Court Opinion

ID: 9516919
Source: CourtListenerOpinion
Date Created: 2023-08-06 23:56:01.690896+00
Date Added: 2024-06-11T09:40:08.424213
License: Public Domain

JUSTICE CARMAN, dissenting: The trial judge made the following findings of fact, which warrant being quoted in extenso: "First, on August 12th of 1991[,] a contract was entered into between the property owner, Defendant Curtis Piercy, with the contractor for this project, Pre-Engineered Steel, for a $39,000 job that the owner wanted Pre-Engineered Steel to complete for it. A few days later, on August 27th of 1991, the contractor, PreEngineered Steel[,] entered into a contract with the Plaintiff [Alliance Steel] as a subcontractor to supply material for this project, and the amount for the material that was to be paid was $18,808. Thereafter, on October 7th of 1991, the Plaintiff in part delivered material to the job site and got from Mr. Piercy a $26,605 check, which was made payable to Pre-Engineered Steel, and the Plaintiff forwarded the check then on to Pre-Engineered Steel after receiving it from Mr. Curtis [Piercy], On October 9th, two days later, 1991, Pre-Engineered Steel sent to the Plaintiff a $20,000 check. There was no indication or direction on the check itself as to any particular account as to which the check should be applied, and the Plaintiff applied it to an account which was older than the Piercy account. On the 7th of November of 1991, Plaintiff completed its delivery of materials to the job site. On January 31st of 1992, the Plaintiff served notice on Mr. Piercy. It is claimed under this contract on February 20th of 1992, the Plaintiff recorded its lien on August 24th, 1992. Mr. Piercy was served by Pre-Engineered Steel with a document indicating a release on the part of Pre-Engineered Steel and an acknowledgement from PreEngineered Steel of full payment by him on the contract with PreEngineered Steel. On October 29th, 1992, Pre-Engineered Steel sent a $500 payment to the Plaintiff, which was applied to the Piercy account, and there is a letter dated December 11th, 1992, from Pre-Engineered Steel to the Plaintiff suggesting a belief on the part of Pre-Engineered Steel that its Piercy job with the Plaintiff was paid in full October 9th, 1991. It seems to the Court those are the significant dates and events that occurred in this situation chronologically.” The court granted summary judgment to Alliance on the following grounds: (1) the payment of $20,000, an amount in excess of the contract price between Pre-Engineered and Alliance ($18,808), was contrary to the prior course of dealings between the parties; (2) the amount of the check given to Alliance was $26,605, again in excess of the subcontract between Alliance and Pre-Engineered; (3) the $500 payment — made almost a year after the final delivery — was directed by Pre-Engineered to be applied to the Piercy account, indicating that the earlier $20,000 payment was not meant to be applied to the Piercy account; and (4) equity was on the side of Alliance, because it remained unpaid, so far as the Piercy project was concerned. The purpose of the Act is to provide extraordinary remedies to certain classes of contractors and subcontractors. (First Bank v. Rinaldi (1994), 262 Ill. App. 3d 179, 187, 634 N.E.2d 1204, 1210.) Once the lien claimant has complied with the statutory requirements, the Act should be liberally constmed to carry out its remedial purpose of allowing recovery where the value of the property has been increased by furnishing labor or materials. (First Bank, 262 Ill. App. 3d at 187, 634 N.E.2d at 1210.) While the party seeking to enforce a lien must "scrupulously observe! ]” the terms of the Act (First Bank, 262 Ill. App. 3d at 187, 634 N.E.2d at 1210), once this is done, the Act alerts owners of what they should do in order to avoid double liability. Cabinet Service Tile, Inc. v. Schroeder (1993), 255 Ill. App. 3d 865, 867, 627 N.E.2d 253, 255. The record indicates that Piercy did not request the affidavit required by section 5 of the Act and therefore should not escape double liability. Section 5 of the Act provides: "It shall be *** the duty of the owner to require of the contractor, before the owner *** 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, *** a statement in writing, under oath or verified by affidavit, of ike names and addresses of all parties furnishing materials and labor and of the amounts due or to become due to each.” (Emphasis added.) (770 ILGS 60/5 (West 1992).) Section 32 of the Act specifically provides: 'Wo payments to the contractor or to his order of any money or other considerations due or to become due to the contractor shall be regarded as rightfully made, as against the sub-contractor *** or party furnishing labor or materials, if made by the owner without exercising and enforcing the rights and powers conferred upon him in section! ] 5 *** of this Act.” (Emphasis added.) (770 ILGS 60/32 (West 1992).) Thus, under section 32 of the Act, Piercy’s payment cannot be regarded as "rightfully made.” There is no question that Piercy did not obtain the requisite