Court to determine whether Proviso district is on the hook for void contract

Do public entities still have to pay void contracts? That's a question before the Illinois Supreme Court.

In May 2014, a fire significantly damaged Proviso East High School in Cook County.

Proviso Township School District Superintendent Nettie Collins-Hart signed a contract with a local restoration and construction company, Restore, to fix the damage before students came back in the fall. A subsequent contract with Restore was signed later by Collins-Hart and school board President Daniel Adams.

Illinois law, however, requires that districts go through a bidding process for contract work, which also then must be approved by a vote of the full school board.

Restore finished its work and received, via the school district's insurance policy, about $5.8 million of the $7.3 million laid out in the contracts. By 2015, the school board halted further payments.

A lower court last year ruled the district liable for the remaining money.

William Gleason, the attorney representing the district, argued Restore should have known it was not following proper procedures.

"That's what Restore chose to do here, was to proceed at its own risk," he told the six justices.

If the high court rules in favor of Restore, Gleason added, it would be a sign to companies that they need not follow the law.

"You haven't really encouraged compliance with the statute at all," he said, "because the contractor knows that no matter what happens, they're going to be entitled to remuneration."

Justice Rita Garman posed that hypothetical scenario to Michael Rathsack, Restore's representative.

"If you agree with them, you are incentivizing non-compliance," Rathsack told Garman.

"If I was on (the board of) a municipal entity, why would I bother to take the contract and approve it?" he argued. "(If) we're not happy, let's just say we don't have to pay him."

Gleason rebutted, however, that allowing Restore to get paid from these void contracts counteracts laws protecting taxpayer money.

"We ask this court to leave Restore exactly where it placed itself," he said.

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