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07/14/95 LEVEYFILM v. COSMOPOLITAN BANK & TRUST

July 14, 1995

LEVEYFILM, INC., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLANT,
v.
COSMOPOLITAN BANK & TRUST, AN ILLINOIS STATE CHARTERED BANK, SUCCESSOR IN INTEREST TO, COSMOPOLITAN BANK OF CHICAGO, AS TRUSTEE U/T/A/ NO. 10333, DATED OCTOBER 31, 1960; THE KERRY CORPORATION, AN ILLINOIS CORPORATION; KELLIHER COMPANY, AN ILLINOIS CORPORATION; CHICAGO SINAI CONGREGATION, A RELIGIOUS CORPORATION, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County. The Honorable Thomas J. Wynn, Judge Presiding.

The Honorable Justice T. O'brien delivered the opinion of the court: MC Nulty, J., concurs. Cousins, P.j., dissents.

The opinion of the court was delivered by: O'brien

JUSTICE T. O'BRIEN delivered the opinion of the court:

Plaintiff Leveyfilm, Inc. appeals from an order of the circuit court dismissing counts I and II of its five count complaint. Count I sought to foreclose a mechanic's lien under the Illinois Mechanic's Lien Act (770 ILCS 60/1 (West Supp. 1993).) Count II requested the imposition of an equitable lien. *fn1 The circuit court dismissed both counts with prejudice and found no just reason for delaying enforcement or appeal. (134 Ill. 2d R. 304(a).) We affirm in part, reverse in part and remand for further proceedings.

BACKGROUND

Because the circuit court dismissed counts I and II under section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615 (West 1992)), the allegations in the complaint are taken as true.

Pursuant to a written agreement, defendant Kelliher Company, as sole beneficial owner of real estate under a trust, and defendant Kerry Corporation, as lessor, leased to plaintiff commercial premises located at 13-15 West Delaware Place, Chicago, Illinois. *fn2 The most recent lease, dated 1988, was extended by the parties until June 30, 1994.

Beginning in May 1993 and continuing until January 1994, the premises became "plagued" with numerous defects and hazards, including flooding, sewage overflow, fire code violations, friable asbestos contamination, lead paint contamination and other structural defects. These hazards were the result of latent defects not attributable to plaintiff.

Previously, the beneficial owner and the lessor had assumed responsibility for making the necessary repairs or alterations. However, at various times in 1993 and 1994, defendants "requested" plaintiff to perform certain services in an effort to maintain and improve the premises. Such services included the patching of foundation walls, installation of wainscoting, removal of cement floor tiles, removal of carpet tile debris, and preparatory work for the installation of drywall and the removal of asbestos insulation. Plaintiff was eventually forced to abandon the premises on January 22, 1994 due to the aforementioned hazards and defects.

By virtue of defendants' requests for services, plaintiff furnished substantial amounts of labor and materials. However, defendant did not compensate plaintiff for his services or reimburse him for any expenses he incurred. Consequently, on March 16, 1994, plaintiff filed a five count complaint seeking, inter alia, a statutory mechanic's lien and a common law equitable lien.

Defendants thereafter moved to dismiss the entire complaint pursuant to section 2-615 of the Code of Civil Procedure. With respect to count I, defendants raised two arguments in opposition to plaintiff's purported right to a mechanic's lien. First, citing Carey-Lombard Lumber Co. v. Jones (1900), 187 Ill. 203, 58 N.E. 347; and Boyer v. Keller (1913), 258 Ill. 106, 101 N.E. 237, defendants maintained that plaintiff, as lessee, could not be considered a "contractor" under the Mechanic's Lien Act. Second, defendants argued that the parties' lease precluded such a lien in this case. Specifically, defendants cited a provision in the lease which prohibited the lessee from placing any mechanic's lien against the property.

With respect to count II, defendants contended that plaintiff could not seek the imposition of an equitable lien because the parties did not intend that the property would serve as a security for payment or reimbursement. ( Oppenheimer v. Szulerecki (1921), 297 Ill. 81, 130 N.E. 325.) They also noted that plaintiff had an adequate remedy at law in light of defendants' breach of contract, as alleged in count IV, and therefore an equitable lien could not lie.

On July 29, 1994, the circuit court granted defendants' motion and dismissed counts I and II with prejudice. Although the record on appeal does not contain a transcript of the hearing, we assume, and the parties so argue, that the circuit court adopted the reasons set forth in defendants' motion to dismiss. Plaintiff then filed a timely appeal with respect to both counts in accordance with Supreme Court Rule 304(a). 134 Ill. 2d R. 304(a).

On appeal, plaintiff contends that the circuit court erred in dismissing count I because plaintiff came within the strict terms of the Illinois Mechanic's Lien Act, Carey-Lombard and Boyer notwithstanding. Plaintiff further submits that the provision in the lease prohibiting the perfection of liens is ineffective where a landlord gives a tenant permission to improve or repair the premises.

With regard to count II, plaintiff posits that a person who renders services in improving or otherwise increasing the value of another's property is entitled to restitution and may enforce the same vis-a-vis an equitable lien. Therefore, the circuit court should not have dismissed count II with prejudice.

Although we agree with plaintiff with respect to count I, we find that the circuit court properly dismissed plaintiff's request for an equitable lien under the facts and circumstances of this case. Accordingly, we affirm in ...


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