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Laws-info.com » Cases » Illinois » 1st District Appellate » 2003 » Seasons-4, Inc. v. Hertz Corp.
Seasons-4, Inc. v. Hertz Corp.
State: Illinois
Court: 1st District Appellate
Docket No: 1-02-0599 Rel
Case Date: 03/28/2003

SIXTH DIVISION
March 28, 2003


No. 1-02-0599


SEASONS-4, INC., a Georgia Corporation,

                         Plaintiff-Appellant,

          v.

THE HERTZ CORPORATION, a Delaware Corporation,

                         Defendant-Appellee,

(CROWN TEMPERATURE ENGINEERS, INC., an
Illinois Corporation, and CITY OF CHICAGO, a Municipal
Corporation,

                         Defendants).

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Appeal from the
Circuit Court of
Cook County



Honorable
Cyril J. Watson,
Judge Presiding.






JUSTICE O'MARA FROSSARD delivered the opinion of the court:

Plaintiff Seasons-4, Inc., a subcontractor and manufacturer of air conditioning units, filed afour-count complaint to foreclose a mechanic's lien and to recover money judgments againstdefendants the Hertz Corporation (Hertz), Crown Temperature Engineers, Inc. (Crown), and the Cityof Chicago (City). The City is the owner and Hertz is the lessee of the property at O'Hare Field inChicago upon which plaintiff claims a lien. Crown is the general contractor that contracted withHertz to improve that property and that hired plaintiff to furnish air conditioning equipment for thatproperty. The trial court entered a default judgment against Crown in the amount of $53,659.61 oncount I, which alleged breach of contract, and dismissed count II, which styled itself an action forquantum meruit and was also directed against Crown. The trial court subsequently dismissedwithout prejudice count III, which sought to foreclose a mechanic's lien on the subject property, andcount IV, which sought to recover money damages. Thereafter plaintiff filed a second amendedcomplaint (amended complaint) to foreclose a mechanic's lien on the property. Hertz filed a motionto dismiss the amended complaint pursuant to section 2-619 of the Illinois Code of Civil Procedure(Code) (735 ILCS 5/2-619 (West 1998)) based on plaintiff's failure to timely serve it with writtennotice of its mechanic's lien claim pursuant to section 24 of the Mechanics Lien Act (Act) (770 ILCS60/24 (West 1998)). The trial court granted Hertz's motion, finding that plaintiff did not satisfy therequirements of section 24 of the Act. Plaintiff now appeals the dismissal of his amended complaint,contending that it gave proper notice under section 24 of the Act.

BACKGROUND

Plaintiff's amended complaint to foreclose mechanic's lien, which included a legal descriptionof the subject property, alleged the following facts. In 2000, Hertz entered into a contract withCrown, pursuant to which Crown agreed to furnish an air conditioning unit for property leased byHertz from the City. That property was commonly known as "10000 Bessie Coleman Drive, O'HareField, Chicago, Illinois." The contract provided that plaintiff would custom build the unit tospecifications required by Hertz and furnish a five-year compressor warranty for the unit. On

November 3, 2000, plaintiff delivered the custom-built air conditioning unit to Crown at the property

leased by Hertz and issued an invoice to Crown for the unit in the amount of $50,217.49. Crown didnot pay the amount billed in the invoice, and on January 25, 2001, less than 90 days after deliveryof the unit, plaintiff faxed the following letter to Hertz:

"January 25, 2001

Mr. Ed Gelfand
Crown Temperature Engineers
4555 North Elston Avenue
Chicago, Illinois 60630-4214

Re: Hertz Rent A Car
       Chicago, IL

Dear Ed,

Please be advised that we are suspending all warranties related to the abovereferenced project effective immediately. As of today's date, our invoice number25045 dated 11/03/00 with a balance due of $50,217.49 is now 83 days old. Season's-4 terms are NET 30. We will not honor any warranty related charges norwill we offer assistance to correct any problems that may arise. I am forwarding thisfile over to our attorney for review.

Sincerely,


SEASONS-4, INC.

[signature of Stephen L. Watford]

Stephen L. Watford
Controller


Cc      David Lampert -Hertz Rent A Car
           Mike Gillespie -Gillespie & Associates
           Bob Lawson -Seasons-4, Inc."


