Father & Sons Home Improvement II, Inc. v. Stuart
2016 IL App (1st) 143666
Ill. App. Ct.2016Background
- Father & Sons Home Improvement II (contractor) entered a 2009 written construction contract with Tracee and Cedric Stuart to build a deck, garage, and basement for $43,500 and later added a retail-installment financing agreement.
- Contractor recorded a mechanic’s lien on September 17, 2009 asserting completion on September 12, 2009 and a total claim of $46,200; work was actually completed around June 2010 and first installment under the financing was due November 1, 2009.
- Contractor attached a sworn affidavit by its president to the recorded lien affirming the September 12, 2009 completion date and amounts claimed.
- Stuarts (pro se initially) and Bank of America (mortgagee/third-party creditor) moved for summary judgment, alleging constructive fraud in the lien; Bank of America also argued the lien was untimely under the Mechanic’s Lien Act.
- The trial court granted summary judgment for defendants, found the lien amounted to constructive fraud, and awarded Stuarts attorney fees under section 17 of the Mechanic’s Lien Act and Bank of America fees as sanctions under Ill. S. Ct. R. 137; plaintiff appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the mechanic’s lien was invalid for constructive fraud | Contractor: false dates/amounts were mere overstatements or mistakes; lien was otherwise timely for certain pre‑construction services | Defendants: lien contained knowingly false, material statements (completion date and amount) corroborated by sworn affidavit, showing intent to defraud | Affirmed — lien defeated for constructive fraud; no genuine issue of material fact |
| Whether Stuarts' attorney fees under §17 of the Mechanic’s Lien Act were excessive | Contractor: award was excessive given the straightforward nature of the lien claim and hours billed | Stuarts: fees were supported by detailed billing, hourly rates, and were reasonable to defend the frivolous lien | Affirmed — trial court did not abuse discretion in awarding $13,675 |
| Whether Bank of America’s Rule 137 sanctions were appropriate and fee amount reasonable | Contractor: lien theory had some legal basis (premature filing can be proper); fees were excessive, duplicative, and included improper paralegal/overhead charges | Bank of America: filings contained repeated false statements; fees were justified, court vetted entries and excluded overhead; paralegal legal tasks recoverable | Affirmed — Rule 137 sanctions appropriately imposed and $26,291.02 fee award reasonable |
Key Cases Cited
- Lohmann Golf Designs, Inc. v. Keisler, 260 Ill. App. 3d 886 (Ill. App. Ct.) (constructive fraud where contractor filed exaggerated liens and affidavits attesting to false statements)
- Cordeck Sales, Inc. v. Construction Systems, Inc., 382 Ill. App. 3d 334 (Ill. App. Ct.) (overstatements alone do not prove constructive fraud absent additional evidence of intent)
- Peter J. Hartmann Co. v. Capitol Bank & Trust Co., 353 Ill. App. 3d 700 (Ill. App. Ct.) (intent to defraud may be inferred from overstated lien amounts plus corroborating evidence)
- Lake Environmental, Inc. v. Arnold, 2015 IL 118110 (Ill.) (Rule 137’s purpose and that sanctions must be assessed based on reasonableness at the time filings were made)