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                                   Appellate Court                         Date: 2019.04.16
                                                                           08:59:42 -05'00'



             LB Steel, LLC v. Carlo Steel Corp., 2018 IL App (1st) 153501



Appellate Court       LB STEEL, LLC, and THE CITY OF CHICAGO ex rel. LB STEEL,
Caption               LLC, Plaintiffs, v. CARLO STEEL CORPORATION; WALSH
                      CONSTRUCTION COMPANY; THE CITY OF CHICAGO; and
                      TRAVELERS CASUALTY AND SURETY COMPANY OF
                      AMERICA, Defendants (LB Steel, LLC, Plaintiff and
                      Counterdefendant-Appellant and Cross-Appellee; Carlo Steel
                      Corporation, Defendant, Counterplaintiff, and Counterdefendant-
                      Appellee and Cross-Appellant; Walsh Construction Company,
                      Defendant and Counterplaintiff-Appellee and Cross-Appellant;
                      Travelers Casualty and Surety Company of America, Defendant and
                      Counterplaintiff-Appellee and Cross-Appellant).–THE CITY OF
                      CHICAGO, Plaintiff, v. MURPHY/JAHN, INC. ARCHITECTS;
                      WERNER SOBEK INGENIUERE GmbH & CO. KG; RUBINOS &
                      MESIA ENGINEERS, INC.; TURNER CONSTRUCTION-
                      O’BRIEN, KREITZBERG, LLC; TURNER CONSTRUCTION
                      COMPANY;           O’BRIEN-KREITZBERG,            INC.;       URS
                      CORPORATION; McCLIER CORPORATION d/b/a O’Hare
                      Partners; AAC DESIGNERS BUILDERS, INC. d/b/a Austin
                      AECOM Company; COTTER CONSULTING, INC.; WALSH
                      CONSTRUCTION COMPANY; BOWMAN, BARRETT &
                      ASSOCIATES, INC.; and TRAVELERS CASUALTY AND
                      SURETY COMPANY OF AMERICA, Defendants (Walsh
                      Construction Company, Defendant, Third-Party Plaintiff, Third-Party
                      Counterdefendant-Appellee and Cross-Appellant; Travelers Casualty
                      and Surety Company of America, Defendant-Appellee and
                      Cross-Appellant; LB Steel, LLC, Third-Party Defendant and
                      Third-Party Counterplaintiff-Appellant and Cross-Appellee; Carlo
                      Steel, Counterdefendant-Appellee and Cross-Appellant).–LB STEEL,
                      LLC, Plaintiff, v. CAL TESTING SERVICES, INC. d/b/a Calumet
                      Testing Services, Defendant.



District & No.        First District, Fifth Division
                      Docket No. 1-15-3501
     Filed                    September 28, 2018



     Decision Under           Appeal from the Circuit Court of Cook County, Nos. 05-CH-2675,
     Review                   07-CH-3886, 08-L-6675, 08-L-3419; the Hon. John C. Griffin, Judge,
                              presiding.



     Judgment                 Dismissed in part, affirmed in part, reversed in part, judgment entered,
                              and remanded.


     Counsel on               Daniel P. Dawson and Joseph A. Ptasinski, of Nisen & Elliott, LLC, of
     Appeal                   Chicago, for appellant.

                              E. Bryan Dunigan, of Chicago, for appellee Carlo Steel Corporation.

                              James R. Figliulo, Michael K. Desmond, and Gregory L. Stelzer, of
                              Figliulo & Silverman P.C., and Patrick J. Enright, Joseph O. Enright,
                              and Colleen B. Cavanaugh, of O’Rourke, Hogan, Fowler & Dwyer,
                              LLC, both of Chicago, for other appellees.



     Panel                    JUSTICE HOFFMAN delivered the judgment of the court, with
                              opinion.
                              Presiding Justice Rochford and Justice Hall concurred in the judgment
                              and opinion.



                                               OPINION

¶1         The appellant, LB Steel, LLC (LB Steel), and the cross-appellants, Walsh Construction
       Company (Walsh), Travelers Casualty and Surety Company of America (Travelers), and Carlo
       Steel Corporation (Carlo Steel), appeal from orders of the circuit court of Cook County entered
       in consolidated cases involving a construction project at O’Hare International Airport. On
       appeal, LB Steel contends that the circuit court erred by (1) setting off certain judgments
       entered in its favor against a judgment entered in favor of Walsh and (2) failing to reduce
       Walsh’s judgment by the value of a payment from its insurer, Zurich American Insurance
       Company (Zurich). Additionally, LB Steel contends that Walsh’s judgment must be reduced
       by the amount due under its policy with another insurer, St. Paul Guardian Insurance Company
       (St. Paul). In their respective cross-appeals, Walsh, Travelers, and Carlo Steel fix additional

                                                   -2-
     issues for review, which we address infra. For the following reasons, we dismiss the
     cross-appeal of Carlo Steel, affirm the circuit court’s judgment in part and reverse it in part,
     enter a judgment in LB Steel’s favor against Walsh and Carlo Steel for $4,771,688 on LB
     Steel’s claim for quantum meruit, and remand.
¶2       The procedural history of this case is lengthy. The following factual recitation, taken from
     the pleadings, exhibits, and evidence adduced at trial, contains only what is necessary for our
     disposition of the issues. Additional facts will be included as needed throughout this opinion.
¶3       In January 2003, Walsh, a general contractor, entered into a contract (Prime Contract) with
     the City of Chicago (City) to construct a steel canopy above several terminals at O’Hare
     International Airport (Project). In connection with the Project, Walsh obtained a public
     construction bond from Travelers (Travelers bond) and an insurance policy from Zurich
     (Zurich policy). Walsh subcontracted with Carlo Steel, a construction company, to build the
     steel canopy (Subcontract). The Subcontract stated that, if Carlo Steel commits a “material
     breach” of the Subcontract, Walsh may “withhold payment” from Carlo Steel “pending
     corrective action to the extent required by and to the satisfaction of [Walsh] and the
     Architect/Engineer.”
¶4       In March 2003, Carlo Steel subcontracted with LB Steel, a steel fabricator, to manufacture
     the steel canopy and 35 steel support columns (Sub-Subcontract). The Sub-Subcontract
     provided that, “[t]o the extent terms of the [Prime Contract] *** apply” to LB Steel’s work,
     Carlo Steel and LB Steel assumed toward each other the same “obligations, rights, duties, and
     redress” that Walsh and Carlo Steel assumed under the Prime Contract. Additionally, the
     Sub-Subcontract provided that “Carlo Steel may reject a *** payment application” from LB
     Steel “as may be reasonably necessary to protect Carlo Steel from loss or damage caused by”
     LB Steel’s failure to “correct rejected, defective, or nonconforming *** work.” Subsequently,
     LB Steel retained an engineering firm, R.I. Johnson Associates (R.I. Johnson), to design
     welding for the canopy and support columns and entered into a contract with Cal Testing, Inc.
     (Cal Testing) to analyze the welding (weld-testing contract).
¶5       LB Steel delivered the steel support columns to the Project site between December 2003
     and March 2004, along with elements of the steel canopy. In December 2004, the City
     discovered cracks in the canopy’s welding; some of the welds were performed by LB Steel,
     and others were performed by another contractor. During the investigation, Walsh withheld
     payment from Carlo Steel, and Carlo Steel, in turn, withheld payment from LB Steel.
¶6       On January 21, 2005, LB Steel issued a notice of claim on the Travelers bond, alleging it
     had not been paid $7,012,856 under the Sub-Subcontract. Subsequently, on February 9, 2005,
     LB Steel filed an action against the City, Carlo Steel, and Walsh in the circuit court of Cook
     County (case number 05 CH 2675). LB Steel’s complaint was amended on several occasions,
     with the last iteration being a six-count third amended complaint adding Travelers as a
     defendant. LB Steel alleged a lien against public funds, directed against “the City, Walsh and
     Carlo, and each of them” (count I); breach of the Sub-Subcontract by Carlo Steel (count II);
     quantum meruit against Carlo Steel and Walsh (count III); declaratory judgment against Carlo
     Steel (count IV); a public construction bond claim against Travelers (count V); and unjust
     enrichment by Carlo Steel and Walsh (count VI).
¶7       While LB Steel’s complaint was pending, the City continued investigating the defective
     welding in the steel canopy and ultimately faulted its structural engineer and not the
     contractors. However, in November 2005, the City discovered additional defects in LB Steel’s

