Court Opinion

ID: 4298274
Source: CourtListenerOpinion
Date Created: 2018-07-26 22:06:00.281704+00
Date Added: 2024-06-11T14:40:58.146458
License: Public Domain

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                                    Appellate Court                            Date: 2018.07.10
                                                                               09:48:10 -05'00'

                  Anekom, Inc. v. Estate of Demith, 2018 IL App (3d) 160554

Appellate Court         ANEKOM, INC., an Illinois Corporation, Plaintiff, v. ESTATE OF
Caption                 RICHARD A. DEMITH, MAYWOOD-PROVISO STATE BANK,
                        as Trustee Under Trust Agreement Dated March 14, 1973, and Known
                        as Trust No. 3155, JOETTE LaVALLEY, Individually and as
                        Independent Executor of the Estate of Richard A. Demith, E
                        TRINITY CONSTRUCTION, LLC, and CARPENTRY BY
                        CONNOR CONSTRUCTION, INC., Defendants (Carpentry by
                        Connor Construction, Inc., and E Trinity Construction, LLC,
                        Defendants and Counterplaintiffs-Appellees; Estate of Richard A.
                        Demith and Joette LaValley, as Independent Executor of the Estate of
                        Richard A. Demith, Plaintiffs and Counterdefendants-Appellants).

District & No.          Third District
                        Docket No. 3-16-0554

Rule 23 order filed     February 21, 2018
Motion to
publish allowed         March 28, 2018
Opinion filed           March 28, 2018

Decision Under          Appeal from the Circuit Court of Will County, No. 14-L-279; the Hon.
Review                  John C. Anderson, Judge, presiding.

Judgment                Affirmed.
       Counsel on               J. Mark Lukanich, of Palos Heights, for appellants.
       Appeal
                                Scott M. Hoster, of Castle Law, of Joliet, for appellees.

       Panel                    JUSTICE SCHMIDT delivered the judgment of the court, with
                                opinion.
                                Justices McDade and Wright concurred in the judgment and opinion.

                                                 OPINION

¶1           The Estate of Richard A. Demith (Estate) appeals the trial court’s orders, granting
         summary judgment to Carpentry by Connor Construction, Inc. (Connor), and E Trinity
         Construction, LLC (E Trinity), on their respective complaints to foreclose their mechanic’s
         liens. We affirm.

¶2                                                  FACTS
¶3                                              I. The Parties
¶4           Anekom, Inc. (Anekom), is a general contractor. Connor and E Trinity are subcontractors.
         The Estate is the owner of the subject property located in Mokena, Illinois. Joette LaValley is
         the independent executor of the Estate. Connor and E Trinity contracted with Anekom to
         complete work on the Estate’s property. Anekom is not a party to this appeal.

¶5                         II. The Original Contract and the Parties’ Performance
¶6           On May 11, 2013, Anekom entered into a contract with LaValley, in her capacity as
         independent executor of the Estate, to demolish the Estate’s fire-damaged structure and
         construct a new house in its place. Pursuant to the contract, Anekom agreed to complete the
         work within 180 days, according to the plans and specifications provided by the Estate, in
         exchange for payment of $414,000.
¶7           On May 16, 2013, Anekom subcontracted with E Trinity to install footings, basement floor
         base, and a garage floor. E Trinity completed its work under the subcontract on September 12,
         2013.
¶8           On September 21, 2013, Anekom subcontracted with Connor for carpentry work. Connor
         completed its work under the subcontract on October 21, 2013.
¶9           On October 28, 2013, the Estate terminated the contract with Anekom after determining
         that the construction of the new house was not on schedule to be completed within the
         contractual 180-day term.
¶ 10         On April 29, 2014, the Estate entered into a contract with a second general contractor, Peak
         Construction and Remodeling, Inc. (Peak). The contract provided that “Peak Construction &
         Remodeling will be taking over and completing the LaValley residence” for a total cost of
         $280,633.

