H.B.D. Construction, Inc. v. Eco Jazz, Inc.

2021 IL App (5th) 180187-U

• Court: Appellate Court of Illinois
• Decided: March 9, 2021
• Docket: 5-18-0187
• Status: Unpublished

Opinion

NOTICE 2021 IL App (5th) 180187-U NOTICE Decision filed 03/09/21 The text This order was filed under of this decision may be NOS. 5-18-0187, 5-19-0290 cons. Supreme Court Rule 23 and is changed or corrected prior to not precedent except in the the filing of a Petition for Rehearing or the disposition of IN THE limited circumstances allowed under Rule 23(e)(1). the same. APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

H.B.D. CONSTRUCTION, INC., ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) St. Clair County. ) v. ) ) ECO JAZZ, INC.; THE HOUSING AUTHORITY OF THE ) CITY OF EAST ST. LOUIS a/k/a The East St. Louis ) Housing Authority; PEOPLE’S VENTURES, LLC; ) SWANSEA BUILDING PRODUCTS CORP.; MPM ) INDUSTRIES, INC.; DAVID J. HYDE & ASSOCIATES, ) INC.; ROSCH COMPANY, LLC; BETHALTO GLASS, ) INC.; KING O’TILES, INC.; LORENZ AND ) Nos. 14-CH-561 & ASSOCIATES, INC.; TOWN & COUNTRY MASONRY ) 14-L-588 AND TUCKPOINTING, LLC; EAST LAKE/CENTRAL ) CITY, L.P.; ESL DEVELOPMENT CORPORATION, NFP; ) EAST LAKE MANAGEMENT & DEVELOPMENT ) CORP.; EAST LAKE MANAGEMENT GROUP, INC.; ) COLE TAYLOR BANK; ST. CLAIR COUNTY TRUSTEE; ) RAVEN SECURITIES, INC.; ACPRODUCTS, INC.; ) and Unknown Owners, Trustees, and Lien Claimants, ) ) Defendants ) ) (Town & Country Masonry and Tuckpointing, LLC, and ) The Housing Authority of the City of East St. Louis a/k/a ) Honorable The East St. Louis Housing Authority, ) Stephen P. McGlynn, Defendants-Appellants). ) Judge, presiding. ________________________________________________________________________

JUSTICE WELCH delivered the judgment of the court. Justices Moore and Barberis concurred in the judgment. 1 ORDER

¶1 Held: The trial court’s orders granting mechanic’s liens to the appellee, H.B.D. Construction, Inc., and the various subcontractors on property developed into a mixed-use senior living facility are vacated where there was insufficient evidence in the record to make this determination. We remand for an additional hearing focused on this issue. We affirm the court’s damage award to the appellant, Town & Country Masonry and Tuckpointing, LLC, against HBD as it was not against the manifest weight of the evidence. We affirm the court’s denial of Town & Country’s request for attorney fees in accordance with the attorney fee provision in its subcontractor agreement with HBD.

¶2 The appellant, the East St. Louis Housing Authority (ESLHA), appeals various

orders entered by the circuit court of St. Clair County granting mechanic’s liens in

connection with labor and materials furnished by the appellee, H.B.D. Construction, Inc.

(HBD), on a multi-use facility in East St. Louis. The appellant, Town & Country Masonry

and Tuckpointing, LLC (Town & Country), appeals the amount of damages awarded to it

against HBD in connection with its masonry work that it completed as a subcontractor on

this project, the court’s denial of its request for attorney fees, and the court’s denial of its

claim under the State Prompt Payment Act (30 ILCS 540/0.01 et seq. (West 2018)). For

the following reasons, we vacate the trial court’s orders granting the mechanic’s liens on

the subject property, vacate the order denying Town & Country’s claim for a lien on public

funds, and remand for further proceedings. We affirm the court’s award of damages to

Town & Country, its denial of Town & Country’s request for attorney fees, and its denial

of Town & Country’s claim under the State Prompt Payment Act.

2 ¶3 I. BACKGROUND

¶4 A. The Eco Jazz Construction Project

¶5 The dispute involves the construction of a three-phase project referred to by the

parties as the Jazz and Mixed Use Senior Living at Walter Circle (project) on property

designated as parcels 1, 2, 3, and 4 in East St. Louis, Illinois. Eco Jazz, Inc. (Eco), was a

not-for-profit corporation organized under the laws of Illinois with its principal place of

business in St. Clair County. It was created specifically to be the sole owner and developer

of the property. The ESLHA was a municipal corporation that operated as a federally

funded housing program with its principal place of business in St. Clair County. Eco and

the ESLHA were the owners of the property that was being developed; the ESLHA owned

parcels 1, 2 and 3, and Eco owned parcel 4. The property consisted of a vacant lot with

three abandoned houses on it.

¶6 The ESLHA and Eco entered into a 99-year ground lease where the ESLHA, as

landlord, leased parcel 1, part of parcel 2, and parcel 3 to Eco, as tenant, for the specific

purpose of developing the property and operating a mixed-use senior living facility. In

addition to the senior living facility, there was a commercial aspect of the project that

included a grocery store, medical office, commercial-grade catering kitchen, and a stage

for a jazz club. The Jazz at Walter Circle project was the first phase of the project. The

project involved the construction of two residential buildings, each of which had four

stories, which were referred to as building 1 and building 2. The first floor of each building

was used for commercial purposes and the remaining floors consisted of the senior housing

apartment units. Signature Program Management oversaw the development and managed 3 the project for Eco. The project was funded by a mix of funds from the U.S. Department

of Housing and Urban Development (HUD) and from private investors.

¶7 On February 23, 2011, after Eco entered into its lease with the ESLHA, Eco entered

into a separate written agreement with HBD, a corporation organized under the laws of

Missouri and authorized to do business in Illinois, for HBD to be the general contractor on

the project. HBD entered into a subcontract with Town & Country, a counterplaintiff in

this suit, for labor, material, and services with regard to the masonry portion of the project.

Town & Country was a Missouri limited liability company engaged in the business of

furnishing brick laying, masonry, tuckpointing, and other services commonly used by

general contractors in the construction of brick-sided facilities. The original masonry

contract was between HBD and Town & Country for $1,309,037; the scope of work was

later split between Town & Country and Peebles Masonry (Peebles), with Peebles being

responsible for building 2. Town & Country was allocated 49% of the work, and Peebles

was allocated 51% of the work.

¶8 On or about August 15, 2013, HBD substantially completed the project and turned

over the second, third, and fourth floors for occupancy. On or about December 31, 2013,

HBD turned over the first floors for occupancy.

¶9 The project suffered from a number of cost overruns and construction delays,

resulting in significant issues of dispute between HBD and Eco. Also, several of the

subcontractors on the project were not paid for their work, which resulted in numerous

mechanic’s liens being placed on the property.

