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First Fed. Sav. & Loan Ass'n v. Connelly

OPINION FILED JUNE 3, 1982.

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF CHICAGO, PLAINTIFF-APPELLEE,

v.

JOHN T. CONNELLY ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. ALBERT GREEN, Judge, presiding.

JUSTICE JIGANTI DELIVERED THE OPINION OF THE COURT:

The validity of a claim filed under the Illinois Mechanics' Lien Act on multiple parcels of property is the subject of this action. (Ill. Rev. Stat. 1979, ch. 82, par. 7.) The trial court on the pleadings found the claim invalid and subordinated it to that of the mortgagee, First Federal Savings & Loan Association.

This litigation began when First Federal filed a mortgage foreclosure action against John T. Connelly to foreclose on a four-unit apartment building located at 15647 Greenwood, Dolton, Illinois. Henry B. Rossi, Jr., d/b/a Kensington Carpet & Rug (Rossi), was named a defendant. Rossi filed an answer and a counterclaim seeking a declaration that his mechanics' lien had priority over the lien of the mortgagee, First Federal.

On January 15, 1980, approximately six months before First Federal filed this foreclosure action, Rossi entered into an oral agreement with Connelly to supply and install carpeting in four apartment buildings. The property involved in this action, an apartment building at 15647 Greenwood, was one of these parcels. Rossi installed the carpet as one contract for a total cost of $12,102.

Rossi alleged he completed the entire installation in the four buildings on March 15, 1980, and then requested payment from Connelly. When payment was not forthcoming, Rossi filed a mechanics' lien statement on June 3, 1980, less than three months after the completion of the contract, one month before the plaintiff instituted the foreclosure action and six months after the contract.

The specific language of Rossi's filing statement is relevant here. Rossi listed the four buildings separately as follows:

"1521 Berg Dr., Dolton, Illinois 1527 Berg Dr., Dolton, Illinois 15641 Greenwood, Dolton, Illinois 15647 Greenwood, Dolton, Illinois." (Emphasis added.)

Below this listing, Rossi inserted the following information: that "on or about Jan. 15, 1980," he had made a contract with John T. Connelly to "install wall-to-wall carpeting for the sum of $12,102," and that "on or about Mar. 15, 1980 * * * all work required namely delivery and installation of said wall-to-wall carpeting" was completed. In this statement, Rossi did not specify the exact date of completion for each separate building or apportion the costs between the four buildings. Thus, there is no specific completion date for the work done on 15647 Greenwood or the specific amount of the lien on this particular building.

First Federal then filed a motion to have Rossi's mechanics' lien declared subordinate to their mortgage because of defects in the mechanics' lien including a failure to partition the cost between the buildings and a failure to provide completion dates for each building. The trial court concluded that Rossi's claim for a lien did not satisfy the filing requirements of the Illinois Mechanics' Lien Act (Ill. Rev. Stat. 1979, ch. 82, par. 7) and entered an order adjudicating Rossi's lien subordinate and inferior to First Federal's first mortgage.

The pertinent language of section 7 of the Illinois Mechanics' Lien Act is summarized and paraphrased below:

No contractor shall be allowed to enforce a lien against or to the prejudice of any encumbrancer, unless within "4 months" after completion, he shall file a claim for a lien verified by an affidavit consisting of a "brief statement of the contract," "the balance due" and "a sufficiently correct description of the lot, lots or tracts of land to identify the same." "In the event the contract relates to 2 or more buildings on 2 or more lots or tracts of land, then all of these buildings and lots or tracts of land may be included in one statement of claims for a lien."

Two issues are presented for review. The first issue is whether the trial court erred in adjudicating Rossi's mechanics' lien subordinate and inferior to First Federal's first mortgage. The second issue is whether the trial court erred in denying Rossi an equitable lien priority against First Federal.

Rossi argues that his lien is not defective because he complied with the exact requirements set out in the statute. Specifically, he filed his claim for a lien within four months after completion of the work. His verified affidavit consisted of a brief statement of the contract, the balance due and what Rossi contends is a sufficiently correct description of the lots to "identify the same"; i.e., the specific address of each building involved in the claim. As the statute allows, he included his claims for liens against each separate building in one filing statement.

First Federal argues, and the trial court agreed, that judicial construction of section 7 as it relates to a single filing involving multiple parcels has added two additional requirements which must be adhered to if a lien claimant is to successfully enforce a mechanics' lien against a prior encumbrancer. One requirement is that the lien claimant disclose the exact date of the completion of the work on each parcel, and the other requirement is that the lienor must apportion the cost of the work on ...


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