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Gerdau Ameristeel US, Inc. v. Broeren Russo Construction, Inc.

Court of Appeals of Illinois, Fourth District

May 23, 2013

GERDAU AMERISTEEL US, INC., Plaintiff,
v.
BROEREN RUSSO CONSTRUCTION, INC., and CAMPUS INVESTORS 309, LLC, Defendants-Appellants and Cross-Appellees, and AHAL CONTRACTING CO., INC., and BLAGER CONCRETE COMPANY, Plaintiffs-Appellees and Cross-Appellants, and JACOBSMEYER-MAULDIN CONSTRUCTION COMPANY; ROLAND REALTY, INC.; BROEREN RUSSO CONSTRUCTION, INC.; CAMPUS INVESTORS 309, LLC; RBS CITIZENS, N.A.; CHARTER ONE, a Division of RBS CITIZENS, N.A.; KLG CORPORATION; PENHALL COMPANY; AHAL CONTRACTING CO., INC.; BLAGER CONCRETE COMPANY; UNKNOWN OWNERS; and NONRECORD CLAIMANTS, Defendants.

Appeal from Circuit Court of Champaign County No. 09CH149 Honorable Charles McRae Leonhard, Judge Presiding.

Justices Knecht and Harris concurred in the judgment and opinion.

OPINION

TURNER, JUSTICE

¶ 1 In March 2009, plaintiff, Gerdau Ameristeel US, Inc. (Gerdau), filed a verified complaint for foreclosure of its mechanics lien and other relief against defendants, Jacobsmeyer-Mauldin Construction Company (JMC); Roland Realty, Inc.; Broeren Russo Construction, Inc. (Broeren Russo); Campus Investors 309, LLC (Campus); RBS Citizens, N.A., and Charter One, a Division of RBS Citizens, N.A.; KLG Corporation; Penhall Company; Ahal Contracting Co., Inc. (Ahal); Blager Concrete Company (Blager); and unknown owners and nonrecord claimants. Blager and Ahal later sought to enforce liens under the Mechanics Lien Act (Act) (770 ILCS 60/1 to 39 (West 2008)).

¶ 2 In December 2011, the trial court granted summary judgment in favor of Ahal and Blager. In April 2012, the court entered a judgment of foreclosure and sale. The court denied Ahal's and Blager's request for attorney fees and deposition costs.

¶ 3 In the appeal of Campus and Broeren Russo, they argue the trial court erred in granting summary judgment in favor of Ahal and Blager. In their cross-appeals, Ahal and Blager argue the court abused its discretion in denying their petitions for attorney fees and claim costs of depositions should have been included as recoverable costs. In Campus and Broeren Russo's appeal, we reverse and remand. Given our ruling herein, the issues raised in Ahal's and Blager's cross-appeals are rendered moot.

¶ 4 I. BACKGROUND

¶ 5 Initially, an introduction of the parties is necessary in this case. Campus is the owner of the subject property located at 309 East Green Street in Champaign. Broeren Russo is a general contractor. JMC is a subcontractor, and Ahal and Blager are secondary subcontractors. Gerdau is a material supplier.

¶ 6 Campus entered into a contract with or otherwise engaged the services of Broeren Russo to perform the construction of a high-rise apartment building, known as the Green Street Tower project, in Champaign. Broeren Russo then entered into a contract with or otherwise engaged the services of JMC to provide labor and materials for the project. JMC entered into a contract with or otherwise engaged the services of Ahal and Blager to provide labor and materials to the project. Blager acted at various times as a subcontractor under both JMC and Ahal. Over time, Broeren Russo paid $9, 539, 150 to JMC.

¶ 7 All of the materials and services provided by Blager and Ahal for the project were of excellent quality, delivered to, and accepted upon the property and were incorporated in and formed a part of the improvement and constitute a permanent and valuable improvement of the property. Ahal and Blager fully performed their obligations to the project in a timely, good and workmanlike manner. Ahal indicated it completed all work under the contract on August 22, 2008, and Blager stated it made its last delivery of concrete materials on September 2, 2008.

