Springfield v. 3947-55 King Dr.

• Decision Date: 15 January 2009
• Docket Number: No. 1-07-2987.,1-07-2987.
• Citation: 901 N.E.2d 978
• Parties: SPRINGFIELD HEATING AND AIR CONDITIONING, INC., Plaintiff-Appellant, v. 3947-55 KING DRIVE AT OAKWOOD, LLC, Southeast Contractors, LLC, Chicago Journeymen Plumbers, Local 130, U.A., and Anton Antonov, Defendants-Appellees.
• Court: United States Appellate Court of Illinois

901 N.E.2d 978

SPRINGFIELD HEATING AND AIR CONDITIONING, INC., Plaintiff-Appellant, v. 3947-55 KING DRIVE AT OAKWOOD, LLC, Southeast Contractors, LLC, Chicago Journeymen Plumbers, Local 130, U.A., and Anton Antonov, Defendants-Appellees.

No. 1-07-2987.

Appellate Court of Illinois, First District, Fourth Division.

January 15, 2009.

Barclay, Dixon & Smith, P.C., Chicago, IL (Lester L. Barclay and Crystal L. Roberts, of counsel), for Appellant.

Law Offices of Mark J. Rose, Chicago, IL (Mark J. Rose, of counsel), for Appellees, 3947-55 King Drive at Oakwood, LLC and Southeast Contractors, LLC.

JUSTICE GALLAGHER delivered the opinion of the court:

Plaintiff Springfield Heating and Air Conditioning, Inc. (Springfield), appeals the trial court's dismissal of its second amended complaint pursuant to section 2-615 (735 ILCS 5/2-615 (West 2004)) and section 2-619 (735 ILCS 5/2-619 (West 2004)) of the Code of Civil Procedure. Springfield contends on appeal that the trial court erred in dismissing its foreclosure of a mechanic's lien count on the basis of constructive fraud because no evidence demonstrating Springfield's intent to defraud was established by defendants Oakwood, LLC, and Southeast Contractors, LLC.¹ Springfield also claims that the trial court erred in dismissing its counts for unjust enrichment and quantum meruit as alternative theories of liability against Oakwood because Oakwood retained the benefits of Springfield's plumbing services without compensating Springfield for those services. For the reasons stated below, we affirm in part and reverse in part.

The following facts are relevant to the instant appeal. Springfield's business consists of providing materials, services, labor and equipment relating to construction services, including air conditioning, plumbing and heating services. Southeast provides general contracting services. Oakwood owns the properties commonly known as 3947-55 King Drive and 401-415 E. Oakwood (collectively referred to herein as "property").

On March 31, 2005, Southeast as the general contractor entered into a "Standard Form of Agreement Between Contractor and Subcontractor" with Springfield as the subcontractor. Southeast was the general contractor for improvements Springfield made at the property, which totaled $465,000.

On September 19, 2005, Southeast terminated its relationship with Springfield. At that time, the unpaid balance relating to the improvements Springfield made to the property totaled $289,302. On December 1, 2005, Springfield filed a contractor's claim for lien for each parcel of property in the trial court alleging that on March 31, 2005, Springfield entered into a contract with Oakwood to provide plumbing services at the property. Springfield claimed that it began providing the plumbing services on April 15, 2005, and by September 19, 2005, Springfield completed 85% of the contracted for services, which totaled $198,000. Springfield further alleged that Oakwood requested additional services and materials, which it provided at a value of $121,302. Springfield alleged that the total amount outstanding after credits was $289,302. Springfield filed a contractor's claim for lien to recover the full unpaid balance of $289,302 with interest at 5% per annum from September 19, 2005, on each of the two properties.

On December 5, 2005, Springfield filed a complaint to foreclose the two mechanic's liens. In response, Oakwood and Southeast filed a section 2-615 motion to dismiss because Springfield failed to allege that it served Oakwood with notice of its mechanic's liens within 90 days following the completion of work at the property. The trial court granted the dismissal without prejudice. On September 15, 2006, Springfield filed an amended complaint, which included an unjust enrichment count and a quantum meruit count against Oakwood in addition to the count to foreclose the two mechanic's liens. The trial court again dismissed the complaint on the grounds that Springfield failed to allege that it served Oakwood with notice of its mechanic's liens within 90 days.

