Steinberg v. Chicago Title and Trust Co.

• Decision Date: 31 March 1986
• Docket Number: No. 83-1643,83-1643
• Citation: 96 Ill.Dec. 834,491 N.E.2d 1294,142 Ill.App.3d 601
• Parties: , 96 Ill.Dec. 834 Jay STEINBERG, as Trustee in Bankruptcy for D & W Equipment Co., an Illinois corporation, Plaintiff-Appellant, v. CHICAGO TITLE AND TRUST COMPANY, et al., Defendants-Appellees. REIMER BROS., INC., an Illinois corporation, Plaintiff, v. D & W EQUIPMENT COMPANY, et al., Defendants.
• Court: United States Appellate Court of Illinois

Page 1294

491 N.E.2d 1294

142 Ill.App.3d 601, 96 Ill.Dec. 834

Jay STEINBERG, as Trustee in Bankruptcy for D & W Equipment

Co., an Illinois corporation, Plaintiff-Appellant, v. CHICAGO TITLE AND TRUST COMPANY, et al., Defendants-Appellees.

REIMER BROS., INC., an Illinois corporation, Plaintiff, v. D & W EQUIPMENT COMPANY, et al., Defendants.

No. 83-1643.

Appellate Court of Illinois, First District, Third Division.

March 31, 1986.

Holleb & Coff, Ltd., Chicago (Ira Gould, of counsel), for plaintiff-appellant.

Anthony L. Frink, Chicago, for defendant-appellee American Nat. Bank and Trust Co.

Ned Langer, Chicago, for defendant-appellee LaSalle Nat. Bank.

Presiding Justice RIZZI delivered the opinion of the court:

This appeal arises from an order of the trial court granting the motions of defendants American National Bank and Trust Company of Chicago, LaSalle National Bank and numerous individual defendants for summary judgment against plaintiff Jay Steinberg as Trustee in Bankruptcy for D & W Equipment Co. We affirm.

D & W Equipment Company, an Illinois corporation, initiated this law suit against numerous defendants to foreclose a "blanket" mechanic's lien it had filed on September 5, 1979. The lien related to excavation and grading work performed by D & W on subdivided property presently known as Charlemagne Subdivision, Hoffman Estates, Illinois. The lien was for the amount of $104,419, stated a completion date of June 8, 1979, and was asserted against three pieces of property defined by three perimeters metes and bounds descriptions.

On August 29, 1980, Jay Steinberg, as Trustee in Bankruptcy for D & W, was substituted as plaintiff in the mechanic's lien foreclosure suit. Plaintiff then filed a second amended complaint to foreclose D & W's "blanket" lien claim. The second amended complaint named additional individual defendants and sought foreclosure of the "blanket" lien claim on only 146 lots in Unit 1 and 20 lots in Unit 3 of the Charlemagne Subdivision rather than on the entire subdivision which the lien covered. Of the named defendants in plaintiff's second amended complaint, defendants American National Bank and Trust Company of Chicago, as Trustee under Trusts No. 509353, 51512 and 51252, LaSalle National Bank as mortgagee under document No. 24629245, and various individual defendants, comprised of individual lot owners, and their respective mortgagees filed motions for summary judgment. All of these defendants are third parties to D & W's mechanic's lien claim. Plaintiff filed his response. The trial court granted the motions for summary judgment. It also dismissed all named defendants and dismissed the second amended complaint with prejudice. The court based its dismissal on two violations of section 7 of the Mechanics' Lien Act (Ill.Rev.Stat.1981, ch. 82, par. 7): (1) that plaintiff's mechanic's lien did not contain a sufficiently correct description of the land covered and (2) that plaintiff's "blanket" lien claim failed to allocate ¹ by specific lot the amount due under the lien.

On appeal plaintiff asserts three arguments: (1) that the mechanic's lien claim filed by D & W correctly and adequately described the property against which the lien was asserted; (2) that allocation of the monetary figure claimed to be due and owing under a mechanic's lien is not required for a subdivided tract if the property was a single tract of land when the contract was entered into; and (3) that an exception to the allocation and dating rule exists when an excavator performs work only on raw land which is later subdivided because the rule imposes an impossible burden on an excavator.