                                                -3-
       welding for the steel support columns it manufactured. The City’s structural engineer
       concluded that, if other welding was also defective, “the overall structural stability of the
       canopy structure *** [could be] endangered.” Due to these findings, Walsh, the City, and the
       City’s engineers developed a plan to identify and remediate welds that were critical to the
       canopy’s structural integrity.
¶8          While the remediation effort was underway, Walsh and Travelers filed a counterclaim
       against Carlo Steel, alleging that it breached the Subcontract, and Carlo Steel filed a
       counterclaim against LB Steel, claiming that it breached the Sub-Subcontract. Later, Walsh
       and Carlo Steel executed an assignment agreement by which Carlo Steel assigned the
       Sub-Subcontract to Walsh “together with any and all claims which [Carlo Steel] has, or may
       hereafter have, against [LB Steel] and the City.” Walsh agreed to “defend *** any and all
       counter-suits or claims brought by any of the Subcontractors against [Carlo Steel] relating to”
       the Project and undertook to “indemnify” Carlo Steel for claims arising from Walsh’s “failure
       to provide payment to [Carlo Steel] which in turn would have been provided to the
       Subcontractors.”
¶9          On April 13, 2007, the City filed an action against Walsh and Travelers in the circuit court
       of Cook County (case number 07 L 3886). In the same proceeding, Walsh filed a third-party
       complaint against LB Steel and Cal Testing, which was later superseded by a five-count
       second amended third-party complaint. Walsh alleged breach of the Sub-Subcontract by LB
       Steel (count I), professional negligence by Cal Testing and LB Steel (counts II and III,
       respectively), fraud by LB Steel (count IV), and breach of the weld-testing contract by Cal
       Testing based on Walsh’s status as a third-party beneficiary (count V). LB Steel filed a
       counterclaim that raised several claims similar to those contained in its third amended
       complaint in case number 05 CH 2675. Specifically, LB Steel alleged breach of the
       Sub-Subcontract by both Carlo Steel and Walsh (count I); a lien against public funds, directed
       against “the City, Walsh and Carlo, and each of them” (count II); quantum meruit against
       Carlo Steel and Walsh (count III); a public construction bond claim against Travelers (count
       IV); and unjust enrichment by Carlo Steel and Walsh (count V). In count VI of its
       counterclaim, LB Steel alleged breach of contract against Cal Testing.
¶ 10        On June 19, 2008, LB Steel filed a complaint against Cal Testing in the circuit court of
       Cook County, which was later superseded by a second amended complaint alleging one count
       of breach of contract (case number 08 L 6675). Then, on July 29, 2009, LB Steel filed a
       third-party complaint in case number 07 L 3886, alleging breach of contract against Carlo
       Steel. In a series of orders entered in July 2009, the trial court consolidated the proceedings in
       case numbers 05 CH 2675, 07 L 3886, and 08 L 6675.1
¶ 11        On April 4, 2013, Cal Testing filed a counterclaim for interpleader in case number 07 L
       3886, seeking to deposit $1,812,696 with the clerk of the circuit court, the amount remaining
       under its insurance policy, because “[b]oth Walsh and LB Steel have claimed entitlement [to
       the money].” In response, Walsh and LB Steel filed counterclaims for those funds. By order of
       the trial court, Cal Testing deposited the funds on June 4, 2013, and was dismissed from the
       litigation.


          1
           Case number 08 L 3419, another action arising from the Project and to which Walsh was a
       defendant, was also consolidated but is not relevant to this appeal.

                                                   -4-
¶ 12       On June 28, 2013, Walsh and the City filed a joint motion in case number 07 L 3886,
       asserting that, due to LB Steel’s lien on public funds, the City was “withholding from Walsh
       $1,554,654.00” under the Prime Contract and sought to deposit that sum with the clerk of the
       circuit court. The trial court granted Walsh’s and the City’s motion on September 13, 2013.
       Subsequently, on November 12, 2013, the court entered an order stating that the deposited
       funds “shall be credited by the parties as if paid by the City to Walsh” and that “LB Steel’s lien
       is released as to the City only and attaches to the deposited funds.” The City deposited the
       funds that day.
¶ 13       On August 24, 2015, the matter proceeded to a bench trial, where the following claims
       were before the court. According to its trial brief, LB Steel proceeded on (1) counts I-III and
       V-VI of its third amended complaint in case number 05 CH 2675, (2) the corresponding claims
       raised in counts I-V of its counterclaim in case number 07 L 3886, and (3) its counterclaim for
       the funds that Cal Testing deposited with the clerk of the circuit court in case number 07 L
       3886. Walsh, in its trial brief, stated that it proceeded on counts I, III, and IV of its second
       amended third-party complaint in case number 07 L 3886 and maintained that “LB Steel’s
       defective work *** was substantial and extensive.” The record shows that, prior to trial, the
       court entered summary judgment in favor of LB Steel and against Walsh on Walsh’s claim for
       professional negligence raised in count III of its second amended third-party complaint.
¶ 14       The evidence adduced at trial established that, following the initial discovery of LB Steel’s
       defective column welds in November 2015, Walsh, the City, and the City’s engineers
       identified 13 types of welds on each of the 35 columns that required inspection and testing.
       Most of those welds were found to be defective but did not require remediation. The welds that
       required remediation, however, included welds that, according to an engineer for Walsh, were
       “critical for the safety of the whole canopy.” Some of those welds had cracks that rendered
       them “totally ineffective” or contained “only a fraction” of the required volume, and in some
       cases, “there was no weld touching the metal and connecting to both sides” of the columns.
       Pursuant to a plan developed with the City and its engineers, Walsh erected temporary shoring
       around the canopy and repaired or retrofitted the defective welds that required remediation. An
       expert for LB Steel opined that the defective welds, in aggregate, constituted approximately
       1000 feet out of a total of 39 miles of welding performed by LB Steel.
¶ 15       During proceedings on October 14, 2015, immediately before the trial judge delivered his
       findings, the parties agreed that Walsh and Carlo Steel had retained a total of $4,771,688 due to
       LB Steel under the Sub-Subcontract following the discovery of cracks in the welding. Counsel
       for Walsh maintained that it “had every right to withhold that payment under the contract
       because of the defective work” but conceded that, “if our costs to repair are awarded and we
       are made whole, then LB Steel would be entitled to reduce” the judgment entered against it by
       “the amount that would have been due [to LB Steel] had [it] properly performed.”
¶ 16       Following this discussion, the trial judge delivered his findings from the bench and also
       entered a comprehensive written judgment order. In his oral findings, the judge observed that,
       although the parties proffered “voluminous documents” in evidence, LB Steel provided neither
       “as-built drawings” showing that it produced the welds according to specification nor “notes
       *** regarding visual inspection.” Because such evidence was “within [LB Steel’s] power to
       produce,” the judge inferred that “the as-builts and visual inspections would be adverse to LB
       Steel.”