4 ¶ 10 B. The Trial Court Proceedings

¶ 11 On July 10, 2014, HBD filed a four-count complaint against, inter alia, Eco and the

ESLHA, bringing the following causes of action: breach of contract, quantum meruit,

enforcement of a mechanic’s lien, and violation of the Contractor Prompt Payment Act

(815 ILCS 603/1 et seq. (West 2012)). With regard to the breach of contract claim, HBD

alleged that on February 23, 2011, it entered into two separate written contracts with Eco

where HBD agreed to act as the general contractor on the project and to provide materials

and labor to Eco for the construction of the mixed-use facility plus any extra work that may

be agreed upon. In exchange for the work, Eco agreed to pay HBD the reasonable value

of the materials and labor provided by HBD and HBD’s subcontractors as set forth in the

contract. During the course of the project, HBD provided materials and labor that were

used in the construction of the project in accordance with the terms of the contract.

However, despite repeated demands, Eco failed and refused to pay the balance of

$3,876,761.25 that was due. HBD requested that it be awarded the outstanding balance

under the contract, attorney fees, prejudgment interest, and court costs. As for the

quantum meruit claim, HBD alleged that it had conferred a benefit on Eco and the ESLHA

as all of the materials and labor charged to them were used in the construction of the project

and retention of that benefit without payment would be unjust.

¶ 12 With regard to the claim involving the enforcement of the mechanic’s lien, HBD

asserted that on May 1, 2014, it filed a contractor’s claim for lien in the St. Clair County

Recorder of Deeds office against the property. HBD requested that the trial court enforce

the lien by declaring it superior to any other lien or interest on the property, force a sale on 5 the property to satisfy the debt, and order the defendants jointly and severally liable for any

deficiency remaining after the sale. HBD also alleged that Eco’s failure to pay for the

construction labor and materials violated section 10(1) of the Contractor Prompt Payment

Act (id. § 10(1)) and that, pursuant to section 15(a) of the Contractor Prompt Payment Act

(id. § 15(a)), Eco is liable to HBD for the full amount due plus interest at the rate of 10%

per annum.

¶ 13 On August 25, 2014, Town & Country filed 1 a counterclaim against HBD. In its

counterclaim, it noted that on or about May 5, 2014, it served a combined subcontractor’s

notice of claim of lien on public funds and claim on bonds on, inter alia, the ESLHA, HBD,

and Eco, claiming that it completed its work on March 31, 2014, but was still owed money

under its subcontractor agreement with HBD. Notice was given pursuant to both the lien

on public funds law (770 ILCS 60/23 (West 2012)) and the Public Construction Bond Act

(30 ILCS 550/1, 2 (West 2012)). Town & Country asserted that, under the contract, it was

owed $955,181.04 for furnished labor, materials, and services but was only paid

$774,653.12. Thus, it was still owed $180,527.92. Town & Country had made repeated

demands for payment. In count I of the counterclaim, Town & Country requested judgment

on the payment bond as well as prejudgment interest, attorney fees, and court costs. In

count II, which was titled lien on public funds accounting, Town & Country alleged that

the ESLHA held $180,527.92 in public funds that were owed to Town & Country and

1 Town & Country was named in HBD’s suit against Eco and the ESLHA as an entity that had a mechanic’s lien on the property. See Park Avenue Lumber & Supply Co. v. Nils A. Hofverberg, Inc., 76 Ill. App. 2d 334, 345 (1966) (the Mechanics Lien Act contemplates one action; all persons who are known to have an interest, either legal or equitable, in the land must be joined as parties). 6 requested that the trial court order the ESLHA to provide an accounting of the public funds

under its control for the construction of the project and then order the ESLHA to pay Town

& Country what was owed for its work on the project. In count III, Town & Country sought

enforcement of its subcontractor’s lien filed on May 12, 2014.

¶ 14 On November 10, 2014, HBD filed a first amended complaint, asserting similar

claims against Eco as those raised in the initial complaint but added various other lien

claimants and other parties who could claim an interest in the property. Lorenz and

Associates, Inc., which was a corporation organized under the laws of Missouri and had

recorded a mechanic’s lien against the property in the amount of $39,646, was named as a

defendant in the first amended complaint. King O’Tiles, Inc., which was a Missouri

corporation and had a recorded mechanic’s lien against the property in the amount of

$47,417.35, was also named as a defendant. Bethalto Glass, Inc., which was an Illinois

corporation and had recorded a mechanic’s lien against the property in the amount of

$31,448, was named as a defendant.

¶ 15 On December 23, 2014, the defendant Vee-Jay Cement Contracting Co., Inc. (Vee-

Jay), a Missouri corporation, who was granted leave to intervene in the case, filed a

counterclaim and cross-claim, requesting a mechanic’s lien against the property because

HBD owed it $70,571 for labor and materials that it furnished on the project.

¶ 16 On March 3, 2017, Town & Country filed a motion for partial summary judgment

on count I of its counterclaim (judgment on the payment bond) against HBD, claiming that

there were no genuine issues of material fact in dispute as to the issue of whether it was

entitled to payment under the bond. On April 26, 2017, the trial court entered an order, 7 finding that Town & Country had established that it was entitled to payment under the

payment bond but that questions of fact remained as to the amount that was owed. The

court then stated that the matter would be set for hearing to prove up the amount due as

well as attorney fees.

¶ 17 The trial court bifurcated the claims into a two-stage trial; HBD’s claims proceeded

to a two-week trial in May 2017, and Town & Country’s counterclaims regarding the

amount of damages were presented on August 16, 17, and 21, 2018. 2

¶ 18 On December 28, 2017, after all of the evidence was presented on HBD’s claims,

the trial court entered an order resolving HBD’s claims against Eco. In the order, the court

noted that it previously dismissed HBD’s claim for equitable relief under the theory of

quantum meruit. On the remaining counts, the court entered judgment in favor of HBD

and against Eco and awarded HBD $3,301,843.25 in total contract damages. The court

also found that HBD was entitled to attorney fees and interest on damages and a mechanic’s

lien on the property in the amount of the judgment. The court ordered counsel to submit

proposed interest and attorney fees calculations within 21 days.

¶ 19 The trial court also found in favor of Lorenz and Associates, King O’Tiles, and Vee-

Jay with regard to their claims against HBD. The court found that the subcontractors

should have been paid through HBD’s performance bond when it was realized that payment

from Eco was going to be delayed. The court entered judgment in favor of King O’Tiles

in the amount of $16,070, judgment in favor of Lorenz and Associates in the amount of

2 To avoid unnecessary repetition, the relevant evidence presented at the trials and the additional procedural posture will be set forth in section II as needed to address the parties’ claims on appeal. 8 $16,370, and judgment in favor of Vee-Jay in the amount of $45,651. The court also found

that the subcontractors were entitled to interest and attorney fees and ordered counsel to

submit calculations on those within 21 days. The court noted that this was not a final and

appealable order and that a final and appealable order would set out the “amount of interest

and attorney fees approved.”

¶ 20 On February 15, 2018, the trial court entered an order reiterating that it was finding

in favor of HBD with regard to its claims against Eco and ordering Eco to pay HBD interest

in the amount of $1,482,995.47 (the total judgment amount against Eco was

$5,181,295.36). Thereafter, Eco filed a timely notice of appeal of the court’s August 26,

2015, and March 8, 2017, orders in which the court denied its motion to dismiss based on

res judicata. 3 It did not appeal the amount of the judgment award entered against it.

