Doors Acquisition, LLC v. Rockford Structures Constr. Co. (IL)


Summary: Under the Mechanic's Lien Act, a subcontractor's lien is limited to the amount owed to its immediate contractor.

Doors Acquisition, LLC v. Rockford Structures Constr. Co., 2013 IL App (2d) 120052.

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Facts: Norman J. Weitzel contracted Rockford Structures Construction Company (“Rockford Structures”) as the general contractor to build a hotel in Rockford. Rockford Structures retained the subcontractor D&P Chicago (“D&P”) in May 2007 to do drywall work on the project. D&P employed union workers pursuant to a collective bargaining agreement, until D&P was terminated by Rockford Structures in November 2007. The union filed a subcontractor mechanic’s lien on the property in March 2008, alleging unpaid wages owed to the workers and benefits owed to the union in the amount of $23,595 plus costs and interest. The union served notice of the lien on Weitzel, Rockford Structures, and D&P in March 2008.

Prior to being served the mechanic’s lien, on January 10, 2008, Rockford Structures provided a section 5 sworn statement to Weitzel specifying that D&P had been paid $130,398 for its work and no further balance remained due to D&P. In November 2008, the union sought foreclosure on the lien. At the trial court level, Weitzel argued that because D&P had been paid in full when Weitzel received notice of the union’s lien, the union could not recover an amount beyond what was owed to its immediate contractor. The union countered that, pursuant to the Mechanic’s Lien Act, the only limitation placed on a subcontractor mechanic’s lien is the contract price between the owner and the general contractor, in this case between Weitzel and Rockford Structures. The trial court agreed, finding the union’s lien valid and ordering Weitzel to pay $32,619 plus $289.76 in costs within 30 days or the sheriff would execute a judgment of foreclosure. Weitzel appealed.


Holding: Reversed. The appellate court reviewed the trial court’s interpretation of the Mechanic’s Lien Act de novo and reversed the trial court decision. The appellate court found that the Act “seeks to balance the rights of owners, contractors, and subcontractors; and thus, one purpose of a section 5 sworn statement is to protect owners from claims by unknown subcontractors.” In Weather-Tite, Inc. v. Univiserity of St. Francis, 233 Ill.2d 385 (2009), the Illinois Supreme Court concluded that once the owner had notice of the amount owed to the subcontractor, the owner could not rely on the general contractor to distribute funds to the subcontractor. Nevertheless, a balance should be struck in favor of the owner when the owner properly relied on section 5 sworn statements from a general contractor that a subcontractor had been paid and did not list lower-tier contractors, even if a lower-tier contractor later complied with the Act’s requirements. Weitzel received notice of the union’s lien after receiving Rockford Structures’ section 5 sworn statement indicating payment in full to D&P. Therefore the union was limited to recovering only what was owed to its immediate contractor.

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By: ATG Underwriting Department | Posted on: Fri, 05/17/2013 - 12:31pm