                                                   -5-
¶ 17        As to Walsh’s claim for breach of contract by LB Steel in count I of its second amended
       third-party complaint, the judge found that “the contract documents support Walsh’s theory of
       the case” and that “there was a need for remediation due to the defective welds, not the
       design.” The judge awarded Walsh $27.5 million, noting that it made “a reasonable and
       responsible attempt to mitigate damages and protect the public safety” and that its damages
       “are the costs it incurred to investigate and repair the defective welds.” In so holding, the judge
       stated that $8 million that Walsh received under the Zurich policy would not be deducted from
       the award because “the insurance policy is clear as to what was covered by the payment.”
       However, the judge found that Walsh did not prove its claim for fraud by LB Steel in count IV
       of its second amended third-party complaint.
¶ 18        As to LB Steel’s claim for breach of contract in count II of its third amended complaint, the
       judge awarded LB Steel $6.5 million, with “the City lien funds *** applied to that amount,”
       but did not make specific findings of fact. The judge also denied LB Steel’s claims for
       quantum meruit and declaratory judgment without making any factual findings.2 Finally, the
       judge entered “an additional judgment in [LB Steel’s] favor *** for the Cal Testing funds on
       deposit.”
¶ 19        Counsel for Walsh then argued that, if Walsh “obtain[s]” the funds awarded to LB Steel,
       that award would “reduc[e]” the judgment in Walsh’s favor because “Walsh withheld the
       contract amount as [it] had a right to do under the contract, and that should be offset against the
       amount of what is claimed.” In response, counsel for LB Steel stated that, pursuant to section
       12-178 of the Code of Civil Procedure (Code) (735 ILCS 5/12-178 (West 2014)), “setoff is not
       appropriate given the different capacities for these different claims.” LB Steel’s counsel also
       stated that his firm, Conway & Mrowiec, filed a “notice of attorneys’ lien in this case, and that
       is one of the specific exceptions to setoff” under the Code. An attorney for MB Financial Bank
       (MB Financial) then addressed the court, stating that MB Financial has “a perfected lien
       security interest in all property of LB Steel,” including “the judgments *** entered in favor of
       LB Steel, the rights to the $1.5 million *** under public statute, the $6.5 million judgment
       against Travelers and *** [the] judgment against Cal Testing.” MB Financial’s attorney
       argued, therefore, that “the rights of setoff should not be determined at this time.” A copy of
       Conway & Mrowiec’s lien notice appears in the record; however, the record does not contain
       an appearance or lien notice filed by MB Financial, and attorneys for both Walsh and Carlo
       Steel objected to its participation in the proceedings. Following these discussions, the trial
       judge stated:
                “[A]t the end of the day, here is the way it should be: There is a $27,500,000 judgment
                entered.
                    LB [Steel] is entitled to credit for the $6,500,000, and the $1,812,696 for a total of
                $8,312,696.
                    The net is [$]19,187,304. I do think these are all—I don’t remember the exact
                terminology—interrelated.
                    I think that pursuant to 5/12-176 [of the Code], [LB Steel] is entitled to a setoff so
                Walsh should get the money *** that is being held by the Clerk.”

           Although the trial court denied LB Steel’s claim for declaratory judgment against Carlo Steel in
           2

       count IV of its third amended complaint, LB Steel’s pretrial brief, as noted, did not specify that it was
       proceeding on that claim.

                                                       -6-
¶ 20       The trial court entered a written judgment order on October 14, 2015. Because of its
       relevance to the issue on appeal, we quote the judgment order at length. It states, in relevant
       part:
                   “1. Judgment is entered in favor of Walsh *** and against LB Steel, *** on Count I
              of Walsh’s Second Amended Third-Party Complaint *** for Breach of Contract in the
              amount of $27,500,000.00;
                   2. Judgment is entered in favor of LB Steel and against Walsh on Count IV of
              Walsh’s Second Amended Third-Party Complaint *** for fraud;
                   3. Judgment is entered in favor of LB Steel and against Carlo Steel *** and Walsh
              on Count I of LB Steel’s Counterclaim *** (and Count II of LB Steel’s Third Amended
              Complaint ***) for breach of contract, in the amount of $6,500,000.00;
                   4. Judgment is entered in favor of LB Steel and the City of Chicago for the use and
              benefit of LB Steel and against Travelers *** on Count IV of LB Steel’s Counterclaim
              *** (and Count V of LB Steel’s Third Amended Complaint ***) on the bond claim in
              the principal amount of $6,500,000.00[;]
                   5. Judgment is entered in favor of LB Steel and against Walsh on Count II of LB
              Steel’s Counterclaim *** (and Count I of LB Steel’s Third Amended Complaint ***)
              for lien *** in the amount of $1,554,654.00;
                   6. Judgment is entered in favor of LB Steel, on Count VI of LB Steel’s *** Answer
              and Counterclaim *** and LB Steel’s Answer and Counterclaim for Interpleader ***
              (and LB Steel’s Complaint against Cal Testing ***) for the principal amount of
              $1,812,696.00 plus accrued interest that was deposited with the Clerk of the Court by
              Cal Testing ***. This $1,812,696.00 is independent of, and in addition to, the
              $6,500,000.00 awarded to LB Steel under Counts I, II, and IV of LB Steel’s ***
              Counterclaim;
                   7. Judgment is entered in favor of Walsh and against LB Steel on Count III of LB
              Steel’s Counterclaim *** and Count III of LB Steel’s Third Amended Complaint ***
              for quantum meruit;
                   8. Count IV of LB Steel’s Third Amended Complaint *** for declaratory judgment
              against Carlo [Steel] is subsumed in other counts;
                   9. Judgment is entered in favor of Walsh and Carlo Steel and against LB Steel on
              Count VI of LB Steel’s Third Amended Complaint *** for unjust enrichment;
                   10. Judgment is entered in favor of LB Steel and against Carlo Steel on Carlo
              Steel’s counterclaim against LB Steel ***. Judgment is entered for Carlo Steel and
              against LB Steel on the LB Steel Third-Party Claim against Carlo Steel;[3]
                   11. LB Steel shall be entitled to a credit for $6,500,000.00 based upon its contract
              claims, bond claim, and lien claim and $1,812,696.00 plus accrued interest based upon
              [its] claims against [Cal] Testing and the funds deposited by [Cal] Testing (plus
              accrued interest), which amounts shall be set-off against Walsh[’s] *** judgment, for a


           3
            Although the trial court denied LB Steel’s claim for breach of contract raised in its third-party
       complaint against Carlo Steel, LB Steel’s pretrial brief, as noted, did not specify that it was proceeding
       on that claim.