¶ 21 On June 21, 2018, the ESLHA filed motions to dismiss HBD’s and the various

subcontractors’ mechanic’s lien claims on the property pursuant to section 2-615 of the

Code of Civil Procedure (735 ILCS 5/2-615 (West 2016)) for failure to state a claim. In

the motion, the ESLHA noted that the property at issue was publicly owned land as the

ESLHA was a governmental body (a municipal corporation) and argued that mechanic’s

liens were not enforceable against publicly owned land. On August 16, 2018, the trial court

entered an order denying the ESLHA’s motion to dismiss, finding that Eco had entered into

a 99-year lease with the ESLHA and that real property subject to a mechanic’s lien on a

leasehold interest of 99 years could be foreclosed upon and sold.

3 This appeal was docketed as 5-18-0187. On September 9, 2019, Eco’s June 26, 2018, appellate brief was withdrawn, and it did not file a substitute brief. Thus, Eco is not part of this decision. 9 ¶ 22 On July 20, 2018, the trial court entered an order amending its December 28, 2017,

order. In this order, the court granted the subcontractors’ requests for HBD to pay their

attorney fees in the following amounts: King O’Tiles was awarded $20,681.60 in attorney

fees; Lorenz and Associates was granted $20,576.90 in attorney fees; and Vee-Jay was

granted $24,636.38 in attorney fees.

¶ 23 On August 8, 2018, Town & Country filed an amended counterclaim against HBD,

adding count IV, which requested interest under section 7(b) of the State Prompt Payment

Act (30 ILCS 540/7(b) (West 2018)) for HBD’s failure to make full payment of the

amounts due under the subcontract agreement.

¶ 24 On May 23, 2019, the trial court entered an order, granting King O’Tiles a

mechanic’s lien against the property in the amount of $47,414.35 as well as $24,873.34 in

prejudgment interest (for a total of $72,287.69), Lorenz and Associates a mechanic’s lien

in the amount of $39,646 and $25,033.08 in prejudgment interest (for a total of

$64,679.08), and Vee-Jay a mechanic’s lien in the amount of $70,571 and $35,723.03 in

prejudgment interest (for a total of $106,294.03). That same day, the court also entered an

order granting Bethalto Glass a mechanic’s lien against the property in the amount of

$48,651.68 ($29,948 and $18,703.68 in prejudgment interest). The court also granted HBD

a mechanic’s lien on the property.

¶ 25 On May 24, 2019, the trial court entered an order, stating that its February 15, 2018,

order in favor of HBD included an amount of $88,474 4 and interest for subcontract work

4 HBD agreed that it owed Town & Country $88,474 but disagreed that it owed any more than that. 10 performed by and materials supplied by Town & Country for the project that had not

previously been paid and was still due under the contract. The court noted that the previous

order did not fully address and resolve the remaining issues between HBD and Town &

Country with respect to damages in excess of $88,474, Town & Country’s claim that HBD

violated the State Prompt Payment Act, and Town & Country’s request for attorney fees.

¶ 26 On June 12, 2019, after all of the evidence was presented on the amount due to

Town & Country, the trial court entered an order granting Town & Country a mechanic’s

lien against the property. In the order, the court noted that HBD acknowledged that it still

owed Town & Country $88,474, but Town & Country asserted in its pleadings that HBD

owed $138,796 plus interest and attorney fees. The court also noted that, after the evidence

was presented on the amount of damages, Town & Country claimed that HBD owed “even

more than that.” The court noted that most of the difference between the figures involved

the acquisition of platinum bricks originally approved for the project but then were rejected

by Signature Management for aesthetic reasons. Town & Country claimed it purchased

the platinum bricks for $51,030 and was entitled to an additional markup of $3572 for a

total amount of $54,602; HBD denied that Town & Country paid for the brick. The court

noted that the evidence at trial demonstrated that the rejected brick had been delivered to

the project. The court also noted that Town & Country had maintained that another brick

and masonry contractor on the job site, Peebles, was overpaid by HBD and that

overpayment was of funds that were owed to Town & Country for services and supplies it

provided and performed on the project.

11 ¶ 27 The trial court found that Town & Country had not produced any cancelled checks

or other similar evidence establishing that it paid for both the rejected bricks and the

replacement bricks but was only reimbursed for one. The court also found that the most

reliable evidence and payment analysis was that of HBD. Thus, the court found for Town

& Country on count I of its counterclaim and against HBD in the amount of $88,474 plus

interest at 5% annum commencing March 31, 2014. The court also concluded that Town

& Country was not entitled to attorney fees under its contract with HBD because neither

party was considered a prevailing party as defined by the contract. As for count II of Town

& Country’s counterclaim, which requested a lien on public funds held by the ESLHA, the

court noted that it was “shocked by the cavalier nature in which millions of dollars were

transferred out of [the] accounts on this project without meaningful oversight.” However,

the court stated as follows:

“[Town & Country] failed to establish that any funds were held by [the ESLHA] at the important times in question to enter judgment against [the ESLHA] or otherwise impose a lien on its present funds. While Count II reads to request equitable relief, i.e., an accounting as well as damages, the court is satisfied that the combination of witnesses and evidence produced by [the ESLHA] provided adequate information to determine if it had at any relevant time in this controversy funds to pay [Town & Country] for uncompensated work, services and materials on the Eco Jazz project.”

¶ 28 As for count III of the counterclaim, which sought to impose a mechanic’s lien on

the property, the trial court granted Town & Country’s request for a mechanic’s lien in the

amount of the judgment. The court, finding that Eco failed to pay Town & Country on a

timely basis without just cause or right, awarded Town & Country a judgment against Eco

in the amount of $88,474. The court also awarded Town & Country attorney fees against

12 Eco and gave counsel 10 days to submit an updated accounting of attorney fees and costs.

As for count IV, which claimed a violation of the State Prompt Payment Act (30 ILCS

540/0.01 et seq. (West 2018)), the court found that HBD had “reasonable cause to pay out

when it did and how much it did” to Town & Country. The court concluded that “all the

delays and shortchanging lies [sic] directly at the feet of Signature Management and Eco

Jazz.” Therefore, the court announced that it was denying the relief sought in count IV.

The court also denied the ESLHA’s motions to deny Town & Country’s requested

mechanic’s lien on the property.

¶ 29 On June 21, 2019, the trial court entered an order, imposing a mechanic’s lien on

the property in the amount of $5,764,108.67.

