Cordeck Sales v. Construction Systems, Inc.
| Decision Date | 09 September 2009 |
| Docket Number | No. 1-08-0554.,1-08-0554. |
| Citation | 917 N.E.2d 536,334 Ill.Dec. 710 |
| Parties | CORDECK SALES, INC., Plaintiff, v. CONSTRUCTION SYSTEMS, INC., et al., Defendants. First Midwest Bank, Appellant, v. Construction Systems, Inc. and Cordeck Sales, Inc., Appellees. |
| Court | United States Appellate Court of Illinois |
Much Shelist Denenberg Ament & Rubenstein, P.C., of Chicago (Stephen P. Kikoler and James M. Dash, of Counsel), for Appellant.
Fuller and Berres, of South Barrington (Karen A. Berres, of Counsel), for Construction Systems, Inc.
Stephen D. Richek, of Chicago, for Cordeck Sales, Inc.
Construction Systems, Inc., and Cordeck Sales, Inc., subcontractors on a stalled construction project, filed claims to enforce mechanics' liens for sums due for their services. The circuit court of Cook County found that the contractors held enforceable liens for a total of $1,786,700 plus interest. First Midwest Bank, the successor of the project's original lender and the holder of a mortgage lien subordinate to the mechanics' liens, appeals the finding that the liens were valid. We affirm in part, reverse in part, and remand for further proceedings.
In June 2000, Construction Services International was engaged to act as the general contractor for a condominium conversion project in Chicago. In March 2002, Construction Services entered into a subcontract with Construction Systems, Inc. (CSI), an unrelated entity, to fabricate, supply and install structural steel for the project. In April 2002, CSI engaged Cordeck Sales, Inc. (Cordeck) to erect the steel at the project site.
On January 23, 2003, Cordeck recorded a lien which asserted that it had completed work on the project "on or about December 17, 2002," that its work had been worth $1,523,099.22, that it had been paid $519,609.52, and that it was due $1,003,489.70. According to Cordeck, its work on the project consisted of $960,000 of items specified by its contract with CSI plus $563,099.22 in extras generated by change orders issued during the project. In April 2003, Cordeck filed an action seeking foreclosure of its lien and damages from CSI for its failure to pay Cordeck's invoices for its work. Several subcontractors joined the action in attempts to foreclose their own liens; an appeal of the dispositions of several such claims was adjudicated by this court in Cordeck Sales, Inc. v. Construction Systems, Inc., 382 Ill.App.3d 334, 320 Ill.Dec. 330, 887 N.E.2d 474 (2008). (Cordeck I)
CSI's responsive pleading denied that it owed any sum to Cordeck and denied that Cordeck had performed extra work on the project. CSI alleged that Cordeck had breached their contract by performing deficiently and by abandoning the project before the completion of the agreed work. CSI asserted Cordeck's nonperformance as a defense to Cordeck's claims and as a basis for an award of damages against Cordeck. On July 30, 2003, CSI sent its notice of a lien on the project property to various parties, alleging that it had substantially performed all of its work on the project as of June 18, 2003, and that it was due $1,839,536.36 as of that date. On September 25, 2003, CSI recorded its lien, asserting that it was due $2,194,973 under the base contract and $838,556 in extras, and that the total unpaid balance had increased to $1,979,412. CSI amended its answer and counterclaim in Cordeck's litigation to add a count for foreclosure of its lien.
First Midwest Bank (FMB) contested the validity of the CSI and Cordeck liens on several grounds. CSI and Cordeck settled their claims against each other, and Cordeck amended its remaining lien foreclosure complaint by dropping its claim for the $560,000 in extra work and change orders, thereby reducing the recovery sought to $415,430.48 plus interest. The trial court ruled that CSI held a valid lien for $1,786,700.65 plus interest, and that this amount included a valid Cordeck lien for $415,430.48 plus interest. FMB then brought the instant appeal.
FMB's initial contention in this court is that CSI's lien failed to sufficiently describe the property encumbered by the lien. Section 7 of the Mechanics Lien Act provides that no contractor shall be allowed to enforce a lien unless it files with the recorder of deeds in the county of the property a claim for lien that includes "a sufficiently correct description of the lot, lots or tracts of land to identify the same." 770 ILCS 60/7 (West 2002). In the instant proceeding, it is undisputed that a description that included individual condominium unit numbers and ownership percentages was recorded with the property owner's condominium declaration nearly one month before the filing of CSI's lien, and that the lien did not include the unit-specific description. FMB argues that Steinberg v. Chicago Title & Trust Co., 142 Ill.App.3d 601, 96 Ill.Dec. 834, 491 N.E.2d 1294 (1986), establishes that a lien is not sufficiently descriptive if it does not include the most current legal description of the property.