David Lampert, a construction manager with Hertz, received the above letter and in turntelephoned Stephen Watford to discuss it. Plaintiff's amended complaint stated that "[i]n thatconversation *** Hertz was provided specific information about [plaintiff's] contract with Crown,including the materials provided thereunder, the date materials were last furnished, and the amountdue to [plaintiff]."

On March 20, 2001, over 90 days after the delivery of the air conditioning unit, plaintiffserved a notice entitled "SUBCONTRACTOR'S NOTICE AND CLAIM FOR MECHANIC'S LIEN"upon Hertz. The opening paragraph of that notice, which indicated it was sent via certified mail toHertz's registered agent, stated "THE CLAIMANT Season's 4, Inc., subcontractor, claims a lienagainst Hertz Corporation, tenant. O'Hare International Airport, c/o Department of Aviation, owner,and Crown Temperature Engineers, Inc., contractor ***." The notice included a description of theproperty at O'Hare Field leased by Hertz and stated Hertz entered into a contract with Crown toimprove that property and that Crown in turn entered into a subcontract with plaintiff pursuant towhich plaintiff was to furnish the subject air conditioning equipment. The notice additionally statedthat plaintiff completed its work on November 7, 2000, by delivering the air conditioning unit andthat $50,217.49 remained unpaid. The notice specified that plaintiff "claims a mechanic's lien on theleasehold interest in the premises of Hertz Corporation."

On December 7, 2001, Hertz filed a motion to dismiss plaintiff's amended complaint,contending that Hertz paid Crown in full for the air conditioning unit and that plaintiff failed totimely comply with the notice requirements included in section 24 of the Act. The motion did notdispute the assertion in plaintiff's amended complaint that David Lampert, an agent of Hertz,received the fax in question and conversed with Stephen Watford following his receipt of that fax.

On January 23, 2002, following a hearing at which counsel presented oral arguments, the trialcourt granted Hertz's motion to dismiss. In support of its ruling, the court stated:

"[T]he issue is does the January 25, 2001 letter to Crowncomply with the notice requirement under Section 24. My shortanswer is no. I'll tell you why.

***

The general assembly has seen fit to require a subcontractorsuch as the plaintiff a potent device to secure payment of hisimprovement of the real property by its provision that a lien can beplaced against the property so improved.

However, the legislature has required that the subcontractorhere adhere to certain technical procedures to effectuate his lien andhis failure to do so means simply that he has not availed himself ofthe remedy extended and that he has no lien.

***

The statute makes no exceptions for cases where the ownermay have actual notice of the subcontractor's claim from some sourceother than those included in Section 24."

The trial court subsequently entered a written order that dismissed the amended complaintwith prejudice.

ANALYSIS

We review de novo the trial court's order granting Hertz's motion to dismiss plaintiff'samended complaint. Coady v. Harpo, Inc., 308 Ill. App. 3d 153, 158 (1999). "The question onappeal from an order granting dismissal under section 2-619 is 'whether the existence of a genuineissue of material fact should have precluded the dismissal or, absent such an issue of fact, whetherdismissal is proper as a matter of law.' " Doyle v. Holy Cross Hospital, 186 Ill. 2d 104, 109-10(1999), quoting Kedzie & 103rd Currency Exchange, Inc. v. Hodge, 156 Ill. 2d 112, 116-17 (1993). "While a section 2-619 motion for involuntary dismissal admits the truth of all well-pled facts in thecomplaint, conclusions of law are not taken as true." Coady, 308 Ill. App. 3d at 158.

In the instant case the parties do not dispute the relevant facts. Rather, they dispute whetherthese facts establish that plaintiff satisfied the requirements of section 24 of the Act as a matter oflaw and thus created an enforceable mechanic's lien.

Mechanic's liens are in derogation of the common law and must therefore be strictlyconstrued. First Federal Savings & Loan Ass'n v. Connelly, 97 Ill. 2d 242, 246 (1983). Such liensare valid "only if each of the statutory requirements is scrupulously observed." First Federal, 97 Ill.2d at 246. However, once the lien claimant has satisfied the statutory requirements, the Act shouldbe liberally construed to fulfill its remedial purpose. First Federal, 97 Ill. 2d at 246. This purposeis to protect, through imposition of an enforceable lien, a party who improves the value or conditionof property by furnishing labor or materials. First Federal, 97 Ill. 2d at 246.

