N. Shore Cmty. Bank & Trust Co. v. Sheffield Wellington LLC

Decision Date26 September 2014
Docket Number1–13–0018.,Nos. 1–12–3784,s. 1–12–3784
Citation20 N.E.3d 104
PartiesNORTH SHORE COMMUNITY BANK AND TRUST COMPANY, 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).
CourtUnited States Appellate Court of Illinois

Robert P. Groszek and Paul E. Peldyak, both of Chicago, for appellants.

James M. Dash and Autumn L. Sharp, both of Carlson Dash, LLC, of Chicago, for appellee.

OPINION

Justice GORDON

delivered the judgment of the court, with 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.

¶ 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 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, 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....

To continue reading

Request your trial
13 cases
  • Estate of Marjorie v. Faskowitz
    • United States
    • United States Appellate Court of Illinois
    • 26 Junio 2019
    ...that party's knowledge. North Shore Community Bank & Trust Co. v. Sheffield Wellington LLC , 2014 IL App (1st) 123784, ¶ 102, 386 Ill.Dec. 243, 20 N.E.3d 104. The effect of a judicial admission is to withdraw a fact from issue, making it unnecessary for the opposing party to introduce evide......
  • Pepper Constr. Co. v. Palmolive Tower Condos., LLC
    • United States
    • United States Appellate Court of Illinois
    • 17 Septiembre 2021
    ...admission. North Shore Community Bank & Trust Co. v. Sheffield Wellington LLC , 2014 IL App (1st) 123784, ¶¶ 117-18, 386 Ill.Dec. 243, 20 N.E.3d 104. However, cases applying either standard agree on the same basic framework. Id. ¶ 119. To be a judicial admission, the statement must be clear......
  • Bangaly v. Alfred C. Baggiani, Individually & of Roadway Express, Inc.
    • United States
    • United States Appellate Court of Illinois
    • 26 Septiembre 2014
    ... ... He further testified that they set up a bank account, but that he did not have copies of bank ... that the appellate court in Midwest Bank & Trust Co. v. Village of Lakewood, 113 Ill.App.3d 962, ... ...
  • Father & Sons Home Improvement II, Inc. v. Stuart
    • United States
    • United States Appellate Court of Illinois
    • 31 Marzo 2016
    ...to the nonmoving party. North Shore Community Bank & Trust Co. v. Sheffield Wellington LLC, 2014 IL App (1st) 123784, ¶ 60, 386 Ill.Dec. 243, 20 N.E.3d 104 (citing Home Insurance Co. v. Cincinnati Insurance Co., 213 Ill.2d 307, 315, 290 Ill.Dec. 218, 821 N.E.2d 269 (2004) ). ¶ 25 A defendan......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT