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Casenotes

Illinois

Mechanic's Liens

Universal Structures Ltd v Buchman, 402 Ill App 3d 10, 937 NE2d 668, 344 Ill Dec 645 (1st D, 2010).

Facts:Around August 25, 2006, Universal Structures, Ltd. (Universal) entered into a written demolition contract with the Buchmans to remove items throughout their home for between $125,000 and $150,000. Universal then submitted numerous work orders to the Buchmans for remodeling services that totaled $1,339,042.04 upon completion. The Buchmans paid Universal $1,234,544.39, leaving an outstanding balance of $104,497.65. On February 1, 2008, Universal recorded a mechanics lien against the Buchmans' property for the outstanding balance owed. On July 1, 2008, Universal filed a verified complaint for foreclosure of its mechanic lien and breach of contract. In support of its complaint, Universal's President attested in an affidavit that the Buchmans accepted the work detailed in each work order, the Buchmans paid all amounts due except for the outstanding balance, and Universal did not deliver a consumer rights brochure.

On September 16, 2008, the defendants filed a motion to dismiss the complaint pursuant to Section 2-619 of Civil Procedure, alleging that Universal's failure to present a written work order for signature and Universal's failure to provide them with a consumer rights brochure were violations of the Home Repair and Remodeling Act (the Act) that precluded Universal's recovery under its claims. Then on October 21, 2008, the Buchmans filed an amended verified complaint seeking an accounting of the work done and alleging violations of the Act, violations of the Consumer Fraud and Deceptive Practices Act, common law fraud, unjust enrichment, and negligence. The circuit court consolidated the cases and on April 22, 2009, granted the Buchmans motion to dismiss based upon Universal's failure to comply with the Act. Universal appealed.

Holding:Reversed and remanded. The issue addressed on appeal was whether Universal was precluded from asserting a mechanic's lien upon the Buchman's property and other relief where there is no signed contract or work orders and no delivery by Universal of the consumer rights brochure to the Buchmans, as required by sections 20 and 30 of the Act. The court looked to prior case law to guide their investigation.

The court found that while Universal did fail to comply with the procedural aspects of Section 20 and 30 of the Act, which are unlawful violations under the Act, the unlawful violation does not invalidate what was otherwise an enforceable agreement. Nothing in the Act provides that a contractor who fails to get a signature on a written work order or provide the homeowner with a brochure cannot collect for his or her work and that the homeowner is entitled to receive a valuable benefit without paying for it. Merely because a contract violates the law does not mean it is unenforceable. If an agreement can by its terms be performed lawfully, it will be treated as legal, even if performed in an illegal manner.

The court found that the underlying bargain to perform home remodeling services did not provide for or require any violation of the law. Therefore the underlying agreement was valid and Universal's procedural violations under the Act did not bar Universal form asserting a mechanic's lien or breach of contract claim. The court also stated that if the Buchmans suffered actual damages from the procedural violations then they had a cause of action under the Act. The court further supported its decision by pointing to a proposed amendment to Section 30 of the Act that eliminated the &€œunlawful&€ language and replaced it with language stipulating that any person who suffers actual damage may bring an action pursuant to Section 10a of the Consumer Fraud and Deceptive Business Practices Act. The case was remanded to determine the legitimacy of Universal's claims.

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[Last update: 3-3-11]