Lazar Bros. Trucking, Inc. v. a & B Excavating, Inc.

365 Ill. App. 3d 559
CourtAppellate Court of Illinois
DecidedApril 7, 2006
Docket1-05-0384 Rel
StatusPublished
Cited by8 cases

This text of 365 Ill. App. 3d 559 (Lazar Bros. Trucking, Inc. v. a & B Excavating, Inc.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lazar Bros. Trucking, Inc. v. a & B Excavating, Inc., 365 Ill. App. 3d 559 (Ill. Ct. App. 2006).

Opinion

PRESIDING JUSTICE McNULTY

delivered the opinion of the court:

Lazar Brothers Trucking sued to foreclose a mechanics lien it filed against property Schmidt & Associates Construction owned. The trial court dismissed the claim based on lien waivers Schmidt obtained from its contractor. The lien waivers showed that before Lazar filed its lien, Schmidt fully paid its contractor for the work Lazar performed. We hold that the lien waivers established a prima facie defense to Lazar’s lawsuit, and Lazar failed to present evidence that could support an inference that Schmidt acted in bad faith or that it knew its contractor provided false affidavits when Schmidt paid the contractor. Therefore, we affirm the judgment in favor of Schmidt.

BACKGROUND

Schmidt sought to develop land it owned in Northbrook. Schmidt decided to act as its own general contractor for the project, directly hiring contractors to perform parts of the work. In August 2002 Schmidt entered into a written contract with A&B Excavating for excavation work at the site. Schmidt agreed to pay $25,000 for the work.

In September 2002 the president of A&B sent Schmidt a waiver of hen in which A&B acknowledged receipt of $20,000 from Schmidt for the excavation. The lien waiver incorporated an affidavit in which the president of A&B swore that no subcontractors worked on the excavation. A&B sent a second lien waiver for the remaining charge of $5,000 in February 2003, and again A&B’s president swore that no subcontractors worked on the excavation.

Schmidt’s president, in his capacity as president of the general contractor for the project, provided sworn statements showing the total price for the construction and listing all contractors along with balances due each contractor. The affidavit dated January 2003 listed A&B as the excavation contractor and showed that Schmidt had paid A&B the full contract price of $25,000. A total of more than $80,000 remained due to the other contractors, and according to the affidavit, Schmidt as owner owed itself a fee for its work as the general contractor. The affidavit dated March 2003 showed a total due of $53,000, all for the work of contractors for landscaping, paving and curb and gutter work. No balance remained due to Schmidt for its work as general contractor.

According to the March affidavit, Schmidt had paid A&B an additional $4,200 for “Retention Pond Grading.” A&B provided a final waiver, dated April 11, 2003, for the $4,200.

On April 14, 2003, Lazar recorded a notice of mechanics lien against the property, and on April 16, 2003, Lazar served Schmidt with notice of the lien.

Lazar sued Schmidt and A&B, amongst others, in 2004. Lazar alleged that A&B hired Lazar to haul excavation debris from the site. Lazar performed the work on January 16 and 17, 2003, charging A&B $170 per truckload for the work. The total bill for two days’ work came to $28,730. A&B never paid the amount due. In the first count of the complaint, Lazar sought to foreclose its lien against Schmidt’s property. The second count, directed against A&B, sounded in breach of contract. Lazar served discovery on Schmidt.

Schmidt did not respond to the discovery. Instead, Schmidt moved, under section 2 — 619(a)(9) of the Code of Civil Procedure (735 ILCS 5/2 — 619(a)(9) (West 2004)), to dismiss the foreclosure claim, based on the lien waivers A&B provided. The president of Schmidt swore in his affidavit that A&B did not inform Schmidt of the contract with Lazar, and Schmidt did not learn of Lazar’s work before service of the notice of hen. Schmidt’s president also swore that Schmidt paid A&B a total of $29,200. The affidavit corroborated the lien waivers.

The president of Lazar responded with an affidavit in which he swore:

“8. Pursuant to the usage and custom of the industry, the trucking/removal of debris is the expensive part of the work [A&B] was providing on January 16, 2003 and January 17, 2003 [ ] (i.e., trucking/removal of debris is substantially more expensive than the site work).
9. Furthermore, it is the usage and custom of the industry to have trucking/removal of the debris contemporaneous with the site work, otherwise, it is more costly to perform the site work, pile up the debris and then later fill the trucks and truck the debris from the site.
10. Moreover, the trucking/removal of the debris in the case at bar was actually done contemporaneous with the site work at issue.
11. Additionally, as general contract and owner, SCHMIDT knew LAZAR was providing the Trucking/removal of debris services for the site, in that:
a. At the relevant time, LAZAR operated approximately 40 trucks, all with Lazar Brothers Trucking, Inc. on the doors.
b. At the time of trucking/removal of debris from the Property, Affiant, upon best information and belief, saw agents/employees of SCHMIDT on site of the Property.”

After hearing argument the court granted Schmidt’s motion to dismiss count I, and the court added language to make the judgment immediately appealable. See 155 Ill. 2d R. 304(a).

ANALYSIS

We review de novo the dismissal of the lien foreclosure action pursuant to section 2 — 619. See A.P. Properties, Inc. v. Goshinsky, 186 Ill. 2d 524, 531 (1999). Lazar argues first that defendant’s evidence leaves unresolved issues of fact and therefore the court should not have dismissed the complaint. In particular, Lazar objects that the evidence does not specify the time and method of Schmidt’s payments to A&B, and Schmidt failed to establish facts that prove that it acted in good faith when it paid A&B.

The Mechanics Lien Act (770 ILCS 60/0.01 et seq. (West 2004)) comprehensively defines the rights and responsibilities of parties to construction contracts (Sanaghan v. Lawndale National Bank, 90 Ill. App. 2d 254, 257-58 (1967)) in a manner that balances the rights and duties of owners, contractors and subcontractors (Struebing Construction Co. v. Golub-Lake Shore Place Corp., 281 Ill. App. 3d 689, 694 (1996)). To protect itself from paying twice for the same work, the owner must demand from the contractor, prior to payment, a sworn statement listing all subcontractors providing labor and materials to the contractor. 770 ILCS 60/5 (West 2004). The contractor’s affidavits and lien waivers do not protect the owner if the owner has notice that the affidavits are false. Knickerbocker Ice Co. v. Halsey Bros. Co., 262 Ill. 241, 245 (1914).

To protect its right to receive payments, each subcontractor must provide timely written notice to the owner of the amount owed to the subcontractor for work on the project. 770 ILCS 60/24 (West 2004).

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Bluebook (online)
365 Ill. App. 3d 559, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lazar-bros-trucking-inc-v-a-b-excavating-inc-illappct-2006.