Illinois Court Throws Down Hammer on Contractor’s Ability to Recover Fees

The Illinois Appellate Court recently affirmed summary judgment against a contractor on the validity of its mechanic’s lien, finding that the contractor failed to comply with a simple — but costly — requirement provided for under the Illinois Mechanics Lien Act (770 ILCS 60/1 et seq. (West 2004)).

Cityline Construction v. Roberts, 2014 Ill. App. (1st) 130730 (March 7, 2014), involved construction work performed on a fire-damaged residence owned by Andrew Roberts and Valerie Gherold (owners).  Cityline sued the owners to enforce its mechanic’s lien claim when it was not able to recover $397,302 in fees and costs from the defendants.  While there was no dispute that the work was performed, the owners’ defense was simple: Cityline failed to provide them with an affidavit listing the subcontractors and suppliers performing work and the amounts each was owed and, as such, they were not obligated to pay the fees Cityline sought.

Section 5(a) of the Act specifically provides, “It shall be the duty of the contractor to give the owner, and the duty of the owner to require of the contractor,” a sworn statement listing the subcontractors, suppliers, and the amounts due.  Here, Cityline admitted it had failed to supply the required sworn statement to the owners — despite having received a request from them to provide same.  In affirming the trial court’s decision, the Appellate Court found that the procedural and technical requirements of the Act “must be strictly complied with in order for a mechanic’s lien to be valid.”  Simply, the statute clearly sets forth that where an owner demands a sworn statement, it is the contractor’s duty to provide one to preserve any potential mechanic’s lien claim.

As the attached publication from The CBA Record sets forth from the outset, “While [the Act] may not be as popular or as well-known as other avenues for justice, its bite is certainly worse than its bark.”  After the Appellate Court’s ruling here, it is doubtful Cityline would argue.  Had Cityline complied with the Act in providing the owners with a sworn statement, it undoubtedly would have had an easier path to recovering its unpaid fees.

Because the Act is automatically incorporated into every construction contract in the state of Illinois — regardless of the amount of the contract price — it is imperative that contractors comply with the Act’s stringent requirements to preserve their right to recovery.