Archive for February 2011

Subcontractor’s Mechanics Lien is Invalid Due to Failure to Serve 90-Day Notice to Lender

February 14, 2011

The Illinois Appellate Court, First District, recently held that a subcontractor’s lien does not have priority over a lender’s mortgage when the subcontractor fails to send or serve notice of its lien claim within 90 days after completion of its work to a known lender. Parkway Bank and Trust Co. v. Meseljevic, No. 1-09-3396 (Ill. App. Ct. Dec. 7, 2010)

In Parkway Bank, a developer began constructing a forty-unit commercial condominium project in Chicago in 2006.  One of the subcontractors on the project, Beta Electric (“Beta”), contracted with the developer to perform the electrical work.  When the developer failed to pay Beta for its work, Beta recorded a mechanics lien against sixteen of the condominium units.  Shortly thereafter, the mortgagee, Parkway Bank and Trust Company (“Parkway”), filed a verified mortgage foreclosure complaint naming Beta, among others, as defendants.  Beta filed a counterclaim to foreclose its mechanics lien.

Parkway moved to dismiss the counterclaim arguing that Beta did not properly perfect its mechanics lien and that the lien, therefore, had no priority over the mortgage.  The court dismissed Beta’s counterclaim, finding that: (1) Beta was a subcontractor; (2) Beta did not give the statutorily required 90-day notice of the lien to Parkway; and (3) Parkway’s mortgage was, therefore, prior to and superior to Beta’s lien.  The court reinstated a default judgment against Beta, denied Beta’s motion to reconsider, and granted Parkway’s motion to confirm the sale and distribution of the unsold condominium units.

On appeal, the appellate court affirmed the trial court’s dismissal finding that Beta did not properly perfect its lien.  The court noted that according to Sections 1(a) and 21(a) of the Mechanics Lien Act (“Act”), Beta was a subcontractor, not a contractor, and Section 24(a) of the Act requires a subcontractor to send or serve a notice of its lien claim within 90 days after “completion” of its work to any lending agency, “if known.” 770 ILCS 60/24(a) (West 2010).  Further, the court stated that Parkway was a “known” lender to Beta as the mortgage was properly recorded and the lender was readily discoverable by Beta.  The court also noted that there was no question that Beta did not provide Parkway with notice of its lien.  As such, the court held that Beta’s lien was invalid against Parkway. 

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.

Optimistic Employment Outlook for the Construction Industry in 2011

February 11, 2011

More construction firms are planning to hire rather than make layoffs in 2011, according to an industry-wide survey conducted by the Associated General Contractors of America and Navigant. 

In Illinois, 29% of construction firms report that they plan to hire in 2011, which translates to an average addition of 11 employees per firm or a 20% increase in a given workforce.  This is a near two-fold increase from 2010, when only 15% of construction firms added workers and 58% reported layoffs. 

Despite the improving employment outlook, however, more contractors expect the construction market to shrink in 2011 than expect it to grow.  Contractors remain optimistic about the projects in the hospital and higher education market but have lower expectations for the private office, retail, warehouse and lodging markets, due in part to a decline in stimulus-funded work.

Additionally, a growing number of firms are adopting new technologies and techniques such as Building Information Modeling (BIM) and Lean Construction Concepts, and are increasingly working on Leadership in Energy and Environmental Design (LEED) registered projects and public private partnerships (PPP).  Many construction firms are hopeful that these strategies will allow them to take advantage of and thrive in a resurgent construction market. 

The full AGC press release is available at http://news.agc.org/wp-content/uploads/2011/01/2011-Outlook-Release.pdf.

The complete set of Illinois-specific data is available at http://news.agc.org/wp-content/uploads/2011/01/IL.pdf.

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.

The Leading Lawyers Network Magazine – Real Estate, Construction and Environmental Edition Features Daniel S. Brennan

February 7, 2011

In a feature article in Leading Lawyers Network Magazine – Real Estate, Construction and Environmental Edition, Dan Brennan, one of the founding partners of Laurie & Brennan, LLP, reflects on his distinguished practice and the construction industry. His practice has included major projects such as Arlington Park Racetrack, Soldier Field, and the future Ann & Robert H. Lurie Children’s Hospital of Chicago.

When asked about his path to becoming a construction lawyer and how much he enjoys participating on construction project teams, Dan comments, “I like the people in the industry, I really do. They work hard. Especially on the contracting side, they are very smart and savvy people from the standpoint of building their business. They are down to earth. I like that.”

Nancy Borders, Associate General Counsel at Children’s Memorial Hospital, describes Dan as “a low-key, practical lawyer with a breadth of experience in the construction law area.” She also states, “He has the ability to explain things so that he gets to the nut of what is important and what could be a risk for us.” Borders further compliments Dan stating, “He’s really been a good partner, an excellent adviser and someone in whom we have a lot of confidence. His personality meshes with our organization, and that is important.”

When asked about Dan’s strengths, Dennis Viellieu, CEO of Midwest Orthopaedics at Rush, says, “[his] strengths lie in his ability to serve as a liaison between the business issues and team and the technical legal issues and team…‘Dan was always very successful in working with all the other attorneys involved so that a specific and maybe minor legal issue didn’t blow up the project.’”

To describe what he hopes people understand about him and his practice, Dan states, “The thing that I try to do and what I try to achieve and take pride when I do is figuring out how to help the client solve a problem at a reasonable cost to them, whether it is to resolve a dispute, to get a transaction completed, or offering them sound counseling and advice on the best way to get there. It doesn’t always mean scorched earth. …I advocate for my clients but also recognize that they are running a business and their best interests are the ones that have to be served.”

Leading Lawyers Network is one of the most trusted and respected resources to locate reputable, experienced lawyers. It surveys lawyers, asking them which of their peers, indeed their competitors, they would recommend to a family member or friend if they could not take a case within their area of law or geographic region. To maintain the quality and credibility of the survey, lawyers cannot nominate themselves or anyone at their own law firm. Based upon survey nominations and approval by our Advisory Board, only the top lawyers are nominated and eligible for membership in the Leading Lawyers Network. Starting in Illinois and eventually worldwide, Leading Lawyers Network provides extensive profiles of the most respected and experienced lawyers to assist you in your search for a highly qualified lawyer.  Please click this link to view the full article. Leading Lawyers Article

This Blog is made available by Laurie & Brennan, LLP for general educational purposes only. The purpose of the Blog is not to provide specific legal advice on any particular matter. By using this Blog site you understand that there is no attorney client relationship between you and this firm and the authors or members of the firm. This Blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Under rules applicable to the professional conduct of attorneys in various jurisdictions, the material on this Blog may be considered advertising material.


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