North Shore Community Bank and Trust Company v. Sheffield Wellington, LLC , 2014 IL App (1st) 123784 ( 2014 )

2014 IL App (1st) 123784
Nos. 1-12-3784, 1-13-0018 (cons.)
Fifth Division
September 26, 2014
IN THE
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
NORTH SHORE COMMUNITY BANK )
AND TRUST COMPANY, )
)
Plaintiff and Counterdefendant- )
Appellee, )
)
v. )
)
SHEFFIELD WELLINGTON LLC, ) Appeal from the Circuit Court
) of Cook County.
Defendant and Counterdefendant )
) No. 09 CH 16804
(Bluewater Capital Development, Inc., and )
Premier Roofing, Inc., ) The Honorable
Defendants and ) Lisa R. Curcio,
Counterplaintiffs-Appellants; ) Judge Presiding.
)
SMH Development, LLC, Sheffield Avenue )
Investors, LLC, and Employees Retirement Plan )
of Consolidated Electrical Distributors, Inc., )
Counterdefendants). )
JUSTICE GORDON delivered the judgment of the court, with opinion.
Justices McBride and Taylor concurred in the judgment and opinion.
OPINION
¶1 The issue in this appeal concerns whether, under the Mechanics Lien Act (the Act) (770
ILCS 60/1 et seq. (West 2008)), a contractor can file a mechanics lien with an incorrect
completion date and then amend the filing with a different completion date when the
Nos. 1-12-3784, 1-13-0018 (cons.)
contractor forecloses on the lien. Bluewater Capital Development, Inc. (Bluewater), and
Premier Roofing, Inc. (Premier), appeal the trial court’s granting the motion of North Shore
Community Bank and Trust Company (the Bank), Sheffield Avenue Investors, LLC (SAI),
and Employees Retirement Plan of Consolidated Electrical Distributors, Inc. (ERPCED), for
summary judgment. 1 Bluewater also appeals the denial of its motion for summary judgment.
¶2 Plaintiffs contend (1) that the Bank released its mortgage on the subject property and
does not have standing; (2) that the trial court erred when it found that the facially valid dates
of completion stated on plaintiffs’ lien claims constituted binding judicial admissions; (3)
that plaintiffs timely filed their lien claims and appropriately complied with all requirements
of the Act; and (4) that the trial court erred when it granted summary judgment against the
plaintiffs and when it denied plaintiffs’ motions for leave to amend their complaints alleging
new completion dates within the statutory period. Bluewater additionally claims that there
are no issues of material fact precluding summary judgment in its favor.
¶3 For the reasons that follow, we reverse the grant of summary judgment in defendants’
favor and affirm the denial of Bluewater’s motion for summary judgment.
¶4 BACKGROUND
¶5 I. The Property and the Parties
¶6 Bluewater and Premier (collectively, plaintiffs) each performed construction work on the
subject property (property), a commercial building located at 2954-58 Sheffield Avenue in
Chicago, Illinois. At the time plaintiffs performed their work, Sheffield Wellington, LLC
(Sheffield), was the owner of the property and SMH Development, LLC (SMH) was its
general contractor. Since Seth M. Harris (Harris) was the sole member-manager of both
1
The cases are separate appeals by two different mechanic's lien claimants in the same
lower court case that were consolidated on this appeal.
2
Nos. 1-12-3784, 1-13-0018 (cons.)
Sheffield and SMH, they are referred to collectively herein as “the owner” unless otherwise
noted. 2
¶7 On May 29, 2008, the owner executed and delivered a “construction mortgage” on the
property to the Bank for a loan in the principal amount of $2.65 million. As “additional
security” for the loan, the owner assigned the Bank an interest in “rents and leases *** and
income” from the property. Among other terms of the “Construction Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixtures Filing” (the mortgage), the owner
agreed to “keep the [property] free from mechanics *** liens.” The owner also agreed to
“complete within a reasonable time any Improvements now or at any time in the process of
erection upon the [property].”
¶8 Under the mortgage, the owner could be deemed in default if the owner failed to “pay
any installment of principal or interest *** on the date when due, or *** within five (5)
days.” In other events where the owner “failed to perform any other obligation” under the
mortgage, the owner would “have a period of thirty (30) days *** to cure” the failure before
an “Event of Default [could] be deemed to exist.” If an “Event of Default occur[ed],” the
Bank retained the option to declare all unpaid principal and interest “immediately due.”
¶9 On May 15, 2009, the Bank filed an action to foreclose its mortgage on the property. The
Bank alleged (1) that, on April 2, 2009, the owner “defaulted under the terms of the
mortgage”; (2) that the owner “failed to pay the amount due and owing under the Promissory
Note” accompanying the mortgage; and (3) that of the original loan amount of $2.65 million,
the principal amount due was $2,609,978.89, the interest accrued was $26,451.05, and the
total amount due to the Bank was $2,637,535. The Bank further alleged that the owner
2
Notwithstanding this shorthand description, neither Harris nor any entity of Harris
owned the property at the time of this appeal. The current owner of record is SAI.
3
Nos. 1-12-3784, 1-13-0018 (cons.)
entered into leases with two separate commercial tenants, that the owner was obligated to
complete certain improvements on the property under those leases, and that the owner had
abandoned those improvements before completion. The Bank alleged that “one tenant ha[d]
notified the [owner] of the [owner’s] default under the lease,” and that “the other tenant [was]
threatening to find alternate space if the improvements *** [were] not completed.”
¶ 10 As provided for in the terms of the mortgage, the Bank requested that a court-appointed
receiver take immediate possession of the property. On June 4, 2009, the court granted the
Bank’s request to appoint Richard Wanland, Jr., as receiver, giving him “full power and
authority with respect to the control, management, and improvement of the property” as well
as “full power to market the property.” However, “[a]ny sale of the property [had to] be
approved by the court.”
¶ 11 On March 17, 2010, Wanland reported to the court that “[the Bank] ha[d] reached an
agreement to sell the property” to SAI. Accordingly, Wanland presented the sale to the court
for approval. The court approved it, finding that “the sale does not affect the validity,
perfection, priority, or amount of any claim for mechanics lien against the property, all of
which remain for future adjudication.” The court then dismissed the owner 3 from the Bank’s
complaint to foreclose the mortgage.
¶ 12 On March 26, 2010, Jeff M. Galus, a commercial banking officer for the Bank, signed
and executed a release of the mortgage. A notary public certified that “Galus *** of North
Shore Community Bank and Trust Company *** acknowledged [before the notary] that he
signed and delivered the [release] *** for the uses and purposes set forth in the [release].”
However, according to the verified affidavit of the Bank’s senior vice president, Christopher
3
Sheffield was the only entity of the owner dismissed in the trial court’s order.
4
Nos. 1-12-3784, 1-13-0018 (cons.)
Swieca, “the release has not been delivered pursuant to the agreement of the parties and
remains in escrow pending the resolution of this case.” The Bank’s mortgage, thus, “remains
of record.”
¶ 13 On April 15, 2010, SAI acquired the property by special warranty deed. 4 SAI then
granted a mortgage to ERPCED. The Bank, SAI, and ERPCED are collectively referred to
herein as “defendants.”
¶ 14 II. Bluewater Capital Development, Inc.
¶ 15 A. Claim for Mechanics Lien
¶ 16 Bluewater, entered into an agreement with the owner to furnish labor and materials to
construct an office at the property. According to the discovery deposition of Bluewater’s
president, Roi Kiferbaum, this agreement was created through various “proposals” and
“change orders” made by the parties on December 3, 2008; December 9, 2008; December 16,
2008; and December 28, 2008. Kiferbaum testified that the owner “often [accepted the
proposals and change orders] through a telephone call or onsite meeting.” According to
Kiferbaum’s testimony, Bluewater “did [not] have a written contract with any SMH entity”
of the owner. As noted, the contract was created by various proposals and change orders.
¶ 17 Bluewater began work on the property but did not complete its work, claiming it was not
paid under the terms of their agreement with the owner. According to its “Subcontractor’s
Notice of Claim and Claim for Mechanics Lien,” Bluewater alleges that (1) it entered into a
"written contract” with the owner on December 16, 2008; (2) the total contract price was
$218,050; (3) it “substantially” completed its work on Sunday, January 4, 2009; (4) the value
4
On October 14, 2010, the court transferred the case to the mechanics lien section of the
chancery division because the “[d]eed *** resolved [the Bank’s] foreclosure claim, [but]
mechanics lien issues remain.”
5
Nos. 1-12-3784, 1-13-0018 (cons.)
of the work it performed and the materials it provided totaled $131,755; and (5) the owner
had paid Bluewater only $30,000, leaving a $101,755 balance.
¶ 18 On April 3, 2009, Bluewater filed its mechanics lien claim and served the owner and the
Bank with notice of the lien. In its action to foreclose its mortgage on the property dated May
15, 2009, the Bank named Bluewater as a defendant. On August 21, 2009, Bluewater
counterclaimed to foreclose its mechanics lien against the Bank, Sheffield, and SMH. In this
counterclaim, Bluewater alleges January 4, 2009, as the date of completion. On December
15, 2009, Bluewater obtained a default judgment against Sheffield and SMH, jointly and
severally, for $101,755 after they failed to file an answer to Bluewater’s counterclaim.
¶ 19 On December 5, 2011, Bluewater filed a motion for summary judgment against all
remaining parties in its action. Bluewater attached Kiferbaum’s affidavit to the motion,
which claimed Bluewater completed its work on the property on January 4, 2009.
¶ 20 B. Discovery
¶ 21 In its original document production, Bluewater provided a self-prepared timeline of the
project and a series of emails between Kiferbaum and the owner from which the timeline was
based. In an email dated December 16, 2008, the owner responded to Kiferbaum’s specific
questions regarding how the owner wanted certain improvements on the property to be made.
In another email, dated December 17, 2008, Kiferbaum sent the owner “a list of [approved]
items [that they] discussed at [their] site meeting on 12/16/08.” In another email, dated
Tuesday, December 30, 2008, the owner “accept[ed Bluewater’s] $4600 proposal to pour the
concrete floor at the new office floor” and promised to “give [Bluewater] a signed proposal
on Monday [January 5, 2009] when [Bluewater] pour[ed] it.”
6
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 22 Bluewater stated in its timeline of the project that Kiferbaum “made several attempts to
resolve payment issues without success.” In an email dated February 10, 2009, the owner
requested that Kiferbaum “send [the owner] all of the open invoices” for the work completed
by Bluewater. In another email dated, February 20, 2009, Kiferbaum told the owner that he
“would be more [than] willing to discuss a solution that would be beneficial to both of us and
least disruptive to either one’s business.” In an email dated March 9, 2009, Kiferbaum asked
the owner about its status in “resolving the payment issue” because it had “been over a week
since [they] last spoke and [Kiferbaum had] not heard anything.”
¶ 23 Additionally, Kiferbaum appeared for a discovery deposition on January 23, 2012.
Keiferbaum testified that Bluewater worked on the property from December 2008 through
early January 2009.
¶ 24 Keiferbaum was questioned about the date that Bluewater concluded work:
“COUNSEL: So the 27th of December would be the last day of
actual physical work?
KIFERBAUM: No. Well now that I’m thinking about it, because
there was the concrete workwhich was then paid by [Kiferbaum’s
father] ***.
***
COUNSEL: Okay. So based on these checks, unless you owe money
to somebody for work after December 27 which you’ve said you don’t,
then the last date of work by Bluewater would have been or on behalf
of Bluewater would have been December 27, 2008; is that right?
KIFERBAUM: Yes.
7
Nos. 1-12-3784, 1-13-0018 (cons.)
***
COUNSEL: Now in Paragraph 13 [of Kiferbaum’s affidavit] it says
between the period of December 16 and January 4, 2009 Bluewater
furnished the labor and materials [to the property.] *** In fact, as
we’ve gone through, that actually happened starting somewhere
around December 5th give or take and ending on December 27th;
correct?
