Appeal from Circuit Court of Sangamon County No. 99CH514 Honorable Leslie J. Graves, Judge Presiding.
The opinion of the court was delivered by: Justice Steigmann
In December 1999, plaintiff, Construx of Illinois, Inc. (Construx), sought to foreclose and enforce a mechanic's lien against property located at 302, 304, and 306 East Washington Street in Springfield (subject property). In May 1999, when Construx entered into an agreement with John Shipley to make certain improvements to the building located on the subject property, the property was under an installment sale contract between Shipley, as the purchaser, and defendant Bette Kaiserman, both individually and as a trustee, and her sons, defendants Donald L. Kaiserman and Herbert A. Kaiserman, as owners. Following an October 2002 bench trial, the trial court entered an order foreclosing and enforcing Construx's mechanic's lien.
The Kaisermans appeal, arguing that (1) the trial court erred by determining that they, as sellers under the installment sale contract, were "owners" under section 1 of the Mechanics Lien Act (Act), as opposed to lienholders under section 16 of the Act (770 ILCS 60/1, 16 (West 1998)); (2) section 16 of the Act, as applied, violates the equal protection clauses of the United States (U.S. Const., amend. XIV) and Illinois Constitutions (Ill. Const. 1970, art. I, §2); and (3) even accepting that they are "owners" under the Act, the court's finding that they authorized or knowingly permitted Construx to make the improvements was against the manifest weight of the evidence. We affirm.
In October 1996, the Kaisermans entered into an installment land sale contract (hereinafter contract) with Shipley for the sale of the subject property. The property consisted of a parcel of land and a three-story brick building, which housed three commercial units on the first floor (one of which Shipley was then leasing from the Kaisermans and operating as the Station House Tavern (hereinafter tavern)) and apartments on the second and third floors. According to the payment terms of the contract, the total sale price was $275,000, and Shipley was to make a $30,000 down payment, pay $2,504.32 in monthly installments for a five-year period, and then pay the remaining balance in a lump sum.
The contract also provided, in pertinent part, as follows:
"6. [Shipley] agrees to cause no improvements to be made upon said premises costing in excess of $1,000.00 without first securing the written consent of the [Kaisermans]. [Shipley] shall further keep said premises free and clear of any valid mechanic's lien and shall hold [the Kaisermans] indemnified against any valid lien arising by reason of [Shipley's] possession of said premises.
7. No failure on the part of the [Kaisermans] to enforce any right accruing to [the Kaisermans] because of any default of [Shipley] in failing to perform promptly any of the provisions hereof, no matter how many times such failure to enforce such rights may be repeated by the [Kaisermans], shall be construed to operate as a waiver of any of the provisions of this agreement, but the [Kaisermans] may at any time omit to take advantage of, or waive any default in any of the provisions hereof without prejudice to the [Kaisermans'] rights to enforce each and all of the provisions of this agreement with reference to any other or subsequent default."
The parties did not record the contract.
In May 1999, Shipley entered into an agreement with Construx to demolish the existing stairwell on the rear of the building and construct an exterior three-floor deck and staircase for a cost of $48,687. In late July 1999, following the completion of those improvements, Shipley informed Bette that he was no longer able to make monthly payments on the contract due to financial difficulties. At that time, the Internal Revenue Service had filed a $300,000 tax lien against Shipley, and Shipley had failed to pay 1998 property taxes (totaling $3,600). The Kaisermans agreed to terminate the contract, and Shipley continued to operate the tavern as the Kaisermans' lessee.
In August 1999, Construx recorded a $48,687 mechanic's lien against the property and Bette as owner. In December 1999, Construx filed a complaint, seeking to foreclose and enforce the mechanic's lien.
