Mechanics' Liens

Onsite Engineering and Management Inc v Illinois Tool Works, 319 Ill App 3d 362, 744 NE2d 928, 253 Ill Dec 195 (1st D 2001).

Facts: Onsite Engineering and Management, Inc. (Onsite) is a corporation that provided temporary workers for businesses. In 1995, the general contractor (General) for a project known as the Lincolnwood Project (Lincolnwood) hired Smith Technology Corporation (Smith) to perform work. In December 1995, Smith and Onsite entered into an agreement, in which Onsite agreed to supply laborers to Smith as needed. Onsite and Smith did not specify the projects for which Onsite would supply workers. In October 1996, Smith requested Onsite workers for the Lincolnwood project. Onsite provided the workers, however Smith did not completely pay Onsite for the supplied workers. In 1997, Onsite served the General with a notice and claim for a mechanics lien for the amount owed. Onsite filed a complaint against the General and the Lincolnwood property owners. The trial court dismissed Onsite's complaint. The issue presented was whether Onsite, as a temporary staffing agency, had standing to file a claim under the Mechanic's Lien Act.

Holding: The appellate court affirmed the lower court's decision. Pursuant to 770 ILCS 60/21, subcontractors are entitled to a lien if they perform services for a contractor. The question presented was whether Onsite could be classified as a sub-contractor as defined in 770 ILCS 60/22. 770 ILCS 60/22 defines a subcontractor as a party who supplies labor and materials to a contractor. The court held that Onsite was not a sub-contractor and could not file a mechanics lien against the General and property owners. The court focused on the contract between Onsite and Smith. Onsite and Smith agreed that Onsite would be an independent contractor. Onsite paid the salaries of their employees and submitted a bill to Smith for reimbursement. Smith also agreed to indemnify Onsite if there was a lawsuit. The court also took into consideration that Onsite was not contractually obligated to work on the Lincolnwood project. The court held that to be classified as a subcontractor, Onsite needed to have a contractual obligation to work on the Lincolnwood project.

© ATG atgc0202vol26

 

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