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Swansea Concrete Prod., Inc. v. Distler





Appeal from the Circuit Court of St. Clair County; the Hon. William Starnes, Judge, presiding.


The main question presented by this appeal is whether a subcontractor who fails to perfect a mechanics' lien is entitled to recover a money judgment from the property owner if that relief is requested at trial. We hold that he may be so entitled and that the trial court did not err in granting that relief in this case.

Defendants Robert C. and Carolyn S. Distler appeal from a judgment against them for $1,871.72 in favor of plaintiff Swansea Concrete Products, Inc. (Swansea), and for $2,553.18 in favor of plaintiff Hill-Thomas Lime & Cement Co. (Hill-Thomas). The plaintiffs' original complaint sought to impose mechanics' liens on property owned by the Distlers and improved with material provided by the plaintiffs. After trial, however, the circuit court of St. Clair County held that statements by the Distlers or their agent, co-defendant Investors Savings & Loan Association (Investors), equitably estopped the Distlers from denying payment to the plaintiffs for that material. The court granted the plaintiffs money judgments against the Distlers rather than liens against their property, and the plaintiffs amended their pleadings accordingly.

• 1 The Distlers now argue that (1) the finding of an estoppel based on verbal promises violates the Statute of Frauds; (2) the plaintiffs' failure to meet the notice requirements of the Mechanics' Liens Act (Ill. Rev. Stat. 1983, ch. 82, par. 1 et seq.) deprives them of statutory and equitable relief; and (3) the judgment improperly forces them to pay more than the contract price for the construction of their building. The Statute of Frauds issue, being an affirmative defense, has been waived by the Distlers' failure to plead it at trial. (Ill. Rev. Stat. 1983, ch. 110, par. 2-613(d); Terminal Freezers, Inc. v. Roberts Frozen Foods, Inc. (1976), 41 Ill. App.3d 981, 354 N.E.2d 904.) Their attempt to raise that defense by filing an amended answer after trial was of no effect, because that answer was filed months after the notice of appeal was filed and the circuit court had lost jurisdiction of the matter. Hecht v. Hecht (1977), 49 Ill. App.3d 334, 364 N.E.2d 330.

In 1980, the Distlers engaged Town & Country Construction (Town & Country), a general contractor, to build a quick shop and automobile repair garage in Shiloh, Illinois. The contract price was $51,400. That amount was to be loaned by Investors. Throughout October and November, Town & Country contacted subcontractors and suppliers, including Hill-Thomas and Swansea. Mrs. Distler spoke to Robert Thomas of Hill-Thomas before a representative of Town & Country did. She selected a particular type of brick at that time and told Thomas the identity of the general contractor at the project. Thomas testified that, as he was unfamiliar with Town & Country, he wanted Mrs. Distler to obtain a lien waiver from him before making payments under the contract. He also stated that he expressed the same concerns to Investors personnel Paul Murphy and Sharon Cleveland. According to Thomas, in two conversations with Ms. Cleveland in October he "was led to assume that we were still going to get our money." Ms. Cleveland denied speaking to Thomas about this matter in October, and she recalled that she first learned in November or December that Hill-Thomas was a supplier. Murphy was not certain when he talked to Thomas, but he felt that Thomas knew that Investors normally required lien waivers from subcontractors before disbursing funds to contractors.

Swansea's David Fournie was contacted by Town & Country on November 3. He had not previously spoken with the Distlers. Like Thomas, Fournie did not know anything about Town & Country, so he asked them for a list of references, which included Investors. Fournie called Investors that day. He did not remember the name of the person with whom he talked, but that person told him that Investors was handling all disbursements on the Distler project, and no payment would be made to Town & Country without requiring lien waivers from material suppliers. According to Fournie, Swansea would not have done business with Town & Country without those assurances. Fournie did not have any dealings with Murphy and did not speak to Ms. Cleveland or Mrs. Distler until December 1980.