In Steinberg, the contractor filed a lien describing the property by its metes and bounds, not by the more specific plat of survey description that had been filed after the property had been carved into subdivisions and the subdivisions further partitioned into individual lots. The Steinberg court specifically noted that the property description in the contractor's lien had covered the entire subdivision, while the contractor's work and its right to a lien applied only to some of the lots in the subdivision. 142 Ill.App.3d at 604, 96 Ill.Dec. 834, 491 N.E.2d 1294. Accordingly, the court concluded: "We do not believe that the three perimeter metes and bounds descriptions contained in [the contractor's] lien would provide the average third-party purchaser or encumbrancer with enough information to readily identify the property affected by the lien through the use of local public records." 142 Ill.App.3d at 606, 96 Ill.Dec. 834, 491 N.E.2d 1294. In affirming the trial court's holding that the contractor's lien was invalid, the Steinberg court stated that "a lien claimant must use the legal description of the property as indicated by plat when such a plat has been recorded in order to bind third parties." 142 Ill.App.3d at 606, 96 Ill.Dec. 834, 491 N.E.2d 1294.
We are unpersuaded by FMB's assertion that Steinberg establishes a blanket requirement that a lien use the most recent legal description of the property. Steinberg's clear holding is that if a subsequent plat of survey is available, a metes and bounds description that fails to specify individual parcels affected by the lien may be found inadequate under section 7 of the Act. Neither Steinberg nor the language of the Act required the trial court in the instant case to invalidate CSI's lien upon the mere showing that a more recent legal description of the property had been available.
The court was instead required to determine the lien's compliance with section 7's mandate that the description be sufficient to identify the affected land. We find no basis for disturbing the court's conclusion that the description met the statutory standard. CSI's lien used a plat of survey description, not the metes and bounds references at issue in Steinberg. The CSI lien also included the street address commonly used to describe the property and the property index numbers that identify the property's parcels in the office of the Cook County recorder of deeds. The trial court heard uncontradicted testimony from an employee of the recorder's office which established that a lien recorded on the property as a whole would appear in a search of the chain of title of each unit included in the condominium declaration. In further contrast to Steinberg, there was no discrepancy between the property described by CSI's lien and the property the company was entitled to encumber as a result of its work. We conclude that the trial court correctly determined that the property description in CSI's lien was adequate to meet the standard of the Act, and we reject FMB's assertion that the lien must be invalidated on that basis.
Section 6 of the Mechanics Lien Act states: "In no event shall it be necessary to fix or stipulate in any contract a time for the completion or a time for payment in order to obtain a lien under this act, provided, that the work is done or material furnished within three years from the commencement of said work or the commencement of furnishing said material." 770 ILCS 60/6 (West 2002). FMB contends that section 6 renders the liens of CSI and Cordeck unenforceable.
The trial court did not consider the merits of this argument. It construed the argument to be an affirmative defense and held that FMB had forfeited the issue by failing to plead it as such. We disagree. When a right of action unknown to common law is created by statute, a plaintiff's compliance with the statute's requirements is an element of his cause of action. Klopfer v. Court of Claims, 286 Ill.App.3d 499, 506, 221 Ill.Dec. 876, 676 N.E.2d 679 (1997). In such actions, a defendant's assertion that these requirements were not met cannot be considered a surprise to the plaintiff and will not be construed to be an affirmative defense. Klopfer, 286 Ill. App.3d at 506, 221 Ill.Dec. 876, 676 N.E.2d 679. The rights granted by the Mechanics Lien Act are creations of statute, not common law. First Federal Savings & Loan Ass'n v. Connelly, 97 Ill.2d 242, 246, 73 Ill.Dec. 454, 454 N.E.2d 314 (1983). A lienholder must therefore prove compliance with the Act's provisions to establish his right to the statutory remedy and cannot claim surprise when a defendant attempts to defeat his claim by proof of noncompliance. We hold that FMB did not forfeit its right to contest CSI's compliance with section 6 of the Act...
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