¶ 30 On July 2, 2019, the trial court entered another judgment order on Town &

Country’s counterclaim as follows: (1) the court entered judgment in favor of Town &

Country on count I of its counterclaim and against HBD in the amount of $88,474 plus 5%

prejudgment interest of $23,003.23, for a total judgment of $111,477.33, and postjudgment

interest at 9% accruing from June 13, 2019; (2) the court entered judgment against Town

& Country on count II of the counterclaim; (3) the court entered judgment in favor of Town

& Country and against Eco on count III of the counterclaim in the amount of $88,474, plus

10% prejudgment interest of $46,005.79, postjudgment interest at 9% accruing from June

13, 2019, and attorney fees and costs in the amount of $100,275.23; (4) the court concluded

that the mechanic’s lien on the property totaled $234,755.02; (5) the court denied the

ESLHA’s motions to deny Town & Country a mechanic’s lien on the property; and (6) the

court entered judgment against Town & Country on count IV of its counterclaim. 13 ¶ 31 On July 12, 2019, the ESLHA filed a timely notice of appeal 5 from the trial court’s

May 23, 2019, order granting King O’Tiles, Lorenz and Associates, and Vee-Jay

mechanic’s liens against the property; the court’s May 23, 2019, order granting Bethalto

Glass a mechanic’s lien against the property; the court’s May 23, 2019, order denying

Eco’s motion for judgment on the pleadings as to HBD’s State Prompt Payment Act claim;

the court’s June 12, 2019, order granting Town & Country a mechanic’s lien against the

property; the court’s June 21, 2019, order on count III (enforcement of the mechanic’s lien)

of HBD’s first amended complaint; the court’s July 2, 2019, order granting Town &

Country attorney fees and costs, imposing a mechanic’s lien against the property, and

denying its motions to deny Town & Country’s mechanic’s lien; and the court’s December

28, 2017, order resulting in the February 15, 2018, judgment granting HBD’s mechanic’s

lien on the property. On July 30, 2019, Town & Country filed a notice of appeal6 from the

court’s June 12, 2019, and July 2, 2019, orders.

¶ 32 II. ANALYSIS

¶ 33 A. The ESLHA’s Appeal

¶ 34 The ESLHA’s sole contention on appeal is that the trial court erred in granting

HBD’s and the various subcontractors’ mechanic’s liens against publicly owned property.

The ESLHA asserts that it was undisputed that it was a municipal corporation; that it was

the fee simple owner of the property; and that the property was used for a public purpose,

i.e., to develop affordable housing. Accordingly, because HBD entered into a contract for

5 This appeal was initially docketed as 5-19-0290 but was later consolidated with 5-18-0187. 6 This appeal was also initially docketed as 5-19-0290 but was later consolidated with 5-18-0187. 14 public improvement of publicly owned property, the mechanic’s liens were not enforceable

against the subject property. In contrast, HBD disputes that the ESLHA was the fee simple

owner of the property and that the purpose of the contract between HBD and Eco was for

public improvement. Rather, HBD contends that the contract was between two private

entities (HBD and Eco) for commercial purposes. In support of its argument that the

ESLHA was not the legal owner of the property, HBD cites Matot v. Barnheisel, 212 Ill.

App. 489, 494 (1918), which found that a lease for a period of 99 years constituted the

owner of the property under section 1 of the Mechanics Lien Act (Act) (770 ILCS 60/1

(West 2018))

¶ 35 Section 1 of the Act states as follows regarding mechanic’s liens:

“Any person who shall by any contract or contracts, express or implied, or partly expressed or implied, with the owner of a lot or tract of land, or with one whom the owner has authorized or knowingly permitted to contract, to improve the lot or tract of land or for the purpose of improving the tract of land, or to manage a structure under construction thereon, is known under this Act as a contractor and has a lien upon the whole of such lot or tract of land and upon adjoining or adjacent lots or tracts of land of such owner constituting the same premises and occupied or used in connection with such lot or tract of land as a place of residence or business ***.” Id. The purpose of the Act is to permit a lien upon premises where a benefit has been received

by the owner and where the value or condition of the property has been increased or

improved by the furnishing of labor and materials. R.W. Dunteman Co. v. C/G Enterprises,

Inc., 181 Ill. 2d 153, 164 (1998).

¶ 36 Section 23 of the Act addresses the procedure and requirements to perfect a

mechanic’s lien for work performed on a construction project for a public entity. When

15 dealing with the public improvement construction on publicly owned property, section

23(b) of the Act instructs as follows:

“Any person who shall furnish labor, services, material, fixtures, apparatus or machinery, forms or form work to any contractor having a contract for public improvement for any county, township, school district, city, municipality, municipal corporation, or any other unit of local government in this State, shall have a lien for the value thereof on the money, bonds, or warrants due or to become due the contractor having a contract with such county, township, school district, municipality, municipal corporation, or any other unit of local government in this State under such contract. The lien shall attach only to that portion of the money, bonds, or warrants against which no voucher or other evidence of indebtedness has been issued and delivered to the contractor by or on behalf of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government as the case may be at the time of the notice.” (Emphasis added.) 770 ILCS 60/23(b) (West 2018).

¶ 37 Section 23 allows subcontractors of a general contractor employed by a public body

to establish a lien on funds in the possession of the public body. R.W. Dunteman Co., 181

Ill. 2d at 164. “Section 23 is materially different from all other liens established under the

Act in that it is the sole remedy of a subcontractor against a public body.” Id. at 164-

65. Thus, the language of section 23(b) only permits a subcontractor a lien attaching to the

public funds and not to the real property. See Aluma Systems, Inc. v. Frederick Quinn

Corp., 206 Ill. App. 3d 828, 841 (1990) (section 23 of the Act allows for a lien on funds

used for public improvement, rather than upon the land where the building is located).

¶ 38 However, to fall within the purview of section 23, the furnished work must be for

public improvement projects for any county, township, school district, city, municipality,

municipal corporation, or any other unit of local government in the state. Section 23(a-5)

of the Act defines “unit of local government” to include, inter alia,

16 “any entity, other than the State, organized for the purpose of conducting public business pursuant to the Intergovernmental Cooperation Act or the General Not For Profit Corporation Act of 1986, or where a not-for-profit corporation is owned, operated, or controlled by one or more units of local government for the purpose of conducting public business.” 770 ILCS 60/23(a-5) (West 2018).

The Act does not define public improvement or public business, although some case law

interpreting the definition of “local public entity” in the Local Governmental and

Governmental Employees Tort Immunity Act (745 ILCS 10/1-206 (West 2018)) may be

instructive. See Carroll v. Paddock, 199 Ill. 2d 16 (2002). However, the trial court here,

when it granted the various mechanic’s lien claims against the subject property instead of

the public funds, did not address the issue of whether Eco would fall within the definition

of a “unit of local government.”