KIFERBAUM: Yes. Correct.
COUNSEL: [Paragraphs] 14 and 15 are just flat out wrong as far as
the date goes; correct?
KIFERBAUM: As far as January 4th?
COUNSEL: Yes.
KIFERBAUM: I mean that was an approximation when we just
decided we’re not continuing. This project’s not, we’re not continuing
to perform work.
COUNSEL: So the last date on the project was on December 27th,
2008?
KIFERBAUM: Not necessarily.
COUNSEL: Hang on. Hang on. But you made the mental decision
on January 4th that you were no longer going to go farther, do I have
that right?
KIFERBAUM: Yes.”
8
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 25 Kiferbaum was further questioned about the cement work his father, Hanan Kiferbaum,
completed. He testified that his father paid for the concrete work and that “the idea was that
Bluewater was going to reimburse him on that particular item.” However, Kiferbaum
testified that his father was never reimbursed and that he could not recall which date his
father performed the concrete work. When Kiferbaum was asked whether Bluewater had ever
employed anyone other than himself, Kiferbaum responded, “At one point, and I don’t know
if it’s considered to be as an employee or subcontractor, my father, Hanan Kiferbaum, had
worked on projects with me.”
¶ 26 Finally, Kiferbaum was also questioned as to how he valued the work done on the
property at $131,755 in light of Bluewater’s document production:
“COUNSEL: When did you do this [calculate the amount for
the lien]?
KIFERBAUM: Approximately the time when the lien was filed.
COUNSEL: Okay. So that was at least a good three months or
so after you were off the job; correct?
KIFERBAUM: Correct.
COUNSEL: So what did you do? Did you sit in your office and
say, hum, I think I remember that being 100% complete; I think I
remember that being 85% complete?
KIFERBAUM: Yes.
COUNSEL: So you didn’t go [to the property] and actually take
measurements; correct?
KIFERBAUM: I had no access to the site.
9
Nos. 1-12-3784, 1-13-0018 (cons.)
COUNSEL: So you could be off by ten percent in some cases?
KIFERBAUM: Sure, I could be.
COUNSEL: Could be off by 20%
KIFERBAUM: I could not say for – I mean I – This is based on
my best recollection of what was completed based on material
purchased, *** based on what my judgment as contractor, as the
subcontractor was.
***
COUNSEL: So basically, it is your opinion; correct?
KIFERBAUM: Yes.
***
COUNSEL: You don’t have any documents that show how
much labor was actually put into the project by Bluewater; correct?
KIFERBAUM: No.
***
COUNSEL: The only documents that you have show
approximately $25,629.93 of materials including the temporary
heat [sic] that were put into the project; is that right?
KIFERBAUM: Yes.
COUNSEL: According to your judgment, Bluewater should be
paid a grand total of $131,755 for its work on the project; correct?
KIFERBAUM: Yes.”
10
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 27 C. Defendants’ Response and Cross-Motion for Summary Judgment
¶ 28 Defendants responded to Bluewater’s motion for summary judgment and filed a cross-
motion for summary judgment on April 3, 2012. Defendants’ response argued that (1) at best,
Bluewater produced documentation accounting for only $64,351 in expenditures on the
property and, therefore, had not produced sufficient evidence to supports its claim for
$101,755; and (2) at the very least, material issues of fact existed as to the date of completion
given the varying dates provided by Bluewater over the course of the litigation.
¶ 29 To its cross-motion for summary judgment against Bluewater, defendants relevantly
attached Bluewater’s lien claim and the entirety of its document production. The cross-
motion argued that because the Act must be strictly construed against Bluewater, (1)
Bluewater failed to comply with section 24 of the Act because it failed to serve notice of
claim to the Bank within 90 days of its only completion date supported by evidence
(December 27, 2008); (2) Bluewater could not prove it worked on Sunday, January 4, 2009;
and (3) Bluewater failed to perfect its claim under section 7 of the Act because it described
the contract in its lien claim as “written,” but never produced a signed written contract to
corroborate this description. Therefore, defendants argued, the lien was unenforceable
against the Bank, SAI, and ERPCED.
¶ 30 On May 18, 2012, Bluewater responded to defendants’ cross-motion for summary
judgment and denied that its claim was not perfected. Bluewater claimed that while the
January 4, 2009, date was mistaken, the actual completion date was not December 27, 2008,
but January 5, 2009, and thus, within 90 days of its notice of claim to the Bank.
¶ 31 To this reply, Bluewater attached the full deposition of Kiferbaum and the affidavit of
Keith Thomas, senior project manager for SMH, who averred that on December 30, 2008,
11
Nos. 1-12-3784, 1-13-0018 (cons.)
SMH accepted a change order proposal from Bluewater to pour concrete and “authorized the
work to be performed on Monday, January 5, 2009,” and that the concrete work was
ultimately completed.
¶ 32 III. Premier Roofing, Inc.
¶ 33 A. Claim for Mechanics Lien
¶ 34 According to the “General Contractor’s Claim for Mechanics Lien” filed by Premier
Roofing, Inc., Premier entered into a contract on October 30, 2008, with SMH to remove the
old roof on the property and install a new roof. According to the claim, Premier completed all
work on the contract on February 27, 2009. The claim further alleges that Premier is due the
full contract price of $44,454 for its work on the property.
¶ 35 Premier filed its mechanics lien claim on June 26, 2009. The lien claim stated that “the
claimant [is] Premier Roofing and Jo[seph] Birt,” and that “claimant made a contract ***
dated October 30, 2008 with SMH Development, LLC under which claimant agreed to
provide all necessary labor, material, and work.”
¶ 36 On November 15, 2010, Premier counterclaimed against defendants to foreclose its
mechanics lien. The counterclaim alleged that “on or about January 8, 2009,” Premier
entered into a contract with “Seth Harris and d/b/a SMH Development LLC, and d/b/a
Sheffield Wellington LLC.” The counterclaim alleged that Premier was due the full contract
price and completed its last substantial work on the property on February 27, 2009. On
December 13, 2010, the circuit court permitted Premier to intervene in the Bank’s
foreclosure proceedings.
12
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 37 B. Discovery
¶ 38 On January 23, 2012, Premier produced documents and served sworn answers in
response to the Bank’s document requests and interrogatories. Question 14 of the
interrogatories requested Premier to “[s]tate the first and last date upon which [Premier]
furnished labor and/or materials to the project and identify all documents evidencing these
dates.” Premier responded that "the date the project began was November 13, 2008, and the
last date of the project [was] December 29, 2008, and see exhibit A and J of the production
request.” Exhibits A and J of the production request contained timesheets related to the
project, the latest of which was dated December 29, 2008.
¶ 39 On April 9, 2012, Premier served amended responses to the Bank’s document requests
and written interrogatories. At this time, Premier produced two additional timesheets related
to its work on the property, one dated February 9, 2009, and the other dated March 4, 2009.
¶ 40 Premier’s president, Joseph Birt, appeared for a discovery deposition on April 18, 2012.
Joseph testified that Premier keeps time records of its projects “in a [bound] book that goes to
and from a job on a daily basis.” He testified that the person in charge of Premier’s project on
the worksite was to “make a list of the people on the site, the time they start, and the time
they finish.” Joseph testified that the end of each week, Ann Birt (his wife and vice president
of Premier) “total[s] up the hours, figure[s] out the rate of pay, [and] write[s the workers] a
[handwritten] check.” Joseph further testified that pages remain bound in the book, and that
the book is stored on a shelf when all the pages are filled. He testified that he has “many
years of [such] books.”
¶ 41 Additionally, Joseph was asked about the completion date stated in Premier’s
counterclaim. He testified that he “believe[d]” that the February 27, 2009, completion date
13
Nos. 1-12-3784, 1-13-0018 (cons.)
came from “documents,” although he stated that he did not know who picked that date for the
complaint.
¶ 42 Moreover, Joseph was asked why the December 27, 2008, completion date originally
sworn to in response to the Bank’s written interrogatories was amended to March 4, 2009.
Joseph testified:
“JOSEPH: How did we come up with another date?
COUNSEL: Yes.
JOSEPH: We didn’t look too deeply into it when we were
looking for this paperwork.
COUNSEL: You didn’t look too deeply into it?
JOSEPH: No, we didn’t look deep enough into it.
COUNSEL: Well, I thought you told me —
JOSEPH: My wife, who was asked to look for this stuff, didn’t
know specifically. This is the first time this has ever happened to
us as I told you before. I never had this happen before. She looked
for stuff that she thought she was supposed to present. She did it to
the best of her ability. When we found out we needed more, we
looked a little further back and found more.”
Joseph then testified that the February 9 and March 4 timesheets were not among the
documents in the original production because “there’s a month of a difference in some of
these documents. It’s further back in the book.”
¶ 43 Finally, Joseph testified that Harris presented him with a check on Friday, February 27,
2009. However, Joseph was unable to deposit the check because of insufficient funds in
14
Nos. 1-12-3784, 1-13-0018 (cons.)
Harris’ account. At the time Harris presented Joseph with the check, Harris requested that
Premier come back the next week to complete the project. Joseph testified that the next
Monday and Tuesday were too cold to complete the work, and that Premier was not able to
complete its project until March 4 because the bricklayer had not yet “finished with the wall
[sic] to cleaning them up and pointing them.”
¶ 44 C. Defendants’ Motion for Summary Judgment
¶ 45 On August 16, 2012, defendants filed a motion for summary judgment against Premier
arguing that Premier failed to strictly comply with section 7 of the Act, which states:
“No contractor shall be allowed to enforce such lien against or to
the prejudice of any other [third-party] creditor or incumbrancer or
purchaser, unless [(1)] within 4 months after completion *** he or
she shall either bring an action to enforce his or her lien therefor or
shall file in the office of the recorder *** a claim for lien, [(2)]
verified by the affidavit of himself or herself, or his or her agent or
employee, which shall consist of [(3)] a brief statement of the
claimant's contract, [(4)] the balance due after allowing all credits,
and [(5)] a sufficiently correct description of the lot ***. *** No
such lien shall be defeated to the proper amount thereof because of
an error or overcharging on the part of any person claiming a lien
therefor under this Act, unless it shall be shown that such error or
overcharge is made with intent to defraud ***.” 770 ILCS 60/7(a)
(West 2008).
15
Nos. 1-12-3784, 1-13-0018 (cons.)
To their motion for summary judgment, defendants attached the entirety of Premier’s
document production, its responses to the written interrogatories, and the deposition
testimony of Joseph.
¶ 46 First, defendants argued that Premier had not timely filed or recorded its claim as
required by section 7 of the Act. Defendants asserted that Premier is bound by, cannot
contradict, and cannot amend the February 27, 2009, completion date that Premier originally
stated. Therefore, defendants argued, because Premier cannot produce evidence that it did in
fact work on February 27, 2009, its lien claim is unperfected and unenforceable against
defendants because it was not timely filed. Second, defendants argued that Premier’s claim is
unperfected under section 7 because the claim incorrectly described Joseph as contracting in
a personal capacity with SMH.
¶ 47 Premier replied to defendants’ motion that the actual date of completion was March 4,
2009. In support of this date, Premier attached the affidavits of Ann Birt, Jack Hartnett, a
foreman for Premier on the property, and Christopher Birt, Joseph’s brother and an employee
of Premier.
¶ 48 Ann’s affidavit stated that after the original document production, Joseph “informed her
that he believed that December 29, 2008, was not the last day of work on [the] project
because the work was not finished when he received” the check from Harris on February, 27,
2009. She stated: “At my husband’s request I re-examined our time record books including
the records for 2009 and noted that I overlooked a time sheet for March 4, 2009, a true and
accurate copy of which is attached to this affidavit.”
