Luise, Inc. v. Village of Skokie

Case Date: 09/06/2002
Court: 1st District Appellate
Docket No: 1-00-4213, 1-01-0857, 1-01-2556 cons.

FIFTH DIVISION

SEPTEMBER 6, 2002




Nos. 1-00-4213, 1-01-0857, and 1-01-2556 (Consolidated)
LUISE, INC., an Illinois corporation, ) APPEAL FROM THE
                  Plaintiff-Appellant, ) CIRCUIT COURT
) OF COOK COUNTY.
v. )
)
THE VILLAGE OF SKOKIE,  )
                  Defendant-Appellee,  )
)
and )
) HONORABLE
SZABO CONTRACTING, INC., and ) CLIFFORD L. MEACHAM,
PEERLESS INSURANCE COMPANY, ) ROBERT J. QUINN,
                  Defendants. ) JUDGES PRESIDING.

BERKELEY TRUCKING INC., an Illinois corporation, )
                  Plaintiff-Appellant, )
v. )
)
THE VILLAGE OF SKOKIE, and FIDELITY & )
DEPOSIT COMPANY OF MARYLAND, )
                  Defendants-Appellees, )
)
and )
)
SZABO CONTRACTING, INC. )
and PEERLESS INSURANCE COMPANY, )
                  Defendants. )

 

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

This is a consolidated appeal. Plaintiff, Luise, Inc., an Illinois corporation (Luise),appeals from a final judgment of the circuit court of Cook County granting summary judgment infavor of defendant, the Village of Skokie, Illinois (Village), pursuant to section 23 of theMechanics Lien Act (The Act) (770 ILCS 60/23 (West 2000)), in connection with subcontractingtrucking work Luise performed on the Village's sewer project. In addition, plaintiff BerkeleyTrucking, Inc., another subcontractor that performed on the same sewer project, appeals fromentry of an order (1) dismissing Berkeley's lien foreclosure claim against defendants SzaboContracting, Inc. (Szabo), the Village, and Peerless Insurance Company (Peerless), pursuant tosection 2-619 of the Illinois Code of Civil Procedure (The Code) (735 ILCS 5/2-619 (West2000)); and (2) dismissing Berkeley's claims for quantum meruit and unjust enrichment and thirdparty beneficiary claims pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2000)). For the following reasons, we reverse the judgment of the trial court and remand this matter forfurther proceedings consistent with this opinion.

BACKGROUND

The following facts are relevant to this appeal. On March 17, 1997, Szabo entered into acontract with the Village to construct a storm sewer system for the Village, known as "Village ofSkokie Storm Sewer & Detention Facilities, Phase J, Project SS97.2" (Skokie Project). TheSkokie Project involved the installation of a new sewer line along several sections of Howardand Main Streets in Skokie. The work proceeded in two steps: The first step was the removal ofthe old sewer line, which involved, inter alia, the excavation and removal of the old sewer pipeand all associated construction and demolition debris. The second step was the installation of thenew sewer pipe, including, but not limited to, the delivery and installation of sand and stoneaggregate sub-base materials.

Szabo entered into a subcontract with Luise to perform "trucking," which included thehauling of debris from the site and the delivery of aggregate stone to the site. The work isdescribed as follows in the subcontract agreement: "Subcontractor agrees to furnish at his owncost and expense trucking of material to job site and trucking of spoils."

Szabo entered into a separate subcontract with Berkeley, another trucking company, toprovide "hauling, disposal and other services."

Neither Luise nor Berkeley was paid for its performance of its respective contracts withSzabo. On February 18, 1998, Luise sent out a verified notice of lien for the amount of$126,771.79, via certified mail to the Village. On May 4, 1998, Berkeley sent out a verifiednotice of lien for the amount of $254,107.28, via certified mail to the Village. At the time ofservice of the lien notices, the Village retained sufficient funds to pay the claims of Luise andBerkeley, having not yet paid Szabo. After November 8, 1998, the Village released funds in theamount of $571,668.29 to Szabo after obtaining a "Release of Lien Bond" from Fidelity &Deposit Company of Maryland (Fidelity).

Luise's Action

On April 3, 1998, Luise filed a verified complaint in seven counts, against the Village,Szabo, the City of Evanston (Evanston), USF & G Insurance Company (USF&G), and PeerlessInsurance Company (Peerless). In count I, Luise sought foreclosure on a mechanics' lien filed ona project for Evanston (Evanston Project). Count II alleged breach of contract against Szabo forthe Evanston Project. Count II sought recovery for a payment bond provided on the EvanstonProject and count IV alleged breach of a third-party beneficiary contract for the Evanston Project. In count V, Luise sought foreclosure of the lien filed on the Skokie Project. In count VI, Luisesought judgment against Szabo for breach of contract for the Skokie Project, and count VIIasserted an action for breach of the third-party beneficiary contract for the Skokie Project. OnAugust 26, 1998, Luise filed an amended complaint adding a count for recovery on a paymentbond provided by Peerless for the Skokie Project. The added count became count VII and thecount for breach of the third-party beneficiary contract for the Skokie Project became count VIII.