¶ 39 While HBD and the subcontractors refer to Eco as a private entity and the project

as a private project, this conclusion cannot be reached based on the record before us. The

trial in this matter was focused on the details of the construction project itself, rather than

Eco’s corporate structure and its relationship with the ESLHA. The record reveals that

(1) the project used HUD financing in planning the project for the purpose of “community

development revitalization”; (2) the project is “mixed use” because it combines residential

and commercial aspects; (3) the project is “mixed funding” because it combines public

financing and private investment; (4) Eco is a not-for-profit corporation that was described

at trial as “an offshoot” of the ESLHA; (5) the ESLHA “set up Eco” as owner and

developer of the project as a “special purpose non-profit affiliate of the ESLHA”;

(6) Elizabeth Tolliver, the executive director of the ESLHA, is on the board of directors of

Eco; and (7) the residential aspects of the project provide subsidized housing for low 17 income seniors in East St. Louis. However, much is absent from the record as to the nature

of Eco and the project, such as (1) its articles of incorporation; (2) its bylaws; (3) its

management structure; (4) the nature of the income generated by the property, in both its

commercial and residential aspects; and (5) who receives that income. While the trial court

was correct to deny the motion to dismiss the mechanic’s lien claims of HBD and the

subcontractors due to these questions of fact, the court erred when it entered judgment on

the lien claims without sufficient evidence on these issues. Thus, pursuant to Illinois

Supreme Court Rule 366(a)(5) (eff. Feb. 1, 1994), which gives this court the authority to

make any order that the case may require, we remand for a further hearing on these issues.

See Amgro, Inc. v. Johnson, 71 Ill. App. 3d 485, 490 (1979) (the reviewing courts have

broad powers of remandment); see also Pepper Pot II, Inc. v. Imperial Realty Co., 133 Ill.

App. 3d 951, 955 (1985) (where the record discloses that all of the evidence on a material

issue has not been produced, it is appropriate for the reviewing court to remand for a

hearing for further evidence). For these reasons, we vacate the orders that entered judgment

on the mechanic’s liens and remand with directions that the trial court determine, after an

evidentiary hearing, the issue of whether this was a project for public improvement and

whether Eco meets the definition of “unit of local government” set forth in the Act.

¶ 40 Moreover, we believe that further directions to the trial court would be instructive.

If the court finds that this was a public project and Eco met the definition of “unit of local

government,” it is important to note that section 23(b) only gives the subcontractors a lien

on public funds due to HBD. See Aluma Systems, Inc., 206 Ill. App. 3d at 841 (a public

mechanic’s lien is available only to subcontractors, as it is a lien upon the funds awaited 18 by, and due to, the original contractor). If the court finds that Eco is not a “unit of local

government” and this was not a public project, HBD and the subcontractors are not entitled

to a lien on the fee of the subject property. While the Matot case does hold that a 99-year

lessee of property is an “owner” for purposes of section 1 of the Act, section 1 also provides

that the lien “extends to an estate in fee, for life, for years, or any other estate or any right

of redemption or other interest that the owner may have in the lot or tract of land at the

time of making such contract.” (Emphases added.) 770 ILCS 60/1(a) (West 2018). Thus,

the mechanic’s liens, if awarded, should only be liens on Eco’s 99-year leasehold interest

in the property.

¶ 41 B. Town & Country’s Appeal

¶ 42 1. Damages Award

¶ 43 Town & Country first contends that the trial court’s decision on the amount of

damages that it was entitled is against the manifest weight of the evidence.

¶ 44 Where a damage award is made after a bench trial, the standard of review is whether

the trial court’s judgment is against the manifest weight of the evidence. 1472 N.

Milwaukee, Ltd. v. Feinerman, 2013 IL App (1st) 121191, ¶ 13. A finding is against the

manifest weight of the evidence where the opposite conclusion is clearly evident or where

the finding is unreasonable, arbitrary, or not based on the evidence presented. Bangaly v.

Baggiani, 2014 IL App (1st) 123760, ¶ 142. “An award of damages is not against the

manifest weight or manifestly erroneous if there is an adequate basis in the record to

support the trial court’s determination of damages.” 1472 N. Milwaukee, Ltd., 2013 IL

App (1st) 121191, ¶ 13. 19 ¶ 45 Here, it was undisputed that, at the time of trial, HBD had paid Town & Country

$808,330.31 under the subcontract. However, the dispute at trial involved the additional

amounts that were allegedly owed to Town & Country for its work on the project; Town

& Country calculated that amount as $138,796, and HBD calculated that amount as

$88,474 (the difference between those amounts is $50,322). Town & Country also claims

that it was owed an additional amount of $61,317.50 for materials purchased by Town &

Country but were used on Peebles’ portion of the project (building 2).

¶ 46 The following testimony was offered at trial in regard to these calculations. Kowert

testified that he prepared a document titled “Analysis of Town & Country and Peebles

Masonry Account Balances,” which was an ongoing document as to his calculations of the

outstanding monies HBD owed to Town & Country (HBD exhibit 184). In calculating the

amount due, he utilized a final accounting provided by Town & Country. He testified that

he also attended several meetings with Town & Country to reconcile the amount owed to

Town & Country. He testified that HBD and Town & Country agreed that Town &

Country was owed $896,804.06 for its work on the project but that Town & Country

believed that it was owed an additional amount; it believed that it was owed a total amount

of $947,126. He provided the following explanation for his accounting and the variances

between his final accounting and Town & Country’s. He noted that there was a variance

between Town & Country’s and HBD’s final accounting for $16,886 for “case stone sills

remake”; he explained that they both had it listed as being paid in the amount of $16,886

to Town & Country, but the item was listed in a different location on the parties’ respective

calculations. He noted that Town & Country’s final accounting included $3365 for a 20 dumpster enclosure, but it never did that work, and it was completed by other contractors.

HBD’s final accounting included back charges for $1923.94 and $7125 for labor that was

supplied by HBD but was within Town & Country’s scope of work and for expenses that

were paid by HBD but were actually Town & Country’s expenses. There was a back

charge of $228 for three yards of concrete to re-pour a sidewalk damaged by Town &

Country.

¶ 47 Kowert’s accounting also included a $556.62 charge for HBD’s overhead for the

back charges at the rate of 5%. Kowert explained that Town & Country’s final accounting

included $25,000 in remobilization charges that had been denied by HBD and a $4500

charge for additional time that was spent by Town & Country on overseeing the

remobilizations but was also denied by HBD. He also explained that Town & Country’s

final accounting included a $285 charge and a $203 charge for profit and overhead that had

already been paid. There was a $91 charge on Town & Country’s final accounting that

was not included on his accounting. He also explained that Town & Country included a

charge of $1173 for work that was part of the contract scope, but Town & Country had

invoiced the charge as an extra. There was a $3572 charge on Town & Country’s final

accounting for claimed overhead and profit on charcoal grey brick for which it previously

provided an executed lien waiver. There was also a $2300 charge that was part of the base

contract and not an extra. After considering those variances, he calculated that HBD still

owed $88,474 under the subcontract. He acknowledged that his final accounting was

prepared shortly before trial, and he had not given Town & Country any notice about the

back charges that he was claiming. 21 ¶ 48 Kowert testified that Town & Country’s president, Jeff White, had executed a lien

waiver for $51,030 on the work completed that involved the charcoal grey brick. He

testified that HBD jointly paid Town & Country and many of their suppliers because the

suppliers cut off Town & Country, and joint payee checks provided them a credit so that

the suppliers would continue to supply the materials. He also stated that HBD had

advanced money to Town & Country and that HBD was always out of pocket on Town &

Country’s account because Town & Country was a smaller company and did not have

working capital.