¶ 49 Hartnett’s affidavit stated that, as a foreman on the project, “the last day [he] recall[ed]
working on the project was on March 4, 2009.” He stated that he completed the time record
16
Nos. 1-12-3784, 1-13-0018 (cons.)
that Ann stated she initially overlooked. Moreover, Hartnett stated that on December 29,
2008, “snow and ice prevented installing permanent flashing around the skylight curbs that
had been cut into the roof but [he] recall[ed was] not finished.” He stated that temporary
flashings were installed until Premier could install ones that were permanent. Hartnett stated
that the reason the work was not completed until March 4, 2009, was because “there was
adverse weather (snow, ice and cold) which prevented the brick masons from repairing
work” and because the “mortar joints were deteriorated so that [Premier] could not attach the
termination bar and counter-flashing without brick masons first repairing that part of the
wall.”
¶ 50 Christopher Birt’s affidavit stated he recalled “after December 29, 2008, work was
suspended due to weather [conditions] and due to the fact that other trades did not complete
installing the HVAC (heating, ventilation, and air conditioning) units on the roof until
February 2, 2009.” Christopher stated that “[o]ften work is interrupted due to adverse
weather conditions such as freezing temperatures which may cause the Johns Mansville
roofing material [Premier] used on the roof to crack and/or not adhere properly to the
underlayment” and that “work is often delayed until other trade complete their involving roof
penetrations – such as piping, mechanical units, skylights curbs, and other such items.”
Finally, he stated that he completed the project on March 4, 2009, “including the flashing and
priming [of the roof].”
¶ 51 On November 20, 2012, Premier made a motion to withdraw its prior countercomplaint
and file an amended countercomplaint to change its date of completion. Earlier that year, on
February 7, 2012, the trial court granted Premier seven days leave to amend its counter-
complaint. Premier did not file an amendment.
17
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 52 IV. Disposition and Appeal
¶ 53 On July 3, 2012, the trial court denied Bluewater’s motion for summary judgment, but
granted defendants’ cross-motion for summary judgment. The trial court entered an order
finding that Bluewater’s lien was not enforceable because it was not timely filed. On October
30, 2012, the trial court denied Bluewater’s motion for reconsideration and motion for leave
to amend the completion date on its complaint to January 5, 2009.
¶ 54 As to Premier, the trial court granted defendants’ motion for summary judgment on
November 30, 2012. In its oral opinion, the trial court reasoned that whatever the Bank’s
standing might be, SAI and ERPCED do have standing. Moreover, “although the lien claim
is facially valid,” the court found that Premier was bound to the completion date stated in its
lien claim (February 27, 2009) and denied Premier’s motion for leave to amend its complaint
with the new completion date (March 4, 2009). The trial court reasoned in its oral opinion:
“[C]onsidering the Mutual Services and Braun-Skiba cases[,] ***
the fact that a [completion date] is included in [plaintiffs’ lien
claims] and is a fact and was sworn to by the [plaintiffs] made that
statement a judicial admission which could not be contradicted by
evidence propounded by the [plaintiffs], which in this case means
that [plaintiffs] cannot attempt to contradict its sworn statement of
the [completion date on their] lien[s] *** by way of evidence that
[the work] may have been completed after that date.
***
[As to the motion for leave, the court] believe[s] that the motion
for leave to withdraw the counterclaim and file an amended
18
Nos. 1-12-3784, 1-13-0018 (cons.)
counterclaim is mooted as a result of the ruling on the motion for
summary judgment.
***
*** [Y]ou know, [the court will not] say that [the motion for
leave to amend] is moot. It’s denied, it’s denied for the same
reasons [the court] ha[s] to grant summary judgment, that you
[Premier] cannot salvage this lien by virtue of the evidence of
work that was alleged to have been done after the sworn date.
***
[The completion date is] a judicial admission that cannot be
under the law of Illinois controverted by the party that made the
admission by way of other evidence. It has nothing to do with
whether it is a lien claim or any other claim.”
¶ 55 After granting defendants’ motion for summary judgment against Premier, the court
entered an order finding there is no just reason for delaying the appeal or enforcement of the
court’s orders regarding plaintiffs’ liens pursuant to Illinois Supreme Court Rule 304(a) (eff.
Feb. 26, 2010). As a result, Bluewater and Premier bring this interlocutory appeal.
¶ 56 ANALYSIS
¶ 57 In our analysis, we consider (1) whether the Bank released its mortgage and has standing
in this action; (2) whether plaintiffs’ mechanics liens are enforceable as a matter of law; (3)
whether the trial court erred when it denied plaintiffs’ motions for leave to amend their
counterclaims; and (4) whether the trial court erred when it granted defendants’ motions for
summary judgment and denied Bluewater’s motion for summary judgment.
19
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 58 For the reasons that follow, we reverse the grant of summary judgment in defendants’
favor and affirm the denial of Bluewater’s motion for summary judgment.
¶ 59 I. Standard of Review
¶ 60 A trial court is permitted to grant summary judgment only "if the pleadings, depositions,
and admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of
law." 735 ILCS 5/2-1005(c) (West 2008). The trial court must view these documents and
exhibits in the light most favorable to the nonmoving party. Home Insurance Co. v.
Cincinnati Insurance Co., 213 Ill. 2d 307, 315 (2004). We review a trial court's decision to
grant a motion for summary judgment de novo. Outboard Marine Corp. v. Liberty Mutual
Insurance Co., 154 Ill. 2d 90, 102 (1992). De novo consideration means we perform the same
analysis that a trial judge would perform. Khan v. BDO Seidman, LLP, 408 Ill. App. 3d 564,
578 (2011).
¶ 61 "Summary judgment is a drastic measure and should only be granted if the movant's right
to judgment is clear and free from doubt." Outboard Marine Corp., 154 Ill. 2d at 102.
However, "[m]ere speculation, conjecture, or guess is insufficient to withstand summary
judgment." Sorce v. Naperville Jeep Eagle, Inc., 309 Ill. App. 3d 313, 328 (1999). A
defendant moving for summary judgment bears the initial burden of proof. Nedzvekas v.
Fung, 374 Ill. App. 3d 618, 624 (2007). The defendant may meet his burden of proof either
by affirmatively showing that some element of the case must be resolved in his favor or by
establishing " 'that there is an absence of evidence to support the nonmoving party's case.' "
Nedzvekas, 374 Ill. App. 3d at 624 (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 325
(1986)). In other words, there is no evidence to support the plaintiff's complaint. If there is a
20
Nos. 1-12-3784, 1-13-0018 (cons.)
material fact that needs to be decided, a motion for summary judgment must be denied.
Forsythe v. Clark USA, Inc., 224 Ill. 2d 274, 280 (2007) (citing Jackson v. TLC Associates,
Inc., 185 Ill. 2d 418, 424 (1998)).
¶ 62 " 'The purpose of summary judgment is not to try an issue of fact but *** to determine
whether a triable issue of fact exists.' " Schrager v. North Community Bank, 328 Ill. App. 3d
696, 708 (2002) (quoting Luu v. Kim, 323 Ill. App. 3d 946, 952 (2001)). " 'To withstand a
summary judgment motion, the nonmoving party need not prove his case at this preliminary
stage but must present some factual basis that would support his claim.' " Schrager, 328 Ill.
App. 3d at 708 (quoting Luu, 323 Ill. App. 3d at 952). We may affirm on any basis appearing
in the record, whether or not the trial court relied on that basis or its reasoning was correct.
Ray Dancer, Inc. v. DMC Corp., 230 Ill. App. 3d 40, 50 (1992).
¶ 63 The issue of standing is a matter of law and is also subject to de novo review. Malec v.
City of Belleville, 384 Ill. App. 3d 465, 468 (2008) (quoting Dimensions Medical Center, Ltd.
v. Advanced Ambulatory Surgical Center, Inc., 305 Ill. App. 3d 530, 534 (1999)). Again, de
novo consideration means we perform the same analysis that a trial judge would perform.
Khan, 408 Ill. App. 3d at 578.
¶ 64 II. Standing
¶ 65 As a preliminary matter, we must address plaintiffs’ contention that the Bank lacks
standing. We note at the outset that the Bank, SAI, and ERPCED collectively filed the
motions for summary judgment against the plaintiffs. Since plaintiffs challenge the standing
of only the Bank and not the standing of either SAI or ERPCED, any determination of the
Bank’s standing is not ultimately dispositive of this appeal. We must, therefore, consider the
21
Nos. 1-12-3784, 1-13-0018 (cons.)
validity of plaintiffs’ mechanics lien claims regardless of our conclusion on the issue of the
Bank’s standing.
¶ 66 “The doctrine of standing is designed to preclude persons who have no interest in a
controversy from bringing suit,” and “assures that issues are raised only by those parties with
a real interest in the outcome of the controversy.” Glisson v. City of Marion, 188 Ill. 2d 211,
221 (1999). “[S]tanding requires some injury in fact to a legally cognizable interest ***.”
Glisson, 188 Ill. 2d at 221. However, our Illinois Supreme Court has stated that the “lack of
standing in a civil case is an affirmative defense, which will be forfeited if not raised in a
timely fashion in the trial court.” Greer v. Illinois Housing Development Authority, 122 Ill.
2d 462, 508 (1988); People v. Kelly, 397 Ill. App. 3d 232, 265 (2009). As an affirmative
defense, the lack of standing is the defendant's burden to plead and prove. Lebron v. Gottlieb
Memorial Hospital, 237 Ill. 2d 217 (2010).
¶ 67 On appeal, plaintiffs urge this court to hold that the Bank released its mortgage to the
property, and that as a result of the Bank’s release, the Bank no longer has an interest in this
action. Plaintiffs argue that “[o]nce a mortgagee receives full payment it seeks under its
mortgage, the mortgage is deemed released.” Plaintiffs not only point out that the Bank
executed a signed release, but plaintiffs also claim that the Bank received full payment for
the mortgage as evidenced by the sale of the property to SAI.
¶ 68 As an initial matter, we are persuaded by defendants’ argument that Bluewater has
waived its arguments concerning standing by not raising lack of standing as a defense before
the trial court. See Greer, 122 Ill. 2d at 508. However, we are not persuaded by defendants’
arguments that Premier waived its arguments concerning standing. Premier raised the issue
of standing before the trial court and therefore preserved the issue on appeal. Moreover,
22
Nos. 1-12-3784, 1-13-0018 (cons.)
waiver is a limitation on the parties, not on the jurisdiction of the reviewing court. Board of
Trustees of the University of Illinois v. Illinois Labor Relations Board, 224 Ill. 2d 88, 112
(2007).
¶ 69 Defendants concede that the Bank executed a mortgage release, but argue that the
mortgage release is not yet effective because it has not been delivered. Defendants also
contend that plaintiffs have not presented sufficient evidence that the Bank received full
payment for the mortgage. Premier does not contest whether the mortgage has been
delivered, but instead argues that delivery is not necessary for the mortgage release to be
effective.
¶ 70 However, the authorities Premier cites simply do not support its legal theory that full
payment or anything short of delivery is sufficient to give effect to a mortgage release. Points
not supported by citation to relevant authority are waived. People v. Ward, 215 Ill. 2d 317,
332 (2005) ("point raised in a brief but not supported by citation to relevant authority *** is
therefore forefeited"); In re Marriage of Bates, 212 Ill. 2d 489, 517 (2004) ("A reviewing
court is entitled to have issues clearly defined with relevant authority cited."); Roiser v.
Cascade Mountain, Inc., 367 Ill. App. 3d 559, 568 (2006) (by failing to offer supporting
legal authority or any reasoned argument, plaintiffs waived consideration of their theory for
asserting personal jurisdiction over defendants); Ferguson v. Bill Berger Associates, Inc., 302
Ill. App. 3d 61, 78 (1998) ("it is not necessary to decide this question since the defendant has
waived the issue" by failing to offer case citation or other support as Supreme Court Rule
341 requires); Ill. S. Ct. R. 341(h)(7) (eff. Feb. 6, 2013) (arguments in an appellate brief must
be supported by citations to legal authority).
