North Shore Community Bank & Trust Co. v. Sheffield Wellington, LLC ( 2014 )

Illinois Official Reports
Appellate Court
North Shore Community Bank & Trust Co. v. Sheffield Wellington LLC,
2014 IL App (1st) 123784
Appellate Court NORTH SHORE COMMUNITY BANK AND TRUST COMPANY,
Caption Plaintiff and Counterdefendant-Appellee, v. SHEFFIELD
WELLINGTON LLC, Defendant and Counterdefendant (Bluewater
Capital Development, Inc., and Premier Roofing, Inc., Defendants and
Counterplaintiffs-Appellants; SMH Development, LLC, Sheffield
Avenue Investors, LLC, and Employees Retirement Plan of
Consolidated Electrical Distributors, Inc., Counterdefendants).
District & No. First District, Fifth Division
Docket Nos. 1-12-3784, 1-13-0018 cons.
Filed September 26, 2014
Held The trial court’s entry of summary judgment for defendant owners in
(Note: This syllabus plaintiffs’ action to foreclose their mechanics’ liens was reversed and
constitutes no part of the the cause was remanded for further proceedings, since the liens were
opinion of the court but facially enforceable as a matter of law, the incorrect dates used by
has been prepared by the plaintiffs as to the completion of their work did not invalidate their
Reporter of Decisions claims or constitute binding judicial admissions, especially when the
for the convenience of incorrect dates did not materially affect defendants’ right to notice
the reader.) under the Mechanics Lien Act, and under the circumstances, the Act
would be construed liberally to give effect to its remedial purpose, and
plaintiffs did provide a “brief statement” of the contracts at issue;
furthermore, the appellate court rejected the claim that the statement
of the amount owed in one of the claims was fraudulent on its face and
the trial court erred in denying plaintiffs leave to amend their claims
with new completion dates.
Decision Under Appeal from the Circuit Court of Cook County, No. 09-CH-16804; the
Review Hon. Lisa R. Curcio, Judge, presiding.
Judgment Affirmed and reversed in part; cause remanded with instructions.
Counsel on Robert P. Groszek and Paul E. Peldyak, both of Chicago, for
Appeal appellants.
James M. Dash and Autumn L. Sharp, both of Carlson Dash, LLC, of
Chicago, for appellee.
Panel 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 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.
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-
¶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 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 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
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.
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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 owner3 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 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
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,
3
Sheffield was the only entity of the owner dismissed in the trial court’s order.
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.”
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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.”
¶ 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.
Kiferbaum testified that Bluewater worked on the property from December 2008 through early
January 2009.
¶ 24 Kiferbaum 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 work which 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.
***
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?
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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.”
¶ 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.
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.
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***
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.”
¶ 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,
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
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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.
¶ 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
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.
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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
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).
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
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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
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.
¶ 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.
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¶ 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 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.
¶ 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.”
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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 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 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
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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, 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 forfeited”); 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).
¶ 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
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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 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.
¶ 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
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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, 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 Ltd. 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 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 regard 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
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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
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
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.
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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 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
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.
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.
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¶ 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)).
¶ 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 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 W.
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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 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 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).
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¶ 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 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
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
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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 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), and 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 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
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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
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 regard 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 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
Community 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
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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
¶ 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 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.”
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¶ 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, 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.
¶ 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 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
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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 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 countercomplaint 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 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
member-manager. Therefore, plaintiffs provided sufficiently accurate “brief statement[s] of
[their] contract[s]” to comply with section 7 of the Act.
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¶ 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)).
¶ 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
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
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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
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).
¶ 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
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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 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
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on January 4, 2009. Bluewater was not able to produce evidence that work occurred on 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 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
6
In its original document production, Bluewater produced the email in which Thomas approved
the January 5, 2009, cement work.
- 29 -
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.
¶ 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.”
¶ 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
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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 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.
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