¶ 49 Kowert acknowledged that Town & Country was “heavy” on materials at the

beginning of the project, but it was reconciled to “shift it away” from Town & Country and

make the material suppliers be paid through Peebles. He testified that Peebles paid about

$250,000 to material suppliers; he did not believe that Town & Country was aware of how

much of the materials was paid by Peebles. He explained that HBD exhibit 197, which

was prepared in 2013, showed that reconciliation. He also explained that HBD attempted

to make it as close to the 49%/51% split as possible to make it fair. He acknowledged that,

for example, with regard to supplier Kirchner Brick, $103,000 was paid to that supplier by

Town & Country and only $16,000 was paid to that supplier by Peebles. He explained that

although Town & Country paid the majority of the costs from this supplier, HBD rectified

that by having Peebles pay more for the costs of another primary supplier. For instance,

he noted that Peebles paid Swansea Brick $121,434.

¶ 50 Deborah Harshany testified that her job responsibilities as Town & Country’s

comptroller included preparing the pay applications for the project and preparing and 22 submitting the change order requests. Harshany testified that she did not know about the

back charges that were included in HBD’s final accounting and that she was surprised to

see those back charges because it was so long ago. She created a spreadsheet to list the

pay applications, the payments, and change order requests to calculate the amount due to

Town & Country. She believed that HBD still owed Town & Country $138,796 on the

subcontract.

¶ 51 Harshany testified that when she submitted pay applications to HBD, it was not

customary for HBD to pay those in full; she explained that Town & Country submitted 15

pay applications to HBD, but HBD made 40 payments toward those 15 applications. She

explained that the payments for the 15 payment applications should have been 15 payments

and 2 payments of retainage. She noted that the way that HBD submitted payments never

made sense to her. She did acknowledge that in construction, sometimes subcontractors

were not paid exactly what was asked for in the pay applications. She acknowledged that

on January 22, 2013, a lien waiver in the amount of $51,030 had been executed in

connection with the grey brick, which indicated that that amount had been paid to Town &

¶ 52 David Jackson, an expert in the area of HUD funding who was brought on board the

project by Eco, testified that he was the owner’s representative on the project. He left the

project when Walter Circle was approximately 90% complete. At the time that he left the

project, Town & Country was still owed money under its subcontractor’s agreement. After

being notified by Town & Country that it was owed money, on December 4, 2012, he

emailed his client about the outstanding balance. There was also an email exchange on 23 December 13 between him, Ken Kayes from HBD, and Kowert notifying HBD that money

was still owed to Town & Country and that Eco was concerned as to why no payment had

been made. He testified that he was concerned that Town & Country might be paying too

much for brick since the contract had been split between Town & Country and Peebles and

that he was trying to find out whether Town & Country was owed any money for materials.

On January 18, 2013, he attended a meeting with Kowert; Jeff White, the president of Town

& Country; and Olatunde Ogundeko, an Eco agent, in which they discussed the amount

due Town & Country. He explained that it appeared that Town & Country was paying for

all of the materials and that Peebles was getting paid far more than Town & Country for

work and for the majority of the materials being used on both buildings. He testified that

everyone at the meeting agreed that Town & Country was owed a little over $200,000. The

white board notes from that meeting were admitted into evidence.

¶ 53 Jackson testified that HUD had given the City of East St. Louis, through the

ESLHA, $32 million to develop housing. He explained that HUD had “earmarked” $22

million for the Walter Circle project and another $13 million for a second housing project

that was started but not finished. The project was also funded with private funds. At the

end of his involvement with the project, the project had a little over $12 million in its

account to be utilized for the second phase. He explained that he personally saw the $12

million deposited into the account. He noted that the money was under Eco’s control.

When he left the project, only about $100,000 had come out of that account.

¶ 54 Elizabeth Tolliver, the executive director of the ESLHA, testified that the ESLHA

received Town & Country’s notice of claim on lien for public funds in the amount of 24 $180,527.92. She testified that Eco was a special purpose non-profit affiliate of the

ESLHA. She agreed that a balance sheet statement for Eco’s checking and savings

accounts reflected a total amount of $581,250.94 on June 30, 2014. She stated that, before

construction, approximately $12 million from HUD was transferred into Eco’s checking

account.

¶ 55 White testified that HBD received its last payment from Eco on the masonry portion

of the contract on August 19, 2013, and that a total of $1,541,607 was paid under HBD’s

contract with Eco for the masonry. However, Town & Country had not been paid in full

under its subcontractor’s agreement. He testified that Town & Country began working on

the project on December 1, 2011, and completed its work on March 31, 2014; Town &

Country did work that was supposed to be completed by Peebles. He testified that in

addition to the $138,796 that was owed to Town & Country for building 1, HBD also owed

Town & Country $61,317.50 for materials Town & Country paid for but were used for

building 2. He explained that building 2 was not Town & Country’s responsibility. He

confirmed that the contract was initially a single contract with Town & Country, but it was

later split assigning responsibility for 51% of the masonry work to Peebles and 49% to

Town & Country. He testified that Town & Country exhibit 30, which was a paid invoice

report, included a check register that showed how much Town & Country paid its vendors

for the project. It also included two-party checks written by HBD to pay what was owed

to Town & Country but for which HBD used to pay for materials used on building 2; the

two payees on the checks were Town & Country and a material supplier. White explained

that Kowert would not pay the invoiced amount because he was overpaying Peebles. 25 Kowert had given White checks, but those checks were conditional on White paying for

the materials. White testified that his endorsements of those two-party checks and the lien

waivers were under duress.

¶ 56 White testified about Town & Country exhibit 33, which was the lien waiver for the

$51,030; he noted that out of the $51,030, only $6000 was made payable to Town &

Country as a single payee. The rest was split into six other two-party checks where a

material supplier’s name was typewritten in as a second payee. The two-party checks

included the added names of Richard Brick for $15,000; Swansea Brick for $14,800;

Raineri for $9000; Irwin for $2000; and Fabrick for $2000. White explained that although

he had endorsed the two-party checks, he did not retain possession of them or deposit them

into Town & Country’s bank account; Kowert kept the checks to pay for the materials for

building 2. White calculated that Town & Country overpaid for materials as follows:

$49,026.66 for brick; $9271.10 for mortar; and $3019.74 for hardware. In January 2013,

he emailed Kowert informing Kowert that he felt that Town & Country was being “held

hostage” to pay for materials for building 2.

¶ 57 White testified that Town & Country made two claims for delay damages: $40,290

and $25,000. He testified that HBD approved the $40,290 and that amount was included

in the $138,796 that was owed. The $25,000 was part of the additional $61,370.50 that he

believed was owed.

¶ 58 On cross-examination, he acknowledged that, on February 14, 2017, after Town &

Country finished its involvement on the project, he had claimed that Town & Country was

owed $163,471.45. He also acknowledged that the spreadsheet completed by Harshany 26 indicated that the amount owed to Town & Country was $138,796 and that the spreadsheet

was prepared just prior to the hearing. He further acknowledged that his amended answer

and counterclaim had alleged that $138,796 was owed to Town & Country. He admitted

that under the subcontractor agreement, Town & Country was required to provide HBD

with seven days written notice of any claims for delay damages and that Town & Country

did not provide written seven days’ notice of these claims. He did not know how much

money Peebles paid for materials on the project.