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¶ 11                                 III. Claims for Mechanic’s Liens
¶ 12       On November 22, 2013, Connor filed a notice and claim for a mechanic’s lien against
       Anekom and LaValley, in her capacity as independent executor of the Estate, in the amount of
       $63,500. On November 27, 2013, E Trinity filed a notice and claim for mechanic’s lien against
       the Estate and Anekom in the amount of $38,070. On January 14, 2014, Anekom filed an
       original contractor’s claim for lien against Maywood-Proviso State Bank as trustee, the Estate,
       and LaValley in her capacity as independent executor of the Estate.

¶ 13                                    IV. Anekom’s Complaints
¶ 14       On April 8, 2014, Anekom filed a six-count complaint in the circuit court of Will County.
       In July 2014, Anekom filed an amended complaint, adding E Trinity and Connor as
       defendants. Counts I, II, and III sought to foreclose Anekom’s lien against Maywood-Proviso
       State Bank, the Estate, and LaValley, in her capacity as independent executor of the Estate.
       Anekom alleged it had “completely performed its obligations under the contract until October
       27, 2013, at which time Joette LaValley denied Anekom access to the job and prevented it
       from completing its work.” Anekom asserted that the value of services it performed totaled
       $179,790, of which $109,000 remained due. Anekom further alleged that it gave notice of its
       lien on January 14, 2014, and that its lien claim superseded any subsequent liens. Count IV
       alleged breach of contract against LaValley, individually and in her capacity as independent
       executor of the Estate. Count VI advanced a quantum meruit claim. The trial court eventually
       dismissed Anekom’s claims with prejudice for failure to appear.

¶ 15                           V. Counterclaims of Connor and E Trinity
¶ 16       In September and November 2014, Connor and E Trinity filed their respective answers to
       Anekom’s amended complaint. They also filed counterclaims against Anekom and the Estate.
       Connor and E Trinity (1) sought to foreclose their respective mechanic’s liens (count I),
       (2) alleged breach of contract against Anekom (count II), and (3) sought relief from Anekom
       and the Estate under section 28 of the Mechanics Lien Act (Act) (770 ILCS 60/28 (West
       2012)) (count III). Specifically, Connor alleged it entered into a contract with Anekom on
       September 21, 2013, to perform carpentry work; by the time Connor completed its obligations
       under the contract on October 21, 2013, it had provided labor and materials totaling $63,500,
       which neither Anekom nor the Estate paid. Similarly, E Trinity alleged it entered into a
       contract with Anekom on May 16, 2013, to perform concrete work and had provided labor and
       materials totaling $38,070.10, which neither Anekom nor the Estate paid.

¶ 17                                  VI. The Estate’s Counterclaim
¶ 18       On September 10, 2015, the Estate filed a counterclaim against Anekom, alleging breach
       of contract and damages “in an amount to be established at trial.” The counterclaim alleged, in
       part, that Anekom “failed to diligently prosecute the work in a timely manner and in
       accordance with the schedule agreed by the parties.” The Estate further alleged that Anekom
       “failed to perform its work in a reasonably workmanlike manner and in accordance with the
       plans and specifications, including, but not limited to” failure to (1) properly pour foundation
       walls, (2) install proper ceiling joists, (3) install hurricane clips and exterior fasteners,
       (4) properly construct bathroom pocket doors, and (5) construct the dining room archway as

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       specified by the plans. The Estate also sought indemnification from Anekom for E Trinity’s
       and/or Connor’s lien claims.

¶ 19                            VII. Connor’s Motion for Summary Judgment
¶ 20       On October 15, 2015, Connor filed a motion for summary judgment on its claim to
       foreclose its mechanic’s lien. In support of its motion, Connor attached the affidavit of its
       president, Nicholas Connor, which essentially repeated the counterclaim’s allegations. Connor
       asserted that it sent a 90-day notice of lien to all interested parties and recorded the mechanic’s
       lien within four months of completing its work. Connor maintained that it complied with all
       procedural requirements of the Act and was entitled to judgment on its lien claim as a matter of
       law.
¶ 21       The Estate responded that summary judgment was inappropriate because (1) it could not be
       compelled to pay more for the completion of the residence than the amount of its original
       contract with Anekom and (2) an issue of fact existed as to the value of Connor’s work.
¶ 22       Following a January 13, 2016, hearing, the trial court granted Connor’s motion for
       summary judgment and awarded damages in the amount of $78,131.09, plus court costs. The
       court subsequently denied the Estate’s motion for reconsideration.

