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Casenotes

Illinois

Mechanic's Liens

Mostardi-Platt Assoc Inc v Czerniejewski, 399 Ill App 3d 1205, 929 NE2d 94, 340 Ill Dec 790 (5th D, 2010).

Facts:Leonard and Barbara Czerniejewski (the Land Owners) owned 157 acres of real property in Jefferson County, Illinois. In 2007, ADA Resources (ADAR) obtained a 24-month option from the Land Owners to buy this property, with rights to assign the option to others and to enter the property for inspection. ADAR indicated that Power Holdings of Illinois, Inc. (Power) was interested in the property; ADAR subsequently assigned the option to Power.

Power signed a contract with Mostardi-Platt Associates, Inc. (MPA) for services related to permitting for Power's planned coal gasification plant. MPA asserted that it completed this work, recorded a mechanic's lien against the property, and that Power failed to pay the full amount due under the contract.

In August 2008, MPA filed a complaint to foreclose the lien, naming the Land Owners, ADAR and Power as defendants. The defendants filed a motion to dismiss indicating that the option to purchase the land was never exercised. Therefore, the Land Owners remained in possession of the property. Furthermore, the defendants argued that MPA's services to assess the land for permitting did not include construction or design and therefore were not lienable under the Mechanics Lien Act. Various defendants filed affidavits attesting to the nature of MPA's services, the state of the property's title, the land's continued use as a farm by the Land Owners, and the fact that the land was not in substantially different condition as a result of MPA's services.

The trial court dismissed MPA's complaint, agreeing that a feasibility study was not lienable under the Act. In June 2009, the trial court dismissed with prejudice MPA's first amended complaint with the same reasoning. MPA appealed.

Holding:Affirmed. The court first assessed what previous courts had said about the purpose of the Mechanics Lien Act. The act is designed to protect investments of material and labor for the improvement of real property. In general, a party who improves the value of property may acquire a lien against an owner who realized a benefit from it.

In a case similar to the instant one, the court rejected an architect's complaint to enforce a mechanic's lien where he prepared plans for a party that did not yet own the property in question. Because the architect's plans did not improve the land for the benefit of the land owner, he could not enforce a mechanic's lien.

In this case, MPA's services only benefitted Power, not the actual Land Owners. Furthermore, MPA's services were merely a prospective study and did not directly improve the real property. Although MPA argued that the services were necessary for the use intended by Power for the property if it exercised its option, this nevertheless was not the type of work for which a mechanic's lien may be enforced. Therefore, the court affirmed the lower judgment.

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[Last update: 3-3-11]