We first address plaintiff's argument that the mechanic's lien filed by D & W correctly and adequately described the property against which the lien was asserted. Historically, mechanics' liens were not recognized by the common law or in equity, but rather, they have always been statutory in nature. Since mechanics' liens are in derogation of the common law, they must be strictly construed regarding the requirements upon which they depend (First Federal Savings & Loan Ass'n v. Connelly (1983), 97 Ill.2d 242, 246, 73 Ill.Dec. 454, 456, 454 N.E.2d 314, 316; Schmidt v. Anderson (1911), 253 Ill. 29, 33, 97 N.E. 291, 292), and the liens are valid only if each of the statutory requirements is scrupulously observed. Connelly, 97 Ill.2d 242, 246, 73 Ill.Dec. 454, 456, 454 N.E.2d 314, 316. Additionally, where the interests of third parties will be affected, a stricter construction of the Mechanics' Lien Act will be adhered to than what is followed in cases arising between the mechanic or materialman and the original owner. Springer v. Kroeschell (1896), 161 Ill. 358, 367, 43 N.E. 1084, 1087. Therefore, since all defendants in this appeal are third parties, we are required to strictly construe the Act.

The focus of plaintiff's first argument is that because the contract between D & W and the original owner was entered into when the land was known by three perimeter metes and bounds descriptions, the lien attached to the property as described at that time. Therefore, plaintiff reasons, the three perimeter metes and bounds descriptions of the land were the proper descriptions to be used in the D & W lien claim.

While it is true that a mechanic's lien attaches as of the date of the contract, it remains unenforceable against third parties unless the contractor complies with the prerequisites set forth in section 7 of the Mechanics' Lien Act. Ill.Rev.Stat.1981, ch. 82, par. 7; Connelly, 97 Ill.2d 242, 245, 73 Ill.Dec. 454, 456, 454 N.E.2d 314, 316. Under Section 7, a claimant cannot enforce a claim for lien against an ultimate third party unless he has either filed the lien within four months after work completion with the recorder of deeds or has brought an enforcement suit against the third party. The filed lien must be verified and must consist of a brief statement of the contract, the balance due after allowing all credits and a sufficiently correct description of the lot, lots or tract of land to identify same. Ill.Rev.Stat.1981, ch. 82, par. 7. As a result, while a lien technically attaches to the property when the contract is entered into, it remains unenforceable until properly filed in compliance with section 7.

The record reflects that D & W entered into its contract to perform excavation work on February 8, 1978. At that time, the property was described by three perimeter metes and bounds descriptions. The plat which subdivided some of this property into 146 lots known as Charlemagne Subdivision Unit 1 was filed on April 21, 1978. The plat for the area presently known as Charlemagne Subdivision Unit 3 was filed November 3, 1978. Both plats designated the property according to its legal description. Although D & W filed its lien claim after the plats for Units 1 and 3 were recorded, the lien contained the three perimeter metes and bounds descriptions rather than the recorded legal descriptions as indicated by the plats.

Plaintiff argues that the metes and bounds descriptions used in the lien complied with section 7 because they sufficiently and correctly described the tracts of land to enable third party identification. We do not agree. The purpose of the description requirement is to protect third parties from purchasing or financing real property without being aware that it is encumbered. O'Brien v. Krochinski (1893), 50 Ill.App. 456, 549. To adequately protect the notice requirement due third parties, the general rule developed that where the interests of third parties are to be affected a stricter construction of the Act is required. Springer, 161 Ill. 358, 367, 43 N.E. 1084, 1087. We believe that a strict statutory construction of the Act's wording requiring "a sufficiently correct description of the lot, lots or tract of land to identify the same" (Ill.Rev.Stat.1981, ch. 82, par. 7) requires 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. We do not believe that the three perimeter metes and bounds descriptions contained in D & W'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. Additionally, since a greater degree of certainty in the description of property is required when third parties are involved, the burden is on the claimant to ensure that third parties are readily able to ascertain the status of the property they wish to purchase or finance.

Here, D & W did not file its lien until approximately 1 1/2 years after the property had been recorded by plat. The foreclosure action was not filed until five months later. As a result, at the time the lien was filed, the land to which the lien sought to attach had changed from a raw tract of land identified by three perimeter metes and bounds descriptions to subdivided land recorded by plat and sold to, or encumbered by, third parties. In such a situation, the use of metes and bounds descriptions when a plat legal description is available places an undue burden in derogation of section 7 on third parties by forcing them to decipher such descriptions to determine the status of the property. As such, we believe that D & W failed to meet its burden of ensuring that third parties could readily ascertain the status of the property in question.

Plaintiff also argues that as long as the Recorder of Deeds' office files liens which utilize perimeter metes and bounds descriptions against property legally described by plat, there is no problem with description or lack of notice to third parties. We do not agree. It is not the duty of the Recorder of Deeds' office to ensure compliance with the Act's requirement of notice to third parties. Instead, because the Act is purely statutory in nature and an addition to the ordinary...