Section 24 of the Act requires a subcontractor seeking to establish and enforce a mechanic'slien to serve notice of his lien claim within 90 days after he has delivered materials to the propertyor completed his work there. 770 ILCS 60/24 (West 1998).

Section 24 of the Act states in relevant part:

"Sub-contractors, or party furnishing labor or materials, ***shall within 90 days after the completion thereof, or, if extra oradditional work or material is delivered thereafter, within 90 daysafter the date of completion of such extra or additional work or finaldelivery of such extra or additional material, cause a written notice ofhis or her claim and the amount due or to become due thereunder, tobe sent by registered or certified mail, with return receipt requested,and delivery limited to addressee only, to or personally served on theowner of record or his agent or architect, or the superintendent havingcharge of the building or improvement and to the lending agency, ifknown ***." 770 ILCS 60/24 (West 1998).

Section 24 additionally states:

"The form of such notice may be as follows: To (name ofowner): You are hereby notified that I have been employed by (thename of the contractor) to (state here what was the contract or whatwas done, or to be done, or what the claim is for) under his or hercontract with you, on your property at (here give substantialdescription of the property) and that there was due to me, or is tobecome due (as the case may be) therefor, the sum of $. . . . ." 770ILCS 60/24 (West 1998).

This notice requirement is not simply a limitation on a subcontractor's remedy but rather " 'has beendetermined to be the very substance upon which a mechanics' lien may be predicated.' " MerchantsEnvironmental Industries, Inc. v. SLT Realty Limited Partnership, 314 Ill. App. 3d 848, 856 (2000),quoting Lundy v. Boyle Industries, Inc., 46 Ill. App. 3d 809, 812 (1977).

Neither plaintiff nor Hertz disputes that the applicable 90-day period under section 24 beganon November 3, 2000, the date plaintiff delivered the air conditioning equipment to Crown. Furthermore, neither party disputes that the notice in question is not the "SUBCONTRACTOR'SNOTICE AND CLAIM FOR MECHANIC'S LIEN," which was served after the 90-day periodspecified in section 24, but, rather, is the January 25, 2001, letter that was faxed to David Lampertof Hertz within the applicable 90-day period.

Plaintiff contends that the manner in which the letter was served and the content of that lettersatisfied the requirements included in section 24 and thus operated to perfect its lien on the subjectproperty. Hertz responds by noting that strict compliance with section 24 is a condition precedentto the creation of an enforceable lien and contends that the trial court properly dismissed plaintiff'samended complaint because neither the service nor the content of the letter complied with section24. The issue in the instant case is thus whether the January 25, 2001, letter was properly servedupon Hertz and whether its content adequately informed Hertz of plaintiff's mechanic's lien claimunder section 24 of the Act. In order to resolve this issue, we must construe section 24.

When construing a statute, our primary goal is to determine and give effect to the intent ofthe legislature. In re Marriage of Beyer, 324 Ill. App. 3d 305, 309 (2001). Inquiries into legislativeintent begin with the language of the statute, which is "the most reliable indicator of the legislature'sobjectives in enacting a particular law." Michigan Avenue National Bank v. County of Cook, 191Ill. 2d 493, 504 (2000). We must give statutory language its plain and ordinary meaning, and whenthe language is clear and unambiguous, we must apply the statute without resorting to additional aidsof statutory construction. Michigan Avenue National Bank, 191 Ill. 2d at 504. When construing astatute, we may consider "the reason and necessity for the statute and the evils it was intended toremedy." In re Marriage of Beyer, 324 Ill. App. 3d at 309.