¶ 59 After hearing all of the testimony and considering the evidence, the trial court

entered an order, stating as follows with regard to the amount of damages owed to Town

& Country:

“This court has examined thousands of documents, invoices, spreadsheets, flow charts, and pictures. This court has also listened to multiple witnesses and, of course, entertained arguments of counsel. HBD acknowledges that [Town & Country] is still owed $88,474. [Town & Country] asserts in its pleading it is owed $138,796 plus interest and attorney’s fees, although after evidence was presented, [Town & Country] argues it is owed even more than that. Most of the difference between HBD and [Town & Country] involves the acquisition of platinum bricks originally approved for the project but then rejected by Signature Management for aesthetic reasons demanding a charcoal grey brick be used instead. Town & Country claim[s] it purchased the platinum grey brick for $51,030 and was entitled to an additional mark up of $3572 for a total amount of $54,602. HBD denies [Town & Country] paid for this brick. However, the evidence at trial demonstrated that this rejected brick had been delivered to the project. On January 22, 2013, [Town & Country] executed a waiver of lien for ‘masonry at Jazz at Walter Circle’ in the amount of $51,030. [Town & Country] also maintains that another brick and masonry contractor on the site, Peebles, was overpaid by HBD and that over-payment was of funds that were owed to [Town & Country] for services and supplies it provided and performed on the project.

27 [Town & Country] has not produced cancelled checks or other similar evidence establishing that it paid for both platinum grey bricks and for charcoal grey bricks but was only reimbursed for one. The Court finds the most reliable evidence and payment analysis was that of HBD. The Court finds [Town & Country] on Count I is entitled to a judgment against HBD *** in the principal amount of $88,474 plus interest at 5% per annum commencing [March 31, 2014].”

¶ 60 After carefully reviewing the record, we find that the trial court’s decision

concerning the amount of damages was not against the manifest weight of the evidence.

Both parties submitted prepared spreadsheets to justify the amount that they believed was

owed to Town & Country for its work on this project. Both parties had witnesses testify

as to how they determined the outstanding amount due, the variances between each party’s

calculation, on how payments were made from HBD to Town & Country, and on the lien

waiver and circumstances surrounding the brick. The court heard White’s testimony in

which he calculated the amounts that Town & Country overpaid for various materials, was

presented with cancelled checks from Town & Country that showed the amounts paid for

materials, was presented with a spreadsheet created by Harshany that detailed the amounts

for labor and materials that Town & Country contributed to the project, and heard Jackson’s

testimony that he believed that Town & Country had overpaid on the project and on the

conclusions that were made following the meeting with Town & Country to resolve the

overpayment issue. There was nothing in the record to indicate that the court did not

consider this evidence. Instead, the court found that HBD’s evidence and payment analysis

were just more reliable. As the trier of fact, the trial court is in the best position to assess

the credibility of witnesses, resolve inconsistencies, determine the weight to assign the

testimony, and draw reasonable inferences therefrom. People v. Daheya, 2013 IL App 28 (1st) 122333, ¶ 61. The trial court’s credibility determinations “must be given great

deference because the trial court, as the trier of fact, is in an optimum position to observe

the demeanor of witnesses while testifying, to judge their credibility, and to determine the

weight their testimony should receive.” Brody v. Finch University of Health Sciences/The

Chicago Medical School, 298 Ill. App. 3d 146, 153 (1998). A reviewing court should not

overturn a trial court’s finding merely because it might have reached a different conclusion.

1472 N. Milwaukee, Ltd., 2013 IL App (1st) 121191, ¶ 13. Given that the role of the trial

court is the trier of fact, and we find no basis in the record to second-guess the court’s

judgment, we find that the court’s decision as to the amount of damages owed to Town &

Country was not unreasonable or arbitrary and that there was an adequate basis in the

record to support that decision. Accordingly, we affirm the trial court’s determination of

the amount of damages owed to Town & Country.

¶ 61 2. Attorney Fees

¶ 62 Town & Country next argues that the trial court abused its discretion by not

awarding it attorney fees under the subcontractor agreement.

¶ 63 The decision whether to award attorney fees is within the sound discretion of the

trial court and will not be disturbed absent an abuse of that discretion. In re Estate of

Callahan, 144 Ill. 2d 32, 43-44 (1991). Typically, attorney fees are the responsibility of

the party who incurred the fees. Fontana v. TLD Builders, Inc., 362 Ill. App. 3d 491, 510

(2005). However, attorney fees can be awarded in construction cases where the

construction contract contains specific language regarding the allocation of attorney fees.

Id.; Geisler v. Everest National Insurance Co., 2012 IL App (1st) 103834, ¶ 86. The 29 construction of an attorney fee provision in a contract is a question of law. Fontana, 362

Ill. App. 3d at 510. A court is required to strictly construe a contractual provision for

attorney fees. Bjork v. Draper, 381 Ill. App. 3d 528, 544 (2008).

¶ 64 Here, the attorney fee provision in Town & Country’s subcontract with HBD

provided as follows:

“9.5. Attorney fees and Expenses—In any dispute resolution proceedings or other legal action, including but not limited to applications to confirm or vacate and appeals thereof, between the parties relating to this Agreement, the prevailing party shall recover from the other party all reasonable attorneys’ fees, consultants costs and other expenses, including but not limited to litigation and arbitration filing fees and arbitrator compensation, in connection with such action. The prevailing party is a party who recovers at least 75% of its total claims in the action, or who is required to pay no more than 25% of the other party’s total claims in the action.”

¶ 65 During oral argument, Town & Country acknowledged that if this court affirmed

the trial court’s damages award of $88,474, then it did not meet the first prong of the

attorney fee provision (recovery of at least 75% of its total claims). However, Town &

Country contends that it was entitled to attorney fees under the second prong of that

contractual provision (required to pay no more than 25% of the other party’s total claims

in the action) because it was not ordered to pay any of the judgment awarded to HBD. In

response, HBD contends that Town & Country is not considered a prevailing party because

HBD’s claims were not brought against Town & Country. HBD argues that absent the

Act, which required Town & Country to be named in HBD’s suit against Eco and the

ESLHA, HBD would not have named Town & Country as a party in the litigation.

¶ 66 The trial court denied Town & Country’s request for attorney fees under the

subcontract, finding that in the litigation between HBD and Town & Country, neither party 30 was a “prevailing party” as defined under the subcontract. The dispute between HBD and

Eco was not a dispute between HBD and Town & Country pursuant to their contract.

Rather, Town & Country was named as a necessary party due to the claims under the Act.

Thus, the fact that Town & Country was required to pay “no more than 25%” of HBD’s

total claims against Eco is not relevant to the analysis. The only dispute between HBD and

Town & Country relating to their agreement was Town & Country’s counterclaim, and as

to that counterclaim, neither party was a “prevailing party.” To require HBD to pay Town

& Country attorney fees based on HBD’s claims against Eco would be a result that was not

contemplated by the contract between HBD and Town & Country. Accordingly, the trial

court did not abuse its discretion in finding that Town & Country was not entitled to

attorney fees under the attorney fee provision in the agreement.