23
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 71 First, Premier cites section 2 of the Mortgage Act as supporting its contention that, once a
mortgagee receives full payment for the mortgage, the mortgage is deemed released. 765
ILCS 905/2 (West 2008). The primary rule of statutory construction requires that effect must
be given to the intent of the legislature. Advincula v. United Blood Services, 176 Ill. 2d 1, 16
(1996); Wal-Mart Stores, Inc. v. Industrial Comm’n, 324 Ill. App. 3d 961, 967 (2001). In
ascertaining the legislature's intent, courts begin by examining the plain language of the
statute, reading the statute as a whole, and construing it so that no word or phrase is rendered
meaningless or superfluous. Kraft, Inc. v. Edgar, 138 Ill. 2d 178, 189 (1990); Wal-Mart
Stores, Inc., 324 Ill. App. 3d at 967. Statutory language that is clear and unambiguous must
be given effect without resort to other aids of construction. People v. Woodard, 175 Ill. 2d
435, 443 (1997); Wal-Mart Stores, Inc., 324 Ill. App. 3d at 967. Section 2 of the Mortgage
Act says, in relevant part:
“Every mortgagee of real property *** having received full
satisfaction and payment of all such sum or sums of money as are
really due to him from the mortgagor *** shall *** make, execute
and deliver to the mortgagor *** an instrument in writing ***
releasing such mortgage *** .” 765 ILCS 905/2 (West 2008).
¶ 72 While the plain language of section 2 does indicate that full payment is a necessary
condition before a mortgagee is obligated to release a mortgage, it does not suggest that full
payment, by itself, is a sufficient condition to release a mortgage. On the contrary, once a
mortgagee receives full payment it must further “make, execute and deliver *** an
instrument in writing *** releasing such mortgage.” 765 ILCS 905/2 (West 2008). To adopt
24
Nos. 1-12-3784, 1-13-0018 (cons.)
Premier’s construction would render the statutory requirements to “make, execute and
deliver” meaningless and superfluous. 765 ILCS 905/2 (West 2008).
¶ 73 Likewise, section 4 of the Mortgage Act does not support Premier’s contentions. While
the provision does make a mortgagee liable to aggrieved parties when it fails to release a
mortgage within one month of receiving full payment for the mortgage, it does not say that
full payment by itself releases the mortgage. See 765 ILCS 905/4 (West 2008). Again, under
section 4, full payment triggers only the obligation of a mortgagee to release a mortgage.
¶ 74 Finally, Premier does not dispute that the Bank failed to deliver the mortgage release, but
instead points to American Garden Homes, Inc. v. Gelbart Fur Dressing, 238 Ill. App. 3d 64
(1992), as supporting its contention that delivery is not necessary for a mortgage release to be
effective. We do not find Premier’s reliance on this case persuasive.
¶ 75 The court in American Garden did not consider whether a mortgage release was effective
before delivery but, rather, whether a party had standing to compel the release of a mortgage.
See American Garden, 238 Ill. App. 3d at 68-69. Indeed, the question before the American
Garden court was whether the plaintiff could compel the defendant to deliver the mortgage
release. American Garden, 238 Ill. App. 3d at 69. Nothing in the case supports Premier’s
contention that American Garden deemed a mortgage release effective prior to delivery.
¶ 76 In the case at bar, Premier’s challenge to the Bank’s standing rests entirely on the theory
that the Bank released its mortgage by receiving full payment. However, even if there was
full payment, the plain language of the Mortgage Act indicates that delivery is necessary
before a mortgage is released. Since it is undisputed that there was no delivery, the mortgage
has not been released. Accordingly, the Bank still has an interest in the property and has
standing.
25
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 77 III. Enforceability of Mechanics Liens
¶ 78 Before we can consider whether the trial court erred in denying plaintiffs’ motions for
leave to amend their complaints and before we can consider whether the trial court erred in
granting defendants’ motions for summary judgment against plaintiffs, we must consider the
trial court’s basis for these decisions. Specifically, the trial court found that the completion
dates on plaintiffs’ lien claims constituted binding judicial admissions that plaintiffs could
not amend or contradict with evidence of a later completion date. The trial court reasoned
that since plaintiffs were bound by the dates stated on their lien claims and could not produce
evidence that work actually occurred on those dates, the trial court was required to enter
summary judgment in favor of defendants and deny plaintiffs’ motions for leave to amend
their complaints.
¶ 79 Plaintiffs contend that their liens are facially enforceable and comply with the
requirements of the Act. In determining whether plaintiffs’ liens are enforceable on their
face, we consider (1) the Act’s general purpose, requirements, and principles; (2) whether we
are to construe the requirements of the Act strictly or liberally; (3) whether the completion
dates stated in plaintiffs’ lien claims and elsewhere constitute binding judicial admissions;
and (4) whether plaintiffs’ claims are unenforceable because (a) of plaintiffs’ description of
their contract and (b) Bluewater’s claimed overstatement of the amount due under its claim.
¶ 80 A. Purpose, Requirements, and Principles
¶ 81 “The purpose of the Act is to permit a lien upon premises where a benefit has been
received by the owner and the value or condition of the property has been increased or
improved by the furnishing of labor and materials.” Northwest Millwork Co. v. Komperda,
26
Nos. 1-12-3784, 1-13-0018 (cons.)
338 Ill. App. 3d 997, 1000 (2003) (citing R.W. Dunteman Co. v. C/G Enterprises, Inc., 181
Ill. 2d 153, 164 (1998)).
¶ 82 Section 7 of the Act contains most of the requirements at issue in the case at bar. The
provision provides:
“No contractor shall be allowed to enforce such lien against or to
the prejudice of any other [third-party] creditor or incumbrancer or
purchaser, unless [(1)] within 4 months after completion *** he or
she shall either bring an action to enforce his or her lien therefor or
shall file in the office of the recorder *** a claim for lien, [(2)]
verified by the affidavit of himself or herself, or his or her agent or
employee, which shall consist of [(3)] a brief statement of the
claimant's contract, [(4)] the balance due after allowing all credits,
and [(5)] a sufficiently correct description of the lot ***. *** No
such lien shall be defeated to the proper amount thereof because of
an error or overcharging on the part of any person claiming a lien
therefor under this Act, unless it shall be shown that such error or
overcharge is made with intent to defraud ***.” 770 ILCS 60/7(a)
(West 2008).
¶ 83 Additionally, this court has interpreted section 7 to impose a requirement that a
mechanics lien claim include a completion date in order to be enforceable. Merchants
Environmental Industries, Inc. v. SLT Realty Limited Partnership, 314 Ill. App. 3d 848, 869
(2000) (inferring from section 7 that lien claims require the statement of a completion date);
but see National City Mortgage v. Bergman, 405 Ill. App. 3d 102, 111 (2010) (explicitly
27
Nos. 1-12-3784, 1-13-0018 (cons.)
disagreeing with the holding in Merchants Environmental, the Second District reasoned that
“hold[ing] that a lien claim is unenforceable because it failed to set forth a completion date
[is] inequitable when the lien holder has complied with the statutory requirements of a lien
claim, which do not include providing a completion date”).
¶ 84 Section 24 of the Act provides the last requirement relevant to this appeal. It provides that
a subcontractor must, within 90 days after the date of completion, “cause a written notice of
his or her claim *** to be sent *** to the lending agency.” 770 ILCS 60/24(a) (West 2008).
¶ 85 In regards to both sections 7 and 24, "[t]he term 'completion' *** does not refer to
completion of the contract. It means completion of the work for which a contractor seeks to
enforce his lien ***." (Internal quotation marks omitted.) Cordeck Sales, Inc. v. Construction
Systems, Inc., 382 Ill. App. 3d 334, 389 (2008) (quoting Merchants Environmental, 314 Ill.
App. 3d at 858).
¶ 86 Additionally, as the rights under the Act are in derogation of the common law, the
requirements to “perfect” the lien must be strictly construed. Westcon/Dillingham
Microtunneling v. Walsh Construction Co. of Illinois, 319 Ill. App. 3d 870, 877 (2001).
“However, notwithstanding the strict construction generally given to all sections of the
Mechanics Lien Act, there is authority that favors some flexibility in applying the general
rules, so that the statute's provisions are not construed so technically that its remedial purpose
is undermined and all but lost in the process.” Walker Process Equipment v. Advance
Mechanical Systems, Inc., 282 Ill. App. 3d 452, 455 (1996) (citing Aluma Systems, Inc. v.
Frederick Quinn Corp., 206 Ill. App. 3d 828, 840 (1990)). In any event, once a plaintiff has
complied with its requirements, the Act should be liberally construed to accomplish its
28
Nos. 1-12-3784, 1-13-0018 (cons.)
remedial purpose. Westcon/Dillingham, 319 Ill. App. 3d at 877; see also 770 ILCS 60/39
(West 2008) (“This act is and shall be liberally construed as a remedial act.”).
¶ 87 Finally, we note that while defendants’ arguments are identical in that both Bluewater
and Premier were untimely in complying with the Act, defendants technically claim that
Bluewater and Premier were untimely under different provisions of the Act. Bluewater filed
as a subcontractor and Premier filed as a general contractor. Both plaintiffs are subject to the
requirements in section 7, which requires a lien claim to be filed or recorded within four
months of completion. See 770 ILCS 60/7 (West 2008). However, Bluewater, as a
subcontractor, was also required to provide notice of the lien claim to the lending agency (in
this case, the Bank) within 90 days of completion. See 770 ILCS 60/24 (West 2008).
¶ 88 Since the parties apply the same legal analysis and arguments to both sections 7 and 24,
we examine both provisions together in deciding whether plaintiffs’ lien claims are
enforceable on their face. Indeed, the purpose of both provisions is the same: to provide third
parties notice of the existence of a lien claim. As will be explained below, the purpose of
section 7 is to provide notice to third parties whether a lien claim is enforceable. See
Merchants Environmental, 314 Ill. App. 3d at 861. Likewise, the purpose of section 24 is to
provide notice to a third party, in this case the Bank, of the existence of a lien claim. See 770
ILCS 60/24 (West 2008). Accordingly, both provisions present the same analytical
questions because they share the same purpose of providing notice to third parties.
¶ 89 However, sections 7 and 24 present different factual questions in the present case (i.e.,
whether Bluewater notified the Bank within 90 days of completion and whether Premier filed
its lien claim within four months of completion). As a result, we examine each provision
29
Nos. 1-12-3784, 1-13-0018 (cons.)
separately when we consider whether plaintiffs presented sufficient evidence to defeat
defendants’ respective motions for summary judgment.
¶ 90 B. Strict Construction v. Liberal Construction
¶ 91 Plaintiffs urge this court to apply a liberal construction of the Act’s requirements. They
correctly point out that our supreme court in United Cork Cos. v. Volland, 365 Ill. 564
(1937), refused to employ strict construction to invalidate a lien with an incorrect completion
date. Contemporary cases still discuss and apply the 1937 United Cork case. See Braun-
Skiba, Ltd. v. La Salle National Bank, 279 Ill. App. 3d 912 (1996); Mutual Services, Inc. v.
Ballantrae Development Co., 159 Ill. App. 3d 549 (1987). Defendants do not appear to
contest plaintiffs’ reading of United Cork, but nevertheless argue that it is inapposite to the
case at bar. Accordingly, defendants argue that this court should strictly construe the Act
against the plaintiffs.