                                                       -7-
               net judgment in favor of Walsh *** and against LB Steel[ ] *** in the amount of
               $19,187,304.00, less accrued interest from funds deposited by [Cal] Testing;
                   12. The judgments against Travelers *** and Carlo [Steel] *** are hereby satisfied
               in full by reason of the set-off and/or recoupment of the judgment in favor of Walsh
               *** as set forth in paragraph 11 above ***;
                   13. IT IS HEREBY ORDERED that the Clerk *** shall release the $1,554,654.00
               deposited by the City of Chicago *** plus accrued interest, to Walsh ***;
                   14. IT IS HEREBY ORDERED that the Clerk *** shall release the $1,812,696.00
               deposited by Cal Testing[ ] *** plus accrued interest, to Walsh ***;
                   ***
                   16. Notwithstanding the Parties[’] claim[s] for attorneys’ fees and costs against LB
               Steel[ ] *** and the continuance of this matter for this issue, this Court makes an
               express finding that there is no just reason for delaying either enforcement or appeal or
               both of this Judgment Order pursuant to Illinois Supreme Court Rule 304(a).”
¶ 21       On October 18, 2015, LB Steel voluntarily filed for protection under Chapter 11 of the
       United States Bankruptcy Code (Bankruptcy Code) (11 U.S.C. § 1101 et seq. (2012)) in the
       United States Bankruptcy Court for the Northern District of Illinois, Eastern Division. 4
       Subsequently, the bankruptcy court modified the automatic stay to allow LB Steel and Walsh
       to file notices of appeal and cross-appeal from the trial court’s judgment order, which they
       filed on December 16, 2015, and December 23, 2015, respectively. Walsh’s notice of
       cross-appeal also listed its surety, Travelers, as a cross-appellant. The record does not show
       whether Carlo Steel sought to modify the automatic stay, nor is Carlo Steel mentioned in the
       bankruptcy court’s order allowing Walsh to file its notice of cross-appeal. Notwithstanding,
       Carlo Steel filed a notice of cross-appeal from the judgment order on January 4, 2016.
¶ 22       LB Steel filed two adversary complaints against Walsh in the bankruptcy court, arguing
       that the setoffs imposed by the trial court were invalid or avoidable. In memorandum opinions,
       the bankruptcy court held that (1) the Rooker-Feldman doctrine barred LB Steel’s challenge to
       the setoffs and, therefore, the bankruptcy court would not disturb the trial court’s
       determination that “the obligations at issue were mutual for purposes of setoff”;5 (2) the funds
       that Cal Testing and the City deposited with the clerk of the circuit court were not part of the
       bankruptcy estate; and (3) the bankruptcy court would not conduct further proceedings until
       the present appeal is resolved. On May 10, 2016, the bankruptcy court entered an order
       modifying the automatic stay “to allow LB Steel and Walsh to proceed with the [a]ppeals.”
       That order did not mention Carlo Steel’s cross-appeal.
¶ 23       As an initial matter, although the parties do not dispute jurisdiction, this court has an
       independent duty to consider its jurisdiction before reaching the merits of the case. See
       Almgren v. Rush-Presbyterian-St. Luke’s Medical Center, 162 Ill. 2d 205, 210 (1994). When,
       as here, multiple parties or claims are involved in an action and the trial court “has made an
       express written finding that there is no just reason for delaying either enforcement or appeal”
           4
              This court “may take judicial notice of public documents which are included in the records of other
       courts,” including the bankruptcy court. Seymour v. Collins, 2015 IL 118432, ¶ 6 n.1.
            5
              The Rooker-Feldman doctrine “prevents a party who is complaining about an injury caused by a
       state-court judgment from seeking redress in a lower federal court.” Vlastelica v. Brend, 2011 IL App
       (1st) 102587, ¶ 34.

                                                       -8-
       of a judgment that is final as to one or more but fewer than all of the parties or claims, an appeal
       must be filed within 30 days of such judgment. Ill. S. Ct. R. 303(a)(1) (eff. July 1, 2017); R.
       304(a) (eff. Mar. 8, 2016). In this case, the trial court entered its judgment order on October 14,
       2015. LB Steel filed its notice of appeal on December 16, 2015, Walsh and Travelers filed their
       joint notice of cross-appeal on December 23, 2015, and Carlo Steel filed its notice of
       cross-appeal on January 4, 2016. Thus, none of the notices of appeal or cross-appeal were filed
       within the 30-day period. However, the bankruptcy petition filed by LB Steel on October 18,
       2015, calls into play two provisions from the Bankruptcy Code that are relevant for
       determining whether the notices of appeal and cross-appeal were timely filed.
¶ 24        Turning first to LB Steel’s appeal, section 108(b) of the Bankruptcy Code provides that “if
       applicable nonbankruptcy law *** fixes a period within which the debtor *** may file any
       pleading *** [or] notice” or “perform any other similar act,” and that period “has not expired
       before the date of the filing of the petition,” the “trustee” may file such notice before the later
       of “(1) the end of such period, including any suspension of such period occurring on or after
       the commencement of the case; or (2) 60 days after the order for relief.” 11 U.S.C. § 108(b)
       (2012); see also 11 U.S.C. § 301(b) (2012) (“[t]he commencement of a voluntary [bankruptcy]
       case *** constitutes an order for relief”). Federal courts have recognized that, although section
       108(b) of the Bankruptcy Code does not expressly reference notices of appeal, “ ‘[f]iling a
       notice of appeal is at least a “similar act” with respect to *** filing a “pleading” or a
       “notice.” ’ ” Local Union No. 38, Sheet Metal Workers’ International Ass’n, AFL-CIO v.
       Custom Air Systems, Inc., 333 F.3d 345, 347 (2d Cir. 2003) (quoting Autoskill Inc. v. National
       Educational Support Systems, Inc., 994 F.2d 1476, 1484 (10th Cir. 1993), overruled on other
       grounds by TW Telecom Holdings Inc. v. Carolina Internet Ltd., 661 F.3d 495 (10th Cir.
       2011)). Further, both federal and state courts have found that section 108(b) of the Bankruptcy
       Code applies to a debtor in possession in a Chapter 11 bankruptcy proceeding, who
       “essentially functions as the trustee.” Custom Air Systems, Inc., 333 F.3d at 348; Hoang v.
       Hewitt Avenue Associates, LLC, 936 A.2d 915, 922 n.3 (Md. Ct. Spec. App. 2007). These
       decisions comport with this court’s application of section 108(b) of the Bankruptcy Code in
       other contexts. See, e.g., In re Application of the County Collector, 367 Ill. App. 3d 34, 35
       (2006) (where the owner of liened property filed a voluntary bankruptcy petition within the
       time for redeeming the lien, “the redemption period was extended 60 days” under section
       108(b) of the Bankruptcy Code). Consequently, LB Steel’s Chapter 11 bankruptcy petition,
       filed on October 18, 2015, extended its deadline to file a notice of appeal from the trial court’s
       October 14, 2015, judgment order by 60 days, to December 17, 2015. The notice of appeal
       filed by LB Steel on December 16, 2015, was, therefore, timely for purposes of establishing
       this court’s jurisdiction.
¶ 25        As to Walsh’s and Travelers’ joint notice of cross-appeal, section 362(a) of the Bankruptcy
       Code (11 U.S.C. § 362(a) (2012)) automatically stays “all entities,” immediately upon the
       filing of the bankruptcy petition, from “the commencement or continuation *** of a judicial,
       administrative, or other action *** against the debtor that was or could have been commenced
       before the commencement of the [bankruptcy] case” unless a party obtains relief from the
       automatic stay. See In re Application of the County Treasurer & ex officio County Collector of
       Cook County, 308 Ill. App. 3d 33, 39-40 (1999). Here, the automatic stay resulting from LB
       Steel’s October 18, 2015, bankruptcy petition barred Walsh and Travelers from appealing the
       trial court’s October 14, 2015, judgment order until the bankruptcy court granted relief from