affidavit; therefore, there is no genuine issue of material fact, and the trial court properly granted summary judgment. The fact that Piercy could have protected himself by other means is irrelevant. The case law is emphatic. In Hudson (117 Ill. App. 3d at 723, 453 N.E.2d at 883), an owner made payments to a general contractor, failing, as here, to obtain the required affidavits. This court held that even though the owner had to pay more than the total contract price in order to discharge the subcontractor’s lien, this was not a defense the owner could raise. Payments made without obtaining the required affidavits are at the owner’s risk. The unbroken chain of authority for this rule dates back to at least 1891. See, e.g., Ambrose v. Biggs (1987), 156 Ill. App. 3d 515, 509 N.E.2d 614; Swansea Concrete Products, Inc. v. Distler (1984), 126 Ill. App. 3d 927, 467 N.E.2d 388; Deerfield Electric Co. v. Herbert W. Jaeger & Associates, Inc. (1979), 74 Ill. App. 3d 380, 392 N.E.2d 914; Barr & Collins v. Seiden (1954), 3 Ill. App. 2d 115, 120 N.E.2d 380; Stanley J. Gottschalk Construction Co. v. Carlson (1929), 253 Ill. App. 520; Mueller Lumber Co. v. Bollinger (1911), 160 Ill. App. 402; Conklin v. Plant (1889), 34 Ill. App. 264. I agree that Piercy’s predicament is regrettable. However, the law could not be more clear. Piercy exposed himself to double liability when he failed to obtain the required affidavits before making payment to the contractor. Furthermore, I am troubled with the ease with which the majority excuses Piercy’s oversight, especially considering the fact that the contract was for construction of his auto body shop. Surely a business owner should not be excused from his failure to follow the provisions of the Act when he is in a position to understand the law as it applies to his business. The case law cited by the majority in fact supports the grant of summary judgment in this case. For example, in Liese (326 Ill. 633, 158 N.E.2d 428), an owner paid a general contractor, who, in turn, paid a subcontractor. The owner, as here, did not ask for the sworn statement required by the Act and, as here, did not provide any directions as to the application of the payment. Under these circumstances, our supreme court held that there was "no basis or reason for deviation from the general rule” set out in the Act. (Liese, 326 Ill. at 639, 158 N.E. at 430.) It emphasized: "Section 5 *** provides that the owner may protect himself before the payment of money by requiring the contractor to supply a sworn statement concerning the bills of sub-contractors and materialmen. *** Where the owner makes payment to a contractor without requiring the statement referred to in the [Act] he does so at his peril.” Liese, 326 Ill. at 638, 158 N.E. at 430. The majority attempts to distinguish Liese by pointing out that "the owner would have been entitled to a credit if the contractor had designated how the payment should be applied, even if the owner had not required a contractor’s written statement.” (277 Ill. App. 3d at 638.) I agree. Here, however, Piercy did not designate how the payment should be applied. In fact, he made the $26,605 check payable to Pre-Engineered, not Alliance. He violated his obligations under the Act, and, however unfortunate, must now bear the consequences. The majority is correct in stating that "other circumstances may require the subcontractor to apply the payment to the owner’s account.” (277 Ill. App. 3d at 637.) No such other circumstances are present here. The Act is emphatic that, absent a request for an affidavit, the payment is wrongful, as against the subcontractor. The majority appears to reverse the trial court mostly on equitable grounds. However, he who requests equity must do equity. Since Piercy’s payment was wrongful, i.e., not rightfully made, equitable relief is inappropriate. Finally, the majority points out that Alliance "made certain that it got the money from Piercy.” (277 Ill. App. 3d at 637.) The record does not support this contention, though. An Alliance driver received a $26,605 check from Piercy on October 7, 1991. This check was payable to Pre-Engineered. Alliance transmitted the check to PreEngineered on October 9, 1991. Alliance was due $18,808 for the Piercy job. The same day, October 9,1991, Alliance received a $20,000 check from Pre-Engineered with no direction as to its application. Over a year later, on October 29, 1992, Pre-Engineered sent a $500 check to Alliance, with directions to apply it to the Piercy account. The record also contains a December 11, 1992, self-serving and contradictory letter from Pre-Engineered to Alliance, in which PreEngineered claims that the $500 check was in error. Coupled with a discrepancy between the cost of the Piercy job ($18,808). the amount of the Piercy check ($26,605) and the amount of the payment to Alliance ($20,000), the $500 payment proves that Alliance did not receive the $20,000 payment for the Piercy account. I see no reason for deviation from the general rule here, nor do I see any special circumstances warranting reversal, and would affirm.