¶ 92 We consider the applicability of United Cork and the doctrine of strict construction to the
completion dates in the present case. In United Cork, the contractor filed a mechanics lien in
February 1931 that stated a completion date of December 1, 1930. 5 United Cork, 365 Ill. at
570. Notwithstanding this stated completion date, the contractor testified that most of the
work was completed by July 1930, and that significant work continued after this date,
including on December 31, 1930. United Cork, 365 Ill. at 570. The contractor further
testified that the work under the contract was not ultimately completed until April 1931, over
a month after the lien claim was filed. United Cork, 365 Ill. at 570. However, the lien claim
5
We note there appears to be a slight discrepancy in United Cork as to the completion
date stated on the lien. The United Cork court first cites the completion date on the lien claim as
December 1, 1930, but later in its opinion and without explanation, the court notes that a lower
court stated the lien claim was December 31, 1930.
30
Nos. 1-12-3784, 1-13-0018 (cons.)
did not seek to charge for any of the work completed after it was filed in February. United
Cork, 365 Ill. at 573.
¶ 93 The court held that although significant work continued after the completion date stated
in the lien, and that although the ultimate completion of the contract did not occur until well
after the contractor filed the claim, the mechanics lien was still valid and enforceable. United
Cork, 365 Ill. at 570-74. The court held that the contractor complied with the statute by filing
within four months of completing the work. See United Cork, 365 Ill. at 572-73. In coming
to this conclusion, the court reasoned:
“The doctrine of strict construction was never meant to be applied
as a pitfall to the unwary, in good faith pursuing the path marked
by the statute, nor as an ambuscade from which an adversary can
overwhelm him for an immaterial misstep. Its function is to
preserve the substantial rights of those against whom the remedy
offered by the statute is directed, and it is never employed
otherwise. ***
*** No charge was attempted to be made for the work
performed [after the contractor filed the lien], and no substantial
right of the defendants was affected by the error.
*** [A] variance between allegations and proof, in order to be
fatal, must be substantial and material.” United Cork, 365 Ill. at
572-73.
¶ 94 We are persuaded by plaintiffs’ argument that United Cork is instructive to our analysis
in the present case. Defendants are correct to point out that United Cork considered the
31
Nos. 1-12-3784, 1-13-0018 (cons.)
completion of work after the lien was filed, and that this case does not present that situation.
However, defendants overlook the fact that United Cork did not invalidate any work
completed before the contractor filed its lien even though the claim’s stated completion date
was clearly incorrect. The only way in which United Cork is distinguishable from the instant
case is that plaintiffs here claim to have completed all of the work before they filed their
liens.
¶ 95 United Cork remains important to our analysis because it provides a framework to
evaluate if the errors made by plaintiffs are material to defendants’ rights. If the errors are not
material, United Cork dictates that we construe the errors liberally to avoid subverting the
Act’s remedial purpose. As quoted above, the United Cork court reasoned that strict
construction is only employed to preserve the rights of parties from whom relief is sought.
¶ 96 The relevant right in the present case is the right of third parties to have notice of a
mechanics lien attached to a property. In Merchants Environmental, this court stated:
"[A] lien claim [must] be filed within a specified time [so] that
'third persons dealing with the property may have notice of the
existence, nature and character of the lien as well as the times
when the material was furnished and labor performed, and thus be
enabled to learn from the claim itself whether it was such as can be
enforced.' " (Emphasis omitted.) Merchants Environmental, 314
Ill. App. 3d at 868-69 (quoting Schmidt v. Anderson, 253 Ill. 29, 32
(1911)).
32
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 97 Accordingly, we must consider whether the plaintiffs’ errors in this case infringed on
defendants’ right to know from the claim itself whether it was an enforceable lien. This is a
right of notice.
¶ 98 Defendants were able to learn from the claims themselves that the liens were facially
enforceable even with the incorrect dates. Whether Bluewater completed work on January 4,
2009, or January 5, 2009, Bluewater sent notice to the Bank within 90 days of completion as
required by section 24. Likewise, whether Premier listed February 27, 2009, or March 4,
2009, on its lien claim is of no consequence to defendants’ right to know whether the claim
was an enforceable lien because both dates are within the four months required by section 7.
Either date would have communicated to a third party like SAI or ERPCED that the lien was
timely filed and enforceable.
¶ 99 As a result, the incorrect dates of completion in plaintiffs’ claims cannot be said to
materially affect defendants’ right of notice under the Act. Therefore, at least in regard to the
completion dates on plaintiffs’ lien claims, we construe the Act’s requirements liberally to
give effect to the Act’s remedial purpose.
¶ 100 C. Judicial Admissions
¶ 101 The trial court found that the completion dates sworn to by plaintiffs in their lien claims
constituted binding judicial admissions. In its oral opinion, the trial court reasoned:
“[C]onsidering the Mutual Services and Braun-Skiba cases[,] ***
the fact that a [completion date] is included in [plaintiffs’ lien
claims] and is a fact and was sworn to by the [plaintiffs] made that
statement a judicial admission which could not be contradicted by
evidence propounded by the [plaintiffs], which in this case means
33
Nos. 1-12-3784, 1-13-0018 (cons.)
that [plaintiffs] cannot attempt to contradict its sworn statement of
the [completion date on their] lien[s] *** by way of evidence that
[the work] may have been completed after that date.
***
*** [I]t’s a judicial admission that cannot be under the law of
Illinois controverted by the party that made the admission by way
of other evidence. It has nothing to do with whether it is a lien
claim or any other claim.”
¶ 102 Judicial admissions are defined as “deliberate, clear, unequivocal statements by a party
about a concrete fact within that party's knowledge.” In re Estate of Rennick, 181 Ill. 2d at
406 (citing Hansen v. Ruby Construction Co., 155 Ill. App. 3d 475, 480 (1987)). They are
“ ‘formal concessions in the pleadings in the case or stipulations by a party or its counsel that
have the [function] of withdrawing a fact from issue and dispensing wholly with the need for
proof of the fact.’ ” Knauerhaze v. Nelson, 361 Ill. App. 3d 538, 557-58 (2005) (quoting John
Williams Strong, McCormick on Evidence § 254, at 142 (4th ed. 1992)); see also Lawlor v.
North American Corp. of Illinois, 409 Ill. App. 3d 149, 163 (2011). In other words, if a fact is
judicially admitted, the adverse party has no need to submit any evidence on that point. The
admission serves as a substitute for proof at trial. Lowe v. Kang, 167 Ill. App. 3d 772, 776
(1988) (judicial admissions “dispens[e] with proof of a fact claimed to be true, and are used
as a substitute for legal evidence at trial” (cited with approval in People v. Howery, 178 Ill.
2d 1, 40-41 (1997))). A verified pleading remains part of the record despite any amendments
to the pleadings “and any admissions not the product of mistake or inadvertence become
binding judicial admissions.” Rynn v. Owens, 181 Ill. App. 3d 232, 235 (1989) (citing
34
Nos. 1-12-3784, 1-13-0018 (cons.)
American National Bank & Trust Co. of Chicago v. Erickson, 115 Ill. App. 3d 1026, 1029
(1983)).
¶ 103 The purpose of judicial admissions “is to remove the temptation to commit perjury.” In
re Estate of Rennick, 181 Ill. 2d at 407 (citing Smith v. Ashley, 29 Ill. App. 3d 932, 935
(1975)). Therefore, a party “cannot create a factual dispute by contradicting a previously
made judicial admission” in a motion for summary judgment or at trial. Burns v. Michelotti,
237 Ill. App. 3d 923, 932 (1992); see also In re Estate of Rennick, 181 Ill. 2d at 406.
¶ 104 To help explain and frame our analysis, we note that the trial court relies on Mutual
Services, 159 Ill. App. 3d 549, and Braun-Skiba, 279 Ill. App. 3d at 912. The Mutual
Services and Braun-Skiba courts relied entirely on the case law and principles unique to
mechanics liens to bind plaintiffs to the completion dates on their claims.
¶ 105 Consequently, we consider whether the completion dates in plaintiffs’ lien claims
constitute judicial admissions under Mutual Services and Braun-Skiba, as well as whether the
completion dates are binding under the broader doctrine of judicial admissions.
¶ 106 1. Under Mutual Services and Braun Skiba
¶ 107 Defendants argue that plaintiffs are barred from presenting evidence of any completion
date after the incorrect date stated on their liens. For example, defendants argue that
Bluewater cannot assert January 5, 2009, as its new completion date because that is after the
January 4, 2009, completion date stated in the lien. Defendants rely on Mutual Services and
Braun-Skiba.
¶ 108 We are not persuaded by defendants’ arguments that Mutual Services and Braun-Skiba
bar plaintiffs from presenting evidence of a later completion date. Defendants correctly note
that the courts in Mutual Services and Braun-Skiba found that the plaintiffs in those cases
35
Nos. 1-12-3784, 1-13-0018 (cons.)
were bound by the completion dates stated on their lien claims and that those plaintiffs could
not contradict the dates with later evidence. See Mutual Services, 159 Ill. App. 3d at 553-54;
Braun-Skiba, 279 Ill. App. 3d at 917-18. However, unlike the claims in the present case, the
lien claims in Mutual Services and Braun-Skiba were invalid on their face and, thus, are
easily distinguished. See Mutual Services, 159 Ill. App. 3d at 551; Braun-Skiba, 279 Ill. App.
3d at 918.
¶ 109 In Mutual Services, the plaintiff filed a mechanics lien that stated a completion date more
than four months prior to the filing of the claim. Mutual Services, 159 Ill. App. 3d at 551. In
Braun-Skiba, the plaintiff mistakenly filed a lien with a typographical error, stating a
completion date more than two years prior to filing. In both cases, “the lien[s] appeared to be
invalid on [their] face, [and] the plaintiff[s] argued that [the liens] should be enforced
because [they] misstated the required date on the lien and the actual date of completion was
one within the mandatory filing period.” Braun-Skiba, 279 Ill. App. 3d at 917 (citing Mutual
Services, 159 Ill. App. 3d at 552).
¶ 110 These are not insignificant distinctions. As the court in Mutual Services noted, “The
purpose of the requirement [to file within the statutory period] is to give third parties dealing
with the property notice of the existence, nature and character of a lien and thus enable third
parties to determine from the claim itself whether the lien is enforceable.” Mutual Services,
159 Ill. App. 3d at 553. The lien claims in Mutual Services and Braun-Skiba could not have
possibly informed third parties that the lienable work was actually completed within four
months of the filing of the liens. On the contrary and on their face, the lien claims stated that
the work was completed well outside the enforceable statutory period. Therefore, if the
courts in Mutual Services and Braun-Skiba were to allow the plaintiffs in those cases to
36
Nos. 1-12-3784, 1-13-0018 (cons.)
amend their lien claims to reflect later completion dates, it would have misled third parties to
believe the claims were unenforceable. In Braun-Skiba, the court explicitly noted the
difference between facially valid and invalid claims as they related to United Cork and
Mutual Services:
“What is also important in United Cork is that the lien was valid on
its face and could properly serve as notice to third parties. In the
present case [(Braun-Skiba)], however, the lien is invalid on its
face and, therefore, under the principles addressed in Mutual
Services, it is not enforceable against defendant, a third party.”
Braun-Skiba, 279 Ill. App. 3d at 918.
¶ 111 However, in the present case, both claims did appear to be timely filed and enforceable.
Since section 7 required the liens to be filed within four months of completing work that was
done at the property, both liens were valid on their face. Additionally, based on the
completion date stated on the face of Bluewater’s lien clam, Bluewater timely notified the
Bank within 90 days as required under section 24 of the Act. In fact, not only were the
completion dates stated on plaintiffs’ liens within the requisite statutory periods, the
amendment plaintiffs requested would also be within the requisite statutory periods. As a
result, third parties would not be misled to believe the liens were unenforceable, and the
rights of third parties would not be compromised.
