Illinois Official Reports 

Appellate Court

Construction Systems, Inc. v. FagelHaber, LLC, 2015 IL App (1st) 141700

Appellate Court 

Caption

CONSTRUCTION SYSTEMS, INC., an Illinois Foreign Corporation, 

d/b/a Construction Systems of Minnesota, Plaintiff-Appellant, v. 

FAGELHABER, LLC, an Illinois Limited Liability Corporation, n/k/a 

Thompson Coburn LLP, d/b/a Thompson Coburn Fagel Haber, 

Defendant-Appellee.

District & No. First District, Third Division

Docket No. 1-14-1700

Filed June 30, 2015

Decision Under 

Review

Appeal from the Circuit Court of Cook County, No. 09-L-942; the 

Hon. John C. Griffin and the Hon. Brigid M. McGrath, Judges, 

presiding.

Judgment Reversed and remanded.

Counsel on

Appeal

Carponelli & Krug, of Barrington (Raymond M. Rudnick and Brian 

M. Ozog, of counsel), for appellant.

Donahue Brown Mathewson & Smyth, LLC, of Chicago (Donald J. 

Brown, Jr., Karen Kies DeGrand, and Michael J. Borree, of counsel), 

for appellee.

Panel JUSTICE MASON delivered the judgment of the court, with opinion.

Presiding Justice Pucinski and Justice Hyman concurred in the 

judgment and opinion.
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 OPINION 

¶ 1 Plaintiff-appellant Construction Systems, Inc., filed a legal malpractice action against 

defendant-appellee FagelHaber, LLC, on the grounds that FagelHaber failed to perfect a 

mechanic’s lien on behalf of Construction Systems, resulting in the subordination of the 

mechanic’s lien to a mortgagee’s lien. The trial court first dismissed Construction Systems’ 

prayer for prejudgment interest with prejudice. The case was then transferred to another judge 

and FagelHaber’s motion for summary judgment was granted. On appeal, Construction 

Systems contends the trial court erred in granting summary judgment because the release 

signed by the parties was intended solely to resolve an outstanding fee dispute and 

Construction Systems was not aware of its malpractice claim at the time the release was 

signed. Construction Systems also claims the trial court erred in striking its prayer for 

prejudgment interest because the statute on which the underlying claim is based allows 

prejudgment interest. For the reasons that follow, we reverse the judgment of the circuit court 

of Cook County and remand for further proceedings. 

¶ 2 BACKGROUND 

¶ 3 On May 30, 2002, Construction Systems, a steel fabrication business that provides material 

and labor on construction projects, commenced work on a building project located at 6 North 

Michigan Avenue in Chicago. Global Real Estate Investors, LLC (Global), was the owner of 

the project and AMEC Construction Services, Inc. (AMEC), was hired as construction 

manager and agent for the project. 

¶ 4 Global’s members were Bassam Haj Yousif and Romel Esmail. Yousif and Esmail also 

established a company called Construction Services International, purportedly to operate as the 

general contractor for the project. However, this company’s registration with the Secretary of 

State was repeatedly allowed to lapse, it was not licensed by the city of Chicago as a general 

contractor, it did not obtain the necessary permits and did not perform any of the necessary 

functions of a general contractor, and AMEC was forced to act as general contractor for the 

project despite the fact that its contract with Global did not provide for such services. 

¶ 5 The contract amount for the work to be performed by Construction Systems was 

$2,684,823. During the course of its work on the project, Construction Systems supplied 

additional materials and labor in the amount of $1,372,477. 

¶ 6 On June 19, 2003, after failing to receive payments for a number of months, Construction 

Systems stopped work on the project. A few additional payments were made, leaving an 

outstanding balance owed to Construction Systems of $3,146,200. Construction Systems then 

retained FagelHaber to record a lien and protect its interest under the Illinois Mechanics Lien 

Act (Act) (770 ILCS 60/1 et seq. (West 2012)), and to collect payment of the outstanding 

balance. 

¶ 7 On April 3, 2003, FagelHaber performed a tract index search on 6 North Michigan. On 

May 6, 2003, Cosmopolitan Bank and Trust (Cosmopolitan) recorded a mortgage on 6 North 

Michigan. Without updating the tract index search, on August 6, 2003, FagelHaber served a 

notice of lien on Global and AMEC. The notice of lien was not served on Cosmopolitan. 

