Casimir and Dawn Komperda (the “Komperdas”) entered into an oral contract with Lipowski & Associates (“Lipowski”) to provide architectural and construction management services for the remodeling of their home. Lipowski contracted with various subcontractors to complete the project, including Northwest Millwork Co. (“Northwest”). When Northwest was not paid, it filed a mechanics’ lien foreclosure suit against the Komperdas and Lipowski. Lipowski also filed a third-party claim against the Komperdas for the balance due from the Komperdas under the oral contract.
The Komperdas moved to dismiss Lipowski’s third-party claim, arguing Lipowski failed to provide them with a sworn list of parties providing material and labor as required by the Illinois Mechanics’ Lien Act (“Act”). In denying Komperdas’ motion, the court reasoned:
The purpose of this act is to permit a lien upon premises where a benefit has been received by the owner and the value or condition of the property has been increased or improved by the furnishing of labor and material. Because the rights under the act are in derogation of the common law, the steps necessary to invoke those rights must be strictly construed. Once a plaintiff has complied with the requirements, however, the act should be liberally construed to accomplish its remedial purpose.
Section 5 of the act provides: ‘It shall be the duty of the contractor to give the owner, and the duty of the owner to require of the contractor, before the owner. . . shall pay. . . to the contractor. . . any moneys. . . a statement in writing, under oath or verified by affidavit, of the names and addresses of all parties furnishing material and labor and of the amounts due or to become due to each.’
The act becomes a part of every construction contract between an owner and a contractor. The purpose of the sworn statement is to protect owners from the potential claims of subcontractors. Section 5 requires contractors to provide information that is within their knowledge but may not be known to the owner. If the owner pays the contractor before receiving the sworn statement, the owner may be compelled to pay subcontractors even if he or she has paid the contractor in full.
The court ruled Lipowski’s third-party claim should not be dismissed for failure to provide the sworn contractor’s statement. The court reasoned the strict construction doctrine was not meant to prevent an otherwise valid lien where the owner was aware of possible subcontractor claims and received the benefit of the subcontractors’ work. Thus, the failure to provide a sworn contractor’s statement would not prevent Lipowski from pursuing its mechanics’ lien claim because the Komperdas knew of Northwest’s lien claim and had accepted the benefit of its work. Moreover, there was no evidence the Komperdas had requested a sworn statement as required by the Act.
A substantial part of our practice includes the representation of contractors. If you are a contractor, or an owner, and have a question about Act, please telephone the member of the firm with whom you regularly work.