At the October 2002 bench trial, Bette testified as an adverse witness that she acted as Donald and Herbert's agent in managing the property. After she, Donald, and Herbert entered into the contract to sell the property to Shipley, she "very rarely" drove by the rear of the building. She denied knowing that the rear stairs were in disrepair or observing Construx's construction on the rear of the building. Bette could not recall whether she spoke with Doyle Finley, a tavern employee, about the construction while it was taking place. She acknowledged speaking with a Construx employee but claimed that the conversation took place after the construction was completed. Bette also acknowledged that sometime between May and June 1999, Shipley provided her with a copy of an appraisal of the property, which indicated, in pertinent part, that the "rear stairwell/fire escape [was] in need of substantial repair or replacement." She further acknowledged that despite the language in paragraph six of the contract, she and Shipley had a verbal agreement that he could spend over $1,000 on the expansion and improvement of the tavern without first receiving the Kaisermans' written consent. However, she denied having an agreement with him regarding other improvements to the property.
Finley testified that he worked as a janitor at the tavern during the time that Construx was completing the construction on the rear of the building. On one occasion during that time period, Finley saw Bette at the rear of the building. Bette saw the construction in progress, and Finley thought he remembered her commenting that it looked nice. Bette did not express disapproval or object to the construction. Finley did not think that the construction was "substantially completed" on that occasion.
Shipley testified as an adverse witness that after he entered into the contract with the Kaisermans, he began remodeling the tavern and expanding it to encompass two of the building's three commercial units. Although Shipley spent around $30,000 on that project, he never received Bette's written consent. Between late 1996 and July 1999, he also spent between $30,000 or $40,000 to repair and remodel some of the apartments without receiving Bette's written consent. He acknowledged that he spent much of that money on new furnishings for the apartments. Before Shipley entered into the October 1996 contract with the Kaisermans, Bette visited the building frequently. After they entered into the contract, she did not visit as often.
Shipley also testified that in May 1999, the City of Springfield informed him that the stairwell at the rear of the building was rotten and in disrepair and he had to immediately repair or replace it. Shipley contacted Gary Sharp, Construx's director, and informed him that Shipley had a "major problem." Sharp came to the building that same day, and Shipley later entered into an agreement with Construx to demolish the existing stairwell and construct an exterior three-floor deck and staircase at a cost of approximately $48,000. During the construction, Shipley agreed to around $2,400 in additional gutter work on the rear of the building. Construx completed the construction in early July 1999. Shipley never paid the amount owed to Construx for the project.
Shipley further testified that he did not tell Bette about the City's May 1999 inspection or his agreement with Construx. He did not remember telling William Clutter, a private investigator hired by Construx, that (1) he and Bette had discussed the construction project toward the project's completion; (2) Bette never objected to the construction; and (3) Bette had been aware of other substantial improvements he had made to the building and had not objected, despite the fact that the cost of those improvements was over $1,000.
Michael Suhadolnik, Construx's chief executive officer, testified that "probably near the end" of the construction project, he spoke via telephone with Bette, who he knew owned the building, and they discussed the project "to some extent." During the conversation, Suhadolnik commented on Construx's response following the May 1999 inspection, and Bette thanked him. He then told her that he "hoped everything was going to be taken care of," and she responded that it would be. Suhadolnik "felt that it was a good phone call." He acknowledged that in a prior affidavit, he stated that the telephone call with Bette took place after Shipley failed to pay Construx.
Clutter testified that during a March 2001 interview with Shipley, Shipley stated that toward the end of the construction project, he talked with Bette about the construction. During that conversation, Bette did not object to the construction project. Shipley also told Clutter that during the construction project, Bette visited the building often and "kept herself aware of what was going on."
Sharp testified that in August 1999, he spoke with Bette and told her that he was concerned that Construx had not been paid for the construction project. Bette told Sharp that she and Shipley "were trying to work out some things" and "they would take care of it." Sharp thought Bette meant that she would pay for the construction project. A few days later, Sharp received a handwritten note from Bette, stating, in pertinent part, that the "[b]uilding[s] are in [t]rust and [Bette] ...