FagelHaber recorded a mechanic’s lien in the amount of $3,146,200 against 6 North Michigan 
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on October 6, 2003, but the lien likewise failed to include Cosmopolitan as an interested party 

and Cosmopolitan was not included on the service list. 

¶ 8 On December 19, 2003, FagelHaber performed a second tract index search and the results 

of that search disclosed Cosmopolitan as an interested party. On January 14, 2004, 

Cosmopolitan filed an appearance in Pinnacle Waste Services, Inc. v. North Star Trust 

Company, No. 02-CH-09958 (Cir. Ct. Cook Co.) (hereinafter Pinnacle litigation), litigation 

involving various mechanics’ liens, including Construction Systems’ lien. FagelHaber 

represented Construction Systems in the Pinnacle litigation, an action Construction Systems 

joined but did not initiate. In late 2004, FBOP Corporation (FBOP) acquired Cosmopolitan 

and filed an appearance in the Pinnacle litigation. 

¶ 9 Construction Systems became dissatisfied with FagelHaber’s representation. Due to a lack 

of progress and the amount of fees charged by FagelHaber, Construction Systems retained 

Karen Berres as substitute counsel in the case. Berres had previously represented Construction 

Systems in connection with the construction project but had not been involved with either the 

filing of the mechanic’s lien or the Pinnacle litigation. On August 28, 2004, FagelHaber was 

allowed to withdraw as counsel for Construction Systems. The court ordered FagelHaber to 

turn over the client file in seven days. Berres received some documentation from FagelHaber 

but later learned she had not received the entire file. FagelHaber withheld the complete file 

until the issue of unpaid legal fees was resolved. As far as the record shows, FagelHaber never 

disclosed to Construction Systems its failure to serve Cosmopolitan with the notice of lien or 

include Cosmopolitan as an interested party on the recorded lien between the date it performed 

the updated tract index search in December 2003 and August 2004 when FagelHaber withdrew 

as Construction Systems’ counsel.

¶ 10 In November 2004, Construction Systems and FagelHaber executed a general release as 

part of a settlement of the fee dispute. The release stated that Construction Systems engaged 

FagelHaber to perform legal services and had an outstanding balance due the firm in the 

amount of $81,566.80, defined as “the Indebtedness.” The release further stated: “Disputes and 

disagreements have arisen between FagelHaber and [Construction Systems], including, 

without limitation, with regard to the Indebtedness. FagelHaber and [Construction Systems] 

desire to compromise and settle all disputes and disagreements between them, including, 

without limitation, the payment and satisfaction of the Indebtedness ***.” The release then 

provided details of the settlement with dates and amounts of the payments agreed to by the 

parties, and noted that upon receipt of the first payment, FagelHaber would release all 

remaining documents in the case file. Finally, the release provided: 

“[Construction Systems] *** does hereby fully remise, release and forever discharge 

FagelHaber *** of and from any and all claims, demands, actions, causes of action, 

suits, *** existing at the date hereof or hereafter arising, both known and unknown, 

foreseeable and unforeseeable, *** arising from or in connection with any matter, *** 

including, without limitation, any Claims in connection with the legal services 

provided by FagelHaber to [Construction Systems] or the Indebtedness.”

¶ 11 In the meantime, Construction Systems and FBOP (as successor to Cosmopolitan) filed 

cross-motions for summary judgment in the Pinnacle litigation. In its motion for summary 

judgment, Construction Systems sought to determine the priority of its mechanic’s lien with 

respect to the mortgage of FBOP and determine the validity of its lien. Construction Systems 

argued that it was not subject to the notice requirement in section 24 of the Act (770 ILCS 
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60/24 (West 2012)) (“Sub-contractors *** furnishing labor, materials, fixtures, apparatus, 

machinery, or services *** shall, within 90 days after the completion thereof, *** cause a 

written notice of his or her claim and the amount due or to become due thereunder, to be sent 

by registered or certified mail *** or personally served on the owner of record *** and to the 

lending agency ***.”). See Parkway Bank & Trust Co. v. Meseljevic, 406 Ill. App. 3d 435, 447 

(2010) (“If the subcontractor does not provide a known lender with the mandated section 24 

notice, the lien is unenforceable against the lender.”). Construction Systems argued that the 

notice requirement did not apply because it was an original contractor rather than a 

subcontractor. In the alternative, Construction Systems argued that even if it was a 

subcontractor, it was not subject to the notice requirement because Cosmopolitan had notice of 

its work on the project. 

