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03/31/87 James R. Fisher, D/B/A v. Harris Bank & Trust

March 31, 1987

JAMES R. FISHER, D/B/A FISHER CONSTRUCTION COMPANY, PLAINTIFF

v.

HARRIS BANK & TRUST COMPANY, TRUSTEE, ET AL., DEFENDANTS (EDWARD HINES LUMBER COMPANY, COUNTERPLAINTIFF-APPELLANT; JAMES R. FISHER ET



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

al., d/b/a Fisher Construction Company,

et al., Counterdefendants-Appellees)

506 N.E.2d 418, 154 Ill. App. 3d 79, 106 Ill. Dec. 711 1987.IL.414

Appeal from the Circuit Court of McHenry County; the Hon. Henry L. Cowlin, Judge, presiding.

APPELLATE Judges:

JUSTICE WOODWARD delivered the opinion of the court. REINHARD and NASH, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WOODWARD

Plaintiff, James R. Fisher, d/b/a Fisher Construction Company (hereinafter Fisher), filed a complaint for foreclosure of his mechanic's lien claim against defendants, Harris Bank & Trust Company, as trustee under trust No. 41979, Frank A. and Bozema Plaminek (hereinafter Harris and Plamineks shall be referred to jointly as owners), Avondale Savings Bank, Edward Hines Lumber Company (hereafter Hines), and certain other known and unknown lienholders and owners. Thereafter, Hines filed a counterclaim against the owners and Avondale for mechanic's lien foreclosure. The owners filed a motion for summary judgment which was granted by the trial court. Hines appeals.

Hines raises the following issues on appeal: whether the trial court erred in granting the motion for summary judgment and whether the delivery of a materialman's waiver of lien constitutes an absolute defense for the owners to that materialman's lien suit under the circumstances of this case.

In his complaint, Fisher alleged that he had entered into a written contract with the owners for the construction of an addition to their home, at a price of $57,280 and extras in the amount of $36,594.03. He further alleged he had been paid $40,742 and that there was due him $52,032.03. Upon being served with a copy of the Fisher complaint, Hines filed an answer and a counterclaim, alleging delivery of materials to the subject premises pursuant to a verbal agreement with Fisher and that there was due and owing to Hines the sum of $10,170.56.

On August 20, 1984, Frank Plaminek filed an answer to Hines' counterclaim, denying the allegations. On October 4, 1984, Fisher filed an amended complaint alleging, inter alia, that as part of a scheme to defraud him, the owners stopped payment on a check for $10,000 issued by them to Fisher. On December 13, 1984, Hines filed a motion to strike the answer of Frank Plaminek to Hines' counterclaim. The motion was granted, and Plaminek was given 45 days to file an amended answer. Instead, on January 29, 1985, a motion for stay of proceedings was filed on behalf of the owners. The motion requested that the matter be submitted to arbitration as provided for in the construction contract. However, on March 11, 1985, the motion was withdrawn.

On March 18, 1985, the owners filed a motion for summary judgment, alleging that Hines had signed a waiver of mechanic's lien against the premises. The motion also alleged that Fisher had executed a sworn contractor's affidavit stating that $26,202 had been paid him and that all costs, liens, and construction debts had been paid. Copies of both the waiver of lien and the contractor's affidavit were attached as exhibits to the motion.

In response to the motion for summary judgment, Hines stated that the contractor's affidavit stated on its face that payout would be made 48 hours after examination of the waivers and that in paragraph 3 of the construction contract between Fisher and the owners it stated "[p]rior to receipt of any payment, contractor will deliver a sworn contractor's affidavit showing all subcontractors who have supplied labor and material, together with waivers of mechanic's lien from all of the parties who performed labor or who supplied material." Thus the owners were aware of the industry custom of submitting lien waivers prior to payment.

Thereafter, the owners were granted leave to file an amended motion for summary judgment. The amended motion added as a basis for summary judgment that Hines had failed to serve the notice to the owner required by sections 5 and 21 of "An Act relating to . . . material men's liens . . ." (the Mechanics' Liens Act) (Ill. Rev. Stat. 1983, ch. 82, pars. 5, 21) and was accompanied by the affidavit of Frank Plaminek. In response to the amended motion, Hines maintained that it did serve the required notice, by first sending the notice certified mail, which was returned unclaimed, and by delivering a copy of the notice to a maintenance man on the premises. Hines further stated that even if the notice had not been served within the 14 days as required by the statute, its lien would still be preserved, but only to the extent that the owner had not been prejudiced by payments made prior to the receipt of the notice. Hines maintained that since the only check intended for Hines was the $10,000 check which owners had stopped payment on, there was still a genuine issue of material fact as to whether owners were prejudiced thereby.

On September 16, 1985, the trial court issued a somewhat confusing and contradictory letter opinion on the owners' amended motion for summary judgment. In its letter opinion, the trial court first stated that summary judgment should be granted, apparently on the basis that the owners ...


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