A. SERVICE OF NOTICE REQUIREMENTS PURSUANT
TO SECTION 24 OF MECHANICS LIEN ACT

We first address whether plaintiff satisfied the service requirements included in section 24. The plain language of section 24 provides that a lien claimant must serve the party in question eitherpersonally or "by registered or certified mail, with return receipt requested, and delivery limited toaddressee only." 770 ILCS 60/24 (West 1998). The plain language thus notifies those against whoma lien may be potentially claimed that they can expect notice of such a claim to be served in onlyone of two ways: delivery in person or delivery by mail. The legislature's designation in section 24of delivery by mail as an acceptable method of service reflects its belief that the formality ofreceiving a notice delivered through the mail system constitutes an effective way of ensuring that thereceiver actually appreciates the importance of reading the notice. Here, plaintiff did not serve Hertzby mailing the notice in question or by personally delivering it to one of Hertz's agents. Instead, itopted to fax the letter to one of Hertz's agents. The plain language of section 24 does not authorizeservice of a notice of a mechanic's lien claim by fax or suggest in any way that such a method ofservice is lawful. Plaintiff did not follow the plain language of section 24, and we will not usurp theauthority of the legislature by holding that transmission by fax constitutes a valid method of servinga notice of mechanic's lien under section 24.

Plaintiff recognizes that section 24 does not include transmission by fax as a permissible wayto serve notice of a mechanic's lien claim by noting that "[w]hen [s]ection 24 was written, facsimiletransmission was unavailable." Plaintiff argues, however, that "[s]ervice of a section 24 notice otherthan by one of the methods listed in that section does not invalidate an otherwise sufficient noticethat is actually received by the owner." Relying upon A.Y. McDonald Manufacturing Co. v. StateFarm Mutual Automobile Insurance Co., 225 Ill. App. 3d 851 (1992), and Watson v. Auburn IronWorks, Inc., 23 Ill. App. 3d 265 (1974), plaintiff specifically argues that "Lampert's undisputedreceipt of the notice vitiates the technical statutory requirement of service 'by registered or certifiedmail, with return receipt requested, and delivery limited to addressee only.' "

We recognize that Illinois courts have been willing to overlook technical deficiencies inservice of section 24 notices which adequately stated a claim for a mechanic's lien when lienclaimants have used, albeit incorrectly, a method of service listed in section 24, and the party inquestion received the actual notice. For example, in A.Y. McDonald, the court found that deliveryby regular mail, rather than by certified or registered mail as specified in section 24, qualified as asufficient method of service when the owner acknowledged actual receipt of the written notice. A.Y.McDonald, 225 Ill. App. 3d at 857. Similarly, in Watson, the reviewing court found that deliveryby registered mail, despite the lien claimant's failure to limit delivery to "addressee only" as specifiedin section 24, constituted valid service because the owner received the actual written notice. Watson,23 Ill. App. 3d at 273.

We note, however, that "[t]he statute makes no exceptions for cases where the owner mayhave actual notice of the subcontractor's claim from some source other than those included in[s]ection 24." Suddarth v. Rosen, 81 Ill. App. 2d 136, 140 (1967) (failure to serve statutory noticerequired dismissal of lien claimant's complaint regardless of whether the owners had notice of theclaim from alternative source). Here, unlike A.Y. McDonald and Watson, plaintiff did not usedelivery by mail, one of the methods of service designated in section 24 of the Act. Rather, plaintiffemployed a method of service, transmission by fax, which was not even mentioned in section 24. Accordingly, we conclude that Hertz's receipt of the fax in question and subsequent discussion withplaintiff regarding that fax do not operate to validate the alleged service. In any event, even if thetransmission by fax did not invalidate service of notice under section 24, we find that the content ofthe faxed letter did not satisfy section 24.

B. CONTENT OF CLAIM PURSUANT TO SECTION 24 OF MECHANICS LIEN ACT

The plain language of section 24 requires the subcontractor to provide "written notice of hisor her claim and the amount due or to become due thereunder." (Emphasis added.) 770 ILCS 60/24(West 1998). The statute does not, however, define "claim."

Although plaintiff does not offer a definition of "claim," it contends that its letter adequatelystated a claim under section 24 and specifically relies upon the following two sentences in that letter:"As of today's date, our invoice number 25045 dated 11/03/00 with a balance due of $50,217.49 isnow 83 days old. Season-4's terms are NET 30." Plaintiff acknowledges that its letter does notinclude a salutation directed to Hertz (i.e., "To Hertz") or use the words "claim" or "mechanic's lien." It argues, however, that these omissions do not negate the validity of its notice since the plainlanguage of section 24 does not require a subcontractor to include a salutation to the party uponwhom the notice is being served and does not require that the notice include the words "claim" or"mechanic's lien."