¶ 12 FBOP argued that Construction Systems was a subcontractor and therefore subject to 

section 24’s notice requirement. On August 29, 2007, the trial court denied both motions for 

summary judgment and FBOP and Construction Systems entered into settlement negotiations. 

In December 2007, Construction Systems settled its claim with FBOP in exchange for the 

payment of $1,825,000. 

¶ 13 On January 27, 2009, Construction Systems filed the underlying legal malpractice action 

against FagelHaber, alleging that as a result of FagelHaber’s failure to perfect its lien, 

Construction Systems’ lien was subordinate to Cosmopolitan’s lien and it suffered a loss of 

$1,321,200. FagelHaber filed a motion to dismiss, claiming that the general release signed by 

the parties as part of the fee dispute barred all claims relating both to fees and to legal services. 

¶ 14 Berres testified at her deposition that she had no knowledge that FagelHaber failed to 

perfect the lien when the release was signed on November 10, 2004. She further testified that 

the fee dispute was the only matter she was aware of at the time the release was executed. On 

January 29, 2010, the trial court denied the motion to dismiss, concluding that it could not 

determine as a matter of law that the claim was within the contemplation of the parties at the 

time the release was executed. 

¶ 15 On January 25, 2012, Construction Systems filed its first amended complaint in which it 

sought interest pursuant to section 21 of the Act (770 ILCS 60/21 (West 2012)), which 

Construction Systems claimed it would have recovered but for FagelHaber’s negligence. 

FagelHaber filed a motion to dismiss the request for interest with prejudice and the motion was 

granted on June 13, 2012. The trial court found that although the underlying case dealt with a 

mechanic’s lien, the action against FagelHaber was for legal malpractice and prejudgment 

interest is not available in legal malpractice actions. 

¶ 16 Yousif and Esmail were not parties and did not otherwise participate in any capacity in the 

lawsuits related to the project. Yousif was under indictment for fraud and eventually pled 

guilty and Esmail left the country. Testimony indicated that Global was actually a land trust, 

with Yousif and Esmail as the sole beneficiaries, and had no assets. Construction Services 

International was a corporation but it likewise had no assets. 

¶ 17 The written contract in the amount of $2,684,823 between Construction Systems, the 

purported subcontractor, and Construction Services International, the purported general 

contractor, was never signed. It contained multiple phrases and sentences that had been crossed 

out and handwritten additions with initials next to each of the changes, but was not executed by 

either party. 
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¶ 18 Perry Haberer, the vice president of Construction Systems, was deposed once during the 

Pinnacle litigation and twice during the underlying malpractice litigation against FagelHaber. 

Haberer testified that the bid he initially submitted for the project was accepted, and when that 

happens, the bid is typically considered the contract. He was directed to move forward by 

AMEC on the basis of the bid, and Construction Systems began the work without any type of 

formal contract in place. The formal contract was not drawn up until much later and was 

delivered to him by AMEC, not Construction Services International, the putative general 

contractor. Haberer crossed out certain items in the contract and added handwritten 

modifications. Haberer received correspondence from AMEC in both September and 

December 2002 asking him to return a signed copy of the contract. But Haberer was instructed 

by Berres not to sign the contract and he informed AMEC that Construction Systems would 

complete the project under the terms of its bid proposal. 

¶ 19 In addition to the base contract amount, Construction Systems submitted numerous cost 

estimates for extra work based on changes requested by either the owners or AMEC. Several 

AMEC employees were also deposed in the legal malpractice suit and conflicting testimony 

was provided regarding whether these additional cost estimates had been approved. 

Construction Systems contended that more than 100 change orders were approved over the 

course of the project. Haberer testified that instead of his cost estimates being incorporated into 

change orders, which is how it is normally done, on this project he simply received verbal 

approval from AMEC to proceed with the work detailed in the cost estimate. It was Haberer’s 

understanding that AMEC was the general contractor for the project. 

