National City Mortgage v. Hillside Lumber ( 2012 )

ILLINOIS OFFICIAL REPORTS
Appellate Court
National City Mortgage v. Hillside Lumber, Inc., 2012 IL App (2d) 101292
Appellate Court NATIONAL CITY MORTGAGE, Plaintiff and Counterdefendant-
Caption Appellee, v. HILLSIDE LUMBER, INC., Defendant and
Counterplaintiff-Appellant (Roman Jakimow, Elizabeth Jakimow,
National City Bank, Jaroslaw Prus, Prime City Construction, Inc., New
Stone Design, Inc., The Title Shop, L.L.C., and Top Quality Flooring,
Inc., Defendants).
District & No. Second District
Docket No. 2-10-1292
Rule 23 Order filed September 29, 2011
Rule 23 Order
withdrawn March 8, 2012
Opinion filed March 8, 2012
Held In a mortgage foreclosure action where the mortgagee joined defendant
(Note: This syllabus lumber company, which had a mechanic’s lien for the materials it
constitutes no part of supplied for the improvements to the property, and both the mortgagee
the opinion of the court and the lumber company filed cross-motions for summary judgment, the
but has been prepared trial court properly entered summary judgment for the mortgagee, since
by the Reporter of the mortgagee asserted that it never received notice of the mechanic’s lien
Decisions for the and the lumber company had the burden of proving that the mortgagee
convenience of the actually received notice, but it admitted it could not produce
reader.)
documentation that notice was even sent.
Decision Under Appeal from the Circuit Court of Du Page County, No. 08-CH-3454; the
Review Hon. Robert G. Gibson, Judge, presiding.
Judgment Affirmed.
Counsel on Eric D. Kaplan and Christopher S. Wunder, both of Kaplan, Papadakis &
Appeal Gournis, P.C., of Chicago, for appellant.
Frank P. Andreano, of Brumund, Jacobs, Hammel, Davidson &
Andreano, LLC, of Joliet, for appellee.
Panel JUSTICE ZENOFF delivered the judgment of the court, with opinion.
Justices Bowman and Birkett concurred in the judgment and opinion.
OPINION
¶1 Defendant Hillside Lumber, Inc. (Hillside), appeals from an order of the circuit court of
Du Page County granting summary judgment against it and in favor of plaintiff, National
City Mortgage. For the reasons that follow, we affirm.
¶2 On September 14, 2006, Roman and Elizabeth Jakimow gave plaintiff a mortgage on
their property to secure a construction loan. The Jakimows defaulted, and plaintiff filed suit
to foreclose its mortgage on September 8, 2008. Plaintiff joined Hillside as a defendant in
the foreclosure suit because Hillside recorded a mechanic’s lien against the property on
March 5, 2008. The lien recited that Hillside furnished $141,188.10 worth of materials to
improve the property and that $65,821.93 was still owed. The lien was signed by Ewa
Kulaga. There was no accompanying proof of mailing or service list. On December 19, 2008,
Hillside filed a counterclaim to foreclose its mechanic’s lien.
¶3 Plaintiff and Hillside filed cross-motions for summary judgment. Plaintiff’s motion was
based, in part, on Hillside’s failure to serve it with notice of the lien. Hillside filed Ewa
Kulaga’s affidavit in which Kulaga, president of Hillside, averred that on March 5, 2008,
Hillside sent the lien by certified mail, with return receipt requested and delivery limited to
addressee only, to the owners of the property, the contractor, and plaintiff at its address in
Miamisburg, Ohio. Plaintiff then filed a counteraffidavit in which its asset manager declared
that plaintiff’s records did not disclose that plaintiff had received the lien. At the hearing on
the cross-motions for summary judgment, Hillside admitted that it did not have either the
white card evidencing a certified mailing with a tracking number, a copy of the envelope
addressed to plaintiff, or a green card evidencing receipt of the lien by plaintiff. On
November 15, 2010, the trial court granted plaintiff’s motion for summary judgment and
denied Hillside’s cross-motion. The trial court granted a finding pursuant to Illinois Supreme
Court Rule 304(a) (eff. Feb. 26, 2010), and this timely appeal followed.
¶4 Hillside contends that Kulaga’s affidavit creates a genuine issue of material fact sufficient
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to defeat plaintiff’s motion for summary judgment and that the trial court misconstrued
section 24 of the Mechanics Lien Act (Act) (770 ILCS 60/24 (West 2008)) when it ruled that
Hillside had to prove plaintiff’s actual receipt of the lien. In order not to run afoul of the
forfeiture rule, Hillside also raises issues with respect to the timeliness and priority of its lien.
Because of our resolution of the notice issue, we will not address the remaining issues.
¶5 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 that the moving party is entitled to judgment as a matter of law. Falcon Funding, LLC
v. City of Elgin, 399 Ill. App. 3d 142, 146 (2010). “The nonmovant need not prove his case
at the summary judgment stage; he must, however, show a factual basis to support the
elements of his claim.” Wilson v. Bell Fuels, Inc., 214 Ill. App. 3d 868, 872 (1991). Where
the evidence before the court on summary judgment shows that a verdict would have to be
directed at trial, summary judgment is proper. Wilson, 214 Ill. App. 3d at 872. We review de
novo a ruling on summary judgment. Falcon, 399 Ill. App. 3d at 146.