"The purpose of the strict notice requirements of section 24 is to prevent owners from beingforced to pay subcontractors for labor or materials for which they have already paid the contractor." Petroline Co. v. Advanced Environmental Contractors, Inc., 305 Ill. App. 3d 234, 239 (1999). Inorder to serve this purpose, section 24 aims to ensure that the content of a notice served pursuant toits provisions adequately informs owners, or lessees who have contracted for the improvement ofthe property, that the subcontractor is claiming a mechanic's lien on the property.

We find instructive the notice of claim served in A.Y. McDonald. That notice, which wasmailed to the party against whom the lien was claimed and which the reviewing court found to belawful under section 24, stated:

" '[Subcontractor] *** claims a mechanic's lien for (1) materials inand about the improvement of the following described real estate ***. Which said real estate at the time of making of the contracthereinafter mentioned was, and now is, owned by State Farm MutualAutomobile Insurance Company. That on the 7th day of May, A.D.1986, claimant and said owner and its agents entered into contractwhich was (2) not in writing, herein it was provided that claimantshould (3) provide materials and supplies in the construction ofimprovements and structures on the above-described premises on anopen account on said above described real estate, and that said owneror its agent should pay claimant therefor the sum of [$38,642.32]***.' " A.Y. McDonald, 225 Ill. App. 3d at 853.

Unlike the above notice in A.Y. McDonald, the purported notice in the instant case did notstate plaintiff was asserting or claiming a "mechanic's lien." Nor did the notice in this case stateplaintiff was asserting or claiming a "lien" or an "interest" in property leased by Hertz. Instead thenotice stated plaintiff was "suspending all warranties related to the above referenced project effectiveimmediately." That "above referenced project" - "Re: Hertz Rent A Car[,] Chicago, IL" - did notstate what the project entailed or indicate that it involved improvement to any particular piece ofproperty.

Furthermore, unlike the notice in A.Y. McDonald, the notice here did not identify theproject's exact location. Instead, it referred only generally to "Chicago, IL." The notice didcommunicate that "invoice number 25045 dated 11/03/00 with a balance due of $50,217.49 is now83 days old." It did not, however, state for what the invoice was originally issued and did not stateplaintiff was claiming any type of legal interest on the property where the project occurred. Finally,while the notice faxed to Hertz was accompanied by a cover sheet directed to David Lampert, aconstruction manager with Hertz, the notice itself was addressed and directed to Ed Gelfan, an agentof Crown, rather than to Hertz, the party against whom plaintiff now seeks to impose a mechanic'slien. Based on these circumstances, we find that plaintiff failed to adequately state his claim undersection 24 of the Act.

CONCLUSION

We note that plaintiff contends in its brief that Hertz failed to comply with section 5 of theAct and argues that this failure precludes Hertz from asserting its payment to Crown as a defenseto plaintiff's claim. Section 5 of the Act imposes a duty on the owner of the property in question torequest a sworn statement from the general contractor listing the names of all parties who furnishlabor and materials and the amounts due or to become due to each, before any payment is made tothe contractor by "the owner or his agent, architect, or superintendent." 770 ILCS 60/5 (West 1998). Plaintiff correctly acknowledges, however, that the applicability of section 5 would only be at issuein this case if we were to find plaintiff's notice under section 24 of the act was valid. Here plaintiffdid not comply with section 24, and accordingly we need not address the applicability of section 5to the instant case.

For the reasons previously discussed, we find the January 25, 2001, letter was not properlyserved upon Hertz under section 24 of the Act. We further find the content of the January 25, 2001,letter failed to properly state plaintiff's mechanic's lien claim under section 24 of the Act. Accordingly, we conclude that the trial court properly dismissed plaintiff's amended complaint.

Judgment of the circuit court is affirmed.

Affirmed.

TULLY and GALLAGHER, JJ., concur.

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