¶ 20 FagelHaber filed a motion for summary judgment, claiming: (1) Construction Systems’ 

legal malpractice action was barred by judicial estoppel; (2) no genuine issue of material fact 

existed on the issue of whether Construction Systems was a subcontractor; (3) the release 

signed by both parties barred all future claims related to legal services provided by 

FagelHaber; and (4) FagelHaber was entitled to partial summary judgment on Construction 

Systems’ claim for sums due to extra work. On May 14, 2014, the trial court granted summary 

judgment on the ground that the release barred known and unknown claims, including those for 

legal malpractice. The court denied summary judgment on the first two grounds, finding that 

the action was not barred by judicial estoppel and that a genuine issue of material fact existed 

regarding Construction Systems’ status as a subcontractor. Because it granted summary 

judgment based on the release, the trial court did not consider whether FagelHaber was entitled 

to partial summary judgment on the extra work issue. Construction Systems timely filed this 

appeal. 

¶ 21 ANALYSIS 

¶ 22 Construction Systems contends that FagelHaber was not entitled to summary judgment 

because the release signed by the parties related to an outstanding fee dispute and did not bar 

the subsequent claim for legal malpractice. Construction Systems further claims that it is 

entitled to prejudgment interest as part of its damages in the legal malpractice action because 

the statute upon which the underlying claim is based allows for recovery of prejudgment 

interest. 

¶ 23 Summary judgment is appropriate when the pleadings, depositions, and admissions on file, 

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

moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2012); 
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Williams v. Manchester, 228 Ill. 2d 404, 417 (2008). “In determining whether a genuine issue 

as to any material fact exists, a court must construe the pleadings, depositions, admissions, and 

affidavits strictly against the movant and liberally in favor of the opponent. A triable issue 

precluding summary judgment exists where the material facts are disputed or where, the 

material facts being undisputed, reasonable persons might draw different inferences from the 

undisputed facts.” Id. We review an order granting summary judgment de novo. Id. 

¶ 24 The Release 

¶ 25 A release is a contract and, as such, is governed by contract law. Farm Credit Bank of St. 

Louis v. Whitlock, 144 Ill. 2d 440, 447 (1991). Where the terms of the release are clear and 

explicit, the court must enforce them as written and construction of the release is a question of 

law. Rakowski v. Lucente, 104 Ill. 2d 317, 323 (1984). “Releases are strictly construed against 

the benefitting party and must spell out the intention of the parties with great particularity.” 

Fuller Family Holdings, LLC v. Northern Trust Co., 371 Ill. App. 3d 605, 614 (2007) (citing 

Scott & Fetzer Co. v. Montgomery Ward & Co., 112 Ill. 2d 378, 395 (1986)). The scope and 

effect of the release are controlled by the intention of the parties, and this intent is determined 

not only from the express language of the release but also from the circumstances surrounding 

its execution. Doctor’s Associates, Inc. v. Duree, 319 Ill. App. 3d 1032, 1045 (2001). 

¶ 26 Under Illinois law, a release will not be construed to defeat a valid claim that was not 

contemplated by the parties at the time the agreement was executed, and general words of 

release are inapplicable to claims that were unknown to the releasing party. Whitlock, 144 Ill. 

2d at 447. Indeed, “[n]o form of words, no matter how all encompassing, will foreclose 

scrutiny of a release [citation] or prevent a reviewing court from inquiring into surrounding 

circumstances to ascertain whether it was fairly made and accurately reflected the intention of 

the parties.” (Internal quotation marks omitted.) Carlile v. Snap-on Tools, 271 Ill. App. 3d 833, 

839 (1995). Thus, where the releasing party is unaware of other claims, general releases are 

restricted to the specific claims contained in the release agreement. Whitlock, 144 Ill. 2d at 447. 

¶ 27 Here, although the release was broadly drafted to include phrases such as “without 

limitation” and general language purportedly barring any claims, “known and unknown,” in 

connection with legal services provided by FagelHaber, the only claim referenced in the 

release was the outstanding balance owed for legal fees. In fact, “the Indebtedness” is 

mentioned more than half a dozen times in the release. The release provided that Construction 

Systems would pay a total of $60,000 in three separate installments of $20,000 each and, in 

exchange, FagelHaber would release the client file upon timely receipt of the first payment. 

