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Illinois

Mechanic's Liens

Weather-Tite, Inc v University of St Francis, 233 Ill 2d 285, 900 NE2d 830, 330 Ill Dec 808 (Ill, 2009).

Facts:The University of St. Francis (the University) contracted with general contractor Stonitsch Construction, Inc. (the general contractor) for renovation of a residence hall. Several subcontractors were hired by the general contractor, including Weather-Tite, Inc. (Weather-Tite) and Excel Electric, Inc. (Excel). The general contractor supplied the University with sworn statements requesting payment and listing subcontractors and the amount due each of them; the University then paid general contractor in full in expectation that it would pay the subcontractors their owed amounts. The fifth such payment, however, was applied by the general contractor's bank to an outstanding debt. As a result, the subcontractors did not receive their fifth payment. Several of them served notice and claim for mechanic's liens on the University. Weather-Tite then filed an action to foreclose its lien; the action named Excel, as a mechanic's lien holder, as a defendant. Excel subsequently filed a counterclaim in order to foreclose its own mechanic's lien.

The University filed a motion for summary judgment on the theory that Excel did not have an enforceable lien. Excel filed its own motion for summary judgment, arguing that the lien was valid and enforceable. Because there was no issue of fact, only an issue of law, summary judgment was appropriate. The trial court found in the University's favor. The appellate court reversed that order and instead granted summary judgment to Excel. The University appealed that decision.

Holding:Affirmed. The question of law presented before the court was whether Excel had a valid mechanic's lien given that the University had provided the general contractor with the necessary money to pay Excel and it failed to do so. The University argued that the Mechanics Lien Act, 779 ILCS 60/1et seq., provides that an owner may rely on the general contractor's sworn statement and pay the general contractors all funds due to both the general and the subcontractors. The court disagreed, however, and instead acceded to Excel's interpretation that the sworn statement is only a notice of subcontractor claims and that it instead creates a duty on the part of the owner to protect the claims of the subcontractor. As such, it was the University's duty to ascertain that Excel would be paid. Therefore, the mechanic's lien on the University for the remaining balance to be paid to Excel was valid, and the court affirmed the appellate court's order of summary judgment for Excel.

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[Last update: 12-2-09]