Court Opinion

ID: 2674652
Source: CourtListenerOpinion
Date Created: 2014-05-16 07:03:01.070728+00
Date Added: 2024-06-11T13:06:09.912025
License: Public Domain

Illinois Official Reports

                                          Appellate Court

                 Cityline Construction Fire & Water Restoration, Inc. v. Roberts,
                                    2014 IL App (1st) 130730

Appellate Court              CITYLINE        CONSTRUCTION            FIRE      AND      WATER
Caption                      RESTORATION, INC., a Pennsylvania Corporation, Plaintiff-
                             Appellant, v. ANDREW C. ROBERTS, VALERIE GHEROLD,
                             MORTGAGE ELECTRIC REGISTRATION SYSTEMS, PERL
                             MORTGAGE, INC., and ERIE INSURANCE COMPANY,
                             Defendants-Appellees (Andrew C. Roberts and Valerie Gherold,
                             Counterplaintiffs and Third-Party Plaintiffs; Cityline Construction
                             Fire and Water Restoration, Inc., Cityline-Hamilton Buildings, LLC,
                             Kirk Leister and Thomas P. Williams, Counterdefendants and
                             Third-Party Defendants).

District & No.               First District, Fifth Division
                             Docket No. 1-13-0730

Filed                        March 7, 2014

Held                         In an action to foreclose a mechanic’s lien, the trial court properly
(Note: This syllabus         entered summary judgment for defendant owners on the foreclosure
constitutes no part of the   count and for defendant owners on the count of their counterclaim
opinion of the court but     seeking a declaration that the lien was void and unenforceable, since
has been prepared by the     plaintiff failed to strictly comply with defendants’ request pursuant to
Reporter of Decisions        section 5 of the Mechanics Lien Act for a sworn contractor’s statement
for the convenience of       containing the names of all parties furnishing materials or labor and
the reader.)                 the amounts due or to become due.

Decision Under               Appeal from the Circuit Court of Cook County, No. 11-CH-22152; the
Review                       Hon. Lisa R. Curcio, Judge, presiding.

Judgment                     Affirmed.
     Counsel on               Dean Gournis, of Kaplan Papadakis & Gournis, P.C., of Chicago, for
     Appeal                   appellant.

                              James P. Zeigler, of Stone Pogrund & Korey, LLC, of Chicago, for
                              appellees Andrew C. Roberts and Valerie Gherold.

     Panel                    JUSTICE PALMER delivered the judgment of the court, with
                              opinion.
                              Justices McBride and Taylor concurred in the judgment and opinion.

                                               OPINION

¶1         Plaintiff, Cityline Construction Fire and Water Restoration, Inc. (Cityline), appeals from
       an order of the circuit court of Cook County granting summary judgment in favor of
       defendants, Andrew C. Roberts and Valerie Gherold (Owners), on count I of Cityline’s
       complaint against the Owners and count II of the Owners’ counterclaim against Cityline.
       Count I of Cityline’s complaint sought to foreclose a mechanic’s lien against the Owners and
       count II of the Owners’ counterclaim sought a declaration that the lien was void and
       unenforceable. For the reasons that follow, we affirm.
¶2         The following facts are undisputed. On or about April 9, 2009, Cityline and the Owners
       made an oral agreement pursuant to which Cityline was to provide restoration and
       reconstruction services to the Owners’ residence after it was damaged by a fire. By December
       15, 2010, Cityline completed all labor and services pursuant to the agreement with the Owners.
¶3         Cityline recorded its mechanic’s lien notice and claim for lien on February 24, 2011, in
       which it averred that: (a) it entered into a valid contract with the Owners; (b) Cityline
       performed all of the required work on the residence; and (c) there was due and owing to
       Cityline the sum of $397,302 plus interest. The lien named the Owners, Perl Mortgage,
       Mortgage Electronic Registration Systems, Inc., and unknown heirs, unknown owners and
       nonrecord claimants potentially having an interest in the residence. On June 21, 2011, Cityline
       filed a lawsuit against these parties. Count I of the complaint sought to foreclose Cityline’s
       mechanic’s lien, count II asserted a claim for breach of contract, count III alleged a quantum
       meruit recovery solely against the Owners and count IV asserted a complaint for interpleader
       against the Owners’ insurance company, Erie Insurance. In response, the Owners filed an
       answer and affirmative defenses as well as a counterclaim against Cityline. As noted above,
       only count I of Cityline’s complaint and count II of the Owners’ counterclaim are at issue in
       this appeal.
¶4         During discovery, Cityline filed a response to the Owners’ request to admit facts in which
       it admitted that, “after the job was well under way,” the Owners had requested a contractor’s

