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Merchants Environmental Industries, Inc. v. SLT Realty Limited Partnership

June 06, 2000

MERCHANTS ENVIRONMENTAL INDUSTRIES, INC., PLAINTIFF-APPELLANT,
v.
SLT REALTY LIMITED PARTNERSHIP, AND IRON MIKE'S, L.L.C.,
DEFENDANTS-APPELLEES.



The opinion of the court was delivered by: Justice Gordon

CIRCUIT COURT OF COOK COUNTY. HONORABLE CYRIL WATSON, JUDGE PRESIDING.

Plaintiff Merchants Environmental Industries, Inc. (MEI), appeals from an order of the circuit court of Cook County granting summary judgment in favor of defendants SLT Realty Limited Partnership (SLT) and Iron Mike's, L.L.C. (Iron Mike's). In the order appealed from, the court granted summary judgment as to counts I and II of MEI's amended complaint for foreclosure of a mechanic's lien in the amount of $219,317.75. Pursuant thereto, the court entered the necessary Supreme Court Rule 304(a) finding to make its ruling immediately appealable. MEI argues on appeal that summary judgment was improper because there were triable issues as to whether its notice of lien and recording of lien were timely, and whether a waiver of lien filed in August 1997 operated to waive MEI's lien rights. For the reasons set forth below, we affirm the granting of summary judgment as to SLT, but reverse it as to Iron Mike's, and remand for further consideration.

BACKGROUND

On May 13, 1998, MEI filed its amended complaint for foreclosure of mechanic's lien and other relief against SLT, Iron Mike's, Tom Gold Construction Company (Gold), MS Tremont, L.P. (Tremont), and several other defendants. MEI alleges that in October 1996 Iron Mike's leased part of the premises at 100 East Chestnut in Chicago, Illinois (also known as the Tremont Hotel), to be used as a restaurant. At that time the owner of the premises was Tremont, but SLT subsequently became the owner (allegedly on April 8, 1997), and the Iron Mike's lease was transferred to SLT, which then became the successor landlord. *fn1 Prior to that purchase, while Tremont was still the owner, MEI alleges that End Zone Enterprises, Inc., the manager of Iron Mike's, contracted with Gold to act as general contractor in the construction of space in the hotel premises to house Iron Mike's restaurant. At about the same time (November 1996), MEI avers that it entered into a subcontract with Gold to perform heating, ventilation, and air conditioning (HVAC) work in the Iron Mike's project for the sum of $115,000.

MEI further alleges that, at the specific request of Gold and the premises owner, it furnished additional duct work, equipment and piping for the project, and that the total amount due for those extras was $210,323.42. According to MEI, as of August 29, 1997, it had completed all work required under the subcontract plus all extra work requested. MEI avers that it has received payments of $106,005.67, leaving a balance due of $219,317.75, which MEI asserts has not been paid despite frequent requests. Therefore, MEI claims a mechanic's lien on the premises plus "the materials, fixtures, apparatus and machinery furnished by it[,] and upon the moneys or other considerations due or to become due from the Owner to [Gold] for said amounts due the Plaintiff."

MEI alleges that its Notice of Mechanic's Lien Claim of Subcontractor, dated November 6, 1997, was sent within 90 days after its completion of all work and delivery of all materials and thus was timely. In addition, MEI avers that its Subcontractor's Claim for Lien, recorded December 17, 1997, was timely filed within four months after completion of all work and delivery of all materials.

In count I of the amended complaint, which is designated "Action to Foreclose on Mechanics' Lien," MEI seeks execution of its mechanic's lien "for whatever sum shall be found due *** including statutory interest from August 29, 1997, and its costs herein." Alternatively, in count II, designated "Action Against Owner and Contractor Jointly Pursuant to 770 ILCS 60/28," MEI seeks judgment jointly and severally against SLT and Gold for $219,317.75 plus statutory interest and costs. *fn2

Attachments to the amended complaint include a copy of the above-mentioned subcontract between Gold and MEI, dated November 22, 1996; a copy of MEI's Notice of Mechanics' Lien Claim of Subcontractor, dated November 6, 1997; and a copy of MEI's Subcontractor's Notice and Claim for Lien, recorded December 17, 1997.

SLT filed a motion for summary judgment on March 16, 1999, alleging that a waiver of lien to date executed by MEI on August 29, 1997, waived any of MEI's mechanic's lien rights up to and including that date, in exchange for a payment of $31,938. SLT also alleged that MEI completed all of its work on the property before August 17, 1997, and that its claim for lien, which was recorded December 17, 1997, therefore came more than four months after the completion date and was untimely under section 7 of the Mechanics Lien Act (Act) (770 ILCS 60/7 (West 1993)).

Attached to the motion is a copy of MEI's August 29, 1997, "Waiver of Lien to Date," which states that, in consideration of a payment of $31,938, "the receipt whereof is hereby acknowledged," MEI

"do(es) hereby waive and release any and all lien or claim of, or right to, lien, under the statutes of the State of Illinois, relating to mechanics' liens, with respect to and on said above-described premises [Iron Mike's, 100 East Chestnut Street], and the improvements thereon, and on the material, fixtures, apparatus or machinery furnished, and on the moneys, funds or other considerations due or to become due from the owner, on account of labor services, material, fixtures, apparatus or machinery, furnished to this date [August 29, 1997] by the undersigned [MEI] for the above-described premises."

