(logo) Attorneys' Title Guaranty Fund Inc.

Casenotes

Illinois

Mechanic's Liens

Action Plumbing Company Inc v Bendowski, 402 Ill App 3d 681, 934 NE2d 35, 343 Ill Dec 35 (2nd D, 2010).

Facts:Neumann Homes (Neumann) built a series of homes in two subdivisions in Kane County, Illinois. In 16 cases, Neumann hired Action Plumbing Company Inc. (Action) to perform the plumbing work. Neumann was the owner of each property at the time the plumbing work was completed. Action completed all the work as required; however, Neumann failed to pay and Action recorded claims for liens on all properties in June, July, and October 2006. In February 2007, Action filed to foreclose the mechanic's liens and for attorneys' fees against both Neumann and the subsequent owners of the homes in question.

Neumann entered bankruptcy and the action to foreclose was stayed for a time. Eventually, the proceedings were reinstated. Neumann did not answer any of the complaints and was defaulted. The subsequent purchasers of each property responded and moved for partial summary judgment. The trial court concluded that Action could not get personal judgments for attorneys' fees against the subsequent homeowners, but did include them in the foreclosure decrees against them, though they were marked as "taxed as costs against Neumann." The homeowners then filed a motion for modification of the judgment, objecting to the attorneys' fees. The motion was denied, and the homeowners appealed.

Holding:Reversed in part and remanded. The appellate court noted that Section 17(b) of the Mechanic's Lien Act allows the court to tax the owner who contracted for the improvements if, without just cause, no payments are made for the contractor's attorneys' fees. Therefore, the appellate court found, the attorneys' fees could only be taxed to Neumann, and the first question was whether the trial court's order amounted to taxing the subsequent owners with the fees. The court concluded that, given Neumann's default, including the attorneys' fees in the foreclosure decree amounted to taxing the subsequent homeowners.

Specifically, the court found that, because at least some of the homeowners would have to pay the attorneys' fees to properly exercise their right vis-à-vis the foreclosure of the mechanic's lien on their property, the fees were really being taxed to the homeowner. Because Neumann had defaulted and no longer owned any of the properties, there was no way that these fees could be taxed to Neumann. As a result, the appellate court reversed the trial court, finding that it had improperly taxed the subsequent purchasers through its judgment of foreclosure.

© ATG|Casenotes/Bulletin 1103_v4n2

[Last update: 3-3-11]