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     sworn statement from Cityline “listing the parties furnishing labor, services, material, fixtures,
     apparatus for machinery, forms or form work and the amounts due or to become due to each of
     them engaged by Cityline to perform the restoration and reconstruction.” Cityline also
     admitted that it never provided “a contractors sworn statement listing the subcontractors and
     material suppliers it had engaged to perform the restoration and reconstruction” on the
     residence.
¶5       The Owners filed a motion for partial summary judgment on count I of the complaint
     (mechanic’s lien), claiming that the lien was void due to Cityline’s failure to provide a sworn
     contractor’s statement after the Owners requested one. The Owners asserted that section 5 of
     the Mechanics Lien Act (the Act) (770 ILCS 60/5 (West 2010)) required a general contractor
     to give an owner a written statement containing names of all parties furnishing materials or
     labor and amounts due or to become due to each when such a statement is requested. In
     response to the motion for summary judgment, Cityline argued that strict compliance with the
     Act was not required and that the Owners suffered no prejudice from Cityline’s alleged failure
     to furnish the contractor’s sworn statement because all subcontractors had been paid. Attached
     to Cityline’s response was an affidavit signed by Cityline’s vice-president Kirk Leister
     attesting that all subcontractors had been paid.
¶6       The trial court granted partial summary judgment as to count I of Cityline’s complaint and
     count II of the Owners’ counterclaim. 1 The trial court made an express written finding
     pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010) that there was no just
     reason to delay enforcement or appeal of the court’s ruling. This appeal followed. 2
¶7       The two issues presented for review in this appeal are the circuit court’s grant of summary
     judgment in favor of the Owners on count I of Cityline’s complaint and count II of the Owners’
     counterclaim. The resolution of these issues turns on the same question of whether Cityline’s
     mechanic’s lien is void due to its failure to provide the Owners with a sworn contractor’s
     statement as required by section 5 of the Act. As they turn on the same question, we consider
     both of these issues together.
¶8       Summary judgment is appropriate if there is no genuine issue of material fact and the
     moving party is entitled to judgment as a matter of law. 735 ILCS 5/2-1005(c) (West 2010);
     Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill. 2d 307, 315 (2004). In determining
     whether the moving party is entitled to summary judgment, the court must strictly construe the
     pleadings and evidentiary material in the record against the movant. Happel v. Wal-Mart
     Stores, Inc., 199 Ill. 2d 179, 186 (2002). The circuit court’s decision to grant or deny a motion
     for summary judgment is reviewed de novo. Harrison, 197 Ill. 2d at 470-71.

         1
           The record on appeal does not contain a transcript of the hearing, if one took place, at which the
     trial court granted summary judgment. However, the parties on appeal agree that summary judgment
     was entered because of Cityline’s failure to provide the contractor’s sworn statement. This is of no
     consequence because we review the entry of summary judgment de novo. See Harrison v. Hardin
     County Community Unit School District No. 1, 197 Ill. 2d 466, 470-71 (2001).

         2
         Counts II (breach of contract) and III (quantum meruit) of Cityline’s complaint, as well as various
     counts of the Owners’ counterclaim, are still pending in the circuit court.

