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05/26/94 FIRST BANK ROSCOE v. ALFONSO A. RINALDI

May 26, 1994

FIRST BANK OF ROSCOE, PLAINTIFF AND COUNTERDEFENDANT-APPELLEE,
v.
ALFONSO A. RINALDI, INDIV. AND AS TRUSTEE OF RINALDI TRUST NO. 1987 DATED JUNE 15, 1987, DEFENDANTS AND COUNTERDEFENDANTS-APPELLEES (EDWIN J. HARPER AND VERA R. HARPER, REDCO GROUP OF WHITE-WATER, WISCONSIN SAVE-MART, INC., AND UNKNOWN OWNERS, DEFENDANTS; LAWRENCE S. LANNON, D/B/A THE REDCO GROUP, COUNTERPLAINTIFF-APPELLANT).



Appeal from the Circuit Court of Winnebago County. No. 92-CH-82. Honorable Harris H. Agnew and Alford R. Penniman, Judges, Presiding.

Rehearing Denied June 27, 1994. Petition for Leave to Appeal Denied October 6, 1994.

Colwell, Quetsch, PECCARELLI

The opinion of the court was delivered by: Colwell

JUSTICE COLWELL delivered the opinion of the court:

The counterplaintiff, Lawrence S. Lannon, d/b/a The Redco Group (Lannon), appeals from an order dismissing his counterclaimand amended counterclaim against counterdefendants, Alfonso A. Rinaldi, sometimes known as Al Rinaldi (Rinaldi), and First Bank of Roscoe (Bank). Lannon had contracted with Rinaldi to develop a shopping center on a tract of real estate owned by Rinaldi. Rinaldi terminated the contract, and Lannon filed a claim for a mechanic's lien against Rinaldi. In a mortgage foreclosure action, subsequently dismissed by the Bank, Lannon sought recovery for his services as a "property manager."

The questions raised on the pleadings are whether the trial court erred (1) in finding that Lannon's services are not recognized as lienable under the Mechanics Lien Act (Act) (770 ILCS 60/1 et seq. (West 1992)), (2) in granting the Bank's motion to dismiss its complaint without prejudice, (3) in sustaining the motions of counterdefendants to strike parts of Lannon's counterclaim, and (4) in granting the motions to dismiss Lannon's alternative claim for equitable relief. We affirm.

An agreement between the Bank and Rinaldi was recorded on June 19, 1989, mortgaging 124 acres of undeveloped real estate in Roscoe, Illinois, for $1,018,000. A second mortgage was recorded on January 2, 1991, for $655,000. Meanwhile, on December 20, 1989, Rinaldi and Lannon entered into a written "Leasing and Development Agreement" (the Agreement), granting Lannon the exclusive right to develop a shopping center on the tract of land and to lease the retail space. On February 28, 1991, Rinaldi gave Lannon a written notice to terminate the Agreement. Lannon filed a claim for a mechanic's lien against Rinaldi on March 19, 1991, asserting he had performed services under the Agreement for which he had not been paid. Lannon alleged that he was owed $313,817.50 after crediting Rinaldi $68,225 for prior payments.

On April 2, 1992, the Bank initiated the instant cause with foreclosure proceedings against Rinaldi to which Lannon was joined as a defendant by virtue of his claim for a mechanic's lien. On May 21, 1992, Lannon filed a counterclaim in two counts: the first count was for foreclosure of his claimed lien against Rinaldi and the Bank, and the second count was in contract against Rinaldi. The Bank answered count I and Rinaldi moved to dismiss count I.

On August 21, 1992, the court granted Rinaldi's motion to dismiss and gave Lannon leave to file an amended counterclaim. Also, on August 21, the Bank dismissed its complaint to foreclose over Lannon's objection. In its order granting the dismissal without prejudice, the court stated that "this order does not affect [Lannon's] counterclaim."

Lannon filed his amended counterclaim in four counts. Count Iwas identical to his original counterclaim and was to foreclose his claimed mechanic's lien. Count II was identical to his original counterclaim and was in contract against Rinaldi. Count III was an expanded version of a complaint to foreclose a mechanic's lien. Count IV, in the alternative, sought to foreclose an equitable lien on the premises.

