Pyramid Development, LLC v. Dukane Precast, Inc.

2014 IL App (2d) 131131
Appellate Court of Illinois·Decided December 22, 2014·No. 2-13-1131·Unpublished·Cited by 1 cases

Opinion

No. 2-13-1131

Opinion filed December 26, 2014

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT

PYRAMID DEVELOPMENT, LLC, ) Appeal from the Circuit Court ) of Du Page County.

Plaintiff and Counterdefendant- )

Appellant, )

)

v. ) No. 09-L-113 )

DUKANE PRECAST, INC., and M.B. ) FINANCIAL BANK, INC., )

) Honorable

Defendants and Counterplaintiffs ) Terence M. Sheen, -Appellees. ) Judge, Presiding.

JUSTICE ZENOFF delivered the judgment of the court, with opinion.

Justices Burke and Spence concurred in the judgment and opinion.

OPINION

¶1 This appeal arises out of mechanic’s lien litigation stemming from construction of the Bluff Townhomes in Hinsdale, Illinois. For the reasons that follow, we affirm the trial court’s judgment.

¶2 I. BACKGROUND

¶3 In March 2007, Dr. Husam Aldairi and plaintiff, Pyramid Development, LLC, entered into a written contract for plaintiff to construct eight townhome units, which became known as the Bluff Townhomes, in unincorporated Hinsdale. The contract price was $3,030,000. Plaintiff was a construction manager, owned no equipment, had no employees, and hired

subcontractors to do all of the work. Plaintiff’s principal was Ramy Saif. When plaintiff and Aldairi contracted to build the Bluff Townhomes, they already had a working relationship. Plaintiff was working, or had worked, on approximately seven different projects for Aldairi. Regarding the Bluff Townhomes, Aldairi required plaintiff to submit sworn affidavits with each draw. Broadway Bank was Aldairi’s lender. Defendant, M.B. Financial Bank, Inc. (Bank), is Broadway Bank’s successor.

¶4 Plaintiff contracted with defendant, Dukane Precast, Inc. (Dukane), to furnish prefabricated concrete slabs, which were to form the walls and floors of the townhomes. The contract price with Dukane was $1,040,000. Dukane delivered the materials, and they were incorporated into the townhomes. However, Saif noticed problems. The slabs were uneven; there were gaps between the walls and the floors; the electrical boxes in the walls were not even and straight; and the conduit between some of the walls was plugged with concrete.

¶5 Completion of the townhome development required the erection of retaining walls, which held up dirt, on the property. The west wall was completed while plaintiff was still the general contractor, but due to burgeoning difficulties between plaintiff and Aldairi, Aldairi had someone else finish the contiguous north and east wall. Eventually that wall failed at the northeast corner. In January 2009, Aldairi terminated plaintiff.

¶6 During lengthy litigation, Aldairi filed for bankruptcy protection. Aldairi entered into a consent judgment with the Bank, and the Bank eventually sold the property to a party not associated with the litigation. The Bank assumed the duty to pay plaintiff’s mechanic’s lien claim, and the Bank claimed that it had paid to repair the failed retaining wall. In June 2012, the trial court heard, in a single trial, plaintiff’s claim to foreclose its mechanic’s lien, Dukane’s claim against plaintiff for breach of contract, plaintiff’s claim against Dukane for breach of

contract, and the Bank’s claim for a setoff against plaintiff for the repair of the retaining wall. To aid in understanding the evidence, we treat the issues involving the mechanic’s lien and the Bank separately from the issues involving plaintiff’s and Dukane’s breach-of-contract claims.

¶7 The Mechanic’s Lien Foreclosure

¶8 This phase of the trial presented two issues: plaintiff’s right to a mechanic’s lien and the Bank’s right to a setoff against any award to plaintiff. Plaintiff filed a claim for a lien on May 6, 2009. The lien claim states that plaintiff’s last day of work was January 15, 2009, and that $235,000 was owed for improvements on the premises.

¶9 Pursuant to Aldairi’s request as the owner of the property, plaintiff furnished a contractor’s sworn statement with each draw. In all, plaintiff submitted six draws. Aldairi approved the first five, and they were paid. Aldairi did not approve the sixth draw, which was not paid.

¶ 10 A significant issue was what caused the retaining wall to fail. Saif testified that a cause of the failure was Aldairi’s insistence on planting trees around it instead of the bushes called for in the original plans. According to Saif, the tree roots damaged the wall. Saif also testified that a heavy machine had fallen against the wall, causing damage. According to Dallas Williams, an architect presented by the Bank, the wall was built incorrectly. Williams took the wall apart and found that it contained too little of a material called geogrid, which was needed to give the wall structure. In Williams’ opinion, the wall had to be rebuilt, and he testified that $145,000 was a reasonable cost to fix the wall. That amount was purportedly reflected on an invoice submitted by a contractor that had rebuilt the wall. Plaintiff’s expert testified that it would cost approximately $70,000 to $80,000 to fix the wall.

¶ 11 Another issue was the accuracy of the contractor’s sworn affidavits that Saif prepared and submitted to Aldairi pursuant to Aldairi’s request that such sworn statements accompany each draw. Saif admitted that the sworn affidavits were not accurate. According to Saif, the subcontractors’ names listed on the affidavits were not accurate, because “the names honestly change all the time.” Saif testified that, for example, Tri-Star Electric did the electrical work, but he did not list it on the affidavits for draws one through six. According to Saif, plaintiff did none of the actual work; however, he listed plaintiff on the sworn affidavits as having done various jobs. Saif testified that plaintiff did not keep any records of which subcontractors performed work on the Bluff Townhomes. According to Saif, “none of the numbers [on the sworn affidavits] are exact numbers.” He testified that the numbers on the sworn affidavits were “estimates” and that the numbers reflected “large cushions on every single line item.” Saif did not obtain lien waivers from any of the subcontractors.

¶ 12 Plaintiff offered exhibit number 32A to support its lien claim. The group exhibit consisted of copies of canceled checks that Saif attributed to the construction of the Bluff Townhomes. He testified that he placed check marks next to those checks that pertained to plaintiff’s lien claim. He also testified that the checks were originally written for all of Aldairi’s projects, not just the Bluff Townhomes, and that he had to “decipher” prior to trial “what checks go where.” According to Saif, that was “hard to figure out.”

¶ 13 Dukane’s Concrete Work

¶ 14 After Saif noticed the problems with Dukane’s precast concrete slabs, Dukane representatives met with Saif on May 7, 2008, at the Bluff Townhomes to resolve the issues. One of Dukane’s proposed solutions was to cut the prefabricated concrete walls to run conduit through them. Because those walls were load-bearing, Saif rejected that proposition.

Plaintiff’s expert, Adel Awad, testified that cutting and patching concrete was a bad solution, because the patched concrete would crack. As for repairing the uneven floors, Awad testified that the cost of the plywood needed for the repairs would vary from room to room and unit to unit. Saif’s solution for the walls was to “fur” by placing wooden strips at various intervals on the walls, running conduit between the walls and the strips, and then installing drywall over the strips. Saif testified that the repairs were done by subcontractors that plaintiff hired.

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Pyramid Development, LLC v. Dukane Precast, Inc., 2014 IL App (2d) 131131 (Ill. Ct. App. 2014).

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