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¶9          The issues raised in this case also require us to interpret the Act. The primary rule of
       statutory interpretation is to ascertain and give effect to the intent of the legislature. In re
       Marriage of Rogers, 213 Ill. 2d 129, 136 (2004). The best evidence of the legislature’s intent is
       the language of the statute, which must be given its plain and ordinary meaning. In re Donald
       A.G., 221 Ill. 2d 234, 246 (2006). Interpretation of a statute is a question of law that is reviewed
       de novo. Taddeo v. Board of Trustees of the Illinois Municipal Retirement Fund, 216 Ill. 2d
       590, 595 (2005).
¶ 10        It is well established that the Act must be strictly construed with respect to all the statutory
       requirements upon which the right to a lien depends. Deerfield Electric Co. v. Herbert W.
       Jaeger & Associates, Inc., 74 Ill. App. 3d 380, 385 (1979) (citing North Side Sash & Door Co.
       v. Hecht, 295 Ill. 515, 519 (1920), and Components, Inc. v. Walter Kassuba Realty Corp., 64
       Ill. App. 3d 140, 145 (1978)). The rights created under the Act are statutory and in derogation
       of the common law, and the technical and procedural requirements necessary for a party to
       invoke the benefits of the Act must be strictly construed. Westcon/Dillingham Microtunneling
       v. Walsh Construction Co. of Illinois, 319 Ill. App. 3d 870, 877 (2001). Strict construction of
       the Act ensures and instructs that “[t]he lien is valid only if each of the statutory requirements
       is scrupulously observed.” (Internal quotation marks omitted.) Aluma Systems, Inc. v.
       Frederick Quinn Corp., 206 Ill. App. 3d 828, 839 (1990).
¶ 11        Section 5(a) of the Act provides in relevant part:
                     “(a) It shall be the duty of the contractor to give the owner, and the duty of the
                 owner to require of the contractor, before the owner or his agent, architect, or
                 superintendent shall pay or cause to be paid to the contractor or to his order any moneys
                 or other consideration due or to become due to the contractor, or make or cause to be
                 made to the contractor any advancement of any moneys or any other consideration, a
                 statement in writing, under oath or verified by affidavit, of the names and addresses of
                 all parties furnishing labor, services, material, fixtures, apparatus or machinery, forms
                 or form work and of the amounts due or to become due to each.” (Emphasis added.)
                 770 ILCS 60/5(a) (West 2010).
¶ 12        Here, Cityline acknowledges that it failed to provide the sworn contractor’s statement
       required by section 5 of the Act. However, Cityline asserts that under First District precedent,
       its failure to do so is not fatal to its mechanic’s lien. Furthermore, Cityline argues that the
       affidavit submitted by its vice-president stating that all subcontractors had been paid was
       sufficient to meet the requirements of the Act. Finally, Cityline argues that because all the
       work on the residence was completed and all of the subcontractors were paid, the Owners were
       not prejudiced by the lack of contractor’s sworn statement and therefore strict compliance with
       the Act should be excused. We disagree.
¶ 13        The plain language of the statute clearly requires that if the owner demands a sworn
       contractor’s statement, it “shall be the duty” of the contractor to provide such a statement as
       described in section 5 of the Act. 770 ILCS 60/5 (West 2010). Essentially, Cityline argues that
       strict compliance with section 5 is not required under the circumstances of this case because it
       would be unfair to lose a mechanic’s lien claim based upon a “technicality.” We have not
       found any First District cases speaking directly to this issue. However, cases decided by the
       Second District of the Appellate Court have addressed requirements of section 5 in the context