¶ 28 Certainly, FagelHaber was aware after it performed the second tract index search that 

Cosmopolitan was an interested party at the time the lien was filed and that Cosmopolitan was 

not included either on the notice of lien or the recorded lien. Thus, it is likely that FagelHaber 

either knew or should have known at the time the release was executed that Construction 

Systems had a potential legal malpractice claim. As noted above, there is no indication in the 

record that FagelHaber ever informed its client of the failure to perfect the lien as against the 

lender’s interest. This court has noted that although a law firm crafting a release in an effort to 

protect itself from all potential claims may have contemplated certain other claims, such an 

undisclosed intent does not bring those claims within the contemplation of both parties. 

Thornwood, Inc. v. Jenner & Block, 344 Ill. App. 3d 15, 22 (2003). Moreover, where, as here, 

a fiduciary relationship exists between the parties, the defendant has the burden to show that a 
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full and frank disclosure of all relevant information was made to the other party. Id. at 25-26 

(quoting Rizzo v. Rizzo, 3 Ill. 2d 291, 305 (1954), and Peskin v. Deutsch, 134 Ill. App. 3d 48, 55 

(1985)). 

¶ 29 Berres was representing Construction Systems at the time it signed the release. Berres was 

not aware at the time the release was executed that FagelHaber had failed to perfect the lien 

and, thus, was not aware of a potential legal malpractice claim. The circumstances surrounding 

the execution of the release lend support to this testimony, as Berres clearly did not have the 

entire client file at the time of its execution, given that obtaining the client file in exchange for 

payment of legal fees was the subject matter of the release and the specific issue in dispute 

between the parties. 

¶ 30 The case relied on by the trial court, Goodman v. Hanson, 408 Ill. App. 3d 285, 299 (2011), 

is inapposite. In Goodman, a client sued his former attorney for malpractice based on the 

attorney’s handling of certain Illinois estate and tax matters. After the case settled, the parties 

executed a general release, which barred any and all claims that could have been brought in the 

first malpractice action as well as any claims related to the management of the trust and estate. 

Id. at 293. The client later filed a second malpractice action for claims related to a federal tax 

return. This court concluded the general release barred the second action because the federal 

tax claims could have been brought as part of the original malpractice action and the claims fell 

within the specific language of the release. Id. at 294, 299. 

¶ 31 Here, there is no evidence to suggest Construction Systems contemplated a potential legal 

malpractice claim at the time the release was executed. Construction Systems was not satisfied 

with the progress of the lawsuit filed to enforce its lien and thought FagelHaber was billing 

excessive amounts. Construction Systems then retained substitute counsel but, despite a court 

order to turn over the client file, FagelHaber withheld the file because of a dispute over fees. 

Given that FagelHaber’s alleged legal malpractice resulted in a claimed loss of $1.3 million, it 

is highly unlikely that Construction Systems–in exchange for a $20,000 reduction in legal 

fees–would have agreed to release its legal malpractice claim. There is, at a minimum, a 

genuine issue of material fact on this point. 

¶ 32 Similarly, FagelHaber’s reliance on Gavery v. McMahon & Elliott, 283 Ill. App. 3d 484 

(1996), is unavailing. In Gavery, the plaintiff entered into an asset purchase agreement and a 

noncompetition agreement to sell his medical practice while represented by the defendant law 

firm. Id. at 485. In a later dispute with the purchaser, the plaintiff was represented by a 

different law firm. In order to facilitate cooperation between the two law firms, the plaintiff 

agreed to release the original law firm from any claims he might have against it. The language 

of the release was “very specific and unambiguous” and included recitals stating that the 

plaintiff had been informed by the new law firm prior to executing the release that he might 

have claims against the original law firm, as well as language specifically referencing the asset 

purchase agreement and the noncompetition agreement. Id. at 487. After executing the release, 

the plaintiff filed claims against the original law firm related to the noncompetition agreement. 

This court held that the release barred the claims because it was specific and unambiguous, the 

claims fell within the scope of the release, and the plaintiff was advised by separate counsel 

that he may have claims against the original law firm arising out of the agreements. Id. at 

488-89. 

¶ 33 In contrast, there is no evidence prior to the execution of the release that Construction 

Systems was advised that it may have a legal malpractice claim against FagelHaber, and the 
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release contains no recitals to that effect. Moreover, the only language in the release related to 

FagelHaber’s overall representation is the general clause barring any claims in connection with 

the legal services provided. But because the release specifically identifies the dispute over 

legal fees as the issue being negotiated by the parties, the inclusion of one clause containing 

broad language purporting to cover any claim related to FagelHaber’s representation cannot 

operate to bring legal malpractice claims within the contemplation of the parties. Likewise, 

because of the specific language relating to the Indebtedness in the release, the phrase “known 

and unknown” does not indicate that the parties intended to bar legal malpractice claims. 

