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09/06/95 SEASON COMFORT CORP. v. BEN A. BORENSTEIN

September 6, 1995

SEASON COMFORT CORP., PLAINTIFF-APPELLEE/CROSS-APPELLANT,
v.
BEN A. BORENSTEIN COMPANY, DEFENDANT-APPELLANT/CROSS-APPELLEE, AND A.A. ADVANCED AIR SYSTEMS, INC; JEWEL TEA COMPANY, INCORPORATED; JEWEL TEA COMPANY, INC.; AND NON-RECORD CLAIMANTS AND UNKNOWN OWNERS, DEFENDANTS.



APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. HONORABLE NORMAN SANDS, JUDGE PRESIDING.

The Honorable Justice Rizzi delivered the opinion of the court: Tully, J., and Cerda, J., concur.

The opinion of the court was delivered by: Rizzi

The Honorable Justice RIZZI delivered the opinion of the court:

Plaintiff, Season Comfort Corp. (Season), is a construction contractor who brought this action against defendants A.A. Advanced Air Systems, Inc. (AA), Jewel Tea Company Incorporated, (Jewel) and Ben A. Borenstein & Company (BABCO), to establish and enforce a lien pursuant to the Mechanics Lien Act (770 ILCS 60/1, (West 1992))(Act) and to recover money judgments against the defendants. Jewel is the owner of the premises where the construction work was done. BABCO is the general contractor for the project. AA is a subcontractor who engaged Season as its secondary subcontractor.

The trial court entered a judgment in favor of Jewel and against Season. It also entered judgment in favor of Season and against BABCO for $27,618. No judgment was entered with regard to AA. The trial court found, however, that there was no just reason for delaying enforcement or appeal of the judgment. S. Ct. Rule 304(a). BABCO has appealed, and Season has cross-appealed. We affirm the judgment in favor of Jewel and reverse the judgment against BABCO and enter judgment in favor of BABCO and against Season. We also remand for further proceedings as the trial court may determine.

Jewel is the owner of real property and has offices located at 1955 West North Avenue, Melrose Park, Illinois (the premises). On October 6, 1987, Jewel entered into a written construction contract with BABCO as a general contractor for $1,483,200 to make improvements on the premises. On December 9, 1987, BABCO entered into a written subcontract with AA for $123,471 to perform certain heating, ventilating and air conditioning work (HVAC work) for the project. The amount was subsequently increased by an additional $4,040.

The written contract between BABCO and AA provided:

No assignment of this agreement of moneys due or which may become due hereafter shall be made without the prior written consent of BABCO. This agreement shall not be sublet in whole or in part without the prior written consent of BABCO.

Despite the no assignment and no sublet without BABCO's written consent provision in its subcontract with BABCO, on April 4, 1988, AA entered into an oral secondary subcontract with Season, without the consent or knowledge of BABCO. According to the oral secondary subcontract between AA and Season, Season was to furnish labor and materials relating to the installation of HVAC work on the project. The oral agreement provided for a contract price of $33,568. There is no explanation in the record as to why an oral rather than a written secondary subcontract was entered into between AA and Season; nor are there any details of the oral agreement.

Pursuant to its oral secondary subcontract with AA, Season began working on the project in April of 1988. On June 16, 1988, Season billed AA in the amount of $19,325.93 for labor and materials, and on July 7, 1988 in the amount of $8,291.82. On July 8, 1988, however, AA filed for bankruptcy. At that time, Season had not received payment from AA for its labor and materials relating to the installation of HVAC work, which amounted to $27,618. As a result, on July 11, 1988, Season ceased working on the project.

On July 26, 1988, for the first time Season served Jewel with a subcontractor's notice of lien under the Act, and on July 27, 1988, Season served BABCO and AA. On September 15, 1988, Season recorded its lien notices with the Recorder of Deeds for Cook County. There is no explanation in the record as to why Season did not file a lien notice pursuant to the Act prior to July 26, 1988.

From January 12, 1988 through December 18, 1988, BABCO submitted sworn statements to Jewel pursuant to the Act, stating the name of each subcontractor, the amount of the subcontract, the amount paid and the amount owed. Season was not named in any of these sworn statements by BABCO because AA had not named Season in the sworn statements that it had submitted to BABCO. The sworn statements that AA had submitted to BABCO required AA to name any of AA's secondary subcontractors. At no time prior to the service of its notice of lien on Jewel on July 26, 1988, did Season notify Jewel or BABCO that it was a secondary subcontractor on the project or that any money was owed to it by AA.

Since AA never completed performance of its subcontract with BABCO, on September 6, 1988, that subcontract was terminated. On BABCO's October 1, 1988 statement to Jewel, it lists $108,000 as having been paid to AA, with no retainage existing and no money owing. Throughout the entire course of ...


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