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Premier Elec. Const. v. La Salle Nat'l Bk

OPINION FILED DECEMBER 27, 1984.

PREMIER ELECTRICAL CONSTRUCTION COMPANY, PLAINTIFF-APPELLANT AND CROSS-APPELLEE,

v.

LA SALLE NATIONAL BANK, TRUSTEE, ET AL., DEFENDANTS-APPELLEES AND CROSS-APPELLANTS.



Appeal from the Circuit Court of Cook County; the Hon. Rosemary Duschene Laporta, Judge, presiding.

JUSTICE ROMITI DELIVERED THE OPINION OF THE COURT:

Rehearing denied May 16, 1985.

The plaintiff, Premier Electrical Construction Company (Premier), appeals from orders of the Cook County circuit court which, pursuant to the defendants' (hereafter owners) motions, dismissed count I of its amended complaint seeking foreclosure of a mechanic's lien, dismissed count II of its amended complaint seeking recovery based upon breach of an oral contract, and denied Premier leave to amend its complaint to include a claim for unjust enrichment. The owners cross-appeal from the trial court's order denying their motion to tax fees and costs against Premier.

The parties raise, inter alia, the following questions for our review:

1. Whether the trial court in dismissing count I properly interpreted a waiver of mechanic's lien to date executed by Premier to operate as a final waiver of lien rights.

2. Whether the trial court properly dismissed count II of the amended complaint because it was inconsistent with prior sworn statements by Premier that were part of the record.

3. Whether the trial court properly denied Premier's motion for leave to file an amended complaint alleging unjust enrichment.

4. Whether the form of owners' motion to strike or dismiss Premier's amended complaint was improper and so prejudicial to Premier that it requires reversal and remandment.

5. Whether the trial court abused its discretion in denying owners' motion to tax fees and costs against Premier pursuant to section 2-611 of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-611), which sought such fees and costs on the ground that count II of Premier's amended complaint was untrue and made by Premier without reasonable cause.

We reverse and remand the dismissal of counts I and II, and affirm denial of leave to file Premier's unjust enrichment claim and owners' motion to assess fees and costs against Premier.

Premier's original verified complaint filed December 9, 1981, sought foreclosure of a mechanic's lien and other relief from La Salle National Bank (La Salle Bank) as trustee under Trust No. 100819; Fulton House Associates (Fulton House), an Illinois limited partnership and beneficial owner of the bank trust; Wolf Point Landing Partners (WPLP), an Illinois general partnership and one of the partners of Fulton House; Harry Weese (Weese), a general partner of WPLP and general partner of Harry Weese & Associates, the architectural firm hired by Fulton House; Continental Illinois National Bank & Trust Co. (Continental), the mortgage lender for Fulton House; and E.W. Corrigan Construction Company (Corrigan), general contractor on the project. La Salle Bank, Fulton House, WPLP, Weese, and Continental will be referred to collectively as "owners" where appropriate. Corrigan is not a party to this appeal.

Premier's complaint alleged that in June 1979, WPLP and Corrigan entered into a written contract to convert the Fulton House cold storage warehouse building at 345 North Canal Street in Chicago from a 16-story brick warehouse to condominium apartments and office space (hereinafter referred to as the "Fulton House project"). It further stated that on June 21, 1979, Corrigan entered into a written subcontract with Premier whereby Premier became the electrical subcontractor for the Fulton House project. Count I of the complaint, directed against the owners, Corrigan, and "unknown owners," sought, inter alia, foreclosure of a mechanic's lien for $90,000 for electrical work Premier alleged it had provided on the Fulton House project and for which it had not been paid. Count II, directed against Corrigan, alleged that Corrigan made numerous requests for additions, extras and changes to Premier's subcontract which substantially increased the cost of the work and materials provided and that after allowance of all credits there remained due and owing to Premier the sum of $431,045.24, which Corrigan refused to pay.

On January 14, 1982, La Salle Bank filed an answer to the complaint alleging that it held title to the premises as a naked-land trustee with no further interest therein and requested that Premier's complaint against it therefore be dismissed with prejudice. Nevertheless, on January 29, La Salle, Continental, and Fulton House filed their "motion to dismiss or in the alternative to strike complaint." The motion requested that the complaint be dismissed pursuant to section 48 of the Civil Practice Act (now Ill. Rev. Stat. 1981, ch. 110, par. 2-619), because (1) Premier had fully and finally waived and released any and all claims for a lien because it had executed a final waiver of lien; (2) Premier had failed to perfect the mechanic's lien claimed in count I of the complaint; (3) Premier had no right to sue them for any sums claimed to be due from Corrigan or to claim a lien; and (4) the allegations in count I failed to conform to the requirements of the Mechanics' Liens Act (Ill. Rev. Stat. 1981, ch. 82, par. 1 et seq.), and were substantially insufficient in law. In the alternative, the motion alleged that the complaint should be dismissed pursuant to section 45 of the Civil Practice Act (now Ill. Rev. Stat. 1981, ch. 110, par. 2-615). In further support, the motion alleged that the complaint failed to identify what labor and material were allegedly provided, failed to allege the total amount due, and failed to allege that the owners had authorized or agreed to any amounts claimed. In support of their motion pursuant to section 2-619 of the Code of Civil Procedure, the owners included the affidavit of Daniel O'Keefe, an employee of Fulton House, which stated in pertinent part that in reliance on Premier's lien waiver, Fulton House had authorized payment to Premier of the amount shown on the pay-out note which had accompanied the lien waiver.

On February 9, Premier filed its motion in opposition to the motion of the owners to dismiss or strike the complaint, arguing that the waiver was not meant by the parties to be a final waiver of lien and that the complaint was factually sufficient.

On March 23, before the trial court ruled on the owners' motion to strike or dismiss, Premier filed a motion for leave to file an amended complaint. This proposed amended complaint was directed against the original defendants as well as numerous parties not named in the first complaint. In proposed count I for foreclosure of mechanic's lien, Premier first alleged in pertinent part that Premier entered into a subcontract with Corrigan on June 21, 1979, in the amount of $511,394, under which Premier agreed to provide labor and materials for electrical work at Fulton House in accordance with the terms of the subcontract and certain drawings, plans and specifications prepared for that purpose and made part of the subcontract. These allegations were realleged and incorporated into most of the subsequent counts of the proposed complaint.

Count I further alleged that during the course of construction, numerous unusual, unforeseen and unanticipated job conditions were encountered, including but not limited to structural defects caused during the thawing of the building (e.g., collapse of a substantial portion of one wall of the building), and vast structural differences in the actual physical construction of the building as opposed to what was reflected in the drawings. Premier claimed that this situation necessitated several field changes resulting in delays, unanticipated materials needs and additional costs. The complaint alleged in substance that the original subcontract did not cover these extras, that the parties had a customary practice between them with regard to the subcontract such that the owners knew that the waiver of lien was not intended to accurately reflect the full current subcontract price including all extras, that it was a matter of trade usage in the industry for a subcontractor to execute a waiver of lien that did not accurately reflect the full current subcontract price including all extras, and that Premier was entitled to a mechanic's lien in the amount of $150,000 with statutory interest.

Count II of the proposed amended complaint sought recovery of $431,045.24, the full value of the extras Premier alleged to have provided on the project, based on the owners' breach of an oral contract with Premier to provide these extras.

Count III of the amended complaint was directed against Corrigan and sought recovery of $431,045.24 based upon breach ...


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