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Onsite Engineering & Management

February 08, 2001


The opinion of the court was delivered by: Justice Hoffman

Appeal from the Circuit Court of Cook County.

Honorable Clifford L. Meacham, Judge Presiding.

The plaintiff, Onsite Engineering & Management, Inc., doing business as Onsite Environmental Staffing (Onsite), appeals from a circuit court order dismissing two counts of its first amended complaint against the defendants, Illinois Tool Works, Inc. (ITW), 3635 Touhy L.L.C. (3635 Touhy), and QST Environmental Incorporated, formerly known as Environmental Science & Engineering, Inc. (QST), and also from an order denying its motion for reconsideration of that ruling. For the following reasons, we affirm.

Onsite is a Maryland corporation engaged in the business of temporary staffing services. Pursuant to the Business Corporation Act of 1983 (805 ILCS 5/1.01 et seq. (West 1994)), Onsite obtained a certificate of authority to conduct business in Illinois on July 27, 1995. On December 1, 1997, the Illinois Secretary of State revoked Onsite's certificate of authority for failure to file an annual report and failure to pay franchise taxes. Onsite did not obtain reinstatement of its certificate until December 1, 1999. In the interim, however, on March 31, 1999, Onsite initiated the instant action by filing a four count complaint seeking, inter alia, to foreclose on a mechanics' lien pursuant to the Mechanics Lien Act (770 ILCS 60/0.01 et seq. (West 1996)) and for other relief in connection with certain work performed on a construction project located in Lincolnwood, Illinois (hereinafter Lincolnwood Project). QST served as the general contractor for the Lincolnwood Project, and ITW and 3635 Touhy own the property.

In its first amended complaint, Onsite alleged that, some time prior to December 1995, QST entered into a contract with Smith Technology Corporation, formerly known as Smith Environmental Technologies Corporation (Smith), pursuant to which Smith agreed to perform certain work on the Lincolnwood Project. Thereafter, on December 19, 1995, Smith and Onsite entered into a "National Services Agreement" (hereinafter agreement), pursuant to which Onsite was to be Smith's sole source provider of temporary contract employees. The agreement did not specify any particular type of work, project, or location of projects. Rather, it provided only that Onsite would furnish contract employees as requested by Smith "from time to time". Over the term of the agreement, Onsite had provided contract employees to Smith as requested for projects in numerous states, including Illinois. In October 1996, Smith allegedly requested, pursuant to their agreement, that Onsite provide laborers to perform environmental remediation work for the Lincolnwood Project. According to Onsite, it fulfilled its obligations under the agreement by supplying workers for this project from October 1996 through April 1997. As of May 1997, Smith allegedly owed Onsite approximately $67,000 for its staffing services. Onsite alleged that, despite repeated demands, Smith paid only a fraction of that amount. As a result, in June 1997, Onsite served the defendants with a subcontractor's notice and claim for a mechanics' lien in the amount of $46,984 pursuant to section 24 of the Mechanics Lien Act (770 ILCS 60/24 (West 1996)), and recorded the lien in the office of the Cook County Recorder.

Counts I and II of Onsite's first amended complaint seek relief against Smith and are not the subject of this appeal. In Count III, Onsite sought to foreclose on a mechanics' lien pursuant to section 24 of the Mechanics Lien Act. Count IV was an action to obtain a judgment in the amount of $46,984 against QST, as general contractor, and ITW and 3635 Touhy, as owners of the property, pursuant to section 28 of the Mechanics Lien Act (770 ILCS 60/28 (West 1996)).

On August 3, 1999, ITW and 3635 Touhy filed a joint motion to dismiss Counts III and IV of the first amended complaint pursuant to sections 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 5/2-615, 2-619 (West 1998)). On the same day, QST filed a similar motion. The two motions contained essentially the same arguments, namely that: (1) Onsite lacked the legal capacity to file suit due to the revocation of its certificate of authority and, as such, its complaint was a legal nullity that did not toll the two year statute of limitations set forth in the Mechanics Lien Act (770 ILCS 60/9 (West 1996)), which had expired in April 1999; (2) Onsite's claims failed because a temporary staffing agency is not a subcontractor or secondary subcontractor entitled to a lien under the Mechanics Lien Act; and (3) Onsite failed to allege that any money was owed to Smith at the time Onsite gave its notice of lien to QST.

On November 3, 1999, the trial court granted the defendants' motions, finding that Onsite lacked the capacity to sue. The trial court dismissed Counts III and IV of the first amended complaint and included a Rule 304(a) (155 Ill. 2d R. 304(a)) finding that there is no just reason to delay the appeal or enforcement of its order. Thereafter, on December 3, 1999, Onsite filed a motion to reconsider, arguing that its certificate of authority had been reinstated by the Secretary of State on December 1, 1999, and that any lack of capacity to sue had been cured retroactively to the date of revocation on December 1, 1997. Onsite also sought leave to file a second amended complaint in response to certain pleading defects raised in the defendants' motions to dismiss. The trial court denied Onsite's motion on February 3, 2000, stating, inter alia, that its claims were barred by the statute of limitations. The trial court again included a Rule 304(a) (155 Ill. 2d R. 304(a)) finding. This appeal followed.

Onsite argues that the trial court's orders, dismissing Counts III and IV of its first amended complaint and denying its motion for reconsideration, should be reversed. It sets forth several arguments in support of this contention, including that it had the capacity to file suit and that it is a subcontractor entitled to a mechanics' lien. We note that the parties devote a substantial portion of their briefs to the issue of Onsite's authority to file a complaint. However, since we can affirm on any basis in the record (McGuire v. Ameritech Cellular Corp., 314 Ill. App. 3d 83, 85, 731 N.E.2d 343 (2000)), we need address only one of the arguments raised by the parties; namely, whether Onsite, a temporary staffing agency, is a subcontractor or secondary subcontractor entitled to relief under the Mechanics Lien Act.

Onsite contends that it is entitled to a lien because it furnished labor to Smith, thereby falling under the definition of subcontractor set forth in section 21 of the Mechanics Lien Act, which provides:

"Subject to the provisions of Section 5, every mechanic, worker or other person who shall * * * furnish or perform services or labor for the contractor, * * * shall be known under this Act as a sub-contractor, and shall have a lien for the value thereof, * * *." 770 ILCS 60/21 (West 1996).

Onsite finds further support for its position in section 22 of the Mechanics Lien Act, which provides:

"When the contractor shall sub-let his contract or a specific portion thereof to a sub-contractor, the party furnishing material to or performing labor for such sub-contractor shall have a lien therefor; and may enforce his lien in the same manner as is herein provided for the enforcement of liens by sub-contractors." 770 ILCS 60/22 (West 1996).

Onsite argues that Smith sub-let the labor portion of its contract with QST to Onsite and it is ...

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