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01/27/94 CONTRACT DEVELOPMENT CORPORATION v.

January 27, 1994

CONTRACT DEVELOPMENT CORPORATION, PLAINTIFF AND COUNTERDEFENDANT-APPELLANT AND CROSS-APPELLEE,
v.
STANLEY BECK AND CHARLOTTE BECK, D/B/A STAR DEVELOPMENT COMPANY, DEFENDANTS AND COUNTERPLAINTIFFS-APPELLEES AND CROSS-APPELLANTS.



Appeal from the Circuit Court of Lake County. No. 89-CH-605. Honorable John G. Radosevich, Judge, Presiding.

Rehearing Denied February 25, 1994. Released for Publication February 25, 1994. Petition for Leave to Appeal Denied June 2, 1994.

McLAREN, Bowman, Colwell

The opinion of the court was delivered by: Mclaren

JUSTICE McLAREN delivered the opinion of the court:

The counterdefendant and cross-appellee, Contract Development Corp. (CDC), appeals from an order entering judgment in favor of Stanley Beck and Charlotte Beck (the Becks), doing business as Star Development Co., counterplaintiffs and cross-appellants, on the Becks' counterclaim for slander of title. CDC's notice of appeal also states that it appeals from the denial of its motion for summary judgment. The Becks filed a cross-appeal seeking additional attorney fees on their counterclaim for slander of title and contesting the date from which interest was set to accrue on the judgment. For the following reasons, we reverse and remand.

On July 18, 1988, CDC entered into a contract with the Becks to provide services as construction manager on property belonging to the Becks. In addition to the general services as construction manager listed in the form contract, CDC agreed to provide the following services:

"1. Coordination of Project Architect and Engineer.

2. Take responsibility for necessary zoning variances with the City of Libertyville, County of Lake, I.D.O.T. and other governing bodies with jurisdiction.

3. Preparation of financial proformas for bank financing, and presentation of same with Owner to lending institutions.

4. Preparation and implementation of marketing and leasing plan, and negotiation of store leases on behalf of Owner."

The Becks became dissatisfied with CDC's performance, or lack thereof, and refused to pay CDC for the work it performed. CDC filed two liens against the property under the Mechanics Lien Act. (770 ILCS 60/1 et seq. (West 1992).) CDC subsequently filed a complaint against the Becks in three counts. Count I requested the foreclosure of the mechanic's liens. Count II was based on breach of contract. Count III sought relief for quantum meruit.

The Becks responded by filing a motion to dismiss CDC's complaint pursuant to section 2-619 of the Code of Civil Procedure. (735 ILCS 5/2-619(a)(9) (West 1992).) The motion was denied and further proceedings were stayed pending arbitration, as the contract between the parties specified that disputes would be settled by arbitration. After a hearing, the arbitrator awarded damages in favor of CDC for $58,851. The trial court confirmed this award by entering a judgment on April 9, 1990.

On May 16, 1990, the trial court granted the Becks' motion for leave to file a counterclaim against CDC for slander of title. CDC responded by filing a motion to strike and dismiss the counterclaim. On June 20, 1990, the trial court granted CDC leave to withdraw its mechanic's lien claims and withdrew its previous order granting the Becks leave to file the counterclaim. The court dismissed the Becks' counterclaim for slander of title "without prejudice to refile as a separate action" and concluded that all matters in controversy were disposed of.

The Becks appealed the order which dismissed their counterclaim. In Contract Development Corp. v. Beck (1991), 210 Ill. App. 3d 677, 569 N.E.2d 941, we reinstated the Becks' counterclaim for slander of title on the basis that CDC should not have been allowed to voluntarily withdraw its complaint when a counterclaim was pending and subsequently move to dismiss the counterclaim. The case was remanded to the trial court upon the filing of the opinion.

In accord with our opinion, the Becks filed three amended counterclaims alleging slander of title and fraud. The Becks asserted that on February 1, 1989, and on February 15, 1989, CDC recorded liens under the Mechanics Lien Act against the subject property knowing that the services performed were nonlienable. CDC filed a motion for summary judgment on the basis that the Becks could not recover for slander of title because they did not hold title to the property at the time they filed the counterclaim, as they conveyed title to Star Development Co., their wholly owned corporation, by quitclaim deed prior to filing the counterclaim. Attached to the motion were an affidavit by Carl Bryant, owner of CDC, and certified copies of documents which showed that the Becks were not in title to the property at the time the counterclaim was filed. After a hearing, the court denied CDC's motion for summary judgment. Thereafter, the Becks moved to add Star Development Company, the present owner of the property, as a party plaintiff. The motion was denied.

The Becks' counterclaim for slander of title and fraud proceeded to a bench trial. The Becks asserted that CDC maliciously filed the mechanic's liens against the property knowing that the services performed were nonlienable and refused to remove the liens upon demand. The trial court found in favor of the Becks on the slander of title claim and awarded damages totalling $18,737.76. The court found in favor of CDC on the fraud claim. On April 15, 1992, a written judgment order was entered which stated that "judgment of the trial of this matter is hereby entered, except for, calculation of interest amounts in connection with offsetting judgments (i.e. arbitration award versus trial court award)." (Emphasis in original.)

The Becks filed a post-trial motion to modify the judgment which requested additional attorney fees for services rendered by the law firms of Laidley & Sutter ($3,832.75) and Pope & John (in excess of $60,000). In an order entered on June 18, 1992, the court denied the Becks' motion and ordered that judgment interest shall run from April 15, 1992. CDC filed a motion to clarify the order because it failed to specify whether interest was assessed on the judgment which confirmed the arbitrator's award. The court responded by ordering that interest would not accrue on orders or awards entered prior to April 15, 1992. CDC filed an appeal, and the Becks filed a cross-appeal. The appeal and cross-appeal were dismissed by the appellate court for lack of a final and appealable order.

On March 23, 1993, the trial court entered a final judgment on the Becks' counterclaim. The court found in favor of the Becks on the slander of title count and in favor of CDC on the fraud count. Damages were awarded to the Becks totalling $18,737.76. The order reflected that the judgment encompassed $2,000 for attorney fees to Laidley & Sutter, $1,800 for the cost of the letter of credit, and $14,937.76 for interest due on loans in connection with the project. The court finalized the judgment by setting off the judgment on the slander of title portion of the counterclaim against the judgment of $56,851 in favor of CDC which confirmed the arbitrator's award. A net amount of $38,113.24 was due from the Becks to CDC. Interest on the judgment was set to accrue as of April 15, 1992, the date it was initially entered.

CDC appealed on the basis that the judgment in favor of the Becks was against the manifest weight of the evidence. The Becks filed a cross-appeal requesting additional attorney fees on their counterclaim for slander of title and contesting the date from which interest was set to accrue on the judgment.

CDC's first contention on appeal is that the court erred in denying its motion for summary judgment. CDC urges that a cause of action for slander of title may only be maintained by a party with interest in the property. Since the Becks conveyed title to the subject property by quitclaim deed to Star Development Company, their wholly owned corporation, prior to filing the counterclaim for slander of title, CDC contends ...


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