                                                    -9-
       the stay on December 23, 2015. See G.M. Fedorchak & Associates, Inc. v. Chicago Title Land
       Trust Co., 355 Ill. App. 3d 428, 432 (2005) (although a party failed to file a notice of appeal
       with 30 days of a final judgment, “the automatic stay barred [that party] from appealing any
       claim *** until the bankruptcy court granted relief from the stay”). Thus, under section 362(a)
       of the Bankruptcy Code, Walsh and Travelers could not file a notice of cross-appeal until
       December 23, 2015. Consequently, the joint notice of cross-appeal that they filed on that date
       was timely and invoked this court’s jurisdiction. See id.
¶ 26       Carlo Steel’s cross-appeal is also controlled by section 362(a) of the Bankruptcy Code. The
       record, however, does not show that Carlo Steel sought to modify the automatic stay in the
       bankruptcy court, nor is Carlo Steel mentioned in the bankruptcy court’s orders modifying the
       automatic stay to permit LB Steel and Walsh to file their notices of appeal and cross-appeal.
       Carlo Steel, in its brief on cross-appeal, posits that the bankruptcy court’s order “modified the
       stay to allow the filing of [c]ross-[a]ppeals,” but the bankruptcy court’s order of December
       23, 2015, states only that “[t]he automatic stay is modified *** to allow Walsh to file its Notice
       of Cross Appeal” (emphases added). Further, the bankruptcy court’s May 10, 2016, order
       modifying the automatic stay “to allow LB Steel and Walsh to proceed with the [a]ppeals” did
       not mention a cross-appeal by Carlo Steel. It is well established that, “in a direct appeal from
       the trial court, the transcript of the record must reveal the basis for the jurisdiction of the
       appellate court” (Tunca v. Painter, 2012 IL App (1st) 093384, ¶ 25), and a reviewing court
       must “dismiss an appeal if jurisdiction is lacking” (Xcel Supply, LLC v. Horowitz, 2018 IL App
       (1st) 162986, ¶ 26). As the record does not show that the bankruptcy court lifted the automatic
       stay to permit Carlo Steel to file its notice of cross-appeal from the trial court’s October 14,
       2015, judgment order, Carlo Steel has not established that this court has jurisdiction over its
       cross-appeal. See, e.g., Application of the County Treasurer, 308 Ill. App. 3d at 44-45 (a notice
       of appeal filed in violation of the automatic stay was “void ab initio,” which deprived the
       reviewing court of jurisdiction and required it to dismiss the appeal). Carlo Steel’s
       cross-appeal is, therefore, dismissed.6
¶ 27       Turning to the merits of the instant appeals, we begin with Walsh’s initial contention on
       cross-appeal that, notwithstanding the terminology used in the judgment order, “the $6.5
       million ‘judgment’ ostensibly awarded to LB Steel” does not “reflect a judicial determination”
       that Carlo Steel or Walsh breached the Sub-Subcontract. 7 Rather, Walsh argues that the
       judgment order shows that LB Steel “lost its breach of contract claim and received only a
       ‘credit’ for the labor and materials it was acknowledged to have provided” and for which Carlo
       Steel was contractually entitled to withhold payment pending adjudication of the breach of
       contract claim that it assigned to Walsh. According to Walsh, this reading of the judgment
       order avoids the “irrational” result of requiring it to pay LB Steel $6.5 million, return the
       $1,554,654 and $1,812,696 that were deposited with the clerk of the circuit court by the City
       and Cal Tech, respectively, and pursue its award of $27.5 million against LB Steel in the

           6
              Although we dismiss Carlo Steel’s cross-appeal for lack of jurisdiction, we observe that the sole
       assignment of error in its brief on appeal, namely, that the trial court erred by granting judgment in
       favor of LB Steel on its claim for breach of the Sub-Subcontract, is also raised by Walsh and addressed
       in this opinion.
            7
              As Walsh and Travelers filed a joint notice of cross-appeal and brief on cross-appeal, we will refer
       to their arguments, collectively, as Walsh’s.

                                                       - 10 -
       bankruptcy court. Therefore, Walsh argues that this court should “give effect to the [c]ircuit
       [c]ourt’s stated intentions of awarding [it] a net judgment” or, alternatively, “modify the
       Judgment Order to expressly provide that LB Steel is only entitled to a ‘credit,’ not a
       ‘judgment.’ ”
¶ 28       In interpreting the trial court’s judgment order, the “determinative factor” is “the intention
       of the court as gathered from all parts of the judgment itself,” which we construe in the same
       manner as other written instruments. Fieldcrest Builders, Inc. v. Antonucci, 311 Ill. App. 3d
       597, 605 (1999). The trial court’s judgment should be examined “with reference to the issues it
       was intended to decide, and it is not the form *** which is determinative but the substance and
       effect of the adjudication.” Virzint v. Beranek, 202 Ill. App. 3d 511, 514 (1990). While an
       unambiguous judgment will be enforced as drafted, an ambiguous judgment should be read in
       conjunction with the entire record, including the pleadings and issues, and construed in
       accordance therewith. Fieldcrest Builders, Inc., 311 Ill. App. 3d at 605.
¶ 29       In this case, a careful reading of the trial court’s judgment order and oral pronouncements
       reveals no ambiguity. The judge expressly stated that “judgment” was entered for LB Steel on
       counts I, II, and V of its third amended complaint in case number 05 CH 2675; counts I, II and
       IV of its counterclaim in case number 07 L 3886; and its counterclaim for the funds that Cal
       Testing deposited with the clerk of the circuit court in case number 07 L 3886. Although Walsh
       maintains that the judgments entered in LB Steel’s favor could inconvenience its efforts to
       enforce the judgment entered in its own favor, such circumstances do not establish that the
       judgment order was unclear or that the trial court intended its words to convey something other
       than their plain meaning. See Garcia v. Gutierrez, 331 Ill. App. 3d 127, 129 (2002)
       (recognizing that “[a]n order is to be construed in a reasonable manner that gives effect to the
       apparent intention of the trial court”). Consequently, we reject Walsh’s contention that,
       contrary to the plain language of the judgment order, the trial court did not enter judgment in
       LB Steel’s favor on its breach of contract claim in count II of its third amended complaint and
       count I of its counterclaim.
¶ 30       Walsh contends, however, that the trial court erred in entering judgment in favor of LB
       Steel on its breach of contract claim against it and Carlo Steel in case numbers 05 CH 2675 and
       07 L 3886 because Carlo Steel had the right to withhold funds from LB Steel due to the
       defective welds. LB Steel, in response, maintains that Carlo Steel committed the first material
       breach of contract by withholding payment prior to the discovery of the defective support
       column welds that were discovered in November 2005.
¶ 31       A material breach of contract constitutes the “failure to do an important or substantial
       undertaking set forth in a contract.” Mayfair Construction Co. v. Waveland Associates Phase I
       Ltd. Partnership, 249 Ill. App. 3d 188, 202-03 (1993). Whether a material breach of contract
       has been committed is a question of fact. Mohanty v. St. John Heart Clinic, S.C., 225 Ill. 2d 52,
       72 (2006). As such, the trial court’s determination will not be disturbed on appeal unless it is
       against the manifest weight of the evidence. Id. A judgment is against the manifest weight of
       the evidence only “if the opposite conclusion is clearly evident or if the finding itself is
       unreasonable, arbitrary, or not based on the evidence presented.” Best v. Best, 223 Ill. 2d 342,
       350 (2006).
¶ 32       We begin our analysis with the relevant contractual language. The Subcontract between
       Walsh and Carlo Steel for the construction of the steel canopy stated that, if Carlo Steel
       commits a “material breach” of the Subcontract, Walsh may “withhold payment” from Carlo

