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C.s. Lewis, Inc. v. Cabot Corp.





APPEAL from the Circuit Court of Douglas County; the Hon. JAMES N. SHERRICK, Judge, presiding. MR. JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:

Rehearing denied August 6, 1980.

These consolidated cases involve appeals by various subcontractors from orders of the circuit court of Douglas County denying their counterclaims for mechanic's liens.

The action began on December 1, 1975, when plaintiff, C.S. Lewis, Inc. (Lewis), filed a complaint to foreclose a mechanic's lien against property owned by defendant, Cabot Corporation (Cabot). Lewis, as general contractor, had supplied, assembled and erected three storage tanks for Cabot on the above property. Among those named as defendants who had or claimed to have some interest in the above property were the appellants, Shoemaker Electric Company (Shoemaker), Morris Construction, Inc. (Morris), Hoke Construction Company, Inc. (Hoke), and Green Bay X-Ray Service, Inc. (Green Bay). Each appellant filed an answer and counterclaim, alleging that it had furnished various materials, labor, supplies, equipment or services to Lewis in connection with the Cabot job. On November 2, 1979, the trial court entered individual orders as to each appellant granting a money judgment against Lewis, but denying the requested mechanic's lien because the materials, labor, etc., had not been used in or incorporated into the structure. Each order contained a finding pursuant to Supreme Court Rule 304(a) (73 Ill.2d R. 304(a)) that no just reason existed to delay enforcement or appeal.

First, we must address the issue of whether Green Bay's answer and counterclaim were timely filed. Section 28 of the Mechanic's Lien Act (Ill. Rev. Stat. 1979, ch. 82, par. 28) allows a subcontractor to "file a claim for lien or file a complaint and enforce such lien within the same limits as to time and in such other manner" as provided for a contractor. Section 9 of the Act (Ill. Rev. Stat. 1979, ch. 82, par. 9) provides in part, "Such suit shall be commenced or counterclaim filed within two years after the completion of the contract." Green Bay stipulated that it had completed the work for which it was claiming a lien on August 5, 1975, and thus had until August 5, 1977, to file suit or counterclaim. Green Bay was named a defendant in Lewis' suit to foreclose its mechanic's lien, and Green Bay filed its entry of appearance on December 29, 1975. However, Green Bay did not file its answer and counterclaim until November 2, 1979, more than two years after the expiration of the statutory period of limitations.

The case of Galloy v. Sparrow (1911), 166 Ill. App. 197, involved a situation identical to that here, except that at that time, a subcontractor was required to file his petition or commence his suit within four months from the date final payment became due. T.M. Tobin Bros., a subcontractor, had been named a defendant in a mechanic's lien suit filed by another subcontractor. Tobin Bros. filed an entry of appearance in the suit within the four-month period of limitations, but did not file its answer making the necessary allegations until after the period had expired. The trial court ruled that Tobin Bros. had not preserved its rights as a lien claimant and the appellate court affirmed stating that the mere appearance by Tobin Bros. did not constitute "`filing a petition' or `commencing a suit.'" 166 Ill. App. 197, 201.

Green Bay contends that the late filing of its answer and counterclaim was authorized by sections 46(1) and (2) of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, pars. 46(1) and (2)) providing relief to claimants which was not available at the time of Galloy. Subsection 1 permits amendment to "any process, pleading, bill of particulars or proceedings" upon "just and reasonable terms." Subsection 2 provides that a cause of action stated in an amended pleading cannot be defeated by any time limitation for filing the cause of action if the time limitation had not expired at the time of filing "the original pleading" and the original and amended pleadings show that the cause of action set forth in the amended pleading "grew out of the same transaction or occurrence set up in the original pleading."

Here, the only document filed by Green Bay within the two-year period of limitations was its entry of appearance. Even if the entry of appearance be deemed a pleading, it did not set forth or refer to any transaction or occurrence. It was not a sufficient prior pleading to enable Green Bay to avoid the time limitations of section 9 of the Mechanic's Lien Act by invoking section 46(2) of the Civil Practice Act. Thus, this case differs from Douglas Lumber Co. v. Chicago Home for Incurables (1942), 380 Ill. 87, 43 N.E.2d 535, where an original complaint to foreclose a mechanic's lien was held, under legislation similar to section 46(2), to be a sufficient prior pleading to serve as the basis for filing an otherwise tardy amendment seeking recovery for additional materials not mentioned in the prior pleading.

Green Bay maintains that Lewis' complaint should be deemed "the original pleading" within the meaning of section 46(2). However, we interpret that phrase to refer to a pleading which is later sought to be amended to properly set forth the claim at issue. We cannot construe Green Bay's counterclaim to be an amendment to Lewis' complaint. Moreover, Lewis' complaint merely alleges that Green Bay and others "have, or claim to have, some interest in the above-described [as set forth in the complaint] premises, as lien creditors, or otherwise." Thus, that complaint did not allege that Green Bay's interest necessarily arose out of the same "transaction or occurrence" as that set forth in Green Bay's counterclaim.

• 1 Green Bay's claim was barred for not having been filed within the time requirements of section 9. Its dismissal by the trial court was proper.

Now we must address the much more difficult question of whether the other appellants were entitled to a mechanic's lien for the services, labor, material and equipment they furnished to Lewis in connection with the Cabot job.

In Hoier v. Kaplan (1924), 313 Ill. 448, 145 N.E. 243, a contractor was denied a mechanic's lien for labor in maintaining heat during the winter months in a building under construction. On appeal, the supreme court recognized that the labor was necessary to furnish heat to preserve the interior of the building and to maintain the workers' comfort, but the court stated that necessity is not the test of whether a lien will attach under the Act. Rather, the question is whether the labor was performed in constructing the building or whether it was performed in "one of the processes of construction as a means to assist in the erection of the building." 313 Ill. 448, 453, 145 N.E. 243, 245.

Under the theory of Hoier, except for items specifically enumerated in the Act, in order to be lienable, materials must be used in or incorporated into the structure or improvement, and labor or services must be performed in the actual construction.

Appellants argue that the instant case is distinguishable from Hoier because the claimant in Hoier was a contractor whose claim is governed by section 1 of the Act, whereas the appellants here are subcontractors whose claims are governed by section 21. Section 21 provides in part,

"Subject to the provisions of section 5 [dealing with notice to the owner], every mechanic, worker or other person who shall furnish any materials, apparatus, machinery or fixtures, or furnish or perform services or labor for the contractor, or shall furnish any material to be employed in the process of construction as a means for assisting in the erection of the building or improvement in what is commonly termed form or form work where concrete, cement or like material is used in whole or in part, shall be ...

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