¶ 8 Broeren Russo submitted pay requests that were reviewed and then paid through Chicago Title & Trust Company (Chicago Title). In October 2008, JMC submitted its waiver of lien to date/subcontractor's affidavit to Broeren Russo, indicating JMC owed more to its subcontractors and suppliers than it had shown on previous requests for payment and waiver of lien to date/subcontractor's affidavits. Although $495, 850 remained to be paid on the contract, JMC owed a total of $722, 995.35. Broeren Russo froze all payments pending a resolution.

¶ 9 On November 18, 2008, Ahal timely mailed its notice of claim of subcontractor by United States mail certified return receipt requested, and delivery limited to addressee only, to all necessary parties. Ahal stated it had been employed by JMC to "pour and finish floor slabs, " as well as perform other work, and was due $385, 096.44. Campus and Broeren Russo stipulated they received Ahal's notice. On December 15, 2008, Ahal timely filed and recorded its subcontractor's claim for lien in the office of the recorder of deeds in Champaign County. Campus and Broeren Russo stipulated Ahal's lien was timely and properly recorded.

¶ 10 On November 26, 2008, Blager timely mailed its notice and claim for subcontrac- tor/material provider's liens by United States mail certified return receipt requested, and delivery limited to addressee only, to all necessary parties. Blager stated $78, 431.44 remained unpaid. Campus and Broeren Russo stipulated they received Blager's notice. On December 19, 2008, Blager timely filed and recorded its notice and claim for subcontractor liens in the recorder's office. Campus and Broeren Russo stipulated Blager's liens were timely and properly recorded.

¶ 11 In March 2009, Gerdau filed a verified complaint for foreclosure of a mechanics lien and other relief against various defendants with an interest in the property. Gerdau alleged it entered into a contract with JMC in July 2008 to furnish and supply rebar and related materials for the project. In August 2008, Gerdau completed the work and $658, 590.54 was due and owing. Gerdau made a demand for payment but the amount remained unpaid. Gerdau claimed a mechanics lien on the premises and on any amounts due from Campus, Broeren Russo, and JMC.

¶ 12 In August 2009, Blager filed a verified answer and counterclaim to enforce its mechanics liens and for other relief against all parties with an interest in the property, asserting its valid and enforceable mechanics liens. In December 2009, Ahal joined Gerdau in a first-amended complaint to enforce their mechanics liens and other relief against all parties with an interest in the property. Gerdau and JMC ultimately settled with Campus and Broeren Russo and are no longer parties at issue.

¶ 13 The sum of $384, 398.14 is the outstanding balance due Ahal for all labor, equipment, materials, and supplies furnished by Ahal, including all extra work, after all payments, credits, and other allowances are taken into account, less an amount of $78, 139.46 owed to Blager on its subcontract with Ahal for material Ahal purchased from Blager.

¶ 14 The sum of $78, 431.44 is the outstanding balance due Blager under Blager's subcontract with JMC for all labor, equipment, materials, and supplies furnished by Blager after all payments, credits, and other allowances are taken into account. The sum of $79, 188.99 is the outstanding balance due Blager under Blager's subcontract with Ahal for all labor, equipment, materials, and supplies furnished by Blager after all payments, credits, and other allowances are taken into account.

¶ 15 In January 2010, Blager filed a motion for summary judgment pursuant to section 2-1005 of the Code of Civil Procedure (735 ILCS 5/2-1005 (West 2010)). In September 2010, Ahal filed a section 2-1005 motion for summary judgment. In June 2011, the trial court denied the motions for summary judgment.