¶ 112 2. Judicial Admissions in General
¶ 113 Having found that Mutual Services and Braun-Skiba do not bar plaintiffs from asserting
later completion dates under the facts of the case at bar, we next consider whether the
broader doctrine of judicial admissions precludes plaintiffs from presenting evidence of any
37
Nos. 1-12-3784, 1-13-0018 (cons.)
completion date other than the date stated in their lien claims. First, we consider the basic
principles that underlie the doctrine of judicial admissions. Second, we discuss the diverging
standards of our review of judicial admissions. Third, we apply the principles, function,
purposes, and standards of review to the trial court’s findings in the case at bar. Finally, we
consider defendants’ additional arguments that other statements made by plaintiffs, but not
considered by the trial court, also constitute binding judicial admissions.
¶ 114 a. Principles, Function, and Purpose of Judicial Admissions
¶ 115 “An admission by a party is substantive evidence admissible as an exception to the rule
excluding hearsay.” In re Estate of Rennick, 181 Ill. 2d 395, 406 (1998). A party may
contradict or explain an ordinary evidentiary admission; however, judicial admissions
“conclusively bind a party.” In re Estate of Rennick, 181 Ill. 2d at 406 (citing Michael H.
Graham, Cleary & Graham's Handbook of Illinois Evidence § 802.11, at 616 (5th ed. 1990),
and McCormack v. Haan, 20 Ill. 2d 75, 78 (1960)). Accordingly, “ ‘[t]he doctrine of judicial
admissions requires thoughtful study for its application so that justice not be done on the
strength of a chance statement made by a nervous party.’ ” Smith v. Pavlovich, 394 Ill. App.
3d 458, 468 (2009) (quoting Thomas v. Northington, 134 Ill. App. 3d 141, 147 (1985)).
¶ 116 b. Diverging Standards of Review in Judicial Admissions
¶ 117 We must also consider the standard of review that applies to the trial court's finding that
the completion dates in plaintiffs' lien claims constituted judicial admissions. There are two
lines of cases concerning the proper standard. Crittenden v. Cook County Comm'n on Human
Rights, 2012 IL App (1st) 112437, ¶ 46. The first, established in 1987 by this court in Hansen
v. Ruby Construction Co., 155 Ill. App. 3d 475, 480 (1987), considers the issue as a question
of law subject to de novo review. Crittenden, 2012 IL App (1st) 112437, ¶ 46 (citing Choate
38
Nos. 1-12-3784, 1-13-0018 (cons.)
v. Indiana Harbor Belt R.R. Co., 2011 IL App (1st) 100209, ¶ 86; Herman v. Power
Maintenance & Constructors, LLC, 388 Ill. App. 3d 352, 360 (2009); Elliott v. Industrial
Comm'n, 303 Ill. App. 3d 185, 187 (1999)). De novo consideration means the reviewing
court performs the same analysis that a trial judge would perform. Khan v. BDO Seidman,
LLP, 408 Ill. App. 3d 564, 578 (2011). The de novo standard of review derives from the
requirement that a judicial admission be a " 'deliberate, clear, unequivocal statement of a
party about a concrete fact within that party's peculiar knowledge' " and is based on the
determination that the question of whether the statement is equivocal is one of law and not
fact. Crittenden, 2012 IL App (1st) 112437, ¶ 46 (quoting Hansen, 155 Ill. App. 3d at 480).
¶ 118 The second line of cases, beginning in 1988 with Lowe, 167 Ill. App. 3d at 777, applies
an abuse of discretion standard of review. Crittenden, 2012 IL App (1st) 112437, ¶ 47 (citing
Serrano v. Rotman, 406 Ill. App. 3d 900, 907 (2011), Smith, 394 Ill. App. 3d at 468, and
Dremco, Inc. v. Hartz Construction Co., 261 Ill. App. 3d 531, 536 (1994)). “An abuse of
discretion occurs when no reasonable person would take the view adopted by the court.”
Trettenero v. Police Pension Fund, 333 Ill. App. 3d 792, 801 (2002) (citing In re Marriage of
Blunda, 299 Ill. App. 3d 855, 865 (1998)). The abuse of discretion standard focuses on the
context of the purported admission:
“What constitutes a judicial admission must be decided under the
circumstances in each case, and before a statement can be held to
be such an admission, it must be given a meaning consistent with
the context in which it was found. [Citation.] It must also be
considered in relation to the other testimony and evidence
39
Nos. 1-12-3784, 1-13-0018 (cons.)
presented.” Serrano, 406 Ill. App. 3d at 907 (citing Smith, 394 Ill.
App. 3d at 468).
¶ 119 We note that both the cases advocating for de novo review and the cases applying the
abuse of discretion standard of review agree on the same basic framework to be applied in
determining whether a statement is deemed a judicial admission. Thus, a case applying the
abuse of discretion standard still requires the statement to be “clear, unequivocal, and
uniquely within the party's personal knowledge” (Serrano, 406 Ill. App. 3d at 907 (citing
Williams Nationalease, Ltd. v. Motter, 271 Ill. App. 3d 594, 597 (1995))), and a case
applying de novo review also looks at the context of the statement. See Herman, 388 Ill. App.
3d at 361 (noting that the doctrine should not be applied to an attorney's statement of legal
opinion in a summary judgment proceeding, “especially if the opinion was manifestly
incorrect within the context of the statement itself”).
¶ 120 c. Trial Court’s Findings of Judicial Admissions
¶ 121 In the case at bar, regardless of the standard of review applied and in light of the
principles, purpose, and functions of both the Act and the doctrine of judicial admissions, we
cannot find that the completion dates in plaintiffs’ lien claims constituted binding judicial
admissions. As previously concluded in our discussion of United Cork, we must liberally
construe the requirements of the Act in the case at bar to give effect to the Act’s remedial
purpose. In doing so, we also thoughtfully apply the doctrine of judicial admissions " 'so that
justice not be done on the strength of a chance statement.' " Smith, 394 Ill. App. 3d at 468
(quoting Thomas, 134 Ill. App. 3d at 147).
¶ 122 First, we note that finding that the completion dates stated in plaintiffs’ lien claims
constituted judicial admissions would create the very type of “ambuscade” for immaterial
40
Nos. 1-12-3784, 1-13-0018 (cons.)
missteps that United Cork so emphatically denounced. See United Cork, 365 Ill. at 572.
When we view the criteria for judicial admissions alongside what plaintiffs are already
required to do under the law of mechanics liens, the pitfalls for plaintiffs become apparent.
¶ 123 As noted, with regards to the dates, section 7 of the Act requires only that a contractor
file a lien within four months of completion and that the lien be verified by an affidavit. 765
ILCS 60/7 (West 2008). In addition, this court has inferred that section 7 also requires a valid
lien to state a date of completion. See Merchants Environmental, 314 Ill. App. 3d 848. Also
as noted, judicial admissions are deliberate, clear, unequivocal statements about a concrete
fact uniquely within plaintiffs’ knowledge. In re Estate of Rennick, 181 Ill. 2d at 406 (citing
Hansen, 155 Ill. App. 3d at 480).
¶ 124 Plaintiffs are required under section 7 of the Act to state and swear to a date within four
months of completion in order to enforce their liens. See Merchants Environmental, 314 Ill.
App. 3d 848; see also 770 ILCS 60/7 (West 2008). Indeed, to further bind plaintiffs to their
mistaken, but facially valid date of completion because plaintiffs swore to that date as
required by the Act would elevate form over substance. It would require “perfection” above
and beyond what is necessary or desirable to preserve the rights of third parties to notice and
would not give effect to the remedial purpose of the statute. Plaintiffs, after working on a
property in good faith of future payment, and after complying with every requirement on the
face of the Act, should not have their lien claims defeated because the actual date of
completion was mistakenly recorded by plaintiffs, when the mistaken date and the correct
date are both within the time periods required by sections 7 and 24 of the Act.
¶ 125 Second, we are not persuaded by defendants’ argument that the doctrine of judicial
admissions is necessary to deter perjury in this case. As noted, a verified pleading remains
41
Nos. 1-12-3784, 1-13-0018 (cons.)
part of the record despite any amendments to the pleadings. Rynn, 181 Ill. App. 3d at 235
(citing Erickson, 115 Ill. App. 3d at 1029). Thus, allowing plaintiffs to present evidence of a
different completion date does not give them free rein to game the judicial process. Lien
claimants still must present sufficient evidence that they completed the work within four
months of filing to defeat summary judgment, and claimants still must persuade the finder of
fact that they completed the work within that timeframe. See Tefco Construction Co. v.
Continental Bank & Trust Co., 357 Ill. App. 3d 714, 718-19 (2005) (claimants have burden
to prove they complied with the Act’s requirements). Allowing lien claimants to present
evidence of a facially valid completion date other than the facially valid completion date
already stated on their lien claims would permit claimants to avoid summary judgment, but
would still risk jeopardizing their credibility before the fact finder. In fact, the first
completion date stated by plaintiffs would remain on the record. See Rynn, 181 Ill. App. 3d at
235. Accordingly, claimants still have sufficient incentive at the outset to provide the correct
completion date on their mechanics lien claim.
¶ 126 Third, we again note that “any admissions not the product of mistake or inadvertence
become binding judicial admissions.” (Emphasis added.) Rynn, 181 Ill. App. 3d at 235 (citing
Erickson, 115 Ill. App. 3d at 1029). As “penalizing confusion or an honest mistake is not
among the purposes of the doctrine of judicial admissions, it must appear that the party
making the statement had no reasonable possibility of being mistaken in order for the
statement to qualify as a judicial admission.” Herman, 388 Ill. App. 3d at 361 (citing Trapkus
v. Edstrom's, Inc., 140 Ill. App. 3d 720, 723 (1986)). In the present case, both plaintiffs
claim to have made a mistake and we cannot say their claims are not reasonable
42
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 127 It could be reasonable that Bluewater mistakenly stated its completion date on a
mechanics lien as January 4, 2009, when completion was in fact January 5, 2009. Filing a
mechanics lien is likely and preferably a last resort for contractors when they have not been
paid. In the present case, Bluewater did not immediately file a claim for mechanics lien when
it discontinued work. Instead, as stated in Bluewater’s “timeline” of the project and
corroborated by the emails in its original document production, Kiferbaum “made several
attempts to resolve payment issues without success” in January, met with the owner of the
property who promised “to work out partial payment in the near future” in February, and
followed up with the owner in March after “he ha[d] not heard anything” from the owner
since their February meeting. It was in April, three months after discontinuing work and just
before the opportunity to file its lien claim expired, when Bluewater ultimately turned to the
legal system to resolve the dispute. In this context, it may not be unreasonable that Bluewater
misstated its date of completion by one day.
¶ 128 It could also be reasonable that Premier misstated its completion date. Premier stated the
completion date on its lien claim as Friday, February 27, 2009, but now claims the
completion date was actually Wednesday, March 4, 2009. Joseph testified in his deposition
that Harris wrote him a check on that Friday and requested that Premier come back the next
week to complete the project. Premier produced a copy of this check. He testified that the
next Monday and Tuesday were too cold to complete the work, but that Premier employees
were ultimately able to complete the project that Wednesday. In fact, Joseph testified about
numerous times Premier’s schedule was interrupted by weather conditions beyond its control.
He also testified that cold weather prevented Premier from applying the silver coat to the
roof. He testified that other contracting projects on the site repeatedly prevented Premier
43
Nos. 1-12-3784, 1-13-0018 (cons.)
from continuing its work, and that Premier could only complete its project on March 4 after
the bricklayer had “finished with the wall to cleaning them up and pointing them.” With the
sporadic nature of Premier’s schedule, it could be reasonable that Premier misstated its
completion date by five days.
¶ 129 Furthermore, Bluewater and Premier are not large corporations with the extensive
resources necessary to keep absolutely meticulous and unmistaken records. They are “ma”
and “pa” small businesses. Kiferbaum is Bluewater’s only employee, the Birts operate
Premier from their home, and Ann is Premier’s sole secretary. According to Joseph’s
deposition testimony, Ann did not know exactly what to look for when gathering the
documents for discovery as “this has never happened [to them] before.”
