Rains Heating and Cooling in Princeton files suit against Grundy County Nursing home District

A gavel and a name plate with the engraving Lawsuit

A petition for damages has been filed against the Grundy County Nursing Home District relating to bidding for a partial HVAC system replacement in the 1972 section of Sunnyview Nursing Home and Apartments of Trenton. Rains Heating and Cooling in Princeton filed the petition, which involves five counts, including breach of contract, unjust enrichment, money had and received, conversion, and promissory estoppel.

The petition says the nursing home district advertised for bids for the project, and the advertisement stated the bids were due by January 6th, 2021. The deadline was later moved to January 22nd.

The project engineer, Fred Malicoat of Malicoat-Winslow Engineers, advised Raines to submit a bid package, which consisted of the HVAC and electrical work to be performed. The project was scheduled to take 210 days.

The petition notes Raines and other contractors involved in the bidding had concerns about the number of days the project was scheduled to take. Malicoat allegedly directed the bidders to mark out the 210 days set forth in the contract.

Raines submitted a bid on January 22nd for $828,270.29. The bidding included the electrical work to be performed and an addendum. Following the terms of the bid, Raines provided, in lieu of a bid bond, a check for $41,413.60, payable to the nursing home district.

The petition says Malicoat told Raines on January 28th to begin compiling shop drawings, insurance certificates, and the performance and payment bonds. Raines was also told the United States Department of Agriculture would issue a notice to proceed in the near future.

Raines requested the performance and payment bonds from its bonding agent. Raines received copies of the contract documents consistent with the agreement on February 19th. Notice was sent out on February 24th in regard to the preconstruction meeting for the project.

An email from Malicoat reportedly directed Raines to obtain the issuance of the performance and payment bonds on the project. The email indicated a tentative preconstruction meeting would be on February 25th.

Deborah Berry with the USDA Rural Development Office reminded Raines on March 1st that USDA Rural Development needed to be shown the performance and payment bond as a co-obligee on the bonds.

Malicoat indicated on March 3rd that the notice to proceed and notice of reward would be signed at the preconstruction meeting. The petition says that seemed odd to Raines and its agent who were obtaining the bonds since the nursing home district had yet to provide a written contract to Raines to which the bonds were to be identified and issued.

On March 19th, the board requested Raines provide the performance and payment bonds by March 23rd. Raines is said to have submitted the bonds to the board by the deadline and was notified on March 30th that the preconstruction meeting was to be held the next day. Berry sent an email on March 30th postponing the meeting. Malicoat informed Raines on March 31st that the second low bidder, the Wilson Group, was threatening to sue the nursing home district.

The board met on March 31st and decided to award the project to Wilson after previously awarding it to Raines.

It was reported to KTTN in February that the Grundy County Nursing Home District Board approved Raines Heating and Cooling’s bid for HVAC for $388,369. It was reported after the March 31st meeting the board rescinded the notice of award to the company. Sunnyview Administrator Jerry Doerhoff said, at that time, Raines did not comply with bidding requirements.

Counsel notified Raines on April 1st that the company was allegedly in default for allegedly failing to provide performance and payment bonds within 15 days of the notice of the award. Raines denied it was delinquent in providing the bonds and that the board representatives handling the bid extended the time in which the bonds could be provided. The company made a demand upon the district on April 5th for payment of damages. The demand included the district return the $41,413.60 Raines previously paid the district in lieu of bid bond. Counsel for the district refused to return the money on April 19th unless and until Raines provided a release to the district.

The petition alleges the nursing home district made promises to Raines that it had been awarded the contract for the project and directed the company to proceed with obtaining performance and payment bonds. In obtaining the bonds and hiring additional personnel, the company relied on the promises made by the district. The district knew and expected Raines would act by obtaining the bonds and preparing to perform under the terms of the project, and it would be unjust if the promise is not enforced.

The company claims it has been damaged by $275,498 as a result of the district’s actions. The company requests judgment against the Grundy County Nursing Home District for that amount, for interest at the statutory rate, for costs, and for such other and further relief the court deems just and proper. Raines also demands a jury trial.

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