In addition, the "Contractor's Affidavit" attached to the waiver states that "all waivers are true, correct and genuine and delivered unconditionally and that there is no claim either legal or equitable to defeat the validity of said waivers." The affidavit also lists the total contract price (for both plumbing *fn3 and HVAC work) as $450,120.95, the amount already paid as $198,835, an amount ($31,938) designated as "this payment," and the "balance due" as $219,347.95, which is the amount claimed in MEI's amended complaint.

In support of its allegation that MEI's lien claim was not timely filed, SLT attached an index of MEI timesheets for the Iron Mike's project that was included in a report by Joseph Manzi, described by SLT as MEI's "opinion witness." The last week listed in that index is the week ending May 13, 1997. SLT also attached what it terms "the very last time sheet of any sort produced by the Plaintiff" (emphasis in original), which is for the week ending July 29, 1997 (not August 29, 1997). One of the entries on that timesheet shows two hours of work on July 25, 1997, and SLT claims that entry is the only one bearing one of MEI's project numbers for the Iron Mike's project. However, that entry states the address as "200 Adams," which is not the address of the Iron Mike's property.

In further support of its untimeliness allegation, SLT attaches an MEI invoice to Gold dated June 3, 1997, stating that it is the "[f]inal billing" for the 100 East Chestnut project. The invoice also notes that "this bill does not reflect any change orders that may be in process." Under the HVAC portion of the June 3 invoice, the amount of "Work Completed To Date" is shown as $325,335, which is slightly more than the $325,323.42 total amount for subcontract work and extras asserted by MEI in its (subsequent) amended complaint. The invoice also shows ".00" after "Balance to Complete." Also attached to the summary judgment motion is a letter from MEI to Gold dated July 1, 1997, which refers to the June 3, 1997, bill as "our final invoice for the work completed on the Iron Mike's Restaurant project." The letter states that, "[d]ue to the amount of our final payment request, we cannot wait beyond our 30 (thirty) day invoice terms," adding that MEI has "no choice but to protect our lien rights."

On March 29, 1999, Iron Mike's filed its motion for summary judgment, raising the same waiver defenses that SLT did. Iron Mike's also alleged that MEI's Notice of Mechanic's Lien, dated November 6, 1997, was filed more than 90 days after the completion date and was thus untimely under section 24 of the Mechanics Lien Act (770 ILCS 60/24 (West 1993)). In support of its allegation that the lien notice was untimely, Iron Mike's attached copies of MEI's June 3, 1997, invoice and July 1, 1997, letter, both of which were submitted with SLT's motion.

In further support of its untimeliness allegation, Iron Mike's submitted graphs from the previously mentioned Manzi report, one of which shows labor for the HVAC subcontract, including changes, ending no later than May 4, 1997. Another of the graphs shows the HVAC work ended during the week of August 3, 1997. Iron Mike's notes that even if the work were completed on that date, it would still be too early for the November 6, 1997, lien notice to have been timely. Also included in the submissions are two MEI timesheets, one allegedly showing that the Iron Mike's work was finished on May 8, 1997. The other is the same July 29, 1997, timesheet that was included in SLT's motion.

Finally, Iron Mike's submitted what it termed Gold's "last contractor's sworn statement" indicating a balance due to MEI of $31,938, which is the same amount stated in MEI's August 29, 1997, "Waiver of Lien to Date." Iron Mike's also submitted a copy of its check dated October 17, 1997, payable to MEI for that amount: $31,938.

In its responses to the summary judgment motions, MEI asserted that its last day of work on the project was August 29, 1997, when it installed eight ceiling air diffusers in the first floor kitchen of the restaurant. MEI therefore averred that both its November 6, 1997, notice of lien claim and its December 17, 1997, recorded lien were timely filed. MEI also alleged that its August 29, 1997, waiver of lien to date does not bar its lien claim because neither SLT nor Iron Mike's relied upon that waiver as a final waiver of lien.

In support of its responses, MEI submitted an affidavit of Al Kupsik, MEI's project manager on the Iron Mike's project. In that affidavit, Kupsik stated that it was MEI's standard practice to send out a "final" bill before work was completed on a project. "Due to its years in business, MEI is able to determine what it will take to complete the work on a project, and so it prepares a 'final' bill although MEI is still on the project. That is what happened on the Iron Mike's project." According to Kupsik, "[i]n June, 1997, when the June 3, 1997[,] 'final' bill was sent to Tom Gold, MEI still had to install eight (8) ceiling grills in the first floor kitchen." Kupsik said MEI had expected to be able to install those grills around the time of the June 3 "final" bill but that Iron Mike's kept rescheduling the work. He said the grills were finally installed on August 29, 1997, adding that those installations "were part of MEI's base contract work."

Kupsik also stated in the affidavit that when MEI's first waiver of lien to date (dated November 6, 1996) was submitted to Gold, all parties were alerted that the waiver was subject to any pending change orders. He said payment to MEI of $20,160 pursuant to that first waiver of lien to date "was authorized on the basis of the November 6, 1996[,] lien waiver which clearly indicates it does not accurately reflect MEI's full up-to-date subcontract ...


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