On April 19, 2007, Springfield filed a second amended complaint to foreclose on the two mechanic's liens and for other relief, including the unjust enrichment and quantum meruit counts against Oakwood. This time, Springfield alleged that it notified Oakwood of Springfield's mechanic's liens. Oakwood and Southeast filed a combined section 2-615 and 2-619 motion to dismiss Springfield's complaint. Oakwood and Southeast sought dismissal under section 2-619(e)(9) on the grounds that Springfield sought enforcement of two separate and identical mechanic's liens each for $289,302 creating an appearance of an encumbrance twice as much as the amount owed. Oakwood and Southeast also sought dismissal under section 2-615 for Springfield's unjust enrichment and quantum meruit counts on the basis that the sole remedy of a subcontractor against an owner of real estate is under the Mechanics Lien Act (Act) ((770 ILCS 60) (West 2006)). On September 20, 2007, the trial court dismissed with prejudice Springfield's mechanic's lien claims based on a constructive fraud theory. The trial court also dismissed the unjust enrichment and quantum meruit counts brought against Oakwood since Springfield failed to comply with the Act, which then precluded recovery under equitable doctrines. Springfield timely appealed the trial court's dismissals pursuant to sections 2-615 and 2-619.

A motion to dismiss under section 2-615 "challenges the legal sufficiency of a complaint based on defects apparent on its face." Heastie v. Roberts, 226 Ill.2d 515, 531, 315 Ill.Dec. 735, 877 N.E.2d 1064, 1075 (2007). To decide the legal sufficiency of a complaint, "all well-pleaded facts are taken as being true and all reasonable inferences from those facts are drawn in favor of the plaintiff." Luise, Inc. v. Village of Skokie, 335 Ill.App.3d 672, 685, 269 Ill.Dec. 556, 781 N.E.2d 353, 364 (2003). In reviewing a trial court's granting of a section 2-615 motion to dismiss, the question this court must address "is whether the allegations in the complaint, when viewed in a light most favorable to the plaintiff, are sufficient to state a cause of action upon which relief can be granted." Luise, 335 Ill.App.3d at 685, 269 Ill.Dec. 556, 781 N.E.2d at 364. We review section 2-615 dismissals de novo. Heastie, 226 Ill.2d at 530-31, 315 Ill.Dec. 735, 877 N.E.2d at 1075.

A motion to dismiss under section 2-619 "admits the legal sufficiency of the plaintiff's claim but asserts `affirmative matter' outside of the pleading that defeats the claim." Czarobski v. Lata, 227 Ill.2d 364, 369, 317 Ill.Dec. 656, 882 N.E.2d 536, 539 (2008). In a section 2-619 motion to dismiss, the defendant bears the burden of proving the affirmative defense. Luise, Inc., 335 Ill.App.3d at 685, 269 Ill.Dec. 556 781 N.E.2d at 363. The purpose of a section 2-619 dismissal "is to dispose of issues of law and easily proved issues of fact early in the litigation." Czarobski, 227 Ill.2d at 369, 317 Ill.Dec. 656, 882 N.E.2d at 539. When reviewing a section 2-619 motion to dismiss, this court "`must consider whether the existence of a genuine issue of material fact should have precluded the dismissal or, absent such an issue of fact, whether dismissal is proper as a matter of law.'" Czarobski, 227 Ill.2d at 369, 317 Ill.Dec. 656, 882 N.E.2d at 539, quoting Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill.2d 112, 116-17, 189 Ill.Dec. 31, 619 N.E.2d 732 (1993). We review section 2-619 dismissals de novo. Czarobski, 227 Ill.2d at 369, 317 Ill.Dec. 656, 882 N.E.2d at 539.

Springfield first contends on appeal that the trial court erred in dismissing its foreclosure of a mechanic's lien count from the complaint because the mechanic's liens were enforceable and no evidence of an intent to defraud existed. Springfield claims that the trial court erred in finding that the mechanic's liens amounted to "constructive fraud." Springfield maintains that the liens contain an inadvertent error and not an intentional error intended to deceive anyone or to obtain an amount in excess of what was due and owing to it. Springfield claims that section 7 of the Act protects an honest lien claimant who makes a mistake rather than a dishonest claimant who knowingly makes a false statement. Peter J. Hartmann Co. v. Capitol Bank & Trust Co., 353 Ill.App.3d 700, 706, 288 Ill.Dec. 263, 817 N.E.2d 913 (2004). According to section 7 of the Act, 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 2006). Springfield contends that its status as an honest lien claimant making an inadvertent error is evidenced by the following: (1) "the complaint seeks the same amount as stated in the liens;" (2) "the lien amounts stated on their face [were] for the total amount for work performed at both pieces of property owned by the same entity;" (3) "the liens stating the different tracts of land reference the same contract date, the same work to be furnished, the same work furnished as of the wrongful termination date and the amounts due and owing;" and (4) "Springfield denied that it intended to overstate its lien amount." Springfield also claims that it lacked an intent to defraud and, as such, the trial court should have allowed Springfield to prepare amended liens to attach to an amended pleading to effect substantial justice. Springfield further claims that the record contains no additional evidence to demonstrate an intent to defraud by Springfield in recording and enforcing the liens for the two different parcels. Thus, Springfield maintains that its count to foreclose the mechanic's liens should be reinstated.

Oakwood and Southeast respond that Springfield created the appearance of constructive fraud...