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Christopher B. Burke Eng'g, Ltd. v. Heritage Bank of Cent. Illinois

Court of Appeals of Illinois, Third District

January 27, 2015

CHRISTOPHER B. BURKE ENGINEERING, LTD., Plaintiff-Appellant,
v.
HERITAGE BANK OF CENTRAL ILLINOIS, Defendant-Appellant (Glen W. Harkins, Carol A. Harkins, Donald Allison, Ann Allison and Unknown Owners and Nonrecord Claimants, Defendants)

As Corrected.

Appeal from the Circuit Court of the 10th Judicial Circuit, Peoria County, Illinois, Circuit No. 09-CH-589. The Honorable Michael Brandt, Judge, Presiding.

Affirmed.

SYLLABUS

In an action to foreclose on a mechanic's lien against various defendants, including defendant bank and a person proposing to develop a subdivision on the land at issue, the trial court properly granted summary judgment to the bank and invalidated plaintiff's mechanic's lien due to its failure to establish a contractual relationship with a party the owner knowingly permitted to contract for engineering services in connection with developing the subdivision and its failure to show an improvement to the property.

Jeffrey E. Krumpe (argued), of Miller, Hall & Triggs, of Peoria, for appellant.

Michael A. Kraft (argued), of Quinn, Johnston, Henderson, Pretorius & Cerulo, of Peoria, for appellee.

JUSTICE CARTER delivered the judgment of the court, with opinion. Justice Wright concurred in the judgment and opinion. Justice Lytton dissented, with opinion.

OPINION

CARTER, JUSTICE

Page 1224

[¶1] The plaintiff, Christopher B. Burke Engineering, Ltd., filed a civil complaint that sought to foreclose on a mechanic's lien against multiple defendants, including Heritage Bank of Central Illinois. After the circuit court invalidated the lien and granted summary judgment in favor of Heritage Bank, the plaintiff appealed. On appeal, the plaintiff argues that the circuit court erred when it granted summary judgment in favor of Heritage Bank in that the court improperly found that: (1) no contractual relationship existed between

Page 1225

the original owner of the property and the prospective purchaser; and (2) the plaintiff's work did not constitute an improvement to the property. We affirm.

[¶2] FACTS

[¶3] This is the second time this case has come before this court on appeal. The facts occurring prior to the first appeal have been set forth in Christopher B. Burke Engineering, Ltd. v. Harkins, 2011 IL App. (3d) 100949-U. We will recount the facts leading up to and including that appeal only to the extent that they are essential to this appeal.

[¶4] On October 29, 2009, the plaintiff filed a civil complaint against the defendants in which it sought to foreclose on a mechanic's lien. The plaintiff alleged that it had performed engineering work between April 2008 and March 2009 on certain real property for defendants Glen W. Harkins and Carol A. Harkins; in connection with that work, the plaintiff filed a mechanic's lien on May 20, 2009.

[¶5] The record in this case indicates that the Harkins defendants and the plaintiff entered into a contract in mid-2008 to perform engineering work on a tract of real property not owned by the Harkins defendants. The Harkins defendants intended to purchase the property and subdivide it for residential development. At the time, the property consisted of unplatted land and two[1] platted lots. After the property was replatted, the final plat for " Crest Ridge Estates" subdivision was recorded on September 19, 2008.

[¶6] Initially, a motion to dismiss filed by the Allison defendants was granted on the basis that the mechanic's lien contained an inadequate legal description. The circuit court also granted a motion for summary judgment filed by Heritage Bank. On appeal, this court held that a question of fact existed with regard to whether the description was inadequate; thus, this court reversed the circuit court's judgment and remanded the case for further proceedings. Burke Engineering, 2011 IL App. (3d) 100949-U, ¶ ¶ 12-13.

[¶7] After the remand, the plaintiff settled separately with the Allisons, and the Harkins defendants filed for bankruptcy protection. Further discovery was conducted, and on October 23, 2012, Heritage Bank filed a motion for summary judgment. Four depositions were appended to the motion, two of which are pertinent to this appeal.

[¶8] In her deposition, Carol Schenk stated that she sold a vacant tract of real property on August 11, 2008, for $550,000 to Glen and Carol Harkins. Prior to selling the property, she had plans of subdividing the land for residential development. Randolph and Associates had prepared a plat for her several years prior to the sale of the land. She stated that the plaintiff never performed any work for her. Through documents she signed associated with the sale of the property, Schenk attested to the property being free of, inter alia, improvements and contracts for improvements or services within the six months prior to the sale. She also stated that at no time prior to the sale did anyone approach her about having the plaintiff perform any kind of work on the property, that she had no knowledge of any work performed by the plaintiff with regard to the property, and that she never consented to Glen and Carol Harkins acting on her

Page 1226

behalf. She did state that prior to agreeing to the sale, she had been approached by Glen Harkins, who told her that he was going to use the plaintiff to perform engineering work, but she had no knowledge of what work the plaintiff was in fact going to perform. She did state, though, that she was aware prior to closing that the plaintiff was preparing the preliminary and final plats and other associated work necessary for the layout of the subdivision.

[¶9] In his deposition, Glen Harkins stated that he had worked as a contractor for over 35 years and, prior to the purchase of Schenk's property, he had bought two other properties that he subdivided and developed residentially. Glen stated that he contacted the plaintiff in late April 2008 to prepare a preliminary plat for the Crest Ridge Estates subdivision. He stated that he received the preliminary plat around July 15, 2008, when he agreed to purchase the property. When he was asked if he intended the plaintiff's work to be the basis for determining whether the development was viable, he responded, " [n]ot really, no." Glen believed that the project would be viable based on one of his prior developments, but he did state that if the plaintiff could not have included in the plat the number of lots that he wanted, he would not have purchased the property. He later recanted that statement and said that he knew he could get the number of lots he wanted out of the property. Glen also stated that after he agreed to purchase the property, he approached the plaintiff to prepare the final plat. While Glen stated that he believed that he received the final plat from the plaintiff before the closing on August 11, 2008, an issue with the existence of a wetland on the property was discovered subsequent to the closing that necessitated some changes to the plat. Additionally, one house was built on a lot on the property for which the plaintiff had performed the " lot work," and the plaintiff had also performed engineering work regarding the planning of sewers and roads on the property. However, Glen further stated that in February 2009, due to the state of the economy, he decided not to pursue development of the property. At some point prior to that decision, he had told the plaintiff to stop all work related to the property.

[¶10] When asked about his association with Schenk, Glen stated that: (1) he never intended to work with her to develop the property; (2) he never intended to work on her behalf to develop the property; (3) she never gave him authorization to act on her behalf to develop the property; (4) he did not recall giving her any information about the plaintiff or the work that the plaintiff did for Harkins, but she did know that work was being performed prior to the closing and did not object to it; (5) he never intended her to receive any benefit from the plaintiff's work; (6) to his knowledge, she never received any benefit from the plaintiff's work; and (7) the ...


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