                                                   - 11 -
       Steel “pending corrective action.” In turn, the Sub-Subcontract between Carlo Steel and LB
       Steel for the manufacturing of the canopy and support columns provided that Carlo Steel
       assumed toward LB Steel the same “rights” and “redress” that, under the Subcontract, Walsh
       assumed towards Carlo Steel and, further, that Carlo Steel could withhold payment form LB
       Steel based on LB Steel’s failure to “correct rejected, defective, or nonconforming *** work.”
       Taking these terms together, the Sub-Subcontract permitted Carlo Steel to withhold payment
       from LB Steel in the event that LB Steel committed a material breach of contract as
       contemplated by the Subcontract between Carlo Steel and Walsh.
¶ 33        The trial evidence established that, in December 2004, the City discovered cracks in the
       welding of the canopy and determined that some of those welds were performed by LB Steel.
       Subsequently, the City withheld payment from Walsh, Walsh withheld payment from Carlo
       Steel, and Carlo Steel withheld payment from LB Steel. Although the City’s investigation did
       not initially fault LB Steel for the defective welding in the canopy, in November 2005
       additional defects were found in LB Steel’s welding for the support columns that it had
       delivered to the project site between December 2003 and March 2004. Those defects
       encompassed 13 types of welds on each of the 35 columns, some of which had cracks that
       rendered them “totally ineffective,” contained “only a fraction” of the required volume, or
       failed to connect one part of a column to another. As established at trial, certain of those
       defects were “critical for the safety of the whole canopy” and prompted a remediation plan that
       involved temporary shoring around the canopy and the repair or retrofitting of the defective
       welds.
¶ 34        As noted, the trial court entered judgment in favor of Walsh on its claim for breach of
       contract by LB Steel. Implicit in the trial court’s ruling is the determination that the “defective
       welds” performed by LB Steel constituted a material breach of the Sub-Subcontract. The
       evidence established that LB Steel’s defective welding caused it to be in material breach of the
       Sub-Subcontract no later than March 2004, when it delivered the affected support columns,
       and it remained in material breach when Carlo Steel began withholding payment in December
       2004 and when the City discovered defects in LB Steel’s welding for the steel support columns
       it manufactured. It is apparent, therefore, that LB Steel committed the first material breach of
       contract and, to the extent that Carlo Steel withheld payment, such withholding was
       contractually permitted and did not constitute a breach on its part. LB Steel, therefore, was not
       entitled to recover on its claim for breach of contract. See Dubey v. Public Storage, Inc., 395
       Ill. App. 3d 342, 361-62 (2009) (“a party who materially breaches a contract cannot take
       advantage of the terms of the contract which benefit him, nor can he recover damages from the
       other party to the contract”). Consequently, the trial court’s order entering judgment in favor of
       LB Steel and against Carlo Steel and its indemnitor, Walsh, on LB Steel’s claims for breach of
       contract in count II of its third amended complaint in case number 05 CH 2675 and count I of
       its counterclaim in case number 07 L 3886 is against the manifest weight of the evidence and,
       therefore, must be reversed.
¶ 35        In view of the foregoing, we find that the trial court also erred by entering judgment in
       favor of LB Steel and against Travelers on LB Steel’s public construction bond claim raised in
       count V of LB Steel’s third amended complaint in case number 05 CH 2675 and count IV of its
       counterclaim in case number 07 L 3886. Suit on a public construction bond can be brought if it
       could be maintained against the principal. Village of Rosemont v. Lentin Lumber Co., 144 Ill.
       App. 3d 651, 668 (1986). Here, LB Steel could properly raise a claim for breach of contract


                                                   - 12 -
       against Walsh as Carlo Steel’s indemnitor and against Travelers as Walsh’s surety. Travelers
       would be liable to the same degree as Walsh. See id. (“As a general rule, the liability of
       a surety is measured by the liability of its principal.”). However, for reasons we have
       explained, the trial court erred in entering judgment in favor of LB Steel on its claim for breach
       of contract against Walsh. As such, the judgment in favor of LB Steel and against Travelers on
       LB Steel’s public construction bond claim must also be reversed.
¶ 36       LB Steel argues, however, that even if it breached the Sub-Subcontract, it is still entitled to
       recover under a theory of substantial performance because the defective welds, in aggregate,
       constituted only 1000 feet of the 39 miles of total welding.
¶ 37       “Under the doctrine of substantial performance, a contractor may recover where there has
       been substantial performance of a contract even though there may be some omissions and
       defects in the contract’s performance, as measured by the strict terms of the contract.” National
       Wrecking Co. v. Midwest Terminal Corp., 234 Ill. App. 3d 750, 761 (1992). Substantial
       performance is the “honest and faithful performance of the contract in its material and
       substantial parts, with no willful departure from, or omission of, the essential elements of the
       contract.” (Internal quotation marks omitted.) Doornbos Heating & Air Conditioning, Inc. v.
       James D. Schlenker, M.D., S.C., 403 Ill. App. 3d 468, 483 (2010). Whether a party to a contract
       rendered substantial performance is a question of fact, and the trial court’s determination of
       that issue will not be disturbed unless it is against the manifest weight of the evidence. W.E.
       Erickson Construction, Inc. v. Congress-Kenilworth Corp., 115 Ill. 2d 119, 127 (1986).
¶ 38       At the outset, Walsh maintains that the doctrine of substantial performance is inapplicable
       in the present case because the Sub-Subcontract permitted Carlo Steel to withhold payment to
       LB Steel “as may be reasonably necessary to protect Carlo Steel from loss or damage caused
       by” LB Steel’s failure to “correct rejected, defective, or nonconforming *** work.” We agree.
       By its plain language, the Sub-Subcontract permitted Carlo Steel to withhold payment,
       irrespective of whether the work was also substantial. However, for reasons that we have
       explained, the manifest weight of the evidence showed that LB Steel materially breached the
       Sub-Subcontract and, as such, failed to render substantial performance under it. See Mayfair
       Construction Co., 249 Ill. App. 3d at 202-03 (a material breach of contract includes the failure
       to perform a “substantial undertaking set forth in [the] contract”). As the trial evidence
       showed, the majority of the welds that were found to be defective did not require remediation,
       but the welds that required remediation included those that were “critical for the safety of the
       whole canopy.” Because the defective welds constituted a material breach of contract, the fact
       that they represented just a portion of the total welds that LB Steel performed does not show
       that LB Steel’s breach of contract was unsubstantial. See Doornbos Heating & Air
       Conditioning, Inc. 403 Ill. App. 3d at 483. As such, LB Steel’s claim for breach of contract
       against Carlo Steel and its indemnitor, Walsh, based on substantial performance fails.
¶ 39       LB Steel also contends that it may recover under a theory of quantum meruit.8 When a
       builder renders less than substantial performance, its measure of recovery under a theory of
       quantum meruit is “reasonable compensation for value received by the [non-breaching party]

           8
             Walsh argues that LB Steel waived quantum meruit as a theory of recovery by raising it for the
       first time in its reply brief. See Ill. S. Ct. R. 341(h)(7) (eff. Nov. 1, 2017) . Because LB Steel’s argument
       responds to an issue that Walsh fixed in its own brief on cross-appeal, LB Steel’s reply brief essentially
       doubled as its response brief, and as such, we will consider its argument on the merits.

                                                        - 13 -
       over and above the injury suffered by the builder’s breach.” Brewer v. Custom Builders Corp.,
       42 Ill. App. 3d 668, 673 (1976). The party seeking recovery has the burden to “introduce some
       evidence specific enough to prove the reasonable value of the benefit *** allegedly received”
       by the other party. Bernstein & Grazian, P.C. v. Grazian & Volpe, P.C., 402 Ill. App. 3d 961,
       979 (2010).
¶ 40       In this case, LB Steel introduced no evidence at trial to establish the value that Walsh
       allegedly received from its partial performance under the Sub-Subcontract. However, the
       record shows that, before the trial court entered the judgment order, the parties agreed that
       Walsh and Carlo Steel had retained a total of $4,771,688 due to LB Steel under the
       Sub-Subcontract following the discovery of cracks in the welding. Counsel for Walsh
       submitted that, although Walsh was entitled “to withhold that payment under the contract
       because of the defective work,” LB Steel “would be entitled to reduce” the judgment entered
       against it by that sum if Walsh were to be “made whole.” The trial court, as noted, entered
       judgment in favor of Walsh for $27.5 million on count I of its second amended third-party
       complaint for breach of contract by LB Steel, and for the reasons we have explained, we have
       reversed the judgment entered in favor of LB Steel on its breach of contract claim against
       Walsh and Carlo Steel. It follows that the $4,771,688 which Walsh retained under the
       Sub-Subcontract constitutes “value received *** over and above the injury” that it sustained
       due to LB Steel’s breach of contract (Brewer, 42 Ill. App. 3d at 673); that sum, which is
       liquidated and admitted by Walsh, constitutes LB Steel’s measure of recovery under a theory
       of quantum meruit. Therefore, we reverse the trial court’s judgment in favor of Walsh and
       against LB Steel on LB Steel’s claims for quantum meruit raised in count III of its third
       amended complaint in case number 05 CH 2675 and count III of its counterclaim in case
       number 07 L 3886. Pursuant to our authority under Illinois Supreme Court Rule 366(a)(5) (eff.
       Feb. 1, 1994), we enter judgment in LB Steel’s favor against Walsh and Carlo Steel for
       $4,771,688 on those two counts.
¶ 41       Walsh next argues that the trial court erred by entering judgment in LB Steel’s favor on its
       claim for a lien against public funds raised in count I of its third amended complaint in case
       number 05 CH 2675 and count II of its counterclaim in case number 07 L 3886, as LB Steel
       was not entitled to enforce its lien due to its own breach of contract.
¶ 42       The Mechanics Lien Act (770 ILCS 60/0.01 et seq. (West 2004)) affords certain
       protections to contractors who contribute labor or materials to a construction project by
       allowing them a lien on the subject property. La Salle Bank National Ass’n v. Cypress Creek 1,
       LP, 242 Ill. 2d 231, 237 (2011). Relevant here, the statute provides that subcontractors who
       render work for a contractor operating under a contract with a government entity “shall have a
       lien for the value thereof on the money, bonds, or warrants due or to become due the
       contractor.” 770 ILCS 60/23(b) (West 2004). In general, “the contractor must completely
       perform the contract to enforce its lien for the value of what has been done.” Fieldcrest
       Builders, Inc., 311 Ill. App. 3d at 609. This court has recognized, however, that
       “[n]otwithstanding the general rule, a contractor still can enforce a mechanic’s lien by proving
       that he substantially performed the contract in a workmanlike manner.” Id. at 610. For reasons
       we have explained, the manifest weight of the evidence demonstrated that LB Steel did not
       substantially perform under the Sub-Subcontract. To the contrary, while the defective welds
       may have constituted just a portion of the total work performed by LB Steel on the Project,
       those defects represented significant failures in the performance that was required of it under