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       of claims similar to those raised by Cityline in this case and have held that the statutory
       language of the Act must be strictly followed.
¶ 14        For example, in Deerfield, a mechanic’s lien was not granted where a bank, on behalf of a
       homeowner’s association (the Association) to whom it had given a construction loan,
       requested from the general contractor a sworn contractor’s statement and the contractor failed
       to provide one. Deerfield, 74 Ill. App. 3d at 380. In that case, the Association initially sent a
       letter to the contractor stating that the bank had requested from the contractor a list of
       subcontractors and itemized costs. One month later, the contractor submitted a letter to the
       Association asking for partial payment and listing by name and trade the subcontractors that it
       had used. Id. at 382. No mention was made in the letter of any amounts due or to become due to
       the individual contractors nor was this list verified by affidavit. Id. Several days later, the
       Association forwarded to the bank the contractor’s letter requesting payment as well as an
       application-for-payment form that it had subsequently received from the contractor. Id. That
       form listed numerous categories of work and the amounts due or to become due under those
       categories. However, this document did not name or otherwise identify the persons or
       companies who were the subcontractors to whom payments were due nor was it verified by
       oath or affidavit. Id. The bank did not make payment to the contractor but instead sent it a letter
       stating that before the first payment could be made, it required a sworn general contractor’s
       affidavit listing all subcontractors and designating their specific jobs and contract amounts.
       The contractor subsequently sent an updated application-for-payment form requesting an
       amount for all work completed at that time. This application was in the same form as the
       previous application and it again did not name any of the subcontractors who furnished the
       materials or labor. The application contained a certification by the contractor’s president that
       all of the work described in the application had been completed and that the payment requested
       therein was due. Id. at 382-83. Although they were not introduced into evidence at trial, the
       contractor’s president later testified at trial that attached to the second application were signed
       lien waivers executed by the contractor and the subcontractors showing all of the payments
       that the contractor was requesting. Id. at 383. The contractor ceased work after it was not paid
       by the Association and as a result filed an action to foreclose its mechanic’s lien on the subject
       property. Id. In response, the Association filed a counterclaim seeking damages against the
       contractor for breach of contract based upon the contractor abandoning its work. Id. The case
       proceeded to a bench trial, at the conclusion of which the court entered judgment in favor of the
       contractor on its mechanic’s lien claim. Id.
¶ 15        On appeal, the Association argued that the mechanic’s lien was invalid because the
       contractor failed to furnish the requested sworn contractor’s statement. The contractor, on the
       other hand, argued that the request-for-payment form and lien waivers submitted constituted
       sufficient compliance with section 5 of the Act. The appellate court began by observing that
       “[i]t is well established that the Mechanics’ Lien Act must be strictly construed with respect to
       all the statutory requirements upon which the right to a lien depends.” (Emphasis added.) Id. at
       385. The court further noted that “[s]ection 5 requires that the contractor give the owner a
       written statement, under oath or verified by affidavit, of the names of all parties furnishing
       material or labor and the amounts due or to become due to each of them.” (Emphasis omitted.)
       Id. Applying these principles, the court noted that the request-for-payment form did not state
       the names of any of the parties furnishing work or material. Moreover, those necessary names

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       could not be provided by reference to the lien waivers, which were not submitted at trial,
       because those names would not then have been given under the oath or affidavit of the
       contractor. Id. Further, the sworn certification did not identify the individuals or companies by
       name. Nor did the certificate incorporate the names found on any lien waiver forms. For these
       reasons, the court held that the combination of documents sent by the contractor did not meet
       the requirements of section 5 of the Act and reasoned that the owner would have been
       unprotected if it had made the payment to the contractor in reliance thereon. Id. at 386.
¶ 16        Similarly, in Weydert Homes, Inc. v. Kammes, 395 Ill. App. 3d 512 (2009), a general
       contractor filed a complaint against a homeowner seeking to enforce a mechanic’s lien and
       asserting claims for breach of contract and quantum meruit. The circuit court dismissed the
       complaint, and the contractor appealed. The appellate court began by reaffirming that “[t]he
       rights created under the Act are statutory and in derogation of the common law, and the
       technical and procedural requirements necessary for a party to invoke the benefits of the Act
       must be strictly construed.” Id. at 516 (citing Westcon/Dillingham Microtunneling, 319 Ill.
       App. 3d at 877). The court then noted that the general contractor in that case had submitted a
       sworn contractor’s statement but that the purported oath therein was not administered
       correctly. Weydert, 395 Ill. App. 3d at 519. As a result, the court held that the statement did not
       meet the requirements of section 5 that the contractor’s statement be “under oath or to be
       verified by affidavit.” (Emphasis omitted.) Id. at 517. The contractor nevertheless argued that
       it fulfilled the intent of section 5 given that the homeowner did not request the section 5 sworn
       statement until after the contractor perfected its lien and after the 90-day deadline by which
       claims of subcontractors were due. Id. at 519 (citing 770 ILCS 60/24 (West 2006)). The
       contractor claimed the purpose of section 5 was met because the owner had notice of any
       subcontractors’ claims. Id. However, the court refused to read such an exception into the
       statute or to otherwise excuse the contractor’s failure to strictly comply with the requirements
       of section 5 of the Act. The court observed:
                     “We do not read into the plain language of a statute exceptions, limitations, or
                 conditions that conflict with the legislature’s expressed intent. [Citation.] The only
                 time limitation that the statute provides is that the owner must request, and the
                 contractor must furnish, a sworn statement before the owner or his agent, architect, or
                 superintendent pays any moneys or other consideration to the contractor. To construe
                 the statute as plaintiff suggests would be to read into it a condition or limitation the
                 legislature did not express. Moreover, courts should not extend mechanic’s liens ‘to
                 cases not provided for by the language of the [A]ct even though they may fall within its
                 reason.’ ” (Internal quotation marks omitted.) Id. at 519-20 (citing Inter-Rail Systems,
                 Inc. v. Ravi Corp., 387 Ill. App. 3d 510, 516 (2008), quoting Robinette v. Servite
                 Fathers, 49 Ill. App. 3d 585, 587 (1977)).
       In reaching this conclusion, the appellate court rejected the contractor’s reliance upon another
       decision holding that the failure to provide a valid section 5 sworn contractor’s statement will
       not preclude the contractor’s claim where the time for subcontractors to file their claims has
       expired. Id. at 520 (citing Northwest Millwork Co. v. Komperda, 338 Ill. App. 3d 997 (2003)).
       The court noted that Northwest Millwork involved a breach of contract claim and the issue of
       whether the failure to furnish a sworn statement precluded the contractor from recovering on
       his contract. Weydert, 395 Ill. App. 3d at 520. The court further noted that the court in