On November 10, 1999, the trial court entered a default judgment against Szabo inconnection with the counts relating to the Evanston Project and Evanston was ordered to pay$90,455.27 to Luise. On June 13, 2000, the trial court granted Luise leave to withdraw andnonsuit count VIII of its amended complaint against Skokie. However, during the course of theproceedings, Szabo filed for bankruptcy, and Luise's action was stayed. On June 19, 2000, thebankruptcy court entered an order modifying the stay and allowing Luise to proceed with its caseas long as no recovery was sought from Szabo. On July 7, 2000, the court granted Luise's motionfor voluntary dismissal of its action against Peerless.

On May 4, 2000, Luise filed a motion for summary judgment and a supportingmemorandum as to count V of its amended complaint. On August 31, 2000, the Village filed acountermotion for summary judgment against Luise. The Village argued that the servicesprovided by Luise on the Skokie Project are not lienable under section 23 of the Mechanics LienAct (770 ILCS 60/23 (West 2000)). Judge Clifford Meacham heard oral arguments on the cross-motions for summary judgment on September 26, 2000.

On November 1, 2001, Judge Meacham issued a memorandum opinion and order denyingLuise's motion for summary judgment and allowing the Village's motion for summary judgment,based on a finding that the services provided by Luise on the Skokie Project were not lienableunder section 23 of the Mechanics Lien Act. The order included Supreme Court Rule 304(a)(155 Ill. 2d R. 304(a)) language making it a final and appealable order. Luise filed a timelynotice of appeal on December 1, 2001.

Berkeley's Action

Berkeley filed a verified complaint in five counts on August 3, 1998. In count I, Berkeleysought to foreclose a mechanics' lien on the Skokie Project. Count II alleged breach of contractagainst Szabo; count III sought recovery on a quantum meruit theory; in count IV, Berkeleysought recovery under a payment bond provided by Peerless; and count V sought recoveryagainst the Village for unjust enrichment. On December 7, 1999, Berkeley filed an amendedcomplaint adding Fidelity as a party pursuant to the "Release of Lien" bond provided by Fidelity.

On January 11, 2000, Berkeley's action was stayed pursuant to Szabo's bankruptcyproceedings. The bankruptcy court entered an order modifying the stay and allowing Berkeley topursue its claims under the Mechanics Lien Act on March 31, 2000, subject to the provision thatBerkeley could not enforce or collect any judgment or deficiency against Szabo in the lienforeclosure action.

On April 18, 2000, Fidelity filed a combined motion to dismiss seeking, in part, todismiss count VI of Berkeley's amended complaint pursuant to section 2-615. After oralarguments on June 21, 2000, Judge Robert J. Quinn entered an order granting Fidelity's motionregarding count VI of Berkeley's amended complaint. The order of June 21, 2000, allowedBerkeley to file an amended complaint, and on July 12, 2000, Berkeley filed its second amendedcomplaint, omitting count VI, which had contained allegations against Fidelity for recovery onthe "Release of Lien" bond it provided.

On July 28, 2000, the Village filed a combined motion to dismiss seeking dismissal ofcount I (foreclosure of mechanics' lien) pursuant to section 2-619, and counts II (quantum meruit)and V (unjust enrichment) pursuant to section 2-615. On January 3, 2001, following oralarguments, Judge Quinn issued a written decision and order dismissing count I of Berkeley'ssecond amended complaint. Judge Quinn found that the services provided by Berkeley on theSkokie Project are not lienable under section 23 of the Mechanics Lien Act. Judge Quinn alsodismissed Berkeley's counts against the Village for quantum meruit and unjust enrichment. OnJanuary 8, 2001, the Village filed a motion to certify the court order of January 3, 2001, andJudge Quinn entered an order finding no just reason to delay enforcement of the order ofJanuary 3, 2001. Berkeley filed a timely notice of appeal of the dismissal of court I on March 1,2001.

On February 9, 2001, Berkeley filed a third amended complaint, renewing count VIagainst Fidelity and amending the allegations contained within counts IV and V for quantummeruit and unjust enrichment. On June 26, 2001, Judge Quinn entered an order giving leave toBerkeley to withdraw paragraphs 39 and 41 of its verified third amended complaint whichcontained the allegations of quantum meruit and unjust enrichment. The order also granted theVillage's motion to strike and dismiss counts IV and V for the reasons set forth in the prior ordersof January 3, 2001, and June 21, 2000. The order provided that there was no just reason to delaythe enforcement or appeal, pursuant to Rule 304(a) (155 Ill. 2d R.304(a).) Berkeley filed a timelynotice of appeal on July 9, 2001.

OPINION

Initially, Luise contends that the trial court, Judge Meacham presiding, erred in enteringits order of November 1, 2000, granting summary judgment in favor of the Village after findingthat the work performed Luise is not lienable under section 23 of the Mechanics Lien Act (770ILCS 60/23 (West 2000)).

Summary judgment is appropriate only when there is no genuine issue of material factand the moving party's right is clear and free from doubt. In re Estate of Hoover, 155 Ill. 2d 402,410-11, 615 N.E. 2d 736 (1993). Our review is de novo. Mandziara v. Canulli, 299 Ill. App. 3d593, 596, 701 N.E. 2d 127 (1998).

The Mechanics Lien Act defines the services that are lienable in three separate sections. Plaintiffs brought their respective actions under section 23 of the Act, which controls liensagainst public funds. Section 23 provides, in pertinent part, as follows:

"