                                                  - 14 -
       the Sub-Subcontract. As such, LB Steel was not entitled to enforce its mechanics lien, and the
       trial court’s order entering judgment in its favor on its mechanics lien claim in count I of its
       third amended complaint in case number 05 CH 2675 and count II of its counterclaim in case
       number 07 L 3886 is, therefore, reversed.
¶ 43        Next, we turn to the issue of setoff. As an initial matter we find that, having determined that
       the trial court erred by entering judgment in favor of LB Steel on its breach of contract, public
       construction bond, and mechanics lien claims, its orders imposing setoffs based on those
       judgments must be reversed. Consequently, the only remaining setoff for our consideration
       involves LB Steel’s judgment for the $1,812,696 deposited with the court by Cal Testing. As to
       that issue, LB Steel contends that the trial court erred by setting off the judgments that were
       entered in its favor on its claim for breach of contract by Cal Testing against the judgment
       entered in Walsh’s favor, as different parties and res were involved in each judgment. We
       agree.
¶ 44        Section 12-176 of the Code (735 ILCS 5/12-176 (West 2014)) states that “[j]udgments
       between the same parties may be set off, one against another” pursuant to section 12-177 of the
       Code. Section 12-177 of the Code (id. § 12-177) provides that a judgment in favor of one party
       may be applied “as far as it will extend, to the satisfaction” of a judgment against that same
       party “and the balance due on the larger judgment may be collected and paid in the same
       manner as if there had been no set-off.” Thus, taken together, sections 12-176 and 12-177 of
       the Code direct that “judgments between the same parties may be set off against each other, so
       that the larger judgment is reduced by the amount of the lesser judgment.” Adam Martin
       Construction Co. v. The Brandon Partnership, 135 Ill. App. 3d 324, 327 (1985). Under Illinois
       law, “[t]he burden of proving an enforceable right of setoff rests with the party asserting the
       right” (In re Clark Retail Enterprises, Inc., 308 B.R. 869, 895 (Bankr. N.D. Ill. 2004)), and the
       amount of the setoff must be certain and ascertainable (Bank of Chicago-Garfield Ridge v.
       Park National Bank, 237 Ill. App. 3d 1085, 1091 (1992)).
¶ 45        Pursuant to section 12-178 of the Code (735 ILCS 5/12-178 (West 2014)), setoff is not
       available when (1) “the creditor in one of the judgments is not in the same capacity and trust as
       the debtor in the other”; (2) “the sum due on the first judgment was lawfully and in good faith
       assigned to another person, before the creditor in the second judgment became entitled to the
       sum due thereon”; (3) “there are several creditors in one judgment, and the sum due on the
       other is due from a part of them only”; or (4) “there are several debtors in one judgment, and
       the sum due on the other is due to a part of them only.” Additionally, setoff is unavailable for
       that portion of a judgment “due to the attorney in that action for his or her fees and
       disbursements therein.” Id. § 12-178(5).
¶ 46        Applying these principles in the present case, we find that the trial court erred in setting off
       LB Steel’s judgment for the funds deposited by Cal Testing against the judgment entered in
       Walsh’s favor. In contravention of section 12-178(1) of the Code, there was no mutuality as to
       the parties involved in the judgments at issue. Id. § 12-178(1); see also Brown v. Farkas, 158
       Ill. App. 3d 772, 780-81 (1986) (denying setoff due to lack of mutuality between the parties to
       the judgments). The trial court’s order setting off LB Steel’s judgment for breach of contract
       against Cal Testing is, therefore, reversed, as is its order releasing to Walsh the sum deposited
       by Cal Testing.
¶ 47        Because we find that each of the setoffs imposed by the trial court must be reversed, we
       need not reach LB Steel’s additional contention that setoff was improper due to the notice of

                                                    - 15 -
       attorney’s lien filed by its trial counsel, Conway & Mrowiec, and the lien alleged by MB
       Financial. However, as we have entered judgment in favor of LB Steel and against Carlo Steel
       and Walsh on LB Steel’s quantum meruit claims, we remand the cause to the trial court for a
       hearing on whether or to what extent the judgment in favor of LB Steel on its quantum meruit
       claims should be offset against the judgment in favor of Walsh on its breach of contract claim.
       In so holding, we express no opinion on the merits of this issue.
¶ 48       LB Steel next contends that the trial court erred in failing to reduce Walsh’s judgment by
       the $8 million it received under the Zurich policy. The following background is relevant for
       understanding the arguments that LB Steel raises in support of its assignment of error.
¶ 49       The Zurich policy states that it covers claims arising from (1) “an actual or alleged
       negligent act, error or omission with respect to the rendering of or failure to render
       ‘Professional Services’ by [Walsh] or any entity for which [Walsh] is legally responsible” or
       (2) “a negligent act, error or omission of the ‘Design Professional’ in the rendering of or failure
       to render ‘Professional Services.’ ” Professional services are defined as services that Walsh or
       a design professional is “qualified to perform for others in their capacity as an architect,
       engineer, landscape architect, land surveyor or planner, construction manager, [or] LEED
       accredited professional, interior designer/space planner, or as specifically described by
       endorsement to this policy.” A design professional, in turn, is defined as a person or entity
       “professionally qualified to perform ‘Professional Services’ either itself or through the
       services of a subcontractor or subconsultant at any tier.” The Zurich policy excludes “the cost
       to repair or replace faulty workmanship in any construction[ ] *** or manufacturing process
       performed or provided by [Walsh] or anyone for whom [Walsh] is legally responsible.” The
       Zurich policy also excludes “materials” and “workmanship which is not in accordance with the
       drawings and specifications with respect to any construction, *** or manufacturing process.”
¶ 50       At trial, Walsh proffered the testimony of one of its senior managers, Dan Wierec, who
       testified that Walsh’s claim under the Zurich policy was premised on design errors by the
       City’s architects and that no portion of the insurance payment related to defective steel
       fabrication. Wierec testified in reference to Walsh’s “Job Cost Report,” which it tendered to
       LB Steel after the close of discovery. The Job Cost Report is a document summarizing Walsh’s
       financial involvement in the Project. The section of the Job Cost Report related to LB Steel’s
       work includes a line item for the $8 million payment under the Zurich policy.
¶ 51       Following Wierec’s testimony, the trial court reopened discovery to permit the discovery
       depositions of Walsh Vice President of Risk Management Patrick O’Connor and a Zurich
       employee, Michael Parsons. O’Connor testified that the Zurich policy does not cover errors or
       omissions by the architecture firm that designed the Project “[t]o the extent that they work for”
       the City. Parsons testified that the $8 million payment from Zurich to Walsh was for
       “[s]ettlement of any and all issues between Walsh and Zurich on the claim,” with “no
       allocation.” Neither O’Connor nor Parsons testified at trial, nor does the record show that their
       discovery depositions were entered into evidence; however, LB Steel attached excerpts from
       both depositions to a brief it filed in the trial court, wherein it argued that Wierec’s testimony
       “should be barred” because it was contradicted by O’Connor’s and Parson’s statements.
¶ 52       Based on the foregoing, LB Steel contends that the trial court’s failure to reduce Walsh’s
       judgment by the $8 million insurance payment constituted “a misconstruction of the plain
       terms” of the Zurich policy, which, according to LB Steel, establish that the insurance payment
       was for damages attributed to it by Walsh. Additionally, LB Steel contends that the trial court