Rinaldi presented a motion to strike various allegations of the amended counterclaim and a motion to dismiss counts I, III, and IV. The Bank joined in Rinaldi's motions. The court considered the pleading and motions and the Bank's oral representation that it would present a motion to withdraw its answer to Lannon's original count I and move to dismiss it.

After the court's ruling on the motions to strike and dismiss, Lannon elected to stand on his amended counterclaim. He orally moved to dismiss without prejudice his original count I as to the Bank and count II sounding in contract.

The court agreed with Rinaldi and the Bank that Lannon's services are not recognized as lienable under the Mechanics Lien Act. Count I of the original counterclaim pending against the Bank, which was to foreclose Lannon's claimed mechanic's lien, was ordered dismissed without prejudice. Count I of the amended counterclaim pending against Rinaldi, which also was for foreclosure of the claimed mechanic's lien, was ordered dismissed with prejudice. Count II of the original and of the amended counterclaim, which were identical and sounded in contract against Rinaldi, were ordered dismissed without prejudice.

Pursuant to Rinaldi's and the Bank's motions, the court struck as self-serving and conclusory certain allegations of the amended counterclaim. The motion to dismiss count III of the amended counterclaim, which was the expanded version of a complaint to foreclose a mechanic's lien, was granted, as was the motion to dismiss count IV of the amended counterclaim. Both counts were ordered dismissed with prejudice. Lannon's timely appeal followed.

It is axiomatic that when the legal sufficiency of all or part of a complaint (or counterclaim) is challenged by a section 2-615 motion to dismiss (735 ILCS 5/2-615 (West 1992)), all well-pleaded facts in the challenged section are to be taken as true, and a reviewing court must determine whether the allegations of the complaint, when interpreted in the light most favorable to the plaintiff (or counterplaintiff), are sufficient to set forth a cause of action upon which relief may be granted. ( DiBenedetto v. Flora Township (1992), 153 Ill. 2d 66, 70, 178 Ill. Dec. 777, 605 N.E.2d 571.) A cause of action should not be dismissed on the pleadings unless it clearly appears that no set of facts can be proved that willentitle the plaintiff to recover. ( People ex rel. Daley v. Datacom Systems Corp. (1991), 146 Ill. 2d 1, 11, 165 Ill. Dec. 655, 585 N.E.2d 51.) To avoid dismissal for the failure to state a cause of action, a complaint must set out sufficiently every essential fact to be proved; Conclusions of law or fact unsupported by specific factual allegations are not taken as true. Benhart v. Rockford Park District (1991), 218 Ill. App. 3d 554, 556-57, 161 Ill. Dec. 242, 578 N.E.2d 600; Groenings v. City of St. Charles (1991), 215 Ill. App. 3d 295, 299, 158 Ill. Dec. 923, 574 N.E.2d 1316.

Lannon first contends that the trial court erred in finding that his services are not recognized as lienable under the Mechanics Lien Act. The basis for filing a lien under the Act is the performance of work or the furnishing of materials that constitute an improvement to the land. ( Cleveland Wrecking Co. v. Central National Bank (1991), 216 Ill. App. 3d 279, 285, 160 Ill. Dec. 101, 576 N.E.2d 1055.) Section 1 of the Act specifies the situations in which a lien may be filed:

"Any person who shall by any contract or contracts, express or implied, * * * with the owner of a lot or tract of land, * * * to improve the lot or tract of land or to manage a structure thereon, * * * or perform any services or incur any expense as an architect, structural engineer, professional engineer, land surveyor or property manager in, for or on a lot or tract of land for any such purpose * * * is known under this Act as a contractor, and has a lien upon the whole of such lot or tract of land * * * for the amount due to him for such * * * services or labor, and interest at the rate of 10% per annum from the date the same is due." (770 ILCS 60/1 (West 1992).)

To determine the validity of a claim under the Act, the focus of the inquiry is whether the work performed has enhanced the value of the land. Cleveland Wrecking, 216 Ill. App. 3d at 285; Watson v. Watson (1991), 218 Ill. App. 3d 397, 400, 161 Ill. Dec. 148, 578 N.E.2d 275.

No allegations are raised in the pleadings regarding Lannon's leasing duties. The Agreement, a copy of which is attached to the counterclaim, describes ...


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