On November 6, the Distlers paid Town & Country $45,000, of which $40,000 came from Investors and $5,000 was from the Distler's personal funds. Town & Country had not yet given the Distlers or Investors an affidavit listing the subcontractors and the amounts due or to be due them (Ill. Rev. Stat. 1983, ch. 82, par. 5), although Robert Rogers, the owner of Town & Country, executed waivers of mechanics' liens for both checks received. No lien waivers were obtained from Town & Country's subcontractors during this period.

Some time in November or December, Mrs. Distler learned that the subcontractors were not being paid. She called Robert Thomas in early December, and he explained that he had received no money from Town & Country. Thomas testified that Mrs. Distler said that there would be enough money to complete the job, and if he had any materials ordered by Town & Country but not delivered, he should deliver them. Mrs. Distler denied representing to Thomas that he would get paid.

On December 12, 1980, Mrs. Distler obtained two contractors' affidavits from Rogers. One of the affidavits listed Town & Country as the sole contractor for the project. This affidavit was presented to Investors. The other affidavit, listing approximately 20 subcontractors and suppliers, was taken by Mrs. Distler to her attorney's office. Sharon Cleveland testified that she never saw the second affidavit prior to trial. Neither affidavit itemized payments made, due or to be due to the subcontractors. Mrs. Distler recalled that when she asked Rogers for an affidavit, he replied that no money was owed any subcontractors because he had paid all of them.

Mrs. Distler discharged Town & Country on December 15, and, as she expressed it at trial, she became the job's general contractor. The following day, she telephoned the subcontractors so that they would not order any more supplies, according to her testimony. Robert Thomas stated that during this call, Mrs. Distler said that Town & Country had been dismissed and informed him that he would get paid. Mrs. Distler testified that she did not assure Thomas of payment then. David Fournie indicated that Mrs. Distler asked him for a copy of overdue bills that day and also verified that they would be taken care of. At trial, Mrs. Distler did not remember asking Fournie for those bills.

After his conversation with Mrs. Distler, Thomas contacted someone at Investors, who told him that they were not certain about the status of the Distler job. David Fournie spoke to Sharon Cleveland on December 19. She said that funds still remained on the construction loan, but they could not be disbursed without the Distlers' approval. Ms. Cleveland, who handled the Distler loan after the discharge of Town & Country, paid the subcontractors directly from Investors with the authority of the Distlers. These disbursements, made only upon the presentation of documented bills and lien waivers, exhausted the $51,400 loan.

Hill-Thomas recorded its lien claim on February 9, 1981, and presented a copy of it to Mr. Distler on February 7. Its last delivery at the Distler job was on December 12, 1980. Swansea recorded its claim on February 19, 1981. It had last delivered material on November 25, 1980. Swansea did not serve a copy of any notice on the Distlers, either personally or by registered or certified mail. Neither plaintiff gave written notice of its claim to Investors. The Distlers eventually completed the building at a cost of $58,386.84, or $6,986.84 more than the original contract price.

• 2 According to the Distlers, the plaintiffs failed to comply with the notice provisions of the Mechanics' Lien Act. (See generally Ill. Rev. Stat. 1983, ch. 82, par. 24; Hill Behan Lumber Co. v. Irving Federal Savings & Loan Association (1984), 121 Ill. App.3d 511, 514, 459 N.E.2d 1066, 1069.) We will assume, for the sake of argument, that this is true. Nonetheless, the plaintiffs' failure to perfect the requested mechanics' liens does not bar them from seeking a money judgment.

• 3 It has often been stated that where a subcontractor fails to perfect a mechanics' lien, he may not be granted an equitable lien in a situation where it would have been appropriate to impose a mechanics' lien had there been compliance with the statute. (Hill Behan Lumber Co. v. Marchese (1971), 1 Ill. App.3d 789, 275 N.E.2d 451; Suddarth v. Rosen (1967), 81 Ill. App.2d 136, 224 N.E.2d 602.) The question ...

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