                                                   - 16 -
       made “an erroneous finding of fact” where the Job Cost Report proved that Walsh “credit[ed]
       LB Steel” with the Zurich policy payment.
¶ 53        Initially, we reject the notion that the proper interpretation of the Zurich policy turns on
       what inferences, if any, may be derived from the Job Cost Report. The construction of
       contracts, including insurance policies, presents questions of law rather than factual
       determinations; our review is, therefore, de novo. Pekin Insurance Co. v. Wilson, 237 Ill. 2d
       446, 455 (2010). In construing an insurance policy, our primary objective “is to ascertain and
       give effect to the intentions of the parties as expressed by the language of the policy.” Valley
       Forge Insurance Co. v. Swiderski Electronics, Inc., 223 Ill. 2d 352, 362 (2006). In doing so, we
       interpret the policy as a whole and, if possible, give effect to every provision. Id. A court may
       consider extrinsic material “only where the policy’s language is ambiguous,” and if the
       language is unambiguous, the policy generally “will be applied as written.” Sharp v. Trans
       Union L.L.C., 364 Ill. App. 3d 64, 71-72 (2006).
¶ 54        Applying these principles in the present case, we observe that the Zurich policy, by its plain
       language, covers claims arising out of negligent acts, errors, or omissions of design
       professionals for whom Walsh is legally responsible. Also by its plain language, the Zurich
       policy excludes coverage for claims involving faulty or noncompliant workmanship in
       “construction,” “manufacturing,” or “materials.” Nothing in the record suggests that LB Steel
       is a design professional for purposes of the Zurich policy. To the contrary, LB Steel was a steel
       fabricator that manufactured steel supports for use in the Project. The claims arising from LB
       Steel’s defective welding related to construction, manufacturing, and materials. Based on the
       relevant provisions of the Zurich policy, these claims were expressly excluded from coverage.
¶ 55        LB Steel argues, however, that evidence adduced at trial established that it retained R.I.
       Johnson, a design professional, to “provide calculations for the redesigned welds” as the
       Project progressed and that the Zurich policy extends coverage for the errors or omissions of
       design professionals working for LB Steel. This assertion is unsupported by the terms of the
       Zurich policy, which, contrary to LB Steel’s assertion, does not “provide*** coverage” for any
       and all entities “working for Walsh or one of Walsh’s subcontractors.” Rather, the policy
       covers negligent acts, errors, and omissions by design professionals retained by Walsh or an
       entity for which Walsh “is legally responsible.” LB Steel has made no showing that Walsh was
       legally responsible for the work of a design professional retained by LB Steel. Therefore, we
       find that the trial court did not err in failing to reduce Walsh’s judgment by the $8 million it
       received under the Zurich policy.
¶ 56        To the extent LB Steel contends that the trial court erred by refusing to bar Wierec’s
       testimony, we find that the issue has been forfeited. Although LB Steel alleges that it was
       “prejudic[ed]” by Walsh’s late disclosure of the Job Cost Report, it neither develops this
       contention nor supports it with citations to authority. See Ill. S. Ct. R. 341(h)(7) (eff. Nov. 1,
       2017); Ramos v. Kewanee Hospital, 2013 IL App (3d) 120001, ¶ 37 (“failure to properly
       develop an argument and support it with citation to relevant authority results in forfeiture of
       that argument”).
¶ 57        LB Steel also argues that the $27.5 million judgment entered in favor of Walsh must be
       reduced by whatever payment Walsh is entitled to receive under its insurance policy with St.
       Paul (St. Paul policy). As of the filing of this opinion, the St. Paul policy is the subject of
       litigation in the United States District Court for the Northern District of Illinois, Eastern
       Division (case number 15 CV 10324), which has been stayed pending resolution of the present

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       appeal. LB Steel has identified nothing in the record showing that the St. Paul policy was
       before the trial court nor identified a copy of the St. Paul policy in the record on appeal. The
       issue is, therefore, forfeited. Foutch v. O’Bryant, 99 Ill. 2d 389, 391-92 (1984) (an appellant
       must produce a sufficiently complete record to support a claim of error; any doubts arising
       from the record’s inadequacy are resolved against the appellant).
¶ 58        As a final matter, we observe that, although LB Steel’s trial brief stated that it proceeded
       on, inter alia, its claim for unjust enrichment against Carlo Steel and Walsh raised in count VI
       of its third amended complaint in case number 05 CH 2675 and count V of its counterclaim in
       case number 07 L 3886, the trial court ruled upon the former count but not the latter. It appears,
       therefore, that count V of LB Steel’s counterclaim in case 07 L 3886 is still pending before the
       trial court.
¶ 59        In summary, (1) the judgment entered in favor of Walsh and against LB Steel for $27.5
       million on count I for breach of contract from Walsh’s second amended third-party complaint
       is affirmed; (2) the judgment entered in favor of LB Steel and against Walsh on count IV for
       fraud from Walsh’s second amended third-party complaint is affirmed; (3) the $6.5 million
       judgment entered in favor of LB Steel and against Carlo Steel and Walsh on LB Steel’s claim
       for breach of contract raised in count II of its third amended complaint and count I of its
       counterclaim is reversed; (4) the $6.5 million judgment entered in favor of LB Steel and the
       City for the use and benefit of LB Steel and against Travelers on LB Steel’s public construction
       bond claim raised in count V of its third amended complaint and count IV of its counterclaim is
       reversed; (5) the $1,554,654 judgment entered in favor of LB Steel and against Walsh on LB
       Steel’s claim for a lien against public funds raised in count I of its third amended complaint and
       count II of its counterclaim is reversed; (6) the judgment entered in favor of LB Steel for the
       $1,812,696 deposited with the clerk of the circuit court by Cal Testing, raised in count VI of
       LB Steel’s counterclaim, its counterclaim for the interpleaded funds, and its second amended
       complaint against Cal Testing, is affirmed; (7) the trial court’s order releasing the $1,812,696
       to Walsh is reversed; (8) the judgment entered in favor of Walsh and against LB Steel on LB
       Steel’s claim for quantum meruit raised in count III of its third amended complaint and count
       III of its counterclaim is reversed, and judgment is entered in favor of LB Steel and against
       Walsh and Carlo Steel for $4,771,688 on those counts; (9) the judgment entered in favor of
       Walsh and Carlo Steel and against LB Steel on LB Steel’s claim for unjust enrichment raised in
       count VI of its third amended complaint is affirmed; and (10) each setoff imposed by the trial
       court is reversed. Carlo Steel’s appeal is dismissed for lack of jurisdiction, and the cause is
       remanded for further proceedings.

¶ 60      Dismissed in part, affirmed in part, reversed in part, judgment entered, and remanded.




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