¶ 23                          VIII. E Trinity’s Motion for Summary Judgment
¶ 24       On January 28, 2016, E Trinity filed a motion for summary judgment on its claim to
       foreclose its mechanic’s lien. In support of its motion, E Trinity attached the affidavit of its
       president, John Flaherty, which essentially repeated the counterclaim’s allegations. E Trinity
       asserted that it sent a 90-day notice of lien to all interested parties and recorded a mechanic’s
       lien within four months of completing its work. E Trinity maintained it complied with all
       procedural requirements of the Act and was entitled to judgment on its lien claim as a matter of
       law.
¶ 25       The Estate responded that summary judgment was inappropriate because E Trinity failed
       to establish compliance with the notice requirements of section 24 of the Act (id. § 24). The
       Estate also took issue with the quality of E Trinity’s work.
¶ 26       In May 2016, without argument, the trial court granted E Trinity’s motion for summary
       judgment and awarded damages in the amount of $38,070, plus statutory interest.

¶ 27                            IX. Default Judgment Against Anekom
¶ 28       In February 2016, the trial court entered a default judgment against Anekom. At an April
       2016 prove-up hearing, the Estate sought a judgment of $144,834.20, plus costs. The damages
       included the amounts of Connor’s and E Trinity’s lien claims. The court entered judgment
       against Anekom on the Estate’s breach of contract claim in the amount of $144,834.20, plus
       costs.

¶ 29                  X. Subsequent Judgments in Favor of Connor and E Trinity
¶ 30       In August 2016, Connor and E Trinity filed a motion for judgment, asking the trial court to
       enter judgment in their favor on counts II and III of their respective counterclaims. The trial
       court granted their motions.

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¶ 31      This appeal followed.

¶ 32                                            ANALYSIS
¶ 33       On appeal, the Estate challenges the trial court’s grants of summary judgment in favor of
       Connor and E Trinity. The Estate further contends that the personal judgments entered against
       it must be reversed because an issue of fact exists as to Connor’s and E Trinity’s pro rata
       shares of money due from Anekom.
¶ 34       When this court examined the record in this case, a question arose as to whether the Estate
       should be precluded from defending Connor’s and E Trinity’s lien claims, since the Estate’s
       judgment against Anekom includes the amount of the lien claims. At oral arguments, we
       ordered the parties to file supplemental briefs to address this issue. For the following reasons,
       we find that the Estate is precluded from defending the lien claims at issue. Accordingly, we do
       not reach the merits of the Estate’s contentions on appeal.
¶ 35       In their supplemental briefs, the parties address whether the election of remedies doctrine
       precludes the Estate from defending against Connor’s and E Trinity’s mechanic’s liens. The
       election of remedies doctrine precludes a party from pursuing two or more inconsistent
       remedies for the same injury or cause of action. Lempa v. Finkel, 278 Ill. App. 3d 417, 423
       (1996); Altom v. Hawes, 63 Ill. App. 3d 659, 661 (1978). “For one proceeding to be a bar to
       another, the remedies must proceed from opposite and irreconcilable claims of right and must
       be so inconsistent that a party could not logically assume to follow one without renouncing the
       other.” (Internal quotation marks omitted.) Hawes, 63 Ill. App. 3d at 661-62. The doctrine’s
       application is generally confined to cases “where (1) double compensation of the plaintiff is
       threatened or (2) the defendant has actually been misled by the plaintiff’s conduct or
       (3) res adjudicata can be applied.” (Internal quotation marks omitted.) Id. at 663.
¶ 36       On appeal, the Estate asserts that the doctrine does not apply because its judgment against
       Anekom is not inconsistent with its defenses to Connor’s and E Trinity’s lien claims.
       Alternatively, the Estate argues that no threat of double recovery exists. Connor and E Trinity
       counter that the threat of double recovery is apparent.
¶ 37       We reject the Estate’s contention that its breach of contract claim against Anekom, and the
       defenses raised regarding Connor’s and E Trinity’s lien claims, are not inconsistent. After
       obtaining a default judgment against Anekom for breach of contract, the Estate reduced the
       judgment to writing following a prove-up hearing in which it sought—and received—damages
       in the amount of $144,834.20. This award included the amounts of Connor’s and E Trinity’s
       lien claims. The record shows that the Estate suffered only one injury here, i.e., damages in the
       amount of $144,834.20. Thus, the remedies pursued by the Estate are clearly inconsistent and
       irreconcilable. As explained further below, the Estate may not obtain a judgment for damages
       against Anekom, which includes the amounts of the lien claims at issue here, then turn around
       and contend that the lien claims are invalid.
¶ 38       The Estate also argues that even if we find the remedies inconsistent, its defenses against
       the lien claims are not barred because (1) double recovery is not implicated, (2) Connor and E
       Trinity did not change their positions based on the judgment obtained by the Estate against
       Anekom, and (3) res judicata does not apply.
¶ 39       We agree with the Estate to the extent that neither Connor nor E Trinity changed their
       positions based on the judgment against Anekom. We also agree that res judicata does not