¶ 34 Both the language of the release and the surrounding circumstances establish that a genuine 

issue of material fact exists regarding whether legal malpractice claims were within the 

contemplation of the parties at the time the release was executed. Therefore, the trial court 

erred in granting summary judgment in favor of FagelHaber on the basis of the release. 

¶ 35 Judicial Estoppel 

¶ 36 Because this court may affirm on any basis appearing in the record, regardless of whether 

the lower court relied on that ground (see Home Insurance Co. v. Cincinnati Insurance Co., 

213 Ill. 2d 307, 315 (2004)), we address FagelHaber’s contention that the doctrine of judicial 

estoppel warranted summary judgment in its favor. FagelHaber argues that all of the elements 

of judicial estoppel have been established and that the trial court erred in concluding that 

because Construction Systems’ motion for summary judgment was denied, it obtained no 

benefit. 

¶ 37 Judicial estoppel is an equitable doctrine designed to prevent a party who takes a certain 

position in a legal proceeding from taking the contrary position in a subsequent legal 

proceeding. Moy v. Ng, 371 Ill. App. 3d 957, 962 (2007). The following elements are required 

for the doctrine to apply: (1) a party must have taken two positions; (2) the positions must have 

been taken in judicial proceedings; (3) the positions must be given under oath; (4) the party 

must have successfully maintained the first position and obtained some benefit thereby; and (5) 

the two positions must be “totally inconsistent.” (Internal quotation marks omitted.) Holland v. 

Schwan’s Home Service, Inc., 2013 IL App (5th) 110560, ¶ 113. 

¶ 38 Judicial estoppel is a flexible doctrine that should not be used when to do so would result in 

an injustice. Ceres Terminals, Inc. v. Chicago City Bank & Trust Co., 259 Ill. App. 3d 836, 

850-51 (1994). The doctrine’s design and function are to protect the court from unscrupulous 

litigants and preserve the integrity of the court system. Id. at 856. Courts have warned that the 

doctrine is “an extraordinary one which should be applied with caution” because it impinges 

on the trial court’s role as fact finder by “preclud[ing] a contradictory position without 

examining the truth of either statement.” (Internal quotation marks omitted.) Id. at 856-57. 

¶ 39 We review a trial court’s determination of whether to apply judicial estoppel under an 

abuse of discretion standard. Holland, 2013 IL App (5th) 110560, ¶ 114. An abuse of 

discretion occurs only when the trial court’s decision is arbitrary, fanciful or unreasonable or 

where no reasonable person would adopt the view taken by the trial court. Id.

¶ 40 The trial court denied FagelHaber’s motion for summary judgment on judicial estoppel 

grounds for three reasons. First, the court noted that while Construction Systems presented 

alternative arguments in the Pinnacle litigation, FagelHaber had not established that the 

positions were factually inconsistent. Second, the court found persuasive Construction 

Systems’ argument that it was forced to advance alternative arguments because of 
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FagelHaber’s professional negligence. Third, the alternative arguments were denied and, 

therefore, did not benefit Construction Systems. 

¶ 41 In the Pinnacle litigation, Construction Systems included alternative arguments in its 

motion for summary judgment. First, Construction Systems argued that it was actually an 

original contractor and, therefore, not subject to the notice requirement in section 24 of the Act 

(770 ILCS 60/24 (West 2012)). In the alternative, Construction Systems argued that even if it 

was a subcontractor, it was not subject to the notice requirement because Cosmopolitan had 

notice of Construction Systems’ work on the project.

¶ 42 We agree with the trial court that although Construction Systems presented alternative 

legal arguments, these arguments did not entail factual inconsistencies. See Giannini v. Kumho 

Tire U.S.A., Inc., 385 Ill. App. 3d 1013, 1018-19 (2008) (judicial estoppel does not apply to all 

types of inconsistencies but only to factual inconsistencies). On the separate issue of whether 

Construction Systems could prove the existence of a subcontract with AMEC, the trial court 

determined that genuine issues of material fact existed with regard to Construction Systems’ 

status. 

