Court Opinion

ID: 9517100
Source: CourtListenerOpinion
Date Created: 2023-08-07 00:03:45.934154+00
Date Added: 2024-06-11T09:43:22.686784
License: Public Domain

JUSTICE COOK, specially concurring: I agree with the decision to affirm in part, reverse in part, and remand with instructions, and basically agree with what is said in the majority opinion. The Act attempts to balance rights and duties of owners, subcontractors (materialmen), and others. On some projects the parties are careful to fully exercise their rights under the Act; on other projects they are not. The Act seeks a fair result in each case. Losses are not always placed on owners, nor are they always placed on subcontractors. There are steps which an owner may take under the Act to protect itself, but an owner is not required to avail itself of every protection the Act affords. The same is true for subcontractors. The Act provides a minimal level of protection in those cases where neither the owner nor the subcontractor takes advantage of the discretionary protections available. On the last day possible, 90 days after it made its final delivery of materials in this case, Ready-Mix mailed its notice of mechanic’s lien to the owner, then recorded its claim of lien. A subcontractor may give the owner written notice of its claim (and thereby protect itself against subsequent disbursements) any time after the subcontractor enters into its contract with the general contractor, but no later than 90 days after the subcontractor’s completion of the contract. (DI. Rev. Stat. 1989, ch. 82, par. 24.) Once the subcontractor’s notice is timely given, the owner must retain “from any money due or to become due the contractor” an amount sufficient to pay the subcontractor. Payments made after the notice without retaining sufficient money to pay the subcontractor are illegal. (111. Rev. Stat. 1989, ch. 82, par. 27.) Still, even if the subcontractor never gives notice to the owner, it is the owner’s duty, before making any payments, to require the general contractor to provide a written statement listing the subcontractors and amounts due or to become due each. (111. Rev. Stat. 1989, ch. 82, pars. 5, 21.) The owner must then ensure that the subcontractors listed are paid the amounts shown; the owner is protected against subcontractors not listed or amounts understated unless those omissions are with the knowledge or collusion of the owner. 111. Rev. Stat. 1989, ch. 82, par. 27. Ready-Mix could have prevented any loss here by giving a subcontractor’s notice to the owner before making any deliveries. Ready-Mix was not required to give that notice, however, and could still claim its rights under sections 5 and 21, relying on the general contractor to disclose the amounts due it. The owner perhaps could have prevented loss by demanding final lien waivers, but had no affirmative duty to do so. In the absence of prior notice by the subcontractor, the owner’s only duty was the duty imposed by sections 5 and 21: to require a written statement by the contractor, and to ensure the amounts listed were paid. The owner complied with that duty here, except to the extent of $127.25. Both the owner and Ready-Mix could have done more, but it is Ready-Mix which is seeking relief, which is asking that the owner pay twice. The Act provides no justification for shifting the loss from Ready-Mix to the owner in this case. The argument could be made that section 32 of the Act requires an owner to always insist on lien waivers. That section provides that no payments shall be regarded as rightfully made “if made by the owner without exercising and enforcing the rights and powers conferred upon him in sections 5, 21 and 22 of this act.” (111. Rev. Stat. 1989, ch. 82, par. 32.) The problem with that argument is that sections 5 and 21 simply mention lien waivers, apparently in connection with work on an existing owner-occupied single-family residence (not the situation here), and do not give the owner any particular right or power to use them. The Act does not define lien waivers, or explain their effect. The term “final lien waiver” is not used in the Act. An owner might avoid problems by making the general contractor and subcontractors joint payees on the owner’s payment checks, or by using some type of escrow, but those rights or powers again are not “conferred” by the Act. If section 32 were read to impose on owners a duty to require lien waivers every time a payment is made, the Act would no longer balance rights and duties between owners and subcontractors, but would place all burdens on owners who failed to obtain lien waivers. Section 24, dealing with subcontractors’ notices, would become meaningless — a subcontractor would be protected irrespective of whether it sent its notice before the owner made payment. Compliance with sections 5 and 21 would likewise provide no protection for the owner.