¶6 The purpose of the Act is to protect contractors and subcontractors who provide labor and
materials for the benefit of an owner’s property by permitting them a lien on the property.
Parkway Bank & Trust Co. v. Meseljevic, 406 Ill. App. 3d 435, 446 (2010). Rights under the
Act are in derogation of the common law, and the steps necessary to invoke those rights must
be strictly construed. Parkway, 406 Ill. App. 3d at 446. “However, once the contractor or
subcontractor has strictly complied with the requirements and the lien has properly attached,
then the Act should be liberally construed to accomplish its remedial purpose.” Parkway, 406
Ill. App. 3d at 446.
¶7 Section 24(a) of the Act requires a lien claimant to send notice of the claim by registered
or certified mail, with return receipt requested and delivery limited to addressee only, to the
owner of record or his agent or architect, or to the superintendent having charge of the
building or improvement, and to the lending agency, if known. 770 ILCS 60/24(a) (West
2008); Cordeck Sales, Inc. v. Construction Systems, Inc., 382 Ill. App. 3d 334, 398 (2008).
Section 24(a) in pertinent part provides:
“Sub-contractors, or parties furnishing labor, materials, fixtures, apparatus, machinery,
or services, may at any time after making his or her contract with the contractor, and shall
within 90 days after the completion thereof, or, if extra or additional work or material is
delivered thereafter, within 90 days after the date of completion of such extra or
additional work or final delivery of such extra additional material, 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, with return receipt requested, and delivery limited to
addressee only, to or personally served on the owner of record or his agent or architect,
or the superintendent having charge of the building or improvement and to the lending
agency, if known ***. For purposes of this Section, notice by registered or certified mail
is considered served at the time of its mailing.” 770 ILCS 60/24(a) (West 2008).
¶8 Hillside first argues that plaintiff’s counteraffidavit alleged only that plaintiff did not
have a record of having received the notice of lien, and the counteraffidavit at most created
an inference that Hillside may not have complied with section 24(a). Hillside contends that
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the trial court could not try the case on its merits at the summary judgment stage, but had to
conclude that there was a genuine issue of material fact regarding Hillside’s compliance with
notice because of the Kulaga affidavit. This issue cannot be addressed without first
addressing Hillside’s argument that section 24(a) requires proof only that the notice was sent,
not that it was received. If Hillside is incorrect in its construction of section 24(a), then the
Kulaga affidavit does not create a genuine issue of material fact. Hillside maintains that the
plain language of section 24(a) requires that the notice of lien be sent by certified or
registered mail, with return receipt requested and delivery limited to addressee, and also
provides that notice is considered served at the time of its mailing. Hillside argues that we
cannot read any other conditions, such as delivery, into the statute.
¶9 Hillside relies on one case, People ex rel. Devine v. $30,700.00 United States Currency,
199 Ill. 2d 142 (2002), which involved the notice provision in the Drug Asset Forfeiture
Procedure Act (725 ILCS 150/1 et seq. (West 2000)). In Devine, the issue was whether the
State had complied with the notice provision, which required the State to give notice either
by personal service or by mailing a copy of the notice by certified mail, with return receipt
requested, to the owner’s or interest-holder’s address. Devine, 199 Ill. 2d at 150. Our
supreme court held that, in light of the express language contained in the notice provision,
service of notice by mailing is perfected when the notice is deposited in the mail, provided
the State complies with the mailing procedures set forth in the statute. Devine, 199 Ill. 2d at
151. The court rejected the argument that notice would not be perfected unless and until the
State received the return receipt. Devine, 199 Ill. 2d at 151. Hillside argues that the notice
provision in the Drug Asset Forfeiture Procedure Act is analogous to section 24 of the Act,
so that they must be construed the same way. What Hillside overlooks in the Devine analysis
is that the record in that case contained the certified mailing receipt proving that the State
actually mailed notice in compliance with the statute. Devine, 199 Ill. 2d at 153. Here,
Hillside admitted that it had no documentation of any kind of mailing.
¶ 10 Devine is inapposite for another reason. Illinois courts have interpreted the strict
requirements of notice under the Act by examining how effectively a party did in fact notify
the other side, rather than simply basing rights solely on whether every phrase of the statute
was followed in exact detail. Matthews Roofing Co. v. Community Bank & Trust of
Edgewater, 194 Ill. App. 3d 200, 205 (1990). Defects in the notice are not a deprivation of
notice where notice was actually received. Watson v. Auburn Iron Works, Inc., 23 Ill. App.
3d 265, 272-73 (1974). It is incumbent on a party to assert that it did not receive actual
notice. J&B Steel Contractors, Inc. v. C. Iber & Sons, Inc., 246 Ill. App. 3d 523, 527 (1993).
At the summary judgment stage of proceedings, it can be conclusively determined whether
notice was received. J&B, 246 Ill. App. 3d at 527. Consequently, pursuant to J&B, once
plaintiff asserted its lack of notice at the summary judgment stage, Hillside had to prove that
plaintiff actually received notice. Hillside admitted that it could not produce documentation
that it even sent notice, let alone documentation that notice was received. Consequently, the
trial court did not err in granting summary judgment in plaintiff’s favor. Accordingly, the
judgment of the circuit court of Du Page County is affirmed.
¶ 11 Affirmed.
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