¶ 130 Finally, it is not at all certain that the dates were deliberate, clear, unequivocal statements
about a concrete fact uniquely within plaintiffs’ knowledge. In re Estate of Rennick, 181 Ill.
2d at 406 (citing Hansen, 155 Ill. App. 3d at 480). Both Kiferbaum and Joseph testified that
they had to rely on documents to remember the date of completion, and both Bluewater and
Premier produced affidavits from other individuals involved with the property addressing the
dates work was scheduled and performed. Bluewater’s lien claim stated it had “substantially”
completed the work on January 4, 2009, and Kiferbaum testified in his deposition that he had
to “estimate” the completion date from the timeline and documents. Premier’s lien claim
appears to be a fill-in-the-blank form document that would give little reason to a contractor to
hedge or qualify the completion date with cautious equivocation.
¶ 131 For the foregoing reasons, we find, that under either standard of review, that the trial
court erred when it found that the completion dates stated in plaintiffs’ lien claims constituted
binding judicial admissions.
44
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 132 d. Additional Statements Alleged to be Judicial Admissions
¶ 133 Defendants also argue that plaintiffs made other judicial admissions of incorrect
completion dates. The trial court did not address these arguments, but we briefly consider
them as we may affirm a trial court’s grant of summary judgment on any grounds in the
record. Ray Dancer, 230 Ill. App. 3d at 50. Defendants contend (1) that plaintiffs are bound
to the incorrect date of completion as repeated in their verified pleadings and in Bluewater’s
motion for summary judgment; and (2) that both plaintiffs respectively made judicial
admissions of additional incorrect completion dates during discovery. We find defendants’
arguments unpersuasive.
¶ 134 First, the same doctrine of judicial admissions that we applied to the incorrect completion
dates in plaintiffs’ mechanics lien claims applies to the repetition of those dates in plaintiffs’
pleadings. Since we did not find the incorrect dates on their mechanics liens constituted
judicial admissions, we do not find that the incorrect dates in their pleadings constitute
binding judicial admissions. The pleadings merely reflect what was stated on the lien claims.
¶ 135 Additionally, plaintiffs did not bind themselves to any other completion date during the
course of discovery. In the case of Bluewater, Kiferbaum was equivocal in his deposition
about the December 27, 2008, date. When we read his entire deposition, it is clear that
Kiferbaum never unconditionally admitted to the date. When asked whether it was
Bluewater’s last day of work on the property, Kiferbaum first responded, “No.” When asked
again, he responded, “Not necessarily.” When Kiferbaum did say that the last day of work
was December 27, he did so only after he was pressed to answer “based on [the] checks”
placed before him in the deposition. Moreover, Bluewater produced emails in its original
document production that occurred after December 27, 2008, which indicated that work was
45
Nos. 1-12-3784, 1-13-0018 (cons.)
then ongoing on the property. Kiferbaum also testified to these emails in his deposition.
Thus, Kiferbaum did not deliberately, clearly, and unequivocally admit to a binding
completion date of December 27, 2008, in his deposition testimony.
¶ 136 Premier is not bound to the December 29, 2008, date stated in its first answer to
defendants’ written interrogatories. The December 29 date was plainly premised on the
documents that Premier attached to its first answer. When Premier uncovered more
documents that evidenced a later completion date, it timely served an amended answer
reflecting these new documents. Indeed, parties should not be discouraged from presenting
new evidence and documents which they may have originally overlooked.
¶ 137 D. Additional Arguments Against Enforceability
¶ 138 1. Brief Statement of Contract
¶ 139 In relevant part, section 7 of the Act requires a mechanics lien claim to include a “a brief
statement of the claimant's contract.” 770 ILCS 60/7 (West 2008). Defendants argue (1) that
Bluewater failed to comply with section 7 of the Act because it misdescribed its contract with
the owner as “written,” and (2) that Premier failed to comply with section 7 because the lien
claim stated that the contract was between Joseph and Premier on one hand, and Harris and
SMH Development on the other hand, when its counter-complaint alleged “the actual
contract was between Premier and SMH Development.”
¶ 140 It is important to note that defendants do not argue that plaintiffs failed to include a “brief
statement” of their contracts, but instead argue that plaintiffs’ claims are invalid because they
did not provide accurate brief statements of their contracts. For the proposition that
inaccurate statements about a contract invalidate a lien, defendants rely on Ronning
46
Nos. 1-12-3784, 1-13-0018 (cons.)
Engineering Co., v. Adams Pride Alfalfa Corp., 181 Ill. App. 3d 753 (1989), and Candice
Co., v. Ricketts, 281 Ill. App. 3d 359, 364 (1996).
¶ 141 Both the Ronning and Candice cases concerned significant inaccuracies in the plaintiffs’
descriptions of their written contracts and are distinguishable from the case at bar. See
Ronning, 181 Ill. App. 3d at 753 (holding that a lien claim “did not contain a sufficient ‘brief
statement of the contract’ ” because “the claim for lien described the wrong contract”); see
also Candice, 281 Ill. App. 3d at 363-64 (holding that, where the original contractor assigned
its rights to a lien claim to the plaintiff, the lien claim was defective because the plaintiff
inaccurately described itself as the original contracting party). Neither Ronning nor Candice
states that a description of a contract must be absolutely correct and perfect to be enforceable.
On the contrary, the language used by both courts suggests that a lien claim need only a
sufficiently correct description of a contract to be enforceable. See Candice, 281 Ill. App. 3d
at 364 (“The Ronning court concluded that, based on these facts, the lien was invalid because
it did not contain a sufficient statement of the contract forming the basis of the claims.”).
¶ 142 In the present case, the errors defendants claim plaintiffs made are nowhere near as
grievous as the errors in Ronning and Candice. Though Bluewater did not produce a singular
“written” contract signed by the parties, Bluewater produced numerous written
correspondences, emails, proposals, and change orders that evidence a written agreement and
performance of that agreement with the owner. Additionally, while Joseph may not have
described the exact capacities he and Harris were acting in when they contracted together,
Premier’s description of the parties is substantially correct. In the end, there is no doubt that
Premier was contracting with Harris or one of the entities in which Harris was the sole
47
Nos. 1-12-3784, 1-13-0018 (cons.)
member-manager. Therefore, plaintiffs provided sufficiently accurate “brief statement[s] of
[their] contract[s]” to comply with section 7 of the Act.
¶ 143 2. Amount Due Under Bluewater’s Lien
¶ 144 Defendants argue that Bluewater “knowingly grossly overstated” that it provided work
with a value of $131, 755. Thus, defendants argue, Bluewater’s claim is void under section 7
because it is “constructively fraudulent.”
¶ 145 Section 7 of the Act provides that no lien “shall be defeated to the proper amount thereof
because of an error or overcharging on the part of any person claiming a lien therefor under
this Act, unless it shall be shown that such error or overcharge is made with intent to
defraud.” 770 ILCS 60/7 (West 2008). The intent to defraud is shown “ ‘by executed
documents that on their face overstate the amount due in combination with some other
evidence of record from which intent could be inferred.’ ” (Emphasis in original.) Cordeck
Sales, Inc. v. Construction Systems, Inc., 382 Ill. App. 3d 334, 373 (2008) (quoting Peter J.
Hartmann Co. v. Capitol Bank & Trust, Co. 353 Ill. App. 3d 700, 708 (2004)).
¶ 146 “A [mechanics lien] claimant who knowingly makes a false statement regarding a
material matter should not be allowed to recover because the effect of his actions is to give
the appearance of a greater encumbrance on the property than that to which he is entitled.”
(Internal quotation marks omitted.) Peter J. Hartmann Co., 353 Ill. App. 3d at 706. However,
“Illinois courts have long held that this provision is intended to protect the honest lien
claimant who makes a mistake rather than a dishonest claimant who knowingly makes a false
statement.” Bank of America National Trust & Savings Ass’n v. Zedd Investments, Inc., 276
Ill. App. 3d 998, 1000-01 (1995) (citing Christian v. Allee, 104 Ill. App. 177, 188 (1902)).
48
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 147 Where a lien claimant (1) knowingly (2) files a lien containing a “substantial
overcharge,” the claim should be defeated on the basis of constructive fraud. Cordeck Sales,
Inc., 382 Ill. App. 3d at 371 (citing Peter J. Hartmann Co., 353 Ill. App. 3d at 708).
However, in the present case, defendants have neither shown that Bluewater knowingly filed
its lien with a substantial overcharge nor that the alleged overcharge is substantial enough to
constitute constructive fraud.
¶ 148 Defendants attempt to use Kiferbaum’s deposition testimony and a check paid from
Bluewater to Kiferbaum as “the other evidence of record” to demonstrate that Kiferbaum had
the knowing intent to defraud. See Cordeck Sales, 382 Ill. App. 3d at 373. However,
Kiferbaum’s testimony does not imply that Bluewater “knowingly grossly overstated” the
amount due as defendants claim. On the contrary, Kiferbaum’s testimony was that he
estimated the amount to his “best recollection based on material purchased, based on ***
what [his] judgment as the contractor, as the subcontractor was.” Moreover, the fact that
Kiferbaum testified he could be “off” as to his estimate is not evidence of fraud, but merely
an admission that he and his calculations were fallible. Furthermore, we do not find
Kiferbaum’s statements that his father paid for and completed the cement work evidence of
constructive fraud. Kiferbaum clearly states that the plan was for Bluewater to reimburse his
father for the work. Additionally, the check paid from Bluewater to Kiferbaum is not
evidence of constructive fraud, but rather appears to be reimbursement for material
purchases.
¶ 149 Additionally, defendants cite no previous cases that found constructive fraud with
overcharges similar to the alleged overcharge in the case at bar. However, plaintiffs cite
several cases that demonstrate constructive fraud is typically found where there are
49
Nos. 1-12-3784, 1-13-0018 (cons.)
significantly greater overcharges than those found here. See, e.g., Bank of America National
Trust & Savings, 276 Ill. App. 3d at 999 (finding that “lien claims should be defeated on the
basis of constructive fraud where a lien claimant files multiple liens that create the
appearance of an encumbrance on the property which is substantially greater than the amount
the claimant is owed” (emphasis added)); see also Lohmann Golf Designs, Inc. v. Keisler,
260 Ill. App. 3d 886 (1994) (finding that a contractor engaged in constructive fraud when it
(1) filed three separate lien claims on three different properties, and (2) each lien claim
sought the aggregate value of all three properties combined, overcharging each property and
effectively tripling the aggregate amount due to the contractor). Thus, we cannot say that the
amount stated on Bluewater’s lien claim constitutes a substantial overcharge on its face, or
on the evidence presented in the motion for summary judgment and the response.
¶ 150 E. Conclusion
¶ 151 In sum, plaintiffs’ lien claims are enforceable on their face, since (1) the incorrect dates
on plaintiffs’ liens do not invalidate their claims; (2) plaintiffs’ statements of incorrect dates
do not constitute binding judicial admissions; (3) plaintiffs complied with section 7’s
requirement to provide a “brief statement of the contract” on their lien claims; and (4) the
amount owed as stated in Bluewater’s lien claim is not constructive fraud on its face, or on
the evidence presented in the motion for summary judgment and the response.
¶ 152 IV. Motions for Leave to Amend
¶ 153 Since plaintiffs’ lien claims are facially enforceable, we next consider whether the trial
court erred when it denied plaintiffs’ motions for leave to amend their complaints with the
new completion dates. Again, we note that the trial court’s denial of plaintiffs’ motions for
50
Nos. 1-12-3784, 1-13-0018 (cons.)
summary judgment was premised on its finding that plaintiff’s statements constituted binding
judicial admissions:
“[The motion for leave to amend is] denied for the same reasons
[the trial court] ha[s] to grant summary judgment, that [plaintiffs]
cannot salvage this lien by virtue of the evidence of work that was
alleged to have been done after the sworn date.”
