:

¶ 44 In today’s decision, the majority takes the extraordinary step of declaring that a surety bond

that explicitly guarantees a single obligation must, by operation of law, be interpreted as

guaranteeing a second obligation that is not referenced in the bond at all. As a result, the

majority holds that the Village of Antioch (the Village) cannot be held liable for its failure to

require a public construction bond that is expressly conditioned for completion of the contract

and payment for labor and materials furnished by subcontractors, even though section 1 of the

Public Construction Bond Act (Bond Act) (30 ILCS 550/1 (West 2008)) obligates the Village

to do exactly that. For the following reasons, I disagree and respectfully dissent.

¶ 45 The Village entered into two contracts with a general contractor, Neumann Homes, Inc.

(Neumann), to make certain public improvements. Neumann, in turn, entered into subcontracts

with Lake County Grading Company, LLC (Lake County Grading), to provide labor and

materials for certain portions of the public improvements benefitting the Village.

¶ 46 Section 1 of the Bond Act provides that where the State or a political subdivision thereof

enters into a public construction contract that exceeds the statutory threshold amount, the

public body must require the contractor to provide a bond that “shall be conditioned for the

completion of the contract, for the payment of material used in the work and for all labor

performed in the work, whether by subcontractor or otherwise.” 30 ILCS 550/1 (West 2008).

As the majority explains, a payment bond secures the obligation of the general contractor to

pay its subcontractors for labor and materials, while a completion bond (sometimes referred to

-9-

as a performance bond) guarantees the general contractor’s obligation to complete the

construction project. See supra ¶ 7 (citing Western Waterproofing Co. v. Springfield Housing

Authority, 669 F. Supp. 901, 903 (C.D. Ill. 1987)).

¶ 47 In this case, Neumann provided four surety bonds that, on their faces, secured its

obligations to “perform and complete” various aspects of the public improvements for the

Village. As the majority acknowledges, it is undisputed that the bonds provided by Neumann

did not contain any language that guaranteed payment to subcontractors for labor or materials.

¶ 48 Although Lake County Grading completed the work specified in the subcontracts, it was

not paid in full. Neumann subsequently defaulted on its contract with the Village and declared

bankruptcy. Lake County Grading subsequently brought suit, as a third-party beneficiary,

seeking recovery against the Village for breach of its contract with Neumann. Those claims

were premised on the Village’s violation of its statutory duty to require that Neumann procure

an appropriate construction bond that secured payment to subcontractors for labor and

materials.

¶ 49 At the time the contracts were entered into, section 1 of the Bond Act provided, in relevant

part, as follows:

“§ 1. Except as otherwise provided by this Act, all officials, boards, commissions

or agents of this State, or of any political subdivision thereof in making contracts for

public work of any kind costing over $5,000 to be performed for the State, or a political

subdivision thereof shall require every contractor for the work to furnish, supply and

deliver a bond to the State, or to the political subdivision thereof entering into the

contract, as the case may be, with good and sufficient sureties. The amount of the bond

shall be fixed by the officials, boards, commissions, commissioners or agents, and the

bond, among other conditions, shall be conditioned for the completion of the contract,

for the payment of material used in the work and for all labor performed in the work,

whether by subcontractor or otherwise.