¶ 43 Our examination of the record discloses evidence in support of both alternative 

positions–that Construction Systems was an original contractor and that it was a subcontractor. 

At one point, Haberer testified that he believed his verbal agreement was with the owners 

directly, thus making him an original contractor. There was conflicting testimony regarding 

whether Construction Services International was, in fact, a general contractor. The unsigned 

contract identified Construction Systems as a subcontractor and the contracting party was 

identified as Construction Services International, the purported general contractor. However, 

Haberer also testified that he believed his verbal agreement was actually with AMEC, the 

construction manager. At another point during one of his depositions, Haberer testified that he 

believed AMEC was a general contractor. Therefore, we disagree with FagelHaber’s 

contention that “[t]he record eliminates any genuine issue of fact” on the issue of whether 

Construction Systems was a subcontractor. Given that Haberer would not have been privy to 

the corporate structure of and interrelationships between and among Global, AMEC and 

Construction Services International, we do not view this as a factual inconsistency implicating 

judicial estoppel. Ultimately, Construction Systems’ legal status as a contractor or a 

subcontractor will have to be determined by a trier of fact after hearing evidence as part of the 

“case within a case” in the malpractice action. See Eastman v. Messner, 188 Ill. 2d 404, 411 

(1999); Fox v. Berks, 334 Ill. App. 3d 815, 817 (2002). 

¶ 44 Moreover, we note that because of FagelHaber’s alleged malpractice in failing to perfect 

the lien as to Cosmopolitan, Construction Systems was forced to attempt to salvage the priority 

of its lien by advancing the legal argument that it was not subject to the notice requirement. 

The fact that Construction Systems pursued all available legal arguments against FBOP as 

successor to Cosmopolitan in an attempt to recover something rather than nothing on its lien 

inures to FagelHaber’s benefit in the event that Construction Systems is successful in its legal 

malpractice action because FagelHaber will be entitled to offset the settlement amount against 

any judgment in the malpractice case. 

¶ 45 Finally, we note that FagelHaber cites authority for the proposition that a settlement may 

establish that a party has prevailed and thus received a benefit in the context of judicial 

estoppel (see Smeilis v. Lipkis, 2012 IL App (1st) 103385, ¶¶ 51-53). However, under the facts 

of this case, Construction Systems’ settlement with FBOP resulted in recovering an amount 
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less than it was owed in order to avoid the possibility of recovering nothing. To the extent that 

Construction Systems could have prevailed in recovering the entirety of its lien had 

FagelHaber given notice to Cosmopolitan, the measure of damages in the malpractice suit 

would be the difference between the settlement amount and the full amount of the lien. 

Therefore, the fact that Construction Systems presented alternative arguments would not allow 

it to obtain a double recovery but merely put it in the same position it would have been had the 

lien been properly perfected. 

¶ 46 As previously noted, judicial estoppel is an extraordinary doctrine that should be applied 

with caution because it impinges on the trial court’s role as fact finder and should not be used 

when to do so would result in an injustice. We cannot say that the trial court abused its 

discretion in declining to apply the doctrine under these circumstances. 

¶ 47 Prejudgment Interest 

¶ 48 Construction Systems also claims that it is entitled to prejudgment interest pursuant to the 

Act as part of its damages in the legal malpractice action and the trial court erred in dismissing 

its request for prejudgment interest with prejudice. Construction Systems concedes that 

prejudgment interest is not available in malpractice actions but contends that because the 

underlying basis of the claim is FagelHaber’s failure to perfect the lien under the Act, and 

section 21 of the Act (770 ILCS 60/21(a) (West 2012)) provides for prejudgment interest, it 

may be recovered as an element of damages. We agree. 

¶ 49 FagelHaber filed a motion to dismiss the prayer for prejudgment interest pursuant to 

section 2-619.1 of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2012)). 

Section 2-619.1 of the Code allows a party to combine a section 2-615 motion to dismiss with 

a section 2-619 motion to dismiss. 735 ILCS 5/2-619.1 (West 2012). A section 2-615 motion to 

dismiss tests the legal sufficiency of the complaint while a section 2-619 motion to dismiss 

admits the sufficiency of the complaint but asserts affirmative matter that defeats the claim. 

Bjork v. O’Meara, 2013 IL 114044, ¶ 21. We review de novo an order granting a motion to 

dismiss under either section 2-615 or section 2-619. Id.

