Aluma Systems, Inc. v. Frederick Quinn Corp.

• Decision Date: 30 November 1990
• Docket Number: No. 1-87-3072,1-87-3072
• Citation: 151 Ill.Dec. 618,206 Ill.App.3d 828,564 N.E.2d 1280
• Parties: , 151 Ill.Dec. 618 ALUMA SYSTEMS, INC., a foreign corporation, and the State of Illinois through its agency, the Capitol Development Board, for Use and Benefit of Aluma Systems, Inc., Plaintiff-Appellant, v. FREDERICK QUINN CORPORATION, C. Dew and Son, Inc., Conform Erectors, Inc. and the Fireman's Fund Insurance Company of Newark, New Jersey, and the State of Illinois through its agency the Capitol Development Board, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

Page 1280

564 N.E.2d 1280

206 Ill.App.3d 828, 151 Ill.Dec. 618

ALUMA SYSTEMS, INC., a foreign corporation, and the State of Illinois through its agency, the Capitol Development Board, for Use and Benefit of Aluma Systems, Inc Plaintiff-Appellant, v. FREDERICK QUINN CORPORATION, C. Dew and Son, Inc., Conform Erectors, Inc. and the Fireman's Fund Insurance Company of Newark, New Jersey, and the State of Illinois through its agency the Capitol Development Board, Defendants-Appellees.

No. 1-87-3072.

Appellate Court of Illinois First District, Fifth Division.

Nov. 30, 1990.

Nigro & Westfall, P.C., Glendale Heights, for plaintiff-appellant.

O'Halloran, Lively & Walker, Chicago (Paul T. Lively, of counsel), for defendants-appellees Frederick Quinn Corp. and Firemen's Ins. Co. of Newark, N.J.

Presiding Justice COCCIA delivered the opinion of the court:

On July 30, 1985, the Capitol Development Board (CDB), an agency of the State of Illinois, entered into a contract with Frederick Quinn Corporation (Quinn), as general contractor, for the construction of the Biotechnology Research Facility (hereafter, "the Project"), part of Chicago Technology Park at the University of Illinois, Chicago, Illinois. Quinn subcontracted a portion of its work, i.e., the concrete work, to C. Dew & Son, Inc. (Dew), which in turn subcontracted the concrete forming work to Conform Erectors, Inc. (Conform). Under the terms of a written agreement executed on or about September 9, 1985, Conform rented a variety of aluminum beam and other construction equipment from the plaintiff, Aluma Systems, Inc., a foreign corporation licensed to do business in Illinois. The contract between Conform and Aluma specifically stated that the equipment was rented for a three-month period, for use at the Project construction site. Conform, which never paid Aluma the amount due under the rental agreement, has since gone out of business and apparently filed for bankruptcy after the filing of this appeal.

In an effort to recover the $20,953.78 which it claims it is owed for its contribution to the Project, Aluma sought a remedy pursuant to section 23 of the Mechanics' Liens Act (Ill.Rev.Stat.1985, ch. 82, par. 23) (hereinafter referred to as section 23), which allows subcontractors of a general contractor employed by a public body to establish a lien on funds, in possession of In order to adequately explain the issues raised by the parties and our resolution of those issues, it is necessary to set out the procedural history of this litigation in the context of the statutory requirements which govern the plaintiff's claims. Section 23, the section of the Mechanics' Liens Act (the Act) (Ill.Rev.Stat.1985, ch. 82, par. 1 et seq.), pertaining to public improvements, provides in relevant part:

[151 Ill.Dec. 620] the public body, which have not yet been paid out to the general contractor. It simultaneously brought a claim pursuant to "An Act in relation to * * * contracts for public construction" (Ill.Rev.Stat.1985, ch. 29, pars. 15, 16; hereinafter referred to as the Bond for Public Works Act, or the Bond Act), [206 Ill.App.3d 831] which permits recovery, on the general contractor's surety bond, of payments for labor and materials used in public construction projects. Firemen's Insurance Company of Newark, New Jersey (Firemen's), a defendant in this case and a party to this appeal, was Quinn's surety for the Project under the terms of a payment bond, to be discussed more fully below. Aluma is appealing from certain orders of the circuit court of Cook County, chancery division, dismissing with prejudice both counts of its complaint: Count I, asserting a claim under section 23; and Count II, relying on the Bond Act.