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       Northwest Millwork held that it would be inequitable to allow a technicality to defeat an
       otherwise valid contract claim. Id. (citing Northwest Millwork, 338 Ill. App. 3d at 1003). The
       court concluded by noting that unlike the breach of contract claim at issue in Northwest
       Millwork, “ ‘[i]t is well established that the creation of a mechanics lien is entirely governed by
       the Act, and the rules of equity jurisprudence are irrelevant at this stage.’ ” Weydert, 395 Ill.
       App. 3d at 520 (quoting Westcon/Dillingham Microtunneling, 319 Ill. App. 3d at 877).
¶ 17        Although these decisions are not binding on this court, we agree with and adopt the
       reasoning expressed in them. In both of these cases, the court strictly construed the
       requirements of section 5 and refused to look beyond or otherwise excuse a contractor’s failure
       to comply with the requirements of a sworn contractor’s statement. We agree with these
       decisions that, regardless of equitable considerations, the rights created under the Act are in
       derogation of the common law and therefore the procedural and technical requirements of
       section 5 of the Act must be strictly complied with in order for a mechanic’s lien to be valid.
¶ 18        Applying the reasoning in these cases to the present case, we conclude that Cityline failed
       to comply with section 5 of the Act and that the trial court’s grant of summary judgment was
       proper. In this case, it is undisputed that the Owners requested a sworn contractor’s statement
       and that Cityline did not provide one. The affidavit submitted by Cityline indicating that all
       subcontractors had been paid did not comply with section 5 because it did not list or name the
       subcontractors and materialmen or state the total amounts due to each of them. See 770 ILCS
       60/5 (West 2010); Deerfield, 74 Ill. App. 3d at 385; Weydert, 395 Ill. App. 3d at 519. Cityline
       is asking this court to excuse its failure to comply with section 5 on the asserted basis that all of
       the subcontractors have been paid and that therefore the Owners were not prejudiced by the
       lack of a sworn contractor’s statement. However, no such exception is contained in section 5 of
       the Act and, under the strict construction adopted above, we will not read any such exception
       into the plain language of the statute. See Weydert, 395 Ill. App. 3d at 519. Cityline also argues
       that because all the subcontractors have been paid, the purpose of the Act was served and it
       would be unfair to allow a “technicality” to defeat its mechanic’s lien. However, as the court
       noted in Weydert, 395 Ill. App. 3d at 520, “the creation of a mechanics lien is entirely governed
       by the Act, and the rules of equity jurisprudence are irrelevant at this stage.” (Internal quotation
       marks omitted.) Therefore, we cannot look beyond Cityline’s failure to comply with section 5
       based upon equitable considerations such as whether the Owners were prejudiced by the lack
       of a sworn contractor’s statement. See Weydert, 395 Ill. App. 3d at 520. We note that whether
       all of the subcontractors have actually been paid is an issue of fact that should not be resolved
       by this court. Regardless, it is not a material issue of fact because Cityline did not provide the
       required sworn contractor’s statement.
¶ 19        We also note that our holding here does not have the dire consequences that Cityline claims
       it would. The Owners are not escaping a $375,302 bill as a result of our holding because
       Cityline still has its claims for breach of contract and quantum meruit pending in the circuit
       court, where Cityline can more appropriately present its arguments regarding equitable
       considerations.
¶ 20        Cityline nevertheless contends that we should look to the First District’s holding in
       National Wrecking Co. v. Midwest Terminal Corp., 234 Ill. App. 3d 750 (1992). Cityline
       claims that under this decision, the failure to comply with section 5 of the Act can be excused.
       We disagree because we do not find the holding in National Wrecking to be applicable to the