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       apply. However, based on our review of the record, we conclude that the threat of double
       recovery in this case is apparent.
¶ 40       On the narrow issue of double recovery, both parties direct our attention to Hawes. In that
       case, pursuant to a separation agreement, the plaintiff procured exclusive possession of certain
       furniture in the marital home. Id. at 660. The plaintiff’s estranged husband sold some of that
       furniture to a family friend for $1500 in violation of the agreement. The trial court
       subsequently entered judgment against the husband in the amount of $1500 for the value of the
       furniture. Id. at 661. Approximately one month later, the plaintiff filed a complaint in replevin
       against the defendants, the family friend, and his wife, seeking to recover the furniture. Id. at
       660. The defendants filed a motion for summary judgment, which the court granted. Id. at 661.
¶ 41       On appeal, the issue was whether the election of remedies doctrine precluded the plaintiff
       from recovering the furniture from the defendants. Id. While the Hawes court found that
       plaintiff pursued inconsistent remedies, it noted that in an effort to ameliorate the harsh results
       that often flow from a strict interpretation of the doctrine, Illinois courts “endeavor to
       determine not whether by the nature of the remedies invoked they are inconsistent, but whether
       the party should be estopped to bring the second action.” Id. at 662. With that in mind, the court
       found that the record revealed no threat of double recovery because the plaintiff’s $1500
       judgment appeared to be uncollectible. Id. at 663.
¶ 42       In this case, nothing in the record convinces us that the Estate’s judgment against Anekom
       is uncollectible. Although there is evidence that Anekom dissolved in 2014, its dissolution
       does not necessarily imply that the judgment is uncollectible; actions may be brought against
       corporations after their dissolution. See 805 ILCS 5/12.80 (West 2014) (“The dissolution of a
       corporation *** shall not take away nor impair any civil remedy available to or against such
       corporation, its directors, or shareholders, for any right or claim existing, or any liability
       accrued or incurred, either prior to, at the time of, or after such dissolution if action or other
       proceeding thereon is commenced within five years after the date of such dissolution.”). The
       Estate’s contention that it is “extremely unlikely” it will be able to collect the judgment against
       Anekom is pure speculation. The Estate offers no evidence whatsoever that it attempted to
       collect the judgment. Ultimately, if the Estate prevails on its defenses to the mechanic’s liens at
       issue, it could collect the full judgment against Anekom and avoid paying the subcontractors
       for the value of the work completed on the Estate’s home.
¶ 43       The Estate cites Gluth Brothers Construction, Inc. v. Union National Bank, 192 Ill. App.
3d 649 (1989), in support of its contention that the threat of double recovery is not implicated
       here “because Anekom would have the right to set off from the Estate’s judgment that amount
       of the Connor and [E Trinity] judgments the Estate was not required to pay.” We find the
       Estate’s reliance on Gluth is misplaced.
¶ 44       In Gluth, the plaintiffs obtained a judgment against the defendant bank after the bank
       improperly set off $195,609.56 in funds deposited by its joint venture with Valley Engineering
       Company (Valley) in order to satisfy a debt that Valley owed the bank. Id. at 651; see also
       Gluth Brothers Construction, Inc. v. Union National Bank, 166 Ill. App. 3d 18, 20 (1988).
       Sometime thereafter, Valley filed for bankruptcy; the bankruptcy court distributed more than
       $180,000 to the plaintiffs as Valley’s creditors. Gluth, 192 Ill. App. 3d at 652. At that point, the
       bank sought a setoff based on the bankruptcy distribution the plaintiff’s received. Id. The bank
       argued that a setoff would prevent the plaintiffs from receiving a double recovery. Id. at 658. It
       asserted that if the plaintiffs were permitted to retain the money from the bankruptcy

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       proceeding in addition to the judgment entered against the bank, plaintiffs would receive “a
       double recovery for the same alleged injury.” Id. The appellate court agreed that a double
       recovery should not be allowed and remanded to the trial court to consider whether a setoff was
       in fact required. Id. The appellate court noted that if the recoveries in both proceedings arose
       from the same claim, the trial court should award the bank a setoff to avoid a double recovery.
       Id. at 659. Essentially, the Gluth court held that a judgment may be reduced to avoid a double
       recovery only after a payment is received from the alternate source.
¶ 45        Here, the Estate attempts to compare Anekom to the bank in Gluth by asserting that
       Anekom can obtain a setoff from the Estate’s judgment against it in the event the Estate
       successfully defends the lien claims at issue here. However, whether Anekom may ultimately
       be entitled to some kind of setoff in the event the Estate prevails against the lien claims at issue
       is irrelevant to this appeal. The Estate chose its remedy when it included the amount of the lien
       claims in its request for damages against Anekom. As it stands, the Estate could potentially
       collect its judgment against Anekom tomorrow and, if successful here, also avoid paying the
       lien claims. Thus, we find that the Estate is precluded from defending the lien claims under the
       election of remedies doctrine.
¶ 46        Similarly, we find that the doctrine of judicial estoppel also precludes the Estate from
       defending the lien claims at issue. “Judicial estoppel is an equitable doctrine invoked by the
       court at its discretion.” Seymour v. Collins, 2015 IL 118432, ¶ 36. The United States Supreme
       Court has observed that “the uniformly recognized purpose of the doctrine is to protect the
       integrity of the judicial process by prohibiting parties from ‘deliberately changing positions’
       according to the exigencies of the moment.” Id. (quoting New Hampshire v. Maine, 532 U.S.
742, 749-50 (2001)). Judicial estoppel may be invoked when the party to be estopped has
       “(1) taken two positions, (2) that are factually inconsistent, (3) in separate judicial or
       quasi-judicial administrative proceedings, (4) intending for the trier of fact to accept the truth
       of the facts alleged, and (5) have succeeded in the first proceeding and received some benefit
       from it.” Id. ¶ 37.
¶ 47        The facts of this case meet all the prerequisites for judicial estoppel. In its breach of
       contract action against Anekom, the Estate alleged its damages amounted to $144,834.20,
       which included the amounts of the lien claims at issue here. The Estate succeeded in its breach
       of contract action by obtaining a judgment against Anekom for the total amount of damages it
       sought. Now, the Estate attempts to change its position and assert it is not liable to Connor or E
       Trinity for their lien claims, despite having obtained a judgment that includes them. The
       doctrine of judicial estoppel is designed to protect against this exact situation.
¶ 48        Accordingly, we find that the Estate is precluded from defending Connor’s and E Trinity’s
       lien claims.

¶ 49                                       CONCLUSION
¶ 50      For the foregoing reasons, we affirm the judgment of the circuit court of Will County.

¶ 51      Affirmed.

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