"Any person who shall furnish material, apparatus, fixtures, machinery or labor to any contractor having a contract for public improvement for the State, may have a lien for the value thereof on the money * * * due or about to become due the contractor * * * by giving to the Director or other official, whose duty it is to let such contract, written notice of his claim for lien containing a sworn statement of the claim showing with particularity the several items and the amount claimed to be due on each. The claimant shall furnish a copy of said notice at once to the contractor. The person claiming such lien may cause such written notice with sworn statement of claim to be given either by sending such notice (by registered or certified mail, return receipt requested, with delivery limited to addressee only) to, or by delivering such notice to the Director or other official of the State whose duty it is to let such contract; and the copy of such notice * * * may be sent * * * or delivered to such contractor in like manner. * * * The person so claiming a lien shall, within 90 days after giving such notice, commence proceedings by complaint for an accounting, making the contractor having a contract with the State and the contractor to whom such material, apparatus, fixtures, machinery or labor was furnished, parties defendant, and shall, within the same period notify the Director * * * by delivering to him a copy of the complaint filed * * *. Failure to commence proceedings within 90 days after giving notice of lien pursuant to this subsection shall terminate the lien and no subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceedings pursuant to this Act. It shall be the duty of the Director, upon receipt of the written notice with sworn statement as herein provided, to withhold payment of a sum sufficient to pay the amount of such claim, for the period limited for the filing of suit * * *. Upon the expiration of this period the money * * * so withheld shall be released for payment to the contractor unless the person claiming the lien shall have instituted proceedings and delivered a copy of the complaint to the Director as herein provided, in which case, the amount claimed shall be withheld until final adjudication of the suit is had. * * * " (Emphasis added.) (Ill.Rev.Stat.1985, ch. 82, par. 23(c).)

Additionally, section 23(a) states as follows:

"For the purposes of this Section 'contractor' includes any sub-contractor; 'State' includes any department, board or commission thereof * * *; and 'director' includes any chairman or president of any State department, board or commission, or the president or chief executive officer or such other person financing and constructing a public improvement, for the benefit of the State." Ill.Rev.Stat.1985, ch. 82, par. 23(a).

The record reveals that Aluma, on September 12, 1986, sent a "Notice of Claim for Lien on Public Funds and on Bond" (the "September 12 notice") by certified mail, return receipt requested, to each of the following: Fred Garcia, Director of Physical Plant, University of Illinois, Chicago; Robert Conte, Project Manager, University of Illinois, Chicago; Attorney Diane Sagner, University of Illinois Counsel's Office, Chicago; Capitol Development Board, Stratton Office Building, Springfield, Illinois; Frederick Quinn Corporation; Conform Erectors; Dew Construction; and "Fireman's [sic ] Fund Insurance Company, Parsicppany, New Jersey." The notice included a sworn statement that Aluma was owed the sum of $19,422.47 for providing to Conform "certain rental equipment" for the Project, plus interest and attorney fees. However, it is undisputed that Gary Skoien, Executive Director of the State of Illinois Capitol Development Board, was in fact the "Director or other official * * * whose duty it [was] to let the contract" entered into by the CDB and Quinn. It is also undisputed that no copy of Aluma's September 12 notice was ever sent, delivered, or addressed specifically to Gary Skoien, or to the "executive director" of the CDB.

Also contained in the record on appeal is a letter dated September 9, 1986, and signed by Aluma's attorney. The letter is addressed to Fred Garcia, Director of Physical Plant, University of Illinois, Chicago. It requests from Garcia a copy of the bond posted on Quinn's contract for the Project, and further asks Garcia to "advise as to the name, address and title of the State of Illinois official responsible for letting the contracts and [sic ] thus should receive service of the Contractor's Claim for Lien on Public Funds." Plaintiff's attorney stated, in other court documents of record, that he received no response to this this letter. He further stated that his initial information from Aluma indicated that the Project was a University of Illinois at Chicago job; that upon personal investigation, he was advised by the University attorney's office and two other University employees that it was a University job and was given "the name of the person who supposedly let the contract in behalf of the University." He then sent the letter to Garcia and filed the notice of lien claim three days later.

On October 27, 1986, Aluma sent its "Second Notice of Claim for Lien on Public Funds and on Bond" ("the October 27 notice"), by certified mail, return receipt requested, to the same addresses who were sent the September 12 notice, with two changes. Attorney Brian Higgins was substituted for Attorney Diane Sagner at the University of Illinois counsel's office, and "Kenneth E. Delford, Office for Capitol Programs, University of Illinois, Chicago, Illinois" was also notified. The October 27 notice included the same sworn statement as the previous notice, except that the sum owed to Aluma in rental fees was stated to be $20,953.78.

On November 6, 1986, Aluma filed an action in the circuit court of Cook County, chancery division (hereafter, "the first lawsuit"). Aluma's complaint, entitled "Complaint to Foreclose Public Lien," named Quinn, Dew, Conform and the "University of Illinois at Chicago, a subdivision of the State of Illinois" as defendants. The complaint contained the following allegations: (1) that Aluma was a corporation ...