¶ 16 In October 2011, Campus and Broeren Russo filed a section 2-1005 motion for summary judgment. Campus and Broeren Russo indicated they had settled with JMC and entered into a mutual release. The sole consideration was the dismissal of the claims against each other and the release of JMC's recorded lien. Campus and Broeren Russo argued Ahal and Blager were limited to their pro rata share of any settlement by the owner with JMC. Because JMC settled with Campus and Broeren Russo for the payment of no additional dollars, no additional money existed to which Ahal's or Blager's liens could attach. The motion stated the sole remedy was for Ahal and Blager to pursue contract claims against JMC. The trial court allowed Ahal and Blager to renew their prior motions for summary judgment.

¶ 17 In December 2011, the trial court issued its memorandum opinion and order. In part, the court stated "the parties are in agreement that Ahal and Blager properly filed and perfected liens against the property for labor or materials furnished in their respective capacities. That fact triggered application of section 27 of the Act [(770 ILCS 60/27 (West 2010))], requiring Campus to ensure that the subcontractors and material suppliers be paid." The court found Campus and Broeren Russo's motion for summary judgment without merit. The court granted motions for summary judgment filed by Ahal and Blager. The court reserved the questions of statutory interest and attorney fees.

¶ 18 In April 2012, the trial court entered a judgment of foreclosure and sale. The court entered judgment in favor of Ahal and against Campus and Broeren Russo in the amount of $412, 328.26. The court entered judgment in favor of Blager and against Campus and Broeren Russo in the amount of $215, 144.24. The court also found Ahal and Blager had liens on the property for the amounts due.

¶ 19 Ahal and Blager had requested attorney fees and costs be taxed against Campus and Broeren Russo pursuant to section 17 of the Act (770 ILCS 60/17 (West 2010)). In February 2012, the trial court denied the petitions for attorney fees. In April 2012, the court denied the requests for deposition costs. This appeal and cross-appeals followed.

¶ 20 Prior to beginning our analysis, we note the record in this case consists of over 3, 600 pages and 19 volumes. The parties have also filed lengthy briefs setting forth their arguments. In those briefs, the parties have stated facts with reference to the pages of the record. We would encourage the parties, especially in cases involving such a voluminous record, to also include the corresponding volume numbers where those pages can be found, thereby allowing this court quick access to the cited materials.

¶ 21 II. ANALYSIS

¶ 22 A. Appeal of Campus and Broeren Russo

¶ 23 Campus and Broeren Russo argue the trial court erred in granting summary judgment in favor of Ahal and Blager without limiting Ahal's and Blager's recovery to only their pro rata shares of the amount of unpaid contract funds remaining at the time they served their notices of lien. We agree.

¶ 24 1. Summary Judgment and the Standard of Review

¶ 25 "Summary judgment is appropriate where 'the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' " Ioerger v. Halverson Construction Co., 232 Ill.2d 196, 201, 902 N.E.2d 645, 648 (2008) (quoting 735 ILCS 5/2-1005(c) (West 2000)). Where, as here, cross-motions for summary judgment were filed, the parties "agree only a question of law is involved, and the court should decide the issue based on the record." Farmers Automobile Insurance Ass'n v. Danner, 2012 IL App (4th) 110461, ¶ 30, 967 N.E.2d 836. On appeal from a trial court's decision granting a motion for summary judgment, our review is de novo. Bagent v. Blessing Care Corp., 224 Ill.2d 154, 163, 862 N.E.2d 985, 991 (2007).

¶ 26 2. The Act

¶ 27 "The Act attempts to balance the rights and duties of owners, subcontractors, and materialmen." Bricks, Inc. v. C&F Developers, Inc., 361 Ill.App.3d 157, 163, 836 N.E.2d 743, 748 (2005). Our supreme court has stated "[t]he purpose of the Act is to permit a lien on premises when the owner has received a benefit, and the furnishing of labor and materials have increased the value or improved the condition of the property. [Citations.] In other words, the purpose of the Act is to protect contractors and subcontractors providing labor and materials for the benefit ...


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