¶ 50 In its first amended complaint, Construction Systems sought judgment against FagelHaber 

in the amount of $1,321,200 “plus the interest it is entitled to under the Illinois Interest Act and 

the Illinois Mechanics Lien Act.” FagelHaber filed a motion to dismiss and strike the request 

for interest on the ground that prejudgment interest is not recoverable in legal malpractice 

actions. Relying on Tri-G, Inc. v. Burke, Bosselman & Weaver, 222 Ill. 2d 218 (2006), the trial 

court determined that although the underlying suit dealt with a mechanic’s lien, the Act did not 

apply to the legal malpractice suit and prejudgment interest was not available. 

¶ 51 FagelHaber relies on Goldfine v. Barack, Ferrazzano, Kirschbaum & Perlman, 2014 IL 

116362, ¶¶ 35-37, as additional support for its argument that prejudgment interest is not 

available here. This reliance is misplaced. In Goldfine, our supreme court distinguished cases 

in which the interest is hypothetical and depends on the amount of the judgment the party 

would have received but for the alleged malpractice–the situation in Tri-G–and cases in which 

the interest is a component of the remedial relief the plaintiffs would have recovered in the 

underlying case but for the alleged malpractice. Id. ¶ 37.

¶ 52 Here, the interest is not hypothetical but is based on the amount of the mechanic’s lien that 

should have been perfected and, under the Act, is a component of the relief Construction 

Systems would have been awarded but for FagelHaber’s failure to perfect the lien. Pursuant to 
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the Act, the interest is not based on the amount of a hypothetical judgment but on the amount of 

the lien. Therefore, Tri-G is inapplicable and the trial court erred in dismissing Construction 

Systems’ request for prejudgment interest with prejudice. 

¶ 53 Extra Work Claim 

¶ 54 The final ground on which FagelHaber seeks to uphold its right to summary judgment, at 

least in part, relates to charges for extra work included in the lien asserted by Construction 

Systems. The mechanic’s lien filed by Construction Systems included $1,372,477, which 

Construction Systems claimed represented charges for extra work on the project ordered by the 

owner. Citing provisions in the written documents requiring the owner’s approval in writing of 

any change orders and Haberer’s testimony that Construction Systems never received written 

approval for the extra work, FagelHaber argues that Construction Systems cannot demonstrate 

by clear and convincing evidence its right to recover such sums. See Ambrose v. Biggs, 156 Ill. 

App. 3d 515, 520 (1987) (in order to recover for extra work, contractor must prove by clear and 

convincing evidence that extras were (i) outside the original contract, (ii) requested and 

approved by the owner, and (iii) not necessitated by the contractor’s own conduct or 

undertaken voluntarily by the contractor (citing Watson Lumber Co. v. Guennewig, 79 Ill. App. 

2d 377, 389-90 (1967))). As noted in Watson, an owner’s agreement to pay for extras may be 

evidenced by either words or conduct. Watson, 79 Ill. App. 2d at 390. 

¶ 55 Our review of the record convinces us that there are genuine issues of material fact as to 

whether the extra work performed by Construction Systems on the project was approved by the 

owners. Haberer testified that the owners requested the additional work and that Construction 

Systems submitted 151 change orders and was assured on numerous occasions that it would be 

paid. While a trier of fact is certainly entitled to consider the lack of written approval in 

determining whether Construction Systems has satisfied its burden, this fact is not 

determinative. Thus, we reject FagelHaber’s argument that it was entitled to partial summary 

judgment on this issue. 

¶ 56 CONCLUSION 

¶ 57 The trial court erred in granting summary judgment in favor of FagelHaber on the basis of 

the language in the release because genuine issues of material fact exist regarding whether 

legal malpractice claims were within the contemplation of the parties at the time the release 

was executed. The trial court did not abuse its discretion in declining to apply judicial estoppel 

under the circumstances of this case. The trial court further erred in granting the motion to 

dismiss the request for prejudgment interest because the interest sought is a component of the 

remedial relief that Construction Systems would have been entitled to but for the alleged 

malpractice. Finally, FagelHaber is not entitled to partial summary judgment on Construction 

System’s claim for extra work. The trial court’s orders entering judgment in favor of 

FagelHaber and dismissing the request for interest with prejudice are reversed and the cause is 

remanded for further proceedings. 

¶ 58 Reversed and remanded.