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Casenotes

Illinois

Mechanic's Liens

Illinois Concrete-ICI, Inc v Storefitters, Inc, 397 Ill App 3d 798, 922 NE2d 542, 337 Ill Dec 419 (2d D, 2010).

Facts:Illinois Concrete-I.C.I. Inc (Illinois Concrete) was hired by Storefitters, Inc. and Tom Nesbitt (collectively, Storefitters) to perform concrete and demolition work. The concrete work was covered by a written contract which provided that any dispute would be subject to arbitration. The demolition work was not provided under contract. Storefitters did not make full payment to Illinois Concrete.

Illinois Concrete filed for a mechanic's lien for both the demolition and concrete work. Storefitters answered this lien with a notice requiring commencement of a suit to enforce the lien per 770 ILCS 60/34. As a result, Illinois Concrete filed suit. Storefitters answered with a request for the court to compel arbitration. The trial court found that Storefitters waived its right to arbitration by filing the Section 34 demands requiring Illinois Concrete to file suit. Storefitters filed an interlocutory appeal.

Holding:Affirmed. The appellate court first found that the appeal concerning the demolition work and whether arbitration applied to the counts related to that work was improper because the appeal was interlocutory and not directly related to the demolition work.

As to the issue of waiver, the appellate court found that Storefitters waived the arbitration clause by requiring a suit on the mechanic's lien, pursuant to Section 34. Actions inconsistent with the right to arbitration are typically taken to be a waiver of that right. The court found that filing a Section 34 demand is akin to requiring a suit. Because Storefitters had the alternate option of immediately requesting arbitration, requiring Illinois Concrete to file suit is inconsistent with the right to arbitration.

The court was unconvinced by Storefitters' argument that Section 34 was a remedy right that arbitration could not uphold, finding that Section 34 was in fact a means to a remedy. It was further unswayed by the argument that Section 34 can serve to simply invalidate a lien when the other party refuses to file suit within the time limit established by the statute. The court found that while this is a valid strategic move, it does not invalidate the fact that Section 34 is a request for a lawsuit and therefore not consistent with arbitration rights. Ultimately, the appellate court determined that the trial court had correctly found the arbitration clause to have been waived by Storefitters due to their section 34 demand.

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[Last update: 10-11-10]