We also note that section 12 of the Mechanics Lien Act provides that “[t]he court shall
permit amendments to any part of the pleadings, and may issue process, [and] make all orders
*** that are or may be authorized in other civil actions.” (Emphases added.) 770 ILCS 60/12
(West 2008).
¶ 154 The trial court's decision of whether to grant a motion to amend pleadings is within the
discretion of the trial court, and the reviewing court will not reverse the trial court's decision
absent an abuse of discretion. Shutkas Electric, Inc. v. Ford Motor Co., 366 Ill. App. 3d 76,
82 (2006). “An abuse of discretion occurs when no reasonable person would take the view
adopted by the court.” Trettenero v. Police Pension Fund, 333 Ill. App. 3d 792, 801 (2002)
(citing In re Marriage of Blunda, 299 Ill. App. 3d 855, 865 (1998)). “In considering whether
the trial court has abused its discretion in denying plaintiff's motion for leave to file a second
amended complaint, we look to the following four factors: *** (1) [whether] the proposed
amendment would cure the defective pleading; (2) [whether] other parties would sustain
prejudice or surprise by virtue of the proposed amendment; (3) [whether] the proposed
amendment is timely; and (4) [whether] previous opportunities to amend the pleading could
be identified. [Citation.]” Shutkas Electric, Inc. v. Ford Motor Co., 366 Ill. App. 3d 76, 82
(2006).
51
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 155 Defendants’ argument that plaintiffs’ proposed amendment would be futile and would not
cure their defective pleadings is not persuasive. Defendants’ argument is premised on the
trial court’s finding that plaintiffs are bound to their prior written completion dates. Since the
completion dates stated on plaintiffs’ lien claims are not binding judicial admissions,
plaintiffs’ proposed amendments are not futile and would cure the defective pleading.
¶ 156 Moreover, defendants would not sustain undue hardship or surprise if plaintiffs were
granted leave to amend. Since the first dates given on the filing of the mechanics lien and the
requested amended dates are both within the statutory periods required by the Act, both dates
are timely and defendants cannot claim prejudice. See 770 ILCS 60/7, 24 (West 2008); see
also United Cork, 365 Ill. at 573 (holding that “variance between allegations and proof, in
order to be fatal [to a lien claim], must be substantial and material[ly affect defendants’
rights]”); Merchants Environmental, 314 Ill. App. 3d at 861 (noting that requiring
completion dates to be stated on lien claims protects the rights of third parties to notice that
the lien claim is enforceable).
¶ 157 Finally while we acknowledge Premier was granted leave to amend its complaint early in
2012, we are not persuaded by defendants’ argument that this opportunity alone is sufficient
to preclude Premier from further opportunities to amend its complaint.
¶ 158 As noted, “any admissions not the product of mistake or inadvertence become binding
judicial admissions.” (Emphasis added.) Rynn, 181 Ill. App. 3d at 235-36 (citing Erickson,
115 Ill. App. 3d at 1028). Since “penalizing confusion or an honest mistake [is] not among
the purposes of the doctrine of judicial admissions, it must [be shown] that the party making
the statement had no reasonable possibility of being mistaken in order for the statement to
52
Nos. 1-12-3784, 1-13-0018 (cons.)
qualify as a judicial admission.” Herman, 388 Ill. App. 3d at 361 (citing Trapkus v.
Edstrom's, Inc., 140 Ill. App. 3d 720, 723 (1986)).
¶ 159 As a result, we cannot find that a reasonable court would have denied plaintiffs’ motions
for leave to amend their complaints with new completion dates.
¶ 160 V. Motions for Summary Judgment
¶ 161 Since (1) plaintiffs’ lien claims are valid and enforceable on their face, and (2) plaintiffs
should have been granted leave to amend their complaints with new completion dates, we
now consider whether the trial court erred when it granted defendants’ motions for summary
judgment and denied Bluewater’s motion for summary judgment.
¶ 162 A. Bluewater
¶ 163 We first consider whether Bluewater produced sufficient evidence to establish a genuine
issue of material fact that it provided timely notice to the Bank under section 24 of the Act.
Section 24 provides that “[s]ub-contractors *** at any time after making his or her contract
with the contractor *** shall within 90 days after the completion [of work] *** cause a
written notice of his or her claim and the amount due or to become due thereunder, to be sent
*** to the lending agency.” 770 ILCS 60/24 (West 2008). In other words, in order to defeat
summary judgment, Bluewater must have produced evidence that it completed work on the
property within 90 days of serving the Bank with notice of its lien claim. See 735 ILCS 5/2-
1005(c) (West 2008).
¶ 164 As previously noted, Bluewater served the Bank with notice of its lien on the property
when Bluewater recorded its lien claim on April 3, 2009, stating that they completed their
work on January 4, 2009. Bluewater was not able to produce evidence that work occurred on
53
Nos. 1-12-3784, 1-13-0018 (cons.)
that date and now claims that that date was mistaken and that work was completed on
January 5, 2009.
¶ 165 To establish that work occurred on January 5, 2009, Bluewater primarily relies on the
sworn verified affidavit of Keith Thomas, senior project manager for SMH. Thomas avers
that on Monday, December 29, 2008, he approved Bluewater to perform $4,600 of cement
work on the property on Monday, January 5, 2009. 6 Thomas also avers that the cement work
was completed, but does not specifically claim that it was in fact completed on January 5 or
on any other date.
¶ 166 In his discovery deposition, Kiferbaum was questioned about the cement work. He
testified that his father, Hanan Kiferbaum, paid for the concrete work and that “the idea was
that Bluewater was going to reimburse him on that particular item.” However, Hanan was
“reimbursed for that” and Kiferbaum could not recall which date his father performed the
concrete work. When Kiferbaum was asked whether Bluewater had ever employed anyone
other than himself, Kiferbaum responded, “At one point, and I don’t know if it’s considered
to be as an employee or subcontractor, my father, Hanan Kiferbaum, had worked on projects
with me.”
¶ 167 Bluewater produced sufficient evidence to establish a genuine issue of material fact as to
whether it completed work within 90 days of notifying the Bank of its lien claim. Bluewater
produced an email evidencing an agreement to complete cement work within the 90-day
period. This agreement took place just three days before the 90-day period began. Moreover,
Thomas, who is not affiliated with Bluewater, corroborated in his sworn affidavit that the
agreement to do the cement work did occur on December 29, 2008, and that the work subject
6
In its original document production, Bluewater produced the email in which Thomas
approved the January 5, 2009, cement work.
54
Nos. 1-12-3784, 1-13-0018 (cons.)
to this agreement was ultimately completed. In addition, Kiferbaum testified that his father
completed the cement work. While Kiferbaum was unsure whether to call his father an
employee of Bluewater and unsure about the exact date his father performed the cement
work, Kiferbaum testified that the plan was for Bluewater to reimburse his father for the
work.
¶ 168 In light of the foregoing evidence, the trial court erred when it granted defendants’
motion for summary judgment against Bluewater because the evidence establishes a genuine
issue of material fact as to whether Bluewater notified the Bank within 90 days of work
completion. For the same reason, the trial court properly denied Bluewater’s motion for
summary judgment against defendants.
¶ 169 B. Premier
¶ 170 Finally, we consider whether Premier produced sufficient evidence to create a genuine
issue of material fact as to whether Premier timely recorded its lien claim under section 7 of
the Act. Section 7 provides that, in order to be enforceable against third parties, a lien
claimant must file or record a lien claim “within 4 months after completion.” 770 ILCS 60/7
(West 2008).
¶ 171 As noted, Premier recorded its lien claim on June 26, 2009. Subtracting four months from
this date, February 26, 2009, is the earliest date that Premier could have completed work on
the property to comply with section 7. Thus, Premier must produce evidence that it
completed work on the property on or after February 26, 2009. On its lien claim, Premier
originally stated that February 27, 2009, was its date of completion. However, Premier was
not able to produce evidence that work occurred on that date. Nevertheless, Premier now
claims that the date was mistaken and that work was actually completed on March 4, 2009.
55
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 172 To establish that work occurred on March 4, 2009, Premier submitted a timesheet
reflecting that date as well as the sworn verified affidavits of Ann Birt, Jack Hartnett, a
foreman for Premier on the property, and Christopher Birt, Joseph’s brother and an employee
of Premier.
¶ 173 Ann’s affidavit stated that she “manually searched for time records *** as part of the
original document production” and found timesheets from “November 14, 2008 through
December 29, 2008.” Ann also stated that after the original document production, Joseph
“informed her that he believed that December 29, 2008, was not the last of work on [the]
project because the work was not finished when he received” the check from Harris on
February 27, 2009. She stated: “At [Joseph’s] request I re-examined our time record books
including the records for 2009 and noted that I overlooked a time sheet for March 4, 2009, a
true and accurate copy of which is attached to this affidavit.”
¶ 174 Hartnett’s affidavit stated that, as a foreman on the project, “the last day [he] recall[ed]
working on the project was on March 4, 2009.” He stated that he completed the time record
that Ann stated she initially overlooked. Moreover, Hartnett stated that on December 29,
2008, “snow and ice prevented installing permanent flashing around the skylight curbs that
had been cut into the roof but [he] recall[ed was] not finished.” He stated that temporary
flashings were installed until Premier could install ones that were permanent. Hartnett stated
that the reason why the work was not completed until March 4, 2009, was because “there was
adverse weather (snow, ice and cold) which prevented the brick masons from repairing
work” and because the “mortar joints were deteriorated so that [Premier] could not attach the
termination bar and counter-flashing without brick masons first repairing that part of the
wall.”
56
Nos. 1-12-3784, 1-13-0018 (cons.)
¶ 175 Christopher Birt’s affidavit stated he recalled “after December 29, 2008, work was
suspended due to weather [conditions] and due to the fact that other trades did not complete
installing the HVAC units on the roof until February 2, 2009.” Christopher stated that
“[o]ften work is interrupted due to adverse weather conditions such as freezing temperatures
which may cause the Johns Mansville roofing material [Premier] used on the roof to crack
and/or not adhere properly to the underlayment” and that “work is often delayed until other
trade complete their involving roof penetrations[,] such as piping, mechanical units, skylights
curbs, and other such items.” Finally, he stated that he completed the project on March 4,
2009, “including the flashing and priming [of the roof].”
¶ 176 Premier produced sufficient evidence to establish a genuine issue of material fact as to
whether it completed work within four months of filing its lien claim. Premier produced not
one, but three affidavits stating in detail the reasons for the original incorrect completion date
and the reason work was not completed until March 4, 2009. Given the foregoing evidence,
the trial court erred when it granted defendants’ motion for summary judgment against
Premier.
¶ 177 CONCLUSION
¶ 178 In conclusion, (1) the Bank has not yet released its mortgage and has standing in this
action; (2) plaintiffs’ statements of incorrect completion dates do not constitute binding
judicial admissions and do not bar plaintiffs from presenting evidence of a later completion
date within the statutory period; (3) plaintiffs’ mechanics liens are facially enforceable as a
matter of law; (4) the trial court erred when it denied plaintiffs’ motions for leave to amend
their counterclaims with new completion dates; and (5) there are genuine issues of material
fact concerning whether plaintiffs complied with the requirements of the Mechanics Lien
57
Nos. 1-12-3784, 1-13-0018 (cons.)
Act. As a result, the trial court erred when it granted defendants’ motions for summary
judgment against plaintiffs. However, we affirm the trial court’s denial of Bluewater’s
motion for summary judgment for the same reasons.
¶ 179 Affirmed and reversed in part; cause remanded with instructions.
58