¶ 67 Town & Country next contends that pursuant to section 7.6.8 of the underlying

general contract agreement between Eco and HBD and 2.4.1 of the subcontractor

agreement, 7 attorney fees awarded to Town & Country should be passed through to HBD’s

judgment against Eco. However, we find that Town & Country was not a “prevailing

party” as defined by the subcontract agreement and thus was not entitled to attorney fees.

¶ 68 3. Lien on Public Funds

¶ 69 Town & Country next contends that the trial court erred in denying count II of its

counterclaim to assert a lien on public funds held by the ESLHA or its agent in accordance

7 Section 7.6.8 of the general contract included a fee-shifting clause making attorney fees and costs reimbursable by a prevailing party in a dispute between HBD and Eco. Section 2.4 of the subcontratctor contract provided that the subcontract document included the general contractor agreement between HBD and Eco. 31 with section 23 of the Act (770 ILCS 60/23 (West 2018)). This is similar to the argument

raised by the ESLHA in section II.A. of this decision. For the reasons set out in that section

of our decision, we vacate the order denying Town & Country’s claim for a lien on public

funds and remand with the same directions.

¶ 70 4. State Prompt Payment Act

¶ 71 Lastly, Town & Country contends that the trial court erred in not awarding it

damages for HBD’s violation of the State Prompt Payment Act. Section 7(b) of the State

Prompt Payment Act states as follows:

“If the contractor, without reasonable cause, fails to make full payment of amounts due under subsection (a) to its subcontractors and material suppliers within 15 calendar days after receipt of payment from the State official or agency, the contractor shall pay to its subcontractors and material suppliers, in addition to the payment due them, interest in the amount of 2% per month, calculated from the expiration of the 15-day period until fully paid. This subsection shall further apply to any payments made by subcontractors and material suppliers to their subcontractors and material suppliers and to all payments made to lower tier subcontractors and material suppliers throughout the contracting chain.” 30 ILCS 540/7(b) (West 2018).

Here, count IV of Town & Country’s amended counterclaim included its claim alleging

that HBD had violated the State Prompt Payment Act. However, during HBD’s cross-

examination of one of Town & Country’s witnesses at the second stage of the trial, Town

& Country indicated that it was withdrawing its motion for leave to amend its counterclaim

adding a prompt pay claim. Counsel further stated that there would not “be a Prompt Pay

Act case on [its] cutoff.” HBD’s counsel then abandoned a line of questioning concerning

this claim. After all of the evidence was presented, the following colloquy occurred

between HBD’s counsel, Town & Country’s counsel, and the trial court:

32 “[TOWN & COUNTRY’S COUNSEL]: There is one other piece *** of bookkeeping that we need to straighten out. I think it was the first day *** unbeknownst to me Judge McGlynn had entered an order granting my motion for leave to amend. [HBD’S COUNSEL]: Right. [TOWN & COUNTRY’S COUNSEL]: And I didn’t know that at the time. So I imagine right now we still have a Prompt Pay Act case. [HBD’S COUNSEL]: I thought you withdrew it during the case. [TOWN & COUNTRY COUNSEL]: At the time it had already been granted, so I can’t withdraw the motion to amend when it’s already been granted. And, frankly, given the evidence that we’ve been able to produce, we want to make it. And so I’ll either—I need to just straighten it out. If you need me to file motion for leave to file an amended complaint to conform to the proofs I will, but I just want to know what *** we need to do and what—maybe the Court can give us some guidance on that. [HBD’S COUNSEL]: Well, I had the court order before the hearing started on Thursday. You were down a line of questioning that I was asking about the 50- some-thousand dollars. You then said ‘I’m withdrawing my prompt payment claim.’ [TOWN & COUNTRY’S COUNSEL]: I understand that. That’s why it’s a mess *** because *** I did not know that it had already been granted. [HBD’S COUNSEL]: It’s not a mess to me. You withdrew the claim and so I dropped the line of questioning and didn’t pursue anything further on that. I didn’t think you were withdrawing the motion. I thought you said I’m withdrawing my prompt payment claim. And since the amendment had already been granted, you are now pulling it. That’s how I understood what you said and because of that [I] didn’t proceed with any further questioning. Nor do I think there’s any evidence to demonstrate that, in fact, *** $50,000 was paid to HBD for Town & Country’s work, and they in turn didn’t pay it. [TOWN & COUNTRY’S COUNSEL]: I think there’s evidence that you guys got paid by the end of December 13 everything of the masonry part of it. That came in today. I think, you know, I don’t know what line of questioning you were pursuing, but I believe you were pursuing it with Deb Harshany, and— THE COURT: I’m going to be ruling on the—you need to file whatever motions you want to file with respect to the significance of your oral motion to withdraw your Prompt Payment Act claim. I did not enter an order—I have now written an order with respect to that motion. I will contemplate whether or not I think the defendant *** is prejudiced by not pursuing a line of questioning on that because you said you were going to orally amend it. I think I’ve got all the numbers and facts and figures to figure out who got paid when, who is properly accounted for, all the moving parts in this project, and who might be confused. So I don’t know that ultimately that you’re going to be prejudiced, Mr. McGovern [(HBD’s counsel)], if I do grant his *** motion.” 33 In its June 12, 2019, order, the trial court stated as follows:

“During the course of the evidentiary hearing on this claim, counsel for [Town & Country] announced [it] was withdrawing this count which lead counsel for HBD to abandon a line of questioning of [Town & Country’s] witnesses on this issue. Thus, HBD’s argument that [Town & Country] waived the right to pursue this particular claim is a strong one.”

Like the trial court, we find that HBD’s argument that Town & Country forfeited its right

to pursue this particular claim when it indicated that it was abandoning this claim during

the hearing on Town & Country’s damages is a strong one. As a result of Town &

Country’s withdrawal of this claim, HBD’s counsel abandoned a line of questioning

concerning this issue and did not pursue any further questioning on the claim. Accordingly,

we find that Town & Country’s abandonment of the State Prompt Payment Act claim at

the trial resulted in forfeiture of that claim.

¶ 72 III. CONCLUSION

¶ 73 For the foregoing reasons, we vacate the circuit court of St. Clair County’s orders,

which granted HBD and the subcontractors’ mechanic’s liens on the subject property and

denied count II of Town & Country’s counterclaim, which sought a lien on public funds

held by the ESLHA. We remand for an evidentiary hearing focused on the issue of whether

this was a project for public improvement and whether Eco meets the definition of “unit of

local government” set forth in the Act. We affirm the court’s award of damages to Town

& Country in the amount of $88,474, its denial of Town & Country’s request for damages

under the State Prompt Payment Act, and its denial of Town & Country’s request for

attorney fees.

34 ¶ 74 Affirmed in part and vacated in part. Cause remanded with directions.