MEP Construction, LLC v. Truco MP, LLC
125 N.E.3d 1130
| Ill. App. Ct. | 2019Background
- MEP contracted (verbally) with Truco in April 2014 to provide construction management/build-out services for a restaurant; Randhurst owned the property. MEP claimed total work of $791,781.16 and alleged partial payment by Truco left an unpaid balance.
- On September 24, 2015, MEP recorded a mechanic’s lien claiming $251,870.45 in its own name only.
- Truco’s discovery showed MEP’s president (Morales) had sworn the lien amount comprised ~$123,134.45 payable to MEP and the remainder payable to other contractors (V&V, Zivak, etc.) who, Morales stated, contracted with and were paid directly by Truco.
- MEP’s verified discovery responses admitted contractors contracted directly with Truco; MEP later filed an affidavit asserting it sought payment for those contractors and “brought them on,” but produced no contracts or assignments showing authority to collect for them.
- Truco moved for partial summary judgment under Ill. Code Civ. Proc. § 2-1005(a), arguing the lien was constructively fraudulent because it overstated MEP’s entitlement by roughly 100%. The trial court granted the motion, dismissed the lien count with prejudice, and certified judgment for appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MEP’s mechanic’s lien was constructively fraudulent due to substantial overstatement | MEP: disputed characterization; argued it acted as general contractor or construction manager and could lien for amounts due subcontractors; asserted additional discovery (depositions) likely would show this | Truco: Morales’s sworn statements and MEP’s verified discovery admit MEP only performed ~$123k and other contractors contracted with/paid directly by Truco, so filing a $251k lien in MEP’s name was a knowingly overstated lien | Court: Granted summary judgment for Truco — lien was constructively fraudulent and dismissed with prejudice |
| Whether summary judgment was inappropriate for lack of completed oral discovery | MEP: depositions not yet taken; no Rule 191(b) affidavit filed but argued further discovery would show MEP’s status and justify lien | Truco: MEP failed to invoke Rule 191(b) or request continuance; the verified admissions and documents on file were sufficient | Court: Denied this argument — MEP failed to file a Rule 191(b) affidavit and could not complain on appeal about limited discovery |
| Whether affirmance would improperly resolve related third-party claims (V&V, Zivak) | MEP: contended affirmance would necessarily determine Truco’s liability to subcontractors in related suit | Truco: argument forfeited (not raised below) and incorrect — finding no contract between MEP and subcontractors does not establish contracts or amounts between Truco and those subcontractors | Court: Rejected MEP’s contention as forfeited and meritless |
| Whether MEP’s affidavits and assertions created a genuine issue of material fact | MEP: submitted Morales affidavit and argued parties’ verified answers and other facts could yield different inferences | Truco: pointed to Morales’s sworn admissions and lack of documentary support for MEP’s contrary assertions | Court: Found MEP’s unsubstantiated assertions insufficient; verified admissions were binding and summary judgment appropriate |
Key Cases Cited
- Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90 (summ. judgment standard; construe evidence against movant)
- Williams v. Manchester, 228 Ill. 2d 404 (if reasonable people could draw divergent inferences, summary judgment improper)
- Lohmann Golf Designs, Inc. v. Keisler, 260 Ill. App. 3d 886 (substantial lien overstatements can constitute constructive fraud)
- Fedco Electric Co. v. Stunkel, 77 Ill. App. 3d 48 (overstatement plus knowledge supports constructive fraud)
- Cordeck Sales, Inc. v. Construction Systems, Inc., 382 Ill. App. 3d 334 (Mechanics Lien Act purpose and parties’ statuses; Rule 191(b) discussion)
- Peter J. Hartmann Co. v. Capitol Bank & Trust Co., 353 Ill. App. 3d 700 (Section 7 protects honest mistakes; knowingly overstated liens may be invalidated)
- Haudrich v. Howmedica, Inc., 169 Ill. 2d 525 (issues not raised below are forfeited)
- Konstant Products, Inc. v. Liberty Mutual Fire Insurance Co., 401 Ill. App. 3d 83 (verified pleadings can be judicial admissions)