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       facts of this case. In National Wrecking, the plaintiff contractor brought suit against the
       defendant, a property owner who hired the plaintiff to perform work on the property. Id. at 756.
       The contractor claimed that it had performed work on the owner’s property pursuant to a
       contract and that the owner had not made the agreed-upon payments. Id. Count I of the
       complaint sought to foreclose on a mechanic’s lien and count II asserted a breach of contract
       claim. Id. On appeal, among other things, the property owner argued that the contractor’s
       failure to provide a sworn contractor’s statement as required by section 5 of the Act barred the
       contractor from recovering on its breach of contract claim. Id. at 763. The court reviewed its
       prior decision on this issue as well as subsequent amendments to the Act and held that the
       failure to provide the sworn contractor’s statement did not bar recovery on the breach of
       contract claim. Id. at 763-64. In dicta, the court stated, “it is undisputed that the failure to
       provide a sworn statement does not bar a mechanics’ lien claim.” Id. at 764.
¶ 21       National Wrecking is not inconsistent with our holding in this case and does not stand for
       the proposition that the First District has rejected a strict interpretation of the Act. First, the
       question raised in National Wrecking was whether the failure to provide the sworn contractor’s
       statement barred recovery on a breach of contract claim. Here, the question is whether the
       failure to provide the contractor’s statement bars recovery on a mechanic’s lien claim. Unlike a
       breach of contract claim, the validity of a mechanic’s lien is governed entirely by the Act and
       therefore the holding in National Wrecking has no bearing on the issue presented in this appeal.
       In fact, the issue of whether the Act’s requirements should be strictly construed was not even
       raised or discussed in National Wrecking. Second, the statement in National Wrecking that the
       failure to provide a sworn contractor’s statement does not bar a mechanic’s lien claim is dicta.
       Finally, after making that statement, the court in National Wrecking cited to two earlier
       decisions holding that the requirement to provide a sworn contractor’s statement can be
       waived. See National Wrecking, 234 Ill. App. 3d at 764 (citing Gillespie v. Patrick, 146 Ill.
       App. 290 (1909), and Rawle v. Gilmore, 76 Ill. App. 372 (1898)). However, Gillespie and
       Rawle interpreted a prior version of the Act that is different from the version applicable to this
       case. More importantly, this line of cases simply held that the requirement of a sworn
       contractor’s statement can be waived when the owner does not make a demand for such a
       statement. See Gillespie, 146 Ill. App. at 296; Rawle, 76 Ill. App. at 375. In the present case,
       there is no issue as to waiver and it is undisputed that the Owners demanded a sworn
       contractor’s statement. For all of these reasons, the holding in National Wrecking does not
       provide a basis for this court to excuse Cityline’s failure to provide the Owners with a sworn
       contractor’s statement.
¶ 22       Finally, in reaching this conclusion, we note that Cityline relies upon one other case for its
       argument that its failure to provide a sworn contractor’s statement can be excused. The case
       relied upon by Cityline, Kasinecz v. Duffy, 2013 IL App (2d) 121329-U, is an unpublished
       decision that has no precedential value. See Ill. S. Ct. R. 23(e) (eff. July 1, 2011) (an
       unpublished order of the court “is not precedential and may not be cited by any party except to
       support contentions of double jeopardy, res judicata, collateral estoppel or law of the case”).
¶ 23       For the reasons stated, we affirm the circuit court of Cook County’s order granting
       summary judgment in favor of the Owners on count I of Cityline’s complaint and count II of
       the Owners’ counterclaim.

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¶ 24   Affirmed.

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