CB Constr. & Design, LLC v. Atlas Brookview, LLC

• Docket Number: 1-20-0924
• Decision Date: 26 March 2021
• Citation: CB Constr. & Design, LLC v. Atlas Brookview, LLC, 2021 IL App (1st) 200924, 196 N.E.3d 115, 458 Ill.Dec. 1 (Ill. App. 2021)
• Parties: CB CONSTRUCTION & DESIGN, LLC, Plaintiff-Appellant, v. ATLAS BROOKVIEW, LLC ; Steven Ivancovich, CEO of Atlas Brookview, LLC; Ravi Malli, Director of Asset Management; Atlas Apartment Homes; and Other defendants yet to be determined, Defendants (Atlas Brookview, LLC, Defendant-Appellee).
• Court: Appellate Court of Illinois

2021 IL App (1st) 200924

196 N.E.3d 115

458 Ill.Dec. 1

CB CONSTRUCTION & DESIGN, LLC, Plaintiff-Appellant,

v.ATLAS BROOKVIEW, LLC ; Steven Ivancovich, CEO of Atlas Brookview, LLC; Ravi Malli, Director of Asset Management; Atlas Apartment Homes; and Other defendants yet to be determined, Defendants

(Atlas Brookview, LLC, Defendant-Appellee).

No. 1-20-0924

Appellate Court of Illinois, First District, SIXTH DIVISION.

Filed March 26, 2021

James M. Dash and Jonathan S. Safron, of Carlson Dash, LLC, of Chicago, for appellant.

David H. Latham, of Latham Law Offices, of Chicago, for appellee.

JUSTICE HARRISdelivered the judgment of the court, with opinion.

¶ 1Plaintiff, CB Construction & Design, LLC(CB), appeals the circuit court order granting defendantAtlas Brookview, LLC's motion to dismiss CB's mechanic's lien claim.On appeal, CB contends that the court erred in dismissing its claim where (1)the parties not made defendants in CB's complaint were not necessary parties under section 11 of the Mechanics Lien Act (Act)( 770 ILCS 60/11(West 2018) ) and (2) pursuant to section 9 of the Act, CB had until two years from completion of the contract to amend its complaint to add necessary parties.For the following reasons, we affirm.

¶ 2 I. JURISDICTION

¶ 3The trial court denied CB's motion to reconsider on July 24, 2020.On August 14, 2020, the court entered an order pursuant to Illinois Supreme Court Rule 304(a)(eff. Mar. 8, 2016) that there is no just reason for delaying enforcement or appeal.Plaintiff filed a notice of appeal on August 21, 2020.Accordingly, this court has jurisdiction pursuant to Rule 304(a) governing appeals from final judgments that do not dispose of the entire proceeding.

¶ 4 II.BACKGROUND

¶ 5 On September 20, 2017, Atlas Brookview, LLC(Atlas) purchased property commonly known as 4200 through 4400 W. Lake Avenue in Glenview, Illinois (Glenview property).To fund its purchase, Atlas received a loan from TPG RE Finance2 Ltd.(TPG), and TPG recorded the mortgage on September 21, 2017.Wells Fargo Bank, NA(Wells Fargo) held a security interest in the leases and rents from the Glenview property.Wells Fargo recorded its security interest on February 23, 2018.On December 17, 2020, TPG assigned the note and mortgage to DB Brookview.

¶ 6 On January 4, 2018, CB and Atlas entered into a construction contract to renovate the units and common areas of the Glenview property.The contract totaled $9,926,633, and the scheduled substantial completion date was June 30, 2020.CB claimed that it completed its work on May 16, 2019, but Atlas still owed $1,439,531.08 under the contract.

¶ 7 On May 20, 2019, CB filed a mechanic's lien pursuant to the Act which named as responsible parties and owners Steven Ivankovich(CEO of Atlas), Lee Ward(loan administrator), and Ravi Malli(director of asset management-Atlas Apartment Homes).On July 15, 2019, Atlas served CB with a section 34( 770 ILCS 60/34(West 2018) )demand to file suit within 30 days.CB filed a complaint for breach of contract and mechanic's lien on August 12, 2019.

¶ 8 The complaint named as defendants Atlas, Ivankovich, Malli, and "Other defendants yet to be determined."CB alleged that it entered into a contract with defendants to provide services, materials, and labor in the construction project for the Glenview properties.CB alleged that it completed performance of the contract on May 16, 2019, and issued a bill for $1,439,531.08, which has yet to be paid.After repeated requests for payment went unanswered, CB filed its mechanic's lien on May 20, 2019, but "there has been no resolution of the lien or payment of the balance shown due and owing to the present date."As a remedy, CB requested "an amount not less than $1,439,531.08, for the "services, materials, and labor, duly provided in good faith on the reliance of the parties[sic ] contract by the plaintiff."

