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06/06/96 STRUEBING CONSTRUCTION CO. v. GOLUB-LAKE

June 6, 1996

STRUEBING CONSTRUCTION CO., INC., AN ILLINOIS CORPORATION, PLAINTIFF-APPELLEE,
v.
GOLUB-LAKE SHORE PLACE CORP., AN ILLINOIS CORPORATION, AMERICAN NATIONAL BANK AND TRUST COMPANY, AMERICAN NATIONAL BANK AND TRUST COMPANY AS TRUSTEE U/T/A DATED 12/16/88 AND KNOWN AS TRUST NO. 106992, PLAYBOY ENTERPRISES, INC., A DELAWARE CORPORATION, BEN A. BORENSTEIN & CO., A WEST VIRGINIA CORPORATION, DEFENDANTS-APPELLANTS, AND GOLUB & CO.-680, AN ILLINOIS CORPORATION, BANK BUILDING AND EQUIPMENT CORPORATION OF AMERICA, UNKNOWN OWNERS, AND UNKNOWN LIEN CLAIMANTS, DEFENDANTS.



Appeal from the Circuit Court of Cook County. No. 90-CH-9023. Honorable Clifford L. Meacham, Judge Presiding.

The Honorable Justice Theis delivered the opinion of the court: Hoffman, P.j., and Cahill, J., concur.

The opinion of the court was delivered by: Theis

The Honorable Justice THEIS delivered the opinion of the court:

This case involves a second-tier subcontractor's mechanic's lien claim against a private owner of a leasehold interest. It is undisputed that the second-tier subcontractor completed certain improvements on the subject property but never received payment for its work. Thus, the circuit court entered a judgment in favor of the lien claimant. On appeal, the defendants challenge the amount of the lien awarded. The circuit court arrived at the figure based on the sum of wrongful payments made by the private owner after it received notice of the second-tier subcontractor's claim pursuant to section 24 of the Mechanics Lien Act (Act). 770 ILCS 60/24 (West 1992). The defendants contend that the amount of the judgment should have been limited to the amount owed to the claimant's immediate subcontractor at the time of notice. In support of their contention, the defendants primarily rely on cases construing mechanics' lien claims against public funds under section 23 of the Act. Because this case concerns section 21, we find cases discussing section 23 immaterial and hold that the circuit court properly awarded a judgment based on the sum of wrongful payments made by the private owner following formal notice of the lien claim. We affirm.

On June 17, 1991, the plaintiff, Struebing Construction Co. Inc. (Struebing), brought an action to foreclose on its mechanic's lien against Golub-Lake Shore Place Corp., Golub & Co.-680, Inc. (Golub entities), American National Bank & Trust Company (American National Bank), Playboy Enterprises, Inc. (Playboy), Ben A Borenstein & Co. (BABCO) and Bank Building & Equipment Corporation of America, and unknown owners and lien claimants. Playboy was the tenant and owner of the leasehold interest at 680 North Lake Shore Drive in Chicago, Illinois. The lawsuit stemmed from Playboy's written construction contract with BABCO for certain improvements on its offices. BABCO entered into a written subcontract with Loughman, a division of Bank Building & Equipment Corporation of America (Loughman). In turn, Loughman entered into an oral subcontract with Struebing for carpentry work at the Playboy offices. Struebing alleges that the Golub entities and American National Bank have an interest in the 680 North Lake Shore Drive property as lien creditors, tenants, judgment creditors, trustees or otherwise.

In September of 1994, the circuit court heard the testimony of three witnesses: (1) Lee H. Struebing, president of Struebing Construction Co., Inc., (2) W.M. McClain, BABCO's project manager for the Playboy construction project, and (3) Jason Sharps, an officer, director and shareholder in BABCO. The court also reviewed several documents submitted by the parties. On April 4, 1994, the court made the following specific findings of fact.

The court found that in August of 1989, Struebing commenced work on the Playboy office project. On October 11, 1989, Struebing submitted a request for partial payment to Loughman, as well as a request for partial waiver of a lien. Thereafter, Struebing sent detailed monthly statements to Loughman requesting payment. Although Loughman had received several payments from BABCO, it never paid Struebing for its work on the project.

The court further found that Loughman failed to list Struebing as one of its subcontractors on the section 5 affidavit submitted to BABCO pursuant to the Mechanics Lien Act. 770 ILCS 60/5 (West 1992). Nonetheless, the court determined that both Playboy and BABCO had actual notice of Struebing's role in the project.

On March 7, 1990, Struebing completed performance under the terms of its oral contract with Loughman, as well as additional work authorized by both BABCO and Loughman. None of the parties disputed the quantity or quality of Struebing's work. Then, in the spring of 1990, Loughman filed for bankruptcy. On June 1, 1990, Struebing notified Playboy of its mechanic's lien claim for $153,250 for improvements made to its offices. The circuit court determined that Struebing's notice to Playboy and BABCO was timely for purposes of section 24 of the Act. 770 ILCS 60/24 (West 1992).

The court further determined that after Playboy received notice of Struebing's lien claim, it made three payments to BABCO for $23,456, $49,047 and $76,205, totaling $148,708. On April 4, 1994, the court entered a judgment for Struebing in the amount of $148,708, finding that Playboy's payments to BABCO were wrongful because they were made after Playboy received notice of Struebing's lien claim.

On appeal, Struebing challenges this court's jurisdiction on the grounds that the defendant's notice of appeal is defective. The notice of appeal filed on June 15, 1994, designated the court's May 17, 1994, order denying their post-judgment motion for modification. The defendants mistakenly failed to include the underlying April, 4, 1994, order granting a judgment in favor of Struebing.

On July 6, 1994, the defendants filed a motion for leave to file an amended notice of appeal to specify the final judgment dated April 4, 1994, citing to Supreme Court Rule 303(d). In its motion, the defendants maintained that they inadvertently failed to include the April order in their notice of appeal. The plaintiff filed an objection, arguing that the defendants failed to state a reasonable excuse for failure to file a notice of appeal on time. 134 Ill. 2d R. 303(e).

Under Supreme Court Rule 303, we have discretion to determine whether we should permit the defendants to file an amended notice of appeal. Because we find the present circumstances sufficiently analogous to those in Bank of Herrin v. Peoples Bank of Marion, 105 Ill. 2d 305, 473 N.E.2d 1298, 85 Ill. Dec. 493 (1985), we grant the defendants' motion to amend their notice of appeal. Therefore, we have jurisdiction to review this appeal.

Turning to the merits of the case, the defendants contend that, as a matter of law, Struebing's lien rights extend only to the amount due its immediate contractor, Loughman, as of the June 1, 1990, notice to Playboy and BABCO. They maintain that Koenig v. McCarthy Construction Co., Inc., ...


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