¶ 9 Atlas filed motions to dismiss pursuant to sections 2-615and2-619 of the Code of Civil Procedure(Code)( 735 ILCS 5/2-615, 2-619 (West 2018)), alleging that CB failed to timely join TPG and Wells Fargo as necessary parties, as well as other grounds.The trial court granted the motion but gave CB an opportunity to amend its complaint.On October 29, 2019, CB filed its amended complaint, which contained four counts: breach of contract (count I), perfection and foreclosure of mechanic's lien (count II), pierce the corporate veil (count III), and in the alternative, unjust enrichment (count IV).In its mechanic's lien count, CB requested that

"the sum of $1,439,531.08, together with attorney fees and interest, be ordered as a lien against the real property, building[s], parcel[s], senior and superior to any claim of right, title or interest in or to the real property of any Defendant, or other person or entity which may be identified hereafter, AND that the real property be ordered sold by the Sheriff of COOK County, ILLINOIS, according to law, and that all proceeds of sale be applied to PLAINTIFF's good and meritorious claim."

¶ 10 CB's amended complaint did not name TPG or Wells Fargo as partydefendants, but again included "Other defendants yet to be determined."Atlas moved to dismiss the complaint on numerous grounds, including CB's failure to add TPG and Wells Fargo as necessary parties.On February 10, 2020, the trial court dismissed some of the claims without prejudice but dismissed the mechanic's lien claim with prejudice for failure to comply with the Act's requirements.The court granted CB leave to file a second amended complaint "consistent with the above rulings" and ordered CB to release the mechanic's lien.

¶ 11 On March 9, 2020, CB filed a motion to reconsider the dismissal of the mechanic's lien claim.Since CB had not released its lien, Atlas filed a motion for rule to show cause.On April 20, 2020, CB filed a motion for leave to file its second amended complaint.

¶ 12 On April 22, 2020, the trial court ruled on CB's motion to reconsider and Atlas's motion for rule to show cause.The court noted that it had dismissed CB's mechanic's lien claim "[b]ecause this right is statutory, [so] the steps necessary to invoke those rights must be strictly construed in accordance with the statute."The court did find that CB's complaint satisfied the requirements of section 11(a) of the Act.However, it affirmed the dismissal of the mechanic's lien count because CB failed to join TPG, as the mortgage lender, and Wells Fargo, as assignee of the rents from the property, as defendants.The court found that TPG and Wells Fargo were necessary parties because under the Act, "necessary parties" include " ‘all persons who may have any valid claim to the whole or any part of the premises upon which a lien may be attempted to be enforced under the provisions thereof, or who are interested in the subject matter of the suit.’ "The court cited section 11(b) of the Act for this provision.See770 ILCS 60/11(b)(West 2018).

¶ 13 Since CB failed to file an action against TPG and Wells Fargo as defendants within 30 days of Atlas's demand, the court determined that the Act barred CB from claiming any lien.Thus, dismissal with prejudice was proper, and there was no reason for the court to reconsider its earlier ruling.The court entered Atlas's motion for rule to show cause and continued the matter to afford CB an opportunity to voluntarily comply with its order to release the lien.The April 22, 2020, order also granted CB 21 days to file its second amended complaint.

¶ 14 On May 5, 2020, CB filed a motion for leave to file a response to the petition for rule to show cause and to supplement its motion for leave to amend.CB's proposed second amended complaint contained the mechanic's lien count and added new parties, although it did not add TPG and Wells Fargo.In its motion, CB alleged that the court's April 22, 2020, order applied an earlier incorrect version of the Act and that, under the correct version, TPG and Wells Fargo were not necessary parties.

¶ 15 In its July 24, 2020, order, the court acknowledged that section 11(b) of the Act was amended in 2006.However, it did not reverse dismissal of the mechanic's lien count because the "plain wording of the 2006amendment" includes lienholders such as TPG and Wells Fargo as necessary parties.The court ruled that the "February 10, 2020 order remains as stated," and CB's "second amended complaint shall stand, except Count II *** for Foreclosure of Mechanic's Lien," which the court struck with prejudice.

¶ 16 On Atlas's motion for rule to show cause, the court determined that, pursuant to section 35(a) of the Act, a claimant who fails to institute suit to enforce the lien after demand has been made "shall acknowledge satisfaction or release thereof."Id.§ 35(a).Since it had found that CB failed to file a suit against all necessary parties within 30 days of Atlas's demand, thus forfeiting its lien, the court"accordingly has ordered [CB] to release the lien."The order also granted Atlas time to answer the remaining portions of CB's second amended complaint and directed Atlas to prepare a release of lien for entry by the court on August 31, 2020.

¶ 17The trial court granted CB's motion for a Rule 304(a)finding, and onAugust 21, 2020, CB filed a notice of appeal.On August 31, 2020, the court denied CB's motion to stay enforcement of judgment pending appeal and entered an order releasing CB's mechanic's lien.This appeal followed.

¶ 18 III.ANALYSIS

¶ 19 As an initial matter, we address Atlas's contention that CB's brief does not comply with Illinois Supreme Court Rule 341(eff. Oct. 1, 2020) and that, as a result, CB's arguments are procedurally defaulted.Specifically, Atlas argues that CB's opening brief misrepresented certain facts and failed to support arguments with citation to authority.SeeIll.S. Ct. R. 341(h)(7)(appellant's brief "shall contain the contentions of the appellant and the reasons therefor, with citation of the authorities and...